ANNUAL REPORT

2018
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LETTER OF TRANSMITTAL

To
The Shareholders,
Bangladesh Bank,
Bangladesh Securities and Exchange Commission,
Registrar of Joint Stock Companies & Firms,
Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited

Dear Sir(s),

Subject: Annual Report - 2018

We forward herewith Annual Report-2018 of Prime Bank Limited and its Subsidiaries namely Prime Exchange Co.
Pte. Limited, Singapore, PBL Exchange (UK) Limited, PBL Finance (Hong Kong) Limited, Prime Bank Investment
Limited, Prime Bank Securities Limited and the dedicated CSR Wing of the Bank, Prime Bank Foundation. The
Report includes Audited Financial Statements, Balance Sheet, Profit and Loss Account, Changes in Equity,
Cash Flow Statement along with notes thereto on the position of the bank at the closing of businesses on 31st
December 2018 for your kind perusal and record please.

Yours sincerely,

Mohammed Ehsan Habib

Company Secretary
ANNUAL REPORT 2018

CONTENTS

General Information Risk Management

Vision, Mission & Core Values 5 Risk Management Framework &
Forward Looking Statement 6 Mitigation Methodology 129
Corporate Profile 8 Market Discipline Disclosure on
Five Years’ Financial Summary 10 Risk Based Capital (Basel-III) 141
PBL Milestones 12
Awards and Recognitions 14 Sustainability Analysis
Strategic Priorities 16
Sustainability Report 170
Group Structure 17
Social Responsibility Initiatives 172
PBL Organogram 18
Report on Prime Bank Foundation 173
Corporate Philosophy 19
Green Banking Report 193
Corporate Culture 196
Board of Directors & Management Profile
Capital Plan 197
Composition of Board and its Committees 21 Environmental & Social Initiatives 198
Directors‘ Profile 22
Senior Management & Committees 31 Integrated Reporting
List of Executives 36
Integrated Reporting 201

Message from the Chairman and Statement of Value Added and its Distribution 215

Managing Director & CEO Economic Value Added Statement 215

Market Value Added Statement 216
From the office of the Chairman 40
Managing Director & CEO's Review 43 Shareholders' Information

Horizontal Analysis 218

Corporate Governance
Vertical Analysis 219
Directors' Report 48 Graphical Presentation 220
Corporate Governance Report 61 Distribution of Shareholdings 222
Certificate on Corporate Governance 69 Shares held by Directors 222
BSEC Checklist on Corporate Governance 70 Market Price Information 223
Statement of the Board of Directors 81 Financial Calendar 2018 223
Statement of the Audit Committee 83
CEO & CFO’s Declaration to the Board 85 Financial Statements
Report on Activities of the Audit Committee 86
Report on Activities of the Risk Management Committee 88 Independent Auditors’ Report to the Shareholders 225
CRO’s Report on Risk Management 89 Consolidated Balance Sheet 230
Ethics & Compliance 91 Consolidated Profit and Loss Account 232
Consolidated Cash Flow Statement 234
Business Review and Analysis Consolidated Statement of Changes in Equity 235
Balance Sheet 236
Management Review 95 Profit and Loss Account 238
Segmental Analysis 116 Cash Flow Statement 239
Report on Human Resource Management 118 Statement of Changes in Equity 240
Report on Non-performing Asset (NPA) 123 Notes to the Financial Statements 241
Products and Services 126
Financial Statements of Islamic Financial Statements of PBL Exchange
Banking Branches (UK) Ltd.

Balance Sheet 313 Independent Auditors' Report

Profit and Loss Account 315 to the Members of PBL Exchange (UK) Ltd. 414
Cash Flow Statement 316 Profit and Loss Account 416
Statement of Changes in Equity 317 Balance Sheet 418
Notes to the Financial Statements 318 Statement of Changes in Equity 419
Statement of Cash Flow 420
Financial Statements of Off-shore Banking Units Notes to the Financial Statements 421

Balance Sheet 332

Financial Statements of PBL Finance
Profit and Loss Account 334
(Hong Kong) Ltd.
Cash Flow Statement 335
Notes to the Financial Statements 336 Independent Auditors' Report to the Members
of PBL Finance (Hong Kong) Ltd. 427
Financial Statements of Prime Bank Statement of Income and Retained Earnings 429
Investment Limited Statement of Financial Position 430
Notes to Statement of Cash Flows 431
Auditors' Report to the Shareholders 345
Notes to the Financial Statements 432
Statement of Financial Position 347
Statement of Profit or Loss and
Financial Statements of Prime Bank Foundation
Other Comprehensive Income 348
Statement of Changes in Equity 349 Independent Auditors' Report to the
Statement of Cash Flows 350 Members of the Foundation 439
Notes to the Financial Statements 351 Statement of Financial Position (Balance Sheet) 441
Statement of Profit or Loss and other Comprehensive
Financial Statements of Prime Bank Income (Income and Expenditure Statement) 442
Securities Limited Receipts and Payments Statement 443

Auditors' Report to the Shareholders 369 Supplementary Information

Statement of Financial Position 371
Statement of Profit or Loss and Human Resource Accounting 446

Other Comprehensive Income 372 Glimpses of 23rd Annual General Meeting 448

Statement of Changes in Equity 373 Branch Network 449

Statement of Cash Flows 374 Notable Activities During 2018 456

Notes to the Financial Statements 375 Redressal of Investors Complaints 458

Minutes of 23rd Annual General Meeting 459
Notice of the 24th Annual General Meeting 463
Financial Statements of Prime Exchange Co.
Acronyms 464
PTE. LTD., Singapore
Proxy Form 465
Independent Auditor's Report
to the Member of Prime Exchange Co. Pte. Ltd. 392
Statement of Profit or Loss
& Other Comprehensive Income 394
Statement of Financial Position 395
Statement of Changes in Equity 396
Statement of Cash Flows 397
Notes to the Financial Statements 398
ANNUAL REPORT 2018

GENERAL
INFORMATION

Vision, Mission & Core Values

Forward Looking Statement

Corporate Profile

Five Years’ Financial Summary

PBL Milestones

Awards and Recognitions

Strategic Priorities

Group Structure

PBL Organogram

Corporate Philosophy

4 PRIME BANK
 VISION MISSION

To be the best Private Commercial Bank in To build Prime Bank Limited into an efficient,
Bangladesh in terms of efficiency, capital market driven, customer focused institution with
adequacy, asset quality, sound management and good corporate governance structure. Continuous
profitability having strong liquidity. improvement of our business policies, procedure
and efficiency through integration of technology
at all levels.

CORE VALUES

DELIVER
High standard to our customers, clients and shareholders.
We share a passion for serving the financial needs of
people, companies and institutional investors.

COMMITMENT
Fully committed to achieving success for our customers, our
teams and ourselves through compliance with regulatory
guidelines.

TRUST
Have trust in our team. We work together to deliver towards
full capabilities to all our constituents. We strive to be
consistent and straightforward in our interactions.

SUCCEED
Know we succeed only when our customers, communities
and environment succeed. We do business in an open,
direct and sustainable way.

PRIME BANK 5
ANNUAL REPORT 2018

“ We bring newer banking solution

to our customers to ease the process of
traditional banking.

FORWARD LOOKING STATEMENT

• Prime Bank is creating a responsible business that will always meet

customers’ needs and a culture where our colleagues put customers first.
This is the key to our long-term success and to fulfilling our aim to retain
our position as the best private commercial Bank for customers, colleagues
and shareholders;
• The transformation in the form of centralization recently undertaken
will ensure we maintain the core values of the past while equipping us to
succeed in the future;
• To keep pace with the rapid change in technology to bring new
opportunities to improve our service to customers with faster, more
convenient and more extensive propositions tailored to meet their needs;
• We aim to treat all our customers fairly and inclusively, making it easy
for them to find, understand and access products that are right for them,
whatever their circumstances.
• We are working to build a “strong balance sheet” by maintaining capital
adequacy, asset quality, strengthening liquidity position, and adopting risk
mitigation measures against market risk;
• Develop the bottom line through improved recovery processes. Recovery
of NPL will be the Bank’s priority area and there is significant room for
improvement;
• Cost management has been a strategic priority and we like to remain
focused on maintaining our competitive advantage in cost leadership
aligned with our centralized business model.

6 PRIME BANK
• We are strong supporters of comprehensive regulatory reform. We
support many of the steps that have been taken to protect consumers in
the financial services sector. If properly implemented, reform should
contribute to future stability of the financial system;
• Our approach to reward aims to provide a clear link between remuneration
and delivery of the Bank’s key strategic objectives, namely, becoming
the best bank for customers whilst delivering long-term, superior and
sustainable returns to shareholders.
• We believe in offering fair reward where colleagues are rewarded for
performance aligned to the long-term sustainable success of the business,
our commitment to rebuilding trust and changing the culture of the Bank.
• The increasing role of digital has heightened customer expectations for
personalization while transforming the manner in which customers interact
with Banks. We believe security and resilience are important factors, with
the ability to respond to heightened cyber and fraud risks key to retaining
customer trust in a digital environment.
• Maintaining corporate sustainability will always remain to be an issue of
critical importance to us. We recognize our responsibility to take actions
supporting environmental issues and to use our business resources
to enable our clients, customers and employees to reduce their own
environmental impacts.

PRIME BANK 7
ANNUAL REPORT 2018

CORPORATE PROFILE

Prime Bank was established in April, 1995 Total Assets (BDT)

by a group of committed and visionary
entrepreneurs who conceived an idea of
floating a commercial bank with different
293,901 million
outlook. Prime Bank is prominent
for its superior service quality, brand
image, strong corporate governance and Loans and Advance (BDT)
corporate culture. We always remain
committed to delivering the best service 205,810 million
for our customers. We aim to treat all
of them fairly and inclusively, making
it easy for them to find, understand and Deposits (BDT)
access products that are right for them,
whatever their circumstances. We have 197,518 million
continued to transform the Bank to
become a safer, more agile and customer
focused organization whilst increasing Net Profit (BDT)

2,188 million
profitability. Committed for excellence,
Prime Bank is a top-tier bank in
Bangladesh and reputed among regulators
as distinctly ‘compliant’.
CRAR

17.04%
Return on Equity
UK
8.60%
Return on Assets
Bangladesh
Hong Kong
0.76%
Singapore

8 PRIME BANK
 Authorized
Capital 2018 2017

} }
25,000 BDT 25,000 BDT
Paid-up 11,323 in Million 10,293 in Million
Share Capital Capital

Prime Bank DSE CSE

Limited
27 March 2000 15 November 1999
Listing In-
formation

Long-Term
2018 2017
AA AA

Rating Informa- ST-2 ST-2

Short-Time
tion

2018 2017
Branches
146 146

Number of
Branches & ATM ATM 170 168

Prime Bank Investment Limited

Prime Bank Securities Limited
Prime Exchange Co. PTE Ltd (Singapore)
05
PBL Exchange (UK) Limited
Number of Sub-
sidiaries PBL Finance (Hong Kong) Limited

Hoda Vasi Chowdhury & Co., Aziz Halim Khair Choudhury

Auditors Chartered Accountants Chartered Accountants

Auditors & Tax K.M. Hasan & Co.,

Adviser Tax Adviser
Chartered Accountants

Prime Bank Limited

Share Division
119/120 Adamjee Court
Sarker Mansion (8th floor)
Address Annex Building-2
29, Rajuk Avenue
Corporate Motijheel C/A, Dhaka-1000
Motijheel C/A, Dhaka-1000
office Web: [Link]

PRIME BANK 9
ANNUAL REPORT 2018

FIVE YEARS’ FINANCIAL SUMMARY

(BDT in million except ratios)

Result of Operation 2018 2017 2016 2015 2014

Interest income 18,390 14,769 13,989 15,551 18,446

Interest expenses 10,741 9,875 10,676 14,257 15,574
Net interest income 7,650 4,894 3,313 1,294 2,872
Investment income 2,154 4,246 6,203 7,989 6,194
Commission, exchange and brokerage 2,209 2,245 1,693 1,956 2,033
Other operating income 887 764 814 834 806
Operating revenue 12,899 12,148 12,023 12,073 11,906
Operating expenses 7,180 6,775 6,266 6,166 5,750
Operating profit 5,719 5,373 5,757 5,906 6,157
Provision for loans and assets 1,782 3,564 3,412 3,154 2,877
Net profit before tax 3,938 1,809 2,345 2,752 3,280
Tax including deferred tax 1,750 750 150 613 887
Net profit after tax 2,188 1,059 2,195 2,139 2,393

Balance Sheet

Authorized capital 25,000 25,000 25,000 25,000 25,000

Paid-up capital 11,323 10,293 10,293 10,293 10,293
Shareholders’ equity 26,181 24,708 25,285 26,415 24,461
Deposits 197,518 199,014 197,934 194,825 204,838
Loans and advances 205,810 198,323 170,212 151,865 147,367
Investments 26,046 23,807 48,249 62,733 72,642
Fixed assets 6,943 6,434 6,590 6,516 6,613
Total assets 293,901 281,275 272,224 267,322 269,218
Total liabilities 267,720 256,567 246,939 240,907 244,758

Other Business

Import 182,263 186,050 134,914 114,747 126,571

Export 134,616 107,002 89,720 88,827 110,096
Remittance 45,755 38,120 32,119 39,146 39,484
Guarantee Business 23,250 31,597 32,350 35,000 30,155
No. of foreign correspondents 672 687 684 658 638

Liquidity Measures

Long-term liabilities 107,586 93,427 90,593 95,170 104,040

Current liabilities 160,134 163,140 140,721 130,576 126,276
Earning assets 241,264 230,038 219,508 215,025 220,115
Current assets 163,248 163,826 157,004 140,218 147,341
Net current assets 3,114 686 16,283 9,641 21,064
Credit-deposit ratio (Conventional) 82.65 84.43 74.95 69.86 66.70
Credit-deposit ratio (Islamic) 82.71 83.25 82.83 79.36 74.56
Current Ratio (percent) 1.02 1.00 1.12 1.07 1.17
Gearing Ratio (percent) 80.43 79.08 78.18 78.27 80.96
CRR Held (percent) 5.72 6.76 6.65 7.04 6.71
SLR Held (percent) 15.28 14.96 28.04 33.18 29.83
Debt Equity Ratio (percent) 9.78 9.63 10.24 10.96 9.99

10 PRIME BANK
 (BDT in million except ratios)

Capital Measures 2018 2017 2016 2015 2014

Total risk weighted assets 224,585 230,211 254,001 229,843 214,892

Tier-1 Capital 24,335 23,048 23,634 22,977 22,511
Tier-2 Capital 13,924 9,203 7,998 6,306 4,802
Total capital 38,259 32,251 31,632 29,283 27,313
Tier-1 Ratio (percent) 10.84 10.01 9.30 10.00 10.48
Tier-2 Ratio (percent) 6.20 4.00 3.15 2.74 2.23
Capital to Risk Weighted Asset Ratio (percent) 17.04 14.01 12.45 12.74 12.71
Leverage Ratio (percent) under Basel-III 6.52 6.61 7.36 7.57 N/A
Liquidity Coverage Ratio (LCR) 101.41 109.58 139.90 178.71 145.86
Net Stable Funding Ratio (NSFR) 127.94 120.08 120.56 109.12 107.25

Operating Performance Ratio (%)

Net interest margin (NIM) 3.62 2.56 2.02 0.86 1.91
Gross profit ratio 54.72 55.28 52.97 45.85 43.33
Cost-income ratio 55.93 55.98 52.11 51.08 48.29
Cost of Deposit 4.72 4.46 4.94 6.64 7.36
Cost of Fund 7.95 7.91 8.13 9.72 10.19
Yield on average advance 8.51 7.42 8.45 10.20 12.09
Spread 3.79 2.96 3.51 3.56 4.73
Earning asset to total assets (average) 81.30 81.00 81.36 81.73 82.28
Return on average assets (ROA) 0.76 0.38 0.81 0.80 0.91
Return on average equity (ROE) 8.60 4.24 8.49 8.41 10.08
Return on capital employed 4.28 4.55 4.97 4.86 4.79

Asset Quality
Non-performing loans (NPLs) 12,686 10,799 10,139 11,883 11,215
NPLs to total loans and advances (percent) 6.16 5.45 5.96 7.82 7.61
Provision for unclassified loans and advance 3,726 4,647 3,503 2,031 1,741
Provision for classified loans and advance 4,567 4,269 3,787 5,749 4,586
NPL Coverage 65% 83% 72% 65% 56%

Share Information
Market price per share (BDT) 17.80 27.40 17.70 18.10 19.60
No. of shares outstanding (in million) 1,132 1,029 1,029 1,029 1,029
No. of shareholders 14,895 15,102 15,876 18,652 23,102
Earnings per share (BDT) (Restated) 1.93 0.94 1.94 1.89 2.11
Dividend (percent) 12.5 C 10 B, 7 C 16 C 15 C 15 C
Dividend yield (percent) 7.02 6.20 9.04 8.29 7.65
Market capitalization (BDT in million) 20,155 28,204 18,219 18,631 20,175
Net asset value per share (BDT) 23.12 24.00 24.56 25.66 23.76
Price earning ratio (times) 9.21 29.30 8.31 8.71 8.43

Other information
No. of branches 146 146 145 145 140
Number of ATM 170 168 168 168 160
No. of employees 3,212 3,499 2,961 2,934 2,867
Profit per employee (BDT in million) 1.78 1.54 1.94 2.01 2.15

PRIME BANK 11
ANNUAL REPORT 2018

PBL MILESTONES

2004
• Registered as
Depository
Participant of
CDBL
2000
• Listed with Dhaka 2006
Stock Exchange
Limited • Incorporation of
Prime Exchange
Co. Pte. Ltd., 2008
Singapore • Launching of 1st
ATM

1995-99 2003
• Incorporation of • License issued 2007
the Company from the
Bangladesh Bank • Opening of
• Certificate of first Off-shore
Commencement as Primary Dealer
Banking Unit
of Business at DEPZ, Savar,
• License issued by 2005 Dhaka
Bangladesh Bank • Agreement with
• License issued for Temenos for Core
opening the first Banking Software
Branch, Motijheel Temenos T24
• Commencement
of business from
the Motijheel
Branch
• Commencement
of Islamic
banking business
from IBB,
Dilkusha
• Listed with
Chittagong Stock
Exchange Limited

12 PRIME BANK
 2010 2018
• Incorporation of • TFP Award
PBIL from Asian
• Incorporation of 2014 Development
PBSL Bank-Best SME
• Launching of Deal.
• Obtained JCB Cards in
permission for • Asia
Bangladesh
issuance of Rights Sustainability
• Launching of Reporting Rating-
Share 2012 Premium Banking ’GOLD Rank’.
• Launching of SMS • Launching of Service ‘Monarch’
Bankingg • Best SME Deal
Mobile Banking
Award from Asian
• Ground breaking • Launching of Development
of Prime Tower Biometric Smart Bank.
Card-Prime Cash

2009 2013
• Launching of • Launching of
Internet Banking Prime Bank
• Opening of first Nursing Institute
SME Centre • Launching of
• Recipient of SAFA Islamic Credit
2011 Card
Best Bank Award 2015
• Change of Face
• Incorporation of • Launching of
Value and Market
PBL Exchange First Business
Lot of Shares of
(UK) Ltd. World MasterCard
PBL
Credit Card in
• Launching of Bangladesh
Phone Banking
• Prime Bank
• Commencement Receives
of business of Remittance
PBL Finance Award
(Hong Kong) Ltd.

PRIME BANK 13
ANNUAL REPORT 2018

AWARDS AND RECOGNITIONS

NATIONAL AWARDS AND

RECOGNITIONS

FIRST POSITION- ICAB National Award for Best Presented Annual Reports
(Category: Private Sector-Banks/ Financial Sector)
Year: 2002, 2005, 2006, 2007, 2008, 2009, 2011, 2013 and 2015

FIRST POSITION- ICAB National Award for Best Presented Annual Reports
(Category: Corporate Governance Disclosures)
Year: 2009 and 2015

FIRST POSITION- ICMAB National Best Corporate Award

Year: 2009, 2010, 2012 and 2013

FIRST POSITION- ICSB National Award for Corporate Governance Excellence

(Category: Banking Companies)
Year: 2015 and 2016

Other National Awards and Recognitions

Bangladesh Business Awards 2011 – DHL – The Daily Star
The Industry 2012 – Best Rated Bank Award

14 PRIME BANK
 INTERNATIONAL AWARDS
AND RECOGNITIONS

FIRST POSITION- SAFA Best Presented Accounts and Corporate

Governance Disclosures Awards
Year: 2009 and 2013

FIRST POSITION- SAFA Best Presented Annual Report Awards and

SAARC Anniversary Awards for Corporate Governance Disclosures
(Private Sector Banks)
Year: 2011 and 2015

Other International Awards and Recognitions:

Financial News Services (FNS) Award 2005 – Best Performing Local Bank
Financial Institution Award - 10 years of Service (2005)
International Star for Leader in Quality (ISLQ) Award, France (2011)
Industry Best Rated Bank Award 2012 – Awarded as Strongest Bank
The Bizz 2012 – Inspirational Company Award
International Platinum Star for Quality Award 2012
Best Bank of Bangladesh by Global Survey (Best Emerging Market Bank in Asia) – 2013
Serdar Patel Awards (2015)
National Center for Sustainability Reporting- Sustainability Reporting Awards 2016
Best SME Deal Award from Asian Development Bank - 2018

PRIME BANK 15
ANNUAL REPORT 2018

STRATEGIC PRIORITIES

With the view to attaining the VISION of the bank and to meet
the challenges of current environment PBL has a set of strategic
priorities. Those priorities are regularly reviewed and refreshed in
order to meet the challenges of changing environment. The Board
and Management is committed to manage those priorities in a
balanced way with an appropriate mix of growth, return, risk and
productivity. PBL believes it can achieve its goal to be ‘A Bank with
a Difference’ by focusing on the following strategic priority:

Customer best choice Assisting our clients to operate successfully and being their bank
bank of choice for their business and personal financial needs;

Service excellence Providing delightful customer experience & service quality;

Continuous diversification with special focus on retail deposit and

Diversification MSME & Consumer business;

Quality growth Maintaining quality asset & business growth;

Achieving technological excellence and to deliver technology

Technology driven driven products and services;

Data security Keeping protection of Customer Data & flawless customer service;

Create strong brand image that carry a commitment of quality and

Brand image integrity;

Sustainable returns to stakeholders, exceeding market and

Sustainable return shareholder expectations;

Seamless business To conduct transparent and high quality business operation based
operation on market mechanism within the legal and social framework ;

Doing business without Committed to community as a corporate citizen and contributing

compromising the towards the progress of the nation in a socially responsible
society manner;

To be the employer of best choice with special focus on

Best employer continuous development of Human Capital and accomplishing a
motivational environment to retain critical resources;

16 PRIME BANK
GROUP STRUCTURE

Prime Bank
Limited

Overseas Local
Subsidiaries Subsidiaries

Prime Bank Prime Bank

Securities Ltd. Investment Ltd.
(95% owned) (99.99% owned)

Prime Exchange
(UK) Ltd.
(fully owned)

Prime Exchange
PBL Finance
Co. Pte. Ltd.
(Hong Kong) Ltd.
(fully owned) Singapore
(fully owned)

PRIME BANK 17
18
PBL ORGANOGRAM

PRIME BANK
ANNUAL REPORT 2018

Board Audit Committee of the Board

BPM+Management Reporting & MIS Managing Director & CEO Board Secretariat
Overall Reporting

Corporate & DMD

DMD & CRO DMD & CFO DMD & CAMLCO
Institutional Banking Commercial Banking
SEVP SEVP SEVP
Transaction Banking Consumer Banking MSME Banking FMD & Special Projects SEVP & COO

Areas Transaction Branches Credit Risk Financial Special Asset Facility Internal Audit
(Dhaka & Chittagong) Segments (CBD) Distribution Network Medium Business Management Division Administration Division Management Division Management Division Liability Operations Division
Banking

Public Sector & Agriculture Structured Consumer Banking Risk Management Card & ADC
Small Business Legal Division
Infrastructure Support Division Finance Business Division Operations

International Card & ADC Micro & Cottage Credit AML & CFT Cash Management
C&IB Liability Team Administration Division
Division Business Business Department Operations

Information
- Collection Trade Operations
Security Division
- Liability-MSME
- Islamic Banking Unit
- Products, Propositions Treasury
& Specialized Business Operations
- Business Finance & MIS
- Channel Support
Centralized
Clearing Cell

Regulatory Reporting
& Reconciliation

Brand & IT Infrastructure Business Process Islamic Banking Client Experience & Internal Control &
HR Division Treasury IT Service & Support Offshore Banking
Communications & Planning Re-engineering Division Process Governance Compliance Division
CORPORATE PHILOSOPHY

For Our Customers

To provide the most courteous and
efficient service in every aspect of
its business

To be innovative in the development

of new banking products and
services

For Our Employees

By promoting their well-being
through attractive remuneration
and fringe benefits

By promoting good staff moral

through proper staff training
and development, and provision
of opportunities for career
development

For Our Shareholders

By forging ahead and consolidating
its position as a stable and
progressive financial institution

By generating profits and fair return

on their investment

For Our Community

By assuming our role as a socially responsible
corporate citizen in a tangible manner
By adhering closely to national policies and
objectives thereby contributing towards the
progress of the nation
By upholding ethical values and best practices
constantly seeking to improve performance
by aligning our goals with stakeholders’
expectations, because we value them.

PRIME BANK 19
BOARD OF DIRECTORS
& MANAGEMENT PROFILE

Composition of Board and Its Committees

Directors’ Profile

Senior Management & Committees

List of Executives
COMPOSITION OF BOARD AND ITS COMMITTEES
Board of Directors
Mr. Azam J Chowdhury Chairman
Mr. Mafiz Ahmed Bhuiyan Vice Chairman
Mr. Imran Khan Vice Chairman
Mr. Md. Nader Khan Director
Mr. Quazi Sirazul Islam Director
Mrs. Marina Yasmin Chowdhury Director
Mr. Md. Shahadat Hossain Director
Mr. Md. Shirajul Islam Mollah Director
Mrs. Nasim Anwar Hossain Director
Mrs. Salma Huq Director
Mr. Nafis Sikder Director
Mr. Waheed Murad Jamil Director
Mr. Tarique Ekramul Haque Director
Mr. Mohammad Mushtaque Ahmed Tanvir Director
Mr. Shamsuddin Ahmad, Ph.D Independent Director
Dr. G. M. Khurshid Alam Independent Director
Mr. M Farhad Hussain FCA Independent Director
Prof. Dr. M. Shamim Z. Bosunia Independent Director

Executive Committee
Mr. Md. Shirajul Islam Mollah Chairman
Mr. Quazi Sirazul Islam Member
Mrs. Nasim Anwar Hossain Member
Mr. Mafiz Ahmed Bhuiyan Member
Mr. Imran Khan Member
Mr. Tarique Ekramul Haque Member
Mr. Waheed Murad Jamil Member

Audit Committee
Mr. Shamsuddin Ahmad, Ph.D, Chairman
Mr. Md. Nader Khan Member
Dr. G. M. Khurshid Alam Member
Mr. M Farhad Hussain FCA Member

Risk Management Committee

Dr. G. M. Khurshid Alam Chairman
Mr. Mohammad Mushtaque Ahmed Tanvir Member
Mr. Shamsuddin Ahmad Ph.D Member
Mr. M Farhad Hussain FCA Member

Nomination and Remuneration Committee

Dr. G M Khurshid Alam Chairman
Mr. Md. Nader Khan Member
Mr. Md. Shirajul Islam Mollah Member

PRIME BANK 21
ANNUAL REPORT 2018

DIRECTORS’ PROFILE

Azam J Chowdhury, Chairman Board of Directors is an elite industrialist and

entrepreneur in Bangladesh. He is the Chairman and owner of East Coast Group,
a conglomerate focused on fuel & energy sector for more than three decades.
Currently Mr. Azam J Chowdhury is associated in the position of President,
Chairman, Managing Director and Director with the following prestigious
businesses:

President:

Bangladesh Association of Publicly Listed Companies (BAPLC)

Bangladesh Energy Companies Association (BECA)

Bangladesh Ocean Going Ship Owner’s Association (BOGSOA)

LPG Operators Association of Bangladesh (LOAB)

Azam J Chowdhury Chairman:

Chairman The Consolidated Tea & Lands Company Bangladesh Limited (formerly, James
Finlay Limited).

Managing Director:

MJL Bangladesh Limited- Affiliate partner of Exxon Mobil, one of the world’s
largest fuel & Lubricant businesses.

Director:

Central Depository Bangladesh Limited (CDBL).

Omera Petroleum Ltd. one of the largest LPG operators of the country

Omera Cylinders Ltd. & Omera Fuels Ltd.

In the past Mr. Chowdhury also served as Chairman of Green Delta Insurance
Company Limited (2001-2005), one of the most successful general insurance
companies in Bangladesh.

In recognition to his performance and repute, the Hungarian Government

nominated him as the Honorary Consul of Hungary in Bangladesh.

Mr. Chowdhury is a renowned Golfer and achieved laurels several times in this
sporting arena.

22 PRIME BANK
 Mr. Mafiz Ahmed Bhuiyan is a Sponsor Director and currently Vice Chairman and
Chairman of the Board of Prime Bank Ltd and Prime Bank Foundation respectively.

Mr. Bhuiyan is Managing Director of IPE Technology Limited, Shepherd World

Trade Limited, Shepherd Consultant & Management Ltd, Native Holdings Ltd.
and Chairman of Citizen Securities & Investment Limited (A full-fledged Merchant
Bank).

He is former Trustee/Life Member of Eastern University & South East University

and Director of Australian International School (International Holdings Ltd.).

As a Businessman, Mr. Bhuiyan can be termed as one of the pioneers in the field
of RMG in terms of setting up backward linkage industries in collaboration with
reputed overseas companies belonging to developed countries.

Mr. Bhuiyan takes keen interest in Games and Sports and is a Member of Kurmitola
Mafiz Ahmed Bhuiyan and Army Golf Club, Dhaka.
Vice Chairman

Mr. Imran Khan is a promising business personality. Currently he is Vice

Chairman of the Board of Directors and had also served as Vice Chairman of the
Executive Committee in the past.

He is Director of the reputed company Pedrollo nk Limited, a market leader in

terms of import of PEDROLLO (Italian Brand) Water pumps including sales &
distribution in Bangladesh. The company also acts as sole agent of renowned
brands Itap, HCP and Rain Bird in Bangladesh.

Mr. Khan is also a director of PNL Holdings Ltd., PNL Water Management Ltd.,
Halda Valley Tea Company Ltd., Halda Fisheries Ltd. and Hill Plantation Ltd. In
addition, he is owner of Prima Enterprise, engaged in import and trading business.

Mr. Khan is an Ex-Cadet of Fauzdarhat Cadet College, Chittagong and completed

his post-graduation from North South University, Dhaka.
Imran Khan Mr. Khan actively associates himself with CSR activities and is a member of the
Vice Chairman Chittagong Club Ltd., Chittagong Boat Club, Shaheen Golf & Country Club and
Governing body of Lion Mukhlesur Rahman Foundation- a renowned NGO and
Charitable Organization operating from Chittagong for the underprivileged and
poor masses across the country.

PRIME BANK 23
ANNUAL REPORT 2018

Mr. Md. Shirajul Islam Mollah, a Sponsor Director, is also a past Chairman of
the Board of Directors. Presently he also holds the position of Chairman of the
Executive Committee of the Board. A very successful business personality, Mr.
Shirajul Islam Mollah is the Managing Director of:

China-Bangla Ceramic Industries Limited

Bengal Tiger Cement Industries Limited

Bajnabo Textile Mills Limited

United Shipping Lines Limited

United Progressive Dredging Ltd.

He is the Chairman of The People’s University of Bangladesh and President of

Bangladesh Ceramic Manufacturers & Exporters Association (BCMEA).
Md. Shirajul Islam Mollah Widely travelled, Mr. Shirajul Islam Mollah is involved with various social and
Chairman, Executive Committee educational activities and earned recognitions from a number of organizations.

He is the founder of Bajnabo Abul Faiz Mollah High School, Shibpur, Narsingdi.
A philanthropist, Mr. Md. Shirajul Islam Mollah is also the Chairman of Shirajul
Islam Mollah Samaj Seba Foundation.

Mr. Mollah is a member of Dhaka Stock Exchange (DSE) and Ex. Member of
Parliament as well.

Mr. Shamsuddin Ahmad, Ph.D. has been an Independent Director of the Bank
with effect from April 2015.

Dr. Ahmad is a distinguished development practitioner with 26 years of experience

in the World Bank tackling development challenges in the financial sectors of
several countries. As a Senior Financial Sector Specialist in the South Asia region
of the World Bank, Dr. Ahmad has worked extensively with the Bangladesh
Bank, the State Bank of Pakistan and the Nepal Rastra Bank in assisting these
Central Banks to transform themselves into professional, efficient and modern
institutions.

Dr. Ahmad retired from the World Bank Headquarters in Washington DC in

February 2015, and is keen to utilize his expertise and experience to further
develop the financial sector in Bangladesh.

Shamsuddin Ahmad, Ph.D. Dr. Ahmad completed his MBA with distinction from IBA in 1977, and started his
career as a banker with American Express Bank in Bangladesh. He obtained his
Chairman, Audit Committee
Masters and Ph.D. degrees in Development Economics from the University of
Hawaii, and returned home to join the World Bank Office in Dhaka in October
1989. He was later posted in Islamabad, Kathmandu and Washington DC offices
of the World Bank.

He has won several awards in his educational and professional pursuits, including
the prestigious Makana Award for Leadership at the East West Center. He also
completed the Financial Institutions Program for Economic Development at the
Kennedy School of Government in Harvard University in 2004.

Besides travelling, Dr. Ahmad loves playing golf, tennis and bridge, and is also an
enthusiastic ballroom-dancer.

He has been Chairman of the Audit Committee since his induction in 2015.

He is also Chairman of Prime Bank Securities Limited and Director of PBL Finance
(Hong Kong) Limited, wholly owned subsidiaries of Prime Bank.

He is also a member of the Risk Management Committee (RMC) of the Board of

Directors.

24 PRIME BANK
 Mr. G.M. Khurshid Alam has been an Independent Director of the Bank with
effect from April 2015.

Mr. Alam is currently serving as a Director with Policy Research Institute (PRI),
a leading policy and economic research think-tank of Bangladesh. Prior to that
he served for 17 years with the World Bank as Senior Private Sector Development
Specialist in its South Asia Private Sector and Finance (SASFP) Department from
where he retired in August 2012.

Mr. Alam started his professional career entering Government services in 1981 as
a member of the Bangladesh Civil Service (Admin) cadre. He served in different
positions both in the field administration, Ministry of Finance and Bangladesh
Biman before joining the World Bank in 1995.

Mr. Khurshid Alam is a PhD in Economics from Boston University, USA. He is

Dr. G.M. Khurshid Alam married and has three children.

Chairman, Risk Management Committee He is currently Chairman of Risk Management Committee, member of the Audit
Committee of the Board, Director of Prime Bank Investment Limited (PBIL), and
PBL Exchange (UK) Limited - subsidiary of Prime Bank.

Quazi Sirazul Islam is a Sponsor Director & former Chairman of the Board of
Directors.

An elected Member of Parliament in 1996 and 2001, Mr. Islam is the Managing
Director of renowned jewelry house, Amin Jewelers Limited.

He is the Chief Advisor of Sonar Bangla Insurance Limited, Member of Gulshan

Club Limited and Chairman of the City Hospital (Burn Hospital), the only Private
Sector Hospital of such kind in Bangladesh.

A philanthropist by nature, Mr. Islam was awarded Kabi Jasimuddin Gold Medal,
Maulana Akram Khan Gold Medal, Sufi Motahar Hossain Gold Medal and Atish
Dipankar Gold Medal for his contribution in the education and social welfare
sectors. He was also awarded MJF (Melvin Jones Fellow) Medal by the Lions
International Foundation for his contribution to the Society.
Quazi Sirazul Islam Mr. Islam is immediate past Chairman of Bangladesh Jewelry Association and is a
Director life member of Red Crescent Society, Bangladesh, and Member Trustee, People’s
University of Bangladesh.

He is also member of Gulshan Society, Gulshan Club and Gulshan North Club
Limited.

Mr. Islam is currently member of the Executive Committee of the Board.

PRIME BANK 25
ANNUAL REPORT 2018

Mr. Md. Nader Khan is a Sponsor Director and former Chairman of the Board of
Prime Bank Limited. He is an entrepreneur and has the credentials of setting up
many prestigious commercial establishments in different sectors. Currently, he is
associated with the following business concerns in the capacity of:

Chairman:

Artisan Ceramics Ltd.

CIDER Education Services Ltd.

Managing Director:

Pedrollo nk Limited

Halda Valley Tea Co. Ltd.

Halda Fisheries Ltd.

Md. Nader Khan
PNL Holdings Ltd.
Director
Director:

National Life Insurance Co. Ltd.

Hill Plantation Ltd.

The Consolidated Tea and Lands Company (BD) Ltd.

Baraoora (Sylhet) Tea Company Ltd

Consolidated Tea and Plantation Ltd.

One of his business concerns, Pedrollo nk Limited is the market leader in the sales
and distribution of famous ‘PEDROLLO’ brand water pumps from Italy since 1985.

In 2010, Mr. Khan received Prime Ministers award for Tree Plantation while in
2018 he received another award from the PM for highest Tea production (3,500 Kg)
per hectare at the Halda Valley Tea Company Ltd. as against average production
of 1,500 Kg/hectare.

Mr. Khan is a philanthropist and involved in various CSR activities. He is the

Chairman of Lion Mukhlesur Rahman Foundation, Zero Club Foot Project,
Founder of Cider International School, Ex- Governor (2000- 2001) of Lions Club
International- District 315 B4 Bangladesh to mention a few.

He is a Trustee Member of ESTCDT (Education, Science, Technology and

Cultural Development Trust) of IUB (Independent University, Bangladesh) & CIU
(Chittagong Independent University) and Chairman, Finance Committee of CIU.

Mrs. Marina Yasmin Chowdhury is a Sponsor Director and former Vice

Chairperson of Prime Bank Limited. She is currently the Vice Chairperson of East
Coast Group (ECG), a conglomerate focused on Fuel & Energy Sector for more
than three decades.

She is also the Chairperson of Clean Fuel Filling Station Limited and Parkesine
Products Limited, subsidiaries of East Coast Group.

Mrs. Chowdhury is former director of Green Delta Insurance Company Limited,

one of the leading general insurance companies of Bangladesh.

Outside the business, Mrs. Marina Y. Chowdhury is actively engaged in

philanthropic activities conducted through East Coast Group Foundation. She also
takes keen personal interest in philanthropic and charitable causes like Health
and Education for the underprivileged.
Marina Yasmin Chowdhury In her leisure time she enjoys preparing culinary dishes for her family members.
Director

26 PRIME BANK
 A successful businessman, Mr. Md. Shahadat Hossain is a Sponsor Director of
Prime Bank Limited. He is also past Vice Chairman of the Board of Directors.

His business entity consists of VIP Shahadat Poultry & Hatchery, VIP Shahadat
Cold Storage and Rangpur Agro Industries.

An active social worker, Mr. Hossain is associated with different social welfare
organizations dedicated to the services of general masses.

Md. Shahadat Hossain

Director

Mrs. Nasim Anwar Hossain, a sponsor Director, is former Vice Chairperson of the
Board of Directors. She is currently a Member of the Executive Committee of the
Board as well.

Mrs. Hossain is a Masters in Political Science from Dhaka University.

She is a successful business personality and Director of the following Companies

Prime Cement Ltd.

Lubricants Asia Ltd.

Bengal Tiger Cement Industries Limited.

She is member of the Board of PBL Finance (Hong Kong) Limited - subsidiary of
Prime Bank.

Mrs. Hossain is an active social worker and takes keen interest in different
Nasim Anwar Hossain benevolent and philanthropic activities.
Director

Mrs. Salma Huq is a Sponsor Directors and former Chairperson of the Executive
Committee of Prime Bank Ltd. She is a Director of GQ Group since 1986 engaged
in manufacturing pen, disposable plastic wares, pp woven sacks, mosquito coils
and snack foods. GQ Group is also one of the sponsors of:

Prime Insurance Co Ltd.

Prime Finance & Investment Ltd.

PFI Securities Ltd. and

Prime Capital Management Ltd.

Mrs. Salma Huq is actively engaged in philanthropic activities like providing

scholarship to needy students and arranging medical treatment for the poor.

She is one of the founders of Qazi Saleema Huq Women’s College and Qazi Saleema
Salma Huq Huq Girls’ High School.

Director

PRIME BANK 27
ANNUAL REPORT 2018

Mr. Nafis Sikder, Director is the Managing Director of renowned Palmal Group
founded by his late father, Engr. Nurul Haque Sikder, a prominent business
personality of the early eighties.

Mr. Nafis after completion of ‘O’ and ‘A’ level went to Washington University, Saint
Louis, Missouri, USA and obtained BS in Business Administration with distinction.

With his ingenuity and expertise in operations, strategic management & marketing
skills, expanded the Group’s business many folds in all spheres of RMG business.
The group at present is the most prolific and trusted suppliers of Apparels to some
of the reputed North American, Australian and European buyers.

Mr. Nafis Sikder is an avid philanthropist and actively contributes in the promotion and
expansion of educational institutes through establishing new Schools and Colleges.

He is also associated with numerous socio welfare and charitable organizations

Nafis Sikder actively supporting the causes of Health Care and poverty alleviation.
Director

Mr. Waheed Murad Jamil has been appointed Director of the Prime Bank Ltd.
with effect from 28.09.2015 to represent M/s. MAWSONS Ltd, a business concern
owned by his family members. An emerging business personality, Mr. Jamil is a
business graduate and current Director of Primeasia University, Prime Islami Life
Insurance Ltd. Fareast Islami Securities Ltd. and Managing Director of Everest
Homes Ltd. and Nowhata Green Bricks Limited.

Mr. Jamil is a member of the Executive Committee of the Board of Prime Bank
Limited.

Waheed Murad Jamil

Director

Effective December 10, 2015 Mr. Tarique Ekramul Haque has been appointed
Director of Prime Bank.

Mr. Tarique Ekramul Haque, Chairman and Director of Bangla Trac Limited,
completed his graduation degree (BA Honors in Economics) from University of
Manchester, United Kingdom in 2001. Afterwards, he obtained Post graduate
degree (MSc in Accounting & Finance) from London School of Economics, U.K.
in the year 2003.

Mr. Tarique E Haque started his career in 2001 in Goldman Sachs International,
London, UK as a Financial Analyst. In 2004, upon completion of his master’s in
accounting and Finance from the London School of Economics, he returned to
Bangladesh to join his family in establishing Bangla Trac Limited (Bangla CAT) -
the Dealer for Caterpillar Inc. (USA) products in Bangladesh. Today, Bangla CAT
is the market leader for electric power solutions and construction machineries in
Tarique Ekramul Haque
Bangladesh. In 2008, he led the establishment of Bangla Trac Communications
Director Limited - an International Gateway Operator. In 2010, he led the establishment
of Acorn Infrastructure Services Limited – a power plant based in Chittagong,
Bangla Trac Power Unit-1, power plant in Daudkandi, & Bangla Trac Power Unit-2,
power plant in Jashore established in 2018. In 2016 he also led the establishment
of Tiffin Box Limited’ the exclusive franchisee for Burger King quick service
restaurants in Bangladesh.

Mr. Tarique E Haque is currently a member of the Executive Committee of the Board.

28 PRIME BANK
 Mr. Mohammad Mushtaque Ahmed Tanvir (Titash), representing Uniglory Cycle
Industries Limited, was appointed Member of the Board of Prime Bank in the
433rd Board Meeting held on 13.05.2015.

Mr. Tanvir is an Architect from BUET. After graduating in 1994, he started business
career in his own discipline wherein he practiced for 6 years. Subsequently, he
joined Uniglory Cycle Components Limited - a sister concern of the Meghna
Group as the Managing Director.

Mr. Tanvir became the Chief Executive officer (CEO) of the Transworld Bicycle
Co. Ltd another Unit of the same Group wherein he was largely responsible for
planning, programming, designing and managing the 100% export oriented
industry. Within a short span of time, Mr. Tanvir became the Managing Director
of Uniglory Paper & Packaging Ltd and director of some of the industries under
the Group.
Mohammad Mushtaque Ahmed
Tanvir (Titash) Finally he became the Executive Director of Uniglory Cycle Industries Limited,
the biggest unit of the Group. During his tenure in various capacities, he made
Director
himself a symbol of innovation, persistence and entrepreneurship for the Group.

Mr. Tanvir is a sportsman having deep attachment for playing and managing
Basket Ball & Golf. He is also associated with a number of organizations like
Cadet College Club Ltd, Gulshan Youth Club, Bogra Golf Club, Mirzapur Ex. Cadet
Association. He was also General Secretary of Athletic Club of EUCSU in BUET.

Mr. Tanvir is a widely traveled person and led a number of sports teams locally
and regionally.

Mr. M. Farhad Hussain FCA has been an Independent Director of the Bank with
effect from April 2015.

Managing Partner of M/s Hussain Farhad & Co., Chartered Accountancy Firm,
Mr. Hussain is a fellow member of the Institute of Chartered Accountants of
Bangladesh with thirty eight years of experience and holding in key positions of
Finance and Accounts with multidisciplinary business organizations at home and
abroad.

Mr. M. Farhad Hussain FCA is a council member and former President of The
Institute of Chartered Accountants of Bangladesh (2007). He is also Technical
Advisor of South Asian Federation of Accountants (SAFA). In addition, Mr. Hussain
is/was associated with the following organizations in different capacities:

Director
M. Farhad Hussain FCA • Bay Asset Management Ltd.
Independent Director • Independent Director of Matin Spinning Mills Ltd and Al-Haj Textile Mills Ltd.
Former Director
• Shadharan Bima Corporation
• Dhaka Stock Exchange (DSE)
• Agrani Bank Limited.
• Dhaka WASA
Past Member of the Boards of:
• South Asian Federation of Accountants (SAFA)
• Confederation of Asia Pacific Accountants (CAPA)
• Former Advisor of Bangladesh Securities and Exchange Commission
• Financial Consultant of Oriental Bank Ltd.

Mr. Hussain is currently member of the Audit Committee and Risk Management
Committee of the Prime Bank , member of the Board of PBL Exchange Singapore
and Chairman, Prime Bank Investment Limited (PBIL), subsidiaries of the Bank.

PRIME BANK 29
ANNUAL REPORT 2018

Prof. Dr. M. Shamim Z. Bosunia has been appointed an Independent Director of

Prime Bank Limited in the 482nd Board Meeting of the Bank on 30th August 2018.

Prof. Bosunia is a renowned personality and a leading Civil Engineer of the

country by profession and whose expertise and advisory services have been
pressed for implementation into various mega projects of the country.

He is an ex. professor of BUET and past President of The Institution of Engineers

Bangladesh (IEB).

Currently, Prof. Bosunia is associated with the following organizations:

• Emeritus Professor, Dept. of Civil Engineering: University of Asia Pacific

(UAP) Dhaka;

• Member, Panel of Experts: PADMA Multi-Purpose Bridge Project and

Karnaphuli River Tunnel Project;
Prof. Dr. M. Shamim Z. Bosunia
• Chairman, Board of Rajshahi WASA;
Independent Director
• President, Bangladesh Association of Consulting Engineers. (BACE)

• Managing Director & Chairman, Abode of Consultants (Pvt.) Limited

Prof. Bosunia is a widely travelled person and led a number of Team/Group

responsible for implementation of various mega projects/schemes sponsored by
UNDP/World Bank/GOB.

Mr. Rahel Ahmed was appointed Managing Director & CEO of Prime Bank Limited
on December 14, 2017. Prior to this, he was the DMD and Chief Business Officer
of the bank overseeing all businesses of large corporate and institutional clients
since 2015.

Mr. Ahmed is an international banker having more than two decades of extensive
experience in Wholesale Banking. He has held senior leadership position with the
two largest multinational Banks in Bangladesh, ANZ Grindlays Bank and Standard
Chartered Bank prior to his relocation to Dubai, UAE where he worked for 7 years
for two of the largest regional Banks; Emirates NBD Banking Group and First Gulf
Bank in senior roles including in Islamic Banking arena. He played a leading
role in ‘Business Model Restructuring and Centralization process’ of Prime Bank
during last 3 years.

Mr. Ahmed holds an MBA in International Business from Maastricht School

Rahel Ahmed
of Business, Netherlands. He is also a certified “Credit Professional” from the
Managing Director & CEO world reputed Omega, UK and holds Certificate of Recognition in International
Trade Skill Assessment Program jointly conducted by Standard Chartered Group
London and ICC. He was also accorded ‘Outstanding Employee and CEO’s award’
in Standard Chartered Bank and First Gulf Bank for his outstanding performance
in different times.

30 PRIME BANK
 SENIOR
MANAGEMENT

From the Left

M Habibur Rahman Chowdhury Rahel Ahmed Md. Golam Rabbani Md. Touhidul Alam Khan Syed Faridul Islam
Deputy Managing Director & CFO Managing Director Deputy Managing Director Deputy Managing Director Deputy Managing Director
& CEO

PRIME BANK 31
 ANNUAL REPORT 2018

SENIOR
MANAGEMENT
TEAM (SMT)

From the Left

Md. Golam Rabbani Sk. Matiur Rahman Abdul Halim Syed Faridul Islam
Deputy Managing Director Senior Executive Vice President Senior Executive Vice President Deputy Managing Director

Rahel Ahmed M Habibur Rahman Chowdhury Md. Touhidul Alam Khan Md. Ziaur Rahman
Managing Director & CEO Deputy Managing Director & CFO Deputy Managing Director Senior Executive Vice President

32 PRIME BANK
EXECUTIVE RISK
MANAGEMENT
COMMITTEE

Standing (from left)

Md. Abul Kashem Md. Shahadat Hossain ANM Mahfuz Abdul Halim
Executive Vice President Senior Executive Vice President Senior Executive Vice President Senior Executive Vice President

Mir Md. Hassanul Zahed Mohammad Jashim Uddin Md. Feroz Al Azad
Executive Vice President Senior Executive Vice President Executive Vice President

Sitting (from left)

Mohd. Rafat Ullah Khan Syed Faridul Islam M Habibur Rahman Chowdhury Md. Iqbal Hossain
Senior Executive Vice President Deputy Managing Director Deputy Managing Director & CFO Senior Executive Vice President

Sk. Matiur Rahman

Senior Executive Vice President

PRIME BANK 33
 ANNUAL REPORT 2018

ASSET LIABILITY
COMMITTEE

Standing (from left)

Shams Abdullah Muhaimin ANM Mahfuz Rahel Ahmed Abu Zafar Md. Sheikhul Islam
Senior Executive Vice President Senior Executive Vice President Managing Director & CEO Executive Vice President

Syed Faridul Islam

Deputy Managing Director

Sitting (from left)

Md. Touhidul Alam Khan M Habibur Rahman Chowdhury Sk. Matiur Rahman Md. Feroz Al Azad
Deputy Managing Director Deputy Managing Director & CFO Senior Executive Vice President Executive Vice President

34 PRIME BANK
SUSTAINABLE
FINANCE
COMMITTEE

Standing (from left)

Md. Moniruzzaman Md. Iqbal Hossain Mir Md. Hassanul Zahed Md. Amir Hossain Majumder Md. Feroz Al Azad
Vice President Senior Executive Vice President Executive Vice President Executive Vice President Executive Vice President

Md. Abul Kashem Md Asif Bin Idrish Mohammad Nazmul Karim Chowdhury
Executive Vice President Senior Vice President Executive Vice President

Sitting (from left)

Mohd. Rafat Ullah Khan Md. Touhidul Alam Khan M Habibur Rahman Chowdhury Syed Faridul Islam
Senior Executive Vice President Deputy Managing Director Deputy Managing Director & CFO Deputy Managing Director

ANM Mahfuz Mohammad Jashim Uddin

Senior Executive Vice President Senior Executive Vice President

PRIME BANK 35
ANNUAL REPORT 2018

LIST OF EXECUTIVES

Managing Director & Additional Managing Deputy Managing

CEO Director Director
Rahel Ahmed Md. Tabarak Hossain Bhuiyan Md. Golam Rabbani
Md. Touhidul Alam Khan
Syed Faridul Islam
M Habibur Rahman Chowdhury

Senior Executive Vice

President
Mohammed Ehsan Habib Mohammad Jashim Uddin Abdul Halim
Md. Ezaz Hossain Md. Shahadat Hossain Md. Anwarul Islam
Abu Ashraf Siddiquee Ziaur Rahman Faruk Ahammad
Sk. Matiur Rahman Mohd. Rafat Ullah Khan Abu Nayeem Mohmmad Mahfuz
Md. Iqbal Hossain Shams Abdullah Muhaimin Syed Tofail Ali

Executive Vice
President
Syed Sahadat Hossain Syed Md. Nazmul Huque Abu Zafar Md. Sheikhul Islam
Imtiaz Ahamed Bhuiyan Muhammad Anowarul Islam Md. Tarique Parvez Jewel
Md. Amzad Hossain Mir Md. Hassanul Zahed Md. Feroz Al Azad
Md. Amir Hossain Majumder Mohammad Nazmul Karim Chowdhury Mohammad Zubayer Ershad
Md. Abul Kashem

Senior Vice
President
Md. Moniruzzaman Md. Abdul Quddus Shaila Abedin
Md. Moniruzzaman Tofail Ahmed Mohammad Firoz Alam
Md. Hafizur Rahman Mallick Mohammad Masud Shahjahan Shahbaj Talat
Mohd. Afzal Hossain Saif-Ul-Alam Md. Al-Amin Mahbuba Ashraf
Md. Ramiz Uddin Miah Tanvir Ahmed Mahboob Muhammad Anuarul Kabir
Abu Taher Md. Zakaria Nurul Momen Khan Mohammad Nur Nobi
Md. Salah Uddin Mamur Ahmed
Muhammad Muzahid Hossain Md. Asif Bin Idrish

Vice President

Mollah Farid Ahmed Debashis Chakraborty Muhammad Rashed Iqbal

Md. Yusuf Ali Md. Nazrul Islam Md. Moniruzzaman
Kazi Azaharul Islam Md. Mozahid Kabir Ahmed Masudul Goni
Md. Jafar Hasan Md. Khaled Anwar Shahana Pervin
Md. Showkat Kamal Sarker Mohammad Ashrafuzzaman Asif Ibne Sattar
A K M Enamul Haque Md. Arman Uddin Bhuiyan Rahat Masood
Harunur Rashid Chowdhury Hasan-Ul-Huq Muhammad Ebnul Alam Palash
S M Khurshed Alam Farid Ahmed Md. Nadeem
Kazi Moinul Haque Sharmin Akther Mohammad Farhan Adel
Dorothy Sultana Mohammad Khurshid Alam Syed Hasnain Mamun
A K M Abdul Alim Ibne Khabir Md. Saidur Rahman Dipu Nazrul Islam

36 PRIME BANK
Vice President

Mohammad Aminul Islam Mohammad Aminur Rahman Tanvir Ahmed Siddiqui

Morshed Ahammed Mohammed Samiullah Mohammad Reaz Ahmad
Mohammad Anisur Rahman Nighat Mumtaz Bishanat Sharder
Md. Rashaduzzaman Mohammad Zubaer Hossain

Senior Assistant
Vice President
Md. Alamgir Md. Mahabub Ujjaman Sirajul Hoque
Md. Ariful Hoque Mohammad Afzalur Rahman Khan Md. Hasan Jamal
Md. Rabiul Islam Mohammad Noor-E-Alam Siddique Mohammad Badrul Anam
Md. Rezwan Uddin Swhel Ashis Bhattacharjee Nahida Sultana
Md. Nazrul Islam S M Parvez Kabir Shubir Kumar Barua
Mohammad Shawkat Ali Md. Abdur Raafi Iftikhar Ahmed Chowdhury
Nazneen Akhter A T M Ahsan Takiyan Chowdhury
Shamima Pervin Mohammad Abu Ali A. S. M. Hafizur Rahman
Florence Sutopa Majumder Md. Taj Uddin Ahmed Md. Mir Murad Ali
Syed Delwar Hossain Giash Uddin Ahmed Muntasir Quium Khan
Md. Kamrul Islam Md. Ruhul Quisth M. Riyadh Farhan
Kamrun Nahar S M Shahidul Islam Kh. Md. Sufian Raji
Md. Mainul Kabir Mohammad Mamunur Rashid Abul Kalam Azad
Mohammad Raihan Shaheed Md. Emdad Hossain Mohammad Mamunur Rashid
Mohammad Jahangir Bhuiyan Masud Uddin Ahmed Muhammed Mustafizur Rahman
Md. Hashmot Ali Mollah Mohammad Kamal Uddin Abdullah Al Mehdi
Md. Moinul Hasan Farjana Yeasmin Saleh Md. Mahfuzul Hassan
Shah Mohammad Mohsin Md. Fazle Rabby A. H. M. Kamrul Monem
A K M Khairul Basher Mohammed Saiful Hossain Md. Istiaq Khaled
Md. Mobinul Haque Md. Abu Sayeed Md. Azad Hossain
Mohammad Sazzad Hossain K. M. Sakhawat Hossain Kazi Shafiul Azam
Md. Aminur Rahman Akanda Mohammad Mamunur Rahman Mohammed Masud Rayhan
Md. Rabiul Ahasan Muhammad Anisur Rahman Bhuyan

Assistant Vice
President
Md. Saidur Rahman Md. Abul Hasanat A K M Humyun Kabir
Mohammad Abdus Sattar Md. Rezaul Karim A K M Ziaul Latif
Shamina Sultana Mesbahuddin Ahmed Sharmin Rahman
Md. Emdadul Haque Md. Adil Uddin Md. Nasim Goni Chowdhury
Md. Obaidul Hoque Bangajit Basak Md. Monirul Haque Bhuiyan
Md. Shamsul Hoque Mohammad Rafiqul Islam Md. Ohiduzzaman
Tareq Bin Mamun Md. Mahfuzur Rahman Shariful Ahsan
Sayeda Rehana Ferdousi Md. Shazzad Hossain Rumman Alam Chowdhury
Md. Rejaul Karim Mohsinul Hoq Sumon Mohammad Hanif
Md. Zakir Hossain Md. Azharul Islam Md. Masud Alam
Noor Mohammad Howlader Md. Rafiqul Islam Rajib Dey
Kazi Foorkan Uddin Mollah Asaduzzaman Mohammad Nazimuddin Sheikh
Md. Nizam Uddin Md. Saiful Hasan Faria Azad Sheme
Md. Azmal Huda Md. Asaduzzaman Pijuce Kumar Roy

PRIME BANK 37
ANNUAL REPORT 2018

Assistant Vice
President
Shakil Ahmed Khan Md. Shahtab Rizvi Md. Sariful Islam
Hamida Khanam Sharifuzzaman Chowdhury Muhammad Mahbub Alam Molla
Shahnaz Akhter Suraiya Rahman Saifuddin Ahmed
Taksima Sultana Muhammad Ariful Islam Tahmina Akter
Md. Abdul Halim Md. Rehan Uddin Mohammad Ansarul Karim Shahed
Shahjahan Kabir Tawhida Choton Sharmin Jahan Khan
Mohammad Roichal Hoque Asadul Kabir Md. Abdul Aziz
Mohammad Sazzad Hossain Afsana Kishwar Md. Mamun Sikder
Md. Afif Bin Haque Shaikat Ibrahim Ali A. S. M. Zahidul Islam
Farzana Mahzabeen Sabina Easmin Azizul Hoq
Shahid Uddin Ahmed Md. Solaiman-Al-Raji Md. Ferdous Hossain Polash
Rupam Chowdhury Md. Rafiqul Islam Sherajus Salekin
Nawadir Ali Khan Sarker Muhammad Ahmed Muneer Muhammad Moniruzzaman
Md. Ashadul Latif Mohammad Anisuzzaman S. Md. Zaved Chowdhury
Mohammad Shakhawat Hossain Nazia Jihan Tania Md. Joynal Abedin
Al Meraz Ahmed Kazi Muhammad Rezaul Karim Muhammad Abu Zafor
Rony Chanddro Podder Mohammad Shihab Hayat Rizvi Md. Ershad Ali
Md. Rakibuzzaman Rojina Parvin Salahuddin Ahmed
Ahmedur Rahman Md. Ziaul Hasan Sarwat Jahan Kabir
B M Touhiduzzaman Sajib Sarkar Abu Mohammad Tariqul Ismail
Md. Burhanul Hassan Mohammad Shahadat Hossain Md. Younus
Mohammad Mahfuzur Rahman S. M. Sohel Jamil M. M. Mahbub Hasan
Mohammad Tanveer Haider Imon Sattya Ranjan Chakraborty

38 PRIME BANK
MESSAGE FROM THE CHAIRMAN AND
MANAGING DIRECTOR & CEO

From the office of the Chairman

Managing Director & CEO’s Review

ANNUAL REPORT 2018

FROM THE OFFICE OF

THE CHAIRMAN

Dear Stakeholders, Global Economy recovery, although they remain exposed

to volatile prices.
The year 2018, as we have experienced, Global economic growth remained
was a challenging year for global steady at 3.1 per cent in 2018, as a Economic activity at the global level is
and domestic market, offering both fiscally induced acceleration in the expected to expand at a solid pace of 3
opportunity to thrive and fear to confront United States of America offset slower per cent in 2019, but there are increasing
instability. The prospect of protectionist growth in some other large economies. signs that growth may have peaked. The
trade policies, particularly in the United Developed economies expanded at a growth in global industrial production
States with President Trump’s new steady pace of 2.2 per cent, and growth and merchandise trade volumes has been
trade strategy, US-China trade war, fast- rates in many countries have risen close tapering since the beginning of 2018,
evolving new technologies reshaping the to their potential, while unemployment especially in trade-intensive capital and
trade landscape, and uncertainty about rates in several developed economies intermediate goods sectors. Leading
the UK’s future trade relationships with have dropped to historical lows. Among indicators point to some softening in
the EU and beyond suggest a global trade the developing economies, the regions economic momentum in many countries in
system that is facing more uncertainty of East and South Asia remain on a 2019, amid escalating trade disputes, risks
than ever before. However, Bangladesh relatively strong growth trajectory, of financial stress and volatility, and an
has been able to continue its sustained expanding by 5.8 per cent and 5.6 undercurrent of geopolitical tensions. At the
growth amid all sorts of uncertainties per cent, respectively in 2018. Many same time, several developed economies
with its resilient mindset and everlasting commodity exporting countries, notably are facing capacity constraints, which may
aspiration. fuel exporters, are continuing a gradual weigh on growth in the short term.

40 PRIME BANK
Bangladesh’s progressing economy technology adaptation, capacity
build-up, corporate governance, and
The Bangladesh economy has been able
improved regulatory and supervisory
to maintain sustained economic growth
in the year 2018 due to many reasons.
environment. The Foreign Exchange CRAR
reserve remained sound and hit around 2018 2017 3.03%
The country’s aim tomake substantial
progress in growing its economy, lifting
USD 32 billion in December [Link] 17.04% 14.01%
deposits and advances, both observed
people out of poverty, and improving
a rise of 9.05 percent and 12.68 percent
the lives of its people was well on target
respectively. However, classified loan
last year. Employment has increased
increased to 10.29 percent of total
specially in IT sector, more people have
outstanding amount in December 2018
access to health and education, and
from 9.31 percent in the same period NPAT
basic infrastructure has also improved. 2018 2017 1,129
of previous year. The private sector
GDP growth for FY2017-18 reached 7.86
credit recorded 13.33 percent growth in 2,188 1,059
percent which is significantly higher
BDT in million
December 2018 which was significantly
than the growth of 7.28 percent in the
lower than 18.00 percent of the same
preceding fiscal year. Among the broad
month of the previous year. Among
sectors of GDP, the contribution of
the positives, there is signal of growth
agriculture and service sector to GDP
slid down by 0.51 percentage point to
of industrial sector in the country.
Bangladesh Bank data shows that
ROE
14.23 percent and by 0.74 percentage 2018 2017 4.36%
disbursement of industrial term loans
point to 52.11 percent which was offset 8.60% 4.24%
increased by 21.22 percent and stood at
by an increased share of industry by
Taka 19111.22 crore and recovery also
1.24 percentage point to 33.66 percent
increased by 5.57 percent during the
in relation to the preceding year.
first quarter of FY19 as compared to the
Investment in FY2017-18 increased
corresponding period of the previous
to 31.23 percent of GDP, up by 0.72
fiscal year. However, total liquid assets
percentage point from the preceding
of the scheduled banks decreased by
fiscal year. As per Bangladesh Bank data,
3.44 percent and stood at Taka 255169.52
rate of inflation on the basis of consumer
crore as of end December, 2018 which
price index was 5.55 in December, 2018,
was Taka 264267.37 crore at the end of
lower than 5.70 in the same period of
June of the same year. Due to political
previous year. With a national strategy
stability and using more of legitimate
focused on manufacturing, dominated
channel by the remitters, inflow of
by the garment industry, the country
remittance witnessed an upward trend
has seen exports soar by an average
last year.
annual rate of 15-17% in recent years;
reaching a record USD36.7 billion as of Safe but Progressive Journey of Prime
June, [Link] sector is on the track to Bank
meet the government’s goal of USD39
2018 was pivotal for Prime Bank, which
billion in [Link] growth enabled
is now engaged in one of the largest
Bangladesh to reach the lower middle-
restructuring processes in its history.
income country status in 2015. In 2018,
Under the new Management the bank
Bangladesh fulfilled all three eligibility
went on a challenging first year, since
criteria for graduation from the UN’s
the bank experienced some structural
Least Developed Countries (LDC) list
reforms like adopting centralized
for the first time and is on pathway for
banking model. The management set
graduation in 2024.
out a new strategic agenda for the bank,
Domestic Banking Scenario: with the customer at its heart, placing it
at the forefront of the industry, and re-
The overall scenario of banking
engaging the clients in the best possible
industry in our country remained
way.
volatile and experienced a moderate
level of resilience round the year The senior management was
2018. Although the industry has lost strengthened with key internal and
little of its momentum due to some external appointments, and plans put
concerns like increasing volume of non in place to achieve successful structural
performing loan (NPL), it has brought reform as well as major initiatives to
several positive changes in terms embrace digital technology, to upgrade
of modernization, quality of assets, our systems architecture in the latest
application of international standards, core banking system, to become

PRIME BANK 41
ANNUAL REPORT 2018

fully cyber ready and improve our • Development of human resource for its officials as well. Apart from
control effectiveness. Prime Bank’s through training program at home cricket, the bank also sponsored Golf
latest and highly sophisticated Core and abroad competition. A three day long “Prime
Banking System (CBS) software now Bank Cup Golf Tournament-2018”at
• Identification of growth driver and
allow customized service offerings to Kurmitola Golf Club was arranged by the
cost optimization.
our valued clients and triggers more bank last year.
innovation in product development • Providing IT security to our Online
Accolades & Recognition
features. customers to safeguard their
transaction from cyber threat In terms of accolades and recognitions,
The Core business was redefined and
once again, the year 2018 has been a
reorganized in preparation for structural • Ensuring highest level of compliance
remarkable year for the Prime Bank.
reform, together with plans to bring its to the regulatory body and
The bank has received Best SME Deal
returns among the market leaders. While transparency to our stakeholders
Award from Asian Development Bank
much is yet to be done, including full- • Introducing tech-savvy products to (ADB), which was awarded at fourth
fledged agent banking, more digitization cope with local and international Annual ADB Trade Finance Program
in the banking model, business trend (TFP) Award-2018 held in Singapore.
restructuring will largely be completed in
• Providing more dynamic and Apart from this prestigious award, the
[Link] should allow the Bank to return
efficient trade and credit related Bank achieved “GOLD RANK” in Asia
into a better shape and accomplish more
services exploiting the benefit of Sustainability Reporting Rating 2018
stable financial performance in coming
centralization by National Centre for Sustainability
years. The year itself saw external
Reporting (NCSR) and Institute of
surprises, including the increase of NPL, CSR Activities
Certified Sustainability Practitioners
different social movements, new entrants Prime Bank has always been exemplary (ICSP), Indonesia. In addition, the Bank
in the industry, Government election and in its endeavors in respect of performing has also been awarded by Citibank
so on. We also faced regulatory pressure Corporate Social Responsibility (CSR) NA, USA with their “2017 Performance
to increase capital levels amid shrinking every year. With no difference the bank Excellence Award”.
interest rates, and the need to improve has extended its benevolent hand in
further our control effectiveness and Note of Appreciation:
numerous occasions throughout last
corporate culture. Notwithstanding such year. For instance, it opened a medical In conclusion, I would like to express my
pressures, I’m pleased with the progress support center and eye camp to provide gratitude to all the relevant stakeholders
that we have made, because it signals of instant free medical services & essential of the bank, including customers,
shiny days ahead. Compared to previous medicine to the devotees attending shareholders, and patrons for putting
year, the quality of our portfolio and at the Ijtema premises. The bank has their trust upon us. I am also grateful
loan loss coverage ratio has improved organized health awareness programs to all the members of board for their
considerably. We also received a vibrant for its Monarch customers in different ceaseless support and guidance to
response from our subsidiaries in this fields, for instance, preventive care make effective decisions to address any
year. for cardiac problems on the occasion challenges we faced during the year. My
Strategic Actions of World Heart Day-2018 and cancer heartiest thanks to the management and
awareness program on a separate employees of the bank for their vigorous
Strategic endeavors are ongoing
occasion. To help the poor & cold-hit effort, commitment and devotion to the
processes to deal with ever-changing
people the bank distributed blankets in bank to make it a success. I believe, 2018
market trends and business demands.
many parts of the country. The Bank also has brought countless opportunities
We always remain proactive to that call;
arranged the tree plantation program to us and our dedication; love for this
otherwise, are well responsive according
on ‘Earth Day’ in bank premises located bank will help us grow even bigger in
to need of our business requirement.
in different places to encourage and coming years. Our continuous journey
Putting our purpose at the heart of
promote the concept of green world. of excellence will not stop if our
our business is critical if we are to be
collaborative effort remains continued.
a truly responsible bank. Our actions With the aim to develop highly
need to match our words. That’s why, we competent cricketers for the future,
believe in continuous market vigilance Prime bank, as part of CSR, sponsored
and improvement for the sake of our Prime Bank Young Tigers National
stakeholders. in addition to contingency School Cricket Tournament, the largest
plans, the management persistently aim cricket competition of the country. More Azam J Chowdhury
to perform some routine tasks which than 11000 students from 554 schools Chairman
include but not limited to: participated in the tournament, which is
being sponsored by Prime Bank for last
• Maintaining quality asset &
3 years. The bank also believes, in order
generating greater value from our
to remain physically and mentally fit,
portfolio
everybody should participate in sports
• Ensuring improvement of service and recreational activities. Therefore, it
quality arranged Prime Bank cricket tournament

42 PRIME BANK
MANAGING DIRECTOR AND
CEO’S REVIEW

“ Prime bank has a solid foundation, a trusted

customer base and a robust balance sheet. We
are well positioned for continued sustainable
growth and ready to take advantage of
promising opportunities that arise in a

”
changing economy

Honorable Shareholders, Respected 2018, it continued to be another year more agile and customer focused
Members of the Board of Directors of growth as well as consolidation. We organization whilst maintaining steady
and my beloved Prime Bank family continually focused on few essential profits. Such performance excellence
members, components of strategic plans and was the result of strategic initiatives
priorities by delivering diversified including effective balance sheet
I am indeed privileged to present
products & services to our customers in management, focus on ‘Current Account
another exceptionally successful year
an effort to treat all fairly and inclusively Savings Account’ (CASA) being low cost
of Prime Bank at the face of many
making it easy for them to find, products liabilities base, quality asset growth and
challenges the industry underwent
that are right for them under any continuous identification of customer
during that period. Although the bank
circumstances. We have continued to needs and gradual improvement of
achieved incredible growth in terms of
transform the Bank to become a safer, customer service.
net operating performance in the year

PRIME BANK 43
ANNUAL REPORT 2018

PBL ended year 2018 with a keen sense trend from 3.92 percent in December Moreover, Bangladesh Bank’s instruction
of focus as the entire organization 2017 to 4.09 percent in December 2018. to reduce the AD ratio in coming days
geared up for what came out to be a However, from the beginning of the 2019, will force the banks to collect more
more challenging year. Working as an the Industry facing a liquidity challenge deposits which lead to higher cost of
integrated team by believing in ‘One and as a result in February 2019 average deposit for overall industry.
Bank, One Team’ mantra, we found call money rate raised to 4.36 percent.
innovative and differentiating ways to
delight our customers, attracting new Performance overview 2018
businesses while strengthening existing Prime Bank has been consistently maintaining its financial performance over the last
relationships. All business segments five years in terms of business volume and profitability. At the end of 2014 total assets
and key branch personnel were most of the Bank was BDT 269,218 million whereas at the end of 2018 it stood at BDT 293,901
effective in providing new levels of high million recording a growth of more than 9 percent. Below table shows the comparative
quality, personalized service. financial information of the bank of last five years.
World Economy
(BDT in million)
World economy is estimated to have
grown by 3.70 percent in 2018, projected Balance sheet 2018 2017 2016 2015 2014
by IMF, which was 3.80 percent in Paid-up capital 11,323 10,293 10,293 10,293 10,293
previous year. Global growth is expected
Shareholders’ equity 26,181 24,708 25,285 26,415 24,461
to be slightly decreased in 2019. Although
near-term growth could have surprise Deposits 197,518 199,014 197,934 194,825 204,838
on the upside, the global outlook is still Loans and advances 205,810 198,323 170,212 151,865 147,367
subject to substantial downside risks,
Total assets 293,901 281,275 272,224 267,322 269,218
including the possibility of financial
stress, increased protectionism, rising
geopolitical tensions and ongoing trade In line with the changes in business dynamics and also having the Bank’s transformation
war between China and USA. ongoing during the period, profitability varied in last five years. Net profit of the bank
went up to BDT 2,188 million at the end of 2018 as opposed to BDT 1,059 million of
Bangladesh Economy
previous year. The key reason of that significant rise in Net Profit has been the increase
Bangladesh has continued its journey of net interest income and decrease of requirement of provisions for loans and
towards graduating to Middle Income advances.
country at a rate faster than anticipated
(BDT in million)
with a greater than 6 percent GDP
growth during last consecutive eight Operating performance 2018 2017 2016 2015 2014
years. Keeping pace with recent growth
Net interest income 7,650 4,894 3,313 1,294 2,872
trends in the economy, fiscal year of
2017-18 ended in happy notes with a Operating revenue 12,899 12,148 12,023 12,073 11,906
GDP growth rate of 7.86 percent against Operating expenses 7,180 6,775 6,266 6,166 5,750
a 7.28 percent growth in last fiscal year.
Operating profit 5,719 5,373 5,757 5,906 6,157
The outlook also remains steady for the
ongoing fiscal of 2019. Average inflation Provision for loans and assets 1,782 3,564 3,412 3,154 2,877
looked yet better at 5.54 percent in Profit before tax 3,938 1,809 2,345 2,752 3,280
December 2018, slightly lower compared
Tax expense 1,750 750 150 613 887
to 5.70 percent in December 2017.
Country’s current account balance is Profit after tax 2,188 1,059 2,195 2,139 2,393
under slight pressure caused by growth
in total imports resulting from increased
imports of investment goods and flood Key ratios (%) 2018 2017 2016 2015 2014
related foods. Total import in FY2017-
Cost of deposit 4.72 4.46 4.94 6.64 7.36
18 was USD 54.46 billion as against total
export of USD 36.67 billion in the same Yield on advance 8.51 7.42 8.45 10.20 12.09
period. Country’s foreign exchange Return on assets (ROA) 0.76 0.38 0.81 0.80 0.91
reserve also reflects robust look with
Return on equity (ROE) 8.60 4.24 8.49 8.41 10.08
USD 32.02 billion at the end of 2018.
Earnings per share (Taka) 1.93 0.94 1.94 1.89 2.11
Banking industry scenario
Dividend (C=cash; B=bonus) 12.50 C 7 C & 10 B 16 C 15 C 15 C
During 2018, industry held sufficient
liquidity position and as such inter-bank Non-performing loans ratio 6.16 5.45 5.96 7.82 7.61
call money rate was stable. The call Capital to risk weighted asset
17.04 14.01 12.45 12.74 12.71
money rate was slightly in upward ratio (CRAR)

44 PRIME BANK
Accounting policies and estimation
and changes thereon

Bank’s financial statements for the year

Shareholders’ 26,181 24,708 6%
Equity 2018 2017 Growth (%)
under review has been prepared as per BDT in Million
International Accounting Standards
(IAS) and International Financial
Reporting Standards (IFRS) as applicable Net profit after
2,188 1,059 107%
in Bangladesh and circulars/guidelines tax 2018 2017 Growth (%)
of Bangladesh Bank and other regulatory BDT in Million

authority as applicable for banks.

Accounting policies and estimation are
consistently followed except otherwise
1.93 0.94 107%
EPS
disclosed in the financial statements. 2018 2017 Growth (%)
Adequate disclosures is being made for
any changes in accounting policies and
–– Under Basel III regime banks need over the years to come. MSME Banking
estimation including the effect of such
to maintain additional buffer capital would strengthening further their
changes. However, no such material
of 2.50 percent from 2019. This foothold and continue expanding the
changes of accounting policies and
may increase pressure to banking horizon to capture more of market
estimation occurred during the year of
industry to maintain additional pie. Within Wholesale Banking arms,
reporting.
capital requirement in coming years Corporate and Institutional Banking
Peer industry financial analysis which may also limit the ability of would continue to consolidate it’s strong
Bank regularly reviews the activities, banking industry to further lending. position by undertaking profitable only
financial performance, financial selective transactions and cementing
Future planning & forecast
position and cash flows of peer further the partnership with the
Although Prime Bank Limited longstanding proven clients. They
industry competitor based on available
is maintaining its performance would focus more on underwriting large
information in public. It helps to
consistently during last many years, we transactions and thereafter distributing
formulate strategic planning and
still believe we have to go a long way in them to diversify risk by leveraging on
renewed focus for coming days. In line
terms of achieving service excellence our Syndication and Structured Finance
with reviewing peer group data PBL
and best corporate practices. Our arms. Trade and more specifically Export
also regularly analyzes its SWOT to
presence in the market is growing based clients would remain key growth
maximize the outcome in a very stiff and
progressively and we have improved area for both them and Commercial
competitive business environment.
our presence in all areas of operations. Banking divisions. Commercial Banking
Risk and concerns for the banking We have professionals with profound would have key focus to churn more of
industry managerial talents and perhaps most the relationships given the mid market
Although the year 2019 expected to be importantly, we have a hard earned spectrum they deal in. Transaction
shinning for banking industry under reputation as one of the top service Banking team would continue to foster
regime of new government, but some providers in the industry. their product and sales support towards
uncertainty still remaining as follows; PBL is committed to achieve performance the Wholesale Bank relationship teams
–– From the beginning of the 2019, the excellence through intense focus on all towards building the scale and ensure
Industry facing a liquidity challenge. segments of business, strong budgetary utilization. Moreover, they would be
Moreover, Bangladesh Bank’s control process and an effective system focusing more on product solutions to
decision for reduction of AD ratio of internal control. Management is continue fetching institutional deposits
will impact its lending decision and confident that, PBL will be able to deliver namely CASA.
increase of cost of deposit; satisfactory result to its stakeholders in
the coming year. Forthcoming years of “PBL corporate positioning,
–– Implementation of various mega
projects are in the process. Thus, to
PBL would be all about reengineering ‘for a better future’ is
further the business and operational
meet up the expenditure, government brought to life through
processes to make it more digitally
may borrow fund from banking
driven and be convenient for the clients personalized service
sector which may affect some degree
of the Bank. Consumer Banking would delivered with disciplined
of the liquidity scenario;
be focusing more on their service quality efficacy and customer-
–– Inflow of wage earners remittance is improvement by introducing automated
not up to the mark and there is also oriented efficiency, because
processes and channels to target the
risk of further declining in remittance ‘Generation Z’ more specifically. It’s a our valued customers are
growth; journey and that would have to continue the bank’s greatest asset.”

PRIME BANK 45
ANNUAL REPORT 2018

Outlook 2019

We set our strategy giving highest 8.60% 4.24% 4.36%

priority on sustainable business growth ROE
and in accordance with that, we believe 2018 2017 Change
2019 shall be a year of moderate growth
and consolidation again for the Bank.
Keeping bank’s strategy in mind along
8.51% 7.42% 1.09%
with the economic scenario we sorted
YOA
2018 2017 Change
our priority and initiatives for the
coming year, which I’d like to put down
here as under: 17.04% 14.01% 3.03%
–– We presume that money market CRAR
2018 2017 Change
will be in a challenging state in the
coming year and interest rates may
climb up as function of that. To meet environment green and to safeguard Finally, I take this opportunity to thank
this challenge, we need to manage the planet from warming and towards all of our customers for their cooperation
liquidity effectively and rationalize achievement of the broader objectives and support and the employees for
pricing of the Loan Portfolio to of Sustainable Development Goals their enthusiasm & tireless effort. I am
maintain the NIM; (SDGs) of the Country; indebted to the board of directors of the
–– Recovery and managing NPL is bank for their forward looking views
Acknowledgements
one of the critical success factor. and guidance. I express my appreciation
In closing, I would like to reiterate and thanks to all the regulators for
For which we set increasing focus
that, together, we will continue to take their continuous help and assistance,
on strengthening recovery and
the bank forward and deliver more especially, Bangladesh Bank has always
managing NPLs effectively.
value to those we serve and to our been forthcoming in their valuable
–– Focus on fee income must continue; shareholders. We are aware that, we face guidelines and co-operation from
–– We believe that innovation and both opportunities and challenges in time to time. I look forward to another
diversification of products and the year ahead, we have the confidence success story in 2019.
services is another key factor to of knowing that the bank we so proudly
Thank you all for your continued trust in
ensure continuous growth and serve, not only embraces the future, but
Prime Bank.
sustainability and our concentrated is defining what that future will be.
strives will continue in this regard;
“As the custodian of the
–– Increased focus on retail & SME and
OBU business;
enterprise, we are committed

–– Focus on Green Banking and

to safeguard and add further
Rahel Ahmed
Eco-friendly Financing as a part interest of the bank’s owners- Managing Director & CEO
of the commitment to keep the our shareholders….”

46 PRIME BANK
CORPORATE GOVERNANCE

Directors Report

Corporate Governance Report

Certificate on Corporate Governance

BSEC Checklist on Corporate Governance

Statement of the Board of Directors

Statement of the Audit Committee

CEO & CFO’s Declaration to the Board

Report on Activities of the Audit Committee

Report on Activities of the Risk Management Committee

CRO’s Report on Risk Management

Ethics & Compliance

ANNUAL REPORT 2018

DIRECTORS’ REPORT
The Board of Directors of Prime Bank Limited has the pleasure of growth in advanced economies is projected to slow from an
presenting Director’s Report, Audited Financial Statements for estimated 2.3 percent in 2018 to 2.0 percent in 2019 and 1.7
the year ended on December 31, 2018 together with Auditors’ percent in 2020.
Report to the Shareholders on the occasion of 24th AGM of
the Bank. A review of the report would reveal satisfactory Bangladesh Economy
performance of the bank in a competitive environment. In Bangladesh reached lower-middle-income status on the
addition, an overview of the global and Bangladesh economy strength of an annual economic growth rate of 6 percent and
during 2018 and outlook for 2019 has been provided as part of above during last five years and more. The consistent growth
humble presentation to our valued shareholders. was achieved mainly by a rise in readymade garment exports,
The Directors’ Report has been prepared in compliance with overseas workers’ remittances, and domestic consumption.
section 184 of the Companies Act 1994, BSEC Notification, the Economic growth in 2018 was mainly driven by strong domestic
Listing Regulations of Dhaka and Chittagong Stock Exchanges, demand with support from robust credit growth, export and
guidelines of Bangladesh Bank and other applicable remittance inflows, Government expenditure supported by
regulations. Moreover, the Directors are pleased to explain and domestic consumption and investments. Buyers’ confidence in
disclose some issues, which they consider relevant to ensure the RMG industry underpinned by improving workplace safety
transparency and practice of corporate governance in the conditions and external demand including strong US growth
operational activities of the bank. The Directors believe the momentum and diversification of RMG orders away from
Report will give real insights of the bank’s performance during China aided exports can be attributed for the trend. Improved
the year under review. energy supply and political calmness also supported economic
activities. In terms of sectorial performance, monthly industrial
Global Economy
production indices suggest strong growth in first half of 2019.
Economic growth accelerated in more than half the world’s The service and agricultural sector activities to remain buoyant
economies in 2018. Advanced economies expanded at a in 2019 supported with relatively political stability. Based on
steady pace of 2.3 percent in 2018, and growth rates in many the recent economic trends and econometric estimates,
have risen close to their potential, while unemployment rates in Bangladesh Bank projected GDP growth in the range of 7.5-
several developed economies have dropped to historical lows. 8.2 for FY2019 assuming continued political stability and no
Among the developing economies, the regions of South Asia external shocks.
remained on a relatively strong growth trajectory, expanding
GDP
by 5.6 percent in 2018. Many commodity exporting countries, FY (Jul-Jun)
Growth (%)
notably fuel exporters, are continuing a gradual recovery,
2011-12 6.52
although they remain exposed to volatile prices. Global
economic growth remained at steady 3.7 percent in 2018. 2012-13 6.01
Economic activity at the global level is expected to expand 2013-14 6.06
at a solid pace of more than 3 percent in 2019. The growth in 2014-15 6.55
global industrial production and merchandise trade volumes
2015-16 7.11
has been tapering since the beginning of 2018, especially in
2016-17 7.28
trade-intensive capital and intermediate goods sectors.
2017-18 7.86
Particulars 2017 2018 2019 2020
Estimates Estimates Projections Projections

World Output 3.8 3.7 3.5 3.6

Advanced Economies 2.4 2.3 2.0 1.7 Foreign Exchange Reserve
Emerging market and (USD in million)
4.7 4.6 4.5 4.9
Developing Economies
33,227
32,092

World Economic Outlook, IMF

32,016

January 2019 35,000

27,493

IMF forecasted that weakness in the second half of 2018 will 30,000
22,310

carry over to coming quarters, with global growth projected

25,000
to decline to 3.5 percent in 2019 before picking up slightly to
18,095

3.6 percent in 2020. This growth pattern reflects a persistent 20,000

decline in the growth rate of advanced economies. From
15,000
the trend levels reflected above it appears that downtrend
Dec,2016
Dec,2014

Dec,2018
Dec,2013

Dec,2015

Dec,2017

occurring more rapidly than previously anticipated-together

with a temporary decline in the growth rate for emerging market
and developing economies in 2019, suggesting contractions in
few countries like Argentina and Turkey, as well as the impact of
trade actions on China and other Asian economies. Specifically,

48 PRIME BANK
Foreign exchange reserves have grown fast to a level generally There is pressure on banking industry for entering into an era
deemed as adequate, but not yet to a level that could be of lower interest rates regime. In December 2018, the weighted
viewed as excessive seen against those of other developing average interest rate on lending of scheduled banks was 9.49
economy competitors. Foreign exchange reserves held by the percent. On the other hand weighted average interest rate
Bangladesh Bank stood at US$ 32,016 million at the end of on deposit was 5.26 percent an increase from 5.01 percent in
December 2018 while it was US$ 33,227 million in December
January 2018.
2017. Foreign exchange reserves decreased due to weak/less
remittance flow in 2018 and high import payments.
Risk and concerns for the banking industry

Overall outlook Although the year 2019 is expected to be better for banking
industry in Bangladesh but following uncertainties appear, will
Bangladesh is now at a crossroads of development. The
growth momentum that the country has achieved over the persist:
last decade must be continued and should be further boosted • From the onset of 2019, the Industry has been passing
to help the economy to the middle income group. Exports through a liquidity contraction. On top of that Bangladesh
will grow with continued economic recovery in the US and
Bank’s directives for reduction of AD ratio in coming days
the Euro area, strong expansion in remittances will boost
will force the banks to collect deposits at higher rates
consumption demand, private and public investment will pick
limiting fresh lending at affordable pricing.
up as the business environment improves under a stabilizing
political situation, and spending will increase under the annual • Growth of investment and business activities may not
development program. From another point of view, the overall occur as per projections due to various directives likely to
outlook for the Bangladesh economy is favorable over the impact credit flow and lack of governance letting loose
medium term in light of a growing working age population ever rising NPLs.
and likely continued global demand for Bangladeshi products.
• In order to execute the ongoing mega projects, government
Faster growth beyond 7 percent and sustained investments in
infrastructure especially in the energy sector will assist turning may borrow huge sums from the banking sector eventually
the country to a mid-income one. causing severe impact on the liquidity scenario.

• Flow of wage earners remittance may shrink further.

Banking Industry Outlook
• As per roadmap for implementation of Basel III, banks will
Banking industry has achieved steady growth in deposit
require maintaining additional buffer capital of 2.50 percent
mobilization. Total deposits in banking industry increased to
from 2019 onwards and this may cause pressure on Capital
BDT 10,099 billion in December 2018 as against BDT 9,261 billion
Management resulting in curtailing fresh lending.
in December 2017 representing a growth of 9.05 percent. On
the other hand, total bank’s advance increased to BDT 9,604
billion in 2018 from BDT 8,444 billion in 2017 registering a 13.74 Capital Market Outlook
percent growth. Banking and capital markets are interlinked for the progress of
Industy Deposit
BDT in Million
Industy Advance
the economy. Until recent time the market appeared heading
for stability after the 2010 bubble but uncertainty might set
10,099,810
9,604,620
9,261,793
8,444,356
8,402,682

in anytime despite Bangladesh Bank’s proactive efforts in

7,450,231

7,131,130
6,588,516

6,174,735

stabilizing the capital market and at the same time taking

5,451,495

steps for reining in the banking sector’s capital market

exposures within global best practice norms linked to their
capital bases.

Dec, 14 Dec, 15 Dec, 16 Dec, 17 Dec, 18

Month End DSEX Index
Banking sector indicators appeared concerning in 2018 as gross
non-performing loan (NPL) ratio increased to 10.30 percent at
the end of December 2018 from 9.31 percent in December
DSEX Performance
2017. NPL ratio of Prime Bank, however, stood at 6.16% from
2018 2017
5.45 percent in 2017- still much lower than the industry average.
6,307

6,245

Industry Classified Loan Prime Bank Classified Loan

6,093
6,040

6,020
6,006

Industry Classified Loan Prime Bank Classified Loan

14 6,500
5,861
5,805

5,739
5,720

5,656

12
10.30

6,000
9.69

5,403
9.31
9.23
8.79

10

5,500
5,597
5,613

5,601
5,476

8
5,405

5,386
5,369
5,344

5,303

5,284

5,281
7.82
7.61

6 6,000
5.96

6.16
5.45

4
4,500
2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
14

16

18
15

17
0

0
0

0
,2

,2

,2
,2

,2

ec
ec

ec

ec

ec
D

PRIME BANK 49
ANNUAL REPORT 2018

Country’s growing trade and financial integration and Company Act 1991,BRPD circular no. 14 dated 25 June 2003, the
increased participation of global investors, capital market will rules and regulations issued by Bangladesh Bank, International
be in a mature shape in coming days. Market capitalization Financial Reporting Standards (IFRS) as adopted by the ICAB in
of DSE remained around 20 percent of GDP at the end of the name of Bangladesh Financial Reporting Standards (BFRS),
December 2018. High national saving tendency can support the Securities and Exchange Rules 1987, Dhaka and Chittagong
capital market development with the companies shifting their Stock Exchange’s listing regulations and relevant rules &
long-term financing away from the banking system towards regulations applicable in Bangladesh.
the capital market, accompanied by continued improvement
The financial statements of 2018 have been reviewed by the
in governance, technology and reliable information disclosure.
Audit Committee of the Board of Directors of the Bank and
then referred to the Board of Directors for its consideration.
Brief History of Prime Bank Limited
The external auditors, Aziz Halim Khair Choudhury, Chartered
Prime Bank Limited (“the Bank”) was incorporated as a Accountants and Hoda Vasi Chowdhury & Co., Chartered
public limited company under Companies Act, 1994 with Accountants appointed by the shareholders, have certified
the registered office at 119-120 Motijheel C/A, Dhaka-1000. It the fairness of the financial statements for the year ended 31
commenced its banking business with one branch from April 17, December 2018.
1995 under the license issued by Bangladesh Bank. At present
the Bank has 146 (One Hundred Forty Six) branches including Maintaining proper books of account
18 (Eighteen) SME Centre/Branches across Bangladesh and 2
Prime Bank maintained proper books of account for its
(Two) booths located at Dhaka Club, Dhaka and at Chittagong
financial transactions occurred during 2018. The transactions
Port, Chittagong. Out of the above 146 branches, 05 (five)
are recorded as per guidelines stipulated by the Bangladesh
branches are designated as Islamic Banking branch complying
Accounting Standard (BAS) and Bangladesh Financial
with the rules of Islamic Shariah. Also the Bank has 3 (Three)
Reporting Standards (BFRS) as applicable for the bank. The
Off-shore Banking Units (OBU), 5 (Five) subsidiary Companies
books of account have also been reviewed by the external
(3 Foreign subsidiaries & 2 Local subsidiaries). The Bank went
auditors, Aziz Halim Khair Choudhury, Chartered Accountants
for Initial Public Offering (IPO) in 1999 and its shares were listed
and Hoda Vasi Chowdhury & Co., Chartered Accountants with
with Dhaka Stock Exchange Limited and Chittagong Stock
an opinion that proper books of accounts as required by the
Exchange Limited as a publicly traded company for its general
law have been properly maintained.
classes of share.
Appropriate Accounting policies
Principal activities
Appropriate accounting policies have been consistently
The principal activities of the bank are to provide all kinds of
applied, except for the changes disclosed in the financial
commercial banking services to the customers which includes
statements in preparation of financial statements and that the
extending credit/lending to customers, deposit taking, retail and
accounting estimates are based on reasonable and prudent
SME financing, trade financing, project financing, lease and hire
judgment. Bank records financial transaction on accrual basis
purchase financing, credit cards, remittance services etc. The
with required disclosures and also prepared the financial
mode of banking includes both conventional and Islamic banking.
statements accordingly.
The services are provided through both traditional and modern
IT based products. The bank performs investment banking Follow up of IAS & IFRS in preparation of financial statements
and advisory services through Prime Bank Investment Limited
and brokerage services through Prime Bank Securities Limited. International Accounting Standards (IAS) and International
Bank’s subsidiaries at Singapore and UK are engaged in providing Financial Reporting Standards (IFRS) as applicable in
remittance facilities to expatriate Bangladeshis. PBL Finance Bangladesh have been followed in preparation of financial
(Hong Kong) Limited advises, negotiates, confirms and provides statements. However, in case requirement for provisioning and
discounting facilities against LCs originating from PBL and other Circulars issued by Bangladesh Bank differs with those of other
banks in Bangladesh. The company also handles remittance regulatory authorities and accounting standards, Circulars
business. 3 (three) Off-shore Banking Units offers banking services issued by Bangladesh Bank has prevailed. As such the Group
related to foreign currency denominated assets and liabilities. and the Bank has departed from certain requirements of BFRS
in order to comply with the rules and regulations of Bangladesh
At present, the bank has been rendering services through 146 Bank which are disclosed in notes to the financial statements.
branches including 18 SME branches. The introduction and
expansion of ATM network, Internet Banking, SMS Banking, Phone Internal control & compliance
Banking, Mobile Banking, Biometric Smart Card and KIOSK ushered
The Audit Committee, an assistive committee of the Board
a new era and PBL is now well poised for sustainable development.
reviews the effectiveness of the system of internal controls and
Preparation of Financial Statements management, establish effective audit process and manage
various risks. The internal audit function reporting to the Audit
The financial statements prepared by the management present Committee operates independently of other aspects of the
fairly its state of affairs, the result of its operations, cash flows company’s management structure. It continuously reviews
and changes in equity. These statements have been prepared the company’s system of internal controls. These controls
in accordance with the “first Schedule (Section-38) of the Bank include financial controls that assist the Board in meeting its

50 PRIME BANK
responsibilities for the integrity and accuracy of the company’s Top management
accounting records. The Company’s financial statements,
The Bank is led by Mr. Rahel Ahmed, Managing Director & CEO.
prepared from those records, comply with the required laws
He is a prominent and professional banker with 24 years of
and standards. The system of internal control is sound in
rewarding multi-dimensional experience in banking and other
design and has been effectively implemented and monitored.
fields of management. Mr. Ahmed has proven track record
A separate report on internal control and compliance is in leading various teams in different banks contributing in
enclosed with the annual report. business policy formulation and strategy management. There
are some other veteran and prominent bankers serving the
Statement of Directors’ Responsibility to establish Bank and contributing their expertise to the continuous growth
appropriate system of internal control of the Bank.
The Directors acknowledge their overall responsibility for the
Managing Director  & CEO With Prime Bank (since dated)
Bank’s systems of internal control for establishing efficiency,
effectiveness, reliability, timeliness, completeness and Rahel Ahmed 01 February 2015
compliance with the applicable laws and regulations. This Additional Managing Director
process ensures that a system of internal control in accordance
Md. Tabarak Hossain Bhuiyan 16 June 2007
with best financial reporting practice was in place throughout
the year and up to the date of the signing of these financial Deputy Managing Director
statements. It also involved an assessment of the ongoing Md. Golam Rabbani 06 January 2015
process for the identification, evaluation and management of Md. Touhidul Alam Khan FCMA 10 March 2015
individual risks and of the role of the various committees and
Syed Faridul Islam  05 April 2015
bank’s risk management functions.
Mohammad Habibur
11 December 2017
Rahman Chowdhury FCA
Statement of Directors’ on adequacy of the system of
internal control Analysis of key operating and financial data for last 5 (five) years

The Directors confirm that the Board through its committees Prime Bank is maintaining its performance consistently in last
has reviewed the effectiveness of the bank’s systems of internal five years in term of business volume and profitability. In last
control for the year ended 31 December 2018. The Board through five years bank’s total assets recorded 9.17 percent growth and
the audit committee has supervised the policies and various stood at BDT 293,901 million at the end of 2018, which was
parts of businesses to ensure an effective internal control BDT 269,218 million at the end of 2014. During last five year
system. The Board business strategy, significant policies for loans and advances grew by 39.66 percent whereas deposits
internal control system and risk management have been taken decreased by 3.57 percent. Below table shows the comparative
properly and internal audit and control has been accomplished business highlights of the bank in last five years.
as per requirement of the Bank Company (amended) Act 2013,
Bangladesh Bank guidelines, Corporate Governance guidelines Total Assets (BDT in Million)
of Bangladesh Securities and Exchange Commission etc.

293,901
281,275
272,224
267,322
269,218

Going concern

Going concern is one of the fundamental assumptions in

accounting on the basis of which financial statements are
prepared. Financial statements are prepared assuming that
a business entity will continue to operate in the foreseeable
future without the need or intention on the part of management
to liquidate the entity or to significantly curtail its operational
activities. Therefore, it is assumed that the entity will realize
its assets and settle its obligations in the normal course of 2014 2015 2016 2017 2018
the business. It is the responsibility of the management of a
bank to determine whether the going concern assumption
is appropriate in the preparation of financial statements. The Shareholders' Equity (BDT in Million)
management of Prime Bank has calculated all the ratios related
to the maintenance of regulatory capital, LCR, NSFR, Leverage
26,181
25,285
26,415

24,708
24,461

ratio, adequacy of bank’s liquidity as per structured liquidity

profile, regulatory reserves and has performed stress testing
to determine bank’s shock absorbent capacity in different
scenario. All the ratios and results thus calculated reveal
that Prime Bank is running well above the level of different
parameters set by the respective guideline of Bangladesh Bank.

2014 2015 2016 2017 2018

PRIME BANK 51
ANNUAL REPORT 2018

(BDT in million)

Change
Balance Sheet (2018 vs 2017) 2018 2017 2016 2015 2014

% Amount

Authorized capital - - 25,000 25,000 25,000 25,000 25,000

Paid-up capital 10.00 1,029 11,323 10,293 10,293 10,293 10,293
Shareholders’ equity 5.96 1,473 26,181 24,708 25,285 26,415 24,461
Deposits (0.75) (1,496) 197,518 199,014 197,934 194,825 204,838
Loans and advances 3.78 7,487 205,810 198,323 170,212 151,865 147,367
Investments 9.41 2,239 26,046 23,807 48,249 62,733 72,642
Fixed Assets 7.92 509 6,943 6,434 6,590 6,516 6,613
Earning assets 4.88 11,226 241,264 230,038 219,508 215,052 220,115
Total assets 4.49 12,626 293,901 281,275 272,224 267,322 269,218
Total liabilities 4.35 11,153 267,720 256,567 246,939 240,907 244,758
Import (2.04) (3,787) 182,263 186,050 134,914 114,747 126,571
Export 25.81 27,614 134,616 107,002 89,720 88,827 110,096
Remittance 20.03 7,636 45,755 38,120 32,119 39,146 39,484
Guarantee Business (26.42) (8,348) 23,250 31,597 32,350 35,000 30,155

In line with the changes in business dynamics, profitability of the bank has varied in last five years. Net profit of the bank recorded
an astonishing growth of more than hundred percent. Net profit increased to BDT 2,188 million at the end of 2018 from BDT 1,059
million of previous year. Moreover, below table shows the comparative operating performance in last five years.

(BDT in million)

Change
Operating Performance (2018 Vs 2017) 2018 2017 2016 2015 2014
% Amount

Interest income 24.52 3,621 18,390 14,769 13,989 15,551 18,446

Interest expenses 8.76 866 10,741 9,875 10,676 14,257 15,574

Net interest income 56.31 2,756 7,650 4,894 3,313 1,294 2,872

Investment income (49.26) (2,092) 2,154 4,246 6,203 7,989 6,194

Commission, exchange and brokerage (1.62) (36) 2,209 2,245 1,693 1,956 2,033

Other Operating Income 16.10 123 887 764 814 834 806

Operating Income 6.18 751 12,899 12,148 12,023 12,073 11,906

Operating expenses 5.99 406 7,180 6,774 6,266 6,166 5,750

Profit before provision and tax 6.44 346 5,719 5,373 5,757 5,906 6,157

Provision for loans and assets (50.02) (1,783) 1,782 3,564 3,412 3,154 2,877

Profit after provision before tax 117.68 2,129 3,938 1,809 2,345 2,752 3,280

Tax including deferred tax 133.33 1,000 1,750 750 150 613 887

Profit after tax 106.60 1,129 2,188 1,059 2,195 2,139 2,393

However, details of operating and financial data of Prime Bank in last five years are shown separately in financial summary of annual
report with charts and graphical presentation. Some key performance ratios are also shown in the below table.

Key Performance Ratio (%) 2018 2017 2016 2015 2014

Net Interest Margin (NIM) 3.62 2.56 2.02 0.86 1.91

Cost-Income Ratio 55.93 55.98 52.11 51.08 48.29
Credit-Deposit Ratio (Conventional) 82.65 84.43 74.95 69.86 66.70
Credit-Deposit Ratio (Islamic) 82.71 83.25 82.83 79.36 74.56
Cost of Deposit 4.72 4.46 4.94 6.64 7.36

52 PRIME BANK
 Key Performance Ratio (%) 2018 2017 2016 2015 2014

Cost of Fund 7.95 7.91 8.13 9.72 10.19

Yield on Average Advance 8.51 7.42 8.45 10.20 12.09
Return on Average Assets 0.76 0.38 0.81 0.80 0.91
Return on Average Equity 8.60 4.24 8.49 8.41 10.08
Return on Capital Employed 4.28 4.55 4.97 4.86 4.79
Earnings per Share (Taka) 1.93 0.94 1.94 1.89 2.11
Dividend* 12.50 C 7.00 C 10.00 B 16.00 C 15.00 C 15.00 C
Dividend Cover Ratio (Times) 1.55 0.55 1.33 1.39 1.55
Dividend Yield 7.02 6.20 9.04 8.29 7.65
Net Asset Value per Share (Taka) 23.12 24.00 24.56 25.66 23.76
Price Earnings Ratio (Times) 9.21 29.30 8.31 8.71 8.43
Non-Performing Loans Ratio 6.16 5.45 5.96 7.82 7.61
Capital to Risk Weighted Asset Ratio (CRAR) 17.04 14.01 12.45 12.74 12.71
Leverage Ratio (Basel-III) 6.52 6.61 7.36 7.57 -
Liquidity Coverage Ratio (LCL) 101.41 109.58 139.90 178.71 145.86
Net Stable Funding Ratio (NSFR) 127.94 120.08 120.56 109.12 107.25
* C = Cash, B = Bonus

Significant deviations from operating results of last year Extraordinary gains or loss

Bank’s net financial performance has improved significantly Extraordinary gains or losses refer to infrequent and unusual
in 2018 due to increase of net interest income, decrease in gains or loss and which is not part of the bank’s ordinary, day-
requirement of provision for loans and advances etc. In 2018, to-day operations. There is no such a gain or losses during the
yield on advances was 8.51 percent compared to 7.42 percent year under reporting.
in 2017 which resulted in an increase of bank interest margin
by more than 1 percent. Significant deviations in key operating Risk Based Capital Framework
lines are described as follows: Risk Based Capital Adequacy Framework (Revised Regulatory
Net interest income: Net interest income increased by 56 Capital Framework for banks in line with Basel III) has been
percent stood to BDT 7,650 million in 2018 against BDT 4,894 implemented in Bangladesh from beginning of 2015 through
million in 2017. The main reasons for this growth is the growth BRPD Circular No- 18 dated December 21, 2014. Bank was in
of interest income. In 2018, spread increased by more than 1 Basel II regime in 2014 maintaining its capital level above
percent and yield increased to 8.51 percent. the minimum requirement, estimating the additional capital
requirement to find out level of Adequate Capital against all
Investment income: Investment income decreased by 49
types of risks under Pillar II and providing adequate disclosure
percent in 2018 compared to previous year. Last year there was
as per pillar III (market discipline) of Basel II guideline.
a one-off event of realization of revaluation gain of BDT 1,559
million. From very beginning of implementation of Basel III in
Bangladesh, Prime Bank has been continuing to calculate
Profit after tax: Profit after tax increased significantly by more
minimum capital requirement (MCR) considering credit
than 106 percent in 2018 compared to previous year. Net profit
risk, market risk and operational risk considering the Capital
increased mainly due to requirement of less provision and
Conservation Buffer @ 0.625 percent. The summary of pillar I
increase of net interest margin in 2018. The bank maintained
(Minimum Capital Requirement) on solo basis of Prime Bank is
provision for loans and assets of BDT 1,782 million from profit of
as under:
2018 against BDT 3,564 million in 2017.

(BDT in Million)

Particulars 2018 2017

Tier I Capital 24,335 23,048

Tier II Capital 13,924 9,203

Total Regulatory Capital 38,259 32,251

Risk Weighted Assets 224,516 230,211

Capital to Risk Weighted Asset Ratio (CRAR) (%) 17.04 14.01

PRIME BANK 53
ANNUAL REPORT 2018

Focusing on the Future Requirement Credit Rating

Bangladesh Bank has issued the “Guidelines on Risk Based Bangladesh Bank vide BRPD Circular No.06 dated July 05, 2006
Capital Adequacy”, a Revised Regulatory Capital Framework has made it mandatory for the Bank’s to have themselves credit
for banks in line with Basel III, on December 2014. Aiming to rated. Accordingly Credit Rating of Prime Bank Limited was
maintain capital above the required level as per this new done by two rating agencies, namely Credit Rating Information
guideline, Prime Bank has issued third subordinated bond and Services Ltd (CRISL) & Credit Rating Agency of Bangladesh
of BDT 7,000 million in August 12, 2018. Though raising fund Ltd (CRAB) based on audited Financial Statements as on
from external sources is a short term and costlier solution, December 31, 2017. The rating report is summarized as under;
the bank is emphasizing more on risk assets management
and capital generation from internal sources like increasing Particulars CRISL CRAB
reserve by generating profit. For risk assets management, Long Term Rating AA AA2
the bank is emphasizing on completion of credit rating of all Short Term Rating ST-2 ST-2
unrated corporate and medium customers by external credit
Date of Rating 28 June 2018 27 June 2018
rating agencies and also emphasizing on restructuring of asset
Validity Date 30 June 2019 30 June 2019
portfolio to low risk based assets. Moreover, the Bank has also
Based on Financial
built up a platform to transfer from the standardized approach December 31, 2017
Statement
of risk measurement to more advanced version of Internal Risk
Based Approach in evaluation of risk exposure of the Bank.
Events occurring after the reporting date

Risk Management As at the date of this report, the Directors are not aware of any
matter or circumstance that has arisen since the end of the
The identification, evaluation and management of risk, together
year 2018 up to the date of approval of financial statements
with the way we respond to changes in the external operating
by the Board of Directors of the Bank that has significantly
environment are key to sustainable growth and underpin the
affected or may significantly affect the operations of the Bank,
robustness of our business plans and strategic objectives,
the results of its operations or its state of affairs. However,
protecting our license to operate and our reputation and
the only event is, “on 03 April, 2019 , the Board of Directors of
helping create a long-term source of competitive advantage.
the Bank recommended 12.50 percent cash dividend” which
Risk management is embedded in Prime Bank’s organizational
is subject to approval of the shareholders in the next Annual
structure, operations and management systems. Business risks
General Meeting to be held on 16 May 2019.
across the Group are addressed in a structured and systematic
way through a predefined risk management structure. This
Corporate social responsibility
ensures that the Board’s assessment of risk is informed by
risk factors and mitigating controls originating from and We acknowledge our responsibilities towards the society
identified by the Group’s assets, functional departments and as a whole in which we live, care for all stakeholders, ethical
operations, including the Company’s subsidiaries. Moreover, functioning, respect for employee’s rights and welfare, respect
Prime Bank possesses a detailed risk management system for human beings, respect for environment and disseminate
with procedures in place to support risk evaluation across the information on CSR policy. We realize that sustainable
Group. The risks associated with the delivery of the business development is an ongoing journey. We are confident that
plan and annual work programs and the associated mitigation we are well positioned and prepared to deliver against our
measures are maintained in asset or project risk matrices and responsibilities in the short, medium and long term. A separate
registers. Prime Bank possesses different committees for risk report on Corporate Social Responsibility has been attached
management. The Credit Committee and Asset and Liability with the annual report.
Committee (ALCO) is constituted by the Company’s senior
management team which regularly reviews issues related to Corporate governance
the markets, credit and liquidity and, accordingly, recommend Prim Bank focuses on ethics, governance and transparency. We
and implement appropriate measures to proactively identify are committed to maintain full compliance with the laws, rules
and mitigate risks. Prime Bank possesses an approved Asset and regulations that govern our business. The main objective
Liability Management (ALM) policy under the responsibility of Prime Bank’s corporate governance is to develop a strong,
of the ALCO. The Company’s Credit Risk Management (CRM) sustainable and competitive company in the best interest of
department independently scrutinizes projects from a risk- its shareholders, employees, business associates and society at
weighted perspective and assists relevant departments in large. Successful value added business is profoundly dependent
setting business development priorities. These are aligned with upon transparency, internal and external confidence and trust.
the Company’s risk appetite while optimizing the risk-return
trade-off derived from relevant risk exposures. The CRM team Compliance of the conditions of SEC’s notification
also clearly defines exceptionally high-risk sectors and prohibits
In exercise of the power conferred by section 2CC of the
lending to those projects which the Company does not ascribe
Securities and Exchange Ordinance, 1969 (XVII of 1969),
to, including those which represent negative environmental,
Bangladesh Securities and Exchange Commission (BSEC)
social or ethical standards. Details of risk management are
issued notification no. SEC/CMRRCD/2006-158/207/Admin/80
given in the “Risk Management” Chapter of this Annual Report.
dated June 03, 2018 to comply with certain conditions

54 PRIME BANK
for corporate governance. The notification was issued for Business ethics and Compliance
establishing a framework for ensuring good governance
How we work is as important as what we do. Prime Bank has a
practices in the listed companies for the interest of the investors
reputation for delivering innovation, performance and solutions.
and the capital market. A statement on the compliance with
The key element to our long-term success is something less
the SEC’s conditions has been attached with the Annual Report
tangible and less easily illustrated with figures. These are
with compliance certificate. Moreover, as per requirement of
integrity and honesty in our business dealings, a factor that
Bangladesh Securities & Exchange Commission, a certificate
contributes to our long-term relationships with clients.
from a professional Chartered Accountants has been obtained
and attached with the annual report. Meeting of the Board of Directors and attendance

Protecting interest of minority shareholders During the year 2018 total 14 no. of Board of Director’s
meeting, 13 no. of Executive Committee meeting, 10 no. of
Prime bank is committed to protect the interest of minority
Audit Committee meeting and 04 no. of Risk Management
shareholders of all of its five subsidiary companies. All the
Committee meeting were held. The status of the attendance
subsidiary company is eventually fully owned considering direct
is mentioned below:
and cross holding of shares except only six number of shares
of Prime Bank Investment Limited is allocated to the name of
senior management of the bank. As a result, no decision of the
bank adversely affect the interest of any outsider.

Attendance of Board of Directors in Board Meeting 2018

Total
SL. Composition of the Board Status Meeting Attended Remarks
Held
1 Mr. Azam J Chowdhury Chairman 14 13  

 10 nos. of meetings

2 Mr. Mafiz Ahmed Bhuiyan Vice-Chairman 14 9
held since his joining

3 Mr. Imran Khan Vice-Chairman 14 7  

4 Mr. Md. Nader Khan Director 14 12  

5 Mr. Quazi Sirazul Islam Director 14 4  

6 Mrs. Marina Yasmin Chowdhury Director 14 7  

 10 nos. of meetings

7 Mr. Md. Shahadat Hossain Director 14 10
held since his joining
 10 nos. of meetings
8 Mr. Md. Shirajul Islam Mollah Director 14 6
held since his joining

9 Mrs. Nasim Anwar Hossain Director 14 11  

10 Mrs. Salma Huq Director 14 4  

11 Mr. Nafis Sikder Director 14 -  

12 Mr. Waheed Murad Jamil Director 14 12  

13 Mr. Tarique Ekramul Haque Director 14 5  

14 Mr. Mohammad Mushtaque Ahmed Tanvir Director 14 9  

15 Mr. Shamsuddin Ahmed Ph.D Independent Director 14 14  

16 Dr. G.M. Khurshid Alam Independent Director 14 11  

17 Mr. M. Farhad Hussain FCA Independent Director 14 11  

 1 no. of meeting held

18 Prof. Dr. M. Shamim Z. Bosunia Independent Director 14 1
since his joining

* Directors who could not attend the meeting were granted leave of absence

PRIME BANK 55
ANNUAL REPORT 2018

Attendance in Executive Committee (E.C) Meeting during the year 2018

Total
Sl Name of the Directors Status Meeting Attended Remarks
Held
10 nos. of meetings held
1 Mr. Md. Shirajul Islam Mollah Chairman 13 9
since his joining
2 Quazi Sirajul Islam Member 13 7

3 Mrs. Nasim Anwar Hossain Member 13 10

10 nos. of meetings held
4 Mr. Mafiz Ahmed Bhuiyan Member 13 10
since his joining
5 Mr. Imran Khan Member 13 6

6 Mr. Tarique Ekramul Haque Member 13 -

7 Mr. Waheed Murad Jamil Member 13 13

Attendance in Audit Committee Meeting during the year 2018

Total
Sl Name of the Directors Status Meeting Attended Remarks
Held
1 Mr. Shamsuddin Ahmad, Ph.D. Chairman 10 10

2 Mr. Md. Nader Khan Member 10 03

3 Dr. G M Khurshid Alam Member 10 08

4 Mr. M Farhad Hussain FCA Member 10 09

Attendance in Risk Management Committee Meeting during the year 2018

Total
Sl. Name of the Directors Status Meeting Attended Remarks
Held
1 Dr. G M Khurshid Alam Chairman 04 03
2 nos. of meetings held
2 Mohammad Mushtaque Ahmed Tanvir Member 04 -
since his joining
3 Mr. Shamsuddin Ahmad, Ph.D Member 04 04

4 Mr. M Farhad Hussain FCA Member 04 03

Pattern of Shareholding

Fully paid up shares issued to No of Shares Amount in Taka % of Shares

Sponsors 4,152,053,35 4,152,053,350 36.67%

Financial Institutions 3,076,157,17 3,076,157,170 27.17%

Foreign Investors 348,688,82 348,688,820 3.08%

Non- resident Bangladeshi 26,774,64 26,774,640 0.24%

General Public 3,719,160,79 3,719,160,790 32.84%

Total 11,322,834,77 11,322,834,770 100%

56 PRIME BANK
Shareholding of Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer and Head of Internal Audit
and their spouses and minor children:

Shares held as
Sl. Name of The directors
on 31 Dec 2018
i) Directors:  
Mr. Azam J Chowdhury, Chairman
 1 22,661,273
(Representative of East Coast Shipping Lines Ltd.)
 2 Mr. Mafiz Ahmed Bhuiyan, Vice Chairman 22,650,208

 3 Mr. Imran Khan, Vice Chairman 22,647,170

 4 Mr. Md. Nader Khan, Director 41,821,296

 5 Quazi Sirazul Islam, Director 22,677,773

 6 Mrs. Marina Yasmin Chowdhury, Director 27,288,000

 7 Mr. Md. Shahadat Hossain, Director 22,672,741

 8 Mr. Shirajul Islam Mollah, Director 22,709,414

 9 Mrs. Nasim Anwar Hossain, Director 25,702,323

 10 Mrs. Salma Huq, Director 35,479,775

 11 Mr. Nafis Sikder, Director 28,408,795

Mr. Waheed Murad Jamil, Director
 12 22,646,523
(Representative of Mawsons Limited.)
 13 Mr. Tarique Ekramul Haque, Director 22,660,429
Mr. Mohammad Mushtaque Ahmed Tanvir, Director
 14 22,836,275
(Representative of Uniglory Cycle Industries Ltd.)
 15 Mr. Shamsuddin Ahmad, Ph.D, Independent Director -

 16 Dr. G. M. Khurshid Alam, Independent Director -

 17 Mr. M. Farhad Hussain, FCA, Independent Director -

 18 [Link] Z. Bosunia, Independent Director -

ii) Mr. Rahel Ahmed, (Managing Director & CEO) and Spouse -

iii) Mr. Mohammed Ehsan Habib ( Company Secretary) and Spouse -

Mohammad Habibur Rahman Chowdhury FCA (Deputy Managing Director and Chief Financial Officer)
iv) -
and Spouse
v) Md. Faruk Ahammad (Senior Executive Vice President and Head of Internal Audit) and Spouse -

Executives (Top five salaried employees of the company, other than the Directors, Chief Executive Office, Company Secretary, Chief
Financial Officer and Head of internal audit)

Shares held as
Sl. Name of Executives
on 31 Dec 2018
1 Mr. Habibur Rahman, Additional Managing Director -

2 Mr. Md. Touhidul Alam Khan, Deputy Managing Director -

3 Syed Faridul Islam, Deputy Managing Director -

4 Mr. Md. Golam Rabbani, Deputy Managing Director -

5 Mr. Ziaur Rahman, Senior Executive Vice President -

Shareholders holding 10% or more voting interest in the company:-

Shareholders holding 10% or more voting interest in the company  Nil

PRIME BANK 57
ANNUAL REPORT 2018

Related party transaction

Significant contracts where Bank is a party and wherein Directors have interest during the year 2018

(Amount in BDT)

Relationship with the Outstanding

Name of Directors Nature of transaction Approved limit
Bank amount

Azam J Chowdhury Chairman Credit Card 1,000,000 10,949

Mr. Imran Khan Vice Chairman Credit Card 1,000,000 221,419
[Link] Khan Director Credit Card 500,000 75,692
Mrs. Marina Yasmin Chowdhury Director Credit Card 1,000,000 43,520
Mrs. Nasim Anwar Hossain Director Credit Card 500,000 122,208
Mrs. Salma Huq Director Credit Card 500,000 59,382
[Link] Sikder Director Credit Card 500,000 29,783
Mr. Tarique Ekramul Haque Director Credit Card 500,000 216,996
Quazi Sirazul Islam Director Credit Card 500,000 865
Mr. Waheed Murad Jamil Director Credit Card 500,000 164,506
Dr. G. M. Khurshid Alam Independent Director Credit Card 500,000 309,356

*Coverd by cash security

Shares issued to Directors and Executives without consideration or exercisable at a discount Nil

Related party transactions

Nature of party/ contract Relationship Amount

Lease agreement Common Director 2,475,168
Lease agreement Common Director 322,920
Lease agreement Common Director 2,054,688
Lease agreement Common Director 60,000
Lease agreement Common Director 738,300
Lease agreement Common Director 4,788,540
Lease agreement Common Director 2,760,000

Lending policies in respect of related party

a) Amount of transaction regarding loans and advances, deposits, guarantees and commitment as on 31.12.2018 Nil
b) Amount of transactions regarding principal items of deposits, expenses and commission Nil
c) Amount of provision against loans and advances given to related party Nil
d) Amount of guarantees and commitments arising from other off-balance sheet exposures Nil

Disclosure of transaction regarding Directors and their related concerns Nil

Business other than banking business with any relation concern of the Directors as per Section 18(2) of the Bank Companies
Act, 1991.
Lease agreement made with the Sponsor Director & Independent Director

Nature of contract Branch Name Name of Director and related by Remarks

Jubilee Road Mr. Md. Nader Khan Director & Lease period: 01.08.2015 to
Lease agreement
Branch owner of the premises 31.07.2021
ATM Booth Lease period: 12.10.2011 to
Mr. Md. Nader Khan Director &
Lease agreement Jubilee Road 11.10.2021
owner of the premises
Branch
Store Room Mr. Md. Nader Khan Director & Lease period: 13.12.2014 to
Lease agreement
(Regional) owner of the premises 12.12.2020

58 PRIME BANK
 Nature of contract Branch Name Name of Director and related by Remarks

Mr. Md. Nader Khan Director & Lease period: 28.11.2017 to

Lease agreement ATM Booth
owner of the premises 27.11.2027
Lease period: 01.09.2013 to
Lease agreement Mrs. Marina Yasmin Chowdhury
Kulaura Branch  31.08.2019
  Director & owner of the premises

Lease agreement Quazi Sirajul Islam Lease period: 10.07.2016 to

Head Office
  Director & owner of the premises 09.07.2022

Mr. Azam J Chowdhury & Mrs. Lease period: 01.01.2017 to

Lease agreement Halishahar
Marina Yasmin Chowdhury 31.12.2025
  Branch
Director & owner of the premises

Service receiving companies where the Directors interest subsisted during the year

Name of party Relationship Nature of transaction Amount

- - - -

Investment in the Securities of Directors and their related concern Nil

Business with subsidiary

Name of party Relationship Nature of transaction Outstanding Amount

Prime Bank Investment Limited Subsidiary Company OD Facilities 3,026,635,480
Prime Bank Securities Limited Subsidiary Company OD Facilities 393,452,756
Prime Bank Securities Limited Subsidiary Company Share Trading 184,242,731
PBL Finance (Hong Kong) Ltd Subsidiary Company Term Placement 2,214,960,000

Remuneration of Directors Appropriation of profit

The Bank does not pay any remuneration to its Directors other Taking into account the profit available for distribution after
than purpose stated in the relevant Bank Companies Act and complying with regulatory requirement, the Board in its 489
prevailing BRPD circulars. As per the BRPD circular no.03 dated meeting held on 03 April 2019 recommended 12.50 percent
18/01/2010 and BRPD Circular letter no. 11 dated 04/10/2015, cash dividend for the year ended on December 31, 2018 which
Chairman may be provided with a car, telephone, Office is subject to approval of shareholders in the next Annual
chamber and private secretary. Directors are entitled to fees General Meeting.
and other benefits for attending Board, EC, Audit Committee,
RMC and Shariah supervisory committee meeting. Managing
Director is paid salaries and allowances as per approval of the
Board and Bangladesh Bank.

Proposed appropriations are as follows:

(BDT in million)

Particulars 2018 2017

Net profit after tax for the year 2,188 1,059
Retained earnings at the beginning 359 382
Profit available for appropriation 2,547 1,441

Proposed appropriations:
Transferred to statutory reserve 788 362
Proposed stock dividend - -
Proposed cash dividend 1,415 721
Retained earnings 344 359

As per corporate governance guidelines the Board declare that, no bonus share or stock dividend has been declared as interim
dividend during the year 2018.

PRIME BANK 59
ANNUAL REPORT 2018

Auditors Report Future outlook

The Board of Directors reviewed the Auditors Report issued Prime Bank Limited is making progress on embedding
by the Bank’s auditors Aziz Halim Khair Choudhury, Chartered sustainability into business. We still believe that, we have scope
Accountants and Hoda Vasi Chowdhury & Co., Chartered to do better. However, Market conditions are challenging and
Accountants based on the audited financial statements sometime volatile as witnessed in recent times. We have a
of the bank for the year ended on 31 December 2018. The strong capital base and have acquired good size of quality
auditors didn’t raise any material misstatement or significant portfolio and diversity to help us boost our revenue earnings.
disagreement during review of the Bank’s financial statements.
Our presence in the market is growing steadily and we have
The Board also reviewed auditors’ opinion/suggestions made
improved our presence in all areas of operations. We have
under a separate management letter likely to give strategic
professionals with profound managerial talents and perhaps
directions/ guidelines to the management for further
most importantly, we have a hard earned reputation as one
improvement.
of the top service providers in the industry. We are convinced
of our ability to continue to thrive in all areas of our business
Appointment of Auditors
backed by around two decades plus experience and driven by
Aziz Halim Khair Choudhury, Chartered Accountants and the ambition to continue reaching new heights in performance.
Hoda Vasi Chowdhury & Co., Chartered Accountants were the Building on our strength, we are confident that the company
auditors of the Bank for the years 2017 and 2018. As 2018 was will be able to present better results to the shareholders in the
the second year, both the firms are eligible for reappointment years ahead.
in the year 2019.
Acknowledgement
Section 210 of the Companies Act, 1994 gives authority to the
shareholders to fix the appointment of the auditors and their I would like to thank my colleagues for their valuable time and
remuneration. Hence, the Board recommends reappointment contributions in guiding the Company to the right direction.
of Aziz Halim Khair Choudhury, Chartered Accountants I also like to thank Bangladesh Bank, Bangladesh Securities
and Hoda Vasi Chowdhury & Co., Chartered Accountants and Exchange Commission, Dhaka and Chittagong Stock
as the auditors of the Bank for the year 2019. However, such Exchanges, Central Depository Bangladesh Limited, borrowers,
appointment will be subject to approval of the shareholders in depositors and all stakeholders for their continuous support
the next Annual General Meeting. and trust on us.

Looking forward for a better performance in the current year

Rotation of Directors
2019.
At the Ordinary General Meeting in every subsequent year one
On behalf of the Board of Directors.
third (1/3rd ) of the Directors who have been holding longest in
office shall retire from the office according to the clause 108 &
109 of Article of Association (AOA) of the Bank. The Bank will
follow the conditions and rotate the Directors as per laws.

Annual General Meeting Azam J Chowdhury

Chairman
24th Annual General Meeting of the Bank will be held on 16 May
2019 at KIB Complex, Krishi Khamar Sarak at 11.00 a.m. and
in this connection Directors’ Report and financial statements
were approved in the Board Meeting held on 03 April 2019 for
presentation to the shareholders.

60 PRIME BANK
CORPORATE GOVERNANCE REPORT
Corporate Governance at Prime Bank comprises carefully of PBL nominated four independent directors (1/5th of total
considered rules and practices by which Board of Directors number of Directors) so that Board comprises of core skills
and Management of the Bank ensures accountability, fairness, considered important for diversification in the composition of
transparency and independence of the operational activities the company’s directors.
of the Bank. The objective is to earn and maintain trust and
The Board in its 482nd Meeting held on 30.08.2018 appointed
confidence of the stakeholders and help the business attain
Prof. Dr. M. Shamim Z. Bosunia a renowned civil engineer as
sustainability. Prime Bank as a bank of many stands inclusive
Independent Director of the Bank with the permission from
rather than exclusive, with its core business offering wide
BSEC and Bangladesh Bank. His nomination will be placed
spectrum of financial products and services to individual and
for approval at the upcoming AGM of the bank. Other three
businesses. Prime Bank is firmly convinced that a traditional
independent directors of the bank are Dr. G.M. Khurshid Alam,
banking model focused on closer customer relationships and
Mr. Shamsuddin Ahmad Ph.D and Mr. M. Farhad Hussain, FCA.
advisory services best serves its purpose, as such, its goals are
The Board of Prime Bank affirms that the Independent Directors
based on customers’ needs & solutions and not merely a product.
appointed by the Board are in compliance with the relevant
directives/guidelines on corporate governance released by the
Board of Directors:
BSEC with regard to appointment of Independent Directors.

Policy on appointment of Directors:

Retirement and Re-election of Directors:
Prime Bank always complies with the prescription of the
As per Companies Act, each year one-third of the Directors retire
regulatory authorities regarding appointment of directors.
from office at the AGM and if eligible, may offer them for re-
Bangladesh Bank circulars, BSEC notifications, Bank
election at the AGM. In line with the BCA 1991 (amendment # 2018),
Companies Act and Companies Act are strictly followed in this
no Director should serve exceeding 9 (nine) years and give a break
regard. Currently all the members of the Board, other than the
for a period of three years in order to be eligible to be reappointed.
Independent Directors maintain minimum two percent shares
Pursuant to the prevailing directives, following Directors will retire
of the company’s paid up capital and the Board collectively hold
at the 24th AGM (2019) and are eligible for re-election:
more than 30% shares required as per prevailing directives.
1. Mr. Md. Nader Khan
As per newly amended Banking Companies Act 1991 (amended
up to 2018), a Director may be in the office for a period up to 2. Mr. Quazi Sirazul Islam
nine years at a stretch (except Independent Directors) and 3. Mrs. Marina Yasmin Chowdhury
may be reappointed after a lapse of three years subject to 4. Mrs. Salma Huq
eligibility and approval of the regulatory authorities. Again, as in
5. Mrs. Nasim Anwar Hossain
the Companies Act, 1994, Directors are subject to retirement,
as such, one-third of the Directors retire by rotation in every 6. Mr. Tarique Ekramul Haque
AGM except the Independent Directors as per new CG codes 7. Mr. Mohammad Mushtaque Ahmed Tanvir (representing
of BSEC. The term of office of an Independent Director is three Uniglory Cycle Industries Ltd.)
years and may be prolonged by another three years with the
prior approval of the concerned regulators. With regards to Among the above retiring directors, all of them are eligible
nomination, removal and casual vacancies etc. of the directors, for reappointment and may continue in compliance with the
Bank strictly follows the relevant rules and regulations section 15KaKa of BCA 1991 (Amended up to 2018).
applicable in such circumstances.
Role of the Board:
The Managing Director is appointed for a minimum period of
As per Bank Companies Act, Section 15B, Board of Directors
three years subject to approval of Bangladesh Bank and his
shall be responsible for framing and implementing policies
office is not subject to retirement by rotation.
with regard to risk management, internal control, internal audit
All the directors of the Board are from non-executive category and compliance thereof. The section further states that:
and more than one-fifth is Independent. Currently, there are
• Every bank Company shall constitute an Audit Committee
four independent directors in the composition of the Board
consisting of such members who are not member of the
with the approval of the BSEC, Bangladesh Bank and consent
executive committee of the Board of Directors
of the shareholders at the AGM.
• Again, every banking company shall constitute a risk
Independent Director: management committee consisting of members of the
Board of Directors
As per the Bank Companies Act, 1991 at least 3 directors
should be from Independent category if the maximum number In compliance with the above stated guidelines, the Board of
of the Board members is 20. Again, as per BSEC guidelines Prime Bank has been discharging its roles and responsibilities
on Corporate Governance at least one fifth of the total which among others include the followings:
Directors should be from Independent category. Therefore, in • Work planning and strategic management
compliance with BSEC’s Corporate Governance Code, Board • Credit & Risk Management

PRIME BANK 61
ANNUAL REPORT 2018

• Internal Control Management Each Director also assures that they shall continue to comply
• Human resources management & developments. with the set of codes approved by the Board of Directors.
• Financial management
• Appointment of Chief Executive of the Bank (CEO) Chairman of the Board:
• Holding Board and various Committee meetings. The Chairman of the Bank is elected by the Board of Directors
as per article 112.1 of the Articles of Association of the Bank, and
Code of Conduct for the Board of Directors:
the Board considers the Chairman independent.
The Board of Directors in discharging their roles & responsibilities
has adopted a Code of Conduct to carry out their duties in an Roles and Responsibilities of the Chairman:
honest, responsible and businesslike manner and within the The roles and responsibilities of the Chairman are as follows:
scope of their authority, as set forth in the laws of the country
as well as in the Memorandum and Articles of Association of • As the Chairman of the Board of Directors (or Chairman of
the Company. The Code of Conduct states that: any Committee formed by the Board of Directors) does not
personally possess the jurisdiction to apply policy making or
1. The Members shall act honestly, in good faith and in the executive authority, he shall not participate in or interfere into
best interests of the shareholders and the company. the administration or operational and routine affairs of the bank.
2. The members shall not make improper use of information
• The Chairman may conduct on-site inspection of any
acquired as a director.
branch or financing activities under the purview of the
3. The members shall not take improper advantage of the oversight responsibilities of the Board. He may call for
position as a director. any information relating to bank’s operation or ask for
4. The members will be obligated to be independent in investigation into any such affairs; he may submit such
judgment and actions and take all reasonable steps to information or investigation report to the meeting of
be satisfied as to the soundness of decision taken by the the Board or the Executive Committee and if deemed
board of directors. necessary, with the approval of the Board, he shall take
5. Confidential information acquired by the members in the necessary action thereon in accordance with the set rules
course of exercise of directorial duties shall remain the through the CEO. However, any complaint against the CEO
property of the company and it will be improper to disclose shall have to be apprised to the Bangladesh Bank through
or allow it to be disclosed, unless that disclosure has been the Board along with the statement of the CEO.
authorized by the company, or the person from whom the Besides this, the Chairman may/shall assume any other
information has been received. responsibility if the Board assigns within the purview of the
6. Members shall make every effort to attend all Board and Rules, Regulations, Acts and Articles of the Bank, BSEC’s
Committee Meetings during their tenure. They will not notification on Corporate Governance Guidelines etc.
absent themselves without good reasons or confirming
leave of absence. Independence of Chairman and CEO:

7. To maximize effectiveness of the Board/Committee The Chairman is independent of the CEO, and this has been in
Meetings, contribution of individual director shall be practice since inception of the Bank. This also complies with
monitored and appraised on an annual basis. Section 1.4 of the BSEC’s notification on Corporate Governance.
8. Board members having interest of any nature in the agenda
Policy on training of Board of Directors:
of the meeting, shall declare beforehand the nature of their
interest and withdraw from the room, unless they have a Prime Bank is fully committed to maintain highest standards of
dispensation to speak. Corporate Governance & professionalism in driving the Bank’s
9. Training opportunities/orientation/workshops will be progress on the principles of transparency and openness. For this
arranged for the members (especially for the newly purpose, training at home and abroad especially on the Corporate
inducted members) to make them acquainted with the Governance is encouraged by the Board. As such, whenever
international best practices, their fiduciary obligations, opportunities arise, bank utilizes it to train and orient its members.
Code of Conduct etc. As per records, Chairman & Directors of the bank have attended
workshop and training courses at home and abroad in the past.
10. Members shall always maintain ‘Fit and Proper Test Criteria’,
clean CIB status and other obligations declared by the
Appraisal of the Board’s performance:
Primary and other Regulators.
Prime Bank Limited doesn’t have a scheme for annual appraisal
11. Members shall be judicious about their entitlement of
of the board’s performance till date, but the bank is abiding
benefit/privileges as per Banking Companies Act -1991 and
by the Code of Conduct prescribed by the regulators and
all circulars issued by Bangladesh Bank and shall be willing
formulated by the Board. The Board members have always
to produce supporting documents, if required.
taken decisions that have in the interest of the bank as a whole
12. Members shall comply with Article 23.1 of the Bank’s
and have performed their duties accordingly. Another way of
Memorandum and Articles of Association of the Company
appraising the Board’s performance is conducted by analyzing
while making Sale-Buy of Company’s share and shall refrain
the execution of the projects In addition; evaluation of the
from making such transaction without formal declaration.
Board also takes place at the AGM by the Shareholders.

62 PRIME BANK
Evaluation of the CEO by the Board: Role of the Company Secretary:

There is a five year (2015-2019) Strategic Priorities & Action Plan Company Secretary is responsible for advising the Board on
(KPI) for the evaluation of the CEO/Management and is revised/ issues relating to compliance with the relevant laws, rules,
reviewed by the Board depending on prevailing scenario and procedures and regulations affecting the Board and the Bank,
trend of the market challenges. as well as best practices of governance. He is also responsible
for advising the Directors of their obligations and duties to
The CEO is also evaluated on an annual basis as against the
disclose their interest in securities, disclosure of any conflict
KPI’s set forth at the beginning of the year. The Board has
of interest in a transaction involving the Bank, prohibited to
the discretion to evaluate CEO whenever it wishes to and
deal in securities and restricted to disclose any price-sensitive
particularly during reappointment.
information.
At the start of each year, the Board participates in extensive
The responsibilities of the Company Secretary comprises of:
discussions with the Management and decides on financial
and non-financial objectives. The annual financial budget are i. Ensuring the compliance of the Bank in relation to
considered and decided by the Board at the beginning of the financial and legal practices, as well as issues of corporate
financial year. The business and financial goals are assessed governance. He acts as a point of communication
each quarter with actual accomplishments by the Board. The between the management, board of directors, company
non-financial successes are also evaluated by the Board in shareholders, reporting in a timely and accurate manner
each quarter. Furthermore, yearly appraisal and assessment of on company procedures and developments
the accomplishments of goals are made at the end of the year. ii. Ensure the Bank complies with its governing document,
A few mentionable KPIs for the CEO are: meet annual budgetary policies, company law and any other relevant legislation i.e.
targets approved by the Board, maximize shareholders value regulations with Bangladesh Bank, Bangladesh Securities
through desired ROA, ROI, ROE and EPS, maintain sustainable and Exchange Commission (BSEC) and Registrar of Joint
growth on investment and revenue for the Bank, reduction of NPL Stock Companies etc.
ratio and improvement in the score for CAMELS & CRMR of BB. iii. Support the Chairman in the smooth functioning of the
Board. Receive agenda items from other Directors/staff
Board Meetings: and ensure appropriate agenda items are tabled at Board
The Board meets as required to discuss business strategy, meetings. This is done in consultation with the Chief
financial performance, matters pertaining to compliance and Executive and the Chair.
governance as well as reports on matters deliberated by the iv. In line with Bangladesh Bank guidelines the Company
respective committees. The Board reviews, amongst others, Secretary has to act as the Secretary to all the committees
the financial performance of the Bank and subsidiaries, risk i.e. Executive Committee, Audit Committee and Risk
management and compliance reports and approve the Management Committee of the Board of Directors.
quarterly results of the Bank at its meeting. In addition, Special v. Ensure the appointment of Bank’s board members as per
Board meetings are held when necessary, to deliberate on major procedure laid down in the governing document and
transactions and ad-hoc matters that require the Board’s urgent policies are followed.
attention and decision. A Board meeting is held at the beginning vi. Confirms that Annual General Meetings (AGMs) and
of the year to discuss the Bank’s Business plan and budget. Extraordinary General Meetings (EGMs) are run effectively
Meeting papers on the proposals and reports are delivered and in accordance with the provisions of Bank’s governing
to the Directors prior to the meetings, giving them sufficient document.
time to evaluate the proposals. Paperless meeting has been vii. File the annual list of members and summary of share
introduced using in-house developed software. This enables the capital together with the authenticated Balance Sheet and
Board to function and discharge their responsibilities effectively. the Profit and Loss account. Issue Dividend Warrants, bonus
The minimum information required for the Board to make an share certificates and make arrangement for disposal of
informed and effective decision includes background, objective, fractional shares, if any.
key issues, rationale, financial and non-financial impact of the viii. viii. Maintain and liaise with various corporate bodies viz.
proposal. Directors who are unable to attend a meeting due to BAB, ABB, Chambers/other bodies, regulators.
unavoidable circumstances are encouraged to provide feedback
to the Chairman on matters to be deliberated for their views and Business objectives and areas of business focus:
which are given due consideration at the meetings.
• PBL’s Board always sets business objectives and areas for
focus in consistency with the market. The latest business
Directors’ Remuneration:
objectives and areas of business focus can be found in
Directors are not eligible for any remuneration other than the “Statement Regarding Forward Looking Approach” has
attendance fee for the Board and its Committee Meeting. been included with the annual report.
Currently, as per BRPD Circular letter No. 11, dated October 04,
2015, directors are eligible for remuneration of BDT 8,000 for Audit Committee:
attending each meeting but numbers of such Meetings are
As per BSEC notification BSEC/CMRRCD/2006-158/207/
also prescribed in the said circular determining the numbers
Admin/80 dated 3rd June 2018 on Corporate Governance Code
with or without remuneration.
and Bangladesh Bank Guidelines; the current Audit Committee

PRIME BANK 63
ANNUAL REPORT 2018

has been formed with 4 members including 3 Independent 8. The representation letter to the auditors; and
Directors. All the members belong to none-xecutive category 9. All material information presented with the financial
and are financially literate as they have years of experience in statements including the business review, and corporate
banking, businesses and financial sectors reforms. governance statements relating to the audit and risk
The Audit Committee of the Board is headed by an independent management.
non-executive director who is not a member of the Executive • Make recommendations to the Board for approval
Committee. He is a retired Senior Financial Sector Specialist at the Annual General Meeting on the appointment,
from the World Bank and a Ph.D. in Development Economics reappointment and removal of the external auditor. The
from University of Hawaii, USA and MBA from IBA Dhaka Audit Committee also ensures that process for appointment
University with distinction. Besides the Chairman, another of external auditor passes through due procedure.
member of AC is a doctorate (Ph. D) in Economics and also • Oversee the relationship with the external auditor,
a retired World Banker and currently Director, Policy Research including:
Institute (PRI), a leading Policy & Research Think-Tank of
i. Approving the terms of engagement (and the engagement
Bangladesh. A third member of the Committee is a Managing
letter) of the external auditor, including the remuneration
Partner of a renowned audit firm and distinguished Fellow
to be paid
Chartered Accountant.
j. Assessing the external auditor’s effectiveness,
The Audit Committee has an approved Internal Audit Charter to independence and objectivity, ensuring that key partners
operate and function independently and effectively. The TOR has are rotated at appropriate intervals
been suitably designed to carry out its roles and responsibilities
k. Agreeing the policy for, and where required by that policy,
to attain the common objective of oversight. As per Charter,
approving the provision of non-audit services by the
Head of Internal Audit has direct access to the audit committee
external auditor and the related remuneration
and can raise his concerns whenever situation so warrants.
l. Agreeing with the Board policy on the employment of
former employees of the Bank’s auditor, and monitoring
Responsibilities of the Audit Committee:
the implementation of this policy
• To monitor integrity of the financial statements of the Bank
• Review and approve the annual audit plan, and ensure that
(and any discussion or analysis thereof including annual and
it is consistent with the scope of the audit engagement, and
interim reports), and any formal announcements relating to the
coordinated with the activities of the Internal Audit function
Bank’s actual and forecast financial performance, reviewing
• Discuss with the external auditor, before the audit
significant financial reporting judgments contained in them.
commences, the nature and scope of the audit and review
• To review any unusual items or matters brought to its the auditor’s quality control procedures and steps taken by
attention requiring the exercise of managerial judgment the auditor to respond to changes in regulatory and other
affecting the preparation of the statements and requirements
announcements
• Review the findings of the audit with the external auditor,
• To provide a forum for the discussion and resolution of considering the external auditor’s management letter and
areas of disagreement in relation to the statements and management’s responsiveness to the auditor’s findings
announcements, e.g. between management and the and recommendations
External Auditor Accounting, Financial Reporting and
• Review reports prepared by the external auditor as the
Regulatory Compliance
Audit Committee shall require, considering management’s
• To review, and challenge where necessary, the actions, response to any major external audit recommendations
estimates and judgments of management (and any
• Review annually and report to the Board on the
changes in them), in relation to the interim and annual
qualification, expertise and resources, and independence
financial statements before submission to the Board,
of the external auditors and the effectiveness of the audit
paying particular attention to:
process, with a recommendation on whether to propose to
1. Significant accounting policies and practices, and any the shareholders that the external auditor be reappointed.
changes in them The assessment should cover all aspects of the audit
2. Disclosures and estimates requiring a major element of service provided by the audit firm, and include obtaining
judgment a reporting on the audit firm’s own internal quality control
3. The extent to which the financial statements are affected procedures and consideration of the audit firm’s annual
by any unusual transactions in the year, the methods used transparency report where available.
to account for any significant or unusual transactions • Ensure that the audit committee section of the annual report
where different approaches are possible, and how such should include an explanation of how the committee has
transactions are disclosed assessed the effectiveness of the external audit process and
4. The clarity and completeness of disclosures, and the the approach taken to the appointment or reappointment of
context within which financial statements are made the external auditor, including length of term
5. Compliance with accounting standards • Review the audit representation letters before signature,
6. Compliance with legal and regulatory requirements giving particular consideration to any nonstandard issues
within the representations.
7. The going concern assumption

64 PRIME BANK
Internal Control: 2. Timely review of evaluations of internal controls made by
management, internal auditors, and external auditors.
A system of effective internal controls is a critical component
of bank management and a foundation for the safe and sound 3. Periodic efforts to ensure that management has promptly followed
operation of the organization. A system of strong internal up on recommendations and concerns expressed by auditors
controls can help ensure that the goals and objectives of a and supervisory authorities on internal control weaknesses.
banking organization will be met, that the bank will achieve 4. Periodic review of the appropriateness of the bank’s
long-term profitability targets, and maintain reliable financial strategy and risk limits.
and managerial reporting. Such a system can also help ensure Through the establishment of the Audit Committee, the
that the bank will comply with laws and regulations as well as Board of Directors monitors the effectiveness of internal
policies, plans, internal rules and procedures, and decrease the control system. The Audit Committee evaluates whether
risk of unexpected losses or damage to the bank’s reputation. management is setting the appropriate compliance culture by
Internal control is a process established by the board of communicating the importance of internal control among the
directors, senior management and all levels of personnel. employees. They also review the corrective measures taken by
It is not solely a procedure or policy that is performed at a the management relating to operational lapses.
certain point in time, but rather it is continually operating at Senior management of Prime Bank develops processes that
all levels within the bank. The board of directors and senior identify, measure, monitor and control risks incurred by the
management are responsible for establishing the appropriate bank; maintains an organizational structure that clearly assigns
culture to facilitate an effective internal control process and responsibility, authority and reporting relationships; ensures
for monitoring its effectiveness on an ongoing basis; however, that delegated responsibilities are being carried out effectively;
each individual within an organization must participate in the sets appropriate internal control policies; and monitors the
process. The main objectives of the internal control process adequacy and effectiveness of the internal control system.
can be categorized as follows: They ensure proper control through techniques such as top
13. Efficiency and effectiveness of activities (performance level reviews, activity controls, physical controls, compliance
objectives); with exposure limit, approvals & authorizations and verification
14. Reliability, completeness and timeliness of financial and & reconciliation of transactions of the Bank.
management information (information objectives); and
Review of the adequacy of the system of internal controls
15. Compliance with applicable laws and regulations
by Board of Directors:
(compliance objectives).
In almost every Audit Committee meeting the issue of
Performance objectives for internal controls pertain to the
adequacy of the system of internal controls is a factor that is
effectiveness and efficiency of the Bank in using its assets and
taken into consideration. The Audit Committee is responsible
other resources and protecting the bank from loss.
to the Board of Directors to ensure that the system of
Information objectives address the preparation of timely, internal controls is adequate to protect against any type
reliable, relevant reports needed for decision-making within of fraud & forgeries. The committee reviews the corrective
the banking organization. They also address the need for measures taken by management relating to fraud-forgery
reliable annual accounts, other financial statements and other and deficiencies in internal control. The Audit Committee
financial-related disclosures and reports to shareholders, places all the compliance report before the Board of Directors
supervisors, and other external parties. and regulators on a timely basis and has performed all other
Compliance objectives ensure that all banking business oversight functions in relation to Internal Control System of
complies with applicable laws and regulations, supervisory the Bank. In this way, the Directors review the adequacy of the
requirements, and the organization’s policies and procedures. system of internal controls in consistent manner.
This objective must be met in order to protect the Bank’s
reputation. Risk Management:

Key objective is Identification of risks to which PBL is exposed

Key features of Internal Control System and the manner in internally and externally since Banking industry is unique in
which the system is monitored: many ways and one of the features that set it apart from other
Key features of Internal Control System of the bank are as business is the diversity and complexity of the risks it is exposed
follows: to. Deregulated regimes along with globalization of business
have opened new frontiers that warrant risk management an
1. Management oversight and the control culture
even greater priority. The failure to adequately manage these
2. Risk recognition and assessment risks exposes banks not only to business losses but also may
3. Control activities and segregation of duties result in circumstances that they cannot remain in business.
4. Information and communication
Following are the core risk areas of banking:
5. Monitoring activities and correcting deficiencies
1. Credit Risk
The board of directors of Prime Bank performs the following
2. Asset and Liability/Balance Sheet Risk
activities to monitor the Internal Control System:
3. Foreign Exchange Risk
1. Periodic discussions with management concerning the
4. Internal Control and Compliance risk
effectiveness of the internal control system.

PRIME BANK 65
ANNUAL REPORT 2018

5. Money laundering Risk Furthermore, as per the BSEC Code, the Chairperson of the
6. Information and Communication Technology Security Risk Committee may appoint or co-opt any external expert and/
7. Environment Risk or member(s) of staff to the Committee as advisor who shall
be non-voting member, if the Chairperson feels that advice
Banking companies in Bangladesh, while conducting day to-
or suggestion from such external expert and/or member(s) of
day operations, may face additionally some other risks both
staff shall be required or valuable for the Committee.
internally and externally. i.e.
The Committee is headed by an Independent Director who is
• Credit risk also includes concentration risk, country risk,
a retired Senior Private Sector Development Specialist of the
transfer risk, and settlement risk
World Bank and a Ph.D. in Economics from Boston University,
• Market risk (including interest rate risk in the banking book,
USA. He is currently Director, Policy Research Institute (PRI),
foreign exchange risk and equity market risk)
a leading Policy & Research Think-Tank of Bangladesh. Other
• Liquidity Risk
two members of the Committee are also renowned business
• Operational Risk
personality of the Country.
• Strategic Risk
• Reputation Risk
Role Of The NRC:

Strategies adopted to manage and mitigate the risks NRC shall be independent and responsible or accountable
to the board of directors and to the shareholders. NRC shall
Prime Bank adopted following strategies to manage and
oversee, among others, the following matters and make report
mitigate the risk but not limited to:
with recommendation to the board of directors:
• Setting targets for capital ratios and capital composition
1. (1) Formulation of the criteria for determining qualifications,
• Managing balance sheet
positive attributes and independence of a director and
• Managing the funding structure recommend to the Board of Directors’ a policy, relating
• Determining general principles for measuring, managing, to the remuneration of the directors, top level executives,
and reporting the bank’s risks considering the followings;
• Developing risk policies for business units a. The level and composition of remuneration is reasonable
• Determining the overall investment strategy and sufficient to attract, retain and motivate suitable
• Identifying, monitoring, and managing the bank’s current directors to run the company successfully;
and potential operational risk exposures b. The relationship of remuneration to performance is clear
• Handling “critical risks” (risks that require follow-up and and meets appropriate performance benchmarks; and
further reporting) c. Remuneration to directors, top level executives involves a
• Following up on reviews by and reports from Bangladesh balance between fixed and incentive pay reflecting short
Bank and informing the Board of issues affecting the bank’s and long-term performance objectives appropriate to the
operational risks working of the company and its goals.

• Following up on reports prepared by Internal Audit and informing 2. Devising a policy on Board’s diversity taking into
the Board through Audit Committee of unusual circumstances consideration age, gender, experience, ethnicity,
educational background and nationality.
• Preparing management information on issues such as IT
security, physical security, business continuity, and compliance. 3. Identifying persons who are qualified to become directors
and who may be appointed in top level executive positions
More information regarding Risk management techniques
in accordance with the criteria laid down, and recommend
used by management to identify and mitigate risk can be
their appointment and removal to the Board.
found in the Risk Management chapter.
4. Formulating the criteria for evaluation of performance of
Independent Directors and the Board;
Formation of Nomination and Remuneration Committee:
5. identify the company’s needs for employees at different
As per BSEC notification BSEC/CMRRCD/2006-158/207/
levels and determine their selection, transfer/replacement
Admin/80 dated 3rd June 2018 on Corporate Governance
and promotion criteria;
Code, the Board of Directors in its 485th Meeting held on
6. Developing, recommending and reviewing annually the
28.10.2018 constituted a new committee named ‘Nomination
company’s human resources and training policies; and
and Remuneration Committee’ (NRC) with the following 03
(three) members: 7. The company shall disclose the nomination and
remuneration policy and the evaluation criteria and activities
i. Dr. G M Khurshid Alam, Independent Director - Chairman
of NRC during the year at a glance in its annual report;
ii. Mr. Md. Nader Khan, Director - Member
Despite the formation of NRC in compliance with the BSEC
iii. Mr. Md. Shirajul Islam Mollah, Director - Member Corporate Governance Code, activation of the committee has
All the members belong to nonexecutive category and are been put on hold as per decision of Central Bank, the Primary
financially literate as they have years of experience in banking, Regulator of the Bank Companies for further clarification on
businesses and financial sector. apparent conflict with the Bank Companies Act with regard to
number/formation of committees by the Board of Directors.

66 PRIME BANK
Ethics, Integrity and Compliance: are advised to take particular care when they are responsible
for dealing with customers, suppliers, agents on behalf of the
Prime Bank is committed to establishing highest level of
Bank. Any failure to disclose a conflict of interest leads to a
business compliance and ethical standard.
disciplinary action.
The Bank has an ‘Employee Code of Ethics and Business
Conduct’ – a framework of ethical behavior for all the Communication on the statement of ethics & business
employees of the organization. practices:
The leaders/managers are required to exemplify the highest All employees are educated to comply with Code of Ethics
standards of conduct and ethical behavior. Leaders/managers and conform to the relevant laws and regulations. HR Division
at Prime bank are expected to: makes sure that during joining employees read, understand the
• Lead according to Prime Bank standards of ethical conduct, ‘Code of Ethics and Business Conduct’ and acknowledge the
in both words and actions. same by signing. HR continuously raises awareness on regular
interval among employees to ensure that business decisions
• Create and maintain an environment where employees feel
and actions undertaken by employees are completely in
comfortable asking questions or reporting concerns.
compliance with the prevalent rules and regulations. The
• Be diligent in enforcing the Bank’s ethical standards and leaders/managers of the Bank are mandatorily required to
taking appropriate action if violations occur. communicate and help their employees to understand how
• Contact the Human Resources Division when in need of ethics apply to their positions and everyday behavior.
assistance. The Employee Code of Ethics and Business The Board of Directors of Prime Bank has approved ‘Employee
Compliance also specify the grounds of punishment Code of Ethics and Business Conduct’ with a commitment to
to refrain employees from any unwanted behavior. For setting high ethical standards so that customers’ expectations
instances, an employee shall be liable to disciplinary and interests are protected in a compliant manner.
actions, if he/she:

• Is convicted of any offence involving moral turpitude; or Whistle Blowers Protection Policy:

• Is corrupt or may reasonably be considered to be corrupt; or Whistle blowing about bad practices can help ensure that
problems are identified before it is too late. This helps
• Assumes a style of living beyond his/her ostensible means; or
prevent disasters ranging from customer mistreatment to
• Is engaged or is reasonably suspected of being engaged huge financial loss. Prime Banks whistle blowing procedures
in subversive activities, or is reasonably suspected of being encourage employees to disclose concerns using appropriate
associated with others engaged in subversive activities, channels before these concerns become a serious problem
and whose retention in service is therefore considered which might jeopardize Bank’s reputation through negative
prejudicial to national security; or publicity, regulatory investigation, fines and/or compensation.
• Is in possession of pecuniary resources or property Employees are encouraged to report any wrong-doing within
disproportionate to his/her known sources of income etc. the Bank. The Head of Internal Control and Compliance and
• The code of employee ethical behavior gives focus on the Human Resources Divisions are the primary channel to report
followings: any incident. The Reporting channels offer the employees the
opportunity to report while maintain their identity confidential.
• Protecting Privacy of Customers’ and Confidential However, from experience Prime Bank understands that an
Company Information, effective whistle blowing policy demands for a shift in the
• Preventing Money Laundering and/or Fraud, culture. The Bank has a division named Internal Control and
Compliance Division which dedicatedly works to ensure
• Avoiding Drug/Substance/Alcohol Abuse in the Workplace
effective controls mechanism in the entire business entity.
• Protecting Bank’s assets

• Avoiding any conflict of interest etc. Disclosure of Remuneration of Directors, Chairman, Chief
Executive and Senior Executives
Each of the above stated issue is properly explained as
separate section in the ‘Employee Code of Ethics and Business The Directors of the Bank are paid only honorarium for
Conduct’. attending Board or Committee meetings. On the other hand,
the Managing Director is paid salary and allowances as fixed
The ‘Employee Code of Ethics and Business Conduct’ starts
by the Bangladesh Bank. The total cost related to employee
with the phrase “Uncompromising integrity”. Employees of
compensation is shown in the profit and loss account.
Prime Bank are judged not only in terms of competencies, but
also with their integrity. The reputation and continued success
Human Capital:
of Prime Bank largely depend on a shared commitment to the
core value of integrity. Respecting this value is the responsibility Employees are the key driving force of Prime Bank’s continuous
of each and every member of the organization. success. A group of motivated and engaged employees with
diverse talents are the key asset of Prime Bank. Prime Bank is
The Code of Ethics and Business Conduct aware employees
highly reputed in the market as an employer of choice. The
to avoid situations where their personal interests conflict, or
Bank has positioned itself with a performance-driven rewarding
may appear to conflict, with those of the Bank. Employees
work culture; where employees are treated with respect and

PRIME BANK 67
ANNUAL REPORT 2018

receive widened opportunities to realize their diverse potentials shareholders are made by publication in the daily newspapers
fully as well as benefit the organization by demonstrating value and through the digital media as well. To ensure compliance
creating behaviors. with regulatory bodies, PBL ensures that it publishes in two
widely circulated newspapers in English and Bangla and sent
To ensure long term sustainability, Prime Bank has a special
to the stock exchanges and BSEC.
focus on skill and merit based recruitment and selection process,
highly competitive remuneration package, adequate training and PBL ensures effective communication with the shareholders
development programs, career growth with succession planning, and encourages shareholder participation at the AGM. PBL
high-performance culture and pleasant working atmosphere connects with the investors through AGM, EGM, Annual Report
where employees are able to escalate their grievance and receive and Company’s website. Shareholders are offered the chance
counseling. Following are highlights by which human resources to enquire with the Board regarding the operation of the Bank.
are nourished and career progressions are ensured: They are also presented the opportunity and scope to make
queries with the Company’s auditors concerning topics linked
• Recruitment and selection process with ‘best-fit’ ethos
to the audit of the Company’s financial statements at the AGM.
followed by clearly defined policy and procedures

• Ensuring adequate learning & development opportunities Environmental and Social Obligation:
through effectively designed training programs and on-
A natural and fresh environment, efficient use of reserves and
the-job experience
appreciation for people’s well-being and safety are what PBL
• Well-crafted compensation & benefits package to have a has always believed in. In harmony with this, PBL is constantly
positive impact on employees’ overall wellbeing working towards decreasing consumption of energy (especially
• Ensuring horizontal and vertical career growth electricity, water, gas, papers etc.) at its branches, removal
of the use of hazardous substances from its practices and
• Succession planning for the talents in different layers of the
reducing waste generation. The importance is on diminishing
organizational hierarchy
paper transactions to the extent that the Credit Committee has
• Comprehensive performance management program to already been made paperless, and PBL is moving forward and
reward employees and drive further development thinking about implementing it more through the branches.
• Reward & recognition program to meet employees’ intrinsic Board and its Committee Meetings are also made paperless
psychological need for appreciation through using in-house built software. One of the key objectives
for financing manufacturing companies is to ensure that they
• Grievances and counseling
try to lessen their carbon footprint.
• Ensuring a decent workplace where employees can
Bangladesh Bank has taken steps to inspire green banking in
participate in work with respect
Bangladesh through issuance of guidelines on green banking
and Environmental Risk Management (ERM). It is always
Communication to Shareholders & Stakeholders:
inspiring banks in lessening paper communications and fitting
Prime Bank ensures that all shareholders are notified at least solar power system in branches and giving refinance to the
2 weeks before the AGM so that they can attend on the day. solar energy, bio-gas and effluent treatment plant (ETP) sectors
Financial Statements (Quarterly and Half yearly) or relevant at concessional pricing. PBL has always been committed to the
information are updated on the website and notified to all environment and also been active in social activities throughout
stakeholders duly. The Bank tries to maintain liaison with the year 2018, and will remain so in the future as well.
the shareholders as much as possible and ensures that all
PBL has always been active regarding its activities for the
stakeholders are informed about the bank’s activities on a
environment. One of its achievements was to make the Credit
routine basis. PBL also engages with all types of stakeholders
Committee & Board Meetings paperless. It is also in the process
as much as possible to ensure that information is effectively
of issuing a green manual for how to make all branches and
communicated.
divisions more environmental friendly. Also, solar panels have
The Directors appreciate the importance of general been set up in quite a few branches as well, and the initiative
shareholders of the Bank and use the Bank’s AGM as further has been taken to install more solar panels in branches in the
opportunities to communicate with them. PBL provides copies future. Environmental activities during the year can be found
of the annual report in order that these are made available to more in details in the Green Banking Report.
them well in advance for detail and constructive discussion. It is
PBL has always been an active member of society and has tried
the company’s policy to give the shareholders the opportunity
to enhance people’s lives and its employees as well.
to ask questions about its activities and prospects at the AGM.
The Board also structures these meetings so that shareholders Prime Bank Foundation was initiated solely for the purpose
can vote separately on each matter, by proposing separate of Corporate Social Responsibility. PBL’s social activities
resolutions for each item to be considered. can be found on the Prime Bank Foundation chapter and its
commitment to its employees can be found in the Employee’s
PBL tries utmost to ensure that all shareholders can participate
Report.
in the AGM. Annual Reports are sent at least 2 weeks before
the AGM to ensure all shareholders are notified about the event
date, place and time. Also, PBL ensures that AGM is held at a
convenient place where all shareholders may attend. Notices to

68 PRIME BANK
CERTIFICATE ON CORPORATE GOVERNANCE

PRIME BANK 69
ANNUAL REPORT 2018

BSEC CHECKLIST ON CORPORATE GOVERNANCE

Status of Compliance With Corporate Governance Code (CGC)

Annexure – C

Status of compliance with the conditions imposed by the Commission’s Notification No. BSEC/CMRRCD/2006-158/207/Admin/80
dated June 03, 2018 issued under section 2CC of the Securities and Exchange Ordinance, 1969:

Compliance Status Remarks

Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
Size of the Board of Directors
1 (1) Board’s size shall not be less than 5 (five) and more than 20 √
(twenty).
Independent Directors
1(2) (a) √
At least 1/5th of the total number of directors;
1(2) (b) For the purpose of this clause:
Independent Director does not hold any share or holds less Independent
than one percent (1%) shares of total paid up capital; Director does
1(2) (b) (i) √ not hold any
shares of the
company.
Independent Director is not a sponsor of the company or is
not connected with the company’s any sponsor or director
or nominated director or shareholder or any of its associates,
sister concerns, subsidiaries and parents or holding entities
1(2) (b) (ii) √
who holds one percent (1%) or more shares of the total paid-up
shares of the company on the basis of family relationship and
his or her family members also shall not hold above mentioned
shares in the company:
Independent Director has not been an executive in immediately
1(2) (b) (iii) √
preceding 2 (two) financial years;
Independent Director does not have any other relationship, Independent
whether pecuniary or otherwise, with the company or its Directors are
subsidiary/associated companies; engaged as
1(2) (b) (iv) √ nominated
Director of
subsidiary
companies.
Independent Director is not a member or director or officer of
1(2) (b) (v) √
any stock exchange;
Independent Director is not the shareholder, director or officers
1(2) (b) (vi) of any member excepting Independent Director or TREC holder √
of Stock Exchange or an Intermediary of the capital market;
Independent Director is/was not the partners or executives
during preceding 3 (three) years of concerned company’s
1(2) (b) (vii) statutory audit firm or audit firm engaged in internal audit √
services or audit firm conducting special audit or professional
certifying compliance of this Code;
Independent Director is not the Independent Director in more
1(2) (b) (viii) √
than 5 (five) listed companies;
Independent Director is not convicted by a court of competent
1(2) (b) (ix) jurisdiction as a defaulter in payment of any loan or any √
advance to a bank or a non-bank financial institution (NBFI);
Independent Director has not been convicted for a criminal
1(2) (b) (x) √
offence involving moral turpitude;

70 PRIME BANK
 Compliance Status Remarks
Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
The independent Director shall be appointed by the Board of
1(2) (c) √
Directors and approved by the Shareholders in the AGM;
The post of Independent Directors cannot remain vacant for No such
1(2) (d) more than 90 days; √ event
occurred.
The tenure of office of an Independent Directors shall be for a period
1(2) (e) √
of 3 (three) years which may be extended for 1 (one) tenure only;
1(3) Qualification of Independent Director (ID)
Independent Director shall be a knowledgeable individual with
1(3) (a) √
integrity who is able to ensure required compliance.
1(3) (b) Independent Director shall have following qualifications:

Business Leader who is or was a promoter or director of an

unlisted company having minimum paid-up capital of Tk.100.00
1(3) (b) (i) √
million or any listed company or a member of any national or
international chamber of commerce or business association;
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
1(3) (b) (ii) 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;
Former official of government or statutory or autonomous or
regulatory body in the position not below 5th Grade of the
1(3) (b) (iii) √
national pay scale, who has at least educational background of
bachelor degree in economics or commerce or business or Law;
University Teacher who has educational background in N/A
1(3) (b) (iv)
Economics or Commerce or Business Studies or Law;
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
1(3) (b) (v) √
Chartered Financial Analyst or Chartered Certified Accountant
or Certified Public Accountant or Chartered Management
Accountant or Chartered Secretary or equivalent qualification;
The Independent Director shall have at least 10 (ten) years of
1(3) (c) √
experiences in any field mentioned in clause(b);
In special cases, above qualification or experiences may be
1(3) (d) √
relaxed by the Commission.
1(4) Duality of Chairman of the Board of Directors and Managing Director or CEO-

The Positions of the Chairman of the Board and the Managing

1(4) (a) Director (MD) and/or Chief Executive Officer (CEO) of the √
company shall be filled by different individuals;
The Managing Director (MD) and/or Chief Executive Officer
1(4) (b) (CEO) of a listed company shall not hold the same position in √
another listed company;
The Chairman of the Board shall be elected from among the
1(4) (c) √
non-executive directors of the company;
The Board shall clearly define respective roles and
1(4) (d) responsibilities of the Chairman and the Managing Director √
and/or Chief Executive Officer;

PRIME BANK 71
ANNUAL REPORT 2018

Compliance Status Remarks

Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
In the absence of the Chairman of the Board, the remaining
members may elect one of themselves from non-executive
1(4) (e) directors as Chairman for that particular Board’s meeting; √
the reason of absence of the regular Chairman shall be duly
recorded in the minutes.
1(5) Directors’ Report to Shareholders
1(5) (i) Industry outlook and possible future developments in the industry; √

1(5) (ii) Segment-wise or product-wise performance; √

Risks and concerns including internal and external risk factors,
1(5) (iii) √
threat to sustainability and negative impact on environment;
Discussion on cost of goods sold, gross profit margin and net
1(5) (iv) √
profit margin;
Discussion on continuity of any Extra-Ordinary activities and
1(5) (v) √
their implications (gain or loss);
Basis for related party transaction- along with a statement
1(5) (vi) showing amount, nature of related party, nature of transactions √
and basis of transactions of all related party transactions;
Utilization of proceeds raised through public issues, right issues N/A
1(5) (vii)
and/ or through any others instruments;
An explanation if the financial results deteriorate after the N/A
1(5) (viii)
company goes for IPO, RPO, Rights Offer, Direct Listing etc.;
If significant variance occurs between Quarterly Financial
performance and Annual Financial Statements the
1(5) (ix) √
Management shall explain about the variance on their Annual
Report’
Remuneration paid to directors including Independent
1(5) (x) √
Directors;
The financial statements prepared by the Management of
1(5) (xi) the company present fairly its state of affairs, the results of its √
operation, cash flows and changes in equity;
Proper books of account of the company have been
1(5) (xii) √
maintained;
Appropriate accounting policies have been consistently
applied in preparation of the financial statements and that the
1(5) (xiii) √
accounting estimates are based on reasonable and prudent
judgment;
International Accounting Standards (IAS) or International
Financial Reporting Standards (IFRS), as --applicable in
1(5) (xiv) Bangladesh, have been followed in preparation of the financial √
statements and any departure there-from has been adequately
disclosed;
The system of internal control is sound in design and has been
1(5) (xv) √
effectively implemented and monitored;
Minority shareholders have been protected from abusive
1(5) (xvi) actions by or in the interest of, controlling shareholders acting √
either directly or indirectly and have effective means of redress;
There are no significant doubt upon the company’s ability to
1(5) (xvii) √
continue as a going concern;
Significant deviations from the last year’s operating results
1(5) (xviii) of the company shall be highlighted and the reasons thereof √
should be explained;

72 PRIME BANK
 Compliance Status Remarks
Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
Key operating and financial data of at least preceding 5 (five)
1(5) (xix) √
years shall be summarized;
If the company has not declared dividend (cash or stock) for N/A
1(5) (xx)
the year, the reasons thereof shall be given;
Board’s statement to the effect that no bonus share or stock No such
1(5) (xxi) dividend has been or shall be declared as interim dividend; √ event
occurred.
Total number of Board meetings held during the year and
1(5) (xxii) √
attendance by each director.
The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name
1(5) (xxiii)
wise details where stated below) held by
Parent or Subsidiary or Associated Companies and other
1(5) (xxiii) (a) √
related parties (name- wise details);
Directors, Chief Executive Officer, Company Secretary, Chief
1(5) (xxiii) (b) Financial Officer, Head of Internal Audit and Compliance and √
their spouses and minor children (name- wise details)’
1(5) (xxiii) (c) Executives; and √
Shareholders holding ten percent (10%) or more voting interest
1(5) (xxiii) (d) N/A
in the company (name- wise details).
In case of the appointment/re-appointment of a Director, a disclosure on the following information to the
1(5) (xxiv)
Shareholders:-
1(5) (xxiv) (a) a brief resume of the Director; √

1(5) (xxiv) (b) Nature of his/her expertise in specific functional areas; √

Names of companies in which the person also holds the
1(5) (xxiv) (c) √
directorship and the membership of committees of the Board.
A Management’s Discussion and Analysis signed by CEO or MD presenting detailed analysis of the
1(5) (xxv) company’s position and operations along with a brief discussion of changes in the financial statements,
among others, focusing on:-
Accounting policies and estimation for preparation of financial
1(5) (xxv) (a) √
statements;
Changes in accounting policies and estimation, if any, clearly
describing the effect on financial performance or results and
1(5) (xxv) (b) √
financial position as well as cash flows in absolute figure for
such changes;
Comparative analysis (including effects of inflation) of financial
performance or results and financial position as well as cash
1(5) (xxv) (c) √
flows for current financial year with immediate preceding five
years explaining reasons thereof;
Compare such financial performance or results and financial
1 (5) (xxv) (d) √
position as well as cash flows with the peer industry scenario;
Briefly explain the financial and economic scenario of the
1 (5) (xxv) (e) √
country and the globe;
Risks and concerns issues related to the financial statements,
1 (5) (xxv) (f) √
explaining such risk and concerns mitigation plan of the company;
Future plan or projection or forecast for company’s operation,
1 (5) (xxv) (g) performance and financial position, with justification thereof, i.e., √
actual position shall be explained to the shareholders in the next AGM;
Declaration or certification by the CEO and the CFO to the
1 (5) (xxvi) Board as required under condition No.3(3) shall be disclosed as √
per Annexure-A;

PRIME BANK 73
ANNUAL REPORT 2018

Compliance Status Remarks

Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
The report as well as certificate regarding compliance of
1 (5) (xxvii) 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.
1 (7) Code of the conduct for the Chairman, other Board members and Chief Executive officer

The Board shall lay down a code of conduct, based on the

recommendation of the Nomination and Remuneration Committee
1 (7) (a)
(NRC) at condition No.6, for the Chairman of the Board, other board √
members and Chief Executive Officer of the company;
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 Under
1 (7) (b)
of interest; compliance with laws, rules and regulations; process.
prohibition of insider trading; relationship with environment,
employees, customers and suppliers; and independency.
2 Governance of Board of Directors of Subsidiary Companies-
Provisions relating to the composition of the Board of the
2 (a) 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
2 (b) holding company shall be a director on the Board of the
√
subsidiary company;
The minutes of the Board meeting of the subsidiary company
2 (c) shall be placed for review at the following Board meeting of the
√
holding company;
The Minutes of the respective Board meeting of the holding
2(d) company shall state that they have reviewed the affairs of the
√
Subsidiary Company also;
The Audit Committee of the holding company shall also review
2 (e) 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
3
Audit and Compliance (HIAC) and Company Secretary (CS)-
3(1) Appointment

The Board Shall appoint a Managing Director (MD) or Chief

Executive Officer (CEO), a Company Secretary (CS), a Chief
3 (1) (a)
Financial Officer (CFO) and a Head of Internal Audit and √
Compliance (HIAC);
The positions of the Managing Director (MD) or Chief Executive
Officer (CEO), Company Secretary (CS), Chief Financial Officer
3 (1) (b)
(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
3 (1) (c) not hold any executive position in any other company at the
√
same time;

74 PRIME BANK
 Compliance Status Remarks
Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
The Board shall clearly define respective roles, responsibilities
3 (1) (d)
and duties of the CFO, the HIAC and the CS; √
The MD or CEO, CS, CFO and HIAC shall not be removed from No such
3 (1) (e) their position without approval of the Board as well as immediate event
dissemination to the Commission and stock exchange(s). occurred.
3 (2) 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.
3 (3) 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
3 (3) (a) 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
3 (3) (a) (i) statement or omit any material fact or contain statements that √
might be misleading;
These statements together present a true and fair view of
3 (3) (a) (ii) 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
3(3) (b) √
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
3 (3) (c) √
in the Annual Report.
Board of Directors’ Committee-

For ensuring good governance in the company, the Board shall √

4
have at least following sub-committees:
4 (i) Audit Committee; and √
4 (ii) Nomination and Remuneration Committee. √
5 Audit Committee
5(1) Responsibility to the Board of Directors

5 (1) (a) Audit Committee shall be the sub-committee of the Board; √

The Audit Committee shall assist the Board in ensuring that
the financial statements reflect true and fair view of the state
5 (1) (b) √
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
5 (1) (c) duties of the Audit Committee shall be clearly set forth in √
writing.
5 (2) Constitution of the Audit Committee
5 (2) (a) The Audit Committee shall be composed of at least 3 members; √
The Board shall appoint members of the Audit Committee
who shall be non-executive Directors of the company
5 (2) (b) √
excepting Chairman of the Board and shall include at least one
Independent Director.

PRIME BANK 75
ANNUAL REPORT 2018

Compliance Status Remarks

Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
All members of the Audit Committee should be “financially
literate” and at least 1 (one) member shall have accounting or
5 (2) (c) √
related financial management background and 10 (ten) years of
such experience.
The Board shall appoint the new Committee member if less
than 03 members to fill up the vacancy immediately or not later No such
5 (2) (d) than 1 (one) month from the date of vacancy in the Committee event
to ensure continuity of the performance of work of the Audit occurred.
Committee;
The Company Secretary shall act as the secretary of the
5 (2) (e) √
Committee;
The quorum of the Audit Committee meeting shall not
5 (2) (f) √
constitute without at least 01 Independent Director.
5(3) Chairman of the Audit Committee

Chairman of the Audit Committee shall be an Independent

5 (3) (a) √
Director.
In the absence of the Chairman of the Audit Committee, the
remaining members may elect one of themselves as Chairman
for that particular meeting, in that case there shall be no
5 (3) (b) √
problem of constituting a quorum as required under condition
No.5(4) (b) and the reason of absence of the regular Chairman
shall be duly recorded in the minutes.
Chairperson
of the Audit
Committee
was present
Chairman of the audit committee shall remain present in the in the last
5 (3) (c) √
Annual General Meeting (AGM): AGM. This
year it will
be ensured
by the
Management.
5 (4) Meeting of the Audit Committee
The Audit Committee shall conduct at least 04 (four) meetings
5 (4) (a) √
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
5 (4) (b) √
of the members of the Audit Committee, whichever is higher,
where presence of an Independent Director is must.
5 (5) Role of Audit Committee
5 (5) (a) Oversee the financial reporting process; √
5 (5) (b) 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
5 (5) (c) √
Audit and Compliance Plan and review of the Internal Audit and
Compliance Report;
5 (5) (d) Oversee hiring and performance of external auditors; √

76 PRIME BANK
 Compliance Status Remarks
Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
Hold meeting with the external or statutory auditors for review
5 (5) (e) of the annual financial statements before submission to the √
Board for approval or adoption;
Review along with the management, the annual financial
5 (5) (f) √
statements before submission to the board for approval;
Review along with the management, the quarterly and half
5 (5) (g) yearly Financial Statements before submission to the Board for √
approval;
5 (5) (h) Review the adequacy of internal audit function; √
Review the Management’s Discussion and Analysis before
5 (5) (i) √
disclosing in the Annual Report;
Review statement of a related party transactions submitted by
5 (5) (j) √
the Management;
Review Management Letters/ Letter of Internal Control
5 (5) (k) √
weakness issued by statutory auditors.
Oversee the determination of audit fees based on scope and
magnitude, level of expertise deployed and time required
5 (5) (l) √
for effective audit and evaluate the performance of external
auditors; and
Oversee whether the proceeds raised through Initial Public
Offering ((IPO) or Repeat Public Offering (RPO) or Rights Share
5 (5) (m) N/A
Offer have been utilized as per the purposes stated in relevant
offer document or prospectus approved by the Commission.
5 (6) Reporting of the Audit Committee

5 (6) (a) Reporting to the Board of Directors

5 (6) (a) (i) The Audit Committee shall report on its activities to the Board. √
The Audit Committee shall immediately report to the Board on
5 (6) (a) (ii)
the following findings, if any:
Report on conflicts of Interests. No such
5 (6) (a) ii) (a) √ event
occurred.
Suspected or presumed fraud or irregularity or material defect No such
5 (6) (a) ii) (b) identified in the internal audit & compliance process or in the √ event
financial statements; occurred.
Suspected infringement of laws, regulatory compliances No such
5 (6) (a) (ii) (c) including securities related laws, rules and regulations; √ event
occurred.
Any other matter which the Audit Committee deems necessary No such
5 (6) (a) ii) (d) shall be disclosed to the Board immediately. √ event
occurred.
5 (6) (b) Reporting to the Authorities

If the Audit Committee’s reporting to the Board is unreasonably No such

ignored, the Audit Committee shall report such findings to the event
Commission following due procedures. occurred.
5 (7) Reporting to the Shareholders and General Investors

Report on activities carried out by the Audit Committee, No such

including any report made to the Board under condition No.5(6) event
(a) (ii) above during the year, shall be signed by the Chairman of occurred.
the Audit Committee and disclosed in the annual report of the
issuer company

PRIME BANK 77
ANNUAL REPORT 2018

Compliance Status Remarks

Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
6 Nomination and Remuneration Committee (NRC)

6 (1) Responsibility to the Board of Directors

The Company shall have a Nomination and Remuneration

6 (1) (a) √
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
6 (1) (b) 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
6 (1) (c) forth in writing covering the areas stated at the condition No. 6 √
(5) (b)
6 (2) Constitution of the NRC
The Committee shall comprise of at least three members
6 (2) (a) √
including an Independent Director;
6 (2) (b) All members of the Committee shall be non-executive directors; √
Members of the Committee shall be nominated and appointed
6 (2) (c) √
by the Board;
The Board shall have authority to remove and appoint any
6 (2) (d) √
members of the Committee;
In case of death, resignation, disqualification, or removal of any No such
member of the Committee or in any other cases of vacancies, event
6 (2) (e)
the Board shall fill the vacancy within 180 (hundred eighty) days occurred.
of occurring such vacancy in the Committee;
The Chairman of the Committee may appoint or co-opt any No such
external expert and/or member(s) of staff to the Committee event
as advisor who shall be non-voting member, if the chairman occurred.
6 (2) (f)
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
6 (2) (g) √
Committee;
The quorum of the NRC meeting shall not constitute without
6 (2) (h) √
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
6 (2) (i) √
otherwise, other than Director’s fees or honorarium from the
company;
6 (3) Chairman of the NRC
The Board shall select 1 (one) member of the NRC to be
6 (3) (a) Chairman of the Committee, who shall be an Independent √
Director;
In the absence of the Chairman of the NRC, the remaining
members may elect one of themselves as Chairman for that
6 (3) (b) √
particular meeting, the reason of absence of the regular
Chairman shall be duly recorded in the minutes;
The Chairman of the NRC shall attend the annual general Will be
meeting (AGM) to answer the queries of the shareholders; ensured
6 (3) (c)
by the
Management.

78 PRIME BANK
 Compliance Status Remarks
Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
6 (4) Meeting of the NRC

The NRC shall conduct at least one meeting in a financial year; Under
6 (4) (a)
process.
The Chairman of the NRC may convene any emergency
6 (4) (b) N/A
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
6 (4) (c) of the Committee, whichever is higher, where presence of an N/A
Independent Director is must as required under condition No.
6 (2) (h);
The proceedings of each meeting of the NRC shall duly be
6 (4) (d) recorded in the minutes and such minutes shall be confirmed in N/A
the next meeting of the NRC.
6 (5) Role of the NRC

NRC shall be independent and responsible or accountable to

6 (5) (a) √
the Board and to the shareholders
NRC shall oversee, among other, the following matters and
6 (5) (b) √
make report with recommendation to the Board:
Formulating the criteria for determining qualifications positive
attributes and independence of a director and recommend
6 (5) (b) (i) √
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
6 (5) (b) (i) (a) sufficient to attract, retain and motivate suitable directors to run √
the company successfully;
The relationship of remuneration to performance is clear and
6 (5) (b) (i)(b) √
meets appropriate performance benchmarks; and
Remuneration to directors top level executive involves a Remuneration
balance between fixed and incentive pay reflecting short and of directors
long-term performance objectives appropriate to the working and CEO’s is
6 (5) (b) (i)(c) of the company and its goals; determined
by
Bangladesh
Bank.
Devising a policy on Board’s diversity taking into consideration Under
6 (5) (b) (ii) age, gender, experience, ethnicity, educational background and process.
nationality;
Identifying persons who are qualified to become directors
and who may be appointed in top level executive position in
6 (5) (b) (iii) N/A
accordance with the criteria laid down, and recommend their
appointment and removal to the Board;
Formulating the criteria for evaluation of performance of Under
6 (5) (b) (iv)
Independent Directors and the Board; process.
Identifying the company’s needs for employees at different Under
6 (5) (b) (v) levels and determine their selection, transfer or replacement process.
and promotion criteria, and
Developing, recommending and reviewing annually the Under
6 (5) (b) (vi)
company’s human resources and training policies; process.
The Company shall disclose the nomination and remuneration
6 (5) (c) policy and the evaluation criteria and activities of NRC during √
the year at a glance in its annual report.

PRIME BANK 79
ANNUAL REPORT 2018

Compliance Status Remarks

Condition (Put √ in the appropriate column) (if any)
Title
No. Not
Complied
complied
7 External or Statutory Auditors
The issuer company shall not engage its external or statutory
7 (1) auditors to perform the following services of the Company, √
namely:-
7 (1) (i) Appraisal or valuation services or fairness opinions; √

7 (1) (ii) Financial information systems design and implementation; √

Book-keeping or other services related to the accounting
7 (1) (iii) √
records or financial statements;
7 (1) (iv) Broker-dealer services; √
7 (1) (v) Actuarial services; √
7 (1) (vi) Internal audit services or special audit services; √
7 (1) (vii) Any service that the Audit Committee determines; √
Audit/certification services on compliance of corporate
7 (1) (viii) governance as required under clause(i) of condition No.9 (1), √
and
7 (1) (ix) 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
7 (2) the tenure of their audit assignment of that Company; his or √
her family members also shall not hold any shares in the said
company:
Representative of external or statutory auditors shall remain Auditor was
present in the Shareholders’ Meeting ((Annual General Meeting present in the
or Extraordinary General Meeting) to answer the queries of the last AGM. This
7 (3) shareholders. year it will
be ensured
by the
Management.
8 Maintaining a website by the company

The company shall have an official website linked with the

8 (1) √
website of the stock exchange;
The Company shall keep the website functional form the date
8 (2) √
of listing;
The company shall make available the detailed disclosures
8 (3) on its website as required under the listing regulations of the √
concerned stock exchange(s);
9 Reporting and Compliance of Corporate Governance

The company shall obtain a Certificate from a practicing

Professional Accountant/Secretary (CA/CMA/CS) other than
its statutory auditors or audit firm an yearly basis regarding
9 (1) √
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 Under
9 (2) of this Corporate Governance Code shall be appointed by the process.
shareholders in the annual general meeting;
The directors of the company shall state, in accordance with
9 (3) the Annexure-C attached, in the directors’ report whether the √
company has complied with these conditions or not.

80 PRIME BANK
STATEMENT OF THE BOARD OF DIRECTORS
A- Statement on Directors’ Responsibility to Establish and promoting adherence to the organization’s legal and
Appropriate System of Internal Control: ethical obligations.

Banking transactions are diversified, complex and fraught with The Board believes failure in corporate governance is a real
inherent risks. Again these are also no longer limited within the threat to the future of the Bank. With effective corporate
geographical boundaries of a country. Under the circumstances, governance based on core values of integrity and trust the
issues relating to effective internal control systems, corporate Bank will have competitive edge in attracting and retaining
governance, transparency and accountability has become of talent and generating positive reactions in the market place-
immense significance. if the Bank has a reputation for ethical behavior in today’s
marketplace, it creates not only customer loyalty but employee
The primary objectives of internal control system in a bank are
loyalty as well. Effective corporate governance can be achieved
to help bank perform better through use of its resources, to
by adopting set of principles and best practices. A great deal
communicate better internally and the external stakeholders
depends upon fairness, honesty, integrity and the manner in
and to comply with the applicable laws and regulations. The
which the Bank conduct its affairs. Prime Bank makes profit in
Bank, therefore, needs to have in place an appropriate and
order to survive and grow; however, the pursuit of profits must
effective internal control environment under which controls
stay within ethical bounds. The Bank has adopted policies that
are developed, implemented and monitored. The control
include environmental protection, whistle blowing, ethical
environment consists of the mechanisms and arrangements
training programs and so on. Such compliance mechanisms
that ensure internal and external risks, to which the Bank is
help develop and build a corporate image and reputation, gain
exposed to, are identified; then appropriate and effective
loyalty and trust of the consumers and heighten commitment
internal controls are developed and implemented to manage
of the employees.
those.
The Board is knowledgeable about the content and operation
The Directors recognize their obligation for the Bank’s systems
of the compliance and ethics system in the Bank and exercise
of internal control for establishing effciency, effectiveness,
reasonable oversight with respect to the implementation and
consistency and appropriateness with regard to compliance
effectiveness of the same. The Board also helps establish an
with the relevant laws and regulations.
organizational culture that encourages ethical conduct and a
The Directors affirm that they are actively concerned with
commitment towards compliance with the law.
sound corporate governance and diligently discharge their
The Board, therefore, would like to state that it has been actively
responsibilities for establishing business strategies and
involved in establishing standards and procedures designed to
adopting policies for internal control, risk management and
prevent and detect misconduct and also promote a high level
implementing risk based internal audit as per ‘section 15 kha
of ethics and compliance within the Bank.
of Banking Company (amended) Act 1991’ for ensuring Bank is
appropriately and effectively managed and controlled.
C- Statement that the Directors have reviewed the Adequacy
The Directors also affirm that the Board, through its committees, of the System of Internal Control:
has appraised the effectiveness of the bank’s systems of
The Board of Directors has certain roles as stipulated in the
internal control for the year ended 31 December, 2018. The
‘Bank Company (amended) Act 1991’. Accordingly, the Directors
Directors have attended periodical review meetings with
have worked on maintaining sound corporate governance and
senior management to discuss the effectiveness of the internal
diligently discharged their responsibilities. The Directors have
control systems of the Bank and ensure that management
established broad business strategies, adopted significant policies
has taken appropriate actions as per recommendations of the
for internal control and risk management and implemented
auditors and regulators.
risk based internal audits as per ‘sections 15 Kha & 15 Ga of the
Bank Company (amended) Act 1991’ for ensuring that the Bank is
B- Board’s Statement on its commitment to establishing
appropriately and effectively managed and controlled.
high level of Ethics and compliance within the
organization: The Board has reviewed the policies and manuals of various
segments of businesses in order to establish an effective internal
Compliance is a comprehensive program that helps Bank
control system which is adequate for achieving sustainable
and their employees conduct operational activities ethically
growth through orderly and efficient conduct of business.
with the highest level of integrity as per legal and regulatory
The Directors have also checked the control procedures
requirements. Establishing an effective Compliance and Ethics
for ensuring safeguard of the Bank’s asset, prevention and
system has become a necessity to protect any regulated
detection of fraud and error, adequacy and completeness of
organization. At its core, an effective system protects an
accounting records, timely preparation of financial information
organization by detecting and preventing improper conduct
and the efficient management of risk.

PRIME BANK 81
ANNUAL REPORT 2018

The Board has overseen the policies for creating a productive The Audit Committee has reviewed the arrangements made
internal control system which is vital for sustainable by management for adding the control features to the existing
development while upholding an effcient manner of business. Management Information System (MIS). The committee has
They have also considered the competence and fullness of also reviewed the corrective measures taken by management
accounting records, sound preparation of financial information, relating to fraud-forgery and deficiencies in internal control
and systematic management of risk and overall internal control revealed in the previous years. It has placed all the compliance
processes. reports before the Board of Directors and regulators on a timely
basis and has performed all other oversight functions relating
The Board of Directors monitors the adequacy and
to Internal Control Systems of the Bank.
effectiveness of Internal Control systems through formation
of Audit Committee. While forming the Committee, all the
conditions mentioned in the Banking Company’s (amended)
Act 1991, Bangladesh Bank guidelines and the Corporate
Governance guidelines by Bangladesh Securities and Exchange
Commission were adequately addressed. The committee has
reviewed the system of internal control and management of
core risks faced by the Bank. It has also reviewed the audit
process, the Bank’s process for monitoring compliance with
laws and regulations and codes of business conduct.

82 PRIME BANK
STATEMENT OF THE AUDIT COMMITTEE
A- Statement on Audit Committee’s review to ensure that employees of the Bank of any concerns regarding questionable
Internal Controls are well conceived, properly Administered accounting or auditing matters.
and satisfactorily monitored:
c. Reviews the findings of the examination by the regulatory
Prime Bank Ltd. (Bank) has a defined internal control policy agencies or other auditors.
and guidelines for providing reasonable assurance that
d. Reviews the process for communicating code of conduct
the Board’s objectives are attained in terms of operational
to the Bank personnel and monitoring compliance
activities, financial reporting, and compliance with prevailing
therewith.
laws and regulations. The Audit Committee through its
oversight activities ensures that Management has put in place e. Obtains regular updates from the Management and Bank’s
appropriate policies and procedures on internal control. legal counsel regarding compliance matters.

A successful internal control environment requires In addition, the Audit Committee ensures that legal fees are
Management’s commitment and support. Management’s goal settled on a timely basis and that the Bank does not have to
is not to make each person an expert in internal control but bear any penalties in this regard.
to increase awareness and understanding as to why the Bank It can, therefore, be stated that the Audit Committee supervises
needs those and how to use them. The Audit Committee always and assures the Board that the Bank complies with all the
stresses on these facts and ensures that Management takes applicable laws, rules and regulations, and also takes measures
proper measures for raising awareness of the employees about to ensure that all statutory dues are being settled on time.
the internal control processes. The Committee frequently
guides Management on issues of internal control and also C- Statement on Audit Committee’s involvement in the
gives decisions on critical issues. Review of the External Audit Functions:
The Audit Committee, during the year 2018, held ten The Audit Committee focuses on the financial management
meetings to review the operational activities of the Bank and and reporting of the Bank. The Committee provides specific
Management. Through the execution of the Internal Audit expertise in this critical area as effective financial management
Plan, Special Investigations, and surprise inspections, the and reporting determines creditworthiness to outsiders and
Committee ensures that internal controls are well conceived, confirms the growth trend and successes to the insiders.
have been properly administered and satisfactorily monitored These are the key determinants in establishing market value of
by the Management. The Committee has been working on Prime Bank – the ultimate scorecard of management’s success.
and monitoring closely the subject and the contents of internal
The Audit Committee undertakes the following responsibilities
control with the objective of ensuring that these are effective
regarding review of the external auditors’ functions:
and workable.
a. Reviews the external auditors’ proposed audit scope and
B- Statement on Audit Committee’s role in ensuring approach, including coordination of audit efforts with
Compliance with Laws and Regulations: internal audit team.

The Board, Audit Committee and the Management, all play b. Reviews the performance of the external auditors and
critically important roles in promoting a compliance culture exercises final approval on the appointment of the auditors.
in the operation and management of the banking affairs. As In performing this review, the Committee:
per the directives of the regulators, the Board sets the policy i. At least annually, obtains and reviews a report by the
guidelines for Management compliance and it’s the Audit independent external auditor describing the firm’s internal
Committee that ensures those are strictly complied with quality-control procedures; material issues raised by the
through its oversight functions. recent internal quality-control review, and assesses the
As part of the responsibility, the Audit Committee, among auditor’s independence in all relationships between the
others, also undertakes the following regular measures for external auditor and the Bank.
ensuring compliance: ii. Takes into account the opinions of Management and
a. Reviews effectiveness of the system of monitoring Internal Audit Division.
compliance with the laws and regulations upon receiving iii. Reviews and evaluates the findings and recommendations
investigations reports which are again followed up for of the independent external auditors.
regularization through appropriate actions including
iv. Presents conclusions with respect to the external auditors
disciplinary ones, where warranted.
to the Board.
b. Establishes procedures for:
c. Reviews and approves any non-audit work assigned to
(i) The receipt, retention, and treatment of the complaints by the external auditors and ensures that such work does not
the Bank regarding accounting, internal controls or auditing compromise the independence of the external auditors.
matters; and
d. Presents its conclusion with respect to the independence
(ii) The confidential and anonymous submission by the of the auditors to the Board.

PRIME BANK 83
ANNUAL REPORT 2018

e. Meets separately with the external auditors to discuss any are properly reflected in the financial reports.
matters that the Committee or auditors believe should be
The Audit Committee assumes the following responsibilities
discussed privately.
with regards to annual and interim financial statements:
f. Recommends appointment/ re-appointment of external
a. Understands management’s responsibilities and
auditors.
representations with regard to annual and interim financial
statements.
D- Statement on Audit Committee involvement in 3.2.5
Selection of appropriate Accounting Policies: b. Understands and assesses the appropriateness of
management’s selection of accounting principles and
The Audit Committee  is a vital Committee of the  Board of
policies.
Directors  assigned with the responsibilities of oversight of
the financial reporting and disclosure process.  The Audit c. Understands management’s judgment and accounting
Committee, as such, has a large degree of responsibility estimates applied in financial reporting.
regarding selection of appropriate accounting policies for d. Confers with both management and the external auditors
the Bank, and evaluation of the annual and quarterly financial about the financial statements.
statements. In addition, members of the Committee often
e. Assesses whether financial statements are complete and
discuss complex accounting figures, issues, and decisions made
fairly presented in all material aspect.
by the Management and the application of new accounting
principles or regulations. Should significant complications with f. Verifies that the financial position of the company and
regard to accounting practices or personnel arise; a special disclosures are clear and transparent.
investigation is instructed by the Audit Committee using g. Reviews financial statements and other information
outside consulting resources, if deemed necessary. External presented with it prior to release.
auditors are also expected to inform the Committee about a
It is to be noted that it is management’s responsibility to
range of issues, such as their views on management’s selection
prepare complete and accurate financial statements and
of accounting principles, accounting adjustments arising from
disclosures in accordance with financial reporting standards
their audits, discrepancies or complexities faced in working
and applicable rules and regulations. The Audit Committee
with management, and any identified acts of fraud or illegal
assures itself that the external auditors are satisfied that the
activities.
accounting estimates and judgments made by management,
The Audit Committee is aware that the selection and application and that management’s selection of accounting principles
of the company’s accounting policies must be appropriately reflect an appropriate application of IFRS, IAS and BFRS. The
analyzed. The Committee is aware that investors increasingly appropriateness, including the degree to which management
demand full transparency of accounting policies and their bias, if any, is evident, of the Bank’s accounting principles and
effects. In line with this, the Committee always encourages underlying estimates, and the transparency of the financial
management to disclose trends, events, or uncertainties that disclosures in reflecting financial performance, would be
would materially affect the reported financial statements. The the core discussion between the committee and external
Committee is always apprised of the evaluation criteria by auditors. The committee is always interested in discussing and
Management in their selection of the accounting principles and understanding the auditor’s views on accounting issues and
methods. Proactive discussion between the Audit Committee actively seeks to develop a relationship with the external auditor
and Management always takes place before signing of the that allows a full, frank and timely discussion of all material
annual report regarding critical accounting policies. issues. With regard to interim reports, the Committee always
In view of the above, the Audit Committee would like to state has an extensive discussion with management regarding
that it takes all necessary steps to ensure that management is material issues before approval of the interim accounts.
taking adequate considerations when selecting accounting The Audit Committee of Prime Bank Limited has always been
policies. The Committee is actively involved in selection extensively involved in the review of the financial statements
of appropriate accounting policies that are in line with the and has provided recommendations whenever needed.
applicable accounting standards, and annually reviews the The committee has duly carried out such responsibilities
same. throughout the year 2018, to the best of their ability.

E- Statement on the Audit Committee involvement in the

review and recommendation of the Annual and Interim
Financial Releases:

The annual and interim financial statements released by the

Bank contain sensitive financial information that needs to
be addressed carefully. The Audit Committee, therefore,
always actively involves itself in reviewing these releases and
recommends to the Management on ways to improve these
financials statements. The Committee reviews and discusses
with management all significant correction/adjustments
(whether or not made) to ensure that all material adjustments

84 PRIME BANK
CEO & CFO’S DECLARATION TO THE BOARD

03 April 2019

The Board of Directors

Prime Bank Limited
Adamjee Court Annex Building
119/120 Moijheel C/A, Dhaka-1000

Subject: Declaration on Financial Statements for the year ended on 31 December 2018.

Dear Sirs,

Pursuant to the condition No. 1(5) (xxvi) imposed vide the Commission’s Notification No. BSEC/CMRRCD/2006-158/207/
Admin/80 dated 03 June 2018 under section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby declare
that:

1. The Financial Statements of Prime Bank Limited for the year ended on 31 December 2018 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; and

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 2018 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,

Sd/- Sd/-
Rahel Ahmed Mohammad Habibur Rahman Chowdhury FCA
Managing Director & CEO Deputy Managing Director & CFO

PRIME BANK 85
ANNUAL REPORT 2018

REPORT ON ACTIVITIES OF THE AUDIT COMMITTEE

Audit Committee of the Board is considered the overseer of the The Company Secretary supports the Committee for effective
activities of the company for protecting interest of the relevant functioning as per directives of BB and BSEC guidelines.
stakeholders and for which it stands out as a pivotal committee
of the Board as per Bank Companies Act and Bangladesh B- Activities of the Committee during the year 2018:
Securities and Exchange Commission-the regulator of the The responsibility of the Audit Committee has been widened
listing companies in Bangladesh. The process of protection is with the promulgation of revised ICC Guidelines and Risk
primarily executed through regular oversight functions which, related circulars, the amended Bank Companies Act, 1991,
among others, include reviewing financial reporting process, Corporate Governance Code. Accordingly, the Committee has
system of internal controls, audit process, Management of to discharge manifold functions including special assignments
financial risks and monitoring compliances with the prevailing requested by the Board.
laws and regulations of the country.
During the year, the Committee held in total ten (10) Meetings
Considering importance of the committee in terms of ensuring to deal with various Audit Reports/Agenda on the following
corporate governance practices in the operational activities, nature of auditing:
regulators have been continuously endeavoring to enable the
Audit Committees through revision of guidelines/directives i. Risk Based;
etc. with the objective to shift focus on the governance issues ii. Comprehensive;
and compliance culture for ensuring transparency. During the iii. Information System & IT;
year, new set of Corporate Governance Code and Financial iv. Special Inspection;
Reporting were promulgated by the BSEC where extra emphasis v. Surprise Inspection;
has been laid down for upholding fairness, transparency,
Summary of activities under reference of the year:
accountability and independence- basic fundamentals of
Corporate Governance. Audit Committee of Prime Bank also
Financial Reporting:
earnestly believes in such values and principles and aspires to
give those a permanent shape in the progress of the bank. • Reviewed Draft Annual Financial statements for the year
ending on December 31, 2017.
In pursuant to the objective, during the year Internal Audit &
Inspection teams were asked to develop strategies/processes, • Reviewed Un-audited quarterly financial statements of the
Charters/Manuals , Policies, risk grading matrix, audit grading Bank (Q1-Q3)
template and other relevant tools and reference books for
making the auditing approach purposeful and effective. All Internal Control:
such auditing guidelines were prepared as per BB guidelines • Reviewed half yearly Self-Assessment reports on Anti Fraud
and those have been very useful for conducting auditing Internal Controls (SAAFIC).
assignments in a structured and organized manner.
• Reviewed/Evaluated overall effectiveness of the Internal
A- Constitution of Audit Committee: Control Systems and Policies & procedures of the Bank and
recommended it to the Board for endorsement
The Board of Directors constituted the Audit Committee with
04 (four) members giving due emphasis on the suitability and • Reviewed Internal Control & Compliance Manual of Prime
following fit and proper test criteria. All the members chosen Bank Limited.
are financially literate and possess required qualifications in
Internal Audit:
keeping with the spirit & objectives laid down in the regulatory
guidelines. Among the members of the Committee, three (03) • Reviewed and approved Audit Plan for the year 2018
including the Chairman, are from the Independent category
• Reviewed major Audit findings and observations on
and none belong to the Executive Committee of the Board
Information Security Division conducted by IT Audit
so as to avoid any conflict of interest. In addition, all the
members are knowledgeable and keen to ensure compliance • Reviewed Draft Internal Audit Manual
with the financial, regulatory and corporate laws. All of them • Reviewed Summary Report of the Audit Findings for the
have professional experiences due to long engagement with year-2017
corporate & financial management in addition to having
• Approved Annual Audit Plan – 2019
relevant academic background.
• Reviewed 03 years (2018-2020) Departmental Strategic
Current composition of the Audit Committee
Status with
Name Status with Bank Educational Qualification
Committee
Shamsuddin Ahmad Ph.D Independent Director Chairman Ph. D. (Economic Development), University of Hawaii, USA
Mr. Md. Nader Khan Director Member [Link].
Dr. G.M. Khurshid Alam Independent Director Member Ph.D. (Economics), Boston University, USA
Mr. M. Farhad Hussain FCA Independent Director Member Fellow of Institute of Chartered Accountants.

86 PRIME BANK
 Planning of the Internal Audit & Inspection division and Compliance Functions:
recommended to the Board
Reviewed Compliance Policy of the Bank
• Reviewed revision of Internal Audit Charter of the Audit &
Reviewed progress and compliance status of the decisions/
Inspection Division and recommended to the Board for
Minutes of the Audit Committee Meetings, Board and Executive
approval
Committee.
• Reviewed the risk based audit report of the branches,
different department and divisions of Head Office. Other functions:

• Reviewed IT Audit Progress report, Summary of IT Audit Emphasized on training for the officials through setting up an
Report of different IT systems. ideal Training Academy including sending abroad to suit the
purpose and requirement of the Bank
• Reviewed the audit reports of all foreign subsidiaries.
Annual Integrated Report on the Health of Prime Bank Limited
• Reviewed Draft Internal Audit Policy.
for the year 2017
• Reviewed monthly Audit Departmental Operational
Reviewed status of Deferral(s) allowed to the customers for
Activities Update.
execution of documentation and other purposes on periodical
• Reviewed information on Year –To-date (YTD) progress basis.
reports.

• Reviewed Information on E-mail System, Active Directory & C- The Committee also carried out the following activities
Anti-Virus conducted by IT Audit. those are linked with the events/ occurrences with the year
2019:
• Reviewed reports on Information Security
Division(ISD),Network Infrastructure Management and Reviewed Draft Annual Financial Statements for the year
SWIFT operation conducted by IT Audit 2018 and recommended suitable changes before presenting
the same to the Board. The Committee also held discussions
• Reviewed Information on RemitF@st System, ALTITUDE
with the representatives of External Auditors: 1) Hoda Vasi
system, and BACH (BACPS & BEFTN) operation conducted
Chowdhury & Co. & 2) Aziz Halim Khair Choudhury, Chartered
by IT Audit.
Accountants; to ascertain compliance with the regulatory
• Reviewed major audit findings and observations on Disaster directives and international standards in preparation of the
Recovery Management, Migration, and Up-gradation of financial statements.
CBS T24(R-16) and AML software (Sanction Screening &
Scrutinized the applications of the intending External Auditors
CTR) conducted by IT Audit.
of the bank and recommended to the Board for appointment
at AGM.
External Audit & Auditors:
Endorsed the Activity Report of the Audit Committee for
Exchanged views with the External Auditors in the 136th AC
the year 2018 and reports drafted for insertion in the Annual
meeting held on 09.04.2018 where representatives of the Audit
Report- 2018 and authorized the Chairman of the Committee
Firms namely M/S. Hoda Vasi Chowdhury & Co and Aziz Halim
to sign on its behalf.
Khair Choudhury were present. All discussed and shared their
observations/ findings with regard to internal control tools put Before concluding, I would like to express my gratitude to
in place for oversight including their adequacy. the Members of the Committee for their valuable time, useful
suggestions and taking keen interest in fulfilling the objectives
Scrutinized applications for the aspiring External Auditors of
leading to protecting the interest of the stakeholders. I would
the Bank for the year 2018 and recommending to the Board for
also like to thank the Management & the Board of Directors
consideration at the AGM for final appointment:
for allowing the Committee to discharge its duties and
responsibilities as an independent Committee of the Board.
Inspections Reports (Internal & Bangladesh Bank):

Reviewed Inspection Report on the documentation status of

different customers of the Bank (branch-wise)

Reviewed Compliance status of Internal Audit observations and

Bangladesh Bank Inspection as on the position of 31.12.2017,
31.03.2018, 30.06.2018 and 30.09.2018 respectively.

Periodical Reporting:

Reviewed quarterly status report on Complaints received by

Service Quality and Central Complaint Management Cell

PRIME BANK 87
ANNUAL REPORT 2018

REPORT ON ACTIVITIES OF THE

RISK MANAGEMENT COMMITTEE
Risk Management Committee Disclosures

The Risk Management Committee (RMC) is one of the three assistive Committees of the Board besides the Executive Committee
and the Audit Committee in compliance with the Banking Companies Act 1991 and BRPD Circular no. 11, dated October 27, 2013 of
Bangladesh Bank. At Present, following Directors of the Board are representing the Risk Management Committee:

Sl Name Status in the Bank Status in the Committee

1 Dr. G.M. Khurshid Alam Independent Director Chairman

2 Mr. Mohammad Mushtaque Ahmed Tanvir Director Member
3 Mr. Shamsuddin Ahmad, Ph.D. Independent Director Member
4 Mr. M Farhad Hussain FCA Independent Director Member

Duties and Responsibilities

• Identifying different risks, introduce and implement proper strategies to control those risks, review existing risk management
principles & procedures and take corrective measures if necessary;

• Ensure appropriate organizational structure for risk management;

• Form separate committees at Management level for compliance of instructions under risk related guidelines and supervision
of their activities;

• Review risk management policies and guidelines, review loan approval limit and submission to the Board for necessary revision
each year;

• Examine and approve the preservation of data and reporting implemented by the management and ensure implementation of
the same;

• Inform the Board of Directors about the summary of minutes of meetings of the committee;

• Submit decisions/recommendations of the Committee to the Board on quarterly basis. If sought by the committee, internal and
external auditors will submit evaluation report to the committee.

The Board of Directors of the Bank has formed the Risk Management Committee (RMC) as per guidelines of Bangladesh Bank.
Risk Management Committee of the Board oversees the overall risk management of the bank. The committee also reviews risk
management policies, process& guidelines of the bank and submit it to the Board for prior approval or renewal as necessary. During
2018, 04 (Four) RMC meetings were held and 26 (Twenty Six) memos were placed before the RMC. The agendas discussed in the
RMC meeting are as below:

Sl Name of the Memo

1 Discussion of Sustainable Finance Activities

2 Review of restructured Large loans
3 Review of Information Security Policy and Procedures of the Bank
4 Review of Fraud Detection and Management Process
5 Review of Comprehensive Risk Management Report
6 Review of Borrower Rating and Capital Management status
7 Review of Stress Testing of the Bank
8 Review of Green Banking Policy
9 Risk Appetite Statement of the Bank
10 Internal Capital Adequacy Assessment Process of the Bank
11 Review of Quarterly Risk Management Report
12 Discussion on Annual Report of AML/CFT activities of last year

The committee likes to extend sincerest thanks to all the members of the Risk Management Committee for their valuable time and
support for facilitating to carry forward the objectives of the Board. The Committee also likes to thank the Management & the Board
for assisting the Committee to discharge its due role.

88 PRIME BANK
CRO’s REPORT ON RISK MANAGEMENT
Effective risk management is essential to perform consistently security related documents is being revalidated by legal firms
and sustainably for the sake of our stakeholders and therefore and also cross examined by the independent audit firms.
Prime Bank considers risk management as a core job beside Corrective measures are being taken as per the audit report
its core business. We try to add value to clients and the issued. Periodical Stock verification and insurance coverage
communities by operating efficiently and generating returns has been made mandatory before sanctioning or renewing
for shareholders by taking and managing risk. Through our Risk any credit proposals. Since the Bank has significant exposure
Management Framework we try to manage enterprise wide in RMG sector, a separate Merchandiser Team has been formed
risks with the objective of maximizing risk-adjusted returns with people having adequate experience in RMG operation.
while remaining within our risk appetite. This has enhanced the Bank’s capability to identify risks and
mitigate them on time. In order to shift to risk adjusted return
To ensure health of the Bankwhich is a significant part of the
on capital, borrower’s rating is considered while considering
whole financial systems, identifying, measuring, monitoring
any price adjustment which is encouraging the borrowers
and controlling various type of risks are crucial factors.. In
to complete rating procedure of External Credit Assessment
addition to the traditional risks faced by the Banks in credit and
Institute (ECAIs).
market risks, various operational risks are also created due to
various reasons like:
Operational Risk Management
• Increasing use of automated technology
Operational Risk Management  (ORM) is a continual cyclic
• Growing importance of IT integration and shared services process which includes risk assessment, risk decision
across financial institutions and entities making, and implementation of risk controls, which results
• Necessity of reducing earnings volatility and achieving in acceptance, mitigation, or avoidance of risk. ORM is
cost efficiencies the oversight of  operational risk, including the  risk  of loss
resulting from inadequate or failed internal processes and
• Shifting from vanilla type products to technology based
systems;  human factors; or external [Link] Risk
products which are creating more complexity in product
Management of the bank is guided by the “principles for the
and product development
sound management of Operational Risks” suggested by Basel
• Increasing customer needs committee on Banking supervision. One of the principles
• Evolving outsourcing arrangements and increasing is to have a strong control environment that utilizes policies,
dependency processes, and systems; appropriate internal control; and
appropriate risk mitigation and/or transfer strategies. Bank;,
• Increasing focus by regulators on legal, fraud, and
follows a sound internal control program that consists of five
compliance issues.
components of that are integrated to risk management process;
• Knowledge gap and lack of supervision. Control environment, risk assessment, control activities,
This has necessitated development of enterprise wise risk information & Communication and monitoring activities. As a
management framework for the Banks. Prime Bank Limited part of strengthening Operational Risk Management, the Bank
(PBL) is increasingly focusing on development of appropriate is now centralizing its total general banking operation which will
risk management framework for managing risks of the Bank. hopefully significantly reduce various operational lapses that
Risk Management Division has been set up which identifies, was prominent in Branch [Link] Administration and
monitors and reports various type of risks and develop Bank- Trade Service Operation already centralized in the past years.
wide integrated risk management culture. The Division has At the end of 2018, the Bank has brought Liability Operations,
been working on identifying the gaps in the risk management Cash Management Operations, Treasury Operations, and
procedure of the Bank, placing those issues to Executive Risk Remittance Operations under the umbrella of centralized
Management Committee (ERMC) comprising of members from operations team along with Card Operations and Alternative
all key business / risk areas and following up for rectification. Deliveries Channel (ADC) operations.
Major activities of RMD include preparing Risk Management Risk Management and Control functions units of the bank
Paper, performing stress testing, vetting of different Product requires to ensure appropriate operational risk management by
Program Guidelines, process manuals, developing various risk implementing Segregation of duties, system automation, data
models and acting as an operation layer for Internal Capital accuracy, proper supervision, On and off-site monitoring with
Adequacy Assessment. the aid of MIS & Reports and senior management overview. The
bank is consciously driving the culture to implement bank wide
Credit Risk Management operational risk management involving all its employees.
The Bank in recent past has increased its focus in managing
Credit Risk. Total Credit Administration Process has been Information Technology Risk
centralized which have mitigated various risks arising from PBL has an IT audit team, which has been formed as per
human error in branch banking. Similarly, Trade related the Central Bank’s guideline. The team conducts IT Audit in
functions of branches havebeen shifted to centralized Trade each branch on a periodic basis and provides suggestions
Service Division since 2016. To reduce the residual risks, the to higher [Link], independent Information

PRIME BANK 89
ANNUAL REPORT 2018

Security Department has been formed to assess the IT related at the end of December, 2018. Besides, Proper organizational
risks faced by the Bank and suggest appropriatemeasures to structure and procedures are also in place to ensure mitigation
mitigate risk. of operational risk and market risk.

Market Risk Pillar 2 Risk Management

Market risk is actively monitored by the Treasury Division of The key principle of the Supervisory Review Process (SRP),
the Bank. As per stress testing, the Bank is unlikely to face any the second Pillar of Basel-III is that “Banks shall have a process
major risks in liquidity, interest rates and foreign exchange. A for assessing overall capital adequacy in relation to their
system based Value at Risk (VaR) Model is being used by the risk profile and a strategy for maintaining their capital at an
Bank to assess the risk related to the Foreign Exchange position. adequate level”. SRP covers additional risks like Residual Risk,
Treasury Mid office monitors risk limits including position Concentration Risk, Liquidity Risk, Reputation Risk, Strategic
limits and stop loss limits for the trading book and reviews Risk, Settlement Risk etc. PBL assessed its additional capital
periodically. Interest rate risk is also being monitored through requirement under Pillar 2 and submitted the statements on
the use of re-pricing gap analysis and duration analysis. Internal Capital Adequacy Assessment Process (ICAAP) to
Bangladesh Bank. PBL has also been conducting stress testing
Environmental & Social (E&S) Risk Management on its financials and asset portfolio on quarterly basis and
Prime Bank Limited (PBL) recognizes that its financing decisions reporting the outcomes to Bangladesh Bank, as a part of Pillar
have potential impact on human health and environment. Under 2 risk management.
this purview, PBL has developed Environmental & Social Risk
Pillar 3: Market Discipline
Management policy statement and procedure manual in 2017
which was fully implemented and effective from the Beginning PBL always delivers the appropriate disclosures not only to
of 2018. The Environmental and Social (E&S) Risk Management meet the regulatory requirements but also as per international
Policy Statement represents the Banks commitment towards best practices. Disclosures on the position of PBL’s risk profile,
being E&S compliant in its activities and financing and the E&S capital adequacy, and risk management system has been
Risk Management Procedure Manual is a detailed document included in this Annual Report [Link] per the Bank Companies
on the process flow, roles and responsibilities and operational Act  1991(Amended up to 2013),and as guided by the
procedure of E&S Risk Management for the Bank. Bangladesh Bank BRPD Circular no. 11 dated October 27, 2013
the Risk Management Committee (RMC) of the Board has been
PBL always committed to promote sustainable growth in
formed to look after the risk management issues of the Bank.
the economy. During the year 2018, PBL strictly followed the
ESRM guideline and total 1,271 borrowers were eligible for
Revised Regulatory Capital Framework for banks in line with
Environmental Social Risk Rating (ESRR).During 2018, the Bank
Basel III
has financed total amount of BDT 335.70 million among which
287.20 million for installation of ETP in 04 projects, BDT 28.0 Bangladesh Bank vide BRPD Circular No – 18 dated December
million in 06 Eco Friendly Brick Production projects, BDT 0.0786 21, 2014 issued“Guidelines on Risk Based Capital Adequacy
million in a solar system project, BDT 0.1 million in two bio-gas (Revised Regulatory Capital Framework for banks in line with
plant in existing Dairy & poultry Farm, 19.6 million in a LED Bulb/ Basel III)” with effect from January 01, 2015. The new guidelines
Tube Assembly Plant.. As a part of exploring new ventures in aimed to strengthen the quality and quantity of the regulatory
environment friendly projects, the Bank has also conducted capital base and enhance the risk coverage of the capital
several field visits, meetings with existing and prospective framework. PBL is well poised for implementing Basel III phase
entrepreneurs, consultants and Central Bank officials. To by phase during the period 2015-2019. It is mentionable that,
strengthen E&S Risk Management PBL had also organized a PBL is maintaining much higher Common Equity Tier-1 (CET-
number training, workshops, seminars etc. during 2018. 1) capital ratio than the prescribed minimum ratio of 4.5% by
Bangladesh Bank. Though in reality, risk capital will remain only
Pillar 1 Risk Management a number and might not be effective if banks do not assess
their risk periodically and take timely corrective action when
PBL has been maintaining capital well above the minimum
the risk exceeds the threshold limit. Thus, whether it is Basel
capital requirement as against Credit, Market and Operational
II or Basel III, it is crucial that PBL does not depend solely on
risk. The Bank has proper credit risk mitigation process in
“regulatory capital”. What is needed is a dynamic risk mitigation
place. Moreover, PBL is consistently trying to rate its corporate
strategy, where all employees act as risk managers in their own
borrowers not only to have expert opinion on the borrowers
area. RMD is trying to develop a proper risk culture across the
but also to strengthen capital base. As of December 2018, PBL
organization where “risk” is an integral part of future business
has 68.43 percent of its corporate borrowers rated through
decision-making. Having said that, PBL always had the
External Credit Assessment Institutions (ECAIs). Through
reputation of being one step ahead and committed to continue
borrower rating, PBL achieved capital relief of 13,093.90 million
the same in the coming days.
during 2018. In terms of Capital Adequacy, PBL was well above
of minimum capital requirement i.e. 10 percent in all the four
quarters of 2018, to be exact Capital to Risk weighted Asset
Ratio of the Bank was 14.10% at the end of March, 15.07% at
the end of June, 16.65% at the end of September and 17.04%

90 PRIME BANK
ETHICS & COMPLIANCE
Professional Ethics Respect for others

The Board and senior management have a vital role to play in This principle demands that the conduct of every individual be
shaping and embedding a healthy corporate culture, and this governed by the notions of good faith, honesty, moral integrity,
continued to be a focus in 2018. Main aspect of our culture Precision and professionalism. Employees are expected to
is Professional ethics which encompass the personal and serve customers with loyalty, care and discretion.
corporate standards of behavior expected from the Prime
Bank officials. The commitment of our employees, at all levels, Respect for professional secrecy
to compliance issues serves as a reflection of our shared Prime Bank employees are bound by professional secrecy.
values. Prime Bank has its own Charter of Professional Ethics They are prohibited from using any confidential information
that reflects our ambitions, commitments and principles of of which they may become aware in the course of their work
excellence. It sets out our fundamental ethical principles and to perform transactions, whether directly or indirectly, for their
serves to guide our professional conduct. own profit or that of others.

Respect for rules and others Transparency

Rules on professional conduct and compliance have always Our Banks inform customers of the conditions and rates that
been a key part of our business. These rules go beyond apply to the products and services they offer. Our employees
simply applying the legal provisions and regulations currently are expected to give their customers clear information about
in force. The conduct of each individual should be guided the services, products and loans on offer.
by the principles of good faith and honesty. Everyone has
a responsibility to comply with the law and regulations – Meeting our commitments
particularly those that relate specifically to banking – in the
Customer-facing employees must be aware of the level of
interests of all stakeholders.
service that can be delivered to customers and take care not to
Customer insight enter into commitments that cannot reasonably be met.

Prime Bank has put in place a series of procedures and tools Collective disclosure requirements
that enable it to identify and gain a better understanding of
Employees can directly alert the Group’s managers, directors
its customers. The processes for opening accounts for new
or shareholders of any anomalies that they notice, particularly
customers and for creating and updating customer files are
with regard to ethics, without fear of reprisals or sanctions.
governed by strict rules.

Combating money laundering and the financing of terrorism

Preventing conflicts of interest
Prime Bank have introduced an internal handbook on ways of
Prime Bank has put in place decision-making systems to prevent
combating money laundering and the financing of terrorism.
conflicts of interest from arising, in particular by separating its
All employees are expected to remain vigilant in this regard.
Investment and commercial divisions and adopting a collective
This vigilance is based upon knowing their customers well. The
approach to lending decisions.
bank does not engage in transactions or financial deals with
individuals or corporations of whose identity and/or activities
it is not aware.

PRIME BANK 91
ANNUAL REPORT 2018

BUSINESS REVIEW AND ANALYSIS

“In-depth review of business & performance assists to have an understanding of
economic environment, trend of business dynamics which shows more opportunities
that ultimately leads to sustainable operations.”

Corporate And Institutional Banking

One-stop services offered to CnIB clients, starting from structured solutions to
cash management under one roof, paid off in terms of volume of business and
earnings as well. This initiative made CnIB clients more comfortable in doing
business with Prime Bank and reap best possible synergy from the relationship.
We hope to continue this approach in the days ahead with particular focus on
cash management services and onboarding of more rewarding relationships
for the bank.

Commercial Banking Division

The Team CBD has set its vision statement for 2018-2021 “Quality Credit for
Sustainable Growth” and the officials/executives of the division have taken
the challenges to reach at emerging stage from disperse situation under
centralization of corporate business of the bank. CBD will bring new dimension
as well in 2019 & onward by adapting to changing client needs, benchmarking
mobility solutions and bespoke products & services through better client
knowledge.

92 PRIME BANK
 In Prime Bank
106.60%
Net Profit grow
CRAR 17.04%

MSME Banking 2018

Prime Bank initiated a revamped MSME banking in 2017 and made it ready
to serve customer thoroughly in 2018. The Bank adopted appropriate and
conducive policies in this arena and took MSME as a high potential enterprise
market segment and in this regard, started operation by adding a dedicated
and customer-driven sales force, cash flow-oriented lending assessments,
decentralized decision-making through 146 touch points.

Consumer Banking
Monarch team recorded a milestone on net deposit growth in 2018 which
helped the team to cross 1,000 crore marking just in 04 years of operation. This
has been possible through an all-out team effort and superior service provided
by the Monarch team.

Diversified Products & Services

Diversification is one of our core strengths. PBL always trys to understand
needs of customers of all segments and recently we launched “PRIME DIGI” 1st
ever digital account in the country.

PRIME BANK 93
BUSINESS REVIEW
AND ANALYSIS

Management Review

Segmental Analysis

Report on Human Resource Management

Report on Non-Performing Asset (NPA)

Products and Services

MANAGEMENT REVIEW
Prime Bank passed another successful year in terms of its increasing portfolio on a selective manner, onboarding funds at
operating performance despite many political and economic optimum price, and focused services helped us to attain [39%]
uncertainties. The Bank did well in 2018 indeed in terms of net overall income growth during the year.
profit and return on assets. The growth rate of net profit and
return on assets were 107 and 100 percent respectively. This
was possible due to prudent balance sheet management. Prime
Bank focuses on sustainable growth and as such emphasized
on diversification of assets, increasing non-funded revenue
generating services, strengthening internal control and
compliance through the implementing process of centralization.

With the view to deploying concentrated effort, the business

are controlled and monitored through its major four segments;
CNIB, CBD, MSME and Retail. Besides conventional mode of
business PBL gives parallel emphasis on its Islamic banking
Financial Closure of the Syndication for Hashem Rice Mills Limited
wing. Moreover, other key divisions also plays vital role in
achieving organization goal. A brief review of business of the Due to strategic rebalancing of overall asset portfolio mix for the
key segments and divisions has been stated below including bank, CnIB’s asset portfolio growth was rationally kept at [6%].
an analysis of financial position and the performance of the Nevertheless, optimization of wallet shares from rewarding &
bank during the year under review. risk minimal customers helped us to augment funded income
by [1.42] times over the last year.
Wholesale Banking Segment

The Wholesale Banking segment of Prime Bank Limited started

its journey from [December 2015], soon after accomplishing
centralization of key processes across the bank. The segment
provides comprehensive relationship coverage to corporate
clients & financial institutions and became the most dominant
business segment for the bank in terms of both income &
profit, since its inception.

The segment comprises of 5 (five) key divisions – namely,

Corporate & Institutional Banking (CnIB) Division, Commercial
Banking Division (CBD), Transaction Banking (TB) Division,
International Division (ID), and Treasury Division (TrD).
Accordingly, it offers a full suite of products and services, Musical Program for Wholesale Banking Sponsors
including but not limited to term & working capital financing
under both conventional & Islamic window, trade financing, Due to persisting demand-supply gap existed in foreign
treasury support, cash management solutions, and project & currency market throughout the year, we grew our Export
syndication financing, etc. business by [1.4] times over last year, but controlled Import
business with a reversed growth. As a result, a marginal
Segregation of business into CnIB and CBD, based on group increase of [2%] could be achieved in non-funded income.
turnover, in the clients’ ecosystems helped Prime Bank to serve We also remained careful with our Guarantee business and
better than the previous with focused & customized manner controlled its growth similar to Import business.
and strengthen bonding further with existing & newly inducted
clients as well. Notably, Commercial Banking Division (CBD)
serves corporate clients with an annual turnover ranging from
BDT 250 ~ 8,000 million, while the Corporate & Institutional
Banking (CnIB) Division serves only to those clients having
turnover beyond the highest threshold of CBD.

In 2018, the Wholesale Banking segment contributed [80%] and

[23%] respectively in the asset and liability pool of the entire
bank. The trade business of [USD 3.9 billion], highest ever since
the inception of this segment, also contributed [4.67%] to the
overall trade of Bangladesh.

Corporate and Institutional Banking (CNIB) Mezban Program for Wholesale Banking Customers

Being the election year, 2018 was a challenging year for To support the growth of CnIB’s asset portfolio with self-
the banking community. However, our careful strategy for supported liability within next 5 years, we put additional focus

PRIME BANK 95
ANNUAL REPORT 2018

on our liability products and could posted a [20.40%] growth in The funded outstanding as a whole witnessed a growth over 11
2018, despite high volatility continued at local liquidity market percent in 2018 over the same of 2017. CBD had no non-performing
with occasional spiky offers from competing banks. loan for core relationship customers as at end December-2018.

To excel further, we continued our journey for onboarding The deposit volume of the Commercial Banking customers
committed & experienced personnel to our team and strategically stood at BDT 11,319 million whereas import, export and guarantee
focus on business segments with high growth potentials. business channeled through the Bank in 2018 stood at BDT 51,996
Creation of a dedicated team for public sector & infrastructure million, BDT 50,222 million and BDT 8,080 million respectively.
projects, was the latest initiative under this endeavor.
During the year 2018, CBD officials conducted 324 factory/project
Notably, one-stop services offered to CnIB clients, starting visits to the customers. Moreover, they had visits to Head Office
from structured solutions to cash management under one roof, and other establishments of the customers whenever required.
paid off in terms of volume of business and earnings as well.
This initiative made CnIB clients more comfortable in doing
business with Prime Bank and reap best possible synergy from
the relationship. We hope to continue this approach in the days
ahead with particular focus on cash management services and
onboarding of more rewarding relationships for the bank.

Commercial Banking Division

The centralization of Relationship Management for Corporate

customers of Prime Bank Limited started with Board’s decision
Loan Agreement Signing with a customer
to segregate the corporate customers based on their annual
turnover. Accordingly, Commercial Banking Division (CBD) was
assigned for the corporate having annual turnover in the range
of BDT 250 million & above to below BDT 8,000 million.

CBD started its operation on 13 October 2015. At present,

CBD has 05 segments for which there are 05 Segment
Heads, 16 Relationship Managers (RMs) and 23 Associate
Relationship Managers (ARMs). One of the segments cover
Chittagong region. Moreover, CBD has two Hubs at Rajshahi &
Khulna under two segments. The team CBD is headed by the
Deputy Managing Director & Chief Business Officer (CBO) of A Jeans Manufacturing Factory financed by the Bank
Commercial Banking Division. The CBO is also assisted by the
Business Planning Manager (BPM), Management Information Among the eligible loan customers of CBD, 239 customers
System (MIS) Official and the Secretary to plan and manage were rated by External Credit Rating Agencies which resulted
the overall activities of CBD. to capital relief for the Bank.

Key features of customers of CBD are- they are of diverse In addition to procuring core business, the RMs/ARMs of CBD
nature, from different cultural background, have different also contributed through cross-selling of products and services
management patterns, requirements and expectations. The offered by other business segments of the Bank in 2018 which
RMs & ARMs have been discharging their responsibility for included among others 08 payroll agreements.
providing services to these Commercial Banking customers, Throughout the year 2018, different talent development
retaining existing customers in a stiff competitive market, programs (training, workshop and seminar) on topics like
booking of new clients to ensure sustainable growth, relationship management, negotiation, communication skill,
regularizing problematic accounts as well as ensuring internal trade finance, syndication financing, anti money laundering
& regulatory compliance. etc. were arranged for the employees of CBD.
As at end December-2018,
Sectoral allocation of CBD loan portfolio
customers under relationship of
CBD had total funded & non-funded Strategic Priorities of
exposure of BDT 111,416 million CBD are to ensure:
against which funded outstanding
• Quality Credit
was BDT 39,901 million whereas
• Sustainable profitability
non-funded outstanding was BDT
• Low NPL (Less than 2%)
25,864 million. The portfolio was
RMG Construction Manufacturing (Other than Food) • Human Capital
adequately covered by securities
Iron & Steel Printing & Packging Food Manufacturing
• Retain worthy Client
and well diversified among different Textile Healthcare Agriculture
Tranding Service Ceramics • Best-in-class in quality of
sectors of the economy like Ship Breaking Jute ICT
service and reputation
Readymade Garments, Textile, Iron Real Estate Transport Poultry
Furniture Telecom Pharmaceuticals • Capital Relief for Higher
& Steel, Construction, Healthcare, Leather Cold-Storage Tourism
Ship Building Others Capital Adequacy
Manufacturing, Agriculture etc.
• Compliance
• Diversified Portfolio
96 PRIME BANK • Better Relationship
Management.
The Team CBD has set its vision statement for 2018-2021 with different partners for specialized privileges for Monarch
“Quality Credit for Sustainable Growth” and the officials/ customers which include local and international brands like
executives of the division have taken the challenges to reach at The Westin Dhaka, Le Meridien, Pan Pacific Sonargaon, Sarah
emerging stage from disperse situation under centralization of Resort, Dusai Resort & Spa, Manipal Hospital (India) etc. Monarch
corporate business of the bank. CBD will bring new dimension became a trendsetter by introducing overseas travel insurance
as well in 2019 & onward by adapting to changing client needs, facility for its valued customers. This has been introduced for
benchmarking mobility solutions and bespoke products & the first time in priority banking space in Bangladesh.
services through better client knowledge.
Monarch also hosted various customer engagement events
focusing on entertainment, lifestyle and health issues
Consumer Banking
throughout the year which were highly appreciated by its
Consumer Banking Division took a number of major initiatives in valued Monarch Customers that in turn helped enhancing
2018 for the advancement of Consumer Banking business and Prime Bank’s brand recognition and value.
operations while keeping customers in the center of all activities.
With its robust deposit portfolio, a resilient team coupled with
excellent service standard, Monarch is poised to become a strong
Some noteworthy initiatives of 2018 were:
player in the Priority segment of the banking industry in the offing.
• Consumer Banking was redefined. Branches, Cards,
ADC along with the existing Product, Segment, Sales, Portfolio (Monarch)
1050
Collection, Consumer Finance and Consumer Compliance 1019
1000
came under Consumer Banking Division. 961
950 931
• Monarch was established as a strong player in the High 889
911 904

BDT CRORE
900 865
Net Worth Segment market through enhanced customer 843
852 864 860
850
relationship management 800
792
800
• The productivity of Sales Team has been increased through
750
structured approach.

Fe 8
M 8

Se 18

O 18
Ja 7

Ap 18
M 8

Ju 8
18

Au 8

N 8

De 8
18
1
1
1

r-1

-1

l-1

-1

-1
n-
b-

g-
p-
c-

n-

c-
ay

ov
ar

ct
Ju
De

• CASA mix in the deposit portfolio was increased.

• Home Loan portfolio was increased through realigning the

New and Revamped Consumer Products
product features
Focusing on customer requirements and convenience remains
• Launch new and revamped competitive products to meet
the pivotal element in designing Consumer Products. Product
the lifestyle aspirations of the customers
team always provide relentless efforts to improve and redesign
• Enhanced MIS and Analytics support for all wings of the products with changing requirements of consumers. The team
Consumer Banking division launched a new deposit scheme, “Kotipoti Deposit Scheme”
• Controlled Portfolio at Risk (PAR) at a minimum level for a (KDS) as well as revamped the existing schemes: Prime
healthy Consumer Loan Portfolio Millionaire Scheme (PMS) Monthly Benefit Deposit Scheme
(MBDS), Double Benefit Deposit Scheme (DBDS), Contributory

Consumer Banking Deposit Mix : 2017 vs. 2018

CASA CASA FDR

34% FDR
32% 35%
41%
2018 2017

Scheme Scheme
25% 33%

Monarch: Crossing a Milestone

Savings Scheme (CSS), Laksma Puron Deposit Scheme (LPDS)
Monarch team recorded a milestone on net deposit growth in
and Lakhopati Deposit Scheme (LDS) with the attractive
2018 which helped the team to cross 1,000 crore marking just in
features. All of these stand out as very competitive products
04 years of operation. This has been possible through an all-out
in the market.
team effort and superior service provided by the Monarch team.
Moreover, the prevailing RFCD account has also been revamped
The Customer Value Proposition (CVP) has further been
with more competitive & attractive features.
enhanced through a number of new corporate alliances

PRIME BANK 97
ANNUAL REPORT 2018

Consumer Finance department has developed a number

of automated tools for asset, liability, transactions, payroll,
Monarch, service quality etc. to support the growing business
need of Consumer Banking division. They have developed their
own robust Consumer Banking Data Warehouse for Deposit,
Asset, Customer, Transaction and Average Balance Datamart.

The team also successfully conducted Interest Rate Review

Project for rationalization of loan revenue.

The new Consumer Loan PPG (Product Program Guide),

Portfolio Risk Minimization
specially Home Loan PPG has provided impetus to the growth
of Home Loan portfolio. Portfolio at Risk (PAR) is a major indicator of the health of the
asset portfolio of a bank. Consumer Banking’s PAR reduced
Consumer Loan Outstanding Balance : 2017 vs. 2018 from 16.80% in 2015 to 4.71% in 2018, indicating a giant leap in
1,000 improvement of the portfolio health.
741.13
673.41

The structured approach of the Collection team along with

598.49

800
552.66

600 close monitoring has resulted in continuous improvement in

PAR.
301.42
BDT Crore

247.37

400
50.02

200
41.38

30+PAR up to 179 DPD

4.68
5.62

-
PERSONAL LOAN CAR LOAN HOME LOAN SECURED SECURED EMI 20%
OVERDRAFT 18%
16.80%
2017 2018 16%
14% 11.95%
12%
10% 5.46%
Sales Team Attained Higher Productivity 8% 4.71%
6%
Consumer Banking division made keen efforts to increase 4%
2%
the productivity of the Sales Teams by equipping them with 0%
good product knowledge, on the job training and rigorous 2015 2016 2017 2018
monitoring of performance on a day to day basis. Both Liability
and Asset team have enhanced its productivity level and they
are all set to take up the challenges for the coming years. MSME Banking 2018 – Traversed another Horizon

To reach out to the customers and provide doorstep service, There are 7.81 million economic entities in Bangladesh,
Sales team took initiative to set up a small kiosk at reputed according to BBS Economic Census 2013 of which around
organizations (e.g. United Hospital) for Consumer Loan 99% are CMSME in reference to size of operation. According
products. to another ADB Institute study conducted in 2016, 99% formal
businesses in Bangladesh are SME. They constitute 75% non-
Meanwhile, the Payroll Team of Consumer Banking on boarded
agricultural employment and contribute about 25 percent to
in total 43 new companies with 3,352 salary accounts in 2018.
the national GDP by only manufacturing set ups.
No. of Payroll Accounts : 2015 to 2018
Small and Medium Enterprises (SMEs) are treated as the
50,000 engines of growth and drivers of innovation worldwide.
38,051
40.000 They play a significant role in driving economic growth and
30,169
generating jobs. In Bangladesh, the sector is actually changing
30.000
20,039 the face of the economy. SMEs are playing a vital role for the
20,000 country’s accelerated industrialization and economic growth,
10,283
10,000 employment generation and reducing poverty. SMEs now
occupy an important position in the national economy.
-
2015 2016 2017 2018 Considering such large stake and potential in economy
Deeper Insights of Consumer Banking Data Prime Bank initiated a revamped MSME banking in 2017 and
made it ready to serve customer thoroughly in 2018. The
Consumer Banking greatly depends on MIS and Analytics.
Bank adopted appropriate and conducive policies in this
As a big stride in this path, RM Coding and Segment Coding
arena and took MSME as a high potential enterprise market
have been successfully completed to measure business
segment and in this regard, started operation by adding a
performance based on system based reports.
dedicated and customer-driven sales force, cash flow-oriented
Consumer Finance team has also started Payroll Database lending assessments, decentralized decision-making through
analysis. This has given the Consumer Banking Management 146 touch points. Moreover, key developments in 2018 in
better insights into the health of the payroll portfolio. The team management, technology, customer service, operation, credit
introduced Monthly MIS Pack/ Report to provide a monthly risk management, products, distribution and sales around
overview of deposit, loans, cards and collection performance MSME banking are illustrated below.
of Consumer Banking Division.

98 PRIME BANK
 Segment
specific
organization
and people

Conducive Broad range

loan approval of financial
policy solution
MSME
Banking
2018

Relationship Simplified
professional Appraisaland
at customer Documents
door step

In 2018 bank developed and launched a range of financial MSME Islamic Banking
product comprising rising need of funds, guarantees and
Being a leading private commercial bank having countrywide
transactions of countrywide diversified cottage, micro, small
network, Prime Bank adopted remarkable steps to offer
and medium sized enterprise customer. Limit size, purpose,
MSME Islamic Banking products and services through all
collateral and eligibility of the loan products were varied and
the distribution channels (branches and MSME hubs) of the
accommodate rising trends, potential and circumstances of
bank, with a view to cater the needs of customers who want
our growing economy.
to avail financial services under Islamic modes, for which, an
Islamic Banking Unit within MSME Banking Division has been
MSME Banking - Loan Products established for business vertical of MSME. Four MSME Islamic
Prime Shahaj Business loan up to BDT 20 Lakh without collateral Banking Products have been developed in 2018 which gets
Business Loan BDT 10 Lakh to 1 Crore by applauding market response. The products are –
Prime
taking lien of 30-50% cash security/FDR • Hasanah Shombhabona
Shombhabona
having regular transactions in banks • Hasanah Emarat
Up to BDT 10 Crore loan to build various type • Hasanah Chalti
Prime Emarat of buildings for accommodation, commerce • Hasanah Sampad
and production
Customers across the country are being served at their
Up to BDT 5 Crore loan to finance operating
doorsteps by dedicated MSME Relationship Managers based
capital of MSMEs in the form of Term Loan,
Prime Chalti on nearest business hubs and branches in addition to services
CC (Hypo), Bill Purchase, SOD, LC, BG, LATR,
from branch, ATMs, internet, mobile apps, POS and call
Performance Security etc.
Up to BDT 5 Crore loan to finance fixed centre. MSME Credit Risk Management, Credit Administration
asset purchase (machinery, equipment, and Other functional units serve the solution value chain by
Prime Sampad adopting MSME conducive policy, procedure, infrastructure
vehicle, vessel) and/or building shop, factory,
warehouse, new projects and technology. As a result of an all-out collective team effort
banks traversed a remarkable horizon in 2018 in MSME banking.
Anchol Rin Loan for women led enterprise up to BDT 50 lakh
MSME Banking – At a Glance
MSME Banking – Deposit Products
As at 31 Dec 2018 or During 2018
A transactional account for MSMEs to
MSME
facilitate sales proceeds realization, trade
Business 1,350 New Loan Customer Booked
and administrative payments and other
Account 4,581 Loan Customer Live
enterprise transactions
An interest bearing transactional account for 7,066 Loan Account Live
MSME Special
MSME having auto balance swapping facility 124,000 Deposit Customer Live
Notice Deposit
with linked accounts 18,390,000,000 Taka Customer Deposit Balance
A Fixed Deposit Accounts for MSME provides a
MSME Fixed 21,120,000,000 Taka Loan Outstanding
higher rate of interest in return after fixed tenor
Deposit 21,150,000,000 Taka Loan Disbursed
of time – 1, 3, 6 & 12 month

PRIME BANK 99
ANNUAL REPORT 2018

MSME – Women Entrepreneur Development Banking

A good number of women are entering into entrepreneurship in

Bangladesh while many other are in queue by making an extra
effort to overcome family and societal responsibilities together.
Prime Bank recognizes their potential and sets affirmative
initiatives to facilitate women in business success. Led by a
dedicated Women Entrepreneurship Development Manager
MSME Banking take initiatives and implemented actions plans
round the year. Some of these are –

Preferred and Low Cost Entrepreneurship

Market Promotion Celebration Women Day
Finance Development Workshop

Bank partnered with Bank celebrates Women Day

Selected women enterprises Bank organized workshop
Bangladesh Bank and provides to recognize contribution
are offered Prime Bank to illustrate business
preferred loans without of women in workplace
Sponsored stall at annual management and banking
security up to BDT 2.5 Million with special attention and
women entrepreneur fair issues among women in
and with security up to BDT 5 differentiation thru distribution
organized by Bangladesh business or are interested to
Million to eligible women led of gifts, cakes and circulating
Bank. be in business in near future.
enterprises at rebated rate messages highlighting them.

International Awards

In 2018, Prime Bank Ltd. has got Best SME Deal Award from
Asian Development Bank (ADB).Rahel Ahmed, MD & CEO
accompanied by Head of MSME Banking received this
prestigious award at fourth Annual ADB Trade Finance Program
(TFP) Award-2018 held on 4 September 2018 in [Link]
200 guests from banks and other financial institutions around
the world attended the event.

Trade Services Division Since inception as a Division, the primary objective of

centralization of Trade Finance through this division has been to
Trade Services Division (TSD) is running with a team of ensure efficiency, grow specialized expertise in Trade Finance
dedicated and qualified, certified trade Specialists who are well and necessary utilization of Manpower performing compliance
conversant in International Trade & Foreign Exchange Business. of rules and regulation of concerned regulatory authorities
At present Trade Services Division supports all segments of like Bangladesh Bank, other concerned Govt. authorities, ICC
Trade Finance clients of the Bank by opening all forms of LCs, rules and publications for International Trade transactions and
Issuing Shipping Guarantees, Handling Import Documentary international standard banking practices.
Collections, Advising LCs, Purchasing or Negotiating Local &
Trade Finance is process-oriented, document-intensive
Foreign Export Documents, Handling of Export Documentary
and highly skill demanding division. Due to centralization
Collections. Besides this trade service division has also been
of Trade activities, the bank has been able to derive the
providing all sorts of demand guarantee (Local & Foreign)
following benefits which ultimately impacted hugely in good
service to our valued customers and demand guarantees to
governance, adherence to compliance and most importantly a
the different government and autonomous bodies against
maintaining a congenial business friendly environment for the
foreign counter guarantees.
valued clientele of the bank.
With the competent guidance, support and supervision
of competent authority of the Bank, cordial cooperation Key Benefits
of Business segments and customers, Prime Bank has • Centralized trade operations with trade finance processing at a central hub
successfully set and made fully operational centralized trade
• Trade business can be extended at the doorstep of all
services including demand guarantees of the Bank. At present
segment of customers
Trade Services Division has centralized Import & Export and BG
activities of all segments of clients of the Bank through three • With ease of implementing new products, new revenue
service points namely: Motijheel, Gulshan and Chattagram. generation opportunities are envisaged

In 2018, TSD has successfully supported 26 % increase in • Better reconciliation and effective financial control
export volume compared to that of last year. Other trade • Compliance, monitoring of transaction and uniformity in
transaction of different sectors also shown an increasing trend transactions in line with the International Banking standard practice
in the current year. and regulations of Central bank and other Govt. authorities.

100 PRIME BANK

Treasury Prime Bank Treasury has the following desks through which it
offers a complete and well diversified range of services to its
What we do in Prime Bank Treasury: customers both in the interbank and corporate market.
Every day the Banking industry is facing the growing challenges
Prime Bank Treasury Structure:
in technology, regulation and compliance. And as such to cope
up with it, Treasury has become a strategically very important
business partner for all the business segments across the
Money
Bank. Now a day’s, Treasury is more responsible for making Primary Market
sound financial investments with the available liquidity while Dealership
reducing financial risks, although, the function of Treasury is (PD) & Fixed
Income
mainly to ensure adequate liquidity and capital of the Bank Securities
while administering the financial assets. Prime Bank Treasury
is not an exception. Over the last couple of years Prime Bank Treasury
Treasury has been performing excellently well in spite of the
Asset
market volatility, uncertainty, complexity & ambiguity that has Liability
been observed globally as well as within the country. Management
(ALM)
Prime Bank Treasury primarily focuses on the followings:
Foreign
Expanding transaction volume; Exchange

Utilizing different market opportunities within all risk and

regulatory limits;
How was 2018?
Strengthening ALM operations in line with market changes &
In the year 2018 the overall business environment observed
regulatory guidelines;
in the country was quite calm. But since it was an election
Creating a diversified fund management channel; year Business houses were very cautious and reluctant about
Minimize market, liquidity and interest rate risks; investment at the later part of the year which was witnessed
through decline in growth of private sector credit.
Enhancing profitability;

Private Sector Credit Growth in 2018

22.00%

20.00% 18.36%
18.00% 16.95%

16.00%

14.00% 13.20%

12.00%

10.00%
Jan-18

Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

However in 2018, the Local Money Market was more or less economic growth in 2018 while containing inflation within
liquid throughout the year. This was mainly due to lack of 5.55%.
Govt. borrowing from the Banking Sector. Deficit budget
financing shifted from market-based tools (bank loans and Policy rate, Call Money rate & Inflation:
government securities) to non-marketable instruments, e.g.,
National Savings Certificates (NSCs). Such large scale recourse Outlook of 2019:
to non-marketable borrowing is creating an environment The GDP is expected to grow by 7.20% in FY2019 as
that is stifling development of different markets like bond, consumption demand slackens despite a rebound in worker
pension fund, mutual fund, group insurance fund and so remittances. Remittance beneficiaries are likely to adopt
forth. In this situation, to support country’s economic growth, a cautious approach to spending, repaying debt incurred
Bangladesh Bank took several steps under inclusive banking in recent years of remittance declines. Private investment
specially credit accessibility for agricultural as well as small and is nevertheless expected to edge up with support from an
medium enterprises (SME), empowerment of women, green accommodative credit policy, and public investment will
banking, modernization of financial sector, mobile banking, expand as the authorities seek to speed the implementation
e-commerce, export promotion and liberalizing foreign of infrastructure projects. Export performance is expected to
exchange transaction. All these steps along with the prudent strengthen on projected higher growth in the euro area and
monetary policy adopted by Bangladesh Bank ensured steady the US. However, net exports will not add to growth, as imports

PRIME BANK 101

ANNUAL REPORT 2018

Industry Repo, Reverse Repo, Call Money Rate and Inflation

Repo Reverse Repo Call Money Rate Inflation

7.50% 6.75%
6.50% 5.76%
6.00%
5.50% 4.75% 5.55%
4.75%
4.50%
4.09%
3.50% 3.90%
2.50%

1.50%
Jan-18

Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18
are expected to expand strongly with rising fuel requirements, current account deficit may deteriorate further if policies
and a steady increase in imports of capital goods. Agriculture to rein in import demand do not succeed. Failure to boost
growth is projected to be slightly higher at 2.5% as higher rice revenues and tap foreign financing could unduly limit spending
prices encourage farmers to plant more of the staple crop. With on needed infrastructure. Finally, climate & disaster resilience
an expected improvement in domestic and external demand, and whether remains a risk.
industry growth will likely be stronger at 10.6%, as services edge
up to 6.5%. Inflation is projected to edge up to 6.3% in FY2019 Treasury performance in 2018:
because of further increases in natural gas and electricity In the year 2018, Treasury achieved all of its KPIs successfully,
prices and continued taka depreciation. However, normal even exceeded in some areas like Exchange Gain & Cross
weather and projected stability in global oil prices should Currency dealing.
temper price pressures compared with this year. Call money
rate is likely to rise on some pickup in Government borrowing. Prime Bank Treasury, at the very beginning of the year, through
Policy support will continue for micro, small, and medium- its own market research and market intelligence anticipated
sized enterprises with renewed emphasis on employment- the market condition and accordingly adopted a dynamic
focused manufacturing and services, and on expanding the fund management and investment strategy for the bank.
availability of low-interest agricultural loans. The central bank Our prudent investment strategies in Money Market, Foreign
is cooperating with capital regulators to encourage startup Exchange Management as well as in Primary Dealership & Fixed
financing for entrepreneurs in Bangladesh. Income securities again contributed to a very successful Year
2018.
With a continued favorable global outlook, export growth
is projected at 14.0% in FY2019. Taking into account central Prime Bank Money Market (MM) Operation:
bank’s policy measures, imports are forecast to grow 7.50%
Over most of the period of 2018 the interbank money market
in FY2019 since Annual development spending was slated to
experienced a liquid scenario. The number of days when
grow by 38.5% to accelerate the implementation of some large
money market felt a bit stretched was very limited. This was
infrastructure projects including the Padma Bridge, Dhaka
mainly possible for the accommodative monetary policy
Metro Rail, Rooppur Nuclear Power Plant, Payra Port, coal-
stance that was adopted by Bangladesh Bank. Call money
fired power plants at Rampal and Matarbari and Kornophuli
rate hovered around 3.00% - 4.50% throughout the year 2018.
under water tunnel. As the dynamics of the recovery stabilize,
Alike the previous years, Prime Bank Money Market Desk was
remittances are expected to grow by 11.0% in FY2019. Due to
very active in the money market all through the year 2018.
rising of remittances and exports, the current account deficit
The revenue generated by MM Desk in 2018 was BDT 1,195.86
is expected to lower, at 2.0% of GDP with monetary policy
million compared to BDT 1,090.07 million of 2017. The biggest
beginning to moderate import demand for FY2019.
challenge in 2018 was to ensure the best utilization of fund,
Forecasts for FY2019 are based on several assumptions: The which Money Market desk of Prime Bank did very successfully.

Daily Average Call Money Position & rate of Prime Bank

Call Borrowing Call Lending W. Avg Rate (%) of Borrowing W. Avg Rate (%) of Lending

300 5.00%
275 4.50%
250
4.00%
225
3.50%
200
175 3.00%
150 2.50%
125 2.00%
100 1.50%
75
50 1.00%
25 0.50%
0.00%
Jan-18

Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18

102 PRIME BANK

Prime Bank Primary Dealership & Fixed Income Operation: Asset Liability Management (ALM) Desk:

In 2018, Prime Bank continued its position as one of the Best Asset Liability Management (ALM) is an integral part of Bank
Primary Dealer Bank in Bangladesh. It expanded its dominance Management. Head of Treasury is the member secretary of ALCO.
in both Primary & Secondary Market of Govt. securities trading. Through ALM our Bank mainly aims to achieve objectives such as:

Prime Bank [Link] portfolio in Comparison to Avg. Market Yield of [Link] in 2018

T Bill BGTB BB Bill PBL Avg Mkt Avg

11.00%
2,600 8.65% 10.00%
8.29%
430 570 410 9.00%
2,100
8.00%
1,600 7.00%

1,928

1,893

1,893
2,055

1,839

1,788
2,042

2,042

1,867
1,944
2,022

1,981
6.00%
1,100
5.00%
5.52% 4.88%
600 4.00%
3.00%
100 396 396 396 497 497 497
2.00%
Jan-18

Feb-18

Mar-18

Apr-18

May-18

Jun-18

Jul-18

Aug-18

Sep-18

Oct-18

Nov-18

Dec-18
Prime Bank Foreign Exchange Dealing:
• Quality growth in assets & liabilities;
In FX market, Interbank Foreign Exchange rate was quite volatile
• Containment of risk in a coherent manner;
and illiquid throughout the year 2018. USD appreciated against
BDT and stood at 83.90 level as of 31th December’18 which • Ensuring regulatory compliance;
was 82.70 at the very beginning of 2018. Our FX Desk was able • Stability and consistency in earnings;
to forecast the situation very early and as such handled the
• Profitability & increasing value of the Stakeholders;
situation pragmatically. In 2018, FX Desk generated BDT 111.18
crore as Exchange Gain in comparison to 105.49 crore of 2017. ALM desk, through its own market research and market
FX Corporate sales Desk was also very active in the interbank as intelligence presented the market outlook throughout the year,
well as the corporate foreign exchange market throughout the gives an explicit idea about the market liquidity for availing
year 2018. The total volume in 2018 handled by FX Corporate market opportunities for investment and fund deployment in
sales Desk was USD 657.71 million compared to USD 361.24 the market. Throughout 2018, the desk helped in pricing the
million in 2017. products of both assets and liabilities to gain the competitive

Net Open Position & Exchange Rate Movement-2018

NOP USD/BDT Exchange Rate

60.00% 84.0000

50.00%
83.6000
40.00%

30.00% 83.2000
20.00%
82.8000
10.00%

82.4000
(10.00)

(20.00) 82.000
1-Jan-18

31-Jan-18

2-Mar-18

1-Apr-18

1-May-18

31-May-18

30-Jun-18

30-Jul-18

29-Aug-18

28-Sep-18

28-Oct-18

27-Nov-18

27-Dec-18

In the year 2018, FX Cross Currency desk registered a growth advantage from the market movement. It also presented
of 16.71% in exchange gain over 2017. During the said period, the bank’s overall financial position in front of the senior
profit earned from speculative dealing was BDT 1.76 crore management to formulate an effective investment and fund
compared to BDT 1.48 crore of 2017. management strategy for the bank.

Proprietaty/ speculative Dealing Performance 2018, 2017 & 2016

Amount in USD
Year Total Deal Volume Growth in Volume
2018 5,005 2,014,447,970.14 119.36%
2017 2,689 918,320,927.50 33.02%
2016 2,513 690,368,745.00 135.24%

PRIME BANK 103

ANNUAL REPORT 2018

In 2018, Treasury operated within all regulatory limits. This reflects partner fixes its own business strategy. Being a major
Prime Bank Treasury’s commitment to operate within the rules contributor of the bank’s revenue line, Treasury contributed
and regulations of the Bank as well as other regulatory bodies. significantly in 2018. All the strategy and policies that were
implemented in 2018 paid us very well and helped us to have a
Treasury Income in 2018: profitable 2018. Overall Treasury revenue numbers in 2018 from
We all are well aware that, a Bank as a whole fixes its yearly different revenue heads are given below with a comparison of
business target and accordingly Treasury being a strategic 2017 & 2016 to show the growth in its business horizon and
revenue line.

Treasury Income
Figures in Million
Particulars 2018 2017 2016
Foreign Exchange Gain 1,111.82 1,054.95 633.28
Interest Income Call Loan 85.70 43.80 24.02
Interest Income on Placement /Deposit (Local) 750.38 725.91 105.39
Interest Income on Placement /Deposit (Foreign) 359.78 320.35 257.34
Interest Income on Govt. Securities 2,011.55 2,312.01 3,326.80
Interest Income on Debenture/Bonds 13.55 23.45 37.19
Capital Gain for Sell of Govt. Sec. 19.15 1,558.59 1,946.67
Gain on discounted bond/bills 21.67 363.25 784.52
Underwriting Commission regarding Treasury Bill/Bond 3.87 6.19 28.25
Total 4,377.46 6,408.51 7,143.46
-31.69% -10.29% -24.64%

Treasury Income 2016 - 2018

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ϳ͕ϭϰϯdŝŶDŝůůŝŽŶ
ϲ͕ϰϬϵdŝŶDŝůůŝŽŶ ϰ͕ϯϳϳ dŝŶDŝůůŝŽŶ

Treasury Priorities in 2019: • Managing Balance sheet in the most efficient and
professional manner;
• Maximizing Treasury Portfolio return through exploring
existing & new areas of business; • Special Emphasize for building awareness among
corporate customers regarding hedging and its benefits;
• Emphasizing on developing market research expertise
under ALM operation; • Updating the policies related with treasury in line the
changed/modified/amended policies as endorsed by
• Strengthening on proprietary/speculative trading under FX dealing;
Bangladesh Bank from time to time;
• Strengthening Foreign Exchange corporate sales operation;
• Organizing knowledge sharing programs e.g. Trainings,
• Emphasizing on providing Forex Advisory services; Seminars on Treasury and Market risk Management;
• Strengthening relationship with all counterparts (both
Interbank & Corporate);

104 PRIME BANK

International Division Export Processing Zone, Chittagong Export Processing Zone
and Adamjee Export Processing Zone. OBUs accept deposit/
Foreign Remittance: borrow from non-resident persons/institutions including
During the year 2018, Prime Bank received foreign remittance of Bangladesh nationals working abroad and 100% foreign owned
USD 547.90 million which is 16.07% higher than previous year. In enterprises in Export Processing Zones in Bangladesh. OBUs
addition to commercial remittance, Prime Bank gives very high also make loans/advances to foreign owned enterprises in
priority to mobilise wage remittance by maintaining bilateral Export Processing Zones in Bangladesh and joint venture /
business relationship with the renowned exchange houses local firms subject to approval from Bangladesh Investment
and banks in Saudi Arabia, Kuwait, Qatar, Bahrain, UAE, Oman, Development Authority. OBUs offer wide range of services
Malaysia, USA, South Korea and the global players like Western including trade finance, working capital, term loan, discounting
Union Money Transfer &  Continental Exchange  Solutions Inc. of UPAS L/Cs and export bill of on-shore customers etc. Loan
(RIA Financial Services).  In 2018, Prime Bank took initiative to book of OBUs registered growth of 2.95% over previous year
reach unexplored market and established new relationship reaching to USD 284.04 million as on December 31, 2018 which
with ‘Kookmin Bank, Korea’. is 11.59% of overall loan portfolio of the Bank. During the year
2018, OBUs have made a profit of USD 3.48 million compared
As a part of Bank’s strategic initiative to handle increased to USD 3.00 million in 2017 registering a growth of 15.83%.
volume of inward foreign remittance, the NRB Remittance
Operations Unit of the Bank, backed by IT facilities, provided Prime Exchange Co. Pte. Ltd., Singapore
efficient service to procure remittance and speedy delivery
Since its modest beginning in 2006 with single branch-single
of foreign remittance through wide distribution network
corridor business in Singapore, Prime Exchange Co. Pte.
comprising of own branches along with country-wide network
Ltd. (PEC) has grown over the years and now has 3 (three)
of two reputed NGOs- BURO Bangladesh and UDDIPAN.
strategically located outlets in Singapore and distribution
Correspondent Banking: network in India and Philippines in addition to its core market in
Bangladesh. With over 12 years of experience PEC, Singapore
PBL maintains active relationships with an extensive network of has established itself as a trusted brand in the Singapore
banks and financial institutions all over the world and provides Remittance Industry. The company has banking and agency
a wide range of correspondent banking services generating relationship with banks having large network in Bangladesh
benefits to its customers. Correspondent network of PBL and internationally renowned banks such as DBS Bank Ltd
includes 672 members, covering 255 banks spread across 69 Singapore, BDO Bank Philippines, ICICI Bank Ltd and HDFC
countries as on December 31, 2018. PBL also maintains 32 Nostro Bank Ltd of India.
Accounts in 9 major currencies with reputed international banks
around the world in all the important global financial centres. Total volume of remittance was SGD 74.80 million in 2018
compared to SGD 71.70 million in 2017. The company made
During 2018, Correspondent Banking has been reoriented operating profit of SGD 24,500 in 2018 compared to SGD
to a relationship-based model and aligned with Wholesale 186,970 in 2017.
Banking stream which has created synergy to offer cross border
trade transactions at very competitive term for LC advising, PEC always strives to expand presence in Singapore through
confirmation, negotiation and discounting, issuance and/or agency arrangement with remittance companies, bringing
confirmation of bonds, guarantees and counter-guarantees; customers under its network coverage at competitive rates
processing of documentary collections and Vostro Account and fee. PEC Singapore is also actively considering to utilise
services to correspondents. In During the year, bank has initiated fintech-based remittance companies to offer customers a
a number of structured transactions with support from partner faster and more convenient money transfer experience.
banks backed by globally renowned Export Credit Agencies.
PBL Exchange (UK) Limited
PBL enjoys sufficient credit limits with a large number of
The company has been operating with three Branches in
international banks including ADB and IFC under trade finance
London, Birmingham and Manchester since its inception in
program. In recognition to a unique solution of cross border
2010. Since 2017, the company, as an Authorised Payment
trade transaction in SME sector, Prime Bank received “Best
Institution (API), began Agents operation to reach the Non
Trade SME Deal Award” from ADB for the year 2018.
Resident Bangladeshi (NRB) community throughout the UK.
PBL continued borrowings from foreign Banks and multilateral As per FCA’s re-authorisation process, the Company has been
institutions viz. IFC, ICD and FMO to meet increasing demand in authorisation to carry on payment services activities as an
foreign currency lending through Offshore Banking Units. During Authorised Payment Institution (API) from 16 May 2018, under
the year, bank’s executives met representatives of international Payment Services Regulations 2017 (PSRs).
banks and participated in a number of international conferences,
The company has been operating by remaining compliant with
seminars including SIBOS 2018 in Sydney which has further
rigorous regulatory guidelines. Despite fierce competition in
strengthened correspondent relationship with Banks.
the Money Service Business Sector, total number of remittance
Offshore Banking for the year 2018 has reached to 70,016, with the remittance
volume hitting GBP 37.51 million, compared to GBP 31.98 million
PBL is offering Offshore Banking facilities in foreign currencies in 2017. The company has managed to make some marked
through its three Offshore Banking Units (OBUs) located in Dhaka progress in business by doubling its total Agent network from

PRIME BANK 105

ANNUAL REPORT 2018

18 in 2017, to 51 Agents by the end of 2018. There has been is one of the key driving forces of the economy of Bangladesh.
a significant growth in the transaction volume through agent There is no alternative but to increase production through the
network, from GBP 9.5 million in 2017 to GBP 15.45 million in development of agriculture to ensure food security. Similarly,
2018. agriculture is still now the largest employment generating
sector of Bangladesh. Besides, agriculture makes the largest
The company expects to deploy more Agents in its service
contribution to favorable Balance of Payment position through
network in 2019 with a view to expand service coverage to
poverty alleviation, providing raw materials for industry,
newer areas in UK. Along with the expected deployment of the
reducing imports and enhancing exports. According to the
new software, PBL Exchange UK will pursue more marketing
Agricultural & Rural Credit Policy and Program of Bangladesh
programs to further enhance its mark in the remittance service
Bank, crop, fisheries and livestock will have to be given priority.
sector. In the later part of 2019, PBL Exchange (UK) Ltd will seek
to tap in to the digital domain by offering mobile Apps and web Agriculture as a sector depends more on credit than any other
access to the wider community, in order to remain competitive sector because of seasonal variations in farmers’ returns and a
and increase coverage. Despite challenges due to Brexit and its changing trend from subsistence to commercial farming. In the
impact on UK economy, PBL Exchange (UK) Ltd. is expected to absence of necessary working capital for buying water, fertilizer
grow in 2019. and pesticides, coupled with it the lack of the knowledge for
their balanced application, farmers often fail to reap a better
PBL Finance (Hong Kong) Limited harvest from modern technology-led crops.
PBL Finance (Hong Kong) Ltd., the third fully owned overseas In line with Government efforts as well as the Bangladesh
subsidiary of Prime Bank Limited, has become well acquainted Bank’s Agricultural & Rural Credit Policy and Program, Prime
within the Hong Kong business houses having major trading Bank continued its proactive policy and program support to
relationship with Bangladeshi industries importing fabrics, boost up agriculture financing.
accessories for RMG sector, clinkers and minerals products like
Prime Bank Limited recognized that Agriculture / Rural Credit
gypsum and limestone for cement manufacturing industries,
is one of the major tools for ensuring “inclusion” of the rural
capital machineries for different sectors, mobile phone
people into the banking activities and plays a major role in
accessories & IT products. The coverage is growing in other
the overall economic development of the country. As such
sectors as clientele have been widening with continuous effort
Bangladesh Bank’s timely guidance to emphasize on this sector
from both of Hong Kong office and parent bank – PBL’s Head
has created a far reaching effect not only on this particular
Office with help of marketing cell. Since its launch of business
sector but on the economy as a whole. Prime Bank Limited,
in September 2011, Company’s professional and expert officials
in line with the guidance of the Bangladesh Bank, has been
deputed from PBL and local recruits from Hong Kong have
relentlessly working to increase its activities in the agricultural
been rendering personalized services to corporate/ businesses
/ rural sector and the bank has been ceaselessly trying to
in Hong Kong.
contribute in the sector and will continue doing so in the future
The business trend throughout the year 2018 was mixed due to for the greater interest of the country.
the consequences of US-China trade & tariff war percolates into
Introduction of Agricultural Loan products in Prime Bank
Hong Kong economy causing Hong Kong investors become
Limited
more vigilant and cautious. However, within this market
scenario, the company has earned an operating profit of HKD PBL has been providing Agriculture Loan in the form of Abad
5,447,754 in 2018 compared to HKD 6,398,652 in 2017. The Core (for crops loan), Khamar (for farm loan) and Nabanno (any agri
Banking Software (CBS) Temenos T24 system connectivity has purpose loan) to meet up working capital and capital expenditure
made the company better equipped from Oct 2018 for ensuring requirements of the farms/ projects/ enterprises/ farmers.
faster service which is a milestone migration achievement. So
far it has established RMA with 44 banks which help to run its Abad (Crops loan)
trade finance services smoothly and formulation of FI marketing Rural people of Bangladesh are dependents on agriculture.
Team at PBL, Head Office from October 2018 for ensuring and For helping and encouraging and betterment of rural people
enhancing the trade finance business is another addition to / share cropper/ marginal farmers/ small farmers/ medium
help handle more trade-based business in 2019 and onward. farmers to cultivate crops/ vegetables, Prime Bank provides
The company is going to strive forward to increase its revenue/ Abad (crop loan) to bear the cost of tilling of land, fertilizer,
fee-based income through advising, negotiation, confirmation pesticides, irrigation, seed etc.
in addition to funded business through discounting facilities
This product has been designed to ensure desired amount of
against banker’s acceptance on L/Cs originating from Prime
money for the share cropper, the marginal, small and medium
Bank Limited and other Bangladeshi Banks.
scale farmers at the beginning of cultivation. The farmers can
repay their loan after harvesting time. This product helps them
Agriculture Financing
a lot in terms of benefit as they need not to take high interest
The overall economic development of Bangladesh is closely loan from the local money lenders, businessmen and MFIs/
interlinked with the development of the agricultural sector. NGOs. Moreover, this flexible repayment system removes their
At the moment, 14.23% of Bangladesh’s GDP originates from mental pressure of weekly/monthly/quarterly installments and
agricultural sector, and the sector absorbs about 41% of the farmers are contributing to the national production over the
total labor force of the country, which indicate that Agriculture year by their better production.

106 PRIME BANK

Khamar (for farm loan) purchasing of Farm machineries/ Agri. Equipments (Irrigation
and tilling technology/equipments, Thresher, Tractor, Harvester
Prime Bank has been providing Khamar Loan to meet up
etc), Solar Pumps/solar power operated irrigational equipment,
working capital and capital expenditure requirements of the
Rural transport and to meet up the capital requirement of
farm of Fisheries, Hatchery, Poultry, Beef Fattening, Milching
Nursery farming, Weavers (Handloom Industry), Tissue culture
cow/Dairy, Bio-gas Plant (for Farm) , Duck rearing, Integrated
farming, Others (related to Agriculture), etc.
Farm , etc.

Agriculture Loan by purpose

Nabanno (any agri- purpose loan)
The Bank has been involved in disbursing quite a large portfolio
Prime Bank has been providing Nabanno Loan to MFIs
of agriculture loans for various purposes during the year 2018,
(for onward lending to Agriculture sector), the farmers for
which are listed below:

Table: Agriculture Loan by purpose

BDT in Million

2018
Purpose
Disbursement Outstanding
Crops / Vegetables cultivation 2895.00 1942.90
Fisheries 183.82 195.54
Livestock 715.02 564.73
Irrigation equipment 146.95 51.10
Farm Machineries 1.82 1.86
Crop storage & Marketing and Others 91.50 172.33
Poverty Alleviation 770.07 499.10
Total 4804.18 3427.56

Agricultureral Loan Disbursement During 2018

Purpose-wise Outstanding as on 31.12. 2018
16.03%
14.56%
1.90%
0.04% 5.04%
3.06% 0.05%
1.49%

14.88% 56.68%
60.26%
3.06%

3.83%

5.70%
Crops / Vegetables cultivation Farm machineries
Crops / Vegetables cultivation Farm machineries
Fisheries Crop storage & Marketing and others
Fisheries Crop storage & Marketing and others
Livestock Poverty Alleviation

Irrigation equipment Livestock Poverty Alleviation

Irrigation equipment

Bangladesh is endowed with a favorable climate and soil the items. Bank may receive 6% interest loss compensation
conditions for the production of variety of crops all the year from Government through Central Bank after realizing the
round. The major crops cultivated in the country are rice, loan from borrower in full. Prime Bank Limited has positive
wheat, jute, pulses, potato, oilseeds, spices, maize, sugarcane intention to contribute in flourishing the crop diversification
and vegetables. For climate change, there is a growing need in the country with a view to attaining multifarious output in
to change the cropping pattern in the country. Water efficient production, saving foreign exchange, substituting rice and
high value crops (such as maize, spices, oilseeds and pulses) other conventional crops.
should be promoted in the drought prone region of the country
In line with this the Bank has financed a substantial amount for
through distribution of high quality seeds and saplings at
cultivation of spices and maize. Credit facilities are allowed at
subsidized price along with provision for agricultural credit at
rebate rate (4 percent) under interest loss compensation from
rebate / low interest rate.
Government for cultivation of spices and maize to reduce
The Central Bank has advised all banks that Credit facilities shall dependency on import and save huge amount of foreign
be allowed at rebate rate (4%) under interest loss compensation currency incurred for importing the items. During the year of
scheme of Government for cultivation of pulse, oil seeds, 2018, PBL has disbursed Tk.4.02 million among 44 farmers at
spices & maize to reduce dependency on import and to save rebate rate (4 percent) for cultivation of species and maize.
huge amount of foreign exchange incurred for importing

PRIME BANK 107

ANNUAL REPORT 2018

BDT in Million Target and achievement

Loan disbursed @ 4% interest No. of Clients Prime Bank Limited has disbursed Agricultural & Rural Credit
Crops of Tk. 4804.18 million in the year 2018. However, considering
(Jan 2018 to Dec 2018)
the FY 2017-2018, Tk. 4396.79 million against the total target of
Spices 2.52 18
Tk.2730.00 million has been disbursed.
Maize 1.50 26
Total 4.02 44 In line with the Agricultural & Rural Credit Policy and Programme
of Bangladesh Bank, a target of agricultural credit amounting
Moreover, Prime Bank has disbursed Tk. 8.17 million to 10 (ten)
to Tk. 3240.00 million has been set for Prime Bank for the FY
taka account holders under financial inclusion program during
2018-2019, out of total target, an amount of Tk.2573.35 million
the year of 2018.
has already been disbursed/achieved during the period from
July 2018 to December 2018.
Pictures of some PBL financed projects on Agriculture

Financing in Guava cultivation Financing for Fish Farming

Financing in Dairy Farm Financing in poultry farm

Disbursement of Crop loan among the farmers

108 PRIME BANK

Performance of Research and Development (R&D) Division Major activities performed by R&D Division are as follows:

A keen understanding of business environment, trend of Market Research

industry’s dynamics and forecast of major indicators play a
crucial role in formulating strategies for growth and sustainable Product Development
operation. Data, information and insight gathered through • New Product Development: R&D Division designed Product
systematic process help the business to take the right decision. Program Guideline (PPG) of New Deposit Product “Money
Besides, opportunities of business avenues can also be explored Building Scheme” combining FD with Scheme.
and existing business can be also given new dimension to
increase the business volume and sustainable growth. Most • Product Re-engineering: A number of recommendations have
importantly, what the customer/stakeholders think about the been made here to make our scheme accounts lucrative.
organization and its peer organization, determine competitive • PPG of Single Installment Schemes in association with
advantage. To gather the insight, there is no alternative to Consumer Banking Division
qualitative and quantitative studies.
• PPG of Motorcycle Loan in association with Consumer
R&D division of the Bank undertakes research studies to Banking Division
provide reliable, accurate, valid information on economy,
• revision of interest rate, provisional profit rate tenure and
market, customer and contemporary issues. Considering the
all the applicable and expected installment sizes for the
business trend, present scenario and forecast- R&D designs
DBDS, MBDS Schemes products had been done following
and reengineers products and services, gathers consumer
the suggestions of the Bank’s ALCO.
insight, proposes prospective locations for banking business,
analyzes sectors, disseminates knowledge through economic
Marketing Research:
publication and undertakes ad-hoc research.
• Credit Card Market Scenario of Bangladesh: Overall
Banking Industry and Peer Banks

R&D’S PRIORITY AREAS • Sector-Wise Credit Concentration Status: Overall Banking

Industry and Peer Banks

• A feasibility study has been conducted on Agent Banking

in some areas as a part of pilot study to expand alternative
delivery channel of the bank.

Sector Research on Local Industry

R&D Division provides up-to-date information on the industry/

Co sector as per instruction of the Board of Directors of the Bank.
nsu
me In addition, it is also a requirement of CRM of the Bank and
r
different business units of the Bank. In this regard, R&D Division
has already prepared and submitted the following reports to
the Bank’s internal stakeholders:
Eco
no • Ceramic Industry
my
• Steel Industry
• Vaccine Industry
• Electronics Industry

These reports have provided market information focusing on

size of market, total supply, production capacity/utilization,
top market players, future outlook/prospect of the respective
industry based on primary as well as secondary data available
from numerous sources.
Banking Market

R & D DIVISION’S ACTIVITIES

Business and Industry
Market Operations
Economic Studies
Research Research
Policy Research

New Product Monthly

Branch Newsletter
Development, Commodity
Expansion ”In-Focus”
Product Business
Program (BEP) Weekly
Reengineering Priority
ATM xpansion e-Newsletter
Consumer Sectors
Program Miscellaneous
Insight Functions

PRIME BANK 109

ANNUAL REPORT 2018

Operations Research This system also has several built-in security features to
protect the Bank against the threats like Cross-site scripting,
The Business Feasibility Study is one of the crucial and frequent
SQL injection, DOS attacks, blocking of Directory Traversal,
studies undertaken by R&D for serving the bank in setting up
Command Injection, Replay Attacks, and even can protect the
any Branch, ATM Booth at recommended and prospective
users from the “Coffee Shop Scenario”.
areas over the country based on geographical, demographic,
business, financial and economic data analysis. Bank’s vision to provide more convenient ways to perform
banking transactions through new and improved alternate
• To explore potential geographic locations where the bank
delivery channels like Internet Banking, Digital Wallet, Mobile
can extend its services to contribute to the socio-economic
Banking/Apps, Agent Banking has moved one step closer with the
development of the area, Feasibility Studies have been conducted
implementation of this latest version of CBS. With this new and
on around Thirty (30) new locations all over the country for new
improved technology, Prime Bank aims to create new markets,
branch and ATM expansion and business growth.
improve efficiency and advance toward greater prosperity.
• Branch Relocation Study has been conducted in One (01)
place to make a comparative analysis between existing Internal Control & Compliance Division
and proposed premises of the branch
Banking is a diversified and multifarious financial activity which
• A Feasibility Study on Ascertaining the Scope of Prospective involves different types of risks. An effective internal control
Green Branch of Prime Bank. and compliance system has become essential in order to
underpin effective risk management practices and to ensure
Business and Economic Policy Research smooth performance of the banking industry.
• The monthly publication “In-Focus” has focused on The objective of internal control and compliance function
contemporary issues that are critical to global and domestic is to assist Management in ensuring that all activities of the
economy as well as financial markets and institutions. In Bank and its staffs are conducted in accordance with ever
total Five (05) unique issues have been circulated to all evolving compliance laws, rules and standards. A system
stakeholders (inside and outside). of internal control allows management to stay focused on
• Besides, a weekly e-newsletter is being disseminated to the organization’s pursuit of its operations and financial
provide financial insights to valued readers on a weekly performance goals, while operating within the confines of
basis. Fifty (52) issues have been communicated to the relevant laws and minimizing surprises along the way.
internal stakeholders of the Bank. The responsibility of implementing internal controls starts
with the business lines, which are the “first lines of defense”
Miscellaneous Activities against breaches that could cause the bank not to fulfill its
• Write up for Sustainability Report of the Bank objectives, not to report properly, or not to comply with laws
and regulations. Beyond that, in any bank, the three important
• Write up for different issues such as for CAMEL’s reporting,
“control functions” are risk management, compliance, and
Financial Stability Report etc.
internal audit. This triumvirate of key functions is underpinned
R&D will endeavor to provide insight, information in an by, and in turn implements and reinforces, the system of internal
innovative and insightful manner to align the Bank’s vision in controls. The first two of these control functions constitute the
being the best commercial bank. “second lines of defense” against mishaps. The final, or “third
line of defense” is the internal audit function.
Core Banking Software and its operations
The Directors are responsible for maintaining and reviewing
Since 2007, Prime Bank has been using Core Banking Software, T24 the effectiveness of overall internal control system of the
of TEMENOS, one of the best available in the global market with bank in order to accomplish a satisfactory standard of its
cutting-edge technology. Recently, it has upgraded its CBS T24 to portfolio. To meet this requirement and to discharge its
the latest version R16 to offer new products and open new avenues obligations, procedures have been designed for achieving
to serve its customer in more flexible and cost-efficient ways. bank’s basic mission and vision; for ensuring timely, accurate,
With the latest version of Core Banking Software i.e. T24 (R16), and comprehensive reporting concerning financial and non-
Prime Bank is now running all three types of banking services financial, internal and external; and for conducting activities
i.e. Conventional Banking, Islamic Banking, and Off-Shore and taking specific actions in accordance with applicable laws
Banking as well through a single platform and has managed and regulations. These procedures can only provide reasonable
to reduce infrastructure and administrative costs significantly. assurance, not absolute assurance, with regard to achievement
of the organization’s objectives.
After implementing this latest version of CBS, Bank has acquired
the capability to run all of its foreign operations and subsidiaries These procedures are designed covering five components
with T24-R16, and recently on 2nd October 2018, Prime Bank of internal control system to ensure the effectiveness of
has implemented T24 (R16) in one of its subsidiary company at internal control system within the Bank in accordance with
Hong Kong i.e. PBL Finance (Hong Kong) Ltd., and now running “Guidelines on Internal Control & Compliance in Banks” issued
its business operations under T24 (R16), while all CBS related by Bangladesh Bank.
functional & technical supports and day end processes are The Bank maintains a culture and environment that provides for
being provided and managed centrally from Bangladesh. a sound and effective internal control system, together with a

110 PRIME BANK

commitment by all employees to adhere with the principles of • Look over the decisions taken over at the meetings of Audit
integrity and transparency. Accordingly, the bank has prepared Committee of the Board of Directors, Executive Committee
banks own Internal Control & Compliance guidelines requiring of the Board of Directors, Board of Directors etc.;
that management and staff at every level in the bank have a role,
• Dissemination of regulatory instructions among all the
duly and responsibility for maintaining sound internal control.
concerns;
The Bank has also established an organizational structure of
ICCD after getting proper approval from Audit Committee of • Follow up proper correspondence with the regulators
the Board & Board of Directors. The Board of Directors of the against their queries in the neck of time;
Bank demonstrated independence from Management and • Extending the coverage and frequency of Compliance
formed an Audit Committee with such directors who are not Tests;
the members of Executive Committee of Board and exercises
• Developed action plans for corrective action and
oversight over the development and effectiveness of the
improvements in internal controls environment by the
internal control environment.
ICCD itself;
Banks are in the business of risk-taking. Consequently, it is
• As a part of green banking initiatives, ICCD adopted web
imperative that, as part of an internal control system, these
portal for collecting DCFCL, QOR, LDCL, sending and
risks are being recognized and continually assessed. From an
receiving Audit and Compliance Reports instead of hard
internal control perspective, a risk assessment should identify
copies to save usage of papers.
and evaluate the internal and external factors that could
adversely affect the achievement of banking organization’s • Ensuring accuracy in Self-Assessment Anti-Fraud & Internal
performance, information and compliance objectives. Controls through physical verification
The Bank promotes a strong compliance culture, where • Minimizing the observations / lapses as well as develop
compliance risk is identified and continuously monitored. The compliance culture within the Bank
Internal Auditors of the Bank set out annual risk based audit
• Introducing compliance rating on Branches and reward
plan, approved by the Audit Committee of the Board (ACB) and
best compliant branch
conducted audit activities accordingly. The Risk Management
Committee of the Board continually reviews and monitors the • Introduced online partial daily DCFCL for Branches. Fully
development, identification & assessment of risks relating to automation of DCFCL & QOR will be accomplished with
business objectives, assessment procedures. the help of IT.

The Bank has formal policies, procedures and guidelines that • Extending on-site inspection of DCFCL, QOR and LDCL
are designed to ensure compliance with generally accepted and cover at least 30%-40% branches according to ICC
conduct, ethics and business practices by ensuring regulatory Guidelines
instructions and global standard which includes a well- • Introducing concurrent audit at selective Divisions as per
defined ICC Manual for the Bank comprising of Compliance ICC Guidelines
Policy, Compliance Rating Criteria etc. In order to ensure the
• Minimizing credit deferrals as well as enriching
effectiveness of the internal control system, it is continually
documentation status within the Bank
verified that these control policies & procedures are being
complied with. A summary report on the overall audit • Introduced IT Unit for compliance of IT audit report
observations and compliance thereof had also been reviewed
by the SMT & Audit Committee on quarterly basis.

The Bank initiates MIS Committee to ensure supply of correct and

accurate information to Management and other stakeholders.
The decisions of SMT, ALCO, ECB, ACB and Board meeting had
been minuted properly & communicated with the concerned
Divisions/Departments for rectification and comply thereof.

In addition to the above, the bank developed control activities

and taken key strategies that contributes to the mitigation of
risks amongst which the followings are newsworthy:

• An explicit way of storing, analyzing and reviewing all the

policy, process, guidelines, procedures, Product Program
Guidelines of the Bank to ensure internal control and
compliances;

• Evaluating performance and effectiveness of the Bank

periodically;

• Review of internal and external audit reports and

compliances thereof at regular basis;

• Ensures multi-typed, periodic statements to ensure the

compliance of all audit findings;

PRIME BANK 111

ANNUAL REPORT 2018

Financial Analysis

Total Assets

Total Assets of PBL stood at BDT 293,901 million as on 31 December 2018 as against BDT 281,275 million of previous year registering
a growth of about 4.49 percent over the year 2017. In total assets, loan and advances covered 70.03% of total assets. Contents of
total assets of PBL is shown in following table:

(BDT in Million)

Growth
Assets 2018 2017
Volume %
Cash 17,640 18,005 (365) -2.03%
Balance with other banks and financial institutions 13,405 10,083 3,322 32.95%
Money at call and short notice - 1,500 (1,500) 100.00%
Investments 26,046 23,807 2,239 9.41%
Loans, advances and lease / investments 205,810 198,323 7,487 3.78%
Fixed assets 6,943 6,434 509 7.92%
Other assets 23,837 22,903 934 4.08%
Non - banking assets 221 221 - 0.00%
Total assets 293,901 281,275 12,626 4.49%

Cash and bank balance

Cash and bank balance includes notes and coins in hand, balance with Bangladesh bank and its agent bank and balance with other
banks and financial institutions. In 2018, total Cash and bank balance was BDT 31,044 million compared to BDT 28,087 million in
December 2017. Details are as follows:

(BDT in Million)

Growth
Assets 2018 2017
Volume %
Cash 17,640 18,005 (365) -2.03%
Balance with other banks and financial institutions 13,405 10,083 3,322 32.95%
Total 31,044 28,087 2,957 10.53%

Money at Call on Short Notice

Call lending is a part of the treasury function. Bank’s lending under this head of BDT 903,070 million as on December 31, 2018 and it
was BDT 470,000 million in the same date of last year which is equivalent of 92.14 percent growth compared to the corresponding
period. Positive growth indicates that banks has strong liquidity position as well as bank is efficient in generating income.

Investment

Investment in Treasury bill/bond occupies a significant portion of the total investment of the Bank which is BDT 18,662 million as on
December 31, 2018 and it was BDT 21,354 million in 2017. Details are as follows:

(BDT in Million)

Growth
Assets 2018 2017
Volume %
Government Securities:
Held for trading (HFT) 5,981 - 5,981 100%
Held to maturity (HTM) 18,662 21,354 (2,692) -13%
Prize Bond 3 2 1 26%
Other Investments: -
Share 398 149 249 166%
Bangladesh Bank Bills - 2,301 (2,301) -100%
Bonds 1,002 - 1,002 100%
Total 26,046 23,807 2,239 9%

112 PRIME BANK

Loans and advances Loans and Advances
BDT in Million
PBL’s loans and advances increased by BDT 7,487 million during the year 2018 and stood at
BDT 205,810 million which was BDT 198,323 million in 2017 showing a substantial growth of

205,810
198,323
3.78 percent over the previous year. Concentration of loans and advances was well managed
and details of concentration are given at notes to the financial statements. The ratio of non-
performing loan was 6.16 percent which is much lower than the industry average. The Bank

170,212
continued its participation in different credit program for financing in industrial projects,

151,865
147,367
import, export, house building, retail, agriculture etc.

Fixed Assets

Fixed assets include land, building, furniture & fixture, office equipment and vehicles etc. PBL’s
fixed assets decreased by BDT 509 million during the year 2018 and stood at BDT 6,943 million
which was BDT 6,434 million in 2017.

Other Assets
2014 2015 2016 2017 2018
Other assets of the bank increased by BDT 934 million during the year 2018 and stood at BDT
23,837 million and it was BDT 22,903 million in 2017. The main components of other assets are investment in subsidiaries, advance
income tax, advance rent, interest receivable, branch adjustment account and suspense account etc.

Borrowings from other Banks, Financial Institutions and Agents

PBL has borrowed fund from other banks and financial institutions as well as Bangladesh Bank as Refinance against SME loan. PBL
has also borrowed foreign currency for its OBU operation. The bank has also raised fund by issuing subordinated bond. In 2018,
borrowings of the Bank stood at BDT 33,945 million which was BDT 22,087 million in 2017.

Deposits

During the year 2018 total deposits of the bank decreased by BDT 1,496 million and stood at
Deposits
BDT 197,518 million and it was BDT 199,014 million in 2017. Total deposit include Bank deposit BDT in Million

and Customer deposit.

204,838

199,014
197,934
Shareholders’ Equity

197,518
194,825
Total shareholders’ equity includes paid up capital, share premium, statutory reserve and
retained earnings and other reserves. By the end of the year 2018, total shareholders’ equity
increased by BDT 1,473 million from BDT 24,708 million in 2017 which is equivalent of 5.96
percent growth. Detail are as follows:
(BDT in Million)
Growth
Assets 2018 2017
Volume %
Paid up capital 11,323 10,293 1,030 10%
Share premium 1,212 2,241 (1,029) -46%
Statutory reserve 10,353 9,566 787 8%
Revaluation 1,534 1,528 6 0% 2014 2015 2016 2017 2018

Retained earnings 1,759 1,079 680 63%

Total Shareholders’ Equity 26,181 24,708 1,473 6%

Foreign Currency
Foreign Currency Translation Gain 13
Retained Earnings Retained Earnings 1,079
Translation Gain 15 1,759 Revaluation Gain 1,515
Revaluation Gain 1,519
Paid-up Capital
10,293
Paid-up Capital
11,323
2018 2017
Statutory
Reserve 10,353
Statutory 9,566
Share Premium Reserve
1,212 Share Premium
2,241

PRIME BANK 113

ANNUAL REPORT 2018

Analysis of Operating results of PBL

In 2018, PBL made operating income of BDT 12,978 million (it was BDT 12,207 in 2017) whereas operating expense was BDT 7,258
million in 2018 compared to BDT 6,834 million in 2017. Profit before provision and tax was BDT 5,719 million compared to BDT 5,373
million in 2017. Profit after tax was BDT 2,188 million against BDT 1,059 million in 2017. Earnings per Share stood at BDT 1.93 which
was BDT 0.94 in 2017. Detail are as follows:

(BDT in Million)

Growth
Assets 2018 2017
Volume %
Interest Income 18,390 14,769 3,621 25%
Interest Expense 10,740 9,875 865 9%
Net Interest Income (NII) 7,650 4,894 2,756 56%
Non-Interest Income 5,249 7,254 (2,005) -28%
Operating Expenses 7,180 6,775 405 6%
Profit before Provision & Taxes 5,719 5,373 346 6%
Profit before Taxes (PBT) 3,938 1,809 2,129 118%
Net Profit after Taxes (NPAT) 2,188 1,059 1,129 107%

Interest Income

During the year 2018, interest income increased by BDT 3,621 million and stood at BDT 18,390 against BDT 14,769 million in 2017. The
major interest earning came from follows:

(BDT in Million)

Growth
Assets 2018 2017
Volume %
Interest on loans and advances 17,195 13,679 3,516 25.70%
Interest on balances with other Banks & FI’s 750 726 24 3.31%
Interest on balance with foreign Bank 360 320 40 12.50%
Interest on call loans 85 44 41 93.18%
Total 18,390 14,769 3,621 24.52%

Interest Expense

In 2018, PBL incurred BDT 10,741 million as interest expense and it was BDT 9,875 million in 2017. It reveals a growth of 8.76 percent
during 2018. The Bank was able to maintain a strong liquidity position during the period and simultaneously managed to procure
deposit at lower cost. Our average cost of deposits in 2018 was 4.72 percent which was 4.52 percent in 2017.

Net Interest Income

Commission Exchange and Brokerage
PBL earned total BDT 7,650 million as net interest income during the year 2018 registering BDT in Million
increase by BDT 2,755 million which is equivalent to 56.31 percent growth over previous year.
It indicates that the management of the Bank is more efficient to manage the interest rate of
2,245

2,209

loans and deposits.

2,033

1,956

Income from Investment

1,693

PBL has earned investment income of BDT 2,154 million during the year 2018 which was BDT
4,246 million in 2017. In investment income, interest income was BDT 2,132 million (equivalent
to 98.97 percent) and non-interest income was BDT 22 million.

Commission, Exchange and Brokerage

During the year 2018, PBL earned total BDT 2,209 million as commission, exchange and
brokerage which was BDT 2,245 million in 2017. Commission, exchange and brokerage
income slightly decreased by BDT 36 million from previous year.
2014 2015 2016 2017 2018

114 PRIME BANK

Other Operating Income

Other operating income increased by BDT 123 million and stood at BDT 887 million in 2018. It was BDT 764 million in 2017.

Operating Expenses

Total operating expenses during 2018 has increased by BDT 405 million to compute total amount of BDT 7,180 million. It reveals an
increase of 5.98%. The main components of the operating expenses are as follows:

(BDT in Million)

Growth
Assets 2018 2017
Volume %
Salaries and allowances 4,159 3,824 335 9%
Rent, taxes, insurance, electricity, etc. 961 906 55 6%
Legal expenses 106 83 23 28%
Postage, stamp, telecommunication, etc. 70 78 (8) -10%
Stationery, printing, advertisements, etc. 226 198 28 13%
Managing Director’s salary and fees 10 12 (1) -12%
Directors’ fees 4 4 (1) -18%
Auditors’ fees 1 1 - 0%
Depreciation and repair of Bank’s assets 407 365 41 11%
Other expenses 1,236 1,304 (68) -5%
Total 7,180 6,775 405 6%

Operating Profit

The total operating profit of the bank for the year 2018 stood at BDT 5,719 million in comparison with BDT 5,373 million in 2017.

Profit before Tax

Profit before tax of the Bank stood at BDT 3,938 million in 2018 compared to BDT 1,809 million in 2017. The Bank maintained adequate
amount of provision against loans and advances, off-balance sheet items, and other assets. Bank maintained adequate provision
during 2018 as per regulatory requirement.

Net Profit after Tax

During the year 2018, net profit after tax increased by BDT 1,129 million and stood at BDT 2,188 million. It was BDT 1,059 million in 2017.

Earnings per Share

In 2018, PBL’s earnings per share (EPS) was BDT 1.93 compared to BDT 0.94 in previous year.

Earnings Per Share (BDT)

Operating Profit Net Profit After Tax
BDT in Million BDT in Million
2,393
6,157

5,906

2,139

2,188
2,195
5,757

2.11
5,719
5,373

1.94

1.93
1.89
1,059

0.94

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

PRIME BANK 115

ANNUAL REPORT 2018

SEGMENTAL ANALYSIS
PBL is dedicated to provide best services by offering innovative products to the society where it operates. PBL also provides services
in local geographic areas and demographics segment. PBL can often best define market segments based on product benefits when
it offers multiple products. In segmenting the market, the potential customers are divided into several sections with similar needs.
From the very beginning, PBL is offering attractive financial products and services considering the concurrent needs of customers.

Prime Bank has 3 Off-shore banking units, 5 Islamic Banking branches, 2 local subsidiaries and 3 foreign subsidiaries. The business
and performance overview of those segments are enumerated as follows:

Off-Shore Units Prime Bank Islamic Banking Branches

Overseas • Prime Exchange Pte. Ltd. (Singapore)

• Prime Bank Investment Ltd.
Local
Subsidiaries • PBL Exchange (UK) Ltd. Subsidiaries
• Prime Bank Securities Ltd.
• PBL Finance (Hong Kong) Ltd.

(BDT in Million)

2018 2017
2018 vs
Particulars % of total % of total
Amount Amount 2017 %
assets assets

Prime Bank Limited 239,552 81% 230,797 82% 4%

Islamic Banking Branches 19,850 7% 17,857 6% 11%

Off Shore Banking Units 24,988 8% 23,365 8% 7%

Group Assets

Prime Bank Investment Limited 6,951 2% 7,021 2% -1%

Prime Bank Securities Limited 1,228 0.4% 1,295 0.5% -5%

Prime Exchange Pte. Ltd. (Singapore) 92 0.03% 118 0.04% -22%

PBL Exchange (UK) Ltd. 30 0.01% 48 0.02% -37%

PBL Finance (Hong Kong) Ltd. 2,321 1% 1,894 1% 23%

Total 295,011 100% 282,395 100% 4%

2018 2017
2018 vs 2017
Particulars % of total % of total
Amount Amount %
revenue revenue
Prime Bank Limited 11,855 88% 11,051 87% 7%

Islamic Banking Branches 710 5% 824 7% -14%

Off Shore Banking Units 334 2% 273 2% 22%

Group Revenue

Prime Bank Investment Limited 243 2% 207 2% 18%

Prime Bank Securities Limited 59 0.4% 67 1% -11%

Prime Exchange Pte. Ltd. (Singapore) 52 0.4% 64 1% -19%

PBL Exchange (UK) Ltd. 61 0.5% 49 0% 23%

PBL Finance (Hong Kong) Ltd. 102 1% 110 1% -7%

Total 13,416 100% 12,645 100% 6%

116 PRIME BANK

Business Segmentation

PBL business has been divided into four major segments i.e Corporate & Institutional Banking, Commercial Banking, MSME and
Consumer. Highest deposits is in Consumer segment which represents 67 percent of total deposit & highest loans is in Corporate
& Institutional Banking segment representing 55 percent of total loans and advance of the bank. Segmental business (Deposits &
Loans) as on 31 December 2018 has been stated as follows:

(BDT in Million)

2018 2017
2018 vs 2017
Particulars % of total % of total
Amount Amount %
deposits deposits
Corporate & Institutional Banking 34,504 17% 28,744 14% 20%
Commercial Banking Division 11,990 6% 14,470 7% -17%
Deposits

MSME 18,390 9% 17,994 9% 2%

Consumer & Others 132,634 67% 137,806 69% -4%
Total 197,518 100% 199,014 100% -1%

Deposits

Corporate & Corporate &

Institutional Institutional
Banking: 18% Banking: 15%

Commercial Commercial
Banking Banking
Division: 7%
Division: 6%
2018 2017
MSME: 9%
MSME: 9% Consumer &
Consumer & Others: 69%
Others: 67%

(BDT in Million)

2018 2017
Particulars 2018 vs 2017
% of % of total
Amount Amount %
total loans loans
Corporate & Institutional Banking 114,058 55% 107,633 54% 6%
Loans and

Commercial Banking Division 52,321 25% 48,915 25% 7%

advances

MSME 21,120 10% 22,232 11% -5%

Consumer & Others 18,310 9% 19,543 10% -6%
Total 205,810 100% 198,323 100% 4%

Loans and Advances

Consumer Consumer
& Others: & Others
10%
9%
MSME: MSME
10% 11%
Corporate & Corporate &
Institutional Institutional
Banking: Banking
2018 55% 2017 54%

Commercial Commercial
Banking Banking
Division: Division
26% 25%

PRIME BANK 117

ANNUAL REPORT 2018

REPORT ON HUMAN RESOURCE MANAGEMENT

Many Banks in Bangladesh aspire to be the package. The remuneration policy of the Bank does not allow
Human Best in the Market. But very few have all the any discrimination between male and female employees. In
Capital elements required: talent, resources, and addition, employees are paid bonus based on yearly business
perseverance. The term human capital in an performance.
organizations and businesses are an important and essential
In addition to monthly competitive base pay and a good
asset who contributes to development and growth, in a similar
number of allowances (e.g., House Rent allowance, Medical
way as physical assets such as machines and money. The
allowance, Conveyance allowance etc.), Prime Bank has variety
collective attitudes, skills and abilities of people contribute to
of market-competitive Benefits schemes designed to motivate
organizational performance and productivity. Any expenditure
the employees. The various cash and non-cash benefits include:
in training, development, health and support is an investment,
not just an expense. An organization can’t survive if there are • Company provided car for top level Executive employees
no employees. Organization runs with the help of individuals • Car allowance for all Executive level employees
who contribute in their own way in its success and productivity. • Leave fair assistance allowance
Employees spend maximum part of their day in offices and strive • Medical treatment allowance
hard to achieve the goals and objectives of the organization.
• Maternity benefits
Employees ought to be motivated from time to time so that
• Car loan facility
they develop a sense of attachment towards their organization
and also deliver their best. Knowledge and expertise which • House loan facility
employees develop in due course of time to further increase • Staff loan at reduced interest rate
the productivity of organizations refer to human capital. Human • House furnishing allowance
capital is defined as the collective stock of skills, attributes,
• Mobile phone allowance
knowledge, and expertise of employees which further plays an
• Travel allowance
integral role in increasing the productivity of the organization.
• Technical allowance
Motivated and Engaged Employees • Festival bonus

Prime Bank has a diverse group of motivated and engaged • Allowance for employees’ meritorious students
employees. From experience it knows that if employees are • Annual leave
properly empowered, they become more engaged and go extra • Maternity leave
miles to fulfil organization’s ambition. Engaged employees are • Study leave etc.
likely to take more responsibility and embrace accountability
which helps to achieve the sustainability strategies. The Bank The Bank also provides long-term as well as retirement
has positioned itself with a performance-driven rewarding work benefits to employees:
culture; where employees are treated with respect and receive
• Leave encashment
plenty of development opportunities. Prime Bank has a special
focus on: • Provident fund
• Gratuity benefit
• Ensuring a balanced diversity
• Retirement benefit
• Promoting human capital development
• Partial and full disability benefit
• Providing competitive compensation and benefits
• Death benefit to family members etc.
• Promoting a performance centric culture
• Protecting human rights
Broadbanding Pay Structure:
• Ensuring workplace health and safety
The Management introduced Broadbanding Pay Structure
• Ensuring equal opportunity
which aims to ensure a performance driven work culture
All the people related issues in Prime Bank are governed by the through a strategic compensation plan synced with the
well-defined policies and procedures which are duly reviewed performance of individual employee. Since inception, Prime
by the Management time to time. Bank has practiced a scale based pay structure for each grade,
so to reward individual performance the new policy offers a
Compensation & Benefits flexible pay plan that will compensate the person, not the grade.
To maintain the market competitiveness, the compensation It places an increased emphasis on encouraging employees
and benefits of Prime Bank are regularly reviewed through to develop new skills and paying for the skills according to
market and peer group study. The well-crafted total rewards their contribution and equity. In a nutshell, broadbanding is a
help the Bank to attract, motivate and retain talent. more flexible pay system for both the employees and for the
employers where career progression takes a different route.
In PBL, the Board of Directors is not eligible for any compensation.
Given that, the specific reasons behind introduction of this new
They are paid honorarium for attending meetings only. On the
pay structure is:
other hand, all employees are paid competitive remuneration

118 PRIME BANK

1. It facilitates/encourages internal /lateral movement Healthy and Safe Work Environment
(Through Job Rotation)
In Prime Bank, the physical, mental and social well-being of
2. It rewards performers than the non performers (Through the employees always gets priority. Healthy, productive and
Pay for Performance) motivated employees are the foundation of a successful
organization. Prime Bank helps employees to assume
3. It puts added trust & greater autonomy in line management
responsibility for their own personal behaviour in health-related
(Through Teamwork/ Relationship)
matters, and support health-promoting general conditions
Moreover, the policy states that when one employee reaches within the Company. We continuously focus on improving
the highest grade within a Band, the employee will grow further health and safety of employees that includes proper work
when he/she is ready to take or has taken higher responsibilities place design and decoration of head office and branches,
and match the criteria of the next Band. maintaining the cleanliness at work space, holding awareness
The total compensation and benefits system of Prime Bank session related to physical and psychosocial well-being,
tracks costs and is linked with performance, while maintaining email communication on various health and safety related
a balance with the business affordability. topics, sending alerts to employees on emergency situations,
arranging fire drill sessions, financial support for medical care
Performance Management Program etc. Because of the nature of operations, Bank employees
are not usually exposed to work-related injury, occupational
Prime Bank has a comprehensive performance management
diseases or fatality. Yet, the Bank remains cautious so as not to
program that evaluates employees’ yearly performance
create any hazardous work condition.
against business targets at the year-end. In addition, their
functional and leadership competencies are also rated by
Decent Workplace
the line management. This appraisal process also identifies
the competency gap and training needs of employees. All Prime Bank has a decent work environment where employees
employees (except employees under probation or training) can work with dignity, have the freedom to express opinions,
of the Bank undergo annual performance appraisal process. can participate in the decision making process that affect their
The process ensures that clear feedback on improvement lives, and receive equal treatment and opportunity. The Bank is
points (performance and professional capabilities) is provided committed to ensure the best practices in compliance with the
to employees by their Managers to promote employees’ labour code of the country. Bank Management believes that
long-term career development and improved contribution to the business can grow favourably if the organization enables
organizational performance. All regular employees undergo employees through creating and maintaining a decent workplace.
the annual performance and career development review. In Prime Bank, employees have the right to exercise freedom
of association or collective bargaining following the legal
Work-life Balance procedure of country laws. However, employees have never
Prime Bank wants its’ employees to balance the work and formed or wanted to form any collective bargaining agency.
personal life and has organization-wide practices and policies The Bank follows non-discriminatory approach in all HR policies
that actively support employees to achieve success at both and practices. The salary of an employee is determined based
work and home. Management is also open and shows flexibility on his/her competency, experience and performance. The
in regard to a balanced work-life. Bank neither employs child labour nor has any provision for
forced labour. Employees have the right to resign from their
In Prime Bank, employees are entitled to sufficient annual leave
employment serving proper notice period and following the
and sick leave with pay. To enjoy vacation with family, Bank
internal procedures.
provides Leave Fare Assistance Allowance to employees. All
female employees are eligible for Maternity Leave (Parental Leave) Ensuring a decent workplace also encompass Bank’s
with pay for a period of six months. In 2018, a total of 53 female investment decisions as well as agreements with the suppliers
employees availed Maternity leave. After completion of the leave, and contractors. For instance, human right, as appropriate,
they returned to work and are still continuing with the organization. is covered as an integral part of decision making for major
financial investments. Among all the significant investments,
Culture garments and manufacturing industry contain major stakes
where issues related to human rights are more relevant and
Culture plays a vital role to create a high performance
critical. Hence, any such investment agreement is subject to
environment that supports sustainability strategy
screening of human right issues along with other criteria.
implementation. Prime Bank carefully develop, shape and
impact organizational culture by: practicing values appropriate On the other hand, all the agreements of Prime Bank with
for the bank; defining working relationship and communication suppliers or contractors undergo due assessment process
pattern between superior and subordinates; governing rules which requires complying with Labour Code and other
and regulations which control employees’ behaviour; promoting applicable laws of the country. Moreover, the procurement
a strong employer brand through which employees identify decisions are also subject to conformity with International
with the organization; maintaining effective reward system Labour Conventions. The team involved in procurement visits
that affects employees loyalty and empowering employees to suppliers and contractors’ premises on need basis to monitor
demonstrate their innovativeness not only to be competitive in working conditions and other relevant issues like labour
the market but also to achieve a sustainable growth. practices, human right etc.

PRIME BANK 119

ANNUAL REPORT 2018

The security personnel employed by the Bank are formally Percentage of female employee over the years:
trained and aware of policies and procedures regarding human
right issues. The training requirement also applies to third party Year % of Female Employees
organizations that provide security personnel to the Bank.
2014 21.00%
The most recent addition to encourage female employees at
2015 21.64%
the workplace is that they are now able to avail child day-care
facility in Motijheel area. Female employees having offices in 2016 21.93%
Motijheel and peripheral area now can avail child day-care 2017 20.92%
facility where they can keep their children in a safe and secured
2018 21.17%
environment. This will not only help to retain female employees
but will relieve them of the dilemma of leaving their child/
children at home. Gender diversity among Board members:

Gender No. of Members Percentage (%)

Diversity in Workplace
Male 15 83.33%
Prime Bank believes that diverse, heterogeneous teams
generate greater creativity, innovation and business Female 03 16.67%
development. An inclusive culture maintains and drives Total 18 100%
workforce diversity by fostering the exchange of ideas and
collaboration among individuals and across groups. To speak
New recruitment by gender and age:
simply, our constant success depends in part on maintaining a
plurality of perspectives.
By Gender:

Employees by age group and gender: Gender No. of Emp. %

Age group No. of Emp. Percentage Male 62 84.93%

Less than 30 years 251 7.81% Female 11 15.07%
30 to 50 years 2,809 87.45% Total 73 100%
Over 50 years 152 4.73%
Grand Total By Age:
3,212 100%

We practice equal employment opportunity; for competent Age group No. of Emp. %
candidates regardless of their gender, age, locality or ethnicity. Below 30 years 23 31.51%
While recruiting fresh graduates, the Bank sources the pool
from different recognized public and private universities; with a 30 to 50 years 49 67.12%
view to create a diverse work force. Over 50 years 1 1.37%

Total 73 100%
Employees by religion:

Religion No. of Emp. Percentage Employee turnover by gender and age:

Islam 2,947 91.75%
By Gender:
Hindu 251 7.81%
Gender No. of Emp. %
Buddhist 12 0.37%

Christian 2 0.06% Male 295 81.94%

Total 3,212 100% Female 65 18.06%

Total 360 100%

Gender diversity among employees:
By Age:
Gender No. of Emp. Percentage

Male 2,532 78.83% Age group No. of Emp. %

Female 680 21.17% Below 30 years 44 12.22%

Total 3,212 100% 30 to 50 years 308 85.56%

Besides, our ration of male and female employees has been Over 50 years 8 2.22%
increasing over the time. Currently, approximately 21.17% of
Total 360 100%
total employees are female. On the other hand, 16.67% of the
Board of Directors represents females. For the year 2018, the turnover rate is 10.73%.

120 PRIME BANK

Learning & Development Ethical and Lawful Behavior in Prime Bank

In Prime Bank, Human Resources (HR) Division regularly Prime Bank is always committed to establish the highest level
undertakes effectively designed training programs targeting of ethical standard. Employees are properly oriented to comply
the right group of employees through proper training need with Code of Ethics & Business Conduct. All employees duly
assessment. Prime Bank believes that continuous efforts should signed the ‘Code of Ethics & Business Conduct’ and the copy
be given so that employees acquire and develop the right set is preserved in respective Employee Records. During joining,
HR Division makes sure that all the new employees read and
of skills required to face the challenge of ever changing market.
accept this policy by signing.
In Prime Bank, the employee development plan is based on
Bank also has ‘Service Excellence Handbook’ & ‘General Code
proper training need assessment. In 2018, Bank’s internal
& Discipline’, which are read by each employee including new
HR Training and Development Centre arranged training on
employees while joining in the Bank and record of these are
different topics for 3548 enthusiastic participants. Besides,
preserved in personal file after signing by employees.
a total of 311 employees were sent to participate in various
“The Prime Bank Employee Code of Ethics and Business
training programs/conferences in home and abroad.
Conduct” – is a framework of ethical behavior for all the
The banking sector is complex and diverse with evolving nature employees of the organization that embodies all the factors
of threats and the risks. So, the training module is updated time mentioned above. It is a reflection of Prime Bank’s role as
to time for employees of the Bank in the changing context of a socially responsible corporate citizen which believes in
financial market. providing the most courteous and efficient service through
innovative banking services and products. However, Prime
Openness in communication for a better employee- Bank’s most farsighted objective is to uphold and build upon
management relation the honour of Bangladesh as a nation, through exhibiting its
own competence as a local organization that can perform at
Employee communications and consultation are the lifeblood of
least on par with a multinational one, if not better than one.
any business. Proper exchange of information and instructions
help the Bank to function more efficiently and provides the The employees of Prime Bank are trained to put their own duties
opportunity to build greater trust among employees and and ethics before everything else. They treat their colleagues
management in discussing issues of mutual interest. To ensure with reverence and honour, and their customers as esteemed
guests. They also learn to abide by the laws that govern our
effective employee communications, management takes a
business, and contribute to the strength and wellbeing of
positive lead.
our community and shareholders. In addition to their regular
The Management has introduced a Whistleblower Protection responsibilities employees are also expected to demonstrate
Policy which intendeds to encourage and enable employees the below ethical behavior:
and others to raise serious concerns internally so that the
Management can address and correct inappropriate conduct
and actions. Employees have an avenue to report concerns
about violations of code of ethics or suspected violations
of law or regulations. The policy covers the protection of a “The Prime Bank
Employee Code of Ethics
whistleblower in two important areas – confidentiality and
and Business Conduct”
against retaliation. An employee who retaliates against
someone who has reported a violation in good faith is subject
to discipline up to and including termination of employment. • Protect Privacy of Customers’
Additionally, now there is an avenue to report sexual and Confidential Company
harassment in the workplace. The policy aims to ensure Information;
a working environment in line with our values, where all
• Prevent Money Laundering
individuals are treated equally, fairly and with dignity and
and/or Fraud;
also foster compliance with governing laws pertaining to
sexual harassment. Such policy creates awareness about the • Demonstrate Workplace
nature of offences and the consequences of an offender. This Respect;
not only fosters a neutral environment but gives a feeling of
• Avoid Offensive Behavior and
assurance that any wrong doing will be strictly addressed by
the Management.
Sexual Harassment;

Any operational changes are properly planned and managed. • Avoid Drug/Substance/
Management follows a participative approach during any Alcohol Abuse in the
major transformation followed by prior communication to Workplace;
the employees. Since there is no trade union or employee
• Protect the Bank’s Assets;
association, no notice period regarding operational change is
stipulated by any collective agreement.

PRIME BANK 121

ANNUAL REPORT 2018

It is mandatory for every employee of Prime Bank Limited to As per the implementation process of integrity strategy in the
abide by the ‘Employee Code of Ethics and Business Conduct’ Prime Bank Limited, topic on integrity/ ethics has already been
and also comply with any other orders or directions provided included in training curriculum and Human Resources Training
by the Management or Board of Directors from time to time. & Development Centre has also started its effort in this regard.
It is also worth mentioning here that the Branch Network
Integrity/ Ethics Committee Division of the Bank in their regular monthly meeting with Head
As per the Bangladesh Bank’s Instructions first Integrity/ Ethics of Branches and Other Branch Executives/ Officials conducts a
Committee, Prime Bank Limited, Head Office, Dhaka was session titled “Improvement of Ethical Values of Officials”.
formed in the year of 2013 for the implementation of National Besides, as per Clause No # 6.1 of the National Integrity Strategy
Integrity Strategy which has been designed and modelled work plan and its implementation quarterly progress report,
by the Government of People’s Republic of Bangladesh on 11.05.2017 “Innovation Team” is also formed envisioning
envisioning happy-prosperous and corruption free Bangladesh to ensure customer services at mass people, to increase the
and establishing rule of law in its different organs/organizations. standard of services and to make customer friendly access to
Thereafter, lastly on 11.12.2018, the abovementioned such services. Furthermore, reference to the Clause No # 6.3 of
Committee was restructured. Currently, Mr. Ziaur Rahman, abovementioned progress report, the Right to Information Act,
Senior Executive Vice President & Head of Human Resources 2009 and in line with Bangladesh Bank’s guidance on 31.12.2017
Division is holding the position as Focal Point of the Committee. a “Responsible Officer” and “Appellate Authority” is appointed.
Apart from Focal Point, the Integrity/Ethics Committee, Prime As per Section 24 of the Right to Information Act, 2009, The
Bank Limited, Head Office is comprised of 05 (five) members “Appellate Authority” shall dispose of the application filed by
from different Divisions/ Departments of the Bank, i.e. Branch any person who is aggrieved by the decision of “Responsible
Network Division, Legal Division, Human Resources Training Officer”. The “Responsible Officer” shall discharge his duties in
& Development Centre, Brand & Communications and accordance with the provisions of Section 7–10 of the said Act.
Compliance Department. In addition, 173 Integrity/ Ethics
Integrity Strategy Work Plan and Implementation quarterly
Committee(s) are also formed in different locations in the Bank,
report of Prime Bank Limited is submitted to Bangladesh Bank
i.e. Regional, Cluster-wise & Branch-wise Committee(s).
regularly.
Moreover, on 28.12.2017 a separate “Integrity Strategy
Implementation Unit/ Cell”, Prime Bank Limited, Head Office,
Dhaka has also been formed comprising of 05 (five) Officials/
Executives of the Bank. This Unit/ Cell came into force with
immediate effect and might furnish its obligations according to
the guidelines provided by Integrity Strategy Implementation
Cell of Bangladesh Bank. Thereafter, on 11.12.2018, the
abovementioned Unit/ Cell was restructured.

122 PRIME BANK

REPORT ON NON-PERFORMING ASSET (NPA)
Prime Bank Limited has mandated reduction of NPA to be BDT in Million
treated as ‘Top Most Priority’. Addressing the problematic Particulars
2018 2017
customers and bringing down the Non-Performing Assets
(NPA) by instilling strict lending and recovery discipline remain Opening Balance (NPA) 10,799.05 10,139.48
the key imperatives for Prime Bank Limited. The overall banking Add: Additional NPA during the
8,806.93 8,007.07
sector got impacted by certain factors like very high NPA and period
probability of re-classification of loans earlier rescheduled.
Less: NPA recovered during the
Establishing or maintaining good governance, managing NPA (1,346.72) (1,635.79)
period
including collecting bad loans and increasing profitability were
Less: NPA declassified/
major challenges for 2018 since recovery from rescheduled
regularized as performing (1,632.05) (2,333.23)
loans was not encouraging. Major industrial sectors did not
during the period
perform in line with expectations mainly due to infrastructural
bottlenecks. Less: NPA written-off during the
(3,941.44) (3,378.48)
period
Non-Performing Asset (NPA) is a debt obligation where the
borrower has not paid previously agreed upon interest and Closing Balance (NPA) 12,685.77 10,799.05
principal repayments to the designated lender for an extended
period of time. The non-performing assets are therefore not No. of rescheduled loans 48 nos. 102 nos.
yielding any income to the lender in the form of principal and
Written-offs:
interest payments. Therefore, managing Non-Performing Asset
During the years 2018 & 2017, the movement of written-off
(NPA) to keep it at the lowest possible level is at the core of our
accounts is as under:
business priorities. We have embedded the essence of asset
quality in our business values, therefore, instituted the best BDT in Million
local as well as international industry practices throughout our Particulars
2018 2017
business processes.
Opening Balance 18,236.77 15,428.92
Prime Bank has a fully capable Special Asset Management
Division (SAMD), dedicated for management and recovery Add: Addition during the year 3941.44 3,378.48
of problem credits. Major responsibilities of this Division is to
Less: Collection/Reduction
formulate strategy and action plans for prevention of credit (267.05) (570.63)
during the year
losses, maximization of recoveries, rescheduling, and/or
pursuing legal actions. Closing Balance 21911.16 18,236.77

Under the present overall socio economic dynamics, Prime

Bank has prioritized to extend purpose-oriented credit facilities Movement of provisions made against NPA
with required security/collateral support as their policy priority
since diversion of fund is one of the identified causes of loan BDT in Million
Particulars
default. So, it becomes imperative need to keep a close watch 2018 2017
on the borrower’s business operations and the movement of its
Opening Balance 4,269.93 3,824.06
financial indicators in an empirical manner.

Prime Bank has formulated well-structured NPA management Add: Addition during the year 2,904.78 2,558.40
strategy and we believe that Bank’s intense recovery strategies Less: Adj. during the year (2,607.43) (2,112.53)
and innovative approaches will lead to a better asset portfolio
of the Bank. Closing Balance 4,567.28 4,269.93

During the year 2018, the NPA Ratio of the Bank has significantly Sector-wise Loan Exposure and Non-Performing Asset (NPA)
increased to 6.16% from previous year’s 5.45%. The absolute Status:
figure shows a rise in classified portfolio from BDT 10,799.05 Following Table shows sector-wise exposure vis-à-vis sector-
million in 2017 to BDT 12,685.77 million in 2018 due to sudden wise NPA of Prime Bank Ltd.:
non-performance of some large borrowers. Special efforts are
being made by the Special Asset Management Division through
stringent and rigorous monitoring over the loan portfolio.

Movement of NPA:

The movement in NPA accounts during the years 2018 & 2017
has been depicted in the following table:

PRIME BANK 123

ANNUAL REPORT 2018

Amount in Taka (Million)

Year 2018 Year 2017

Sector- Sector-
Sectors Sub-sectors
Total wise Total wise
Loans & Total NPA NPA in % Loans & Total NPA NPA in %
Advances of Total Advances of Total
Portfolio Portfolio
Agricultural Credit 3,428.00 15.90 0.46% 5,782.40 18.10 0.31%
1. Large Scale
a) Food Manufacturing 6,963.80 410.40 5.89% 10,469.00 646.50 6.18%
b) Beverage 635.80 - - 1,061.00 - -
c) Tobacco 713.30 - - 833.80 - -
d) RMG 23,264.50 607.40 2.61% 15,112.50 1,432.46 9.48%
e) Textile 11,384.70 51.20 0.45% 9,816.80 40.90 0.42%
f) Footwear, other wearing
1,318.10 116.60 8.85% 1,124.20 124.40 11.07%
apparel & made up Textiles
g) Wood cork & allied
- - - - - -
products
h) Furniture & Fixture 1,088.80 0.30 0.03% 1,414.80 0.10 0.01%
i) Paper & paper products 243.00 42.60 17.53% 14.00 - -
j) Printing, publishing & allied
1,471.00 - - 1,439.50 1.90 0.13%
industries
k) Leather & leather products 29.80 - - - - -
Industry
l) Rubber products 3,312.70 5.10 0.15% 4,333.00 0.30 0.01%
m) Chemical & chemical
774.30 20.60 2.66% 456.30 - -
products
n) Petroleum & coal products - - - - - -
o) Non-metallic mineral
7,359.10 1.90 0.03% 5,548.40 4.60 0.08%
products
p) Basic metal products 14,221.10 162.30 1.14% 13,985.90 174.50 1.25%
q) Electrical machinery &
1,087.90 19.20 1.76% 1,180.80 - 0.00%
apparatus
r) Other manufacturing
4,593.10 23.30 0.51% 5,165.50 20.20 0.39%
industries
s) Ship building 945.50 - - 771.00 - -
t) Ship breaking 978.20 52.90 5.41% 829.40 - -
u) Pharmaceutical 4,935.80 - - 4,221.90 - -
2. Small Scale 739.40 1.70 0.23% 794.60 46.70 5.88%
Construction 14,807.10 4,500.30 30.39% 18,149.20 2,326.10 12.82%
Power, Gas,
Water & Sanitary 1,884.20 - - 215.20 - -
Services
Transport,
Storage & 5,646.20 597.20 10.58% 4,958.70 404.40 8.16%
Communication
Trade Services 22,484.80 1,985.60 8.83% 21,626.70 1,557.90 7.20%
1. Urban
a) Commercial 3,538.10 361.60 10.22% 3,956.80 719.20 18.18%
Housing Services
b) Residential 4,140.10 274.10 6.62% 3,923.50 280.60 7.15%
2. Rural 403.50 20.00 4.96% 391.50 25.60 6.54%

124 PRIME BANK

 Amount in Taka (Million)

Year 2018 Year 2017

Sector- Sector-
Sectors Sub-sectors
Total wise Total wise
Loans & Total NPA NPA in % Loans & Total NPA NPA in %
Advances of Total Advances of Total
Portfolio Portfolio
Professional and
Miscellaneous 7,254.00 700.10 9.65% 5,985.40 798.40 13.34%
Services
Others 32,331.39 1,865.97 5.77% 31,944.49 1,338.89 4.19%
OBU 23,832.23 849.50 3.56% 22,816.44 837.30 3.67%

Total 205,809.52 12,685.77 6.16% 198,322.73 10,799.05 5.45%

Prime Bank projects domestic demand-driven economic deployed external sources where found suitable, strengthened
activity will remain relatively buoyant, as indicated by credit our legal team, thereby intensified recovery initiatives which
growth, industrial activity and import needs which are reflected brought in defaulting clients under negotiation and thereby
in the loan portfolio of our Bank. During past few years, Prime sizable recovery was possible in the year 2018. On the other
Bank maintained a supervisory vigilance on lending efficiency hand, in order to check any further significant NPA, we have
and risk management which will further be strengthened. extensively reorganized our Division and re-engineered
business and operational processes putting into a strong risk
In order to arrest NPA, our focus was not only on reducing
management framework in place which are expected to result
NPA portfolio, but also avoiding further NPA. In line with that,
further improvement in the year 2019.
we have strengthened our recovery and monitoring drives,

Non-performing loans (NPLs) Provision for loans and advance NPL Coverage NPLs to total loans and advances
12,686
11,883

10,799

100 10.00
11,215

10,139

5.45
(BDT in Million)

7.61 7.82
8,916

80 5.96 8.00
8,293
7,780

6.16
7,290

PRECENT
6,327

PRECENT
60 6.00

40 4.00
56 65 72 83 65
20 2.00

- -
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

PRIME BANK 125

ANNUAL REPORT 2018

PRODUCTS & SERVICES

Corporate Loan Products

Working Capital Finance
Capital Machinery Finance
Real Estate Finance
Work order Financing
Import and Trade Finance
Export Finance
Project Finance
Structured Finance
Lease Finance

SME Loan Products

Anchol (Women Entrepreneur’s Loan)
Chalti Rin (Working Capital Loan)
Prime Sampad (Capital Loan
Sahaj Rin (Collateral Free Loan)
Moushami Rin (Seasonal Loan)
Prime Shomhabona
Prime Emarat

Retail Loan Products

Swapna Neer Home Loan
Swapna Shaj Home Loan
Abash Home Loan
Car Loan
Personal Loan
Retail SOD (FO)
Retail Secured EMI

Agriculture Loan Products

Abad (Crop Loan)
Khamar (Farm/Non-Crop Loan)
Nabanno (for any Agri-purpose Loan)

Islamic Banking Hasanah

(Investments) Products
Home Investment (Manjeel)
Auto Investment (Burak)
Household Durables Investment (Asbab)
Medical Investment (Shifa)
Quard-e-Hasana

126 PRIME BANK

Conventional Deposit Products
Current Account
Savings Account
Short Notice Deposit (SND)
Fixed Deposits
My First Account (School Banking)
Shukonna’ (Female SB Account)
Prime Premium
Prime Excel
Prime Power
PrimeDiGi
Single-Installment Based Deposit Scheme
• Double Benefit Deposit Scheme
• Monthly Benefit Deposit Scheme
Services
• Account 150% Deposit Scheme Premium Banking “Monarch”
• Brighter Tomorrow Internet Banking “ALTITUDE”
Monthly-Installment Based Deposit Scheme Off-Shore Banking
• House Building Deposit Scheme SMS Banking
• LaksmaPuron Deposit Scheme Phone Banking through IVR
• Lakhopati Deposit Scheme Locker Services
• Nobagoto Account Foreign Remittance
• Contributory Savings Scheme Investment Bond for NRBs
• Prime Millionaire Scheme Accounts Facilities for NRBs
• Kotipoti Deposit Scheme Forex & Fund Management
Money Market Services
Primary Dealer Services
ATM Services
Islamic Deposit Products Prepaid Cards
Debit Cards
Al-Wadeeah Current Account (AWCA) Master Debit Card
Mudaraba Savings Account (MSA) JCB Debit Card
Mudaraba Payroll Account Proprietary Debit Card
Mudaraba Special Notice Deposit (MSND) Credit Cards
Other Mudaraba Deposit Accounts MasterCard Gold Credit Card
Mudaraba Term Deposit Receipt (MTDR) MasterCard Silver Credit Card
VISA Gold Credit Card
Single-Installment Based Deposit Schemes VISA Classic Credit Card
• Mudaraba Double Benefit Deposit Scheme (MDBDS) International Credit Card
• Mudaraba Monthly Benefit Deposit Scheme (MMBDS) Platinum Credit Card
• Mudaraba 150% Deposit Scheme Hasanah Credit Card
• Mudaraba Education Savings Scheme (MESS) JCB Credit Card
Monthly-Installment Based Deposit Schemes Fund Transfer
• Mudaraba House Building Deposit Scheme (MHBDS) SWIFT
• Mudaraba LaksmaPuron Deposit Scheme (MLPSS) Foreign Drafts
• Mudaraba Lakhopati Deposit Scheme (MLDS) BEFTN
• Mudaraba Contributory Savings Scheme (MCSS) BACPS
• Mudaraba Hajj Savings Scheme (MHSS) RTGS
• Mudaraba Cash Waqf Deposit Scheme

PRIME BANK 127

RISK MANAGEMENT

Risk Management Framework & Mitigation Methodology

Market Discipline Disclosures on Risk Based Capital (Basel-III)

RISK MANAGEMENT FRAMEWORK &
MITIGATION METHODOLOGY
Risk is inherent in all our business activities. Sound risk v. The risk function can help banks remove biases;
management enables us to serve our customers and deliver for our
vi. The pressure for cost savings will continue.
shareholders. If not managed well, risks can result in financial loss,
regulatory sanctions and penalties, and damage to our reputation, The six trends suggest a vision for a high-performing risk function
each of which may adversely impact our ability to execute our is inevitable. It will need to be a core part of banks’ strategic
business strategies. We take a comprehensive approach to risk planning, collaborate closely with businesses, and act as a center
management with a defined Risk Framework and an articulated of excellence in analytics and de-biased decision making. Bank
Risk Appetite Statement which are approved annually by the Risk to manage multiple risk types while complying with existing
Management Committee (RMC) and the Board. regulation and preparing for new rules will make it more valuable
still, while its role in fulfilling customer expectations will probably
Bank’s risk appetite statement indicates the amount of capital,
render it a key contributor to the bottom line.
earnings or liquidity we are willing to put at risk to achieve
our strategic objectives and business plans, consistent with Risk management functions will need to transform its
applicable regulatory requirements. Our risk appetite provides operating models;initiatives can be implemented that will bring
a common and comparable set of measures for senior short-term business gains while helping build the essential
management and the Board to clearly indicate our aggregate components of a high-performing risk function over the next
level of risk and to monitor whether the bank’s risk profile remains few years. Here are some examples of such initiatives that can
in alignment with our strategic and capital plans. Our risk be launched immediately:
appetite is formally articulated in the Risk Appetite Statement, i. Digitize core processes
prepared in accordance with the regulatory guidance and
ii. Experiment with advanced analytics and machine learning.
[Link] overall capacity to take risk is limited; therefore,
we prioritize the risks we take in order to maintain a strong iii. Enhance risk reporting.
and flexible financial position so we can withstand challenging iv. Collaborate for balance-sheet optimization
economic conditions and take advantage of organic growth
v. Build a strong risk-management culture
opportunities. Therefore, we must set objectives and targets for
capital and liquidity that are intended to permit us to continue Risk management is a discipline at the core of every enterprise
to operate in a safe and sound manner. and encompasses all activities that affect its risk profile. The
objective of risk management is to identify and analyze risks and
The setting of an appropriate strategy and risk tolerance/
manage their consequences. Basel II/III Accord, the standards
appetite levels, a holistic risk management approach and
of Risk Management as guided by the Bank for International
effective reporting lines to the competent authority in its
Settlements (BIS) and particularly Basel Committee on Banking
management and supervisory functions, enables management
Supervision (BCBS), has been applied by bank regulators across
to take risks knowingly and treat risks where appropriate. Risk
the world. The Central Bank of Bangladesh i.e. Bangladesh
management is a part of internal governance involving all
Bank also issued guidelines to comply with the global norms
areas of bank. There is a strong link between good corporate
which forms the basis of risk management of all scheduled
governance and sound risk management. Without proper risk
banks in Bangladesh. The guidelines require that Banks adopt
management, the various functions in a banking institution
enhanced policies and procedures of risk management. PBL’s
cannot work together to achieve the bank’s objectives. It
risk management strategy is based on a clear understanding
is an essential part of helping the bank grow and promote
of various risks, disciplined risk assessment, measurement
sustainability and resilience.
procedures and continuous monitoring. PBL continues to
focus on improving its risk management systems not only to
Trends in Risk Management
ensure compliance with regulatory requirements but also to
Risk management in banking has been transformed over the ensure better risk-adjusted return and optimal capital utilization
past decade, largely in response to regulations that emerged keeping in mind of the business objectives. For sound risk
from local as well as global financial crisis. But important trends management, PBL manages risk in strategic level, managerial
are afoot that suggest risk management will experience even level, and operational level.
more sweeping change in the next decade.
The risk management process of the bank operates under
The change expected in the risk function’s operating model following structure:
illustrates the magnitude of what lies ahead. Six trends are
• The Board of Directors (BoD) approves overall risk
shaping the role of the risk function of the future:
management policies of the Bank in line with the regulatory
i. Regulation will continue to broaden and deepen; guidelines; The Board also sets the Risk Appetite of the
ii. Customer expectations are rising in line with changing technology; Bank at the beginning of the year.

iii. Technology and advanced analytics are evolving; • Executive Committee (EC) of the Board is responsible for
all sort of decision making as set by the Board. All decisions
iv. New risks are emerging;
taken by EC are ratified by the Board afterward;

PRIME BANK 129

ANNUAL REPORT 2018

• Audit Committee (AC) of the Board reviews the internal Basel III implementation status
audit reports of the bank and operational risk and assesses
Basel III is an evolution rather than a revolution for many banks.
whether internal control of the Bank is proper or not;
It was developed from the existing Basel II framework, and the
• Risk Management Committee (RMC) of the Board oversees most significant differences for banks are the introduction of
the overall Risk Management of the Bank. The committee liquidity and leverage ratios, and enhanced minimum capital
also reviews risk management policies & guidelines, loan requirements.
approval limit and submits to the Board for necessary
Globally Basel III was introduced in 2010 as the previous version
revision each year;
of capital standard, was felt inadequate to maintain financial
• For managing risk, PBL established Credit Risk stability during global financial crisis started in 2007 with the
Management Division (CRM), Credit Administration intention of gradual implementation starting from January 01,
Division (CAD), Recovery Division, Legal Division, Internal 2013 and full implementation starting from January 01, 2020.
Control and Compliance Division (ICCD), Internal Audit & In Bangladesh, Basel III phase wise implementation started
Inspection Division and Risk Management Division (RMD). back in 2015 and will fully be implemented from January 2020.
For managing money laundering risk, Branch Anti Money Basel III changes & implementation status of Prime Bank briefly
Laundering Compliance Officer (BAMLCO) for every stated below -
Branch under dedicated Chief Anti Money Laundering
Capital: Banks are required to hold at least 4.5% of risk-
Compliance Officer (CAMLCO) has been placed;
weighted assets in the form of Core Equity Tier-1 as prescribed
PBL also formed various risk committees at management level, by Bangladesh Bank. This rule is an effort to ensure that banks
like Head Office Credit Review Committee (HOCRC), Asset maintain high quality capital. In contrast to the requirement
Liability Committee (ALCO), Senior Management Team (SMT), Tier-1 capital of PBL is 10.92% at the end of Dec 2018.
Central Compliance Committee(CCC), and Enterprise Risk
Liquidity ratios: The Liquidity Coverage Ratio (LCR) mandates
Committee (ERMC) to Identify, assess, mitigate and monitor
that banks must hold high-quality liquid assets that would
of risk throughout the organization; In addition to these
cover the bank’s cash outflows for a minimum of 30 days in a
Committees, a Risk Management Forum (RMF) has also been
stress scenario whereas the Net Stable Funding Requirement
introduced by Risk Management Division (RMD) to escalate
(NSFR) is for banks to have enough funding to last for a
&capture,evaluate and mitigate operational risk at different
whole year in an emergency. PBL had a very healthy Liquidity
level of activities through combined effort. To assist this forum
throughout the year and was able to maintain LCR within the
and formally capture various events, an online module named
regulatory threshold during the year 2018, however, the said
Risk Platform has also been developed where employees of the
ratio was marginally above the threshold of 100% at the end
bank can escalateor register any anticipated or potential risks.
of December 2018, efficient liquidity management will be a
big challenge for banking sector so do the PBL, as the credit
Risk Management Committee of the Board:
growth shows upward trend than the deposit growth at the end
To oversee the risk management of the Bank, the Board has formed of Dec 2018 which stood at 13% and 9.4% respectively.
a Risk Management Committee as per the guidelines of Bangladesh
Leverage Ratio and its Impact on business: The new quality
Bank. The Committee supervises various risks arise from cores risks
capital requirement policy and leverage ratio calculation will
namely Credit Risk, ICC Risk, ICT Risk, FX Risk, ALM Risk &, AML
affect all businesses proportionally and the impact would
Riskand also Operational risk, which is key risk component of day
be more pressing on marginally profitable businesses, but all
to day banking operation. Presently four(04) members of the Board
businesses would suffer unless the cost rise could be passed on
of Directors are representing in the Risk Management Committee.
to customers as Banks need to ensure LCR and NSFR to comply
During 2018 four(04) RMC meetings were held where following
with Basel III regulations. Moreover introduction of Leverage
memos were placed before the Committee:
ratio means Banks will have to have sufficient Tier-1 capital for
SI Subject its business expansion. In comparison to LCR, NSFR, quality
capital and Leverage Ratio, PBL is in good position as the Bank
1 Discussion of Sustainable Finance Activities
is maintaining above 10% of CET-1 capital against total RWA.
2 Review of restructured Large loans
Review of Information Security Policy and Procedures Risk Management Process
3
of the Bank
Risk management is nothing but balancing the trade-off
4 Review of Fraud Detection and Management Process between risk and return and ensure optimum risk-adjusted
5 Review of Comprehensive Risk Management Report return on capital. Risk management function of PBL strives to
6 Review of Borrower Rating and Capital Management status proactively anticipate vulnerabilities at the transaction as well
as at the portfolio level, through quantitative and qualitative
7 Review of Stress Testing of the Bank
examination of the embedded risks. Risk is managed through
8 Review of Green Banking Policy a framework of policies and principles approved by the Board
9 Risk Appetite Statement of the Bank of Directors which ensures that the Bank operates within its
10 Internal Capital Adequacy Assessment Process of the Bank risk appetite. The policies and procedures established for this
purpose are continuously benchmarked with international
11 Review of Quarterly Risk Management Report
best practices. Furthermore, the Internal Capital Adequacy
12 Discussion on Annual Report of AML/CFT activities of last year Assessment Process (ICAAP) of the Bank assesses all the

130 PRIME BANK

significant risks other than the risks under Pillar-1 of Basel III and The above process of risk management is being undertaken by
calculates the adequate capital requirement. PBL which implies that if any risk(s) remains un-attended, that will
be addressed through the repetition of the process which started
with identification of those factors and the process continues.

Identification
Credit Risk Management

Management of Credit Risk in PBL

While financial institutions have faced difficulties over the

Monitoring years for a multitude of reasons, the major cause of serious
Measurement
banking problems continues to be directly related to lax credit
standards for borrowers and counterparties, poor portfolio risk
management, or a lack of attention to changes in economic
or other circumstances that can lead to a deterioration in
the credit standing of a Bank’s counterparties. Credit risk is
most simply defined as the potential that a Bank’s borrower
or counterparty will fail to meet its obligations in accordance
Planning & Aggregation with agreed terms, however, “migration risk” which refers to the
Controlling
potential deterioration of the credit quality of an un-defaulted
exposure, also subsumed under broader definition of credit risk
in a core principles of Basel Committee.
Identification: The first stage of risk management is to identify Credit risk is one of the significant risks of bank by the nature
bank’s risk area in order to measure and manage i.e either of their activities, according to the basel regulation, bank
mitigate or risk transfer. Typically PBL distinguishes Credit risk, need to allocate high amount of capital for providing poor or
Market risk, Liquidity risk, Operational risk, and Information risky credit. The quality of credit is considered by recognizing
& Communication Technology (ICT) risk. Beside these, the rating of the exposure. If an exposure is rated as “AAA”, it
concentration risk, strategic risk, residual risk, reputation risk, treated as high quality credit than an exposure rated as” C” and
settlement risk, environmental & climate risk etc are covered it required less capital as per regulation.
under Internal Capital Adequacy Assessment Process (ICAAP).
The goal of credit risk management is to maximize a Bank’s
Measurement: The consistent assessment of the above risk adjusted rate of return by maintaining credit risk exposure
mentioned types of risks is an essential prerequisite for within acceptable parameters. The effective management of
successful risk management. For example, in order to assess credit risk is a critical component of a comprehensive approach
credit risk associated with any corporate financing proposal, PBL to risk management and essential to the long-term success of
carries out various risk assessment like financial spreadsheet any banking organization. That is why a risk based asset review
analysis, credit risk grading and other risk like concentration framework has also been put in place wherein the frequency of
related to the borrower and the relevant industry. asset review would be higher for high exposure cases and/or
Aggregation: PBL closely monitors aggregate risk in order poor credit rating.
to minimize its exposure to adverse financial developments- Sound practices that the Bank is trying to ensure are -
such as a credit crunch or even insolvency- arising from a
• Establishing an appropriate credit risk environment;
counterparty or client. While aggregating risks, it is important
to take into account correlation effects which cause a Bank’s • Operating under a sound credit granting process;
overall risk differing from the sum of the individual risks. This • Maintaining an appropriate credit administration
applies to risks both within a risk category as well as across measurement and monitoring process;
different risk categories.
• Ensuring adequate controls over credit risk
Planning & Controlling: PBL takes into consideration the
business strategy while planning and setting control for The following sets of principles are used for the sustainable risk
mitigating risk. As risk management is the trade-off between management culture:
risk and return, PBL always tries to manage the risk without Balancing Risk and Return: Risk is taken considering the
hampering the business growth and stakeholders return. interest of Bank’s stakeholders, in line with Bank’s strategy and
Internal Capital Adequacy Assessment Process (ICAAP) is one within its risk appetite.
of the largest part of planning and controlling of risk.
Responsibility: All employees ensure that risk-taking is
Monitoring: Risk monitoring is the most challenging task in the disciplined and focused.
whole risk management cycle as monitoring helps the Bank to
Accountability: Risk is taken only by delegated authorities and where
identify earlier any probable risk that may take in place in many
there is appropriate infrastructure and resources. PBL maintains a
cases. Risk monitoring also helps to track whether the risks
clear and transparent process for all risk-taking decisions.
actually incurred lie within the prescribed limits, thus ensuring
an institution’s capacity to bear those risks. Anticipation: PBL seeks to anticipate future risks and ensures
awareness of all known risks.

PRIME BANK 131

ANNUAL REPORT 2018

Competitive advantage: The bank seeks to achieve the implementation of Internal Rating Based Approach (IRB),
competitive advantage through efficient and effective risk Bank shall continue existing Credit Risk Grading (CRG) System
management and control. The credit risk management policy which was circulated vides BRPD Circular No. 18 in 2005 for
of PBL operates under the following broad principles: implementation.

A. Establishing an appropriate Credit Risk environment C. Operating under a sound credit granting process

The Board of Directors is responsible for approving PBL follows sound, well defined credit-granting criteria. These
andreviewing the credit risk strategies and policies of the criteria include a thorough assessment of the borrower or the
bank periodically. The strategy reflects Bank’s tolerance for risk counterparty, as well as the purpose and structure of the credit,
and the level of profitability the bank expects to achieve for and its source of repayment.
incurring various credit loss.
• Credit facilities are allowed in a manner so that asset growth
Senior management is responsible for implementing the can be maintained ensuring optimum asset quality and
credit risk strategy approved by the Board and for developing without compromising the Bank’s standard of excellence;
standard policies and procedures for identifying, measuring,
• PBL carefully avoids name lending. Credit facility is being
monitoring and controlling any type of risk associated with
granted on business consideration with absolute due
the strategy. Such policies and procedures address credit risk
diligence;
of the Bank’s activities and at both the individual credit and
portfolio level. • Risks inherent in a credit proposal are being identified and
appropriate mitigating steps are taken accordingly;
PBL ensures that the risks inherent in products and activities
which are apparently new to the bank are subject to adequate • Collateral offered against a credit facility is properly valued
procedures and controls before being introduced or and verified by the concerned Relationship Officer or
undertaken, and approved in advance by the Board of Directors Relationship Manager periodically. In addition, the same
or its appropriate committee. In order to streamline risk control collateral is valued and verified by an enlisted surveyor
features in a more effective manner, PBL has put in place of the bank which is now applicable for all customers
Standard Operating Procedure (SOP) in line with internationally irrespective of any amount;
accepted best practices. Moreover, the Bank has centralized • Risk grading of the accounts is being done as per the
its corporate credit to ensure better management of corporate Bangladesh Bank’s guidelines. Any credit approval/
borrowers. Besides, Credit Risk Management Division also sanction aresubject to the banking regulations in force
set different limits in regards to sector concentration, area or imposed by the regulatory body from time to time and
concentration, Off-Balance Sheet Exposure etc. subject to changes of the Bank’s policy. Data collection
check list and limit utilization format are prepared for
B. Borrower evaluation regular assessment. Internal Audit & Inspection Division
Borrower evaluation is at the core of the credit risk management. independently reviews the risk assessment at the time of
Bangladesh Bank vides BRPD Circular No 16 dated 30.10.2018 conducting internal audit.
has circulated “Guidelines on Internal Credit Rating System • PBL also performs borrower rating to assess its borrowers
for Banks”. From November, 2018, new Guidelines on Internal for ensuring sound asset quality.
Credit Risk Rating System (ICRRS) is simultaneously effective
The bank has established overall credit limit at every level for
besides existing CRG. From 01.07.2019, ICRRS willbe mandatory.
groups of legally connected borrowers including individual
ICRRS comprises with 20 (twenty) different rating templates for
borrowers and counterparties that aggregate in comparable
20 industries/ sectors instead of just one template for all the
and meaningful manner for different types of exposures, both
sectors like previous CRG model.
in the banking & trading book and on & off balance sheet.
Internal Credit Risk Rating System will be an integral part of
PBL always complies with the prevailing banking regulations
credit risk management for the banks. The key uses of these
regarding Single Borrower Exposure Limit set by the Bangladesh
guidelines are as follows:
Bank from time to time. Credit facilities to a single customer
i. To provide a granular, objective, transparent, consistent (Individual, Enterprise, Company, Corporate, Organization, and
framework for the measurement and assessment of Group) are being treated as Large Loan if total limit amount
borrowers’ credit risk. exceeds 10 percent of the total capital of the Bank. As per BRPD
ii. To facilitate the portfolio management activities. Master Circular no. 02 dated January16, 2014on Single Borrower
Exposure Limit,PBL has always maintained thepercentage
iii. To assess the quality of individual borrower to help the
ceiling of Large Loan Portfolio exposure.
banks to determine the quality of the credit portfolio, line
of business, the branch or the Bank as a whole. The bank has a clearly-established process in place for
approving new credits as well as the extension of existing
iv. To be used for individual credit selection, credit pricing and
credits. A thorough credit risk assessment is done before
setting credit limit and terms and conditions.
granting loans. The Credit Risk Assessment includes borrower
PBL will start preparation (including capacity building) for risk analysis, industry risk analysis, historical financial analysis,
“Internal Credit Risk Rating System (ICRRS)’ simultaneously. projected financial performance, conduct of account, and
Before adoption of Internal credit risk rating system in line with security against the proposed loan.

132 PRIME BANK

The assessment originates from relationship manager/ is completed by the Relationship Manager and sent to the
account officer and is reviewed by Head Office Credit Review approving authority in Credit Risk Management Division for
Committee. The Credit analyst or executive duly delegated any account that is showing signs of deterioration. The Risk
by proper authority approves the credit proposals. Executive Grade is also changed and referred to Credit Risk Management
Committee of the Board approves the proposals beyond the Division for assistance in recovery.
delegated authority limit of the Management. The Board of
The bank has also put a system in place for monitoring
Directors also reviews the proposals approved by the Executive
the condition of individual credits including determining
Committee on post facto basis.
the adequacy of provisions and reserves. The guidelines
All credit extensions are made on an arm’s length basis. In established by the Bangladesh Bank for Credit Information
particular, credits to related companies and individuals are Bureau (CIB) reporting, provisioning and write-off of bad
monitored with particular care and other appropriate steps and doubtful debts and suspension of interest are followed
are taken to control or mitigate the risks of connected lending. meticulously in all cases. Provision is maintained for any shortfall
Credit granting process at PBL operates within the defined in the Forced Sale Value (FSV) to cover total loan outstanding
risk limit so that the bank can achieve its growth target and once an account is classified.
superior return on capital.
PBL also has information systems and analytical techniques that
enable the management to measure the credit risk inherent in
Sales Risk Analysis Processing all on- and off-balance sheet activities. PBL has taken initiative
to make management information system more robust and
Aquisition of
Approval sophisticated for monitoring the asset quality of the Bank. At
credit Specific Documentation
Decline present total limit loading and disbursement procedure of the
Customer
Bank is fully centralized within Credit Administration Division
(CAD) and various MIS reports for monitoring purpose e.g
Collect & Rebiew Risk & Collteral
Disbursement
Documents Assessment overdue report, EOL report, disbursement report etc. can be
generated from this end as well. All credit approvals are given
Send Documents
complying with the requirements of Bank’s Memorandum and
to Central Credit Review Monitoring Articles of Association, the Bank Company Act-1991(amended
Review Unit
up to2013), as amended from time to time, the Bangladesh
Bank’s circulars, guidelines and other applicable laws, rules
D. Maintaining an appropriate credit administration, and regulations, Bank’s Credit Risk Management Policy, Credit
measurement and monitoring process Operational Manual and all relevant circulars that are currently
A system has been put in place by the bank for ongoing in force. Any deviations from the internal policy of the bank are
administration of various credit risk-bearing portfolios. well documented and subject to approval from competent
Dedicated independent risk management units are developed authority/Board of Directors. The portfolio is well diversified
for these purposes. Dedicated committees at management with respect to sector and industry. Concentration of credit is
level have been set up to monitor risk. PBL segregated the total carefully avoided to minimize risk.
credit process into Relationship Management/Marketing, Credit PBL takes into consideration of potential future changes in
Approval/Risk Management, Credit Administration to improve economic conditions while assessing individual credits and
the knowledge levels and expertise in each department and credit portfolios. An important element of sound credit risk
to impose controls over the disbursement of authorized loan management involves discussing what could potentially go
facilities and obtain an objective and independent judgment wrong with individual credits and within the various credit
of credit proposals. Credit Administration Division completes portfolios, and factoring this information into the analysis of the
security documentation after getting approval from Credit adequacy of capital and provisions.
Risk Management Division and ensures adherence to
approved terms and other requirements before limit creation E. Ensuring adequate controls over credit risk
and disbursement. To minimize credit losses, monitoring
PBL has established a system of independent, ongoing credit
procedures and systems are placedwhich provides an early
review and the results of such reviews are communicated
indication of the deteriorating financial health of a borrower.
directly to the Board of Directors and senior management.
Early Alert system is an example of such monitoring PBL ensures that the credit-granting function is being
procedures. An Early Alert Account is one that has risks or properly managed and that credit exposures are within levels,
potentialweaknesses of a material nature requiring monitoring, consistent with prudential standards and internal limits. The
supervision, or close attention of the management. If bank has established and enforced internal controls and other
such weaknesses are left uncorrected, they may result in practices to ensure that exceptions to policies, procedures and
deterioration of the repayment prospects for the asset or in limits are reported in a timely manner to the appropriate level
the Bank’s credit position at some future date with a likelihood of management.
of being downgraded. Early identification, prompt reporting
Prime Bank Limited has taken initiative to introduce Risk Based
and proactive management of Early Alert Accounts are prime
Pricing Model and the model has already been developed
responsibilities of all Relationship Managers / Officers and
which is currently under scrutiny of senior management. After
the whole process is a continuous one. An Early Alert Report
getting vetting by RMC and subsequently approved by the

PRIME BANK 133

ANNUAL REPORT 2018

Board of Directors, the Risk Based Pricing Model will be in place Wherever the ESRR is “High”, the credit risk management
for pricing corporate loans. Benefits of Risk Based Pricing are: function is to ensure drafting an E&S Action Plan (ESAP) and
include additional covenants/conditions to be used to mitigate
• Enhance shareholders value by ensuring that credit risk
the identified problems.
associated with the transaction is appropriately measured
and priced
Liquidity Risk Management
• Enable the Bank to know well ahead of time, what kind of
Liquidity risk is the failure to meet obligations leading to an
price will satisfy its risk/return preferences
inability to support normal business activity and to meet
• Enhance the achievement of credit portfolio goals and liquidity regulatory requirements. Liquidity risk can arise due to
objectives. market liquidity or funding liquidity. Market liquidity risk is the
PBL also has a system in place for managing problem credits risk of the inability to sell assets due to lack of liquidity in the
and various other workout situations. All NPLs are assigned market. Funding liquidity risk is the risk of the inability to meet
to Account Manager(s) within the Recovery Division, who is liabilities when they fall due or can only be met at abnormal
responsible for coordinating and administering the action plan high price.
/ recovery of the account and serve as the primary customer To manage liquidity risk, PBL maintains diversified and
contact after the account is downgraded to doubtful. stable funding base comprising of core retail, corporate and
institutional deposits. The principle responsibility of the liquidity
Environmental & Social Risk Management risk management of the bank rests with Treasury Division which
Environmental & Social risk may be defined as an actual maintains liquidity based on historical requirements, current
or potential threat of adverse effects on living organisms liquidity position, anticipated future funding requirement,
and environment by effluents, emissions, wastes, resource sources of fund, options for reducing funding needs, present
depletion, etc., arising out of an organization’s activities. These and anticipated asset quality, present and future earning
effects increase risks as they bring an element of uncertainty capacity, present and planned capital position. ALCO manages
or possibility of loss in the context of a financing transaction. the liquidity risk by:

Environmental & Social Risk Management is the process of • Setting tolerance limit for cumulative cash flow mismatches,
identification, analysis, assessment, control, and avoidance, • Setting limit on loan to deposit ratio and
minimization, or elimination of unacceptable environmental
• Setting limits on dependence on institutional deposits
& Socialrisks. An organization may use risk assumption, risk
which are volatile in nature.
avoidance, risk retention, risk transfer, or any other strategy (or
combination of strategies) in proper management of future From the liquidity statement it can be seen that out of total
events having impact on the environment. deposit liabilities of BDT 267,584 million, contractual maturity
of liability within 1 year is BDT 160,134 million. In the liquidity
Environmental & Socialrisk is one of the several risks that
statement it is apparent that there is moderate negative gap in
the Bank must take into account while assessing financing
3-12 months and 1-5 years’ bucket which reveals that pressure
opportunities as it affects credit risk to a great extent. As
on liquidity is nominal.  In reality, approximately 85-90 percent
environmental risk is a facilitating element of credit risk, the
of fixed term deposits are renewed on maturity. As such, the
Bank has integrated Environmental & SocialRisk Management
negative gap actually converts into positive gap.
with Credit Risk Management in all aspects.

As instructed by the Bangladesh Bank, PBL has Environmental & Cost of Deposit based on daily average
Social Risk Management policy statement and Environmental &
Social Risk Management Procedure Manual. The loan categories 4.75% 4.74%
for which PBL uses Environmental & Social Risk Management 4.74% 4.72%
Manual (ESRM) are agriculture, retail, trade, microfinance, SME,
4.72%
corporate finance and project finance and it is applicable forall
4.70% 4.68%
loan proposals (New/Renewal/Enhancement/ Rescheduling/
4.68%
Restructuring).
4.66%
• If the Environmental & Social Risk Rating (ESRR) is low, then 4.64%
the transactions are approved as per the Delegation of Mar-18 Jun-18 Sep-18 Dec-18
Business Power (DBP) holder.
Deposit Mix (BDT in Crore)
• If the Environmental & Social Risk Rating (ESRR) is medium,
Short Term
then the transactions are escalated to one (1) level up Deposit, 1,293.76
Current Deposit, Savings Deposit,
from the authority that approves low risk transactions 1,989.84 4,317.62

conforming to DBP but up to the Managing Director. Others, 1,589.44

• If the Environmental & Social Risk Rating (ESRR) is high, Scheme Deposit,
3,165.00
2018
then the transactions are escalated to the Board/Executive
Committee (as applicable) after review by the MD, for
approval.
Fixed Deposit,
7,396.00

134 PRIME BANK

Market Risk Management net worth arising out of all re-pricing mismatches and other
interest rate sensitive position.
Market risk is defined as the risk of losses in on and off-balance
sheet positions arising from adverse movements in market Duration Gap
1.04
prices which may impact the Bank’s earnings and capital. The 1.02
purpose of market risk management framework is to minimize 1
the risk of loss and maximize profit in trading portfolio. The risk 0.98
0.96
may pertain to interest rate related instruments (interest rate
0.94
risk), equities (equity price risk) and foreign exchange rate risk 0.92
(currency risk). Besides, the Bank is also exposed to liquidity or 0.9
funding risk. 0.88
0.86
Market Risk management is guided by well laid policies, 0.84
guidelines, processes and systems for the identification, March-18 June-18 September-18 December-18
measurement, monitoring and reporting of exposures against
Maturity grouping of rate sensitive assets and liabilities of the
various risk limits. The Asset Liability Management Committee
Bank (see table on Interest Rate Risk Analysis) shows positive
(ALCO) meets periodically and reviews the positions of trading
gap in first quarter and moderate negative gap in the second
groups, interest rate sensitivity, sets deposit and benchmark
to third quarters. If interest rate increases by 1 percent, the
lending rates and determines the asset liability management
Bank will enjoy positive earnings of BDT 23.52 million during
strategy, as deemed fit, in light of the current and expected
1 year period and vice versa. The impact is very insignificant
business environment. Treasury Front office has developed
compared to total revenue of the Bank and also within the
MAT policy to manage stressed liquidity. Treasury mid office
acceptable limit as stipulated by the Bangladesh Bank. The
has been formed which is responsible to monitor, measure and
statement also shows that there will be 8.88% impact on
analyze the risks inherent in treasury operations of the Bank.
quarterly net profit which is also within the stipulated limit of
Treasury back office before formation of Mid office used to
10 percent.”
monitor risk limits including position limits and stop loss limits
for the trading book and reviews periodically. For managing and Moreover interest rate risk is also monitored through DEAR
monitoring foreign exchange risk PBL has started calculation of or Daily Earnings at Risk. DEAR is defined as the estimated
Value at Risk (VaR). Interest rate risk is monitored through the potential loss of a portfolio’s value over a one-day period as
use of re-pricing gap analysis and duration analysis. Interest a result of adverse movement in market conditions, such as
rate risk is further monitored through the ALCO. changes in interest rates, foreign exchange rates or market
volatility.
PBL uses various tools like structural liquidity profile, stress
testing etcfor measuring liquidity risk. PBL maintains diversified
Foreign Exchange Risk Management
sources to facilitate the bank to meet funding requirements.
It is the risk that the bank may suffer losses as a result of adverse
exchange rate movements during a period in which it has an
open position in an individual foreign currency. In addition, the
Market Risk bank is also exposed to interest rate risk and settlement risk on
account of its foreign exchange business.

To evaluate the extent of foreign exchange risk, a Liquidity

Gap Report is prepared for each currency. Gap or mismatch
of maturities can arise due to a customer transaction resulting
in a long or a short position for the bank. The Net Open
position Limit (NOP) of the Bank is ± USD 75.23 million which is
equivalent to ± BDT 6,311.79 million on overnight basis as fixed
Interest Equity Foreign
Rate Risk Risk Exchange by Bangladesh Bank. The actual Net Open Position (NOP) of the
Risk Bank as on December 31, 2017 was Tk. 1,946.61 million which is
equivalent to USD 23.20 million. The overall exposure did not
exceed the stipulated limit at any point of time.
Interest Rate Risk

Interest rate risk is the risk of losing revenueby an interest- Value at Risk (VaR) (at 99% confidence level)
bearing asset, such as a loan or a treasury bond etc due to Amount in USD
variability of interest rates. In general, as rates rise, the price of
a fixed rate bond will fall, and vice versa. 122,140.56
99,388.16
PBL monitors interest rate risk through duration gap analysis, 48,290.82 45,704.89
sensitivity analysis, andDaily Earning At Risk (DEAR) analysis.
The short term impact of changes in interest rates is on the
bank’s Net Interest Income (NII). In a longer term, changes in
8

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-18
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interest rates impact the cash flows on the assets, liabilities

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-18

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-18
-18

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-18

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and off-balance sheet items, which raise the risk of losing the
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PRIME BANK 135

ANNUAL REPORT 2018

Furthermore Foreign Exchange Risk is also measured and • Incident reporting and analysis of causes and actionstaken on
monitored through Value at Risk (VaR) under variance – losses from both internal & external fraud and control lapses;
covariance method. The Value-at-Risk is the maximum loss
• Review of safety and control measures of premises.
that the Bank is likely to face within a given time period with
(usually) a 95% (high) & 99% (extremehigh) probability. Risk control and measurement in PBL are as under:

Equity Risk Management • Manuals and Standard Operating Procedures are in place
and implementation of those are regularly monitored;
Equity risk is defined as losses due to changes in market
price of equity held by the bank. To measure and identify • Regular review of system and network by concerned
the risk, mark to market valuations of the share investment Divisions and related committees.
portfolios are done. Mark to market valuation is done against a • Internal Audit & Inspection Division of the Bank undertake
predetermined limit. Risk Based Internal Audit, Comprehensive audit, special
Equity Risk of the Bank is also monitored through analysis of audit and IT audit of branches and departments at
own investment on shares by subsidiaries, margin loan against Head Office for review of the operation and compliance
investment in share by subsidiaries and loan statement against of statutory requirement respectively and submit the
shares. major audit findings to Audit Committee of the Board.
Upon getting guidelines from the Committee Internal
Furthermore, PBL measures equity risk through stress testing
Control, Compliance & Government Relations Division
by devaluing equity portfolio held by the bank 10%, 20% and
communicate with related branches for immediate
40% under minor, moderate and major shock level respectively.
compliance on mentioned issues and thereafter submit
During 2018, Capital to Risk weighted Asset Ratio (CRAR) was
the updated compliance status to the Audit Committee of
greater than 10% under all equity shock levels.
the Board.

Capital Market Exposure • Self-Assessment of Anti-Fraud Internal Control are being

carried out with due diligence under the purview of best
Bond/ practices in the banking industry.
Debenture, 0
Loan to Stock
Share, 8.23 Dealer, 1 • Risk Based Internal Audit (RBIA)is being carried out by
Loan to other
Brokerage, 60.72 Internal Audit & Inspection Division.

• Independent Anti Money Laundering (AML) Inspection

is being conducted at branch level byInternal Audit &
2018 Inspection Division.
Loan to own Subsidiary
Loan to other Brokerage • Segregation of duties and multi-tier approval procedure
Loan to Stock Dealer
Bond Debenture are in place.
Share
Loan to own • IT Audit is being carried out on regular basis
Subsidiary, 390
• Establishing a Data Center for backup of data and
Operational Risk Management, information

Operational risk is defined as the risk of loss resulting from • Regular testing of system’s back-up procedure and
inadequate or failed internal processes, people and systems, contingency plan
or from external events. Operational risks vary in their
components. Some are very high occurrence with low impact Prevention of Money Laundering
and some are low occurrence with high impact risks. Third Money Laundering means properties acquired or earned
consultative paper of Basel-II recommended following event directly or indirectly through illegal means or illegal transfer or
based classification of operational risks: use of legally earned money, conversion and concealment of
• Internal fraud; ownership and source of fund. Bangladesh Bank through BRPD
• External fraud; Circular No. 17 dated October 07, 2003 advised the scheduled
• Employment practices and workplace safety; commercial banks operating in the country to put in place
• Client, products and business practices; effective risk management system which includes Money
• Damage to physical assets; Laundering Risk Management among others.
• Business disruption and system failure; PBL has updated Anti Money Laundering Guidelines in 2016,
• Execution, delivery and process management. which includes Senior Management commitment to the anti-
money laundering program. The Management has developed
In PBL, operational risks are identified and measured in the such a culture for the Bank so that all the employees strictly
following manner: adhere to each and every provision of Money Laundering
• Risks are identified with reference to the relevant policy Prevention Act 2012 which was letter amended on 2015 and
manuals, processes, procedures and practices; Anti-Terrorism Act-2009 with amendment of 2012 and 2013.
All employees of the Bank, irrespective of the position they
• Controls are evaluated as per Departmental Control
hold, are accountable to the Top Management and regulatory
Function Check List (DCFCL);

136 PRIME BANK

bodies for their activities which might directly or indirectly • Fiduciary risk is the risk that arises from Bank’s failure to
relate to money laundering. Details of Anti Money Laundering perform in accordance with explicit and implicit standards
activities are included in the ‘Corporate Governance’ chapter applicable to their fiduciary responsibilities. As a result
of this Annual Report. of losses in investments, banks may become insolvent
and therefore unable to (i) meet the demands of current
For mitigating the risks, the management of the Bank has
account holders for repayment of their funds and (ii)
formed Anti Money Laundering Department. The Bank has also
safeguard the interests of their PLS (Profit Loss Sharing)
nominated CAMLCO, Deputy CAMLCO centrally and BAMLCO
deposit holders. Banks may fail to act with due care when
at branches for monitoring compliance issues related to Anti
managing investments resulting in the risk of possible
Money Laundering. The regulatory requirements are being
forgone profits to PLS deposit holders. In order to reduce
complied with the guidelines.
Shari’ah non-compliance risk, the Muraqibs regularly
The CAMLCO of the Bank has been participating in the conducted Shari’ah audit. Fiduciary risk is controlled
CAMLCO Conference organized by Bangladesh Bank every through Bank’s risk management process.
year. The Central Bank has been arranging district level AML
related training for employees of all schedule Banks operating Information &Communication Technology Risk Management
in the district(s).
We are living in an era of information and communication
technology and the banks have become more technology
Internal Control and Compliance
driven these days. Use of computer, internet has become a
Internal Control and Compliance is a management process common practice in the banking industry. There are certain
designed to achieve effectiveness and efficiency of operations, risks involved in the use of information and communication
reliable financial reporting and compliance with laws and technology. This risk may arise from malfunction of system,
regulations. failure of network, lack of knowledge about the use of
Internal Audit & Inspection Division conducts internal audit in technology, virus attack, hacking etc.
all the Branches of our Bank to identify lapses/irregularities PBL has a robust network infrastructure with scalable, secure,
related to account opening, preparation and update of KYC redundant and load balanced architecture to support its
and other related issues, preparation of accurate Transaction customers regarding the on-line transactions with highest
Profile (TP) and to build up the knowledge about AML issues/ level of security. PBL uses world renowned Active Devices in its
matters and forwards those to Internal Control, Compliance & network infrastructure.
Government Relations Division for follow-up.
PBL has adopted world class Core Banking Software “TEMENOS
Pillar 1 and Pillar 2 of Basel Accord also focuses on operational T24” and also implemented Disaster Recovery (DR) site which
risk and supervisory review respectively attaching considerable is located in Uttara to make sure that the bank operates
importance to internal control & compliance and on supervision smoothly under unavoidable circumstances. The Bank has
& monitoring. As prescribed in the Bangladesh Bank core risk relocated its Data center this year for better management
guideline on Internal Control & Compliance, Management of IT infrastructure and equipment. PBL has performed DR
Committee (MANCOM) of PBL reviews the overall effectiveness test during month of December2018, although the result
of internal control system. of DR test was satisfactory but bank has to go a long way in
The chapter on ‘Corporate Governance’ of this Annual Report Business Continuity &IT DisasterRisk Management. As the bank
contains detail discussion on internal control & compliance is transforming to centralized operation,the BCP & DRP need
measures of the Bank. to be equally supplemented by contingency planning with
adequate system, logistical& structural set up.
Islamic Banking Risk Management PBL has an IT audit team also, formed as per the Central Bank’s
Islamic banking is becoming a popular mode of banking guideline. The team conducts IT Audit in each branch on a
because of its Shari’ah complied principles. In many countries, periodic basis and provides reports to higher management.
there are separate Islamic banking banks and also banks which IT Division is also managing IT related training programs to
are operating under both conventional and Islamic mode of make sure that employees are aware of IT risk related issues.
banking. In addition to the investment risk, market risk, liquidity The chapter on ‘Corporate Governance’ in this Annual Report
risk and operational risk there are other risks in Islamic banking contains details of IT audit.
operation.
Information Security Management
• Shari’ah Non-Compliance Risk arises from the failure of
the banks to comply with Shari’ah rules and regulations. Information security (InfoSec) is the practice of preventing
As more and more banks are operating under both unauthorized access, use, disclosure, disruption, modification,
conventional and Islamic banking, it is becoming inspection, recording or destruction of information. On the
increasingly important to comply with Shari’ah rules and other hand, Information security management (ISM) describes
regulations for the sustainability of Islamic banking. Based controls that an organization needs to implement to ensure
on historical reviews, the potential areas of Shari’ah non- that it is sensibly protecting the confidentiality, availability, and
compliance is assessing potential profits that cannot be integrity of assets from threats and vulnerabilities. Information
recognized as eligible profits under Shari’ah Principle. Security Division (ISD) is dedicated to provide information
security services & expert security guidance to all employees

PRIME BANK 137

ANNUAL REPORT 2018

of Prime Bank Limited (PBL) to ensure confidentiality, integrity, Risk Management Reports
& availability of the information assets & resources according
As per Bangladesh Bank (BB) requirement, Risk Management
to PBL’s Information Security Policy & Bangladesh Bank’s
Division (RMD) prepares Risk Management Report which is
regulations & guidelines. Information Security Division directly
presented in the meeting of Executive Risk Management
reports to Chief Risk Officer.
Committee (ERMC) on monthly basis. At the end of each
Information Security Division conducting Information quarter, Risk Management Report along with the minutes is
Security Risk Assessment of various Applications, Systems submitted to Bangladesh Bank by Risk Management Division.
& Business Processes on regular basis with consideration Risk Management Report is a comprehensive document
of latest vulnerabilities, threats and information security related to riskissues which is being placed in the ERMCs’
breaches. In consequence, Information Security Divisionhas monthly [Link] allows identification and mitigation of
conducted Risk Assessment on Swift System, DCRMS (Debit risk under necessary guidance of the Senior Management of
Card Requisition Management System), Docudex System/ the Bank.
Application, Altitude iOS Apps, and Risk Assessment Review on
In addition to the prescribed format of Bangladesh Bank, PBL
Network Devicesduring the year of 2018.
has incorporated various analyses on Credit Risk, Market Risk,
To fulfill the vision, Information Security Division (ISD) has Liquidity Risk, Operational Risk as well as Strategic Risk.
been solely working for last three to four years to mitigate
Risk Management Paper is also being submitted to the
PBL’s information risks and ensure bare minimum information
Risk Management Committee of the Board(BRMC) and the
security breaches. ISD was able to successfully justify his role
decisions are being communicated with relevant divisions of
in the organization with some remarkable achievements in year
the bank for necessary initiatives.
2018 and continues the succession by conducting Information
Security Risk Assessment of various Applications, Systems Borrowers’ Rating
& Business Processes on regular basis with consideration of
latest vulnerabilities, threats and information security breaches. As prescribed by Bangladesh Bank (BB), all banks in Bangladesh
Moreover, ISD is actively engaged in various transformational assessing credit risk under the Standardized Approach
projects of Prime Bank, like; Data Center Migration (TIER-III) of the Risk Based Capital Adequacy framework (Basel III),
project, Core Banking Up gradation project, EMV CO. and CMS where External Credit Assessment Institutions (ECAIs) duly
up gradation project, Microsoft up gradation project as well as recognized by BB performs borrower rating against which
PCI-DSS (Payment Card Industry Data Security Standard) project. risk weight mapped with the credit rating category and risk
weighted assets (RWA) is determined for calculating the capital
ISD analyze information security incidents and set priority requirement of banks against credit risk.
items mainly to eliminate information leaks. ISD have identified
problems systematically and making improvement plans Basel-III, in respect of capital measurement and capital
based on assessment results. ISD have conducted periodic standards, aligns capital of a bank more closely with the
vulnerability assessment and penetration testing internally to underlying risk. With a view to smooth implementation of Basel
all critical systems or applications as well as externally through III Accord, The management of PBL decided to conduct Credit
third party vendors to measures and find out the security Rating for Corporate Borrowers through External Credit Rating
threats and vulnerabilities in Banking Infrastructure. Assessment Institutions (ECAIs).

Apart from this, ISD also conducting regular security awareness Capital Management is one of the key strategic issues these
session/training to all end users of prime Limited through days in the banking business. Borrower rating not only plays
classroom or through online platform. ISD Provides end users’ an important role in improving capital adequacy of the bank
information security training, awareness and periodically through capital relief but also helps the bank to understand the
monitors the users’ knowledge regarding information security risk associated with the borrowers. In this regard, RMD calculates
through training evaluation and communications. capital relief on the basis of rated customers quarterly.

As a result of vigorous effort and continuous persuasion,

Internal Capital Adequacy Assessment Process (ICAAP) 570 (68.43%) borrowers out of total 833 eligible Corporate &
The Bank conducts ICAAP process every year as stipulated Commercial borrowers of PBL was completed and for SME this
by the Bangladesh Bank. ICAAP is aimed at ensuring that the number was 163. The rating distribution of the 733 Corporate &
bank maintains an amount of capital commensurate to its risk SME borrowers of PBL as on 31 Dec 2018 was asfollows:
profile and improves upon its risk management systems and
framework. It involves realistic assessment of the level of risks Borrowers Rating Distribution
inherent in the business operations of the bank and setting
BB Grade-4, 8.87%
aside adequate capital to cover all such risks like Residual Risk, BB Grade-1 , 14.87%

Concentration Risk, Liquidity Risk, Reputation Risk, Strategic

Risk, Settlement Risk etc. The assessment is done considering
the operational presence, activities, and processes etc.
BB Grade-2, 31.92%
Monitoring all the material risks also forms part of ICAAP. In
short, ICAAP is integrated into the management and decision
BB Grade-3
making process and is reflected in the processes and business BB Grade-2
BB Grade-1
operations of the Bank. BB Grade-3, 44.07%
BB Grade-4

138 PRIME BANK

Stress Testing Performing loan directly downgraded to B/L-Sectoral
Concentration (RMG, SME & Construction)
A stress test, in financial terminology, is an analysis or simulation
designed to test the ability of a given financial institution to deal It is a measure of the concentration risk where the bank has
during forecasted economic crisis. Instead of doing financial the second highest investment. It assumes that 3 percent, 9
projection on a “best estimate” basis, a bank or its regulators percent and 15 percent of the performing loan will be directly
do stress testing where it looks at how robust institutions is in downgraded to B/L category in minor, moderate and major
certain crashes, a kind of “What-If” scenario analysis. levels of shock respectively. CRAR of PBL will be 16.94 percent,
16.52 percent and 16.11 percent in minor, moderate and major
This type of analysis has become increasingly widespread,
levels of shock respectively when considering individual shock.
and has been taken up by various governmental bodies as
a regulatory requirement on certain financial institutions to 18.00%
16.00%
ensure adequate capital allocation to cover potential losses
14.00%
incurred during extreme, but plausible, events. 12.00%
10.00%
Stress testing framework as provided by Bangladesh Bank Minor
8.00% Moderate
assesses the impact on Capital to Risk Weighted Asset Ratio Major
6.00%
(CRAR) due to minor, moderate and major level of shock in 4.00%
terms of credit risk, exchange rate risk, liquidity risk, equity 2.00%

price risk and interest rate risk. Stress testing for credit risk 0.00%

assesses the impact of increase in the level of Non-Performing

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Loans (NPLs) of the banks.
Increase in NPLs due to default of top large loan borrowers
Performing loan directly downgraded to B/L- Sectoral It represents the scenario of the bank when top large borrowers
Concentration Industry 1(Other Manufacturing) default. It is assumed that top 3, 7 and 10 borrowers of the
It is a measure of the concentration risk where the bank has the bank will default in minor, moderate and major levels of shock
highest investment. It assumes that 3 percent, 9 percent and respectively. CRARof PBL will be 13.43 percent, 10.84 percent
15 percent of the performing loan will be directly downgraded and 8.63 percent in minor, moderate and major levels of shock
to B/L category in minor, moderate and major levels of shock respectively when considering individual shock. PBL is trying to
secure more collateral coverage to avert any negative impact
Percentage of on capital due to default of top large loan borrowers. Moreover,
Bangladesh No. of Rated
Total Rated the bank is continuously monitoring the performance of large
Bank Rating Borrowers of PBL
Borrowers loan borrowers.
Grade
Corporate SME Total Percentage 16.00%

BB Grade 1 109 0 109 14.87% 14.00%

12.00%
BB Grade 2 222 12 234 31.92%
10.00%
BB Grade 3 213 110 323 44.07% Minor
8.00%
Moderate
BB Grade 4 25 40 65 8.87% 6.00% Major

BB Grade 5 1 1 2 0.27% 4.00%

2.00%
Total 570 163 733 100.00%
0.00%

** Risk weight for unrated exposure is 125 percent.

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respectively. CRAR of PBL will be 16.78 percent, 16.06 percent Negative shift in NPLs categories
and 15.32 percent in minor, moderate and major levels of shock
It represents the shift of a loan from one NPL category to the
respectively when considering individual shock.
next category. It is based on the assumption of 5 percent,
10 percent and 15 percent downward shift in the NPLs
18.00%
16.00%
categories in minor, moderate and major levels of shock
respectively. CRARof PBL will be 16.48 percent, 14.60 percent
14.00%
12.00%
and 14.20percentin minor, moderate and major levels of shock
10.00% respectively when considering individual shock.
Minor
8.00% Moderate 18.00%
Major 16.00%
6.00%
14.00%
4.00%
12.00%
2.00% 10.00%
Minor
0.00% 8.00% Moderate
Major
6.00%
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2.00%
0.00%
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PRIME BANK 139

ANNUAL REPORT 2018

Decrease in the Forced Sale Value (FSV) of the collateral 15 percent in minor, moderate and major levels of shock
respectively. Capital Adequacy Ratio (CAR) of PBL will be 17.11
It represents the Bank’s condition when FSV of collateral
percent, 17.07 percent and 17.03 percent in minor, moderate
decreases sharply. It is based on the assumption that FSV of
and major levels of shock respectively when considering
collateral will fall by 10 percent, 20 percent and 40 percent in
individual shock.
minor, moderate and major levels of shock respectively. CRARof
18.00%
PBL will be 16.97 percent, 16.80 percent and 16.45 percent in 16.00%
minor, moderate and major levels of shock respectively when 14.00%

considering individual shock. 12.00%

10.00%
Minor
18.00% 8.00% Moderate
16.00% Major
6.00%
14.00%
4.00%
12.00%
2.00%
10.00%
Minor 0.00%
8.00% Moderate

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4.00%
2.00% Equity shock
0.00%
It represents the Bank’s condition when market value of share
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falls sharply. It is based on the assumption that share price will

Ap

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Increase in NPLs change by 10 percent, 20 percent and 40 percent in minor,

moderate and major levels of shock respectively. Capital
It represents the condition of the bank when Non-Performing Loans
Adequacy Ratio (CAR) of PBL will be 17.06 percent, 16.98
increases significantly. It is based on the assumption that 3 percent,
percent and 16.81 percent in minor, moderate and major levels
9 percent and 15 percent of performing loans will be downgraded
of shock respectively when considering individual shock.
to Bad & Loss category having 100% provisioning requirement in
18.00%
minor, moderate and major levels of shock respectively. Capital 16.00%

Adequacy Ratio (CAR) of PBL will be 15.52 percent, 12.00 percent 14.00%
12.00%
and 7.75 percent in minor, moderate and major levels of shock 10.00%
Minor
respectively when considering individual shock. 8.00% Moderate
Major
6.00%

18.00% 4.00%
2.00%
16.00%
0.00%
14.00%
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10.00%

8.00%
Minor
When all the shocks are considered together, Capital Adequacy
Moderate

6.00% Major Ratio (CAR) of PBL will be 14.31 percent, 8.36 percent and
4.00% 2.89 percent in minor, moderate and major levels of shock
2.00%
respectively. So, the Bank can absorb minor level of shock
0.00%
only when all the shocks are considered together. However,
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Interest rate shock industry, the bank may require additional capital and reserve.
18.00%
It represents the condition of the bank when interest rate 16.00%

changes significantly. It is based on the assumption that 14.00%

12.00%
interest rate will change by 1 percent, 2 percent and 3 percent 10.00%
Minor
in minor, moderate and major levels of shock respectively. 8.00% Moderate
Major
6.00%
Capital Adequacy Ratio (CAR) of PBL will be 16.88 percent, 16.61
4.00%
percent and 16.35 percent in minor, moderate and major levels 2.00%

of shock respectively when considering individual shock. 0.00%

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16.00%
14.00% For absorbing different shocks under Stress Testing, PBL
12.00%
took the following measures:
10.00%
Minor
8.00% Moderate • Exposure on large loan customers are being monitored
Major
6.00%
4.00%
closely
2.00%
• Emphasize on enhancing collateral coverage against large
0.00%
loan exposure;
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• Encouraging focus on MSME & Consumer loanlending;

Foreign exchange shock
• Regular loans are being monitored closely in order to avoid
It represents the condition of the bank when exchange rate
classification;
changes significantly. It is based on the assumption that
exchange rate will change by 5 percent, 10 percent and • Persuading unrated Corporate and MSME customers to
bring them under the umbrella of ECAI’s credit rating.

140 PRIME BANK

MARKET DISCIPLINE DISCLOSURES ON RISK BASED
CAPITAL (BASEL-III)
1. Scope of Application
The name of the top corporate Prime Bank Limited
a) entity in the group to which this
guidelines applies.
An outline of differences in Prime Bank Limited has 5 (Five) subsidiaries viz. (i) Prime Bank
the basis of consolidation for Investment Limited, (ii) Prime Bank Securities Limited, (iii) Prime
accounting and regulatory Exchange Co. (Pte.) Limited, Singapore, (iv) PBL Exchange (UK)
purposes, with a brief description Limited and (v) PBL Finance (Hong Kong) Limited.
of the entities within the group
(a) that are fully consolidated; A brief description of the Bank and its subsidiaries is given below:
(b) that are given a deduction Prime Bank Limited:
treatment; and (c) that are neither
consolidated nor deducted (e.g. The Prime Bank Limited (“the Bank”) was incorporated as a public
where the investment is risk- limited company in Bangladesh under Companies Act, 1994 with
weighted). the registered office of the company at 119-120 Motijheel C/A,
Dhaka-1000. It commenced its banking business with one branch
from April 17, 1995 under the license issued by Bangladesh Bank.
Presently the Bank has 146 (One Hundred and Forty Six) Branches
including 18 (Eighteen) SME Centers/ Branches all over Bangladesh
and 2 (Two) booths located at Dhaka Club, Dhaka and at Chittagong
Port, Chittagong. Out of the above 146 branches, 05 (five) branches
are designated as Islamic Banking branch complying with the rules
of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking
Units (OBU), 5 (Five) subsidiary Companies (3 Foreign subsidiaries &
2 Local subsidiaries). The Bank went for Initial Public Offering in 1999
and its shares were listed with Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited as a publicly traded company
Qualitative for its general classes of share.
disclosure
The principal activities of the Bank are to provide all kinds of
b)
commercial banking services to its customers through different
business divisions and branches.

Subsidiaries of PBL:

Prime Bank Investment Limited:

Prime Bank Investment Limited (PBIL) is a subsidiary company of

Prime Bank Limited incorporated as a public limited company on
April 27, 2010 with the registrar of Joint Stock Companies, vide
certificate of incorporation no.C-84266/2 dated 28 April 2010 which
has commenced its business on the same date.

The main objectives of the company are to carry out the business
of full-fledged merchant banking activities like issue management,
portfolio management, underwriting, corporate advisory services etc.

Prime Bank Securities Limited:

Prime Bank Securities Limited was incorporated on April 29, 2010

as a private Limited company under the Companies Act 1994. The
main objectives of the company are to carry on business of stock
brokers / dealers in relation to shares and securities dealings and
other services as mentioned in the Memorandum and Articles
of Association of the Company. The company commenced its
operation from May 2011.

PRIME BANK 141

ANNUAL REPORT 2018

Prime Exchange Co. (Pte.) Limited, Singapore:

Prime Exchange Co. (Pte.) Ltd., Singapore a fully owned subsidiary

company of Prime Bank Limited was incorporated in Singapore on
January 06, 2006 and commenced its remittance business with one
(1) Branch from July 08, 2006. In 2011 the Company has also opened
another Branch located at Jurong East Branch, Block: 134 #01-305
Jurong Gateway Road, Singapore 600134 and in 2016 it has opened
its 3rd branch located at Joo Koon Branch, 55 Benoi Road , #01-14, Joo
Koon Bus Interchange (Opposite KFC), Singapore-629907. The principal
activities of the company are to carry on the remittance business and
to undertake and participate in transactions, activities and operations
commonly carried on or undertaken by remittance and exchange house.

PBL Exchange (UK) Limited:

PBL Exchange (UK) Limited was incorporated as a private limited company

with Companies House of England and Wales under registration no.
7081093 dated 19 November 2009. The company is a wholly owned
subsidiary of Prime Bank Limited. The company commenced its operation
on 02 August 2010 with three Branches located at Brick Lane of London,
Coventry Road of Birmingham and North Oldham of Manchester. The
registered office is located at 16 Brick Lane, London E1 6RF.

PBL Finance (Hong Kong) Limited:

PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime

Bank Limited, was incorporated with Companies Registries of
Hong Kong (Certificate of incorporation no. 1584971 and Business
Registration no. 58197431 both dated April 7, 2011). PBL Finance (Hong
Kong) Limited obtained Money Lending Licenses # 307/2011 issued by
Honorable Court of Hong Kong on 28th July 2011. It has commenced
its operation from August 2011 with one branch located at Suite 1407,
14/F, Admiralty Centre, Tower-1, 18 Harcourt Road, Hong Kong.
c) Any restrictions, or other major
impediments, on transfer of
Not applicable
funds or regulatory capital within
the group.
Quantitative d) The aggregate amount of capital
disclosure deficiencies in all subsidiaries not
Not applicable
included in the consolidation that
are deducted and the name(s) of
such subsidiaries.

2. Capital Structure
Summary information on the As per Guidelines on Risk Based Capital Adequacy (Revised
terms and conditions of the main Regulatory Capital Framework for Banks in line with Basel III)
features of all capital instruments, introduced by Bangladesh Bank, ‘Common Equity Tier-1 (CET 1)’
especially in the case of capital Capital of PBL consists of (i) Paid-up Capital, (ii) Non-repayable Share
instruments eligible for inclusion Premium Account, (iii) Statutory Reserve, (iv) Retained Earnings and
in CET1, Additional Tier 1 or Tier 2. (v) Minority Interest in Subsidiaries.

Prime Bank does not have ‘Additional Tier 1 (AT 1)’ Capital since it
Qualitative
a) did not issue any instrument that meets the qualifying criteria for
disclosure
Additional Tier 1 Capital. Subsidiaries did not issue AT 1 capital to
third parties as well.

Tier-2 Capital consists of (i) General Provision (ii) Subordinated Debt/

Instruments issued by the Banks that meet the qualifying criteria for
Tier 2 Capital. (iii) Revaluation Reserves (50% of Fixed Assets & Govt.
Securities and 10% of equity instruments) subject to regulatory
adjustment/deduction i.e. 80% for 2018.

142 PRIME BANK

 Solo Consolidated
The amount of Tier-1 capital with separate disclosure of:
Taka in Crore
Common Equity Tier 1 (CET 1) Capital:
i. Fully Paid up capital 1,132.28 1,132.28
ii. Non repayable share premium account 121.19 121.19
iii. Statutory reserve 1,035.34 1,035.34
iv. General reserve - 2.80
b) v. Retained earnings 175.90 179.88
Quantitative
vi. Minority interest in subsidiaries - -
disclosure
vii. Dividend equalization account - -
Sub-Total 2,464.71 2,471.49
Additional Tier 1 Capital - -
Total Tier 1 Capital 2,464.71 2,471.49
Tier 2 Capital 1,470.22 1,471.24
Total amount of Tier 1 and Tier 2 capital 3,934.93 3,942.73
c) Regulatory Adjustments/Deductions from capital (109.03) (112.53)
d) Total eligible capital 3,825.90 3,830.20

3. Capital Adequacy:
A summary discussion of the bank’s The Bank has adopted Standardized Approach (SA) for
approach to assessing the adequacy computation of capital charge for credit risk and market
of its capital to support current and risk, and Basic Indicator Approach (BIA) for operational risk.
future activities. Assessment of capital adequacy is carried out in conjunction
with the capital adequacy reporting to the Bangladesh Bank.

The Bank has maintained Capital to Risk Weighted Asset

Ratio (CRAR) at 17.04% & 16.58% for stand-alone and for
consolidated group respectively. As per guideline, Bank is
required to maintain a Capital Conservation Buffer (CCB) of
2.50%, comprised of Common Equity Tier-1 (CET-1) Capital,
above the regulatory Minimum Capital Requirement (MCR) of
Qualitative
10%. The following table shows that Bank has adequate Tier-1
disclosure a) & Tier-2 Capital to maintain all the ratios at the required level. It
has covered both MCR as well as CCB (required for 2018) with
its eligible capital after considering all regulatory adjustments.

The Bank’s policy is to manage and maintain its capital with the
objective of maintaining strong capital ratio and high rating. The
Bank maintains capital levels that are sufficient to absorb all material
risks. The Bank also ensures that the capital levels comply with
regulatory requirements and satisfy the external rating agencies
and other stakeholders including depositors. The main objective of
the capital management process in the Bank is to ensure that Bank
has adequate capital to meet up its all sorts of obligations any time.

Quantitative Solo Consolidated
disclosure Particulars Taka in Crore
b) Capital requirement for Credit Risk 19,726.55 20,128.42
c) Capital requirement for Market Risk 211.13 400.32
d) Capital requirement for Operational Risk 2,513.98 2,578.96
Total Risk Weighted Assets (RWA) 22,451.65 23,107.71
Total Regulatory Capital (Tier 1 & Tier 2) 3,825.90 3,830.20
e) Capital To Risk Weighted Asset Ratio (CRAR) 17.04% 16.58%
Common Equity Tier 1 (CET 1) Capital to RWA Ratio 10.84% 10.55%
Tier 1 Capital to RWA Ratio 10.84% 10.55%
Tier 2 Capital to RWA Ratio 6.20% 6.03%
Minimum Capital Requirement (MCR) 2,245.17 2,310.77
f) Capital Conservation Buffer (2.50% * RWA) 561.29 577.69

PRIME BANK 143

ANNUAL REPORT 2018

• Minimum Tier 1 Capital Ratio: 6.00%,

• Minimum Total Capital Ratio: 10.00%,
• Capital Conservation Buffer: 2.50%
• Minimum Total Capital plus Capital Conservation Buffer: 12.50%

4. Credit Risk:
Qualitative a) The general qualitative disclosure requirement with respect to credit risk, including:
disclosure
i) Definitions of With a view to strengthening credit discipline and bring classification and provisioning
past due and regulation in line with international standard, a phase-wise program for classification
impaired (for and provisioning was undertaken by the Bank as per Bangladesh Bank circulars issued
accounting from time to time. In this regard, all the loans and advances/investments are grouped
purposes); into four categories for the purpose of classification, namely (i) Continuous Loan, (ii)
Demand Loan, (iii) Fixed Term Loan and (iv) Short-term Agricultural and Micro Credit.
They are classified as follow:

Continuous & Demand Loan are classified as:

Sub-standard- if it is past due/overdue for 03(three) months or beyond but less than
06 (six) months;

Doubtful- if it is past due/overdue for 06 (six) months or beyond but less than 09 (nine) months;

Bad/Loss- if it is past due/overdue for 09 (nine) months or beyond.

In case of any installment(s) or part of installment(s) of a Fixed Term Loan amounting up

to Taka 1 million is not repaid within the due date, the amount of unpaid installment(s)
are treated as “past due or overdue installment”. Such types of Fixed Term Loans are
classified as under:

Sub-standard- if the amount of past due installment is equal to or more than the amount of
installment(s) due within 06 (six) months, the entire loans are classified as “Sub-standard”.

Doubtful- if the amount of past due installment is equal to or more than the amount of
installment(s) due within 09 (nine) months, the entire loans are classified as “Doubtful.

Bad/Loss- if the amount of past due installment is equal to or more than the amount of
installment(s) due within 12(twelve) months, the entire loans are classified as “Bad/Loss”.

In case of any installment(s) or part of installment(s) of a Fixed Term Loan amounting

more than Taka 1 million is not repaid within the due date, the amount of unpaid
installment(s) are treated as “past due or overdue installment”. Such types of Fixed
Term Loans are classified as under:

Sub-standard- if the amount of past due installment is equal to or more than the
amount of installment(s) due within 03 (three) months, the entire loans are classified
as “Sub-standard”.

Doubtful- if the amount of past due installment is equal to or more than the amount of
installment(s) due within 06 (six) months, the entire loans are classified as “Doubtful”.

Bad/Loss- if the amount of past due installment is equal to or more than the amount of
installment(s) due within 09 (nine) months, the entire loans are classified as “Bad/Loss”.

Short-term Agricultural and Micro Credit will be considered irregular if it is not repaid
within the due date as stipulated in the loans agreement and will be classified as under:

Sub-standard- if the irregular status continues after a period of 12 (twelve) months, the
credits are classified as “Sub-standard”.

Doubtful- if the irregular status continue after a period of 36 (thirty six) months, the
credits are classified as “Doubtful”.

Bad/Loss- if the irregular status continue after a period of 60 (sixty) months, the credits
are classified as “Bad/Loss”.

A Continuous loan, Demand loan or a Term Loan which remained overdue for a period
of 02 (two) months or more, is treated as “Special Mention Account (SMA)”.

144 PRIME BANK

 ii) Description The Bank is required to maintain the following general and specific provision in
of approaches respect of classified and unclassified loans and advances / investments on the basis
followed of Bangladesh Bank guidelines issued from time to time:
for specific Particulars Rate
and general General provision on unclassified Small and Medium 0.25%
allowances Enterprise (SME) financing.
and statistical
General provision on unclassified loans and advances/ 1%
methods;
investments other than Consumer Financing, Loans to
Brokerage House, Merchant Banks, Stock Dealers etc., SMA as
well as SME Financing).
General provision on Short-term Agricultural & Micro-credits. 1%

General provision on interest receivable on loans / 1%

investments.
General provision on off-balance sheet exposures (Provision 1%
has been made on the total exposure and amount of cash
margin & value of eligible collateral were not deducted while
computing off-balance sheet exposure).
General provision on unclassified loans and advances/ 2%
investments for housing finance, loans for professionals to
set-up business under consumer financing scheme.
General provision on the unclassified loans to Brokerage 2%
House, Merchant Banks, Stock Dealers, etc.
General provision on unclassified amount for Consumer 5%
Financing.
General provision on outstanding amount of loans kept in Special Mention Account
(SMA) will be at the same respective rate as stated above (0.25% to 5%) as per BRPD
Circular No. 05 dated 29.05.2013.
Specific provision on Sub-Standard loans & advances / 20%
investments
Specific provision on Doubtful loans & advances / investments 50%

Specific provision on bad / loss loans & advances / investments 100%

Quantitative b) Total gross Total gross credit risk exposures broken down by major types of credit exposure
disclosure credit risk of the Bank:
exposures Particulars Taka in Crore
broken down by Secured Overdraft/Quard Against TDR 3,415.81
major types of
Cash Credit/Mudaraba 2,539.88
credit exposure.
Loan (General) 6,541.92
House Building Loan 213.59
Loan Against Trust Receipts (LTR) 989.81
Payment Against Documents (PAD) 1.06
Retail Loan 1,564.75
Lease Finance/Izara 421.62
Credit Card 88.92
Hire Purchase 1,162.54
Other Loans & Advances 2,705.74
Bill purchased/discounted-Inland 597.65
Bill purchased/discounted-Foreign 337.69
Total 20,580.95

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c) Geographical Geographical distribution of exposures, broken down in significant areas by

distribution major types of credit exposure of the Bank:
of exposures, Particulars Taka in Crore
broken down Urban: Dhaka Zone 16,499.00
in significant
Chittagong Zone 2,424.01
areas by major
Khulna Zone 365.13
types of credit
exposure. Rajshahi Zone 458.64
Barishal Zone 10.46
Sylhet Zone 149.71
Rangpur Zone 192.99
Sub-Total: Urban 20,099.95
Rural: Dhaka Zone 196.77
Chittagong Zone 118.23
Khulna Zone 7.68
Rajshahi Zone 116.24
Rangpur Zone 16.11
Sylhet Zone 25.97
Sub-Total: Rural 481.01
Grand Total (Urban + Rural) 20,580.95
d) Industry or Industry or counterparty type distribution of exposures, broken down by major types
counterparty of credit exposure of the Bank:
type distribution Particulars Taka in Crore
of exposures, Commercial Lending 2,140.28
broken down by
Export Financing 1,264.63
major types of
House Building Loan 213.59
credit exposure.
Retail Loan 1,564.75
Small & Medium Enterprises (SME) 2,112.04
Special Program Loan -
Staff Loan 0.51
Loans, Advances & Lease/Investments to Managing Director / 158.53
CEO and other senior executives
Industrial Loans/Investments (Details are given below) 11,674.12
Other Loans & Advances 1,452.49
Total 20,580.95
Industrial Loans/Investments
Particulars Taka in Crore
Agriculture 356.05
Textile Industries 1,803.17
Food and allied industries 649.01
Pharmaceutical Industries 451.29
Leather , Chemical, Cosmetics, etc. 159.94
Tobacco Industries 70.43
Cement and Ceramic Industries 467.72
Service Industries 2,323.02
Transport & Communication Industries 533.42
Other Industries including bills purchased and discounted 4,860.06
Total 11,674.12

146 PRIME BANK

e) Residual Residual contractual maturity break down of the whole portfolios, broken down by
contractual major types of credit exposure of the Bank:
maturity Particulars Taka in Crore
breakdown Repayable on Demand -
of the whole
Up to 1 month 2,915.75
portfolio, broken
Over 1 month but not more than 3 months 3,910.38
down by major
types of credit Over 3 months but not more than 1 year 5,779.97
exposure. Over 1 year but not more than 5 years 5,266.67
Over 5 years 2,708.18
Total 20,580.95
f) By major industry or counterparty type:
i) Amount of The amount of classified loans and advances/investments of the Bank are given below
impaired loans as per Bangladesh Bank guidelines.
and if available, Particulars Taka in Crore
past due loans, Standard 18,459.89
provided
Special Mention Account 852.48
separately;
Sub-standard 137.28
Doubtful 260.33
Boss/Loss 870.97
Total 20,580.95
ii) Specific Specific and general provisions were made on the amount of classified and unclassified
and general loans and advances/investments, off-balance sheet exposures and off-shore banking
provisions; and units, interest on receivable, diminution in value of investment and other assets-
suspense of the Bank according to the Bangladesh Bank guidelines.
Particulars Taka in Crore
Provision on classified loans/investments 406.04
Provision on unclassified loans/investments 348.00
Provision on Off-balance sheet exposures 151.31
Provision for Off-shore Banking Units 74.35
Provision for interest receivable on loans & advances/ 0.95
investments
Provision for other assets 25.74
Provision for diminution in value of investments. 3.56
Total 1,009.95
iii) Charges During the year the specific and general provisions were made on the amount of
for specific classified and unclassified loans and advances/investments, off-balance sheet
allowances exposure, off-shore banking units, interest on receivable, diminution in value of
and charge- investment and other assets-suspense of the Bank as per Bangladesh Bank guidelines.
offs during the Particulars Taka in Crore
period. Provision on classified loans/investments 269.03
Provision on unclassified loans/investments (93.60)
Provision on Off-balance sheet exposures (16.50)
Provision for Off-shore Banking Units 2.72
Provision for interest receivable on loans & advances/ -
investments
Provision for other assets 5.33
Provision for diminution in value of investments 1.87
Provision for impairment loss for investment in subsidiaries 8.61
Total 177.46

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ANNUAL REPORT 2018

g) Gross Non Performing Assets (NPAs).

Non Performing Assets (NPAs) to Outstanding loans and advances.

Movement of Non-Performing Particulars Taka in Crore

Assets (NPAs). Opening balance 1,079.90
Addition/adjustment during the year 188.68
Closing balance 1,268.58

Particulars Taka in Crore

Movement of specific Opening balance 377.37
provisions for NPAs. Provisions made during the period 269.03
Transferred from unclassified loan & advances -
including OBU
Write-off (260.74)
Recoveries of amounts previously written off 20.38
Closing Balance 406.04

5. Equities: Disclosures for Banking Book Positions

Qualitative a) The general qualitative disclosure requirement with respect to equity risk, including:
disclosure Differentiation between holdings on which capital gains are Investment in equity securities are broadly
expected and those taken under other objectives including categorized into two parts:
for relationship and strategic reasons; and
i) Quoted Securities (Common or
Preference Shares & Mutual Fund) that are
traded in the secondary market (Trading
Book Assets).

ii) Unquoted securities include shares of

Central Depository Bangladesh Limited
(CDBL), investment in SWIFT, Star Ceramics
Preference Share, Golden Harvest Ice Cream
Ltd and Market Stabilization Fund (MSF).
Discussion of important policies covering the valuation The primary aim is to invest in these equity
and accounting of equity holdings in the banking book. securities for the purpose of capital gain by
This includes the accounting techniques and valuation selling them in future or held for dividend
methodologies used, including key assumptions and income. Dividends received from these
practices affecting valuation as well as significant changes equity securities are accounted for as
in these practices. and when received. Both Quoted and Un-
Quoted equity securities are valued at cost
and necessary provisions are maintained if
the prices fall below the cost price.

148 PRIME BANK

 Quantitative Solo Consolidated
disclosure
Taka in Crore
At market At market
At cost At cost
value value
b) Value disclosed in the balance sheet of investments,
as well as the fair value of those investments; for 11.25 8.23 151.72 102.83
quoted securities, a comparison to publicly quoted
share values where the share price is materially
different from fair value.
The cumulative realized gains (losses) arising from
c) sales and liquidations in the reporting period. - -
• Total unrealized gains (losses) (3.02) (48.89)
d)
• Total latent revaluation gains (losses) - -

• Any amounts of the above included in

Tier-2 capital. - -
e) Capital requirements broken down by appropriate equity groupings, consistent with the bank’s
methodology, as well as the aggregate amounts and the type of equity investments subject to any
supervisory provisions regarding regulatory capital requirements (10% on market value).

• Specific Market Risk 0.82 10.28

• General Market Risk 0.82 10.28

6. Interest Rate Risk in the Banking Book (IRRBB)

Qualitative a) The general qualitative disclosure Interest rate risk is the risk where changes in market interest rates
disclosure requirement including the nature might adversely affect a bank’s financial condition. Changes
of IRRBB and key assumptions, in interest rates affect both the current earnings (earnings
including assumptions regarding perspective) as well as the net worth of the bank (economic value
loan prepayments and behavior perspective). To evaluate the impact of interest rate risk on the net
of non-maturity deposits, and interest margin, Prime Bank monitors the size of the gap between
frequency of IRRBB measurement. rate sensitive assets and rate sensitive liabilities in terms of the
remaining period to repricing. Repricing refers to the point in time
when adjustments of interest rates on assets and liabilities occur
owing to new contracts, renewal of expiring contracts or that a
contract specifies a floating rate that adjusts at fixed time intervals.

A maturity mismatch approach is used to measure Prime Bank’s

exposure to interest rate risk. A positive mismatch means that more
assets than liabilities are repriced in a given period. With a positive
mismatch, a rise in market interest rates will have a positive effect
on the bank’s earnings. On the other hand, a negative mismatch,
where more liabilities are repriced than assets in a given period,
means a drop in earnings if interest rates had increased.

The table presented below showing the Interest Rate Risk Analysis
of Prime Bank Limited. The analysis shows that Bank may have a
positive earnings impact of Taka 3.2454 crore in the first quarter
which has also been positive in the second quarter. In the third
quarter, the total year-to-date accumulated earnings impact has
also been positive (Taka 4.6741 crore). Hence, accumulated earning
for the year 2018 owing to a 1% increase in interest rate is a gain of
Taka 2.3519 crore.

The rule of thumb suggests that quarterly gaps, causing an

earnings impact of 10% of the Bank’s average quarterly net profit
for each 1% change in interest rates, should be carefully handled
by the Bank’s Management. The last row of the following table
reveals that earnings impact on Prime Bank’s average quarterly net
profit is not significant and remains within the acceptable limit as
prescribed by Bangladesh Bank.

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6. Interest Rate Risk Analysis (for 1% change in the market rate of interest)
Quantitative b) The increase Over 3 Over 6
Over 9
disclosure (decline) in earnings months months
Particulars 1 to 90 days months to
or economic to up to 6 to up to 9
up to 1 year
value (or relevant months months
measure used by
Taka in Crore
management)
Rate Sensitive
for upward and 8,660.00 3,385.97 850.96 725.25
Assets
downward rate
shocks according Rate Sensitive 7,343.80 4,059.93 1,556.02 1,604.22
to management’s Liabilities
method for GAP 1,316.20 (673.96) (705.06) (878.97)
measuring IRRBB, Cumulative GAP 1,316.20 642.24 (62.82) (941.79)
broken down Adjusted Interest
by currency (as 1.00% 1.00% 1.00% 1.00%
Rate Changes (IRC)
relevant). Quarterly earnings
impact (Cum. GAP 3.2454 1.5836 (0.1549) (2.3222)
* IRC)
Accumulated
earning impact to 3.2454 4.8290 4.6741 2.3519
date
Earning impact/Avg.
12.26% 18.24% 17.66% 8.88%
quarterly net profit

7. Market Risk:
Qualitative a) i) Views of Board of Directors Market risk is the possibility of losses of assets in balance sheet and
disclosure (BOD) on trading/ investment off-balance sheet positions arising out of volatility in market variables
activities. i.e., interest rate, exchange rate and price. Allocation of capital is
required in respect of the exposure to risks deriving from changes in
interest rates and equity prices in the bank’s trading book, in respect
of exposure to risks deriving from changes in foreign exchange rates
and commodity price in the overall banking activity. The total capital
requirement for banks against their market risk shall be the sum of
capital charges against:

• Interest rate risk

• Equity position risk

• Foreign exchange (including gold) position risk throughout the

bank’s balance sheet and

• Commodity risk.
ii) Methods used to measure Measurement Methodology:
Market risk.
As banks in Bangladesh are now in a stage of developing risk
management models, Bangladesh Bank has suggested the banks for
using Standardized Approach for credit risk capital requirement for
banking book and Standardized (rule based) Approach for market
risk capital charge in their trading book.

Maturity Method has been prescribed by Bangladesh Bank in

determining capital against market risk. In the maturity method,
long or short positions in debt securities and other sources of
interest rate exposures, including derivative instruments, are slotted
into a maturity ladder comprising 13 time-bands (or 15 time-bands
in case of low coupon instruments). Fixed-rate instruments are
allocated according to the residual term to maturity and floating-
rate instruments according to the residual term to the next re-pricing
date.

150 PRIME BANK

 In Standardized (rule based) Approach the capital requirement for
various market risks (interest rate risk, price and foreign exchange
risk) are determined separately.

The total capital requirement in respect of market risk is the sum of

capital requirement calculated for each of these market risk sub-
categories. e.g.:

Capital Charge for Interest Rate Risk = Capital Charge for Specific Risk
+ Capital Charge for General Market Risk;

Capital Charge for Equity Position Risk = Capital Charge for Specific
Risk + Capital Charge for General Market Risk;

Capital Charge for Foreign Exchange Risk = Capital Charge for

General Market Risk;

Capital Charge for Commodity Position Risk = Capital charge for

general market risk.
iii) Market Risk Management Treasury Division manages the market risk and ALCO monitors the
system. activities of treasury Division in managing such risk.

iv) Policies and processes for To mitigate the several market risks the bank formed Asset Liability
mitigating market risk. Management Committee (ALCO) who monitors the Treasury
Division’s activities to minimize the market risk. ALCO is primarily
responsible for establishing the market risk management and asset
liability management of the Bank, procedures thereof, implementing
core risk management framework issued by the regulator, best risk
management practices followed by globally and ensuring that internal
parameters, procedures, practices/polices and risk management
prudential limits have been set up and followed.

The Treasury Division are taking following measures to minimize the

several market risks:

Foreign exchange risk management: it is the risk that the bank may
suffer losses as a result of adverse exchange rate movement during
a period in which it has an open position in an individual foreign
currency. This risk is measured and monitored by the Treasury
Division. To evaluate the extent of foreign exchange risk, a liquidity
Gap report is prepared for each currency.

ii) Equity Risk: Equity risk is defined as losses due to changes in market
price of the equity held. To measure and identify the risk, mark to
market valuation of the investment portfolios of share is being done.
Mark to market valuation is done against a predetermined limit. At
the time of investment, following factors are taken into consideration:

• Security of Investment
• Fundamentals of securities
• Liquidity of securities
• Reliability of securities
• Capital appreciation
• Risk factors and
• Implication of taxes etc.

Quantitative b) The capital requirements for: Solo Consolidated

disclosure Taka in Crore
• Interest rate risk - -
• Equity position risk 1.65 20.57
• Foreign exchange risk and 19.47 19.47
• Commodity risk - -
Total Capital Requirement 21.11 40.03

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ANNUAL REPORT 2018

8. Operational Risk:
Qualitative a) i) Views of BOD on Operational risk is defined as the risk of loss resulting from inadequate or failed
disclosure system to reduce internal processes, people and systems or from external events. This definition
Operational Risk includes legal risk but excludes strategic and reputation risk. It is inherent in every
business organization and covers a wide spectrum of issues. The Board of Directors
(BOD) of the Bank and its Management firmly believe that an effective internal
control systems has been established within the Bank to ensure adequacy of the risk

management framework and compliance with a documented set of internal policies

concerning the risk management system which mainly include,

# Top-level reviews of the Bank’s progress towards the stated objectives;

# Checking for compliance with management controls;

# Policies, processes and procedures concerning the review, treatment and

resolution of non-compliance issues; and

# A system of documented approvals and authorizations to ensure accountability to

the appropriate level of management.

Bank has ensured some other internal practices to be in place as appropriate to

control operational risk. Examples of these include:

# Close monitoring of adherence to assigned risk limits or thresholds;

# Maintaining safeguards for access to, and use of, bank’s assets and records;

# Ensuring that staffs have appropriate expertise and training;

# Regular verification and reconciliation of transactions and accounts.

The BOD has modified Bank’s operational risk management process by issuing
a high level standard like SOP, supplemented by more detailed formal guidance.
This explains how the bank manages operational risk by identifying, assessing,
monitoring, controlling and mitigating the risk, rectifying operational risk events,
and implementing any additional procedures required for compliance with local
regulatory requirements.

The Bank maintains and tests contingency facilities to support operations in the
event of disasters. Additional reviews and tests are conducted in the event that
any branch of the bank is affected by a business disruption event, to incorporate
lessons learned in the operational recovery from those circumstances. Plans have
been prepared for the continued operation of the bank’s business, with reduced
staffing levels.
ii) Performance Motivated and Engaged Employees
gap of executives
Prime Bank has a diverse group of motivated and engaged employees. From
and staffs.
experience it knows that if employees are properly empowered, they become
more engaged and go extra miles to fulfill organization’s ambition. Engaged
employees are likely to take more responsibility and embrace accountability which
helps to achieve the sustainability strategies. The Bank has positioned itself with
a performance-driven rewarding work culture; where employees are treated with
respect and receive plenty of development opportunities. Prime Bank has a special
focus on:

• Ensuring a balanced diversity

• Promoting human capital development
• Providing competitive compensation and benefits
• Promoting a performance centric culture
• Protecting human rights
• Ensuring workplace health and safety
• Ensuring equal opportunity

All the people related issues in Prime Bank are governed by the well-defined policies
and procedures which are duly reviewed by the Management time to time.

152 PRIME BANK

Compensation & Benefits

To maintain the market competitiveness, the compensation and benefits of Prime

Bank are regularly reviewed through market and peer group study. The well-crafted
total rewards help the Bank to attract, motivate and retain talent.

In PBL, the Board of Directors is not eligible for any compensation. They are paid
honorarium for attending meetings only. On the other hand, all employees are paid
competitive remuneration package. The remuneration policy of the Bank does
not allow any discrimination between male and female employees. In addition,
employees are paid bonus based on yearly business performance.

In addition to monthly competitive base pay and a good number of allowances

(e.g., House Rent allowance, Medical allowance, Conveyance allowance etc.), Prime
Bank has variety of market-competitive Benefits schemes designed to motivate the
employees. The various cash and non-cash benefits include:

• Company provided car for top level Executive employees

• Car allowance for all Executive level employees
• Leave fair assistance allowance
• Medical treatment allowance
• Maternity benefits
• Car loan facility
• House loan facility
• Staff loan at reduced interest rate
• House furnishing allowance
• Mobile phone allowance
• Travel allowance
• Technical allowance
• Festival bonus
• Allowance for employees’ meritorious students
• Annual leave
• Maternity leave
• Study leave etc.

The Bank also provides long-term as well as retirement benefits to employees:

• Leave encashment
• Provident fund
• Gratuity benefit
• Retirement benefit
• Partial and full disability benefit
• Death benefit to family members etc.

Broadbanding Pay Structure:

The Management introduced Broadbanding Pay Structure which aims to ensure a

performance driven work culture through a strategic compensation plan synced with
the performance of individual employee. Since inception, Prime Bank has practiced
a scale based pay structure for each grade, so to reward individual performance the
new policy offers a flexible pay plan that will compensate the person, not the grade.
It places an increased emphasis on encouraging employees to develop new skills
and paying for the skills according to their contribution and equity. In a nutshell,
broadbanding is a more flexible pay system for both the employees and for the
employers where career progression takes a different route. Given that, the specific
reasons behind introduction of this new pay structure is:

1. It facilitates/encourages internal /lateral movement (Through Job Rotation)

2. It rewards performers than the non-performers (Through Pay for Performance)
3. It puts added trust & greater autonomy in line management (Through Teamwork/ Relationship)

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ANNUAL REPORT 2018

Moreover, the policy states that when one employee reaches the highest grade
within a Band, the employee will grow further when he/she is ready to take or has
taken higher responsibilities and match the criteria of the next Band.

The total compensation and benefits system of Prime Bank tracks costs and is linked
with performance, while maintaining a balance with the business affordability.

Performance Management Program

Prime Bank has a comprehensive performance management program that

evaluates employees’ yearly performance against business targets at the year-end.
In addition, their functional and leadership competencies are also rated by the
line management. This appraisal process also identifies the competency gap and
training needs of employees. All employees (except employees under probation or
training) of the Bank undergo annual performance appraisal process. The process
ensures that clear feedback on improvement points (performance and professional
capabilities) is provided to employees by their Managers to promote employees’
long-term career development and improved contribution to organizational
performance. All regular employees undergo the annual performance and career
development review.

Work-life Balance

Prime Bank wants its’ employees to balance the work and personal life and has
organization-wide practices and policies that actively support employees to achieve
success at both work and home. Management is also open and shows flexibility in
regard to a balanced work-life.

In Prime Bank, employees are entitled to sufficient annual leave and sick leave with
pay. To enjoy vacation with family, Bank provides Leave Fare Assistance Allowance
to employees. All female employees are eligible for Maternity Leave (Parental Leave)
with pay for a period of six months. In 2018, a total of 53 female employees availed
Maternity leave. After completion of the leave, they returned to work and are still
continuing with the organization.

Culture

Culture plays a vital role to create a high performance environment that supports
sustainability strategy implementation. Prime Bank carefully develop, shape and
impact organizational culture by: practicing values appropriate for the bank;
defining working relationship and communication pattern between superior and
subordinates; governing rules and regulations which control employees’ behaviour;
promoting a strong employer brand through which employees identify with the
organization; maintaining effective reward system that affects employees loyalty
and empowering employees to demonstrate their innovativeness not only to be
competitive in the market but also to achieve a sustainable growth.

Healthy and Safe Work Environment

In Prime Bank, the physical, mental and social well-being of the employees always
gets priority. Healthy, productive and motivated employees are the foundation of
a successful organization. Prime Bank helps employees to assume responsibility
for their own personal behaviour in health-related matters, and support health-
promoting general conditions within the Company. We continuously focus on
improving health and safety of employees that includes proper work place design
and decoration of head office and branches, maintaining the cleanliness at work
space, holding awareness session related to physical and psychosocial well-being,
email communication on various health and safety related topics, sending alerts to
employees on emergency situations, arranging fire drill sessions, financial support
for medical care etc. Because of the nature of operations, Bank employees are not
usually exposed to work-related injury, occupational diseases or fatality. Yet, the
Bank remains cautious so as not to create any hazardous work condition.

154 PRIME BANK

Decent Workplace

Prime Bank has a decent work environment where employees can work with dignity,
have the freedom to express opinions, can participate in the decision making
process that affect their lives, and receive equal treatment and opportunity. The
Bank is committed to ensure the best practices in compliance with the labour code
of the country. Bank Management believes that the business can grow favorably
if the organization enables employees through creating and maintaining a decent
workplace.

In Prime Bank, employees have the right to exercise freedom of association or

collective bargaining following the legal procedure of country laws. However,
employees have never formed or wanted to form any collective bargaining agency.
The Bank follows non-discriminatory approach in all HR policies and practices. The
salary of an employee is determined based on his/her competency, experience
and performance. The Bank neither employs child labour nor has any provision for
forced labour. Employees have the right to resign from their employment serving
proper notice period and following the internal procedures.

Ensuring a decent workplace also encompass Bank’s investment decisions as well

as agreements with the suppliers and contractors. For instance, human right, as
appropriate, is covered as an integral part of decision making for major financial
investments. Among all the significant investments, garments and manufacturing
industry contain major stakes where issues related to human rights are more
relevant and critical. Hence, any such investment agreement is subject to screening
of human right issues along with other criteria.

On the other hand, all the agreements of Prime Bank with suppliers or contractors
undergo due assessment process which requires complying with Labour Code and
other applicable laws of the country. Moreover, the procurement decisions are also
subject to conformity with International Labour Conventions. The team involved in
procurement visits suppliers and contractors’ premises on need basis to monitor
working conditions and other relevant issues like labour practices, human right etc.

The security personnel employed by the Bank are formally trained and aware of
policies and procedures regarding human right issues. The training requirement
also applies to third party organizations that provide security personnel to the Bank.

The most recent addition to encourage female employees at the workplace is that
they are now able to avail child day-care facility in Motijheel area. Female employees
having offices in Motijheel and peripheral area now can avail child day-care facility
where they can keep their children in a safe and secured environment. This will not
only help to retain female employees but will relieve them of the dilemma of leaving
their child/children at home.

Diversity in Workplace

Prime Bank believes that diverse, heterogeneous teams generate greater creativity,
innovation and business development. An inclusive culture maintains and drives
workforce diversity by fostering the exchange of ideas and collaboration among
individuals and across groups. To speak simply, our constant success depends in
part on maintaining a plurality of perspectives.

Employees by age group and gender:

Age group No. of Emp. Percentage
Less than 30 years 251 7.81%
30 to 50 years 2,809 87.45%
Over 50 years 152 4.73%
Grand Total 3,212 100.00%

We practice equal employment opportunity; for competent candidates regardless

of their gender, age, locality or ethnicity. While recruiting fresh graduates, the Bank
sources the pool from different recognized public and private universities; with a
view to create a diverse work force.

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Employees by religion:
Religion No. of Emp. Percentage
Islam 2,947 91.75%
Hindu 251 7.81%
Buddhist 12 0.37%
Christian 2 0.06%
Total 3,212 100.00%

Besides, our ration of male and female employees has been increasing over the
time. Currently, approximately 21.17% of total employees are female. On the other
hand, 16.67% of the Board of Directors represents females.

Gender diversity among employees:

Gender No. of Employees Percentage
Male 2,532 78.83%
Female 680 21.17%
Total 3,212 100.00%

Percentage of female employee over the years:

Year % of Female Employees
2014 21.00%
2015 21.64%
2016 21.93%
2017 20.92%
2018 21.17%

Gender diversity among Board members:

Gender No. of Members Percentage (%)
Male 15 83.33%
Female 03 16.67%
Total 18 100%

New recruitment by gender and age:

By Gender:
Gender No. of Emp. %
Male 62 84.93%
Female 11 15.07%
Total 73 100.00%

By Age:
Age group No. of Emp. %
Below 30 years 23 31.51%
30 to 50 years 49 67.12%
Over 50 years 1 1.37%
Grand Total 73 100.00%

Employee turnover by gender and age:

By Gender:
Gender No. of Emp. %
Male 295 81.94%
Female 65 18.06%
Total 360 100.00%

156 PRIME BANK

 By Age:
Age group No. of Emp. %
Below 30 years 44 12.22%
30 to 50 years 308 85.56%
Over 50 years 8 2.22%
Grand Total 360 100.00%

For the year 2018, the turnover rate is 10.73%.

Learning & Development

In Prime Bank, Human Resources (HR) Division regularly undertakes effectively

designed training programs targeting the right group of employees through proper
training need assessment. Prime Bank believes that continuous efforts should be
given so that employees acquire and develop the right set of skills required to face
the challenge of ever changing market.

In Prime Bank, the employee development plan is based on proper training need
assessment. In 2018, Bank’s internal HR Training and Development Centre arranged
training on different topics for 3548 enthusiastic participants. Besides, a total of
311 employees were sent to participate in various training programs/conferences in
home and abroad.

The banking sector is complex and diverse with evolving nature of threats and the
risks. So, the training module is updated time to time for employees of the Bank in
the changing context of financial market.

Openness in communication for a better employee-management relation

Employee communications and consultation are the lifeblood of any business.

Proper exchange of information and instructions help the Bank to function more
efficiently and provides the opportunity to build greater trust among employees and
management in discussing issues of mutual interest. To ensure effective employee
communications, management takes a positive lead.

The Management has introduced a Whistleblower Protection Policy which intendeds

to encourage and enable employees and others to raise serious concerns internally
so that the Management can address and correct inappropriate conduct and
actions. Employees have an avenue to report concerns about violations of code of
ethics or suspected violations of law or regulations. The policy covers the protection
of a whistleblower in two important areas – confidentiality and against retaliation.
An employee who retaliates against someone who has reported a violation in good
faith is subject to discipline up to and including termination of employment.

Additionally, now there is an avenue to report sexual harassment in the workplace.

The policy aims to ensure a working environment in line with our values, where all
individuals are treated equally, fairly and with dignity and also foster compliance
with governing laws pertaining to sexual harassment. Such policy creates awareness
about the nature of offences and the consequences of an offender. This not only
fosters a neutral environment but gives a feeling of assurance that any wrong doing
will be strictly addressed by the Management.

Any operational changes are properly planned and managed. Management follows a
participative approach during any major transformation followed by prior communication
to the employees. Since there is no trade union or employee association, no notice
period regarding operational change is stipulated by any collective agreement.

Ethical and Lawful Behavior in Prime Bank

Prime Bank is always committed to establish the highest level of ethical standard.
Employees are properly oriented to comply with Code of Ethics & Business Conduct.
All employees duly signed the ‘Code of Ethics & Business Conduct’ and the copy is
preserved in respective Employee Records. During joining, HR Division makes sure
that all the new employees read and accept this policy by signing.

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Bank also has ‘Service Excellence Handbook’ & ‘General Code & Discipline’, which
are read by each employee including new employees while joining in the Bank and
record of these are preserved in personal file after signing by employees.

“The Prime Bank Employee Code of Ethics and Business Conduct” – is a framework
of ethical behavior for all the employees of the organization that embodies all the
factors mentioned above. It is a reflection of Prime Bank’s role as a socially responsible
corporate citizen which believes in providing the most courteous and efficient
service through innovative banking services and products. However, Prime Bank’s
most farsighted objective is to uphold and build upon the honour of Bangladesh as
a nation, through exhibiting its own competence as a local organization that can
perform at least on par with a multinational one, if not better than one.

The employees of Prime Bank are trained to put their own duties and ethics before
everything else. They treat their colleagues with reverence and honour, and their
customers as esteemed guests. They also learn to abide by the laws that govern
our business, and contribute to the strength and wellbeing of our community
and shareholders. In addition to their regular responsibilities employees are also
expected to demonstrate the below ethical behavior:

• Protect Privacy of Customers’ and Confidential Company Information;

• Prevent Money Laundering and/or Fraud;

• Demonstrate Workplace Respect;

• Avoid Offensive Behavior and Sexual Harassment;

• Avoid Drug/Substance/Alcohol Abuse in the Workplace;

• Protect the Bank’s Assets;

It is mandatory for every employee of Prime Bank Limited to abide by the ‘Employee
Code of Ethics and Business Conduct’ and also comply with any other orders or
directions provided by the Management or Board of Directors from time to time.

Human Resources Accounting in Prime Bank

To understand and draw an inference on how well the Human Resources are
yielding on the investment made, Prime Bank tracks the profit and related HR costs.
In this process, the costs of recruitment, training, compensation, other direct cost
related to employees are measured to estimate the overall investment. The costs
are then compared with several parameters. This analysis helps the Bank to have
an outlook and make prudent decisions on future HR investment. Valuing the
human resources and measuring the direct impact of the cost spent for employees
is difficult as there is no specific or widely adopted method. Human Resources
accounting is the process of valuing human resources as assets. Presently, this is
not accounted in the conventional accounting practices. The period of existence
of a set of human resources in an organization cannot be predicted; hence treating
and valuing them as assets in strict sense is not plausible. However, followings are
some of the parameters which are tracked year on year:

Amount in BDT Million

Particulars
2018 2017
Salary cost per employee 1.29 1.10
Operating cost per employee 2.24 1.94
Operating income per employee 4.02 3.47
Profit before provision per employee 1.78 1.54
Profit before tax per employee 1.23 0.52
Salary cost as percentage of operating cost 58.06 56.61
Salary cost as percentage of operating income 32.32 31.57

158 PRIME BANK

iii) Potential Risk factors/Potential external events:
external events
There are certain risk factors which are external in nature but can affect the business
of the Bank. The factors discussed below can significantly affect the banking
business:

• General business and political condition

Some major economic-financial indicators performed well below par in the outgoing
calendar year i.e. 2018, casting their adverse impacts on Bangladesh’s economic
health. The underperformances are: a negative overall balance of payments (BoP),
net domestic asset with the central bank and inadequate broad-money growth
as a result of poor demand deposits. The net sales of national savings certificates
continued to rise over expectation, leading to low growth in the banking sector and
leaving huge liabilities for the government. And imports expanded substantially,
driven mainly by import of food and machinery mostly meant for Padma Bridge and
capital machinery, affecting the balance of trade.

Performance of Prime Bank greatly depends on the general economic conditions

of the country. For Bangladesh 2018 has been a mixed year of achievements and
challenges. Though some macro indicators reflect the positive trends, the overall
strength of the economy is weakening due to a number of developments toward
the second half of the year. One of the major achievements of the economy has
been a 7.86 percent economic growth in FY 2017-18 breaking the six percent cycle
that continued for a decade or so. Like previous years, major boost of growth has
come from the industrial sector followed by the services sector. Though average
inflation has been around 5.54 percent, food inflation is showing a declining rate
in recent months, mainly because of agricultural achievement in rice production
result in decline of price. Investment is a major impetus to Bangladesh’s growth.
Despite the relative calm in the political scenario, private investment has not picked
up. Target was set to increase investment to 31.90 percent of GDP in FY 2017-18,
keeping in mind the need for a growing economy.

The external sector has been a source of strength for the Bangladesh economy
for several years. This has changed in recent periods. A glimmer of hope is in the
horizon with both RMG and total exports picking up during July-December of FY
2018-19. Current account deficit of Bangladesh reached its historical highest at
USD 9.8 bn in 2018. High import growth arising primarily from one–time surge in
food grain import due to flood and sharp increase in petroleum products import
exerted significant pressure on current account. Modest performance in export and
remittance turned out to be insufficient to ameliorate it. As a result USD gets dearer.
Central bank supported the currency throughout the year, soaking up further BDT
liquidity from the market.

• Good Governance

Despite a bounce back in a sluggish growth and the rise in import volumes in
recent months, the financial sector faced a number of serious challenges, which
could threaten progress in the year 2019. A severe governance crisis caused the
industry to face a record increase in non-performing loans (NPL), financial scams
and liquidity shortages. Bad loans and recapitalization in the banking sector, have
always been a cause for concern in Bangladesh.

The lack of good governance is another reason for the deterioration of the banking
sector’s health. Government’s move to award licenses to new banks at a time when
the sector is struggling may cause further imbalance in the economy. There was
a saying that the existing 58 (2 newly opened in 2018) banks cannot cover all the
people across the country; the new banks will bring all people under the banking
umbrella. Economic experts opined that this is totally wrong because the new
banks can never give service in the villages due to high costs, rather the existing
banks could have extended their branch network to achieve the same goal.

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The new law allowing more members of the same family to be directors of the
privately owned banks and extension of their tenure are apprehended to further
deteriorate the governance in private banks. Despite the central bank’s attempt
to improve performance of the banking sector, improvements are not visible yet.
The independence of the central has been gradually diminishing due to political
influence. If reform measures are not taken, the crisis of the banking sector will have
serious implications for the economy.

• Foreign remittance

In FY 2017-18 remittance earning growth experienced a growth of 14.86 percent

with the increase of manpower export. The uptrend in fuel oil prices globally also
contributed to raise the inflow of remittance, particularly from the Middle-Eastern
countries. The Bangladesh Bank as well as the government is working continuously
to expedite remittance inflows from different parts of the world through formal
banking channel. The depreciating mode of Taka against the US Dollar also played
a role for high export and remittances growth to some extent. The exchange rate
of taka depreciated significantly against dollar last year mainly due to a higher
demand for the greenback for settling import bills. The country’s stable outlook
would continue with this upward trend in inward remittances in 2019.

• Inflation

Inflation came down to 5.35 percent in December 2018, from 5.37 percent a month
ago, riding on a decline in food as well as non-food prices, according to Bangladesh
Bureau of Statistics. In 2018, food inflation decreased and for the last two months,
non-food inflation also decreased, the overall inflation fell. The lower price of rice
mainly influencing the decline of food inflation. In addition oil price in the global
market, stable exchange rate over the year result in lower inflation in December
2018. The government has set the inflation target at 5.6 percent for fiscal 2018-19.

• Changes in credit quality of borrowers

Nonperforming loans in the banking sector are on the rise this year on the back of
increasing tendency of habitual defaulters to file writ petitions, which stall the loan
recovery process. The share of NPLs in the total outstanding loans came down to
10.30 per cent as of December 31 in 2018 from 11.45 per cent three months back.
It was 9.31 per cent on December 31, 2017. Some willful defaulters continue to file
writ petitions with the High Court to show their loans as unclassified. The habitual
defaulters take fresh loans from banks soon after filing the writs as these give
them a clean slate. The Credit Information Bureau reports they present then are
flawless. “But they do not pay back the loans”. Banks are yet to take the requisite
tough administrative and legal actions against those habitual defaulters. Stronger
recovery drives by the commercial banks and rescheduling of loans before the last
parliament election pushed down the volume of default loans in the final quarter
(Q4) of 2018. Credit flow to the private sector needs to be monitored properly to
ensure that disbursed loans are being used properly and there is no fund diversion
at the borrowers’ end.

• Implementation of Basel-III in Bangladesh

In 2018, the banking sector exposed further weaknesses through major indicators
such as rise of nonperforming loans, lower capital adequacy and the overall lack
of governance in the sector. Though the period of BASEL III implementation is
approaching in 2019, most banks are not prepared. The government has been
recapitalizing the state-owned banks for their loss every year without any fruition.
This has been an unfortunate example of using public money towards compensating
for the greed of bank defaulters.

• Volatility in equity market

Overall, 2018 was not good for the market. The market was depressed due to
this year being election year and unrest in the banking sector. Investors went

160 PRIME BANK

 through a volatile financial sector amid financial scams, non-performing loans,
and poor management that dampened investor moods. In 2018, financial sector
was adversely affected by rising interest rate and growing NPL problems which
dominated its stock market performance. Financial composite which includes Bank,
NBFI, and Insurance declined by 18.60% against overall market decline of 13.80%.
On the other hand, outperforming the market in 2018. However, 2018 witnessed a
number of developments in the form of partnerships and regulations. The strategic
partnership between DSE and a Chinese consortium of Shanghai and Shenzhen
Stock exchanges is expected to contribute in capital market improvement.
Provided that interest rates remain under control and liquidity conditions improve,
the market is expected to perform better. Stable political environment will attract
foreign investment and improvement of exports and remittance can help ease
pressure on currency.

• Liquidity Crisis:

Senior bankers and experts suggest Bangladesh’s banks be cautious in liquidity

management from the start of 2018 as well as 2019 as a majority of them have been
facing a shortage of available liquid funds at the extreme end of this year. Over the
year Bangladesh Bank has taken different initiatives such as to reduce the AD ratio,
CRR and SLR requirement to cope up with the liquidity crisis. An increasing trend
in private sector credit growth, large import payments and declining depositors’
confidence on the banking sector may erode banks’ liquidity base. The banks may
also face a shortage of foreign currency funds because of the need to make a huge
amount of import payments. The latest volatile situation in the banking sector might
also put an adverse impact on depositors’ confidence which will add extra pressure
on banks’ efforts to collect the fund from common people. The rate of interest
on deposit has increased sharply which indicated that the banks are now facing
a shortage of available funds. Higher interest rate on savings tools continues to
encourage the common people to keep their money on the instruments avoiding
the bank. Such phenomenon has emerged as a challenge for the banks.

• Digital security

Cyber heist in baking sector in different countries in recent time has jolted the board
and bank management out of the stupor. SWIFT, the global messaging system used
to move trillions of dollars each day, warned banks that the threat of digital heists is
on the rise as hackers use increasingly sophisticated tools and techniques to launch
new attacks. To prevent cyber heist Banks need to become very much alert and to
make investments in strengthening their own IT infrastructure along with security
measures.

• The risk of litigation

In the ordinary course of business, legal actions, claims by and against the bank
may arise. The outcome of such litigation may affect the financial performance of
the Bank.

• Success of strategies

PBL is proceeding with its strategic plan and its successful implementation is very
important for its financial performance. Major deviation due to external and internal
factors will affect the performance of the Bank.
iv) Policies Operational risk can broadly be defined as the risk of direct or indirect losses
and processes or damaged reputation due to failure attributable to technology, employees,
for mitigating processes, procedures or physical arrangements, including external events and
operational risk. legal risks. In other words, operational risk can be defined as any risk which is not
credit risk, market risk, liquidity risk, strategic risk nor compliance risk. The Bank’s
operational risk management focuses on proactive measures in order to ensure the
accuracy of information used internally and reported externally, a competent and
well-informed staff, and its adherence to established rules and procedures as well as
on security arrangements to protect the physical and ICT infrastructure of the Bank.

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The Operational Risk Management Function is responsible for monitoring,

coordinating measures, reporting on operational risks and developing the
framework models and methodologies as required.

The Bank identifies and assesses the operational risk inherent in all its material
products, activities, processes and systems. Furthermore the Bank ensures that
before new products, activities, processes and systems are introduced or undertaken,
the operational risk inherent in them is subject to adequate assessment procedures.
The Bank mitigates operational risks by defining, documenting and updating the
relevant business processes. Furthermore, the Bank mitigates operational risk
by following strict rules for the assignment of duties and responsibilities among
and within the functions and a system of internal control and supervision. The
main principle for organizing work flows is to segregate the business-generating
functions from the recording and monitoring functions. An important factor in
operational risk mitigation is also the continuous development and upgrading of
strategic information and communication systems.

Risk Management Division (RMD) of the bank is primarily responsible to drive and look
after the overall risk management function including operational risk management.
RMD under the leadership of Chief Risk Officer (CRO) is entrusted to ensure:

• Drive and populate the culture of pro-active risk identification and mitigation;
• Lead Bank wide integrated risk management approach;
• Validate and improve the reliability and effectiveness of business operation and
the operations of the risk management framework;
• Identify the Bank’s operational deficiencies;
• Increase accuracy and visibility of risk information;
• Designing of organizational structure by clearly defining roles and responsibilities
of individuals to support the identification, assessment, control and reporting of
key risk indicators;
• Ensure compliance with the core risks management guidelines at the
department level, and at the desk level;
• RMD will work under Bank’s organizational structure and suggest to the
management to take appropriate measures to overcome any existing and
potential financial crisis;
• Initiation to measure different market conditions, vulnerability in investing in
different sectors;
• RMD will also work for substantiality of capital to absorb the associated risk in
banking operation.

Activities undertaken by “Risk Management Division” since inception and

recent approaches

• Risk Management Division (RMD) is the propagator of effective risk management

across the bank;
• Aligned the division’s structure and committees in line with the Central Bank
directives/circulars;
• Ensured all the regulatory reporting are prepared and submitted on time;
• Reviewed Product Program Guidelines (PPG) and suggested a standard template
to bring discipline and uniformity in managing asset and liability products.
• Driving the initiatives of business continuity management across the Bank;
• Ensured that development or review of internal processes/policies/guidelines/
Manuals are vetted by RMD;
• RMD played a vital role in determining strategies in consistency with risk management
policy, which can measure, monitor, and maintain acceptable risk level of the Bank;
• Prudently oversaw Capital Management, Internal Capital Adequacy Assessment
Process (ICAAP), Credit Risk, Market Risk (Foreign Exchange Risk, Interest Rate Risk,
and Equity Risk), Liquidity Risk, Operational Risk (Internal Control & Compliance
Risk, Reputation Risk, and Money Laundering Risk) as guided by the Central Bank;

162 PRIME BANK

 v) Approach • RMD analyzed the overall portfolio of the Bank through Risk Management Paper,
for calculating Stress Testing and ICAAP, also effectively engaged in preparation of efficient
capital charge for Management Information System (MIS) report for the higher management and
operational risk. for the Risk Management Committee of the Board.

• Risk Management Division has recently formed a Risk Management Forum

(RMF), a common platform among the all divisions for driving the culture of
pro-active risk identification and escalation of risk across the bank. The member
of Risk Management Forum meets regularly in monthly meeting to analyze
identified/potential risks and suggest mitigation followed by monitoring.

Risk Management Division (RMD) has developed an online module named ‘Risk
Platform’ for escalation and reporting of identified & anticipated risk events of
the Bank proactively to the management as part of integrated risk management
approach.

Stress Testing in PBL:

Stress testing framework as provided by Bangladesh Bank assesses the impact on

CRAR (Capital to Risk Weighted Asset Ratio) due to minor, moderate and major level
of shock in terms of credit risk, exchange rate risk, liquidity risk, equity price risk and
interest rate risk. Stress testing for credit risk assesses the impact of increase in the
level of Non-Performing Loans (NPLs) of the banks for the following scenario -

• Performing loan directly downgraded to B/L- Sector wise Concentration 1

• Performing loan directly downgraded to B/L- Sector wise Concentration 2

• Increase in NPLs due to default of top large loan borrowers

• Negative shift in NPLs categories

• Decrease in the Forced Sale Value (FSV) of the collateral

The stress testing based on the financial performance of the Bank as on December
31, 2018 has also been completed which shows that the Bank has adequate capital
to absorb minor level of shocks for combined shock. However, for absorbing
moderate and major levels of shock which is very unlikely in the industry, the Bank
may require additional capital.

Quantitative Solo Basis Consolidated

Particulars
disclosure Taka in Crore
b) The capital requirement for operational risk 251.40 257.90

9. Liquidity Ratio:
Qualitative (a) - Views of BOD on system to reduce Liquidity Risk
Disclosure - Methods used to measure Liquidity Risk
- Liquidity risk management system
- Policies and processes for mitigating Liquidity Risk.
Bank is maintaining the ratios mentioned in the Bangladesh Bank guideline considering all the relevant
factors, policies and procedures to mitigate Liquidity Risk. A brief discussion on the emergence of those
ratios and their interpretation is stated in the following part:
In the aftermath of the financial crisis of 2008-09, the Basel Committee of Banking Supervision (BCBS)
emphasized on a program of sustainability revising its existing guidelines with a goal to promote a more
resilient banking sector through further restructuring of the existing approach by strengthening global
capital and liquidity rules within the global regulatory framework.

BCBS proposed two liquidity ratios in December 2009 i.e. 1. Liquidity Coverage Ratio (LCR) and 2. Net
Stable Funding Ratio (NSFR). Following that Bangladesh Bank vide its BRPD Circular No-07 dated March
31, 2014, declared the road map for implementing the Revised Regulatory Capital Framework for banks
in line with Basel III in Bangladesh starting from the year 2015. According to the revised road map issued
vide BRPD Circular No. 18/2014, from January 2015 and onwards Banks have to maintain a standard LCR
and NSFR, the minimum standard of which is defined by Bangladesh Bank.

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ANNUAL REPORT 2018

Prior to LCR and NSFR, Cash Reserve Ratio (CRR), Statutory Liquidity Reserve (SLR), and Advance Deposit
Ratio (ADR) were grossly used as benchmark parameter of measuring a bank’s liquidity in most of the
countries. But in the wake of financial crisis due to the limitations, as well as ineffectiveness of those ratios,
the BCBS suggested more reforms in the liquidity measures like LCR and NSFR which are more relevant
with the structure and mix of Bank’s balance sheet as well as funding.

For the LCR, the stock of high quality liquid assets is compared with expected cash flows over a 30 day
stress scenario. The expected cash outflows are to be covered by sufficient liquid, high quality assets. It
aims to ensure that a bank maintains an adequate level of unencumbered, high-quality liquid assets that
can be converted into cash to meet its liquidity needs for 30 calendar days. The minimum standard set
by BB is that LCR shall be greater than or equal to 100.

On the other hand, the NSFR compares available funding sources with funding needs resulting from
the assets on the Balance Sheet. Like the LCR, the NSFR calculations assume a stressed environment. It
aims to limit over-reliance on short-term wholesale funding (mostly interbank) during times of abundant
market liquidity, increase stability of the funding mix, encourage better assessment of liquidity risk across
all on- and off-balance sheet items, and promotes funding stability. The minimum standard set by BB is
that NSFR shall be greater than 100.
Quantitative (b) - Liquidity Coverage Ratio : 101.41%%
Disclosures - Net Stable Funding Ratio (NSFR): 127.94%
- Stock of High quality liquid assets: BDT 4,236.46 crore
- Total net cash outflows over the next 30 calendar days: BDT 4,177.42 crore
- Available amount of stable funding: BDT 23,377.54 crore
- Required amount of stable funding: BDT 18,272.51 crore
(The above ratios and balance are stated as per position of December 31, 2018)

10. Leverage Ratio

Qualitative (a) Views of BOD on system to reduce excessive leverage policies and processes for managing
Disclosures excessive on and off-balance sheet leverage:

In order to avoid building-up excessive on- and off-balance sheet leverage in the banking system, a
simple, transparent, non-risk based leverage ratio has been introduced. The leverage ratio is calibrated
to act as a credible supplementary measure to the risk based capital requirements. The leverage ratio is
intended to achieve the following objectives:

a. constrain the build-up of leverage in the banking sector which can damage the broader financial
system and the economy

b. reinforce the risk based requirements with an easy to understand and a non-risk based measure

Prime Bank calculates leverage ratio on quarterly basis and submits it to the Department of Off-site
Supervision (DOS), Bangladesh Bank along with CRAR report.

Approach for calculating exposure:

A minimum Tier-1 leverage ratio of 3% has been prescribed by Bangladesh Bank to maintain by the Banks
both at solo and consolidated level. Accordingly, Prime Bank maintains leverage ratio on quarterly basis.
The formula for calculating leverage ratio is as under:

Leverage Ratio = Tier-1 Capital (after related deductions)/ Total Exposure (after related deductions)
Quantitative (b) Solo Consolidated
Disclosures Sl. Particulars In crore Taka
A. Tier-1 Capital 2,433.48 2,437.57
B. On balance sheet exposure 28,933.34 29,044.40
C. Off-balance sheet exposure 8,449.07 8,449.07
D. Total deduction from on and off-balance sheet exposure 31.23 33.92
E. Total exposure (B+C-D) 37,351.18 37,459.55
F. Leverage Ratio (A/E)*100 6.52% 6.51%

164 PRIME BANK

11. REMUNERATION:

11.1 Qualitative Disclosure:

Qualitative (a) Information relating to the bodies that Prime Bank has a flexible compensation and benefits
Disclosure oversee remuneration. Disclosures should system that helps to ensure pay equity, is linked with
include: performance that is understood by employees, and keeps
in touch with employee desires and what’s coveted in the
Name, composition and mandate of the
market, while maintaining a balance with the business
main body overseeing remuneration.
affordability. The compensation and benefits are reviewed
External consultants whose advice has through market and peer group comparison. The
been sought, the body by which they were balanced total rewards help the Bank to attract, motivate
commissioned, and in what areas of the and retain talent that produces desired business results.
remuneration process.
Remuneration Committee is generally understood to be
A description of the scope of the bank’s derived from among the Board. The Board of Directors of
remuneration policy (e.g. by regions, the Bank approves the remuneration policy in accordance
business lines), including the extent to which with the Remuneration and Increment & Promotion Policy
it is applicable to foreign subsidiaries and recommended by the Senior Management. The policy
branches. approved by the Board of Directors is implemented by the
A description of the types of employees Management with the support and/or under the supervision
considered as material risk takers and as of Human Resources Division. The officials are evaluated by
senior managers, including the number of a Committee which is formed comprising of all DMDs and
employees in each group. Head of HR. The Committee is responsible for Performance
Appraisal Rating, Promotion and implementation of the Pay
Progression Strategy of the Bank.

Though the Bank has no permanent external consultant for

managing remuneration, but expert opinion may have been
sought by the Management, in case to case basis, regarding
Gratuity related provisioning accounting and settlement of
end service benefits of the separated employees.
(b) Information relating to the design and Policy Objective:
structure of remuneration processes.
Prime Bank Limited aims to create a future-oriented, strategic
Disclosures should include:
compensation plan in order to attract and retain its talent
An overview of the key features and through using a modern compensation strategy called
objectives of remuneration policy. “Broadbanding Pay Structure”. This policy applies to all the Full
Time and Permanent Employees of Prime Bank Limited. The
Whether the remuneration committee
Remuneration Policy is designed to establish broad pay-ranges
reviewed the firm’s remuneration policy
based on performance, skills or competencies and avoid
during the past year, and if so, an overview of
multiple pay structures. The policy is also empowering managers
any changes that was made.
& encourage the professionals for career development
A discussion of how the bank ensures that risk
and compliance employees are remunerated Broadbanding Pay Structure:
independently of the businesses they
The Management introduced Broadbanding Pay Structure
oversee.
which aims to ensure a performance driven work culture
through a strategic compensation plan synced with the
performance of individual employee. It places an increased
emphasis on encouraging employees to develop new skills
and paying for the skills according to their contribution
and equity. In a nutshell, broadbanding is a more flexible
pay system for both the employees and for the employers
where career progression takes a different route.

Salary Structure:

Salary component is as under:

Part–I:
(i) Basic; (ii) House Rent; (iii) Medical Allowance;
Part–II:
(i) Conveyance; (ii) Leave Fare Assistance

PRIME BANK 165

ANNUAL REPORT 2018

Annual Performance Bonus:

As a part of employee motivation through monetary

incentive, a bonus policy formulated. The Bank has been
paying the bonus to the employees every year on the
basis of their performance. The objective of bonus policy
is to promote the performance of individual employee as
well as team.
(c) Description of the ways in which current Bank takes into account the following key risks when
and future risks are taken into account in the managing and determining remuneration arrangements:
remuneration processes. Disclosures should
(a) Financial Risks;
include:
(b) Operational Risks; and
An overview of the key risks that the bank
takes into account when implementing (c) Compliance Risks.
remuneration measures. While evaluating the performance of each employee
An overview of the nature and type of the annually, all the financial and non-financial indicators
key measures used to take account of these as per pre-determined set criteria are considered and
risks, including risks difficult to measure accordingly the result of the performance varies from one
(values need not be disclosed). to another and thus affects the remuneration as well.

A discussion of the ways in which these

measures affect remuneration.

A discussion of how the nature and type of

these measures has changed over the past
year and reasons for the change, as well as
the impact of changes on remuneration.
(d) Description of the ways in which the Prime Bank Ltd. uses modern standardized strategies for
bank seeks to link performance during a determining pay progression within the newly proposed
performance measurement period with Bands to adjust pay rates of individual employees over
levels of remuneration. Disclosures should time. It is determined on the following basis:
include:
Inflation Support based: It includes process for
An overview of main performance metrics for adjusting basic pay increase across the Organization &
bank, top-level business lines and individuals. all employees receive the same amount of percentage
increase to maintain & balance lifestyle expenditures;
A discussion of how amounts of individual
what is commonly referred to as inflation support.
remuneration are linked to bank-wide and
individual performance. Performance based: It includes process for Performance
Planning & Management, Performance Assessment,
A discussion of the measures the bank will
Incentives and Recognition to determine the amount
in general implement to adjust remuneration
of pay increases. It differentiates performers from non-
in the event that performance metrics are
performers and also creates positive effects on employee
weak.
motivation.
(e) Description of the ways in which the bank To maintain the market competitiveness, the
seek to adjust remuneration to take account compensation and benefits of Prime Bank are regularly
of longer-term performance. Disclosures reviewed through market and peer group study. The well-
should include: crafted total rewards help the Bank to attract, motivate
and retain talent. All employees are paid competitive
A discussion of the bank’s policy on deferral
remuneration package. The remuneration policy of the
and vesting of variable remuneration and, if
Bank does not allow any discrimination between male
the fraction of variable remuneration that is
and female employees. Prime Bank has variety of market-
deferred differs across employees or groups
competitive Benefits schemes designed to motivate
of employees, a description of the factors
the employees. The various cash and non-cash benefits
that determine the fraction and their relative
include:
importance.
• Company provided car for top level Executive
A discussion of the bank’s policy and criteria
employees
for adjusting deferred remuneration before
vesting and (if permitted by national law) after • Car allowance for all Executive level employees
vesting through clawback arrangements.
• Leave fair assistance allowance

• Medical treatment allowance

166 PRIME BANK

 • Maternity benefits

• Car loan facility

• House loan facility

• Staff loan at reduced interest rate

• House furnishing allowance

• Mobile phone allowance

• Travel allowance

• Technical allowance

• Festival bonus

• Allowance for employees’ meritorious students

• Annual leave

• Maternity leave

• Study leave etc.

• The Bank also provides long-term as well as retirement

benefits to employees:

• Leave encashment

• Provident fund

• Gratuity benefit

• Retirement benefit

• Partial and full disability benefit

• Death benefit to family members etc.

(f) Description of the different forms of variable The Bank pays variable remuneration on cash basis (i.e.
remuneration that the bank utilizes and the direct credit to the employee Bank account and/or Pay
rationale for using these different forms. Order/ Cheque), as the case may be, as per Employees’
Disclosures should include: Service Rule/ practice.

An overview of the forms of variable Bank provides annual increments based on performance
remuneration offered (i.e. cash, shares and to the employees with the view of medium to long term
share-linked instruments and other forms. strategy and adherence to Prime Bank’s values.

A discussion of the use of the different forms

of variable remuneration and, if the mix of
different forms of variable remuneration
differs across employees or groups of
employees), a description of the factors
that determine the mix and their relative
importance.

11.2 Quantitative Disclosure:

Quantitative (g) Number of meetings held by the main There were 06 (six) meetings of the Committee, which is
Disclosure body overseeing remuneration during the responsible for Performance Appraisal Rating, Promotion
[Link] year and remuneration and implementation of the Pay Progression Strategy of
paid to its member. the Bank, held during the year 2018. All the members of
the Committee are from the core banking area/operation
of the Bank. No additional remuneration was paid to the
members of the Committee for attending the meeting
except their regular remuneration.
(h) Number of employees having received a • Performance Bonus/incentives: BDT 98.39 Million
variable remuneration award during the
• Number of total festival bonus: 03
financial year.
• Total amount of festival bonus: BDT 575.96 Million
Number and total amount of guaranteed
bonuses awarded during the financial year. • Number of severance payments: 298

PRIME BANK 167

ANNUAL REPORT 2018

Number and total amount of sign-on awards • Total amount of severance payments: BDT 805.06
made during the financial year. Million

Number and total amount of severance • (including provident fund, gratuity fund, retirement
payments made during the financial year. benefit and leave encashment)
(i) Total amount of outstanding deferred No deferred remuneration was paid out in the financial
remuneration, split into cash, shares and year 2018.
share-linked instruments and other forms.

Total amount of deferred remuneration paid

out in the financial year.
(j) Breakdown of amount of remuneration Part–I: BDT 2,824.62 & Million
awards for the financial year to show:
Part–II: BDT 445.48 Million
- fixed and variable.

- deferred and non-deferred.

- different forms used (cash, shares and share

linked instruments, other forms).
(k) Quantitative information about employees’ No amount is outstanding of deferred remuneration and
exposure to implicit (e.g. fluctuations in retained remuneration exposed to ex post explicit and/or
the value of shares or performance units) implicit adjustments.
and explicit adjustments (e.g. clawbacks or
There were no reductions during the financial year 2018
similar reversals or downward revaluations
due to ex post explicit adjustments.
of awards) of deferred remuneration and
retained remuneration: There were no reductions during the financial year 2018
due to ex post implicit adjustments.
Total amount of outstanding deferred
remuneration and retained remuneration
exposed to ex post explicit and/or implicit
adjustments.

Total amount of reductions during the

financial year due to ex post explicit
adjustments.

Total amount of reductions during the

financial year due to ex post implicit
adjustments.

168 PRIME BANK

SUSTAINABILITY ANALYSIS

Sustainability Report

Social Responsibility Initiatives

Report on Prime Bank Foundation

Green Banking Report

Corporate Culture

Capital Plan

Environmental & Social Initiatives

ANNUAL REPORT 2018

SUSTAINABILITY REPORT
“Act Responsible, Think Sustainable” GRI 102 - General Disclosures: The report contextual
information about an origination.
Sustainability report conveys disclosures of an organization’s
most critical impacts – be they positive or negative – on the GRI 103 - Management Approach: To report the management
environment, society and the economy. As part of our constant approach for each material topic.
commitment to disclose the impacts on the economy, the (B) Topic-specific Standards: There are various topic-specific
environment, and /or society to stakeholders against the Standards, organized in three series:
activities of Prime Bank Limited, the bank has been publishing
• Economic topics (200 Series)
Sustainability Report since 2013.
• Environmental topics (300 series)
Prime Bank successfully completed the  GRI Materiality
Disclosures Service  for the earlier Sustainability Reports • Social topics (400 series)
and those Report had already been achieved “materiality
Prime Bank is strategically moving towards a sustainable future
disclosure” icon from GRI, the Netherlands for quality report &
and playing a role of private sector partner of the Bangladesh
for maintaining the all guidelines as well under GRI G4. The ‘GRI
Government who has already adopted ‘whole of society’
Materiality Disclosures Service’ organizational mark is the formal
approach to ensure attainment of ‘Sustainable Development
confirmation that  the report has undergone and successfully
Goals (SDGs)’. Innovation and Sustainability – which are closely
completed the ‘GRI Materiality Disclosures Service’ and in line
related – are key pillars of Prime Bank’s strategy. The Bank
with the international standard one under latest guidelines of
started its journey in the year 1995 with the firm commitment
GRI G4 or GRI standard 2016. The Sustainability Reports of the
of excellence in customer service with a difference and with
bank had uploaded in GRI website (based on headquarter at
a mission to be an efficient, market driven, customer focused
Netherlands).
institution with good corporate governance structure through
In 2018 Prime Bank has been awarded as  “GOLD” Rank in  Asia designing and adopting policies to embed sustainability into
Sustainability Reporting (ASR) Rating for Sustainability Report-2017 its operations, undertaking awareness and capacity building
by the National Center for Sustainability Reporting (NCSR), activities, supporting & financing environment friendly business
Indonesia, which indicates that Prime Bank is striving for excellence initiatives, covering social dimension of sustainability concerns
to create Social, Environmental and Economic Benefits. and ensuring transparency in financial as well as sustainability
reporting.
In order to prepare Sustainability Report uniformly, GRI has
announced new Guidelines named “GRI Standards” in 2016. By using the Global Reporting Initiative (GRI) standards,
Under this guideline, all organizations / companies have to reporting organizations can generate reliable, relevant and
prepare Sustainability Report under new standards from July standardized information with which to assess opportunities
2018.  Mentionable that previous GRI G4 Guidelines have been and risks, and enable more informed decision-making –
transitioned to GRI Standards for preparing Sustainability both within the business and among its stakeholders. By
Report  which was  released by the Global Sustainability developing and communicating their understanding about the
Standards Board (GSSB), GRI. As per new guidelines, connections between sustainability and business, companies
the companies to be more transparent about the impacts their can enhance their value, measure and manage change, and
activities and assets have on the environment, economy and drive improvement and innovation.
society.  The Supplement for Financial Sectors has also been
Prime Bank Limited believes in eco-friendly socially responsible
developed according to a multi-stakeholder process and have
banking system which drives the whole nation towards a
included some new criteria’s and indexes to prepare report for
healthy environment and presents an excellent and hazardless
the banking sector.
banking. In order to protect the environment, Bank is spreading
As Prime Bank is striving for excellence to create Social, its wings by introducing both in-house & external green
Environmental and Economic Benefits, the Bank has taken activities towards supporting Green Economy. Sustainability
initiative to prepare Sustainability Report uniformly by strategy of Prime Bank Limited entails adopting environmentally
following the new Guidelines named “GRI Standards” in 2016 responsible operations, monitoring our consumption of internal
to communicate to it’s stakeholders about it’s impacts on the environmental resources and embracing efficiency as a way
economy, the environment, and /or society. to reduce the environmental footprint of our operations. Our
direct environmental impacts are limited to paper, energy, water
GRI Sustainability Reporting Standards (GRI Standards) are
consumption, and the greenhouse gases (GHG) emissions
used by organizations around the world to communicate
they produce. Bank’s Green banking activities are day-by-day
to stakeholders about their impacts on the economy, the
flourishing towards creating a “Greener” future for the welfare
environment, and /or society. The use of the GRI Standards
of the society. For a sustainable economy Prime Bank Limited
helps organizations to disclose this information in a consistent
plays crucial role in financing environment friendly projects led
and comparable way. It also helps to promote greater
by green banking which believes in social responsibility. We
transparency and accountability of organizations.
currently have no premises located or planned in areas of high
Overview of the set of GRI Standards: biodiversity value.
A. Universal Standards: The Universal Standards apply to all The emerging idea of integrating strategic sustainability-
organizations preparing a report in accordance with the related information with other material financial information is a
GRI Standards: significant and positive development. Sustainability is, and will
GRI 101 - Foundation: Starting point for using the GRI increasingly be, central to the change that companies, markets
Standards. and society will be navigating. Sustainability information that

170 PRIME BANK

is relevant or material to a company’s value prospects should these objectives throughout the organization. They must
therefore be at the core of integrated reports. also choose a strategy that is consistent with the mission,
culture, and aligned with geography, customer, product,
Corporations have become more sensitive to social issues and
community, and other stakeholder requirements. Strategy and
stakeholder concerns are striving to become better corporate
leadership are minimum enablers to successful sustainability
citizens. Whether the motivation is a concern for society
implementation. Just as the formulation of sustainability
and the environment, government regulation, stakeholder
strategy is critical, so is the execution. Management must
pressures, or economic profit, the result is that managers must
also make choices about how to implement the sustainability
make significant changes to more effectively manage their
strategy and integrate economic, social, and environmental
social, economic, and environmental impacts. Companies hunt
impacts into their organizations. These impacts are sometimes
for ways to improve their performance, determining the best
managed using “soft” leadership elements and culture along
ways to thoroughly integrate these improvements into all parts
with a variety of informal systems. In their recruitment and
of the organization still facing challenges. These challenges are
developing practices, companies may seek to create in their
because implementing sustainability is fundamentally different
employees a passion and commitment to sustainability. They in
than implementing other strategies in the organization. For
effect create a culture to support sustainability decisions. This
operating goals, the direct link to profit is usually clear. For
culture is firmly embedded in the beliefs, values, and mission
innovation, the goals are long-term and often difficult to predict
and vision statements of companies that serve to inspire and
and measure, the intermediate goal is new products and the
motivate employees to take sustainability obligations seriously.
ultimate goal is increased profit. However, for sustainability, the
goal is to simultaneously achieve excellence in both social and Prime Bank has developed “Environmental & Social (E&S)
environmental and financial performance. Risk Management Policy Statement” and “Environmental &
Social Risk Management Procedure Manual” in line with the
It is difficult to implement the proper systems to pursue
Bangladesh Bank Guidelines. These documents comprise of
sustainability and to evaluate the impacts of sustainability on
prime bank’s commitment towards being Environmentally
financial performance and the trade-offs that ultimately must
& Socially (E&S) compliant, include the social risk factors,
be made. Often, it is unclear how trade-offs between financial
excluded activities, discouraged sectors, define environmental
and environmental or social performance should be made.
and social requirements for lending, E&S risk management
There is considerable uncertainty about how shareholders
procedures, tools, roles & responsibilities etc. These two policy
will respond to these trade-offs. Moreover, the trade-offs
and procedural documents played a vital role in strengthening
keep changing—at certain times, shareholders may want the
ESMS in Prime Bank Limited.
company to place substantial weight on social performance
and the environment, whereas at other times they may want the Prime Bank has an independent ‘Sustainable Finance Unit’
company to place more weight on short-term profits. The costs which is being headed by the Head of Credit Risk Management
of implementing sustainability are also constantly changing. (CRM) Division. Five fulltime officials have been deployed in this
For example, potential technology improvements may make it unit to plan, execute and monitor Bank’s sustainable banking
far cheaper to implement pollution reduction later rather than and sustainable financing activities. The main activities of
earlier. Even when sustainability is thought to provide financial this Unit includes formulation, amendment & up-gradation
benefits, the benefits can, at best, only be measured over long of policies related to green banking, Corporate Social
time horizons, which make it difficult to measure the impact Responsibility, environmental and social risk management,
of social and environmental performance and to quantify the green office guide, green strategic plan etc. They monitor
resulting benefits. The constant uncertainty about how far to all the process and procedures related to carbon footprint
move toward sustainability, the constantly changing emphasis measurement, green marketing, and management of climate
on and costs of implementing sustainability, and the long time risk fund. They will also ensure implementation of directives
horizons therefore make it difficult to implement sustainability related to sustainable development goals (SDGs) provided
in the same way that other strategic initiatives are implemented. by the Bangladesh Government and Bangladesh Bank from
time to time. They assist concerned business division and
The standard implementation approaches often fail. In order to
international division of the Bank in signing participation
improve the integration of social and environmental impacts
agreement and applying all on-lending / on-blending (re-
into day-to-day management decisions, companies must
finance/pre-finance/re-imbursement) scheme/fund/facility/
tie the measurement and reporting of these impacts into
project under ‘Sustainable Finance Department’ of Bangladesh
decision making processes. Further, these impacts must be
Bank. They liaise in designing financial instruments and
measured and reported in financial terms and then integrated
products under green finance and sustainable finance with
into the traditional investment models. So how can companies
concerned business division and Bangladesh Bank and seek
integrate sustainability into day-to-day decision-making?
approval from Bangladesh Bank in this regard. We have a
Through the combination of a clear and well-articulated and
‘Sustainable Finance Committee’ to set annual objective of
communicated sustainability strategy, senior management
Sustainable Finance Unit and to evaluate its performance.
commitment to a broader set of objectives than profit alone,
This committee ensures appropriate coordination and support
and utilizing appropriate structures and systems to drive
among all the relevant divisions of the Bank to accomplish the
sustainability through the organization.
activities of Sustainable Finance Unit. All these activities of the
The importance of vision and communicated core values are well Bank are reported separately by another committee named
accepted. But these commitments to social and environmental ‘Sustainability Reporting Committee’ through Sustainability
concerns must be consistently communicated both in words Report following GRI standards and receive GRI ‘Materiality
and actions. Companies must exercise leadership to decide Disclosure Certification’ every year which ensure transparency
how much integration of social and environmental concerns of our sustainable initiatives to a larger extent to the internal
they want and how they want to do it, align the organization, and external stakeholders.
articulate the trade-offs to managers, and continually reinforce

PRIME BANK 171

ANNUAL REPORT 2018

SOCIAL RESPONSIBILITY INITIATIVES

The modern concept of Corporate Social Responsibility (CSR) around twenty percent of total CSR expenditure allocation in
is evolving gradually despite several obstacles. Driving forces this area would be appropriate.
behind this evolution is pressure from various stakeholders
a) Support assistances in this area would include direct
(Importers, Environmentalists, etc.) while slow progress is
grants towards costs of curative treatment of individual
attributed to lack of Good Governance, consumer forums and
patient, towards costs of running hospitals and diagnostic
above all lack of understanding by business houses that CSR is
centers engaged substantially in treatment of patients from
not charity but is rather an instrumental investment to achieve
underprivileged population segments, and
sustainable growth. Corporate Social Responsibility (CSR)
is gaining fast global acceptance as a standard to assume b) towards costs of preventive public health and hygiene
environmentally sustainable and socially equitable business initiatives like provision of safe drinking water, hygienic toilet
practices. The role of business world-wide and specifically in facilities for poor households and for floating population in
the developed economies has evolved from classical ‘profit urban areas, and so forth.
maximizing’ approach to a ‘social responsibly’ approach, where iii) The remainder of direct budgetary CSR expenditure
businesses are not only responsible to its stockholders but allocations should be used in such other areas as:
also to all of its stakeholders in a broader inclusive sense. With
a) emergency disaster relief, promoting adoption of
increased globalization, local businesses are being integrated
environmentally sustainable output practices and
with the global economy than ever hence pressure is mounting
on local businesses to converge on international standards b) lifestyles, promoting artistic, cultural, sports and recreational
of socially responsible business. As a member of the global facilities for the underprivileged, upgrading facilities and
economy, Bangladesh is also aware of the need to take positive lifesavings equipment’s in emergency rescue services like the
initiative to establish an image of environmentally and socially fire brigades etc.,
responsible businesses. CSR as a concept is being gradually c) infrastructure improvement for disadvantaged communities
interwoven into the psyche of local business, however, the in remote far flung areas and so forth.
process is slow and only in its infancy.
The above outlined indicative allocation guidelines are for direct
The banking sector of Bangladesh has been actively budgetary CSR expenditures only. Indirect costs associated
participating in various social activities. However, these with promotion of inclusive financing for productive SME
efforts were hardly recognized and labeled as CSR activities initiatives in agriculture, manufacturing and services, and for
since most of the banks have not integrated CSR in their environmentally beneficial ‘green’ projects are partly mitigated
routine operation; rather these were in the form of occasional by such policy supports as concessional refinance lines, with
charity or promotional activities. Bangladesh Bank (BB) has the remainder to be viewed as investment costs of expanding
taken initiatives in respect of formalizing CSR in the banking into newer client bases.
sector of Bangladesh and issued a directive to the banks
Over the past 11 years, Prime Bank Foundation (PBF) has
and, financial institutions on June 01, 2008 in this regard. It
played a pivotal role in the field of national development in
defined the strategic objective for CSR engagement, provided
the education and health sector. PBF is a staunch believer
some priority areas with a suggestion to foster CSR in their
of empowerment rather than aid and this belief is reflected
client businesses, and suggested a first time CSR program
clearly in the long term projects that PBF has undertaken over
indicating some likely action plans.  BB’s DOS Circular No 01
the years. Sustainable growth, rather than charity has been
of June 2008 and the subsequent circulars on the subject
the core objective of all of PBF’s projects. The projects of PBF
comprehensively enumerate the expected ranges and areas of
aim not only to make health and education more accessible
CSR engagements of banks in the communities they operate
to the target population but also to contribute to the national
in. Given the current pattern of relative urgencies of needs
development through its initiatives. A country’s development
in diverse areas, broad adherence to the following allocation
depends largely on the well-being of its population as well
pattern is advisable:
as a strong educational backbone, and that is exactly what
i) Education and job focused vocational training being crucial in PBF strives to accomplish. PBF hopes to expand its sphere of
widening advancement opportunities for the underprivileged influence through its initiatives and provide more opportunities
population segments, around thirty percent of total CSR of better health and education in order to ensure equal
expenditure should be: opportunities for the less privileged people of our society.
(a) for scholarships/stipends for students from low income family Prime Bank Foundation (PBF), being the CSR wing of Prime
in reputed academic and vocational training institutions, and Bank, has a unique business philosophy which believes that
(b) for support towards upgrading of facilities in academic “Sustainability for self and others, private and public interests
and vocational training institutions substantially engaged with are one and the same.” This means that PBF’s business activities
students and trainees from the underprivileged rural and urban must sustain not only for the Foundation’s own benefits, but
population segments. Selection processes for scholarships also for the society and the nation. The idea behind this dogma
and stipends should elicit enough information to preclude represents the essence of our CSR, and has been carried on in
applicants from drawing benefits from multiple banks sources. the Foundation’s Mission Statement, which also includes: “We
aim to constantly stay a step ahead in dealing with change,
ii) Preventive and curative healthcare support assistance for
create new value, and contribute broadly to society and its
underprivileged population segments comes next in priority,
development.”

172 PRIME BANK

PRIME BANK 173
ANNUAL REPORT 2018

Prime Bank
Foundation

An Enlightened
Tomorrow
Prime Bank Foundaion came forward and is Prime Bank English Medium
helping students through Education Support School (PBEMS) started its
Programme (ESP) to gain higher education. journey in 2008. PBEMS
These students are now working in higher initiated with a unique approach
positions of different organizations. If more of teaching methodology which
opportunity is given, these students would be focuses on low cost and values
able to move forward. oriented education.
The year 2018 was a year of
great achievement as PBEMS
obtained the Cambridge
Approval under British Council
and also approval from Primary
Education and Dhaka Board.

Prime Bank Cricket Club (PBCC) was

established in November 2011 by acquiring a
club of Dhaka Premier Division. It has been
able to rise as one of the best cricket clubs of
Bangladesh, with championship title in key
tournaments of domestic cricket within a short
time through high professionalism and
well-organized administration.

A Winning
Team

174 PRIME BANK

 Nursing
is Caring
All the students from Prime College of Nursing,
Dhaka (PCND)’s 1st and 2nd batch are already
employed in different public and private
hospitals and organisation as a Senior Staff
Nurse. Among these 66 students, 15 have joined
as Govt. 2nd class Gazette Officer and posted at
Medical College Hospital / city/ division/ district/
upazilla level service delivery points and rest of
the 41 graduates are employed in different
private hospitals like Apollo, Asgar Ali Hospital,
Square, United, Delta, Pran RFL Group
Hospitals of Bangladesh.

In 2017, Prime Bank Eye Hospital

(PBEH) examined 20,211 patients at
the base hospital. On the other
hand, 16,608 patients were
examined in the fields through its
outreach eye camps. In the
reporting year 1,398 patients were
operated at PBEH which was 992
only in 2016 (surgery growth
40.92%).

The Future
Vision

PRIME BANK 175

ANNUAL REPORT 2018

MESSAGE FROM THE CEO OF PRIME BANK FOUNDATION

The Corporate who take into account the financial and I would like to thank our governing bodies, the Board of
social return in CSR are more likely to not only increase Directors of Prime Bank Limited and Foundation Management
their profitability but enhance their sustainability as well. It Committee for their invaluable guidance and advice. I would
is wise to be sufficient and expect return in order to make a also like to especially thank you, our shareholders, for their
life-time impact for a nation and help the project stand on continued trust and support. And finally, I would like to thank our
its own feet. Self-sufficiency is the quality of feeling secured clients and beneficiaries around the county for their confidence
and contented with an organisation, a deep-rooted sense of in our organisation, people, brands and technologies.
inner completeness and stability. Self-sustainability  and  self-
Before I come to an end, I extend my sincere thanks to you all
sufficiency of an organisation are overlapping states of being in
for taking time to review our activities this year and for sharing
which the organisation needs little or no help from others. It is
with us a sense of optimism for what we make things possible.
our belief that self-sufficiency entails the organisation enough
to fulfil needs, while a self-sustaining entity can maintain self-
sufficiency indefinitely. But there is no definitive guide on how Sincerely yours,
to become self-sufficient. Instead of specific steps, it is more
important that we may have to change the way we look at and
think about our actions and dependency and seek alternatives
in each area. For the Prime Bank Foundation (PBF), this is the
Dr. Iqbal Anwar
year we take a closer look to witness the achievement from our
Chief Executive Officer
initiatives of CSR over the past years.
Prime Bank Foundation
In 2018, we have achieved the point of sustainability of another
income generating projects of PBF. Now we feel pressure to
work harder to earn more and have more for being a self-reliant
project and make all the beneficiaries self-sufficient. We believe
that the principles and examples of achievement will remain
forever, while the social problems and technological changes
will persist.

In the face of such unevenness, some organisations will

assume achievement requires a winner-takes-all approach.
They believe that achievement depends on putting all their
energy into attaining one goal, such as single-minded focus
on priority area or a commitment to being one of the best
contributors in the society. If an organisation develops in the
right way, the ideals of that organisation itself and society can
become powerful and manageable-factors of success. So in
PBF, we believe that the utmost priority of achievement is being
independent in terms of projects and having the financial and
social return.

2018 was an important landmark on our path toward our long-

term sustainability goal. It is our belief that all our CSR work
is important when it has impact on other lives as our CSR is
designed to make social impact and have the return in terms of
economical and social.

For such entities to become and remain successful, each

individual ought to work towards the common goal of the
organisation, and the organisations have to value individuals.
Our team members of both PBF and projects level like to
feel proud not only of being a part of something bigger than
themselves, but also of being validated for their individual
ideas, contributions and achievements.

As you read this annual report, we hope it will remind you of our
sustainable projects and energise you for the future. For those
of PBF and its projects’ team who have tirelessly committed
time and energy to the success of this organisation, I do salute
and thank you a lot.

176 PRIME BANK

 Introduction
In the year 2002, a reverie of Prime Bank Limited started its obviously earn for his/her survival and at the same time support
journey with a longing to help the society in a lifetime. Now education for others.
it is 2019, after 12 years of project intensification in 2007, the
Moving forward, the passion which triggered in 2007 led to
desire to help the people of Bangladesh has now become
the commencement of another Education Project. Prime
perpetual. Prime Bank Foundation started with the initiatives for
Bank Foundation inaugurated Prime College of Nursing,
the welfare of our society in the Corporate Social Responsibility
Dhaka, in the year 2013. The college has been able to
(CSR) sector. The projects of Prime Bank Foundation have
successfully complete 6 years of its journey as the project
become sustainable and at the same time serving the society
became sustainable in 2018. Prime College of Nursing, Dhaka
as well. Prime Bank and Prime Bank Foundation believe that
feels proud to share that it started with Diploma in Nursing
sustainability can only be achieved if there is a social and
Science and Midwifery course and now with the affiliation
financial return from the CSR project.
of Dhaka University offering B. Sc. in Nursing both Basic and
As we reflect on the previous years, we travelled a long way, Post Basic Courses. The year 2018 brought a new horizon of
and the footsteps left behind have shown that a CSR project achievement for PCND as it reached the point of sustainability,
can sustain if it runs on its own and at the same time help the which bears the evidence to the strategic path provided by the
society. Now, we will head towards an end of a new beginning Board of Prime Bank Limited in managing the project. With the
of the journey. 12 years have passed after project intensification introduction of two new programmes B. Sc. in Nursing both
in 2007, and with time the projects of Prime Bank Foundation Basic and Post Basic Courses in 2018, and with efficient staff
now stand on its own feet and also serving the people and and teachers, PCND achieved sustainable growth which is an
society to stand on its own. example for other nursing institutions in Bangladesh. The year
2018 was a year of Achievement as PCND became self reliant in
As part of a CSR guideline by the Bangladesh Bank, CSR
the 3rd year of its 3 year strategic plan.
projects of Banks should focus on education and health sector
of Bangladesh. Reflecting on this, Prime Bank Foundation With the education project, Prime Bank and Prime Bank
started Prime Bank English Medium School (PBEMS) in Uttara Foundation also took the initiative to open Prime Bank Eye
in the year 2008. PBEMS initiated with a unique approach of Hospital under its health project. Prime Bank Eye Hospital was
teaching methodology which focuses on low cost and values- established in 2012 at House # 82, Road # 8A, Satmasjid Road,
oriented education. In the year 2015, the project was nurtured Dhanmondi, Dhaka-1209 with the management & technical
in a way by all the team effort of Prime Bank Foundation family assistance of Aravind Eye Care System (AECS), one of the
that it became sustainable. The project now generates enough centres of excellence in eye care in India.
revenue for its survival and at the same time save for future
According to National Eye Care Plan and National Institute of
expansion. Achievement came forward to PBEMS as the
Ophthalmology and Hospital (NIOH), around 250,000 people
existence of the school has been approved by international
in Bangladesh are at risk of losing eyesight because of diabetic
and local governing bodies. PBEMS envisaged bringing out
retinopathy. Also, about 750,000 people in Bangladesh are
the best of the education methodology and curriculum in our
suffering from blindness. In 2018, PBEH examined 36,917
country only by becoming sustainable in it.
patients of which 1,677 patients underwent surgery from PBEH
In continuation of the Education project, Prime Bank and which is an indirect contribution to the economic growth of
Prime Bank Foundation introduced a unique combination Bangladesh. Among these people, many have joined the
of helping the youth to build a better future. The Education employment sector and now are able to contribute to the
Support Programme (ESP) stepped in the year 2007. The family. Prime Bank Eye Hospital is indirectly helping to eradicate
Programme was designed to serve the nation builders of the unemployment and poverty from Bangladesh. Although the
future of Bangladesh. ESP is a fully subsided project, which has percentage of contribution is small, but we all know that “We
a social return. The classification of social return falls into the can do no great things, only small things with great love”.
national level of a country as 1671 students completed their
~Mother Teresa.
graduation under different fields with the help of a monthly
stipend from Prime Bank
Foundation. When a project
helps a nation to produce
Doctors, Engineers, Lawyers,
Police officers, BCS-Cadre,
Professor and many more, this
PBEMS

return can be measured as it

PCND

is a direct contribution to GDP

in the form of employment.
PBEH

Even if the designation

cannot be classified directly
in accordance with GDP, ESP

Cost Recovery Break Even Point

an educated individual can

PRIME BANK 177

ANNUAL REPORT 2018

Education Support Programme (ESP) distinguished personalities

of Bangladesh, namely Prof.
From the beginning of Prime Bank’s journey, the Board and
M. Q. K. Talukder, Chairman,
management of Prime Bank believed that Corporate Social
Centre for Women and Child
Responsibility (CSR) should focus on making some return to the
Health and Chairperson,
society, for which Prime Bank through Prime Bank Foundation
Bangladesh Breast Feeding
subsequently started Corporate Social responsibility, especially
Foundation (Chairperson of
in the field of Health & Education. Prof. M. Q. K. Talukder
the Advisory Committee),
Scholarship programme is one of the unique programmes Prof. Jamilur Reza Choudhury,
in the Education sector of Bangladesh. As part of the Educationalist, Vice Chancellor
uniqueness, ESP was launched in the year 2007. According of Asia Pacific University,
to a famous quote by Mother Teresa “As Jesus said love one Former Vice Chancellor of
another. He didn’t say love the whole world.”  Prime Bank and BRAC University (Member of
Prime Bank Foundation understand that country’s growth the Advisory Committee) and
and development depends largely on the strong educational Ms. Rasheda K. Chowdhury, Prof. Jamilur Reza Chowdhury
backbone. Education is the most powerful weapon which can Director, Campaign for Popular
be used to improve the economic growth of Bangladesh, as Education (CAMPE), (Member
it is directly linked with alleviating poverty. Bangladesh has of the Advisory Committee).
the seventh largest population in the world. It is needless to
The ESP follows guidelines very
emphasize the immense role; such a huge manpower can play
strictly where gender equality
in the economic, social and intellectual development of the
is concerned; the female
country. But poverty and financial hardship is the main reason
to male ratio of 3:7 must be
in the discontinuation rate of higher studies. Ms. Rasheda K. Chowdhury
maintained to ensure that a
Prime Bank Foundation’s Education Support Programme sufficient number of both genders receive assistance. Students
(ESP), is a long term renewable scholarship programme for from all 64 districts of the country are recipients of the PBF
underprivileged but meritorious students. Eligible students scholarship. We can proudly mention that PBF has made a
receive monthly stipend that allows them to pursue undergrad/ country-wide impact through its commendable initiative and
graduation level studies. Our scholarship programme has is helping students build a strong foundation for their families’
spread to all the 64 districts of Bangladesh. & society’s future.
Investment through social contribution never fails. It is a hard- With the help of the PBF stipend the first 7 batches from
edged business decision which is first-rated for a business. As 2007 to 2013 have successfully completed their graduation.
per Bangladesh Bank CSR guideline (GBCSRD circular No-7, In addition to this, more than 1055 out of 1671 passed out
dated December 22, 2014) and around 30% (thirty percent) of awardees are now established in Public & private University
the total CSR expenditure should be spent in the education & College Teachers/Medical Officers/Engineers/Civil Service
sector, including scholarships/stipends for underprivileged but & Custom officers/Class-1 Officers/Bankers/Business etc. All
meritorious students of Bangladesh. these established young people play a key role in helping their
As a part of Prime Bank’s CSR activities, this unique programme family, developing the society and serving the nation.
was launched in 2007 with 170 awardees. Today, after 12
rewarding years, we are proud to say that our ESP has been
able to witness the achievement which influenced the lives of
3445 awardees and their family across the country.

In keeping the continuity of the past years’ selection process,

the same steps of the previous years were followed this year.
Applications were invited from potential underprivileged but
meritorious students through advertisements in the country’s
leading national dailies. We received 6662 applications from
64 districts of the country. As per selection criteria set by the
honourable Advisory Committee, 776 students were primarily
selected. After on site & off site Validation Exercises and
conducting all other relevant processes, most deserving 291
meritorious students were finally selected for 2018. The first
instalment of stipends for all the students selected in 2018 is
to be disbursed to their individual accounts through a formal
Award Giving Ceremony.

In order to ensure that most deserving students are awarded

for the scholarship, PBF has a three member Advisory
Committee which is commissioned to develop neutral
selection criteria. The Advisory Committee consists of three

178 PRIME BANK

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PRIME BANK 179

ANNUAL REPORT 2018

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180 PRIME BANK

 Our proud ESP awardees who were uncertain about their graduation. Today! With the help of ESP stipend the awardees
successfully completed their graduation and many of them has obtained outstanding result. Some awardees are shown as under:

Name: Md. Anwar Hossain Name: Md. Imam Uddin

PBF ID # 11-1-061 PBF ID # 13-1-2-290
Result: 8th Position Result: 8th Position
Subject: Applied Physics Subject: Social Welfare
Institution: Pabna University of Science Institution: Dhaka University
and Technology

Name: Ms. Asia Khatun Name: Ms. Tasmia Islam

PBF ID # 11-1-198 PBF ID # 13-2-1-203
Result: 1st Position Result: 1st Class 5th
Subject: Account and Information System Subject: Bangla
Institution: Dhaka University Institution: Rajshahi University

Name: Md. Shahin Kabir Name: Mohammad Saiful Islam

PBF ID # 12-1-2-235 PBF ID # 14-1-1-112
Result: 5th Position Result: 1st Position
Subject: Islamic History and Culture Subject: Civil Engineering
Institution: Dhaka University Institution: Chittaong University of
Engineering & Technology

Name: Ms. Tandra Bagchi Name: Ms. Tasmia Islam

PBF ID # 12-2-1-178 PBF ID # 13-2-1-203
Result: 1st Class 3rd Result: 4th Position
Subject: Urban & Regional Planning Subject: Generic Engineering
Institution: Khulna University of Institution: Dhaka University
Engineering Technology

Name: Mr. Anondo Mohon Name: Md. Shah Paran

PBF ID # 12-1-1-83 PBF ID # 14-1-2-251
Result: 6th Position Result: 3rd Position
Subject: Computer Science and Subject: Development Studies
Engineering Institution: Dhaka University
Institution: Islamic University

Name: Ms. Fahima Akter Name: Ms. Sadia Afrin

PBF ID # 13-2-1-167 PBF ID # 14-2-2-338
Result: 1st Position Result: 1st Class
Subject: Chemistry Subject: Population Science and Human
Institution: Begum Rokeya University, Resource
Rangpur Institution: Dhaka University

PRIME BANK 181

ANNUAL REPORT 2018

At a Glance ESP Awardees

Dropped Out
Recently Award,
ESP Expenditure by year Gratuated 56

42,766,384
620

42,043,009
37,611,339

37,201,878
Passed Out

31,961,536
Awardees Awardees,
now in 1671

26,081,054
Job, 1051
8,529,020

18,349,800
15,715,193
4,301,890

11,955,719
1,292,556

Existing
Awardees,
Y-2007 Y-2008 Y-2009 Y-2010 Y-2011 Y-2012 Y-2013 Y-2014 Y-2015 Y-2016 Y-2017 Y-2018 1718
Financial statement of Education Support Programme
Total Contribution Taka: 27,78,09,378.00 Total Awardees 3445

Prime Bank recognized and encouraged Sumon Ali and

Ms. Shahnaj Parvin for their bravery and outstanding
contribution

Paikpara, a beautiful village looks like a painting coloured in

green. It is located in the Hondial Union of Chatmohar Upazila of
Pabna. Beside the village, the ‘Chalanbil’ gave a new dimension
to the beauty of Paikpara. People from all walks of life visit the
place regularly. On 31st August, 2018, in the evening, a group
of 22 people came to the ‘Chalanbil’ in Paikpara village to
enjoy the boat ride. They climbed on to the roof of the boat to
capture the memory for which the boat got stranded at one
stage with the load of the people.

Nearby the Chalanbil, Sumon Ali, a student of Class-VII of

Hondial Dimukhi High School was sitting on the dike in his tiny
boat (dinghy).Confused by the unexpected incident, at that
moment, Sumon jumped out of his tiny boat (dinghy) to save
the lives of the people. With Sumon’s prompt action, alertness
and bravery, he was able to save 17 people with the help of
Shahnaj, another comrade in the rescue team.

Suman and Shahnaj are now among the outstanding

personalities of the Paikpara village. On September 8, 2018,
the “Daily Prothom Alo” gave special appreciation and
encouragement to them by publishing an article “Shadharoner
Oshadharon Shahosh”. Prime Bank recognised Suman and
Shahnaj’s bravery and outstanding contribution. Accordingly,
Sumon Ali received a long time monthly stipend under ESP
of Prime Bank Foundation. Also, Ms. Shahnaj Parvin received mygb I kvnbvR cvifx‡bi Amvgvb¨ Ae`v‡bi ¯^xK…wZ
a one-time amount of Tk. 25,000. With the approval of the
f~wgKv:
Board of Directors of Prime Bank/Foundation Management
Committee, Chief Executive Officer of Prime Bank Foundation cvBKcvov, Qwei gZ my›`i GK MÖvg| mey‡Ri mgv‡ivn Pvwiw`K| cvebvi
& Deputy Managing Director Mr. Golam Rabbani of Prime Bank PvU‡gvni Dc‡Rjvi nvwÛqvj BDwbq‡b Gi Ae¯’vb| MÖv‡gi cvk w`‡q
Limited along with the help of Mr. Md. Jasim Uddin, Deputy e‡q Pjv ÔPjbwejÕ cvBKcvovi †mŠ›`‡h© G‡b w`‡q‡Q bZzb gvÎv| ZvB‡Zv
Commissioner of Pabna distributed the recognition through a ågb wcqvmy gvby‡li Avbv‡Mvbv GLv‡b †hb GK wbZ¨ ‰bgwËK e¨vcvi|
formal ceremony in Pabna on October 22, 2018. The eventhad 31 †k AvMó, mܨvÿY| 22 Rb ch©U‡Ki GKwU `j †bŠåg‡b Av‡m
a widespread publicity and it was publsihed in the print media. cvBKcvov MÖv‡gi Pjbwe‡j| we‡ji †mŠ›`‡h© AvZ¥nviv mevB| Avb›`Nb
gyn~Z© ¯§iYxq Ki‡Z †bŠKvi QB‡q D‡V †mjwd ZzjwQj m‡e wg‡j| QB‡q

182 PRIME BANK

DVv ågb wcqvmy †mB 22 R‡bi fv‡i GK ch©v‡q Wze‡Z Lv‡K †bŠKvwU| year of 2008 in Uttara. The voyage of establishing a quality and
ïiæ nq AvZ© wPrKvi, euvPvI! euvPvI!! unique English Medium School commenced with the vision to
help the society to carry on the paramount level of creativity
mygb I Zvi Dcw¯’Z eyw×:
and individualism which can be transferred to others. In the
mygb Avjx, eqm gvÎ 13| nvwÛqvj wØgyLx D”P we`¨vj‡qi mßg †kÖYxi long run, this helps the community in creating leaders who can
QvÎ †m| ˆKk‡ii PÂjZv Zvi †Pv‡L gy‡L| we‡ji Zx‡i GK †QvÆ wWw½ build a better future for a nation. Over all these years, PBEMS
†bŠKvq e‡m ågb wcqvmy‡`i Avb›` Dc‡fvM KiwQj GKvKx| †K RvbZ, with its Interactive Methodology successfully completed its 10
Zx‡i e‡m _vKv GB ‡QvÆ †Q‡jwUB mevi Rb¨ ÎvZv n‡q Av‡Q! NUbvi year long journey. However, with time, the urge of establishing
AvKw¯§KZvq wKsKZ©e¨wegyp, mygb| gyû‡Z©B wbR‡K ¸wU‡q `ªæZ Qz‡U the school with Cambridge guided all to obtain the approval.
P‡j Zvi wWw½wU wb‡q 22 R‡bi Rxeb euvPv‡Z| myg‡bi wWw½wU wbZvšÍB PBEMS’s unique approach of teaching nurtured the project in
†QvU! m‡ev©&”P 5 Rb em‡Z cv‡i G wWw½ †bŠKvq| A_P gvbyl 22 Rb! such way that the project is now sustainable. The first batch
gvbyl¸‡jv‡K GK mv‡_ Zvi (myg‡bi) wWw½‡Z DVv‡j KvD‡KD& nqZev of PBEMS students who started their journey in 2008 are now
euvPv‡bv hv‡ebv! Am¤¢e axkw³ m¤úbœ †QvÆ myg‡bi gv_vq bZzb wPšÍv preparing for their O-Level examination in 2019. PBEMS has
Av‡m| fvM¨vnZ gvbyl‡`i wPrKvi K‡i e‡j, ÒAvcbviv †KD ‡bŠKvq given a praiseworthy performance in an environment where the
DV‡eb bv| ïay †bŠKv a‡i cvwb‡Z †f‡m _vKzb| mevB DV‡j wWw½ Wz‡e vision and mission of the project was difficult to comprehend to
hv‡e ZLb Avcbv‡`i KvD‡K euvPv‡bv hv‡e bv!Ó the society of Bangladesh. After 10 long years, we can proudly
say that we not only dream of becoming self-sustainable, but
kvnbvR cvifxb, hvÎx D×v‡i myg‡bi mn‡hv×v:
we already did and initiated some of the work of expansion of
kvnbvR cvifxb| hv‡K †c‡q ‡QvÆ mygb Amnvq hvÎx‡`i D×v‡ii GK PBEMS by planning to hire another campus of the school.
mn‡hv×v cvq| 35 eQi eqmx GB M„nea~ wej †_‡K evwo †div nuvm ¸‡jvi
The year 2018 was a year of great achievement as PBEMS
Lvevi w`w”Qj wkï mšÍvb‡K †Kv‡j wb‡q| g„Zz¨ c_ hvÎx ågb wcqvmy‡`i obtained the Cambridge Approval under British Council. We
AvZ© wPrKvi Kv‡b Avm‡ZB Kvjwej¤^ bv K‡i wWw½wU wb‡q Qz‡U P‡j `~N©Ubv have finally proved that PBEMS is a quality English Medium
KewjZ ¯’v‡b| myg‡bi Dcw¯’Z eywׇZ wew¯§Z nq kvnbvR cvifxb wb‡RI| School with low cost. Also, PBEMS has obtained the approval
myg‡bi †KŠkj LvwU‡q †mI g„Zy¨cÖvq hvÎx‡`i Rxeb euvPv‡Z we‡kl f~wgKv from Primary Education and Dhaka Board. The quality of
iv‡L| mygb I kvnbvR cvifx‡bi eyw×, mvnwmKZv I cÖ‡Póvq ‡eu‡P hvq education of PBEMS has not only been recognized by
17 wU ZvRv cÖvY| fv‡M¨i wbg©g cwinvm! 5 Rb‡K eiY Ki‡Z nq mwjj International Body but also by the government of Bangladesh.
mgvwa! †bŠKvi gvwS mvZ‡i Kz‡j G‡m wb‡R‡`i Rxeb iÿv K‡i| In line with the projection, PBEMS got the approval from the
cÖvBg e¨vsK KZ…©K mygb I kvnbv‡Ri exi‡Z¡i ¯^xK…wZ `vb: Board of Prime Bank Limited to open another campus after
completion of 2019.
Ggb Amvgvb¨ Ae`v‡b mygb I kvnbvR AvR cvBKcvov MÖv‡gi Av‡jvwPZ
wcÖq e¨w³Z¡| GjvKvi gvby‡li gy‡L gy‡L Zv‡`i MíK_v| ‰`wbK cÖ_g “Achievement” has come in the path of PBEMS as the integrity
of the school has been seen and approved by international
Av‡jv weMZ 8 †m‡Þ¤^i 2018 Bs Zvwi‡L Zv‡`i Òkwbev‡ii †µvoc‡ÎÓ
and local governing bodies. In the starting of its journey,
mygb I kvnbvR‡K wb‡q Òmvavi‡Yi AmvaviY mvnmÓ bv‡g GK AvwU©K¨vj
PBEMS envisaged to bring out the best of the method and
Qvwc‡q mygb I kvnbvR cvifx‡bi Ae`v‡bi ¯^xK…wZ `v‡bi cvkvcvwk we‡kl
curriculum in our country. Prime Bank English Medium School
Drmvn cÖ`vb K‡i| cvebvi †Rjv cÖkvmK wb‡RI mygb‡K Ò‡¯^”Qv kÖ‡gi
would like to thank Prime Bank, Prime Bank Foundation and
exiÓ Dcvwa `v‡bi cvkvcvwk Avw_©K mnvqZvi gva¨‡g Drmvn cÖ`vb K‡ib|
all its well-wishers, without them the journey of a decade and
bwRi wenxb exi‡Z¡i ¯^xK…wZ I Drmvn cÖ`v‡b cÖvBg e¨vs‡Ki f~wgKv: achievements would not have been possible. Our project is an
example for others and eventually it has been able to achieve
eq‡m cwic~Y© bv n‡jI eyw&ׇZ cwic°Zvi cÖgvY w`‡q‡Q mygb Avjx|
the common vision of the management, Prime Bank, Prime
cvkvcvwk kvnbvR cvifx‡bi Ae`vb Amvgvb¨| avivevwnK Drmvn cÖ`v‡b
Bank Foundation and the society.
mygb ‡nv‡mb GKw`b A‡bK eo n‡q ‡`‡ki m¤ú‡` cwiYZ n‡e, Ggb
Avkv ZvB AevšÍi bq| Avi kvnbvR cvifxb †Zv G‡`‡ki bvix mgv‡Ri
Kv‡Q GK bZzb †cÖiYv ev D`vniY|
mygb ‡nv‡mb I kvnbvR cvifxb‡K Avw_©K mn‡hvwMZvi D‡jøwLZ cwiKíbv
ev¯Íevq‡b cÖvBg e¨vs‡Ki ‡evW© Ae wW‡i±im-Gi m¤§vwbZ m`m¨M‡bi m`q
Aby‡gv`b mv‡c‡ÿ wmBI, cÖvBg e¨vsK dvD‡Ûkb, cvebvi ‡Rjv cÖkvmK
Rbve †gvt Rwmg DwÏb Gi mn‡hvwMZvq GK Abvi¤^o Abyôv‡bi gva¨‡g
kvnbvR cvifxb‡K GKKvjxb I mygb †nv‡mb‡K AvbyôvwbKfv‡e BGmwc-
Gi wkÿve„wËi AvIZvf~³ K‡ib| D‡jøL¨ †h, mygb Avjx‡K e„wË cÖ`v‡b
BGmwc-Gi e„wË cÖvß QvÎ/QvÎx‡`i GKvD›U †Lvjvi ixwZ ûeû cvjb
Kiv n‡q‡Q| mygb Avjx‡K BGmwc-Gi AvIZvq gvwmK nv‡i `xN© †gqv`x
wkÿve„wË cÖ`vb Kiv n‡q‡Q| kvnbvR cvifxb‡K Zuvi Ae`v‡bi ¯^xK…wZ
¯^iæc GKKvjxb 25,000/- (cwPuk nvRvi) UvKv gvÎ cÖ`vb Kiv n‡q‡Q|

Prime Bank English Medium School (PBEMS)

Ten Years of Achievement

Prime Bank English Medium School (PBEMS), one of the PBEMS is now registered as a Cambridge International School
initiatives of Prime Bank Foundation started its journey in the

PRIME BANK 183

ANNUAL REPORT 2018

PBEMS is now registered as a and we expect them to demonstrate responsibility for learning,
Cambridge International School for their actions and for the environment.

Reflecting on the year 2018, I have reflected on the bigger

picture of PBEMS and what we need to do to continue to
grow and develop the school in a purposeful and innovative
direction. In the year 2018, the focus was on establishing
the foundation of the school by determining the quality of
the school. In order to make the journey of accomplishment
memorable, I needed the support of all my team members
and Prime Bank Foundation to obtain the registration of the
school as a Cambridge International School from the British
Council. It was a challenging time for the school, as the
team needed to include and upgrade more facilities within
the budget. PBEMS compared to other English Medium
Schools has an element of difference, as it is one of the CSR
projects of Prime Bank Foundation. The policy, guidelines and
requirements of Cambridge, does not compromise with any of
the prerequisites, including the financial ability of a school. The
need to have all the physical facilities was given priority. Also,
the registration of Primary Education and Dhaka Board was one
of the important necessities. Teaching and learning was an
emphasis and through hard work and dedication by the staff
from both campuses, Cambridge syllabus was planned and
PBEMS is now registered under Dhaka Education Board implemented as a written, taught and assessed curriculum.
Ongoing Professional Development in teaching and learning
From the Desk of the Principal, PBEMS
strategies aligned with Cambridge, was another focus. Finally,
The one year journey with Prime Bank English Medium School through hard work, satisfying the requirements and submitting
for me has been an exciting, engaging and requiring abundant all documentation, PBEMS finally obtained the Cambridge
energy. Resilience is definitely a common value that most approval in November 2018. Now, we have verification that
people in Bangladesh possess and is to be admired. PBEMS is a quality English Medium School, which has been
Confidence is one of the attributes of PBEMS teachers, staff approved by National and International Bodies.
and students.  What we are most confident about is that there I believe that resilience is one of the most important attributes
is a great future for the school.  Everyone involved with PBEMS for anyone to acquire. I have become extremely resilient - I have
is confident that together we can continue to build on what is to bounce back when maybe I have not achieved what I set
already a great place for students to grow and learn. out to do within a timeframe. But one of the most important
Innovation is one of the attributes of the Cambridge teacher things I have learned that I cannot achieve on my own - I need
and learner.  You might ask how we are innovative. The model my team and the support of the wider community and Prime
for our English Medium School encourages students to interact Bank Foundation.  As they say there is no ‘I’ in TEAM. I would
with each other and the teaching methodology engages the like to take this opportunity to thank all of the staff, parents and
students in the learning process. To be engaged in the learning students of PBEMS and also the Foundation for the support I
process is another attribute that allows PBEMS students to have received in 2018.
experience hands on learning opportunities and be more Helen Salmon
involved with the community and service. As a responsible Principal (till Dec 2018),
human being, the students are learning to value authenticity Prime Bank English Medium School

Principal of PBEMS interview was published in The Daily Jugantor

184 PRIME BANK

Commencement of a New Beginning…. I also give advice to my sister on her projects  and if there is

Reean Rahman John of Class-10, a student of PBEMS Uttara, any gap in her assignments, I ask her to study. Even though I
shared his views about his beloved school PBEMS. I am with stress her out sometimes, I knew it came with love. My parents;
PBEMS Uttara since 2011. “According to me, PBEMS gave me Mr. Anisur Rahman and Mrs. Umme Salma Rahman have been
the perfect platform and the opportunity to explore and learn telling how my sister is jealous over my social enhancement
with the help of the Interactive Methodology. I would like to and my English language skills. PBEMS helped me to visualize
share that my respected teachers guided me in a way that now my aim to study in a quality English Medium School. I would be
I am more focused in life and have the intention to become a thankful to Prime Bank English Medium School for providing
global responsible citizen of Bangladesh. From extracurricular affordable fees which have made my dream come to reality.
activities, physical education, project work, building moral PBEMS also taught us the skill of compassion and being
values and obeying the elders, all these have guided me appreciative of others. At PBEMS, we have been educated
to develop my future and be determined in whatever I am that caring for someone cannot be based on conditions, it is
engaged with”. something we do out of moral values”.
“Now in 2018, everything changed during the end of my junior Finally I would conclude by asking for best wishes from all so
year of school. I have started giving advice to my peers on what that we graduate from school with flying colours in O-Level
subjects they should take for their O and A-Level examination. examination-2019.

PRIME BANK 185

ANNUAL REPORT 2018

Prime Bank Eye Hospital (PBEH)

We are also in the field of success…

Prime Bank Eye Hospital (PBEH), one of the best ophthalmic and

modern hospitals, located at House # 82, Road # 8A, Satmasjid
Road, Dhanmondi, Dhaka-1209. Prime Bank Eye Hospital is a
health project of Prime Bank Foundation (a CSR wing of Prime
Bank Limited). The hospital started its journey in the year 2012
and is now able to provide all kinds of eye treatment services
to the patients. By this time, Prime Bank Eye Hospital is already
established as the hospital of choice among the patients.
Since inception, this hospital is operating under the guidance
of Aravind Eye Care System (AECS) as the management &
technical partner of PBEH.

In the year 2018, among the three projects, Prime Bank English
Medium School and Prime College of Nursing Dhaka, are now the mandates of PBEH is to provide eye care services to both
sustainable projects of PBF. Not only did the projects reach the rich and poor. In the year 2018, PBEH performed 665 walk-in
point of sustainability, they are now contributing to some of the and 1012 camp surgeries. The cost associated with the camp
activities of PBF and also supporting themselves. surgeries was Tk. 33,88,936/-. On the other hand, the cost
Prime Bank and Prime Bank Foundation believes that associated with walk-in surgeries was Tk. 38,29,612/-. In return
sustainability is achievable if there is a social and financial return of the services, PBEH incurred almost the same amount of cost
from our CSR projects. When a hospital becomes sustainable, to perform both camp and walk-in surgeries. Whereas, 43%
its desire to help the society for a life time is fulfilled. Reflecting revenue was achieved from walk-in and on the other hand 12%
on this, the need for making the health project sustainable was achieved from camp surgery. The same amount of service
arises. As PBEH is now a partially subsidised project, the was provided to the rich and the poor as it is one of the mandates
hospital feels more pressurised to accomplish sustainability of PBEH. So, the requirements of the hospital and the patients
in order to be considered as an independent and recognised do not compromise with any of the provisions, including the
hospital in the health sector of Bangladesh. financial ability of PBEH. The hospital had to set up its prices of
different surgical procedures, investigations and pathological
From the year 2012, PBEH has been facing crucial time to
tests based on the requirements of daily patients and the
provide reduced rate of eye care services to the poor. One of
catchment area. Every year, PBEH incurs a huge operating cost
in order to provide the services with a comparatively lower
priced fee. Therefore, it becomes challenging for PBEH to offer
discount to the prices and maintain the financial sustainability
which is an obstacle in generating enough revenue for the
hospital. As PBEH provides services to all categories of
patients in the country, the prices were set according to the
financial solvency of the patients. In some cases, more than
60% discount is given for surgical procedures of the camp
and walk-in poor patients. The average discount of all surgical
procedures for the poor patients is almost 40%. The annual
loss for offering such discounts is huge which definitely has
some negative impact to enable PBEH to stand on its own feet.
However, as per the trend of subsidy of PBEH, it is certain that
the hospital is also on the verge of success with the directive
ÒcÖwZw`b †`Le †fvi, bZzb Av‡jvq...Ó|

Some Statistics of Prime Bank Eye Hospital (2018)

In the year, Prime Bank Eye Hospital (PBEH) examined a total

of 36,917 patients (pts). Of them, 22,552 patients were walk-in,
10,567 patients were from outreach eye camps and the rest
3,798 patients were examined at the Vision Centre, Narayanhat,
Chattagram.

In 2018, the income growth of PBEH shows that it increased

from 21% to 77% over the last six years because the amount
of subsidy is gradually decreasing by year. The decrease
in subsidy occurred due to increase in patient & increased
number of surgeries.

186 PRIME BANK

 698
665

22552 524
504
20211
18906
391
15481

11900
250
9042

147
5676

Y-2012 Y-2013 Y-2014 Y-2015 Y-2016 Y-2017 Y-2018 Y-2012 Y-2013 Y-2014 Y-2015 Y-2016 Y-2017 Y-2018

Walk-in Patient Examination Walk-in Patient’s Surgery

50000 3000

45000 2644
2500
40000

35000 2000

30000
1500
1497
25000

20000 1000 1012

15000
700
500 395 468
10000
93
5000 0
Y-2012 Y-2013 Y-2014 Y-2015 Y-2016 Y-2017 Y-2018
0
Y-2012 Y-2013 Y-2014 Y-2015 Y-2016 Y-2017 Y-2018

Camp Patient Examination Camp Patient Surgery

Note: In 2013 and 2014, camp patients were high as PBEH conducted 55 additional eye camps fully sponsored by Prime Bank
Limited. Similarly, camp patients’ surgery was also high.

PRIME BANK 187

ANNUAL REPORT 2018

A Letter of a Patient to CEO, PBF

Respected Sir,

I am Md. Shahjahan Chowdhury. I am currently an UN retiree residing in Dhanmondi. Fortunately

or unfortunately, I have had three Operations in  three different hospitals namely, Square Hospital for
Orthopaedics Surgery,  Japan Friendship Hospital for Recta; Surgery and Prime Bank Eye Hospital for
Cataract Phaco Surgery at Satmasjid Road, Dhanmondi 15, Dhaka.  But I have been blessed to have
undergone my surgery at Prime Bank Eye Hospital.

Dr. Anthony Albert, who did my Cataract Phaco Operation, was a very peaceful, gentle and helpful person.
As a doctor, he handled my case with precision and care. I don’t think I could have met a better doctor
than Dr. Anthony.

The Counsellor on call, Dilruba Sultana, was an exceptionally cooperative, supportive and a cheerful
person at all times. She helped me to sort out my documents and enabled me to easily carry out the
hospital procedures.

The concerned support staff Stela, Jaya and Rina Dey of the hospital took care of my basic requirements
and catered to my various needs whenever required. I am very satisfied and content with my stay and
operation at Prime Bank Eye Hospital. And I hope your esteemed organisation will continue to deliver high
quality service in the future as well. I am extremely pleased with your hospital’s service and will definitely
recommend your hospital to family and friends.

Thanking you,
Md. Shahjahan Chowdhury
Cataract Phaco Patient

188 PRIME BANK

 Prime College of Nursing, Dhaka (PCND) Kvwnbx - 1
In the past years, Bangladesh has achieved tremendous success Ònv‡Riv Lvbg I Av‡qkv LvbgÓ Avgvi cwiev‡ii Me© .. .. ..
in the health sector. As a Nursing College in Bangladesh, we
Avmmvjvgy-AvjvBKzg| nv‡Riv Lvbg Ges Av‡qkv Lvbg Avgvi ‡gvU 7
can proudly mention that Prime College of Nursing, Dhaka
mšÍv‡bi g‡a¨ cÖ_g GB `yB †g‡q| GB †g‡qiv 2013 mv‡j GBPGmwm
(PCND), an initiative of Prime Bank Foundation, is a part of this
success as well. PCND’s aim is to make qualified and skilled
cvm Kivi ci LyeB wPšÍvq wQjvg I‡`i †Kv_vq covïbv KivB| ZLb
nurses in Bangladesh. The college is proud to portray nursing Avgv‡`i GK AvZ¥x‡qi gva¨‡g cÖvBg K‡jR Ae bvwm©s, XvKv m¤ú‡K©
as a prosperous profession in every corner of the country. Rvb‡Z cvwi| Zvici Rvbyqvix 2014 †Z GB K‡j‡R Avgv‡`i `yB
†g‡q‡K fwZ© Kwi|
PCND was established in January 2013 and in the past six years
of PCND since inception was well heeled. The journey started K‡jRwU XvKvi bZzb Gqvi‡cvU© †iv‡Wi cv‡k¦© wLj‡ÿZ GjvKvq Aew¯’Z|
with 29 students and now the number of students in the 1st-2nd- GKB fe‡b K‡jR K¨v¤úvm I †g‡q‡`i _vKvi my›`i e¨e¯’v Av‡Q|
3rd year of college stands to 137. PCND is uncompromisingly K‡jRwU `ÿ wkÿKgÛjx Øviv cwiPvwjZ| Av‡Q DbœZgv‡bi bvwm©s j¨ve|
offering standard nursing education under the guidance & Bs‡iRx Ges Kw¤úDUvi wkÿvi Rb¨ Avjv`vfv‡e j¨ve| Av‡iv Av‡Q fv‡jv
supervision of Dhaka University (DU) & Bangladesh Nursing Bs‡iRx Ges we‡`k †_‡K cov‡jLv Kiv Kw¤úDUvi wkÿK| nvmcvZvj
and Midwifery Council (BNMC). A total of 121 “Diploma in
cÖvw±m Gi Rb¨ i‡q‡Q Kzwg©‡Uvjv †Rbv‡ij nvmcvZvj| GKK_vq K‡jRwU
Nursing Science & Midwifery” graduates are currently working
bvwm©s covïbvi Rb¨ LyeB fv‡jv|
in different public & private healthcare service delivery centres
in Bangladesh at Medical College & Medical university/division/ GB K‡jR †_‡K 2016 mv‡j Avgvi †g‡qiv LyeB fvj djvdj K‡i
district/upazila level and private hospitals: Square, Apollo, Asgar ‡mweKv n‡q ‡ewi‡q‡Q| cvm Kivi ciciB `yB †g‡qi PvKzix n‡q‡Q
Ali, and United Hospital etc. They have held the reputation of †`‡ki bvgKiv ‡emiKvix AvmMi Avjx nvmcvZv‡j| G eQi (2018
the PCND at every step of their work. mvj) Zv‡`i GKRb Av‡qkv Lvbg wØZxq †kÖYxi Kg©KZ©v wnmv‡e miKvix
In both public and private sectors, students are making the PvKzix †c‡q‡Q| eZ©gv‡b PUªMÖvg †gwW‡Kj K‡jR nvmcvZv‡j ÷vd bvm©
name of the PCND proud. All the faculty members of PCND c‡` Av‡Q| bvwm©s ‡ckvq Lye Aí mg‡q ‡g‡qiv fv‡jv Kivq Avwg LyeB
feel proud to mention that in 2018 a remarkable number of Avbw›`Z| GB †ckvq †g‡q‡`i‡K fv‡jv bvm© wn‡m‡e M‡o †Zvjvi Rb¨
students have got the opportunity to join as the Govt. 2nd Avwg cÖvBg K‡jR Ae bvwm©s, XvKv Gi Kv‡Q K…ZÁ|
Class Officer and posted at different Public Medical College
bvwm©s †ckv‡K Avwg LyeB m¤§vb Kwi| Kvib G †ckvi gva¨‡g me ai‡bi
Hospitals including Bangabandhu Sheikh Mujib Medical
University (BSMMUH), District level general hospitals and
gvby‡li DcKv‡i Avmv hvq| hv Ab¨ †Kvb †ckvq m¤¢e bq| Z`ycwi
Upazila level Health Complexes. ag©xq `„wó‡KvY †_‡K GB †ckv n‡jv DËg †mev ev mIqv‡ei KvR|
G eQi Avgvi Av‡iK ‡Q‡j GBPGmwm cvk K‡i‡Q| miKvix fwZ©
To take this success further, two new feathers have been added
cixÿvi gva¨‡g GB K‡j‡R 3 eQi †gqvw` wW‡cøvgv Bb bvwm©s mvBÝ GÛ
to the crown as the great achievement in the year 2018. During
the year, PCND obtained the affiliation of Dhaka University to
wgWIqvBdvwi †Kv‡m© fwZ© Kwi‡qwQ| Avwg g‡b Kwi bvwm©s wkÿvi Rb¨
offer two B. Sc. Nursing Courses: B. Sc. in Nursing (4 years) and mew`K †_‡K GB K‡jRwU LyeB fv‡jv| GLv‡b bvwm©s wkÿvi cvkvcvwk
Post Basic B. Sc. in nursing (2 years). Post Basic B. Sc. in nursing ˆbwZK wkÿvI ‡`qv nq| hv K‡j‡Ri QvÎ-QvÎx‡K GKRb Av`k© gvbyl
course already started from July 2018. A total of 30 students wnmv‡e M‡o Zzj‡Z mvnvh¨ K‡i|
have enrolled in B. Sc. in nursing course under the govt. unified Avkv Kie Avgvi mšÍvb‡`i gZ Ab¨vb¨ †Q‡‡j-‡g‡qiv GKBfv‡e cÖvBg
exam system by Directorate General of Nursing and Midwifery
K‡jR Ae bvwm©s, XvKv †_‡K bvwm©s wkÿv MÖnY Ki‡e| wb‡R‡K GKRb
(DGNM) for the session 2018-19. Their classes will start from
fv‡jv bvm© I Av`k© gvbyl wnmv‡e M‡o †Zvjvi my‡hvM cv‡e| GB K‡j‡R
January 20, 2019.
Av‡iv `ywU weGmwm bvwm©s †Kvm© Pvjy Kivi Lei †R‡b Avwg LyeB Avbw›`Z|
The year 2018 was also the milestone of PCND for its Avgvi †g‡q‡`i‡K K‡j‡Ri 2 eQi †gqvw` †cv÷ †ewmK weGmwm Bb
achievement as a self sustaining project of PBF. During the
bvwm©s †Kvm© Kiv‡bvi B”Qv Av‡Q| K‡j‡Ri Kv‡Q Avgv‡`i Av‡iv Avkv
period from 2013 to 2017, PCND expended/invested a total of
AwP‡iB D”PZi GgGmwm Bb bvwm©s Pvjy Kivi| GB K‡jR †_‡KB hv‡Z
Tk. 5.86 crores. As per projection of PCND, it is expected that
Avgv‡`i mšÍv‡biv mn‡RB D”PZi bvwm©s wkÿv jvf Ki‡Z cv‡i|
its sustainability will be strengthened gradually. Accordingly,
PCND will be able to pay back the total expended amount K‡jR KZ…©cÿ‡K Avwg AvšÍwiK ab¨ev` RvbvB Zv‡`i ‡mevi Rb¨| Avwg
(Tk. 5.86 crores) by 2024 enabling PBF to invest needed for its K‡j‡Ri DbœwZ Kvgbv KiwQ|
vertical and horizontal expansion of its existing/new activities.

PCND has already achieved a high ranking position among

other nursing colleges and institutes in Bangladesh. To keep
the reputation ahead, all the faculty members and staff of
PCND are working with full of devotion and dedication. PCND is
committed to work persistently for providing standard nursing
education and make students as qualified and efficient future
nurse.

PRIME BANK 189

ANNUAL REPORT 2018

cÖvBg K‡jR Ae bvwm©s, XvKv †_‡K cvkK…Z mdj

QvÎ-QvÎx‡`i K‡qKRb

Kg©‡ÿ‡Î ‡hvM w`‡q GKUv welq Lye fvjfv‡e Dcjwä Ki‡Z †c‡iwQ Ñ wcwmGbwW ïay `ÿ ‡h Avkv-AvKv•Lv wb‡q wcwmGbwWÕ‡Z Rvbyqvix 2015 mv‡j fwZ© n‡qwQjvg Zvi †_‡K A‡bK
bvm©-B ‰Zwi K‡i bv| GKRb fvj gvbyl I ˆZwi K‡i| †ewk wKQz AR©b K‡iwQ|

iæwj gvbwKb
wmwbqi óvd bvm©
Kzwg©‡Uvjv †Rbv‡ij nvmcvZvj
Igi mvwb
wmwbqi óvd bvm©
¯‹qvi nvmcvZvj wjt

welqwfwËK wel‡q wewfbœ miKvix we‡klvwqZ nvmcvZvjmn mviveQi wbqwgZfv‡e miKvix

Kzwg©‡Uvjv †Rbv‡ij nvmcvZv‡j wK¬wb‡Kj cÖwkÿY GKRb `ÿ bvm© wn‡m‡e M‡o Zzj‡Z
gvbm¤úbœ bvwm©s wkÿvi Rb¨ Avgv‡`i K‡jRwU GKwU e¨wZµgag©x cÖwZôvb| ¸iæZ¡ Abw¯^Kvh©|

Bgivb wgqv
wmwbqi óvd bvm© myBwU Av³vi
‡kL dwRjvZz‡bœQv gywRe †g‡gvwiqvj ‡Kwc‡R wmwbqi óvd bvm©
we‡klvwqZ nvmcvZvj Kzwg©‡Uvjv †Rbv‡ij nvmcvZvj

K‡j‡Ri D”P gvbgm¤§Z bvwm©s wkÿvi cvkvcvwk G·Uªv KvwiKzjvg Kg©Kv‡Û AskMÖn‡b
Avgv‡K GKRb `ÿ bvm© wn‡m‡e M‡o Zzj‡Z K‡j‡Ri Ae`vb Abw¯^Kvh©| †bZ…Z¡`v‡bi AwfÁZv Avgv‡`i‡K AvZ¨cÖZ¨wq K‡i Zz‡j‡Q|

¯^Y©v ivq jyebv Av³vi

wmwbqi óvd bvm© wmwbqi óvd bvm©
wm‡jU GgGwR Imgvbx †gwW‡Kj K‡jR nvmcvZvj miKvwi nvmcvZvj

`ÿ bvm© I Av`k© gvbyl wn‡m‡e wb‡R‡K cÖwZwôZ Ki‡Z wcwmGbwWÕi

`ÿ bvm© wn‡m‡e wb‡R‡K Mo‡Z PvB‡j cÖvBg K‡jR Ae bvwm©s, XvKv-Gi wkÿv Acwinvh©|
bvwm©s wkÿvi weKí †bB|

‡gvt †ivgvb Avn‡g` Rqv PvKgv

wmwbqi óvd bvm© wmwbqi óvd bvm©
G¨v‡cv‡jv nvmcvZvj wjt ev›`ievb †Rbv‡ij nvmcvZvj

190 PRIME BANK

 New Initiative of Prime Bank Foundation Prime Bank Cricket Club
(PBCC)
In order to implement Prime Bank Board’s/Foundation
Management Committee’s approved wish-list of supply-side Prime Bank believes that
financing initiatives/enterprises on Prime Bank Foundation’s sports is not only a source of
pure entertainment but also
is connected with the mental
and physical health, and the
character development of the
nation. As a whole, Prime Bank
has long been a patron of
culture in Bangladesh, having
sponsored sporting events over
many years. Cricket, no doubt, is a passion of the entire nation.

Along with the health and education sectors, Prime Bank also
focused on cricket because it is popular in Bangladesh and
helps our country to maintain an image as one of the important
cricket nation. In this regard, Prime Bank Cricket Club (PBCC)
was established in November 2011 by acquiring a club of
The MOU was signed between Prime Bank Foundation Dhaka Premier Division. In the year 2018, PBCC participated in
and Symon Capital Trust Bangladesh Cricket League (BCL) and was the winner in the
tournament. PBCC also performed in Dhaka Premier League
own land at Ashulia, Savar, Dhaka; a partnership has been (DPL).
formed between Symon Capital Trust (SCT), an Australia based
International Corporate Advisory Firm, specialising in Impact
Investment, Capital Raising & International Development
Assistance and Prime Bank Foundation (PBF). Accordingly, a
Memorandum of Understanding (MOU) for partnership was
signed between SCT and PBF on July 9, 2018 to develop an
impact investment health services strategy, setup a medical
college and multi-purpose hospitals on PBF’s land at Ashulia,
Savar, Dhaka, Bangladesh. This MOU has been designed to
establish the mentioned infrastructures and operations after
consultation and completion of feasibility studies.
Winner of BCL 2018-2019

CSR contribution Conducted Directly by PBL

Amount of
Description of initiatives
Expenditure
(Jan-Jun, 2018)
(in BDT)
1) Donation to Society for the Welfare of 5,00,000/-
Autistic Children (SWAC) for continuing
yearly salary of Occupational Therapist.
2) Donation to Bangladesh Thalassaemia 1,00,000/-
Hospital.
3) Donation to BAPLC in connection with 10,00,000/-
owning an office space.
4) Donation to Prime Minister’s Relief & 50,000,000/-
Welfare Fund.
5) Donation to SWAC for the 11th World 1,00,000/-
Autism Awareness Day Celebration
Program-2018.
Total = 51,700,000/-

PRIME BANK 191

ANNUAL REPORT 2018

Amount of Others
Description of initiatives
Expenditure Donation to 50,000pcs Blankets to 1,97,10,000.00
(Jul-Dec, 2018)
(in BDT) Prime Minister’s Relief Fund.
Education Donation to 18,000pcs Blankets for 70,95,600.00
Donation to Central Women’s College to 300,000.00 underprivileged People through PBL
build a female common room Branches.
Donation to Old Faujians Association for 500,000.00 Donation to Debhata B.B.M.P Govt 100,000.00
procuring micro bus Institution for celebrating 100years of
Donation to Chittagong Independent 20,000.00 anniversary.
University regarding a research on Donation to Tea Planters & Traders 922,000.00
‘Expansion & Profitability’ Association of Bangladesh, Sreemangal
Health for installing 5 units Air Conditioners.

Donation to Mr. Mohammed Syed Noor 50,000.00 Donation to BAB (Bangladesh 53,60,000.00
for his own Medical Treatment Association of Banks) for
implementation of cultural development
projects by concerned ministry of the
Government.
Donation to Kara Odhidoptor for 10,00,000.00
inauguration of the Book ‘Tin Hajar
Tipanno Din’
Total 350,57,600.00

Strategic Goals
Strategic Goal 1
Make education more accessible for all

• Prime Bank Foundation’s scholarship programme has been able to reach out to the poor but meritorious students from
all sixty four districts of the country. Education Support Programme (ESP) has been successful in bringing change to the
society. With the contribution of ESP, students graduated on time are now employed in a respectable position.

• Prime Bank English Medium School has been able to give a student the learning of moral development. As a result, these
students have a positive perception towards life.

• Prime College of Nursing, Dhaka also has been able to witness the accomplishment as the students who graduated in
the 1st and 2nd batch are employed in renowned hospitals in Bangladesh.

Strategic Goal 2
Make health more accessible for all

• Prime Bank Eye Hospital is continuously helping the people in need of proper eye care service. The hospital looks after
every patient as it is both for the rich and the poor at the same time.

Strategic Goal 3
Build a strong and dynamic organisation, capable of facilitating effective education, eye and other components of
the health programme

Our capacity development venture is envisioned to establish learning processes and methodically systematize information
flow, experiences, best approach and lessons learned at project level and the organisation we work with.

We aim to institutionalize the values of being a responsible corporate citizenship into the way of doing business and to
professionalize the practice of CSR.

Monitor, measure and report on the impact of the work that we do.

Implemented information sharing and communication systems to lead our people and programmes.

Increased efficiency in managing organisational resources.

Continued building capacity of project staff and systems to support our target people.

192 PRIME BANK

GREEN BANKING REPORT
The word “Green Banking” has been conceptualized to instructed the Banks & NBFIs (vide SFD Circular No. 02 dated
implement the broader concept like sustainable development. 1st December, 2016) to:
“Sustainable Development” is development that meets the
i. Establish a Sustainable Finance Unit
needs of the present without compromising about the ability
of future generations to meet their own needs. Various global ii. Establish a Sustainable Finance Committee chaired by
initiatives are underway to counter the adverse effects of senior most Deputy Managing Director.
development such as global warming and climate change. iii. Ascertain the Terms of Reference (TOR) set by Bangladesh
Banks can play an instrumental role in these global efforts to Bank for Sustainable Finance Unit and Sustainable Finance
make the planet a better place for livelihoods. Committee in the Bank.
“Green Banking” means operating banking business in such iv. Risk Management Committee (RMC) of the Board of
a fashion that proper and adequate attention is allocated in Directors to oversee the formulation of policy, set strategies
social, ecological and environmental factors of environment and programs and monitor the overall activities related
by minimizing conservation of nature and natural resources. to Sustainable Banking and Sustainable Finance (Green
“Green Banking” is a form of banking taking into account the Banking & CSR) programs.
social and environmental impacts and their main objects are to
As a regulatory body of the Banking sector, Bangladesh Bank
safe-guard and conserve the environment. As the intermediary
introduced Environmental & Social Risk Management (ESRM)
of financial sector, banks can ensure that business entities
framework for Banks and NBFIs. The framework includes
adopt environment-friendly practices. The main objective is
the environmental & social risk management factors for
to reduce carbon footprint from banking operations as well as
ensuring the sustainable development and protection of the
from financed projects.
surroundings from further deterioration.

Bangladesh Bank’s initiatives To promote Green Banking, Bangladesh Bank has declared the
following preferential treatments for the compliant banks:
The Sustainable Finance Department of Bangladesh Bank is
engaging and encouraging all Banks and NBFIs to expedite • Points to be awarded on management component while
their green banking initiatives and standards. The necessary computing CAMELS rating resulted ultimately in overall
policy guidelines and strategies for Banks and NBFIs have been rating of the Bank;
disseminated by the central bank which encompasses policy • Top 10 (ten) Banks’ name to be declared in the Bangladesh
formulation and governance, incorporation of environmental & Bank website.
social risks into credit risk management, in-house environmental
• Consideration will be given while according permission for
management, introduction of green finance, creation of a
opening new Branch of the Bank.
climate risk fund, capacity building through training and
awareness along with periodical regulatory reporting on green Bangladesh Bank also, vide GBCSRD Circular No. 04 dated
banking practices. September 04, 2014 instructed all scheduled banks to allocate
5% of its total funded disbursed loan for BB enlisted 52 (Fifty-
With a view to incorporate sustainability in the financial sector;
two) Green products.
Bangladesh Bank undertook its first initiative during the year
2011 by introducing Green Banking Policy Guideline for the
Prime Bank’s commitment
Banks (vide BRPD Circular No. 02 dated February 27, 2011)
and later during the year 2013 it was made applicable for the Prime Bank Limited believes in eco-friendly and socially
NBFIs (vide GBCSRD Circular no. 04, dated August 11, 2013). In responsible banking system which drives the whole nation
that policy guideline, Bangladesh Bank instructed the Banks towards a healthy environment and presents an excellent
and NBFIs to formulate green banking policy and establish a and hazardless banking. In order to protect and balance the
separate green banking unit/cell with an aim to evaluate and environment, Prime Bank is spreading its wings by introducing
manage the activities related to green banking. Afterwards, both in-house & external Green activities towards supporting
Bangladesh Bank vide its GBCSRD Circular No. 08 dated Green Economy.
December 24, 2013 instructed the Banks to assign the Risk
Management Committee of the Board of Directors to supervise Green Banking Governance at Prime Bank
the overall green banking activities of the Bank. As per instruction of Bangladesh Bank vide SFD Circular No. 02
Moreover, the Government of Bangladesh has taken initiatives Prime Bank Limited has established Sustainable Finance Unit
to implement Sustainable Development Goals (SDGs) at (SFU) under CRM Division. Moreover, a Sustainable Finance
national level which was announced by the United Nations to Committee has been established which is chaired Deputy
implement at global arena. In line with that, Honorable Prime Managing Director & Chief Risk Officer. The Risk Management
Minister of Bangladesh has also instructed all to participate in Committee (RMC) of the Board of Directors is to approve
combined manner to accomplish SDGs. In this connection, policies, strategies and programs related to Sustainable
to bring stability in financial sector, Bangladesh Bank has Banking and Sustainable Finance (Green Banking & CSR)
programs.

PRIME BANK 193

ANNUAL REPORT 2018

Sustainable Finance Unit (SFU): As per BB SFD Circular No. 02, Energy & water management: The Bank has advised the
Prime Bank established SFU under direct supervision of Head officials to adopt energy and water efficient practices. The
of CRM Division. The ToRs of SFU are as under: officers have been advised to put emphasis to ensure efficient
use of gas, fuel, electricity and water with a view to reduce
• Formulation, amendment and implementation of Green
carbon emission. Energy efficient equipments like energy
Banking policy, Green Office Guide, E&S Risk Management
saving bulbs, products with ecofriendly features are being
Policy and other related policy
used in the office.
• Participation agreement signing and applying Refinance
from BB Paper Consumption Management: Green Printing Guideline is
• Support in annual budget preparation & escalation an integral part of our Green Office Guideline which is being
• Provide necessary assistance to internal & external circulated among all employees. Internal communications are
stakeholders done through emails. All staffs have dedicated email IDs for
• Assisting Sustainable Reporting Committee (SRC) & FAD in office use. Customer communications are being done through
preparing Annual Sustainability Report emails, SMS or ATM displays also. Use of scrap or one side used
• Conduct SFC Meeting regularly papers has become usual practice in the workplace. One side
• Update RMC of the Board on quarterly basis regarding used papers are also used for printing draft copies of the office
Sustainable Banking assignments. All divisions and branches have been instructed
• Regulatory & Internal Reporting to maintain a stock in-out register to prevent misuse of papers.

Sustainable Finance Committee (SFC): As per BB SFD Circular Renewable Energy Usage: Up to year 2018, the Bank has
No. 02, Prime Bank established SFC chaired by DMD & CRO. installed solar panels at 36 branches as well as at 4 ATM booths
The ToRs of SFC are as under: and as part of its commitment to the usage of renewable
energy resources.
Approve, monitor & evaluate the activities of Sustainable
Finance Unit at management level. Green Travel: Prime Bank always encourages the officials to
consider the following green approaches while travelling:
Set annual objective of Sustainable Finance Unit and evaluate
its performance. • Encourage employees to use Public Transport/Carpool
Program.
Ensure appropriate coordination and support among all
relevant division of the Bank to accomplish the activities of • Encourage employees to use eco-friendly energy for
Sustainable Finance Unit. private vehicles.

Green Banking Policy of Prime Bank Online Banking and Internet banking facilities offered by
Prime Bank
In line with Circular No.02 dated February 27, 2011 of Banking
Regulations & Policy Department, Bangladesh Bank; Prime Online banking system is a great way to reduce paper
Bank Limited outlined a comprehensive Green Banking Policy consumption. Prime Bank has been one of the pioneers in
for implementing Green Banking activities. The updated Green introducing online Banking and it covers 146 branches. All the
Banking Policy of the Bank which was revised during year 2018 146 branches of the Bank are providing online banking facilities
is in place which is duly approved by the Board of Directors and through its core banking system namely “Temenos T24”. Fund
circulated vide instruction circular among all employees. Transfer to Other bank’s Accounts through BEFTN has been
made available through Online Banking for the Consumer
Green Office Guide of Prime Bank Banking Customers. As a result, customers can execute fund
As part of Prime Bank’s continuous effort of positively upholding transfer through paperless and automated Online Banking over
the Green Banking initiatives, the Bank has developed Green internet to any other account in Bangladesh.
Office Guide as a general guideline to facilitate the Green Prime Bank Limited has also offered a safe and convenient
Banking objectives of the Bank. The Green Office Guide has Internet Banking, which is accessible 24/7. By using real-time
pictorial demonstration for better understanding of the internet banking our customers can avail services like balance
readers. The updated Green Office Guide of the Bank which enquiry, view account statement, view loans & deposit of their
was revised during year 2018 is in place which is duly approved own, insurance premium payment, mobile & utility bill payment.
by the management of the Bank and circulated vide instruction
circular among all employees. Automated Teller Machine (ATM)

In addition to the Bank’s own 164 ATMs, the Bank has joined
Major In house Green Banking Initiatives taken by Prime
National Payment Switch Bangladesh  (NPSB) network during
Bank Ltd
the year 2014, which enabled the cardholders of the Bank to
Prime Bank is aligned with Green Banking values. Here are some enjoy cash withdrawal facility from other ATMs under NPSB
initiatives that we already have taken with a view to practice Network. Prime Bank uses the BACH and BEFTN mechanism for
Green Management in the offices. convenient payment activities which to a great extent supports
Solid waste management: 3R approach (Reduce, Reuse and the concept of green banking.
Recycle) has been advised for lowering solid waste. However,
careful management and disposal of solid waste has been
advised.

194 PRIME BANK

Capacity Building initiatives taken by Prime Bank Field Visit to explore green financing opportunity: Member
of SFU accompanied Agriculture Support Division and visited
For continuous capacity building of our human resource, all
different areas of Natore & Rangpur during mid-September of
the foundation training courses organized by our HR-Training
2018 to explore the opportunity of Green Finance. The team
& Development Center has dedicated session to familiarize
visited several poultry farms, dairy farms and solar irrigation
the participant with the concept related to Green Banking &
pumping project. During the visit, the officials met & discussed
sustainability.
with relevant stakeholders from different sectors including
Green Event organized by Prime Bank entrepreneur/farm owners.

Earth Day 2018: On 22nd April 2018 to celebrate “Earth Day”, Financing in Green projects by Prime Bank
Prime Bank arranged tree plantation program by planting trees
Green financing could be one of the suitable opportunities to
at branch premise.
diversify the bank’s business. It is also sensible initiative to keep
our environment better. Prime Bank is committed to promote
sustainable growth in the economy. We have launched 52
lending products to support green and efficient energy
projects. Prime Bank has financed various projects which are
environment friendly. During 2018, the Bank has financed a
total of 33.57 Crore in green finance of which BDT 28.72 crore
for installation of ETP in 04 projects, BDT 2.80 crore in 06 Eco
Friendly Brick Production projects, BDT 7.86 Lac in a solar
system project, BDT 1 lac in two bio-gas plant in existing Dairy &
poultry Farm, 1.96 crore in a LED Bulb/Tube Assembly Plant. In
addition to the above, to explore new ventures in environment
World Environment Day 2018: To observe World Environment
friendly projects, the Bank has conducted field visit, meetings
Day on 5th June, 2018 an advertisement for print media was
with existing and prospective entrepreneurs and Central Bank
developed and published in leading daily newspapers. The
officials. The outcome is positive and we aspire to see the
theme was “Beat Plastic pollution” .
ultimate outcome of this endeavor.

Disclosure and Reporting of Green Banking Activities Green

by Prime Bank

Prime Bank has been regularly reporting its Green Banking

Activities to Bangladesh Bank on quarterly basis since 2011.
Moreover, there is a detail section namely “Sustainable
Finance” in Bank’s official website for disclosing our Green
Banking activities. Prime Bank has been reporting Sustainability
Report based on the GRI framework as benchmark to show
organizational performance with respect to laws, norms,
Green Carnival codes, performance standards and voluntary initiatives;
demonstrate organizational commitment to sustainable
Free Altitude subscription for one year (22 April – 31 May development; and compare organizational performance over
2018): Alternate Delivery Channel (ADC) Division offered time. It is mentionable that, Prime Bank has been awarded
internet banking “Altitude” subscription fee (which is BDT 575 as  “GOLD “Rank in  Asia Sustainability Reporting (ASR)
including vat) free for 1st year during 22 April -31 May 2018 and Rating for Sustainability Report-2017 by the National Center for
communicated about this offer to the valued accountholders Sustainability Reporting (NCSR), Indonesia.
by giving an SMS and displaying message on ATM screens. The
outcome of the campaign was quite impressive.

Pot Bonsais to customers (22 April – 15 May 2018): Distributed

number of pot bonsais among selected valued customer
through Branches Network Division as a token to create
awareness during 22 April 2018 - 15 May 2018.

Green Marketing performed by Prime Bank

As part of Green Marketing, Prime Bank commenced the

mandatory use of jute in product packaging. Prime Bank Limited
has been using its official website for advertising new products as
well as the features of existing products to capture the market and
also it will penetrate to get new customers. Prime Bank Limited
also conveys various offers of different Credit Cards through SMS.

PRIME BANK 195

ANNUAL REPORT 2018

CORPORATE CULTURE

We understand that our ability to succeed ultimately depends

on our culture and ensuring it holds everything we need to
deliver: our strategies from performance and compliance to
stewardship and responsibility. As an important determinant
of the culture, we wish to build dynamic and engaged
leadership teams who are charged with, living the Bank’s
values each day and holding themselves accountable
and responsible for the business, celebrating success and
learning from their mistakes.

196 PRIME BANK

CAPITAL PLAN
Capital planning should be in tune with the business plan of a How Do We Managee Capital at Prime Bank
bank at present keeping in mind the desired business plan for the
The Prime Bank’s approach, to managing capital in line with
future. It should follow a forward looking approach taking into
Basel-3 and other risk management frameworks, is approved
consideration, the target growth, target ROE and target CRAR
by the Risk Management Committee (RMC) and the Board and
(to cover both Pillar 1 and Pillar 2 risks). To achieve the objective,
includes amongst others:
capital planning should be an integral part of ICAAP which is
reviewed by the central bank every year to assess whether Bank Capital Management Framework
has adequate quality capital in line with its strategies.
The Capital Management Framework comprises the
Capital planning is a dynamic and ongoing process that, in order governance, policies and procedures which set out the
to be effective, is forward-looking in incorporating changes in requirements for effective management of capital at Prime
a bank’s strategic focus, risk tolerance levels, business plans, Bank level and its entities, including identification, assessment,
operating environment, or other factors that materially affect monitoring, managing and reporting of any capital matters to
capital adequacy. Capital planning assists the bank’s Board of relevant committees such as RMC and the Board. The Capital
Directors and senior management to: Management Framework contains the basis for setting of internal
1. identify risks, improve their understanding of the bank’s capital targets and also the principles for the development and
overall risks, set risk tolerance levels, and assess strategic usage of Risk Adjusted Return on Capital (RAROC) to measure
choices in longer-term planning; and manage the return on capital across the Bank.
2. identify vulnerabilities such as concentrations and assess
Capital Contingency Plan
their impact on capital;
The Capital Contingency Plan is to ensure robust monitoring
3. integrate business strategy, risk management, capital and
of capital position and provides a framework for effective
liquidity planning decisions, including due diligence for a
governance and escalation process in the event of a capital
merger or acquisition and
crisis. The Capital Contingency Plan also formalizes the basis,
4. have a forward-looking assessment of the bank’s capital
strategies and action plans to restore capital to required level
needs, including capital needs that may arise from rapid
in the fastest possible time without affecting business plans,
changes in the economic and financial environment.
assets growth and strategic agenda.
The most effective capital planning considers both short-term
and long-term capital needs and is coordinated with a bank’s Annual Capital Plan
overall strategy and planning cycles, usually with a forecast The Annual Capital Plan involves detailed planning of the Bank’s
horizon of at least 5 years. The capital planning process should regulatory capital to highlight the capital projections, capital
be tailored to the overall risk, complexity, and corporate requirements, levels of capital and capital mix to support the
structure of the bank. The bank’s range of business activities, Bank’s business plan and strategic objective.
overall risks and operating environment have a significant
impact on the level of detail needed in a bank’s capital planning. Capital Structure
A more complex institution with higher overall risk is expected
Prime Bank holds a significant amount of its capital in the form
to have a more detailed planning process than an institution
of common equity which is permanent and has the highest loss
with less complex operations and lower risks. While the exact
absorption capability on going concern basis. In addition to
content, extent, and depth of the capital planning process
common equity, there are some other components like share
may vary, an effective capital planning process includes the
premium, statutory reserve, retained earnings etc. in the core
following components:
capital. The Bank also maintains subordinated debts in order to
a. Identifying and evaluating risks ; optimize capital mix and reduce overall costs of capital.
b. Setting and assessing capital adequacy goals that relate to risk;
Capital to Risk Weighted Asset Ratio
c. Maintaining a strategy to ensure capital adequacy and
contingency planning ; As per Basel III guideline, Banks are required to maintain
d. Ensuring integrity in the internal capital planning process ‘minimum Total Capital Ratio’ of 10% including ‘Common
and capital adequacy assessments. Equity Tier-1 Capital Ratio’ of 4.50%. Additionally, Banks have to
maintain ‘Capital Conservation Buffer’ of 2.50% by the end of
Our approach to capital management is driven by our strategic
the year 2019. There are some phase-in arrangements for Basel
objectives whilst ensuring that the regulatory requirements,
III implementation by the Bangladesh Bank which allow the
capital targets and risk appetite are met at all times across
Banks to maintain ‘Capital to Risk Weighted Asset Ratio (CRAR)’
the Bank. Effective capital management is fundamental to the
at 11.25% & 11.875% by the end of 2017 & 2018 respectively. Prime
sustainability of the Bank. As such, the Prime Bank proactively
Bank has already been able to maintain CRAR at 17.04% at the end
manages its capital position, capital mix and capital allocation
of 2018. As a result of our efficient Balance Sheet management,
to meet the expectations of key stakeholders such as regulators,
the Bank has consistently been maintaining all Basel ratios after
shareholders, investors, rating agencies and analysts whilst
release of Action Plan/Roadmap for implementation of them by
ensuring that the return on capital commensurate with risks
Bangladesh Bank.
undertaken by respective business units and subsidiaries.

PRIME BANK 197

ANNUAL REPORT 2018

ENVIRONMENTAL & SOCIAL INITIATIVES

What is Environmental & Social (E&S) Risk in financing? After drafting, finally “Environmental & Social (E&S) Risk
Management Policy Statement” and “Environmental & Social
Environmental & Social (E&S) risks are the potential negative
Risk Management Procedure Manual” was placed before the
consequences on the natural environment (air, water, soil, nature,
bank’s Risk Management Committee of the Board. With the
animals or valuable sites) or community people (e.g. employees,
consent of the Risk Management Committee of the Board, the
customers, local residents) due to business operations.
policy & procedure documents were placed before the Board
Environmental Risk Management (ERM) Guideline: of Directors for approval. In November 2017, the “Environmental
& Social (E&S) Risk Management Policy Statement” and
In order to incorporate “Environmental Risk” in overall credit/ “Environmental & Social Risk Management Procedure Manual”
investment management, Bangladesh Bank issued ‘Guidelines got approval from bank’s Board of Directors and it was fully
on Environmental Risk Management (ERM) for Banks and rolled out across the bank from January 01, 2018.
Financial Institutions in Bangladesh’ vide BRPD Circular No.
01/2011. Guideline on ERM has been a pioneering initiative from Project milestones of Environmental & Social Management
any central bank or financial sector regulatory body all over System (ESMS) Implementation in Prime Bank:
the globe in context of addressing environmental risk in the
• In 2014, PBL deployed an E&S Manager and eight
process of credit management in banks or financial institutions.
representatives of various divisions to form an ESMS
Prime bank adopted the ERM policy as provided by Bangladesh
Implementation Committee.
Bank and incorporated it in the credit policy in 2011.
• In 2014, PBL appointed a foreign consultant namely FI
Evolution of Environmental & Social Risk Management Konsult of Czech Republic to provide technical assistance
(ESRM) Guideline from Environmental Risk Management for developing and implementing a system for managing
(ERM) Guideline: E&S risks.
During  2017, Bangladesh Bank introduced “Guidelines on • In 2015, Prime Bank organized three one-day training
Environmental & Social Risk Management (ESRM)” for Banks sessions (conducted by FI Konsult) to equip 90 bank staff.
and Financial Institutions with an Excel-based Risk Rating
• In 2015 & 2017, the bank reformed ESMS Implementation
Model and circulated vide SFD Circular No. 02 dated February
Committee by including more members from cross
08, 2017. The ESRM Guideline had replaced the Guidelines on
functional divisions.
ERM. Moreover, vide the same circular, Bangladesh Bank had
declared that, year 2017 to be treated as phase-in period for • In 2017, Bangladesh Bank circulated ESRM Guidelines.
implementation of ‘Guidelines on ESRM’ and from January • In July 2017, Prime Bank organized a day long training
01, 2018 ‘Guidelines on ESRM’ to be enforceable under Bank session for 32 PBL officials. Training of Trainers (TOT) was
Company Act, 1991 and Financial Institutions Act, 1993. also conducted in the duration.
In 2014, long before Bangladesh Bank circulated the final ESRM • In November 2017, Prime Bank Board of Directors approved
guideline, Prime Bank took initiative to strengthen the then the “Environmental & Social (E&S) Risk Management Policy
ERM guideline and expand the area from environmental risk Statement” and “Environmental & Social Risk Management
management to environmental and social risk management Procedure Manual”.
considering both national and international standards.
• From 01 January 2018, both the policy and the procedure was
The revision work in 2014 started with the help of a foreign made effective on the entire lending portfolio of the bank.
consultant namely FI Konsult of Czech Republic under the
• Continuous follow up and hand holding is done now.
background of Prime Bank borrowing some fund from FMO, a
Moreover, currently periodical E&S review is being conducted
Netherlands based development bank.
for learning and to identify the scope of improvement.
During the policy revision series of meetings and consultations
were held and with the help of the consultant in line with What is “E&S Risk Management Policy Statement” and “E&S
Bangladesh Bank guidelines, Prime Bank with its active co- Risk Management Procedure Manual”?
operation drafted two (2) important documents namely
• E&S Risk Management Policy Statement: It represents
“Environmental & Social (E&S) Risk Management Policy
the Banks commitment towards being E&S compliant in its
Statement” and “Environmental & Social Risk Management
activities and financing. The applicability, excluded sectors
Procedure Manual”. These documents comprise of prime
and discouraged sectors are defined in this policy statement.
bank’s commitment towards being Environmentally & Socially
(E&S) compliant, include the social risk factors, excluded • E&S Risk Management Procedure Manual: It is a detailed
activities, discouraged sectors, define environmental and document representing the process flow, roles and
social requirements for lending, E&S risk management responsibilities and operation procedure of E&S Risk
procedures, tools, roles & responsibilities etc. These two policy Management for the Bank.
and procedural documents played a vital role in strengthening
ESMS in Prime Bank Limited.

198 PRIME BANK

Highlights of major components of Environmental & Social Environmental & Social Risk & Opportunities Management
Management System (ESMS): (ESROM 2.0):

• Exclusion List: List of identified 12 activities, where Prime In 2018, the Bank participated in ESROM 2.0 where 29 employees
Bank is committed not to finance for any such activity, and 2 clients of the Bank attended 2-day long training program
production, use of, trade & distribution. in 8 different sessions on “E&S Risk Management”. The training
program was organized by FMO, DEG, proparco, Oe-EB, UNEP-
• Discouraged Sectors: List of identified 11 sector, where the
FI facilitated by ERM- India and participated by 9 FIs operating
Bank finance is discouraged under the purview of legal aspect,
in Bangladesh including Prime Bank Limited.
regulatory compliance, business risk and banking ethics

• Industry categorization by Department of Environment

(DoE): Industries are being categorized based on
environmental risk. The categorizations are recorded
as Green, Orange A, Orange B and Red where industry
categorized as “Green” is expected to have low
environmental impact through its operation and industries
categorized as “Red” is believed to pose the highest
environmental risk.

• ESDD Checklist: It is an excel-based Risk Rating Model

comprising of 12 questions for determining the associated
E&S Training by IFC:
environmental & social risk of a concern. The outcome of
ESDD is known as environmental & social risk rating (ESRR) In 2018, few officials of the Bank obtained “Training for ESRM
and categorized as high, medium & low. Implementers” organized by IFC.

• Environmental & Social Action Plan (ESAP): For “High”

In-house Training on “E&S Risk Management”:
ESRR an E&S Action Plan (ESAP) needs to be drafted within
a reasonable timeframe. In 2018, Prime Bank Human Resources-Training & Development
Center organized two dedicated training on E&S Risk
• E&S Covenants: For “Medium” and “High” ESRR E&S
management to familiarize the participant with the concept
covenants/conditions is required to be incorporated in the
related to Environmental & Social Risk Management where 56
Sanction Advice.
bank officials received training.
• Monitoring of E&S Risk: After disbursement monitoring by
bank officials is required to address E&S risk issues. Workshop on “Environmental & Social Safeguard and
Compliance Reporting” by BB:
Applicability of ESMS in Prime Bank Limited:
In 2018, In October 2018, Bangladesh Bank organized a workshop
ESMS is applicable for all loan proposals (New/Renewal/ on “Environmental & Social Safeguard and Compliance
Enhancement/ Rescheduling/Restructuring) under agriculture, retail, Reporting” where 2 Prime bank officials participated.
trade, microfinance, SME, corporate finance and project finance.
E&S Training by IFC & FI Konsult:
Process Flow Environmental & Social (E&S) Risk Management:
In 2017, to equip bank’s officials on ESRM, the bank arranged
training by FI Konsult for 60 bank officials from different
business segments.
[Link] 3. ESRM PROCEDURES 4. REPORTING
Bank’s environmental & social E&S Performance of
commitment & standards Bank & clients
Evaluating E&S Risk

Transaction Screening

Risk Categorization

2. E&S CAPACITY
Roles & responsibilites
Training E&S Due Diligence

Conditions of Financing

Monitoring E&S Risk

Reviewing Client’s
E&S performance

Managing Non-compliance

Environmental & Social (E&S) Risk Management Capacity

Building: Training of the Trainers:

For continuous capacity building of our human resource on In 2017, Training of Trainers Workshop was organized by foreign
E&S, both internal and external training/seminars & workshops consultant Milan Tomik, FI Konsult where 11 officials received
has been arranged. ToT.

PRIME BANK 199

INTEGRATED REPORTING

Integrated Reporting

Statement of Value Added and Its Distribution

Economic Value Added Statement

Market Value Added Statement

WELCOME TO OUR INTEGRATED REPORTING
This report is prepared around Prime Bank Limited (PBL)’s story in the bank, we have prepared corporate governance report
of value creation. The crucial features of our value creation adhere to the revised Corporate Governance code issued by
process are the different forms of capital that provide the Bangladesh Securities and Exchange Commission (BSEC).
inputs, and the value creating actions that result in outputs,
The information content of the report covers the economic,
outcomes and impacts, while the entire process is driven by
social and environmental impacts resulting from value creation
bank governance.
activities of the bank and includes a rational assessment of
prospective impacts. The assessment of materiality embedded
Here is a description of the context and framework of our
in our process has ensured that we report on all material issues
reporting.
relating to sustainability with regard to aspects internal and
The companies Act, 1994 requires that the Bank publishes external to the organization within the sphere of influence of
its annual report within a specified period after the end of its the bank. The bank stakeholder identification process ensures
financial year. It also stipulates particular requirements and stakeholder comprehensiveness.
disclosures that must be integrated in the annual report. In
This Annual Report relates to the activities of Prime Bank Limited
parallel, the Board’s commitment to stewardship demands
and its subsidiaries, collectively referred to as the PBL Group,
transparency on matters related to stakeholders.
covering a 12-month period ended 31 December 2018. There have
PBL’s value creation model aims to generate value while been no changes in reporting scope and/or boundaries from the
matching the bank’s responsibilities towards its various previous year. Non-financial information in this report pertaining to
stakeholders, including its shareholder and the environment. the previous year has not been restated, unless otherwise stated.
How the bank achieved this over the last financial year through The Assurance Statement is available at the end of this report.
performance and conformance is discussed comprehensively
The Independent Auditor’s opinion on the Financial Statements
through the different segments of the report.
is available in the Independent’s Auditor’s Report.
The financial Statements of the bank as at 31 December
2018 have been prepared in accordance with the applicable Responsibility of the Board of directors of PBL
Bangladesh Accounting Standards (BASs) and Bangladesh
We acknowledge the responsibility to ensure the integrity of
Financial Reporting Standards (BFRSs). In addition to, we
this integrated report, which addresses all material issues,
have followed relevant criteria mentioned in the framework
presents fairly PBL’s integrated performance. The integrated
issued by the ‘International Integrated Reporting Council
report, incorporated in this annual report has been prepared in
(IIRC)’ and the guidelines issued by the ‘Institute of Chartered
line with the key guidelines of IIRC.
Accountants of Bangladesh (ICAB)’ in the form of ‘Integrated
Reporting Checklist’.

The sustainability requirements, as detailed separately in our

Sustainability Report, comply the GRI Standards issued by the
Global Reporting Initiative (GRI). To report the good governance

PRIME BANK 201

ANNUAL REPORT 2018

Competitive intensity and our response information to our stakeholders. Our effort to manage the
risks as those cannot be removed completely. We have done it
A detailed analysis of competitive intensity PBL faces while
through illustrating our risks structure by using Michael Porter’s
conducting business in country’s vibrant banking industry
five forces model.
and PBL responses to absorb the shock of these risks on its
business model have been considered relevant in providing

Threat of new entrants Buyer power

Despite the regulatory and capital requirements of Corporate and  high net worth individual  customers
starting a new bank, a number of new banks have have relatively higher bargaining power. Individual
entered in the market. With so many new banks in the consumers, especially in the retail banking
market is obvious to intensify the competition and the marketplace, have relatively low bargaining power.
probability of new entrants will intensify it further. However, in the aggregate, the bargaining power of
consumers is greater.

Supplier power Threat of substitute product

The two main suppliers for a bank are the depositors In addition to the threat from the new entrants, PBL is
who supply the primary resource of capital and also exposed to competition from the other financial
employees who supply the resource of work. The intermediaries offering substitute products. These
power of the suppliers is largely based on the market, include the non-banking finance companies and the
their power is often considered to fluctuate between new entrants as well as the substitute products are
low to medium. adding on to the already existing competition from
the present players.

Competitive rivalry

The banking industry of Bangladesh is considered highly competitive. Because of this, PBL must attempt to attract clients
by offering cutting-edge services, higher rates, investment services, and greater conveniences compared to its rivals. The
banking competition is often a race to determine whether PBL can offer both the best and fastest services.

One of the industry element that intensifies the importance of competition is the relatively low  switching costs  that
customers face.

202 PRIME BANK

VALUE CHAIN OF PBL

• Corporate governance • Nondiscriminatory • World class core • Financial reporting in

code Recruitment and banking software compliance with
• Risk Audit selection • ATMs regulatory guidelines
• Risk based internal • Training and • Internet banking • Accounting Standards
audit development • Mobile banking (BFRSs, BASs)
• Regulatory compliance • Career Development • Automation of • Management
• Credit risk • Higher pay operation Information System
management process • Performance Appraisal • IT audit (MIS)
• Operational risk • Succession planning • IT security • Management
management process • Decision support Accounting
• Internal control system • Financial Accounting
systems (ICSs)

Governance and Risk Management

Support activities

Human Capital Management

Technological Advancement

Margin
Finance and Reporting
activities

Inbound Operations Outbound Marketing Services

Primary

Logistics Logistics and Sales

• Customer databank • Dedicated trade • Tailored made • Advertising • Dedicated customer

• Talented human service desk for products and • Branding, market service & complaint
capital handling trade services development management
• Modern Technology transactions • High quality • Multi channel • Customer
• Dedicated team for customer service management relationship
providing SME • Asset quality • Alternative delivery management
service through efficient channel • Apparent
• Real time credit risk • Direct sales communication
transactions management executives
• Faster turnaround
time

PRIME BANK 203

ANNUAL REPORT 2018

PESTEL Analysis

Macroeconomic factors Impact on industry Our Front

P-Political factors
Despite eleventh national election Entrepreneurs took conservative steps The bank is ready to take up the
was held in 2018 Political stability in the year of election. However, It is opportunities which will open for the
was remaining same in the country. expected that Entrepreneurs will be growth of private sector investment.
Political stability have encouraged the starting investment again. The demand
Suitable strategy will be taken by
entrepreneurs to borrow more from local of loans and advances will increase and
the management by assessing the
sources to meet their growing demand pressure will put on liquidity.
environment.
for investment.
Demands of public sector will increase as
The vigorous risk mitigation process of
The present government leads the existing mega projects will be completed
the bank is enable to mitigate the political
country in last ten successive years in timely manner and huge infrastructure
risk.
and elected for next five years. As projects will be taken.
the present government effectively
controlled the political environment so
far so, it is expected it will continue in
near future. As a result, policy and priority
in infrastructure development will be
emphasized.
E-Economic factors
Interest rate has been decreased to single The spread has declined affecting PBL attracted low cost or no cost funds
digit. Lower interest rates on loans and interest income of Banks. and decreased the loan rate which will
advances has inspired the businessmen help to retain present customers as well
to borrow additional fund from local as to attract prospective customers.
banks for investment.
In 2018, GDP growth rate hit 7.86% After having excess liquidity for quite The asset liability management
which was the highest ever in history a long time, banks have faced liquidity committee has managed the assets and
of the country’s economy. GDP growth pressure in the last half of 2018. Low-cost liabilities efficiently. Management has
increased by 7.97% compared to last foreign loan has been taken by some of been working at high scale to increase its
year’s growth. the entrepreneur. loan and advance portfolios in agriculture
and SME from last few years which will
continue for upcoming years.
S-Social Factors
The life styles of the citizens have Banks analyze the demands of customers Per capita income in fiscal year 2017-2018
changed due to advancement of in different methods as customers was $1751 which has a positive impact on
information technology which has lifestyle has changed. Information the banking sector. Life style of people
facilitated gathering of information in providing sources have changed and has improved and this led to opening
no time. Customers desire a seamless qualities of services have improved due new window of financing and PBL is
banking experience and technology is to increased awareness of the customers. ready to capitalize it through its superior
developing to allow customers to enjoy Differentiation is the key driver to sustain products and services.
services easier. in the market.
T-Technological
Technological development is growing Banks need further investment and The core banking system (CBS), Temonos
fast as government invests at large scale improve operational efficiency to meet version-R16, of PBL has been updated.
to make IT infrastructure in the country. up the demand of customers following This Updated CBS would further strength
the regulatory rules and regulations. its processes and give opportunities for
Technology is changing how customers
further growth with proper control in
operate their accounts. Many banks
place.
offer a mobile app to operate accounts,
transfer funds, generate E-statement and PBL has launched a mobile app to
pay bills on smartphones. operate accounts, transfer funds,
generate E-statement and pay bills on
smartphones.

204 PRIME BANK

 Macroeconomic factors Impact on industry Our Front
E-Environmental
The environment and climate change A separate department namely PBL has outlined an inclusive green
effect on human existence and the sustainable finance department has banking policy for implementing green
planet are now a global concern. The been opened by Bangladesh bank which banking activities.
world is more conscious about green and is engaging and encouraging all banks
PBL has also incorporated the
environmentally sustainable banking. and FIs to step-up their green banking
environmental risk management policy
Sustainable finance is vastly appreciated initiative and standards.
in its credit risk management policy as
by the community.
Regulatory monitoring has been an integral part of environmental due
increased on green financing. diligence.

Bangladesh Bank also introduced green PBL has launched a mobile app to
baking policy for all banks. operate accounts, transfer funds,
generate E-statement and pay bills
on smartphones. Thus, PBL is trying
to reduce individual environmental
footprints.
L-Legal
Banking sector are faced with rigorous Increase in regulatory demand placing PBL has already developed a decent
laws and regulations set by the different greater pressure on employees and image for compliance issues.
regulators. increasing the cost of compliance.
PBL imparts training to employees, notify
Emphasis has to be put on the application the customers about the new rules and
of provision for loans and advances and regulations to ensure requirement of
capital adequacy. compliance.

SWOT Analysis

STRENGTH

Strengths Strengthening our bank further

Solid capital base Strong ability for playing important role on growth platform
Strong brand among local banks continue our efforts to boost up the goodwill for creating
good image
Competent and experienced employees Invest in people as they are the main assets of the bank
Personalized products and services and high level of customer Continue market research to innovate new product and
service service line
Credit portfolio is diversified by multiple norms and Maintain the diversification to minimize the credit risk
classifications
Sound asset liability management Keep continuing top class practice
Advance risk management and pricing systems Continue proactive initiative to manage the risk
Clear structure, high degree of flexibility and fast decisions Invest in operations and technology to improve the decision
making
Conventional and sustainable business policy Continue strong monitoring and response in time to cope up
the changes
Rigorous regulatory adherence Comply the regulatory rules and regulations for the
improvement of the bank
World class core banking software Obtain the best benefits for our sustainable growth
Excellent job environment Continue to uphold the pleasant environment where an
employee can perform without any fear
PBL has 123 Conventional branches, 18 SME branches, 05 PBL will establish more banking channels nationwide, in order
Islamic Banking branches, 03 OBU, 170 ATMs across the country. to providing financial services effectively.

PRIME BANK 205

ANNUAL REPORT 2018

WEAKNESS

Weaknesses Dealing our weaknesses

Dependency on interest income from loan and advance as a Diversify the portfolio, innovate the new products and services
key source of income in line with the demand of customers

OPPORTUNITY

Opportunities Capitalizing on opportunities

Unique culture and competitive positioning in the market Talented employees will play strong role with the current
continue to attract top talent talented employees
Building new client relationships Opportunity to expand the business
Several new initiatives introduced to increase the product Customers will attract for others products and services
portfolio and enhance cross-selling
Growing economy Opportunity to expand the loans and advances
Private sector credit growth has risen notably Opportunity to expand the loan and advances portfolio

THREAT

Threats Responding to threats

Client losses from aggressive competitor actions Providing topmost services to all customers
Liquidity surplus driving banking sector participants towards Creating new loan market, Select customers very carefully,
unhealthy price wars to grab the best customers Attract new customers by offering differentiated services
The increase in regulatory demand placing greater pressure Train employees properly, Educate the customers, Change the
on employees and increasing the cost of compliance system to cope up the changes
Scarce skills representing challenges for new appointments Make the succession plan for the key positions
and potential loss of key employee to peers
The Banking sector has been at risk for cyber security PBL is committed to ensure top-notch cyber security with the
attacks since the inception of the internet growing use of technology with banking transactions

The Capitals Report

Financial
Capital

Manufactured
Capital

Intellectual Human
Capital Capital

Social and
Relationship
Capital

Natural Capital

206 PRIME BANK

An organization’s competitiveness depends to a great extent on 19th February and 19th August each year. Floating rate is
on the capability to efficiently manage the different sorts of determined by calculating a benchmark rate i.e. peer banks’
capital, and that is what an integrated report is trying to capture. most recent average FDR rate and 2.75% margin with a floor at
Delivering information about how the types of capital are 11.50% and capped at 14.00% p.a.
managed is vital for capital providers. The bank cannot assume
Total outstanding balance of Prime Bank Subordinated Bond-2
that its capital providers and other stakeholders will understand
was 2,000,000,000 as on December 31, 2018.
how different sorts of capital are linked to financial performance
if the bank fails to communicate that information effectively. PBL has issued another unsecured non-convertible bond
on August 12, 2018 namely “Prime Bank Subordinated Bond-
Financial Capital 3” after obtaining approval from Bangladesh Bank and
Bangladesh Securities & Exchange Commission respectively.
Financial capital is the familiar form of capital. It is generally The bond shall bear interest with floating rate payable semi-
understood as the pool of funds available to the organization. annually on 12th February and 12th August each year. Floating
This includes both debt and equity finance. PBL uses both sort rate is determined by calculating a benchmark rate i.e. peer
of finance to create value in short, medium and long term. banks’ most recent average FDR rate and 2.00% margin with a
Financial capital is a medium of exchange that releases its value floor at 7.00% and capped at 10.50% p.a.
through conversion into other forms of capital. Financial capital
has an impact on the co-development and maintenance of Total outstanding balance of Prime Bank Subordinated Bond-3
capitals with other organization in the supply and value chain. was 7,000,000,000 as on December 31, 2018.

PBL currently uses the following major equities and debts to

Deposits
create value in short, medium and long term.
Currently a range of attractive products and services have
Paid Up Capital been offered by PBL through 123 conventional branches, 5
Islamic banking branches and 18 SME branches. The major
Paid up capital represents total amount of shareholders’ capital types of deposits are Current/Al-wadeeah current deposits,
that has been paid in full by the ordinary shareholders. It is a Bills payable, Savings bank/ Mudaraba term deposits, Term
measure of how much money investors have pumped into the deposits/Mudaraba term deposits. Total amount of deposits
bank since inception in return for equity. The Paid up capital of and bills payable of the bank was Tk. 197,517,725,557 as on 31
PBL was Tk. 11,322,834,770 which played a significant role for December 2018. Deposits are the key source of finance that
creating value for the stakeholders. played crucial role in value creation process of the bank.

Share Premium Manufactured Capital

Share premium is the capital that the bank raises upon issuing This refers to our business structure and operational processes,
shares that is in excess of the face value of the shares. The share including our physical and digital infrastructure, as well as
premium may be applied by the Bank in paying up unissued information technology that provides the framework and
shares to be allotted to members as fully paid bonus shares machines of how we do business and make profit. Having
or writing-off the preliminary expenses of the Bank or the identified the importance of this important capital, which
expenses of or the commission paid or discount allowed on, is easily identifiable due to its nature, the bank focuses in
any issue of shares or debentures of the Bank or in providing developing infrastructure in order to support current business
for the premium payable on the redemption of any redeemable activities and also meet future challenges given the importance
preference shares or of any debentures of the Bank. The Share of this capital in the value creation process.
premium of the bank was Tk. 1,211,881,786 which played a vital
role in value creation process. The bank has already been able to gain benefits of money
spent on strengthening infrastructure of the bank. The bank will
Retained Earnings continuously invest in technology with the objective of delivering
unmatchable customer experience through technology.
Retained earnings refer to the percentage of net earnings not
paid out as dividends to shareholders, but retained by the bank Further, the Bank is mindful of the requirement to maintain
to be reinvested in its core business, or any other purposes. The the state of art work environment within the bank premises
current retained earnings position of PBL was Tk. 1,759,002,003 and continuously invest sufficiently in upbringing the existing
as on 31 December 2018. premises to be line with industry standards.

Borrowings from other banks, financial institutions and agents Consequent to above initiatives the total amount invested in the
Manufactured Capital of the Bank which are represented in the form
The bank has borrowed Tk. 33,944,516,693 from different banks of Fixed Assets stood at Tk. 6,943,348,521 as on 31 December 2018.
and agents inside Bangladesh and outside Bangladesh.
PBL raised fund by issuing two Sub-ordinated bonds which Human Capital
played vital role in value creation.
It is represented by our people; our investment in management
and leadership development; and the knowledge, skills and
Prime Bank Sub-ordinated Bond experience they collectively bring to enable innovative,
PBL has issued unsecured non-convertible bond on February convenient and competitive solutions for our customers.
19, 2015 namely “Prime Bank Subordinated Bond-2” after Human capital in an organizations and businesses are an
obtaining approval from Bangladesh Bank and Bangladesh important and essential asset who contributes to development
Securities & Exchange Commission respectively. The bond and growth, in a similar way as physical assets such as machines
shall bear interest with floating rate payable semi-annually and money. The collective attitudes, skills and abilities of people

PRIME BANK 207

ANNUAL REPORT 2018

contribute to organizational performance and productivity. Any sharing culture, extensive training and human capital management
expenditure in training, development, health and support is an tools contribute to how we manage and exploit knowledge.
investment, not just an expense.
We believe that knowledge used and shared also depends on
An organization can’t survive if there are no employees. the unspoken norms of behavior that constitute PBL’s culture.
Organization runs with the help of individuals who contribute in It is these norms and our family friendly working environment,
their own way in its success and productivity. Employees spend rather than formal systems, which shape our employees’
maximum part of their day in offices and strive hard to achieve interaction with customers, colleagues and other stakeholders.
the goals and objectives of the organization. Employees should
Our brand reputation has been carefully built through the
be motivated from time to time so that they develop a sense
PBL differentiation strategy. We have sought to differ from our
of attachment towards their organization and also deliver
rivals through technological excellence, effective customer
their best. Every employee in his/her tenure acquires some
relationship management, market presence and strong sense
set of skills through his experience, exposure, trainings and
of responsibility and accountability.
so on which further increase his/her productivity eventually
benefitting the organization. Knowledge and expertise which
Social and Relationship Capital
employees develop in due course of time to further increase
the productivity of organizations refer to human capital. Every These capital reflect our citizenship and the strong relationship
employee tries his/her level best to sharpen his/her skills during we have with all our stakeholders, including the communities
his turn with the organization. Human capital is defined as the we live in, as we recognize the important role that banks play in
collective stock of skills, attributes, knowledge, and expertise of building a strong and thriving nation.
employees which further plays an integral role in increasing the Relationship capital- made up of customers and business
productivity of the organization. partners- has a significant role in the PBL value creation process.
People should be treated as an asset rather than an expense Customers, and other interactions with them, thus have a
item. Every effort should be taken, whether formally or strong influence on sustaining and enhancing PBL’s relationship
informally, to develop skills and abilities and to provide capital. We believe that the new business environment requires
opportunities for people to maximize their contribution. companies to shift from being product-centric to being
customer-centric. At PBL, customer capital thus goes beyond
Intellectual Capital long term customer relationships to be viewed as an asset that
is a source of organizational competitiveness.
The contribution of customers to current and future revenues
Intellectual is therefore fundamental to assessing how successful PBL
Capital is at converting customer relationships into a sustainable
competitive advantage.
Our attitude to sustaining and enhancing customer capital
involves managing customers’ experiences and superseding
their expectations with our products and services.
Understanding client needs and aspiration allows us to gear
our supply chain better to finally deliver products that satisfy
Organization Brand the customer. This is supported by our focus on regular
based Reputation engagement and ethical marketing.
Intangibles
PBL reaches its existing and potential clients across multiple
platforms. Our branch networks and SME centers make up one
Intellectual Capital refers to our intellectual assets, such as our of the largest, most modern banking networks in Bangladesh.
brand, research and development, innovative capacity, our Relationships with our business partners are a key driver of
reputation, and the knowledge of our employee. value and an important part of our strategy. We engaged in
This capital is enhanced through two important elements- partnership with only those who share our core values. Once
our brand reputation and the value created by organizational we begin a relationship with a business partner, high priority is
intangibles. PBL is committed to learning and service given to managing every aspect of that relationship in a mutually
excellence; we have thus generated several assets that do not beneficial manner. This approach has enabled PBL to secure
appear in the Financial Statements. Our competitive strategy enriching relationships with local and global business partners.
and differentiation have been leading facilitators to the creation Strong relationships cultivated over many years with the world’s
of value in the form of Intellectual Capital. best, have enabled us to deliver on our strategic approach of
During our glorious 23 years in business, we have collaborated collaboration while offering unique products and services to
with employees to build a massive pool of expertise and diverse group of customers.
experience which is a key component of PBL’s intellectual capital.
This pool of knowledge consists of specialized expertise in Natural Capital
business field, and in capital management and risk management. Natural Capital refers to naturally occurring biological, physical,
We know however that knowledge gained is only as valuable as biophysical, chemical and mineral assets, as well as their
its effect and influence on the work we do. At PBL we endeavor to interplay through healthy functioning ecosystems, on which
document and share information in as many ways as possible to all life depends. Within the financial sector, the impact, both
maximize the value of this most important element. Knowledge positive and negative, of our operations and business activity
on natural resources are considered.

208 PRIME BANK

 Our Value-Creating Business Model
(Creating value in a sustainable manner through our Strategy)

Our business model creates value by converting capital inputs very much aligned with the ‘value creation process’ which is
(i.e. various types of capital e.g. financial, natural, human etc.). the key element of Integrated Reporting.
These inputs include the skills and our talent of the people
The financial resilience of this model is built on fair interest
within our organization and money from the customers, via
rates to savers; reasonable long-term returns for investors; and
our core products and services. It transforms these inputs into
deposits that are lent to sustainable entrepreneurs working in
value outputs through value adding activities so that they make
the real economy to deliver real impact. We seek to satisfy the
a positive contribution to the development of a healthy society
needs of our valued customers and valued clients by offering a
that’s able to flourish within our planetary limits. A portion of
well-rounded value proposition- a wide range of products and
bank’s operating profit is spent every year for performing social
services- and thereby deliver a smoother income stream and
responsibilities which has a positive impact on social capital.
sustainable returns.
PBL is also generating relationship capital along with social
capital by contributing to the unprivileged segment of the We endeavor to deliver a healthy balance between loans and deposits
society through providing them with education, health support so we are able to mobilize as much of our deposits as possible. We also
as well as creating job opportunities by transforming them as maintain healthy levels of capital, well above regulatory requirements.
competent human resources. Hence, our business model is This makes us more resilient over the long-term.

PRIME BANK 209

ANNUAL REPORT 2018

OUR CAPITALS
Inputs ENABLE VALUE DELIVERING FINANCIAL
ADDING ACTIVITIES PERPORMANCE
(OUTPUTS)
Offer Savings and
Financial Capital
investment products Advances: BDT 205,810 million
26,181 million Equity
Generate fair returns on Deposits: BDT 197,518 million
197,518 million Deposits
investments

Human Capital
Extend credit to our
3,212 talented employees
valuable clients through
Created 73 new job opportunities
responsible lending practices
Customer and people centered culture
Robust governance and
compliance culture Reward performance
and invest in attracting,
developing and retaining
Manufactured Capital
our people
170 ATMs
146 digitally focused branches Facilitate payments and
and 3 OBUs transactions offer global
Digital channels and products standard services
Details have been illustrated in our
capital report Manage, protect and grow
wealth through asset and
wealth management
Intellectual Capital
solutions
Details have been demonstrated
in our capital report

Social and Relationship Capital

Details have been explained
in our capital report

Natural Capital
Carbon footprint reduction
Growth in green financing

Details have been described

in our capital report

210 PRIME BANK

 ENABLE VALUE-ADDING ACTIVITIES
(OUTPUTS)

Employees
Produces
Created 73 new permanent job opportunities
Net interest
Increased average employee salaries by
income: BDT 7,650
BDT 0.10 million
million less
Incurred training and development
spend of BDT 13.36 million
Provision: Career advancement and ability to
BDT 1,782 million reach individual potential

Equals
Customers
Income from lending
Loans and advances increased by
activities: BDT 5,868 million
BDT 7,486.79 million and grow
at 3.78% over the year
Launched various innovative
solutions that address the needs
of our customers
02 New ATMs
Non-interest income: Maintained competitive pricing
BDT 5,249.91 million
including Commission Shareholders
and fees: BDT 2,208.57 Yearly dividend 12.50 cash and net asset
million value per share BDT 23.12
Investment income: Maintained a robust balance sheet
BDT 2,154.01 million to protect against unforeseen risks
Other operating income:
BDT 887.32 million Regulators
Expenses: BDT 7,180.03 Comply with regulation to
million mitigate against system risk
Adhere to sustainable banking
Taxes: practices to protect our customers
Direct Tax: BDT 491.56 million Support government through
In-direct Tax: BDT 3,928.29 million BDT 4,419.85 million Tax contribution
(direct, indirect, PAYE and other)

Communities
CSR BDT 703.04 million
Carbon-neutral operations
Provided significant amount of loan in
renewable energy projects during the year.
Almost 100% local procurement

PRIME BANK 211

ANNUAL REPORT 2018

Strategy and Resource Allocation the financial capabilities of clients and potential clients, and
supporting companies to make the transaction to more
Our strategy is primarily aimed at creating value for our
sustainable business model.
shareholders (long-term capital providers) which has been
described in “Strategic Priority” part of the annual .
Our main differentiators that powers PBL competitive
The described objectives will be achieved by advantage
• Satisfying the promises we make to our customers through We financially empower by making banking accessible and
vigilantly planned and executed processes that are fully easier to understand in line with our customer needs. We see
leveraged by our scale. sustainability as a source of competitive advantage of bank.
• Crafting relentlessly excellent customer experience by We broadened our sustainability approach in corporate lending
understanding our customers and offering the products, and in general lending and also extended it in retail banking.
services and solutions they require to serve their purpose. The success of our strategy will ultimately depend on how
• Serving our customers quickly, competently, consistently well it enables us to adopt to change and continue to deliver a
and courteously in person and/or online, as they choose. superior experience for our customers.

• Continuing the investment in IT infrastructure to meet up PBL is focusing not on price leadership but on offering a
the requirements of customers. superior customer experience, conforming that this is the area
bank need to focus on to succeed.
• Providing our employees with what they need to deliver
outstanding customer experience. Consumers are rapidly turning to digital services for an
increasing number of needs. What they are experiencing with
• Fostering a deep connection among all our employees
digital leading bank is shaping their expectations.
with our purpose and our customers.
Economic growth rate of the country hit the highest point
• Creating state-of-the-art workstation
in the history of Bangladesh. However, interest rates were
• Empowering our employee to deliver against our declining, putting pressure on savings and lending margins,
strategy by encouraging them to make the most of every which make up a large portion of our revenues. As a response,
opportunity to achieve their full potential, and by rewarding we are increasing our focus on services to clients that generate
their contribution. fee income.
• Honoring our strong culture attributes while encouraging Regulation is another challenging area for banking sector.
and entrenching focused customer-centric behavior. Many regulations have introduced to increase the stability of
• Continuing dynamic and engaged leadership teams who banking system. New regulatory initiatives in the pipeline could
live our values and are focused on doing the right business further increase capital requirement for banks, putting pressure
the right way, who hold themselves accountable for the on returns. This will require banks to look for new sources of
business, and who celebrate success and learn from their income and to lower costs.
mistakes. All these developments in the external environment confirm
• Increasing research and development to deliver new to us that we are on the right track with our strategy to
products and services which meet the contemporary create a differentiating customer experience based on digital
demand of customers. banking. We support that through the clear and easy approach
embodied in our customer promise.
• Creating a great place to work.

At PBL we believe that our purpose as a bank is to contribute to OUTLOOK

the sustainable development of society by empowering people
to stay a step ahead in life and in business. In 2018, we made Challenges in executing our strategy
good progress implementing our strategy and promoting
The following challenges offer a board forward looking view of
the organization and culture we need to deliver on our client
what we need to manage as we carry out our strategy over the
promise.
short to medium term as well as long term, and are reflective of
In 2018, we continued to build on our think forward strategy to the issues deliberated on by management across our business.
empower customers and provide them with a differentiating To realize our vision we need to be proactive in how we plan
customer experience. That includes a focus on being leading for and handle these challenges, allowing us to leverage the
bank in the digital customer experience based on easy, 24/7 associated opportunities.
access in ATMs, attractive products and services, and tools to
Maintaining awareness of these challenges in our planning
support customers make sound financial decisions.
ensures that the way we do things is informed by strong decision
Those goals are reflected in our customer promise to be clear making and ultimately results in better service to our customers,
and easy, make financial services available anytime-anywhere, balanced by our commitments to our other stakeholders.
empower, and to keep getting better for customers.
Changing Regulatory Landscape
Contributing to the sustainable development of the society
is also an integral part of the think forward strategy. Our The number of new financial services regulations continues to
sustainability direction focuses on two areas: enhancing grow. The various ways in which new regulations are circulated

212 PRIME BANK

within country can lead to uncertainty. Ensuring an efficient Aligning Risk Management to Our Customer Focus
customers experience while adhering to regulatory demands
Understanding our customers forms a key part of managing
is an ongoing consideration. Our customers focus align to
risk on the continent and will benefit from our customer focus.
the spirit of these regulations, which is ultimately protect
A key initiative in this regard is bringing risk management
customers.
closure to the functions where risk arise, identifying risks early
and, in our customer-facing functions, gaining deeper insight
Technological Advancement
into our customers.
New technologies present us with reflective opportunities to
Other projects include aligning the collection of financial
compete more effectively by meeting changing customer
and risk data to improve our view of the size and potential
expectations. They also introduce major new challenges.
consequences of exposures, and implementing measures to
Building a digital financial bank needs to be managed in a
better understand the complex interrelationships between
way that does not compromise system stability and customer
different risk types.
experience. In addition to, the value of information as an asset
makes it a potential target for cyber-attacks, furthermore, theft These initiatives are supported by our investment in technology,
of fund. Globally, cyber-attacks are increasing in number and and will allow us to customize our products and services in
sophistication, as is the utilization systems and people. a way that better manages our risk exposures and reduces
related capital requirements.
Increasing Competition
Acting Ethically and Fairly in Everything We Do
Private Banks are expanding their presence in different areas
of the country and competition is being driven by advances in Conduct risk is the risk that the bank itself poses to our
technology. In this context, we need to defend and grow our customers, and to the effective operation of financial markets,
position by providing our best services at cost effective rate. through conduct that is not ethical or fair. The way we execute
Our legacy and position as an integrated financial services our day-to-day activities-including how we design and market
bank differentiates us in the banking industry. products, how we communicate with customers and how we
meet their expectation-prescribes the culture we wish to build,
Customer Expectations and therefore determines our ability to keep the promises
we make to our customers and place them to the center of
The competences of new technologies- and the speed
everything we do.
with which they are being adopted- mean that customers
increasingly expect highly customized yet affordable products (Risk Management Framework & Mitigation Methodology
and services that are available whenever they choose. The provides more details on the bank’s approach to risk
emergence of new services from competitors, the simplicity management)
with which customers can change to a different bank and the
speed at which negative experiences can be shared through Determining Our Material Matters
the social media greater focus on customer experience. Our proactive engagement with our stakeholders updates our
business strategy and material issues, shapes our products and
People and Culture services, assists us handle and respond to social expectations,
Realizing our objectives of placing our customers at the center mitigates reputational risk and influences our operating
of everything we do finally depends on our employees’ ability environment.
to provide vast customer experience, whether directly through Business units enabling functions are authorized to connect
their communications with customers, through the products directly with stakeholders and are responsible for identifying
and services we develop or through the management of stakeholder concerns and taking suitable action. For strategic
compliance processes that could impact on the perceived engagement, the stakeholder relations team undertakes
quality of service. Structuring a digital financial services bank engagement based on the identified needs and concerns of
requires us to employ and develop new skills, and for our our stakeholders.
employees to adjust to new ways of working. In light of the
We take the following steps to determine our material matters
challenges in executing our strategy, and to maintain trust,
we need to ensure a culture that values customer fairness and
Investigate
market integrity in everything we do.
We identify all issues that have the potential to impact our
Managing Associated Risks earning sustainability and the ability to create value for our
stakeholders. The process of identifying potential material
Building a Risk-aware Culture maters is a group wide responsibility, requiring input from all
business units and divisions, and taking into account input and
Building a flexible and steady risk-aware culture is vital in
feedback from all our stakeholders. Areas of potential impact
effectively managing the challenges that may arise in executing
that are assessed include financial, environmental, social,
our strategy. We build a risk-aware culture by ensuring
strategic, competitive, legislative, reputational, and regulatory
accountability, responsibility and sufficient coverage of the risk
matters (including policy matters), as well as our stakeholders.
landscape.

PRIME BANK 213

ANNUAL REPORT 2018

Rank • Our compliance on revised corporate governance code

for the year ended 31 December 2018 has been audited by
The issues identified are prioritized according to greatest
Haque Fazlul & Co., Chartered Accountants. Auditor has
relevance and highest potential to impact significantly on the
certified that PBL has compiled with the conditions of the
viability of our business and relationships with stakeholders.
revised Corporate Governance Code issued by Bangladesh
Integrate Securities and Exchange Commission (BSEC).

The material matters that have been identified and prioritized • The financial statements of Prime Bank Foundation for the
inform our long-term business strategies and targets as well as year ended 31 December 2018 have been audited by S F
short-to-medium term business plans. Ahmed & Co., Chartered Accountants and an unqualified
opinion has been expressed on those financial statements
Assess by the auditor.

Material matters are continuously assessed to ensure that our • Actuarial valuation for Prime Bank Employees’ Gratuity
strategic focus areas remain relevant to our stakeholder needs Fund is performed by Z Halim & Associates, an actuarial
and the environment. firm, every year.

(The details of determining material aspects of the Bank have • The credit rating report of Prime Bank is issued to the Bank
been reported in Sustainability Report) Management upon assessment by two External Credit
Assessment Institutions (ECAI) namely “Credit Rating
ASSURANCE Information and Services Limited (CRISL)” and “Credit
Rating Agency of Bangladesh (CRAB)”.
External Assurance

PBL makes use of various independent service providers to

get assurance on various aspects of the business operations
including elements of internal and external reporting.

Annual integrated report includes information generated from

various sources on which assurance has been provided by the
external auditors, credit rating agencies and an independent
professional actuary, such as:

• The consolidated annual financial statements and the

financial statements of PBL for the year ended 31 December
2018 have been jointly audited by Hoda Vasi Chowdhury
& Co., Chartered Accountants and Aziz Halim Khair
Choudhury, Chartered Accountants and an unqualified
opinion has been expressed on those financial statements
by the auditors.

214 PRIME BANK

STATEMENT OF VALUE ADDED AND ITS DISTRIBUTION
The value added statement provides a detailed account of total value addition and the distribution of the value created by
the organization. Prime Bank contributes significantly to socio economic development by empowering employees through the
payment of salaries and allowances; by paying attractive and consistent dividend to the providers of capital; by assisting the
regulatory capacities through paying taxes and of course keeping in mind company’s continuous expansion and business growth.
(BDT in million)
2018 2017
Particulars
Amount % Amount %
Net interest income 7,650 90.67 4,894 82.65
Commission, exchange & brokerage 2,154 25.53 4,246 71.70
Investment income 2,209 26.18 2,245 37.91
Other income 965 11.44 823 13.90
Management expenses excluding salaries & allowances, depreciation (2,759) (32.71) (2,722) (45.96)
Provision for doubtful losses (1,782) (21.12) (3,564) (60.20)
Total value added by the company 8,437 100 5,921 100

Value added contributed to-

Employees:
As salaries and allowance 4,169 49.41 3,835 64.77
Provider of capital:
Dividend to shareholders 1,415 16.78 721 12.17
Government:
Corporate tax 1,750 20.74 750 12.67
To expansion and growth:
Retained income 772 9.16 338 5.71
Depreciation 330 3.91 277 4.68
Total distribution by the company 8,437 100 5,921 100

Value added statement Value added statement

10.39%
13.07%
12.67% Employees
Employees
Provider of capital
Provider of capital
20.74%
2018 49.41% Government 2017 Government
12.17% 64.77% To expansion and growth
To expansion and growth

16.78%

ECONOMIC VALUE ADDED STATEMENT

Economic value added (EVA) is the financial performance measure of true economic profit of an organization. It provides a
measurement of a company’s economic success (or failure) over a period of time. Such a metric is useful for investors who wish
to determine how well a company has added value for its investors and it can be compared against company’s peers for a quick
analysis of how well the company is operating in its industry. Economic value added is calculated by taking a company’s net
profit after tax, adding with it, the amount of provision charged to absorb the probable losses intrinsic in the investments. EVA is
calculated as under:

PRIME BANK 215

ANNUAL REPORT 2018

(BDT in million)
Particulars 2018 2017 2016 2015
Shareholders’ equity at year end 26,181 24,708 25,285 26,415
Accumulated provision 10,280 10,893 9,055 9,204
Average shareholders’ equity 36,031 34,971 34,979 33,753
Cost of equity (%) 5.40% 6.35% 5.76% 6.11%

Economic value added

Net profit after tax (before provision) 3,969 4,623 5,607 5,293
Less: Cost of equity 1,946 2,221 3,317 2,566
Economic value addition 2,024 2,403 2,290 1,738

Key ratios
EVA/Operating revenue (%) 15.69 19.78 19.05 14.39
EVA/Average shareholders’ equity (%) 5.62 6.87 6.55 5.15
Net profit after tax/Operating revenue (%) 16.96 8.72 18.26 17.72

Economic value added EVA/Average shareholders’ equity (%)

BDT in Million
2,403

6.87
2,290

6.55
2,024

5.62
5.15
1,738

2015 2016 2017 2018 2015 2016 2017 2018

MARKET VALUE ADDED STATEMENT

Unlike EVA, which measures internal performance, market value added (MVA) is a measure of external performance that indicate
how the market has evaluated the company’s performance in terms of market value of shares compared to book value of shares.
MVA is the difference between the market value of equity of a company and the book value of equity invested in the company. A
positive MVA indicates that the company added value to shareholders wealth. The following statement indicates the MVA at the
year ended on 31 December of 2018 and 2017 :

(BDT in million)
Particulars 2018 2017
Market value of shares outstanding 20,155 28,204
Book value of shares outstanding 26,181 24,708
Market value added (6,026) 3,496

Explanation behind the negatige MVA

Market Value Added (MVA) is the difference between the current market value of a firm and the capital contributed by investors.
In an ideal scenario, if MVA is positive, the firm has added value. If it is negative, the firm has lost value. But in some cases due to
volatile market scenario and unusual/abnormal decrease of market index market value of shares outstanding may be less than
the book value.

216 PRIME BANK

SHAREHOLDERS’
INFORMATION

Horizontal Analysis

Vertical Analysis

Graphical Presentation

Distribution of Shareholdings

Shares Held by Directors

Market Price Information

Financial Calendar 2018

218
HORIZONTAL ANALYSIS
Balance Sheet Items (BDT in million except %)

PRIME BANK
ANNUAL REPORT 2018

Particulars 2018 18 vs 17 2017 17 vs 16 2016 16 vs 15 2015 15 vs 14 2014 14 vs 13

Loans and advance 205,810 3.78% 198,323 16.52% 170,212 12.08% 151,865 3.05% 147,367 -4.05%
Propery plant and equipment 6,943 7.92% 6,434 -2.36% 6,590 1.12% 6,516 -1.46% 6,613 3.21%
Total assets 293,901 4.49% 281,275 3.32% 272,224 1.83% 267,322 -0.70% 269,218 4.78%
Deposits and other accounts 197,518 -0.75% 199,014 0.55% 197,934 1.60% 194,825 -4.89% 204,838 1.45%
Shareholders’ equity 26,181 5.96% 24,708 -2.28% 25,285 -4.28% 26,415 7.99% 24,461 6.21%

Profit & Loss Items

Particulars 2018 18 vs 17 2017 17 vs 16 2016 16 vs 15 2015 15 vs 14 2014 14 vs 13

Interest income / profit on investments 18,390 24.52% 14,769 5.58% 13,989 -10.04% 15,551 -15.70% 18,446 -16.20%
Interest / profit paid on deposits, borrowings, etc. (10,741) 8.76% (9,875) -7.50% (10,676) -25.12% (14,257) -8.45% (15,574) -11.91%
Net interest / net profit on investments 7,650 56.31% 4,894 47.71% 3,313 156.07% 1,294 -54.95% 2,872 -33.70%
Investment income 2,154 -49.26% 4,246 -31.56% 6,203 -22.35% 7,989 28.97% 6,194 10.96%
Commission, exchange and brokerage 2,209 -1.62% 2,245 32.58% 1,693 -13.44% 1,956 -3.79% 2,033 -5.68%
Other operating income 887 16.14% 764 -6.09% 814 -2.47% 834 3.44% 806 -0.75%
Total operating income 12,899 6.18% 12,148 1.04% 12,023 -0.41% 12,073 1.40% 11,906 -7.58%
Salary expenses 4,169 8.70% 3,835 4.75% 3,661 1.65% 3,602 9.53% 3,288 11.45%
Other operating expenses 3,011 2.44% 2,940 12.87% 2,605 1.56% 2,564 4.20% 2,461 0.12%
Total operating expenses 7,180 5.98% 6,775 8.12% 6,266 1.61% 6,166 7.25% 5,750 6.30%
Operating profit 5,719 6.44% 5,373 -6.67% 5,757 -2.52% 5,906 -4.06% 6,157 -17.63%
Provision for loans and advance & other assets 1,782 -50.02% 3,564 4.46% 3,412 8.18% 3,154 9.66% 2,877 -28.60%
Total profit / (loss) before taxes 3,938 117.68% 1,809 -22.86% 2,345 -14.79% 2,752 -16.10% 3,280 -4.80%
Provision for tax 1,750 133.33% 750 400.00% 150 -75.53% 613 -30.91% 887 -45.10%
Net profit after taxation 2,188 106.60% 1,059 -51.76% 2,195 2.62% 2,139 -10.61% 2,393 30.80%
 VERTICAL ANALYSIS
Balance Sheet Items BDT in million except % which represent percentage of total assets

Particulars 2018 % 2017 % 2016 % 2015 % 2014 %

Loans and advance 205,810 70.03% 198,323 70.51% 170,212 62.53% 151,865 56.81% 147,367 54.74%
Propery plant and equipment 6,943 2.36% 6,434 2.29% 6,590 2.42% 6,516 2.44% 6,613 2.46%
Total assets 293,901 100% 281,275 100% 272,224 100% 267,322 100% 269,218 100%
Deposits and other accounts 197,518 67.21% 199,014 70.75% 197,934 72.71% 194,825 72.88% 204,838 76.09%
Shareholders’ equity 26,181 8.91% 24,708 8.78% 25,285 9.29% 26,415 9.88% 24,461 9.09%

Profit & Loss Items BDT in million except % which represent percentage of gross operating revenue

Particulars 2018 % 2017 % 2016 % 2015 % 2014 %

Interest income / profit on investments 18,390 77.79% 14,769 67.06% 13,989 61.63% 15,551 59.06% 18,446 67.13%
Interest / profit paid on deposits, borrowings, etc. (10,741) -45.43% (9,875) -44.84% (10,676) -47.03% (14,257) -54.15% (15,574) -56.67%
Net interest / net profit on investments 7,650 32.36% 4,894 22.22% 3,313 14.60% 1,294 4.91% 2,872 10.45%
Investment income 2,154 9.11% 4,246 19.28% 6,203 27.33% 7,989 30.34% 6,194 22.54%
Commission, exchange and brokerage 2,209 9.34% 2,245 10.19% 1,693 7.46% 1,956 7.43% 2,033 7.40%
Other operating income 887 3.75% 764 3.47% 814 3.58% 834 3.17% 806 2.93%
Total operating income ( net operating revenue) 12,899 54.57% 12,148 55.16% 12,023 52.97% 12,073 45.85% 11,906 43.33%
Gross operating revenue 23,640 100% 22,024 100% 22,699 100% 26,330 100% 27,480 100%
Salary expenses 4,169 17.63% 3,835 17.41% 3,661 16.13% 3,602 13.68% 3,288 11.97%
Other operating expenses 3,011 12.74% 2,940 13.35% 2,605 11.47% 2,564 9.74% 2,461 8.96%
Total operating expenses 7,180 30.37% 6,775 30.76% 6,266 27.60% 6,166 23.42% 5,750 20.92%
Operating profit 5,719 24.19% 5,373 24.40% 5,757 25.36% 5,906 22.43% 6,157 22.40%
Provision for loans and advance & other assets 1,782 7.54% 3,564 16.18% 3,412 15.03% 3,154 11.98% 2,877 10.47%
Total profit / (loss) before taxes 3,938 16.66% 1,809 8.21% 2,345 10.33% 2,752 10.45% 3,280 11.94%
Provision for tax 1,750 7.40% 750 3.41% 150 0.66% 613 2.33% 887 3.23%

PRIME BANK
Net profit after taxation 2,188 9.25% 1,059 4.81% 2,195 9.67% 2,139 8.12% 2,393 8.71%

219
ANNUAL REPORT 2018

GRAPHICAL PRESENTATION

Loans and Advances Deposits Shareholders' Equity

BDT in Million BDT in Million BDT in Million

204,838
205,810

199,014
198,323

197,934

197,518
194,825

26,415

26,181
25,285

24,708
24,461
170,212
151,865
147,367

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Operating Revenue Operating Profit Net Profit After Tax

BDT in Million BDT in Million BDT in Million
12,899

2,393
6,157
12,073

12,148
12,023

5,906
11,906

2,139

2,188
2,195
5,757

5,719
5,373

1,059

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Non- performing loans Regulatory Capital Earnings Per Share (BDT)

Non- performing loans (percent) Total capital to RWA Ratio (percent)

Non- performing loans (BDT in Million) Total capital (BDT in Million)

17.04
14.01
7.82

6.16

12.45

2.11
7.61

12.74

1.94

1.93
12.71

1.89
5.45
5.96

0.94
38,259
29,283

32,251
31,632
27,313
12,686
10,799
10,139
11,883
11,215

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

220 PRIME BANK

 Yield on Advances (Percent) Cost of Deposit (Percent) Return on Assets (Percent)
12.09

0.91
10.20

7.36

0.81
0.80
6.64

0.76
8.45

7.42

8.51

4.94

4.72
4.46

0.38
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Return on Equity (Percent) Dividend (Percent) Net Asset Value per Share (BDT)
17.00
16.00
10.08

15.00

15.00

25.66

24.56

24.00
12.50
8.60
8.49

23.76
8.41

23.12
4.24

2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

Deposits (by segments) Loans and Advances (by segments)

Consumer
Corporate & & Others:
Institutional 9%
Banking: 18%
MSME:
10%
Commercial Corporate &
Banking Institutional
Division: 6% Banking:
2018 2018 55%

MSME: 9%
Consumer & Commercial
Others: 67% Banking
Division:
26%

PRIME BANK 221

ANNUAL REPORT 2018

DISTRIBUTION OF SHAREHOLDINGS
Amount % of shares
Types
2018 2017 2018 2017
Sponsors 4,152,053,350 3,915,393,490 36.67% 38.04%
Financial Institutions 3,076,157,170 2,503,815,050 27.17% 24.32%
Foreign Investors 348,688,820 385,416,330 3.08% 3.75%
Non- Resident Bangladeshi 2,6774,640 27,819,790 0.24% 0.27%
General Public 3,719,160,790 3,461,041,500 32.84% 33.62%
Total 11,322,834,770 10,293,486,160 100% 100%

Shareholding Positions

Sponsors:
General 36.67%
Public:
32.84%

2018
Non-Resident
Bangladeshi: 0.24%
Foreign
Investors:
3.08%
Financial
Institutions:
27.17%

SHARES HELD BY DIRECTORS

Sl.
Name of the Director Designation 31-12-2017 31-12-2018 Change
No.
Mr. Azam J Chowdhury (Representative of East
01 Chairman 20,601,158 22,661,273 10%
Coast Shipping Lines Limited)
02 Mr. Mafiz Ahmed Bhuiyan Vice Chairman 20,591,099 22,650,208 10%
03 Mr. Imran Khan Vice Chairman 20,588,337 22,647,170 10%
04 Mr. Md. Nader Khan Director 38,019,361 41,821,296 10%
05 Quazi Sirazul Islam Director 20,616,158 22,677,773 10%
06 Mrs. Marina Yasmin Chowdhury Director 24,225,000 27,288,000 13%
07 Mr. Md. Shahadat Hossain Director 20,611,583 22,672,741 10%
08 Mr. Shirajul Islam Mollah Director 20,644,922 22,709,414 10%
09 Mrs. Nasim Anwar Hossain Director 23,365,749 25,702,323 10%
10 Mrs. Salma Huq Director 32,254,341 35,479,775 10%
11 Mr. Nafis Sikder Director 25,826,178 28,408,795 10%
Mr. Waheed Murad Jamil
12 Director 20,587,749 22,646,523 10%
(Representative of Mawsons Limited)
13 Mr. Tarique Ekramul Haque Director 20,600,391 22,660,429 10%
Mr. Mohammad Mushtaque Ahmed Tanvir
14 Director 20,760,250 22,836,275 10%
(Representative of Uniglory Cycle Industries Ltd.)
15 Mr. Shamsuddin Ahmad, Ph.D Independent Director - - -
16 Dr. G. M. Khurshid Alam Independent Director - - -
17 Mr. M. Farhad Hussain, FCA Independent Director - - -
18 Dr. M. Shamim Z. Bosunia Independent Director - - -
Total 329,292,276 362,861,995

222 PRIME BANK

MARKET PRICE INFORMATION
The reported high and low prices and volume of shares of Prime Bank Limited traded during the year 2018 on Dhaka Stock Exchange
and Chittagong Stock Exchange are given below:

DSE CSE Total Volume on

Month
High Taka Low Taka Volume High Taka Low Taka Volume DSE & CSE
January 27.60 23.20 18643493 27.30 22.60 255655 18899148
February 24.00 20.50 9884555 24.40 20.50 209160 10093715

March 22.40 19.00 8096976 22.40 19.10 62617 8159593

April 22.50 19.40 13395766 23.00 18.90 283481 13679247
May 22.10 17.40 4608986 22.00 16.00 147137 4756123
June 18.30 15.80 11965235 18.20 16.10 226813 12192048
July 16.50 14.50 14837868 16.20 14.20 716734 15554602
August 18.90 15.30 42506010 19.00 15.40 1098701 43604711
September 18.30 15.60 33972653 17.60 15.50 566294 34538947
October 17.60 15.50 36071329 18.00 15.50 1884965 37956294
November 18.20 16.20 11993222 17.60 16.40 169156 12162378
December 18.50 16.70 16913821 18.80 16.80 366760 17280581

Total Trade Graph of PRIME BANK

_ Trade

1000

900

800

700

600

500

400

300

200

100

0
Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18

FINANCIAL CALENDAR 2018

Quarterly Results

Audited consolidated results for the 4th quarter ended 31 December 2017 Announced on 10th April 2018
Unaudited consolidated results for the 1st quarter ended 31 March 2018 Announced on 13th May 2018
Unaudited consolidated results for the 2nd quarter and half-year ended 30 June 2018 Announced on 26th July 2018
Unaudited consolidated results for the 3rd quarter ended 30 September 2018 Announced on 28th October 2018

Dividends

Distribution of cash dividend of 7.00% in respect of financial year ended 31 December 2017 28th May 2018
Notice of Annual General Meeting 10th April 2018
Annual General Meeting 24th May 2018

PRIME BANK 223

FINANCIAL STATEMENTS

Independent Auditors’ Report to the Shareholders

Consolidated Balance Sheet

Consolidated Profit and Loss Account

Consolidated Cash Flow Statement

Consolidated Statement of Changes in Equity

Balance Sheet

Profit and Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Financial Statements

Independent Auditor’s Report
To the Shareholders of Prime Bank Limited
Report on the Audit of the Consolidated and Separate Financial Statements

Opinion

We have audited the consolidated financial statements of Prime Bank Limited and its subsidiaries (the “Group”) as well as the
separate financial statements of Prime Bank Limited (the “Bank”), which comprise the consolidated and separate balance sheets
as at 31 December 2018 and the consolidated and separate profit and loss accounts, consolidated and separate statements of
changes in equity and consolidated and separate cash flow statements for the year then ended, and notes to the consolidated and
separate financial statements, including a summary of significant accounting policies and other explanatory information.

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 2018, 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 Auditors’ 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 judgement, 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 in forming our opinion thereon, and we do not provide a separate opinion on
these matters.

Description of key audit matters Our response to key audit matters

Measurement of provision for loans, advances and leases
The process for estimating the provision for loans, We tested the design and operating effectiveness of key controls
advances and leases portfolio associated with credit risk focusing on the following:
is significant and complex.
• Credit appraisal, loan disbursement procedures, monitoring and
For the individual analysis for large exposure, provisions provisioning process;
calculation consider the estimates of future business
• Identification of loss events, including early warning and default
performance and the market value of collateral provided
warning indicators;
for credit transactions.
• Reviewed quarterly Classification of Loans (CL);
For the collective analysis of exposure on portfolio
basis, provision calculation and reporting are manually Our substantive procedures in relation to the provision for loans and
processed that deals with voluminous databases, advances portfolio comprised the following:
assumptions and estimates. • Reviewed the adequacy of the general and specific provisions in
At year end the Group reported total gross loans and line with related Bangladesh Bank guidelines;
advances of BDT 208,196 million (2017: BDT 200,619 • Assessed the methodologies on which the provision amounts are
million) and provision for loans and advances of BDT based, recalculated the provisions and tested the completeness
8,728 million (2017: BDT 9,390 million). 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 Bangladesh Bank inspection team to the actual
amount of provision maintained.
See note no 7 and 14 to the financial statements

PRIME BANK 225

ANNUAL REPORT 2018

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
require judgment and complex estimates. identify and confirm the existence of treasury bills and bonds.

In the absence of a quoted price in an active market, We obtained an understanding, evaluated the design and tested the
the fair value of T-Bills and T-Bonds is determined using operating effectiveness of the key controls over the treasury bills and
complex valuation techniques which may take into bonds valuation processes, including controls over market data inputs
consideration direct or indirect unobservable market into valuation models, model governance, and valuation adjustments.
data and complex pricing models which require an
We tested a sample of the valuation models and the inputs used in
elevated level of judgment.
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.
See note no 6 to the financial statements

Impairment assessment of unquoted investments

In the absence of a quoted price in an active market, We have assessed the processes and controls put in place by the
the fair value of unquoted shares and bonds, especially Company to ensure all major investment decisions are undertaken
any impairment is calculated using valuation techniques through a proper due diligence process.
which may take into consideration direct or indirect
We tested a sample of investments valuation as at 31 December 2018
unobservable market data and hence require an elevated
and compared our results to the recorded value.
level of judgment.
Finally, we assessed the appropriateness and presentation of
disclosures against relevant accounting standards and Bangladesh
Bank guidelines.
See note no 6 to the financial statements

IT systems and controls

Our audit procedures have a focus on IT systems and We tested the design and operating effectiveness of the Bank’s
controls due to the pervasive nature and complexity of IT access controls over the information systems that are critical to
the IT environment, the large volume of transactions financial reporting.
processed in numerous locations daily and the reliance
We tested IT general controls (logical access, changes management
on automated and IT dependent manual controls.
and aspects of IT operational controls). This included testing that
Our areas of audit focus included user access requests for access to systems were appropriately reviewed and
management, developer access to the production authorized.
environment and changes to the IT environment. These
We tested the Bank’s periodic review of access rights and reviewed
are key to ensuring IT dependent and application based
requests of changes to systems for appropriate approval and
controls are operating effectively.
authorization.

We considered the control environment relating to various interfaces,

configuration and other application layer controls identified as key to
our audit.

Legal and regulatory matters

We focused on this area because the Bank and its We obtained an understanding, evaluated the design and tested the
subsidiaries (the “Group”) operates in a legal and operational effectiveness of the Bank’s key controls over the legal
regulatory environment that is exposed to significant provision and contingencies process.
litigation and similar risks arising from disputes and
We enquired to those charged with governance to obtain their view
regulatory proceedings. Such matters are subject to many
on the status of all significant litigation and regulatory matters.
uncertainties and the outcome may be difficult to predict.
We enquired of the Bank’s internal legal counsel for all significant litigation
These uncertainties inherently affect the amount and timing
and regulatory matters and inspected internal notes and reports.
of potential outflows with respect to the provisions which
have been established and other contingent liabilities. We assessed the methodologies on which the provision amounts are
based, recalculated the provisions, and tested the completeness and
Overall, the legal provision represents the Group’s and
accuracy of the underlying information.
the Bank’s best estimate for existing legal matters that
have a probable and estimable impact on the Group’s We also assessed the Bank’s provisions and contingent liabilities
financial position. disclosure.

226 PRIME BANK

 Carrying value of investments in subsidiaries by the Bank
The Bank has invested in equity shares of its five We have reviewed Management’s analysis of impairment assessment
subsidiaries, namely Prime Bank Investment Limited, and recoverable value calculation of subsidiaries in accordance with
Prime Bank Securities Limited, Prime Exchange Co (Pte) IAS 36.
Limited, Singapore, PBL Exchange (UK) Limited, PBL
In particular, our discussions with the Management were focused
Finance (Hong Kong) Limited. As at 31 December 2018
on the continued appropriateness of the value in use model, the key
the carrying value of this investment is BDT 3,814 million.
assumptions used in the model, the reasonably possible alternative
At the time of conducting our audit of the separate assumptions, particularly where they had the most impact on the
financial statements of the Bank we have considered value in use calculation.
the recoverable value of the Bank’s investments in all the
We also checked mathematical accuracy of the model, recalculated
above subsidiaries stated at cost.
discount rate used within the model, inputs used in the determination
Management has conducted impairment assessment of assumptions within the model were challenged and corroborating
and calculated recoverable value of its individual information was obtained with reference to external market
subsidiaries in accordance with IAS 36. information, third-party sources.

Revaluation of property, plant and equipment

The Bank in prior year has undertaken revaluation of its We assessed the process of revaluation previously taken by the Bank.
land and building. As a result of this revaluation exercise,
We reviewed revaluation report of the independent valuer along with
an amount of BDT 1,767 million is recognised as the fair
relevant documents and applied our judgment to see whether the fair
value gain in revaluation reserve and BDT 270 million
value is still relevant.
as resultant deferred tax liability. Determination of fair
value in absence of any quoted price and active market We checked related accounting treatments of fair value gain and
require significant judgment associated deferred tax as recognized by the Bank.

Reporting on 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 auditors’ 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.

If, based on the work we have performed, on the other information obtained prior to the date of this audit report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.

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.

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.

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.

PRIME BANK 227

ANNUAL REPORT 2018

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 judgement 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 auditors’ 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.

Report on other Legal and Regulatory Requirements

In accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987, the Bank Company Act, 1991 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 anti-fraud 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. Consolidated financial statements of the Bank include five subsidiaries, namely Prime Bank Investment Limited, Prime Bank

228 PRIME BANK

 Securities Limited, Prime Exchange Co (Pte) Limited, Singapore, PBL Exchange (UK) Limited, PBL Finance (Hong Kong)
Limited reflect total assets of BDT 295,011,325,205 as at 31 December 2018 and total revenue of BDT 24,235,857,493 for the
year ended 31 December 2018. These five subsidiaries of the Bank have been audited by other component auditors who
have expressed unqualified audit opinion. The results of these subsidiaries have been properly reflected in the Group’s
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 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 8000 person hours; and

xii. Capital to Risk-weighted Asset Ratio (CRAR) as required by Bangladesh Bank has been maintained adequately during the
year.

Aziz Halim Khair Choudhury Hoda Vasi Chowdhury & Co

Chartered Accountants Chartered Accountants

Dated, April 03, 2019

PRIME BANK 229

ANNUAL REPORT 2018

Consolidated Balance Sheet

as at 31 December 2018
Amount in Taka
Particulars Notes
2018 2017
PROPERTY AND ASSETS
Cash 3
Cash in hand (including foreign currencies) 3,132,734,166 3,140,588,297
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) 14,539,287,480 14,973,037,651
17,672,021,646 18,113,625,948
Balance with other banks and financial institutions 4
In Bangladesh 10,300,411,247 7,471,466,377
Outside Bangladesh 3,327,554,977 2,773,249,334
13,627,966,225 10,244,715,711
Money at call on short notice 5 - 1,500,000,000
Investments 6
Government 24,646,806,239 23,657,686,975
Others 3,341,464,542 2,222,449,188
27,988,270,780 25,880,136,163
Loans, advances and lease /investments
Loans, cash credits, overdrafts etc./ investments 7 196,586,141,191 184,066,239,687
Bills purchased and discounted 8 11,609,817,551 16,552,939,609
208,195,958,743 200,619,179,296
Fixed assets including premises, furniture and fixtures 9 6,996,504,016 6,487,041,211
Other assets 10 20,310,103,156 19,329,742,018
Non - banking assets 11 220,500,640 220,500,640
Total assets 295,011,325,205 282,394,940,987

LIABILITIES AND CAPITAL

Liabilities
Borrowings from other banks, financial institutions and agents 12 33,944,516,693 22,137,997,510
Deposits and other accounts 13
Current / Al-wadeeah current deposits 32,720,490,917 33,182,700,323
Bills payable 3,045,875,590 4,212,571,458
Savings bank / Mudaraba savings deposits 41,478,074,475 38,397,699,341
Term deposits / Mudaraba term deposits 120,248,988,239 123,207,326,047
Bearer certificate of deposit - -
Other deposits - -
197,493,429,221 199,000,297,169

Other liabilities 14 37,274,782,999 36,443,698,544

Total liabilities 268,712,728,913 257,581,993,222
Capital / Shareholders' equity
Paid -up capital 15.2 11,322,834,770 10,293,486,160
Share premium 15.8 1,211,881,786 2,241,230,396
Non-controlling Interest 15.9 63 61
Statutory reserve 16 10,353,413,584 9,565,853,177
Revaluation gain / loss on investments 17 71,798,624 55,285,288
Revaluation reserve 18 1,496,759,104 1,496,759,104
Foreign currency translation gain 19 15,117,438 15,334,146
General reserve 28,002,888 28,002,888
Surplus in profit and loss account / Retained earnings 20 1,798,788,031 1,116,996,544
Total Shareholders' equity 26,298,596,289 24,812,947,765
Total liabilities and Shareholders' equity 295,011,325,205 282,394,940,987

230 PRIME BANK

Consolidated Balance Sheet
as at 31 December 2018
Amount in Taka
Particulars Notes
2018 2017
OFF - BALANCE SHEET ITEMS
Contingent liabilities 21
Acceptances and endorsements 21.1 52,944,055,583 49,721,797,256
Letters of guarantee 21.2 57,826,844,429 72,966,435,302
Irrevocable letters of credit 21.3 38,072,832,383 34,112,938,262
Bills for collection 21.4 11,613,890,781 10,766,851,918
Other contingent liabilities - -
160,457,623,176 167,568,022,737
Other commitments
Documentary credits and short term trade -related transactions - -
Forward assets purchased and forward deposits placed 2,095,175,884 240,823,450
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities , credit lines and other commitments - -
Liabilities against forward purchase and sale - -
- -
2,095,175,884 240,823,450
Total Off-Balance Sheet items including contingent liabilities 162,552,799,060 167,808,846,187

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

See annexed auditors' report to the Shareholders of the date.

Aziz Halim Khair Choudhury Hoda Vasi Chowdhury & Co

Chartered Accountants Chartered Accountants
Dated, 03 April 2019

PRIME BANK 231

ANNUAL REPORT 2018

Consolidated Profit and Loss Account

for the year ended 31 December 2018
Amount in Taka
Particulars Notes
2018 2017

Interest income / profit on investments 23 18,524,318,925 14,853,354,233

Interest / profit paid on deposits, borrowings, etc. 24 (10,741,904,936) (9,885,293,129)
Net interest / net profit on investments 7,782,413,989 4,968,061,104
Investment income 25 2,312,228,869 4,396,502,019
Commission, exchange and brokerage 26 2,379,034,115 2,453,506,591
Other operating income 27 942,121,164 827,182,771
Total operating income (A) 13,415,798,137 12,645,252,485

Salaries and allowances 28 4,328,098,311 3,966,047,129

Rent, taxes, insurance, electricity, etc. 29 1,030,304,013 963,386,657
Legal expenses 30 110,747,428 88,016,667
Postage, stamp, telecommunication, etc. 31 79,503,863 87,789,124
Stationery, printing, advertisements, etc. 32 231,584,903 202,304,048
Managing Director's salary and fees 33 10,131,935 11,528,936
Directors' fees 34 4,501,129 5,200,364
Auditors' fees 35 2,800,850 2,558,659
Charges on loan losses 36 - -
Depreciation and repair of Bank's assets 37 422,261,737 375,487,188
Other expenses 38 1,385,429,678 1,353,717,503
Total operating expenses (B) 7,605,363,847 7,056,036,276
Profit / (loss) before provision (C=A-B) 5,810,434,290 5,589,216,209

Provision for loans & advances 39 1,781,500,000 3,255,500,000

Provision for diminution in value of investments 39 41,967,108 (141,676,723)
Provision for impairment of client margin loan 39 (27,964,899) 106,528,754
Other provisions 39 (13,902,208) 372,364,941
Total provision (D) 1,781,600,001 3,592,716,972
Total profit / (loss) before taxes (C-D) 4,028,834,289 1,996,499,236
Provision for taxation:
Current tax 40 1,775,174,401 781,212,608
Deferred tax 26,022 (241,630)
1,775,200,423 780,970,978
Net profit after taxation 2,253,633,866 1,215,528,259
Retained earnings brought forward from previous year 20.1 332,714,576 263,263,221
2,586,348,442 1,478,791,480

232 PRIME BANK

Consolidated Profit and Loss Account
for the year ended 31 December 2018
Amount in Taka
Particulars Notes
2018 2017
Appropriations
Statutory reserve 787,560,407 361,794,935
Non controlling interest 3.44 1.33
General reserve - -
787,560,411 361,794,936
Retained surplus 20 1,798,788,031 1,116,996,544

Earnings per share (EPS) 45 1.99 1.07

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

See annexed auditors' report to the Shareholders of the date

Aziz Halim Khair Choudhury Hoda Vasi Chowdhury & Co

Chartered Accountants Chartered Accountants
Dated, 03 April 2019

PRIME BANK 233

ANNUAL REPORT 2018

Consolidated Cash Flow Statement

for the year ended 31 December 2018
Amount in Taka
Particulars Notes
2018 2017
A) Cash flows from operating activities
Interest receipts in cash 20,893,501,871 17,266,709,150
Interest payments (10,014,939,036) (10,329,512,430)
Dividend receipts 88,098,460 135,923,182
Fees and commission receipts in cash 2,379,034,115 2,453,506,591
Recoveries of loans previously written off 203,780,138 409,904,161
Cash payments to employees (4,227,915,674) (4,093,129,740)
Cash payments to suppliers (704,234,102) (745,612,408)
Income taxes paid (491,561,431) (587,515,461)
Receipts from other operating activities 41 1,139,444,273 2,742,217,905
Payments for other operating activities 42 (2,122,945,953) (2,108,218,281)
Cash generated from operating activities before
changes in operating assets and liabilities 7,142,262,661 5,144,272,670
Increase / (decrease) in operating assets and liabilities
Purchase of trading securities (Treasury bills) (2,698,687,081) 16,912,134,608
Loans and advances to customers (10,235,424,998) (29,444,601,255)
Other assets 43 45,363,165 6,883,801,999
Deposits from other banks / borrowings 6,933,521,555 8,313,001,382
Deposits from customers (2,671,173,267) 315,343,333
Other liabilities account of customers (1,166,695,868) (955,792,457)
Other liabilities 44 (640,075,960) 315,079,735
(10,433,172,454) 2,338,967,345
Net cash from operating activities (3,290,909,793) 7,483,240,015
B) Cash flows from investing activities
Payments for purchases of securities (116,933,132) 213,301,771
Purchase of property, plant and equipment (872,160,159) (285,131,076)
Payment against lease obligation - -
Proceeds from sale of property, plant and equipment 2,428,754 3,748,894
Net cash used in investing activities (986,664,537) (68,080,411)
C) Cash flows from financing activities
Receipts from issue of sub-ordinated bond 7,000,000,000 -
Payments for redemption of sub-ordinated bond (500,000,000) (1,250,000,000)
Dividend paid (788,631,461) (1,705,034,284)
Net cash used in financing activities 5,711,368,539 (2,955,034,284)
D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) 1,433,794,209 4,460,125,319
E) Effects of exchange rate changes on cash and cash equivalents 9,174,203 41,104,854
F) Cash and cash equivalents at beginning of the year 29,860,716,759 25,359,486,586
G) Cash and cash equivalents at end of the year (D+E+F) 31,303,685,171 29,860,716,759
Cash and cash equivalents at end of the year
Cash in hand (including foreign currencies) 3,132,734,166 3,140,588,297
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) 14,539,287,480 14,973,037,651
Balance with other banks and financial institutions 13,627,966,225 10,244,715,711
Money at call and short notice - 1,500,000,000
Prize bonds (note-6a) 3,697,300 2,375,100
31,303,685,171 29,860,716,759

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

Dated , 03 April 2019

234 PRIME BANK

 Consolidated Statement of Changes in Equity
for the year ended 31 December 2018
Non Revaluation F.C.
Paid up Statutory General Share Revaluation gain / loss on translation Retained
controlling Total
Particulars capital reserve reserve premium reserve earnings
interest investments gain

Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka
Balance as at 1 January 2018 10,293,486,160 9,565,853,177 28,002,888 2,241,230,396 61 1,496,759,104 55,285,288 15,334,146 1,116,996,544 24,812,947,765
Changes in accounting policy/Last year's profit - - - - - - - - -
Restated balance 10,293,486,160 9,565,853,177 28,002,888 2,241,230,396 61 1,496,759,104 55,285,288 15,334,146 1,116,996,544 24,812,947,764
Surplus / (deficit) on account of
revaluation of properties - - - - - - - - - -
Adjustment of last year revaluation - - - - - - (53,012,078) - - (53,012,078)
gain on investments
Surplus / (deficit) on account - - - - - - 69,525,414 - - 69,525,414
of revaluation of investments
Currency translation differences - - - - - - - (216,708) 4,349,489 4,132,781
Net gains and losses not recognized in - - - - - - 71,798,624 15,117,438 1,121,346,033 24,833,593,882
the income statement
Net profit for the year - - - - - - - - 2,253,633,866 2,253,633,866
Dividends (Bonus shares) 1,029,348,610 - - (1,029,348,610) - - - - - -
Cash dividend - - - - - - - - (788,631,461) (788,631,461)
Share Premium - - -
Minority interest - - - - 2 - - - - 2
Issue of share capital-right share - - - - - - - - - -
Appropriation made during the year - 787,560,407 - - - - - - (787,560,407) -
Balance as at 31 December 2018 11,322,834,770 10,353,413,584 28,002,888 1,211,881,786 63 1,496,759,104 71,798,624 15,117,438 1,798,788,031 26,298,596,289
Balance as at 31 December 2017 10,293,486,160 9,565,853,177 28,002,888 2,241,230,396 61 1,496,759,104 55,285,288 15,334,146 1,116,996,544 24,812,947,765

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

Dated , 03 April 2019

PRIME BANK
235
ANNUAL REPORT 2018

Balance Sheet
as at 31 December 2018
Amount in Taka
Particulars Notes
2018 2017
PROPERTY AND ASSETS
Cash 3a
Cash in hand (including foreign currencies) 3,100,264,070 3,031,607,478
\Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) 14,539,287,480 14,973,037,651
17,639,551,549 18,004,645,129
Balance with other banks and financial institutions 4a
In Bangladesh 10,174,200,785 7,380,647,955
Outside Bangladesh 3,230,634,401 2,701,942,497
13,404,835,186 10,082,590,452
Money at call on short notice 5 - 1,500,000,000
Investments 6a
Government 24,646,806,239 23,657,686,975
Others 1,399,611,720 149,457,283
26,046,417,958 23,807,144,258
Loans, advances and lease / investments
Loans, cash credits, overdrafts, etc./ investments 7a 196,456,187,502 183,593,663,315
Bills purchased and discounted 8a 9,353,331,214 14,729,065,476
205,809,518,716 198,322,728,791
Fixed assets including premises, furniture and fixtures 9a 6,943,348,521 6,434,047,671
Other assets 10a 23,836,555,730 22,903,009,700
Non - banking assets 11 220,500,640 220,500,640
Total assets 293,900,728,300 281,274,666,641
LIABILITIES AND CAPITAL
Liabilities
Borrowings from other banks, financial institutions and agents 12a 33,944,516,693 22,087,479,113
Deposits and other accounts 13a.1.c
Current / Al-wadeeah current deposits 32,742,551,758 33,196,233,861
Bills payable 3,045,875,590 4,212,571,458
Savings bank / Mudaraba savings deposits 41,478,074,475 38,397,699,341
Term deposits / Mudaraba term deposits 120,251,223,734 123,207,471,241
Bearer certificate of deposit - -
Other deposits - -
197,517,725,557 199,013,975,901
Other liabilities 14a 36,257,586,840 35,465,414,699
Total liabilities 267,719,829,090 256,566,869,714
Capital / Shareholders' equity
Paid up capital 15 .2 11,322,834,770 10,293,486,160
Share premium 15.8 1,211,881,786 2,241,230,396
Statutory reserve 16 10,353,413,584 9,565,853,177
Revaluation gain / (loss) on investments 17a 22,087,009 17,749,598
Revaluation reserve 18 1,496,759,104 1,496,759,104
Foreign currency translation gain 19a 14,920,954 13,414,088
Other reserve - -
Surplus in profit and loss account / Retained earnings 20a 1,759,002,003 1,079,304,405

Total Shareholders' equity 26,180,899,209 24,707,796,928

Total liabilities and Shareholders' equity 293,900,728,300 281,274,666,641

236 PRIME BANK

Balance Sheet
as at 31 December 2018
Amount in Taka
Particulars Notes
2018 2017
OFF - BALANCE SHEET ITEMS
Contingent liabilities 21a
Acceptances and endorsements 21a.1 52,944,055,583 49,721,797,256
Letters of guarantee 21a.2 57,826,844,429 72,966,435,302
Irrevocable letters of credit 21a.3 38,072,832,383 34,112,938,262
Bills for collection 21a.4 11,613,890,781 10,766,851,918
Other contingent liabilities - -
160,457,623,176 167,568,022,737
Other commitments
Documentary credits and short term trade -related transactions - -
Forward assets purchased and forward deposits placed 2,095,175,884 240,823,450
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities , credit lines and other commitments - -
Liabilities against forward purchase and sale - -
2,095,175,884 240,823,450

Total Off-Balance Sheet items including contingent liabilities 162,552,799,060 167,808,846,187

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

See annexed auditors' report to the Shareholders of the date.

Aziz Halim Khair Choudhury Hoda Vasi Chowdhury & Co

Chartered Accountants Chartered Accountants
Dated , 03 April 2019

PRIME BANK 237

ANNUAL REPORT 2018

Profit and Loss Account

for the year ended 31 December 2018

Amount in Taka
Particulars Notes
2018 2017
Interest income / profit on investments 23a 18,390,385,430 14,769,140,556
Interest / profit paid on deposits, borrowings, etc. 24a (10,740,853,932) (9,875,345,368)
Net interest / net profit on investments 7,649,531,498 4,893,795,187
Investment income 25a 2,154,009,477 4,245,579,605
Commission, exchange and brokerage 26a 2,208,574,964 2,244,846,406
Other operating income 27a 887,322,424 764,028,440
Total operating income (A) 12,899,438,362 12,148,249,639
Salaries and allowances 28a 4,158,596,820 3,823,661,492
Rent, taxes, insurance, electricity, etc. 29a 961,285,687 906,160,291
Legal expenses 30a 105,967,130 83,038,972
Postage, stamp, telecommunication, etc. 31a 70,375,029 77,943,186
Stationery, printing, advertisements, etc. 32a 226,156,608 197,559,994
Managing Director's salary and fees 33 10,131,935 11,528,936
Directors' fees 34a 3,663,929 4,495,414
Auditors' fees 35a 1,380,000 1,380,000
Charges on loan losses 36 - -
Depreciation and repair of Bank's assets 37a 406,514,271 365,042,696
Other expenses 38a 1,235,964,917 1,304,063,983
Total operating expenses (B) 7,180,036,326 6,774,874,964
Profit / (loss) before provision (C=A-B) 5,719,402,036 5,373,374,674
Provision for loans & advances 39a 1,781,500,000 3,255,500,000
Provision for diminution in value of investments 39a 18,700,000 (60,516,500)
Other provisions 39a (18,600,000) 369,416,500
Total provision (D) 1,781,600,000 3,564,400,000
Total profit / (loss) before taxes (C-D) 3,937,802,036 1,808,974,674
Provision for taxation
Current tax 40a 1,750,000,000 750,000,000
Deferred tax - -
1,750,000,000 750,000,000
Net profit after taxation 2,187,802,036 1,058,974,674
Retained earnings brought forward from previous years 20.1a 358,760,374 382,124,666
2,546,562,410 1,441,099,340
Appropriations
Statutory reserve 787,560,407 361,794,935
General reserve - -
787,560,407 361,794,935
Retained surplus 20a 1,759,002,003 1,079,304,405
Earnings per share (EPS) 45a 1.93 0.94

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

See annexed auditors' report to the Shareholders of date

Aziz Halim Khair Choudhury Hoda Vasi Chowdhury & Co

Chartered Accountants Chartered Accountants
Dated , 03 April 2019

238 PRIME BANK

Cash Flow Statement
for the year ended 31 December 2018
Amount in Taka
Particulars Notes
2018 2017
A) Cash flows from operating activities
Interest receipts in cash 20,527,429,925 16,885,847,491
Interest payments (9,781,570,590) (10,022,462,361)
Dividend receipts 88,098,460 80,601,232
Fees and commission receipts in cash 2,208,574,964 2,244,846,406
Recoveries of loans previously written off 203,780,138 409,904,161
Cash payments to employees (4,048,414,183) (3,950,744,104)
Cash payments to suppliers (700,210,243) (723,477,625)
Income taxes paid (491,561,431) (587,515,461)
Receipts from other operating activities 41a 926,247,149 2,583,008,785
Payments for other operating activities 42a (1,888,295,683) (1,984,631,152)
Cash generated from operating activities before
changes in operating assets and liabilities 7,044,078,506 4,935,377,372
Increase / (decrease) in operating assets and liabilities
Purchase of trading securities (Treasury bills) (2,698,687,081) 16,912,134,608
Loans and advances to customers (9,900,768,555) (29,772,028,217)
Other assets 43a 92,178,274 6,944,608,143
Deposits from other banks / borrowings 6,739,373,030 8,766,832,663
Deposits from customers (2,671,173,267) 315,343,333
Other liabilities account of customers (1,166,695,868) (955,792,457)
Other liabilities 44a (678,988,274) 222,731,088
(10,284,761,741) 2,433,829,160
Net cash from operating activities (3,240,683,235) 7,369,206,532
B) Cash flows from investing activities
Proceeds from sale of securities (248,072,215) 263,688,699
Purchase of property, plant and equipment (841,204,209) (285,131,076)
Proceeds from sale of property, plant and equipment 2,428,754 3,748,894
Net cash used in investing activities (1,086,847,670) (17,693,483)
C) Cash flows from financing activities
Receipts from issue of sub-ordinated bond 7,000,000,000 -
Payments for redemption of sub-ordinated bond (500,000,000) (1,250,000,000)
Dividend paid (720,544,031) (1,646,957,786)
Net cash used in financing activities 5,779,455,969 (2,896,957,786)
D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) 1,451,925,064 4,454,555,264
E) Effects of exchange rate changes on cash and cash equivalents 6,548,290 42,470,948
F) Cash and cash equivalents at beginning of the year 29,589,610,681 25,092,584,469
G) Cash and cash equivalents at end of the year (D+E+F) 31,048,084,036 29,589,610,681
Cash and cash equivalents at end of the year
Cash in hand (including foreign currencies) 3,100,264,070 3,031,607,478
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) 14,539,287,480 14,973,037,651
Balance with other banks and financial institutions 13,404,835,186 10,082,590,452
Money at call and short notice - 1,500,000,000
Prize bonds (note-6a) 3,697,300 2,375,100
31,048,084,036 29,589,610,681

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

Dated , 03 April 2019

PRIME BANK 239

240
Statement of Changes in Equity
for the year ended 31 December 2018

PRIME BANK
ANNUAL REPORT 2018

Paid-up Share Statutory Revaluation Revaluation gain/ F.C. Translation Retained Total
Particulars Capital premium reserve reserve loss on investments gain earnings
Taka Taka Taka Taka Taka Taka Taka Taka
Balance as at 1 January 2018 10,293,486,160 2,241,230,396 9,565,853,177 1,496,759,104 17,749,598 13,414,088 1,079,304,405 24,707,796,928
Changes in accounting policy / Last year's profit - - - - - - -
Restated balance 10,293,486,160 2,241,230,396 9,565,853,177 1,496,759,104 17,749,598 13,414,088 1,079,304,405 24,707,796,928
Surplus / deficit on account of revaluation of properties - - - - - - - -
Adjustment of last year revaluation gain on investments - - - - (53,012,078) - - (53,012,078)
Surplus / deficit on account of revaluation of investments - - - - 57,349,488 - - 57,349,488
Currency translation differences - - - - - 1,506,866 - 1,506,866
Net gains and losses not recognized in the income statement - - - - 22,087,009 14,920,954 1,079,304,405 24,713,641,204
Net profit for the year - - - - - - 2,187,802,036 2,187,802,036
Dividends (Bonus shares) 1,029,348,610 (1,029,348,610) - - - - - -
Cash dividend - - - - - - (720,544,031) (720,544,031)
Share premium - - - - - - - -
Issue of share capital (Right share) - - - - - - - -
Appropriation made during the year - - 787,560,407 - - - (787,560,407) -
Balance as at 31 December 2018 11,322,834,770 1,211,881,786 10,353,413,584 1,496,759,104 22,087,009 14,920,954 1,759,002,003 26,180,899,209
Balance as at 31 December 2017 10,293,486,160 2,241,230,396 9,565,853,177 1,496,759,104 17,749,598 13,414,088 1,079,304,405 24,707,796,928

These financial statements should be read in conjunction with the annexed notes 1 to 51.

Chairman Director Director Managing Director

Dated , 03 April 2019

Notes to the Financial Statements
as at and for the year ended 31 December 2018

1 The Bank and its activities

1.1 Prime Bank Limited
Prime Bank Limited ("the Bank") was incorporated as a public limited company in Bangladesh under Companies Act, 1994
with the registered office of the company at 119-120 Motijheel C/A, Dhaka-1000. It commenced its banking business with one
branch from April 17, 1995 under the license issued by Bangladesh Bank. At present the Bank has 146 (One Hundred Forty
Six) branches including 18 (Eighteen) SME Centres/ Branches all over Bangladesh and 2 (Two) booths located at Dhaka Club,
Dhaka and at Chittagong Port, Chittagong. Out of the above 146 branches, 05 (five) branches are designated as Islamic
Banking branch complying with the rules of Islamic Shariah. Also the Bank has 3 (Three) Off-shore Banking Units (OBU), 5
(Five) subsidiary Companies (3 Foreign subsidiaries & 2 Local subsidiaries). The Bank went for Initial Public Offering (IPO) in
1999 and its shares were listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a publicly
traded company for its general classes of share.

1.2 Principal activities

The principal activities of the Bank are to provide all kinds of commercial banking services to customers through its branches
and SME centres/ branches in Bangladesh. The Bank also provides off-shore banking services through its 3 (Three) Off-shore
Banking Units (OBU).

1.3 Off-shore Banking Units

The Bank commenced its off-shore banking operation after obtaining permission from Bangladesh Bank vide letter no.
BRPD(P)744(84)/2001-868 dated March 19, 2001. The Bank commenced operation of its one unit from March 15, 2007.
Presently, the Bank has 3 (Three) Off-shore Banking Units (OBU) located at Dhaka EPZ, Chittagong EPZ and Adamjee EPZ.
The Off-shore Banking Units are governed under the rules and guidelines of Bangladesh Bank. Apart from the reporting of
OBU with solo financial statements a separate financial statements of Off -shore Banking Units are shown in Annexure-K.

1.4 The Bank has 5 (Five) Subsidiaries with following detail as presented in note no. 1.4.1 to 1.4.5:

1.4.1 Prime Bank Investment Limited

Prime Bank Investment Limited is a subsidiary company of Prime Bank Limited incorporated as a public limited company
on April 27, 2010 with the registrar of Joint Stock Companies, Dhaka vide certificate of incorporation no. C-84266/10, dated
April 28, 2010 which has commenced its business on the same date. Total 299,999,994 shares (out of 300,000,000 shares)
of Prime Bank Investment Limited are held by Prime Bank Limited and only 6 shares are held by 6 Senior Executives of
Prime Bank Limited and Prime Bank Investment Limited. The main objectives of the company for which it was established
are to carry out the business of full-fledged merchant banking activities like issue management, portfolio management,
underwriting, corporate advisory services etc. Securities and Exchange Commission (SEC) thereafter issued a full fledged
merchant banking license in favor of Prime Bank Investment Limited, vide letter no. SEC/Reg/MB/SUB/2010/03/208, dated
June 02, 2010 with effect from June 01, 2010. Financial Statements of the company are shown in Annexure-L.

1.4.2 Prime Bank Securities Limited

Prime Bank Securities Limited was incorporated on April 29, 2010 as a private limited company under the Companies Act
1994 vide certificate of incorporation no.C-84302/10. Prime Bank Securities Limited became member of Dhaka Stock
Exchange Limited and Chittagong Stock Exchange Limited for brokerage transaction vide Bangladesh Securities &
Exchange Commission certificate no. 3.1/DSE-219/2010/429, dated September 16, 2010 and 3.2/CSE-141/2010/239, dated
August 31, 2010 respectively. Prime Bank Securities Limited commenced its operation from May 2011. The main objectives
of the company are to carry on business of stock brokers / dealers in relation to shares and securities dealings and other
services as mentioned in the Memorandum and Articles of Association of the Company. Prime Bank Limited and Prime
Bank Investment Limited hold 95% and 5% share of Prime Bank Securities Limited respectively. Financial Statements of the
company are shown in Annexure-M.

1.4.3 Prime Exchange Co. (Pte) Limited, Singapore

Prime Exchange Co. (Pte) Ltd., a fully owned subsidiary company of Prime Bank Limited was incorporated in Singapore
on January 06, 2006 and commenced its remittance business from July 08, 2006 under the remittance license issued
by the Monetary Authority of Singapore (MAS) under section 7A(3) of the Money Changing and Remittance Business Act
(Chapter 187) with 1 (One) branch located at 2A Desker Road, (2nd floor), Singapore 209549. In 2011, the Company has also
opened another Branch located at Jurong East Branch, Block: 134 #01-305 Jurong Gateway Road, Singapore 600134. The
principal activities of the company are to carry on the remittance business and to undertake and participate in transactions,
activities and operations commonly carried on or undertaken by remittance and exchange house. Financial Statements of
the company are shown in Annexure-N.

PRIME BANK 241

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018

1.4.4 PBL Exchange (UK) Limited

PBL Exchange (UK) Limited was incorporated as a private limited company with Companies House of England and Wales
under registration no. 7081093 dated November 19, 2009. The company is a wholly owned subsidiary of Prime Bank Limited.
The company commenced its operation on August 02, 2010 with 3 (three) Branches located at Brick Lane of London,
Coventry Road of Birmingham and North Oldham of Manchester. The registered office is located at 16 Brick Lane, London E1
6RF. Financial Statements of the company are shown in Annexure-O.

1.4.5 PBL Finance (Hong Kong) Limited

PBL Finance (Hong Kong) Limited, a fully owned subsidiary of Prime Bank Limited. PBL Finance (Hong Kong) Limited was
incorporated with Companies Registries of Hong Kong (Certificate of incorporation no. 1584971 and Business Registration
no. 58197431 both dated April 7, 2011). PBL Finance (Hong Kong) Limited obtained Money Lending Licenses # 307/2011 issued
by Honorable Court of Hong Kong on 28th July 2011. It has commenced its operation from August 2011 with one branch
located at 608, 6/F, Admiralty Centre, Tower-2, 18 Harcourt Road, Hong Kong. Financial Statements of the company are
shown in Annexure-P.
2.00 Significant accounting policies and basis of preparation of financial statements

2.1 Basis of accounting

2.1.1 Statement of compliance
The financial statements of the Bank and its subsidiaries (the "Group") have been made for the year ended on December
31, 2018 and are prepared under the historical cost basis, except for certain investments which are stated at fair/market
value and freehold land which are measured at revalued amount, in accordance with the First Schedule (Sec-38) of the
Bank Companies Act 1991 (as Amended up to 2013), BRPD Circular # 14 dated June 25, 2003 and DFIM Circular # 11, dated
December 23, 2009, other Bangladesh Bank Circulars, International Accounting Standards ("IAS") and International Financial
Reporting Standards ("IFRS") adopted by the Institute of Chartered Accountants of Bangladesh ("ICAB"), the Companies
Act 1994, the Securities and Exchange Rules 1987, Dhaka & Chittagong Stock Exchanges' listing regulations and other laws
& rules applicable in Bangladesh. In cases where the requirements of Bangladesh Bank differ with those of IAS/IFRS, the
requirements of Bangladesh Bank have been applied.
In addition to foregoing directives and standards, the operation of Islamic Banking Branches are accounted for in accordance
with Financial Accounting Standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions,
Bahrain, and BRPD circular no-15, dated November 09, 2009. A separate balance sheet, profit and loss account and a
statement of profit paid on deposits are shown in Annexure-G and G(1) 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.

The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC) is to be
formed and it is to issue financial reporting standards for public interest entities such as banks. The Bank Companies Act
1991 has been amended to require banks to prepare their financial statements under such financial reporting standards.
The FRC has been formed but yet to issue any financial reporting standards as per the provisions of the FRA and hence
International Financial Reporting Standards (IFRS) as issued by the Institute of Chartered Accountants of Bangladesh (ICAB)
are still applicable.
Accordingly, the financial statements of the Bank continue to be prepared in accordance with International Financial
Reporting Standards (IFRS) and the requirements of the Bank Company Act 1991, the rules and regulations issued by
Bangladesh Bank (BB), the Companies Act 1994. In case any requirement of the Bank Company Act 1991, and provisions
and circulars issued by Bangladesh Bank differ with those of IFRS, the requirements of the Bank Company Act 1991, and
provisions and circulars issued by Bangladesh Bank shall prevail.
2.1.2 Basis of consolidation
The consolidated financial statements include the financial statements of Prime Bank Limited and its subsidiaries, i.e. Prime
Bank Investment Limited, Prime Bank Securities Limited, Prime Exchange Co. (Pte) Limited, Singapore, PBL Exchange (UK)
Limited and PBL Finance (Hong Kong) Limited.

The consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS)-
27: "Separate Financial Statements" and International Financial Reporting Standard (IFRS)- 10: "Consolidated Financial
Statements". The consolidated financial statements are prepared to a common financiall year ended on December 31, 2018.

242 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

Subsidiary
Subsidiary is that enterprise which is controlled by the Bank. Control exists when the Bank has the power, directly or
indirectly, to govern the financial and operating policies of an enterprise from the date that control commences until the
date that control ceases. The financial statements of subsidiary are included in the consolidated financial statements from
the date that control effectively commences until the date that the control effectively ceases. Subsidiary companies are
consolidated using the purchase method of accounting. The overseas subsidiary companies i.e. Prime Exchange Co. (Pte)
Limited, Singapore, Prime Exchange (UK) Limited and PBL Finance (Hong Kong) Limited has a common financial year ending
December 31, 2018. The conversion policy of subsidiary companies is given below:

Prime Exchange Co. PBL Exchange PBL Finance

Particulars Price
(Pte) Ltd., Singapore (UK) Ltd. (Hong Kong) Ltd.

For assets & liabilities Closing price 61.14270 105.98250 10.71657

For income & expenses Average price 61.48260 108.86335 10.65075

All intra-group transactions, balances, income and expenses are eliminated on consolidation. Profit and loss resulting from
transactions between Group are also eliminated on consolidation.

2.1.3 Use of estimates and judgments

In preparation of the financial statements management is required to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on a going concern basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
The most significant areas where estimates and judgments have been applied are to calculate provision for loans, advances
and investments as per Bangladesh Bank guidelines.

2.1.4 Foreign currency transaction

a) Foreign currency
Items included in the financial statements of each entity in the group are measured using the currency of the primary
economic environment in which the entity operates, i e. the functional currency. The financial statements of the group and
the Bank are presented in BDT which is the Bank's functional and presentation currency.

b) Foreign currencies translation

Foreign currency transactions are converted into equivalent BDT using the prevailing 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 BDT at weighted average rate of inter-bank market as determined by Bangladesh Bank on the
closing date of every month. Balances held in foreign currencies other than US Dollar are converted into equivalent US Dollar
at buying rates of New York closing of the previous day and converted into equivalent BDT.
Assets and liabilities & income and expenses of Off-shore Banking Units have been converted into BDT currency @ US$1 =
BDT 83.90 (closing rate as at 31st December 2018) and BDT 83.4680 (average rate at year-end).
c) Commitments
Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated at
rates mentioned in contracts. Contingent liabilities / commitments for letters of credit and letters of guarantee denominated
in foreign currencies are expressed in BDT terms at the rates of exchange prevailing on the balance sheet date.

d) Translation gains and losses

The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on the
translation of net investment in foreign subsidiary.
e) Foreign operations
The results and financial position of the Group's operations whose functional currency is not Bangladeshi Taka are translated
into Bangladeshi Taka as follows:
i) Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date.
ii) Income and expenses in the income statement are translated at an average rate approximating the exchange rates
at the year end;
iii) Resulting exchange differences are recognized as a separate component of equity.

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Notes to the Financial Statements

as at and for the year ended 31 December 2018

iv) As per IAS 21, 'Foreign Currency Transactions' i.e. foreign currency denominated both monetary and non-monetary
items of the OBUs are translated at historical rate because the OBUs are considered as an integral part of the Bank's
operation not a foreign operation due to specific regulations governing the OBU and its unique nature.
f) Consolidation of Financial Statements of foreign operations.
In Consolidation, foreign exchange differences arising from the translation of net investments in foreign entities, as well as
any borrowings are taken into capital reserve. When a foreign operation is disposed of, such currency translation differences
are recognized in the income statement as part of the gain or loss on disposal.

2.1.5 Statement of cash flows

Statement of cash flows have been prepared in accordance with the BRPD Circular No. 14, dated June 25, 2003 issued by
the Banking Regulation & Policy Department of Bangladesh Bank.
2.1.6 Liquidity statement
The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term as per
the following basis, details are shown in [Annexure-I & I (1)]:
i) Balance with other Banks and financial institutions, money at call and short notice, etc. are on the basis of their maturity term;
ii) Investments are on the basis of their residual term;
iii) Loans and advances / investments are on the basis of their repayment/maturity schedule;
iv) Fixed assets are on the basis of their useful life;
v) Other assets are on the basis of their realization / amortization;
vi) Borrowing from other Banks, financial institutions and agents, etc. are as per their maturity / repayment terms;
vii) Deposits and other accounts are on the basis of their maturity term and past trend of withdrawal by the depositors;
viii) Provisions and other liabilities are on the basis of their payment / adjustments schedule.
2.1.7 Reporting period
These financial statements cover one calendar year from 1st January to 31st December 2018.
2.1.8 Offsetting
Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realize the asset and
settle the liability simultaneously (note-9a, 25a, 26a.1).
2.2 Assets and basis of their valuation
2.2.1 Cash and cash equivalents
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and
highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Bank
management for its short-term commitments.
2.2.2 Loans, advances and lease / investments
a) Loans and advances are stated in the balance sheet on gross basis.
b) Interest / profit is calculated on a daily product basis but charged and accounted for on accrual basis. Interest / profit
on classified loans and advances / investments is kept in suspense account as per Bangladesh Bank instructions and
such interest / profit is not accounted for as income until realised from borrowers [note - 7a.10 (x)]. Interest / profit
is not charged on bad and loss loans / investments as per guidelines of Bangladesh Bank. Records of such interest
amounts are kept in separate memorandum accounts.
c) Commission and discounts on bills purchased and discounted are recognized at the time of realization.
d) Provision for loans and advances / investments is made on the basis of the following instructions contained in
Bangladesh Bank BRPD Circular no. 14, dated September 23, 2012, BRPD Circular no. 19, dated December 27, 2012,
BRPD Circular no. 05, dated May 29, 2013, BRPD Circular no. 16, dated November 18, 2014, BRPD Circular no. 12, dated
August 20, 2017, BRPD Circular no. 15, dated September 27, 2017 and BRPD Circular no. 1 dated February 2018. The
rates of provision for loans and advances / investments are given below:
Particulars Rate
General provision on unclassified general loans and advances / investments 1%
General provision on unclassified small and medium enterprise financing 0.25%
General provision on interest receivable on loans / investments 1%
General provision on unclassified loans / investments for housing finance 1%
General provision on loans for professionals and loans to BHs/MBs against share etc. 2%
General provision on unclassified consumer financing other than housing finance and professionals 5%
General provision on short term Agriculture/Micro Credit 1%
General provision on credit card 2%
General provision on Special Mention Account (SMA) except Short Term Agriculture Loans 0.25%-5%
Specific provision on substandard loans and advances / investments 20%
Specific provision on doubtful loans and advances / investments 50%
Specific provision on bad / loss loans and advances / investments 100%

244 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

e) Loans and advances/investments are written-off to the extent that (i) there is no realistic prospect of recovery, and (ii)
against which legal cases are pending for more than five years as per guidelines of Bangladesh Bank. These write-off
however will not undermine/affect the claim amount against the borrower. Detailed memorandum records for all such
write off accounts are meticulously maintained and followed up.
f) Amounts receivable on credit cards are included in advances to customers at the amounts expected to be recovered.
2.2.3 Investments
All investment securities are initially recognised at cost, being fair value of the consideration given, including acquisition
charges associated with the investment. Premiums are amortized and discounts accredited, using the effective yield
method are taken to discount income. The valuation method of investments used are:
Held to maturity (HTM)
Investments which have 'fixed or determinable payments', and are intended to be 'held to maturity', other than those that
meet the definition of 'held at amortized cost-others' are classified as held to maturity. Investment (HTM)-BHBFC is shown in
the financial statements at cost price.
Held for trading (HFT)
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 measured at fair value and any change in
the fair value is recognised in the statement of income for the period in which it arises. These investments are subsequently
revalued at current market value on weekly basis as per Bangladesh Bank Guideline. Revaluation gain has been shown in
revaluation reserve account & revaluation loss has been shown in Profit & Loss account.
Value of investments has been enumerated as follows :

Items Applicable accounting value

Government treasury bills-HTM Amortized value
Government treasury bills-HFT Market value
Government treasury bonds-HTM Amortized value
Government treasury bonds-HFT Market value
Prize bond At cost

Investment in listed securities

These securities are bought and held primarily for the purpose of selling them in future, or held for dividend income. These
are reported at cost. Unrealized gains are not recognized in the profit and loss account. But provision for diminution in
value of investment is provided in the financial statements where market price is below the cost price of investments as per
Bangladesh Bank guideline (note-14a).
Investment in unquoted securities
Investment in unlisted securities is reported at cost under cost method. Adjustment is given for any shortage of book value
over cost for determining the carrying amount of investment in unlisted securities.

Investments in subsidiary
Investment in subsidiaries is accounted for under the cost method of accounting in the Bank's financial statements in
accordance with the IFRS-10. Accordingly, investments in subsidiaries are stated in the Bank's balance sheet at cost, less
impairment losses (if any).
2.2.4 Property, plant and equipment
Property, plant & equipment are recognized if it is probable that future economic benefits associated with the assets will flow
to the Bank and the cost of the assets can be reliably measured.
a) All fixed assets are stated at cost less accumulated depreciation as per IAS-16 " Property, Plant and Equipment". The
cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to
its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.

b) The Bank recognises, in the carrying amount of an item of property, plant and equipment, the cost of replacing part
of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item
will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets
have been put into operation, such as repairs and maintenance, is normally charged off as revenue expenditure in the
period in which it is incurred.

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Notes to the Financial Statements

as at and for the year ended 31 December 2018

c) Revaluation of Land and Building: As per International Accounting Standard (IAS-16) revaluation should be made
with sufficient regulatory compliance to ensure that the carrying amount does not differ materially from that which
would be determined using the fair value at the end of reporting period. The fair value of Land and Buildings is usually
determined from market based evidence by an appraisal that is normally undertaken by professionally qualified
Valuers. Therefore, any upward increases of the assets have positive impact on the capital adequacy of the Bank (50%
of the asset revaluation is considered as Tier-2 Capital subject to deduction as per roadmap for implementation of
BASEL-III). With a view to qualify for higher capital adequacy, the bank revalued its Land and Buildings upon complying
with all regulatory requirements.
d) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets other than
vehicles, software and all fixed assets of ATM related on which straight line depreciation method is followed and no
depreciation is charged on land:
Category of fixed assets Rate
Land Nil
Buildings 2.50%
Furniture and fixtures 10%
Office equipments 20%
Vehicles 20%
Category of fixed assets (ATM Assets) Rate
Furniture and fixtures 10%
Office equipment 20%
e) For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation
is charged up to the date of disposal.
f) On disposal of fixed assets, the cost and accumulated depreciation are eliminated from the fixed assets schedule and
gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book
value of the assets and net sale proceeds.
g) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset have
been capitalized as part of the cost of the asset as per IAS-23.
h) Leasehold properties are recorded at present value of minimum lease payments or fair market value, whichever is
lower as per the provisions of IAS-17. The carrying value of leasehold properties is amortized over the remaining lease
term or useful life of leasehold property, whichever is lower.
2.2.5 Intangible assets
a) An intangible asset is recognized if it is probable that the future economic benefits that are attributable to the asset
will flow to the entity and the cost of the assets can be measured reliably.

b) Software represents the value of computer application software licensed for use of the Bank, other than software
applied to the operation software system of computers. Intangible assets are carried at its cost, less accumulated
amortization and any impairment losses.
Initial cost comprises license fees paid at the time of purchase and other directly attributable expenditure that are
incurred in customizing the software for its intended use.
c) Expenditure incurred on software is capitalized only when it enhances and extends the economic benefits of
computer software beyond their original specifications and lives and such cost is recognized as capital improvement
and added to the original cost of software.
d) Software is amortized using the straight line method over the estimated useful life of 10 (ten) years commencing from
the date of the application. Software is available for use over the best estimate of its useful economic life.
2.2.6 Impairment of Assets:
The policy for all assets or cash-generating units for the purpose of assessing such assets for impairment is as follows:
The Bank assesses at the end of each reporting period or more frequently if events or changes in circumstances indicate
that the carrying value of an asset may be impaired, whether there is any indication that an asset may be impaired. If any
such indication exits, or when an annual impairment testing for an asset is required, the bank makes an estimate of the
asset's recoverable amount. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount,
the asset or cash-generating unit is considered as impaired and is written down to its recoverable amount by debiting to
profit & loss account.

246 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

Fixed assets are reviewed for impairment whenever events or charges in circumstances indicate that the carrying amount
of an asset may be impaired.
2.2.7 Other assets
Other assets include all balance sheet accounts not covered specifically in other areas of the supervisory activity and such
accounts may be quite insignificant in the overall financial condition of the Bank.
2.2.8 Securities purchased under re-sale agreement
Securities purchased under re-sale agreements are treated as collateralized lending and recorded at the consideration paid
and interest accrued thereon. The amount lent is shown as an asset either as loans and advances to customers or loans to
other banks.
The difference between purchase price and re-sale price is treated as interest received and accrued evenly over the life of
Repo agreement.
2.2.9 Receivables
Receivables are recognised when there is a contractual right to receive cash or another financial asset from another entity.
2.2.10 Inventories
Inventories measured at the lower of cost and net realizable value.
2.2.11 Leasing
Leases are classified as finance leases whenever the 'terms of the lease' transfer substantially all the risks and rewards of
ownership to the lessee as per BAS-17 " Leases". All other leases are classified as operating leases as per BAS-17 "Leases".
The Bank as lessor
Amount due from lessees under finance leases are recorded as receivables at the amount of the Bank's net investment in
the leases (note-7a.2). Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of
return on the bank's net investment outstanding in respect of the leases.
The Bank as lessee
Assets held under finance leases are recognised as assets of the Bank at their fair value at the date of acquisition or, if lower,
at the present value of the minimum lease payments (note-9a).
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.
2.2.12 Non-banking assets:
Non-banking assets are acquired on account of the failure of a borrower to repay the loan on time after receiving the
decree from the Court regarding the right and title of the mortgage property. The Bank has been awarded ownership of
the mortgage properties according to the verdict of the Honorable Court in accordance with the section 33 (7) of “Artharin
Adalat-2003”. The value of Non-Banking Assets has been determined and reported in the financial statements on the basis
of valuation report of an Independent valuer. Details of which is presented in (note-11).
2.2.13 Reconciliation of inter-bank and inter-branch account
Accounts 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. Un-reconciled entries / balances in the case of
inter-branch transactions as on the reporting date are not material.
2.3 Share Capital
Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.
2.3.1 Authorised Capital
Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of
Association. Details are shown in (note 15.1).

2.3.2 Paid up Capital

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 are ranked after all other shareholders and
creditors and are fully entitled to any residual proceeds of liquidation. Details are shown in (note 15.2).
2.4 Statutory reserve
As per Bank Companies Act, the Bank requires to transfer 20% of its current year's profit before tax to statutory reserve until
such reserve equals to its paid up capital. The Bank does comply with this requirement of law every year.

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ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018

2.5 Revaluation reserve

When an asset's carrying amount is increased as a result of revaluation, the increase amount should be credited directly to
equity under the head of revaluation surplus / reserve as per BAS-16: "Property, Plant and Equipment". The Bank revalued
its land and buildings during the year 2008 & 2013 which are absolutely owned by the Bank and the increased amount was
transferred to revaluation reserve account accordingly. The tax effects on revaluation gain are measured and recognised in
the financial statements as per BAS-12: Income Taxes.
2.5.1 Non controlling interest in subsidiaries
Non controlling interest in business is an accounting concept that refers to the portion of a subsidiary corporation's stock
that is not owned by the parent corporation. The magnitude of the non controlling interest in the subsidiary company
is always less than 50% of outstanding shares, else the corporation would cease to be a subsidiary of the parent. non
controlling interest belongs to other investors and is reported on the consolidated balance sheet of the owning company to
reflect the claim on assets belonging to other, non-controlling shareholders. Also, non controlling interest is reported on the
consolidated income statement as a share of profit belonging to non controlling shareholders.
2.5.2 a) Prime Bank Sub-ordinated Bond
Prime Bank has issued unsecured non-convertible sub-ordinated bond on 07 February 2010 after obtaining approval from
regulatory bodies. The bond has been fully redeemed during the year of 2017.
b) Prime Bank Sub-ordinated Bond-2
Prime Bank has issued another subordinated bond on February 19, 2015 namely “Prime Bank Subordinated Bond-2” after
obtaining approval from Bangladesh Securities & Exchange Commission and Bangladesh Bank vide their letter BSEC/CI/
DS-16/2014/735 dated October 29, 2014 and BRPD (BFIS) 661/14B (P)/2014-8043 dated December 18, 2014 respectively. The
bond shall bear interest with floating rate payable semi-annually on 19th February and 19th August each year. Floating rate
is determined by calculating a benchmark rate i.e. peer banks’ most recent average FDR rate and 2.75% margin with a floor
at 11.50% and capped at 14.00% p.a.

c) Prime Bank Sub-ordinated Bond-3

Prime Bank has issued another subordinated bond on August 12, 2018 namely “Prime Bank Subordinated Bond-3” after
obtaining approval from Bangladesh Securities & Exchange Commission and Bangladesh Bank vide their letter BSEC/CI/
DS-16/2014/230 dated April 03, 2018 and BRPD (BFIS) 661/14B (P)/2018-3296 dated May 22, 2018 respectively. The bond shall
bear interest with floating rate payable semi-annually on 12 August and 12 February each year. Floating rate is determined
by calculating a benchmark rate i.e. peer banks’ most recent average FDR rate and 2.00% margin with a floor at 7.00% and
capped at 10.50% p.a.

2.5.3 Share premium

Share premium is the capital that the Bank raises upon issuing shares that is in excess of the nominal value of the shares.
The share premium may be applied by the Bank in paying up unissued shares to be allotted to members as fully paid bonus
shares or writing-off the preliminary expenses of the Bank or the expenses of or the commission paid or discount allowed on,
any issue of shares or debentures of the Bank or in providing for the premium payable on the redemption of any redeemable
preference shares or of any debentures of the Bank as per the provison of section 57 of the Companies Act 1994. Share
premium was shown in accounts after deduction of income tax @ 3% on share premium as per finance Act-2010.

2.6 Contingent liabilities

A contingent liability is a possible obligation that arises form past events and the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Bank; or

A present obligation that arises from past events but is not recognised because:
a) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
b) the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow of
resources embodying economic benefits is reliably estimated.
Contingent assets are not recognised in the financial statements as this may results in the recognition of income which may
never be realised.
2.7 Deposits and other accounts
Deposits by customers and banks are recognised when the Bank enters into contractual provisions of the arrangements
with the counterparties, which is generally on trade date, and initially measured at the consideration received.

248 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

2.8 Borrowings from other banks, financial institutions and agents

Borrowed funds include call money deposits, borrowings, re-finance borrowings and other term borrowings from banks,
financial institutions and agents. These are stated in the balance sheet at amounts payable. Interest paid / payable on these
borrowings is charged to the profit & loss account.
Disclosures of borrowings against Repo are shown in notes- 6a.7 to 6a.8 and 47
2.9 Basis for valuation of liabilities and provisions
2.9.1 Provision for current taxation
Provision for current income tax has been made as per prescribed rate in the Finance Act, 2018 on the taxable income as
per income tax law and Bangladesh Accounting Standard (BAS) -12: " Income Taxes".

2.9.2 Deferred taxation

Deferred tax is accounted for in accordance with IAS 12: "Income Taxes". Deferred tax normally results in a liability being
recognized within the Statement of Financial Position. IAS 12 defines a deferred tax liability as being the amount of income tax
payable in future periods. Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for
using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences
and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which
deductible temporary differences, unused tax losses or unused tax credits can be utilized. Such assets and liabilities are
not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company intends
to settle its current tax assets and liabilities on a net basis.
2.9.3 Benefits to the employees
The benefits accrued for the employees of the Bank as on reporting date have been accounted for in accordance with the
provisions of International Accounting Standard-19, "Employee Benefit". Basis of enumerating the benefit schemes operated
by the Bank are outlined below:
a) Provident fund
Provident fund benefits are given to the permanent employees of the Bank in accordance with Bank's service rules.
Accordingly a trust deed and provident fund rules were prepared. The Commissioner of Income Tax, Taxes Zone-5,
Dhaka has approved the Provident Fund as a recognized provident 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 recognition took effect from July 07, 1997. The
Fund is operated by a Board of Trustees consisting six members (03 members from management and other 03 members
from the Board of Directors) of the Bank. All confirmed employees of the Bank are contributing 10% of their basic salary as
subscription to the Fund. The Bank also contributes equal amount of the employees' contribution. Interest earned from the
investments is credited to the members' account on yearly basis.
b) Gratuity fund
The Bank operates a funded gratuity scheme on "Continuing Fund Basis", in respect of which provision is made regularlly
according to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance with
Bank Service Rules. The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has approved
the Prime Bank Limited Employees' Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.035.02.0016.2
013/217, dated 22/07/2013) within the meaning of Para 2,3 & 4, read with the provisions of Part - C of the First Schedule of
Income Tax Ordinance 1984. The recognition took effect from July 22, 2013. The Fund is operated by a Board of Trustees
consisting six members (03 members from the Board of Directors and other 03 members from management) of the Bank.
Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for the scheme as
per BAS-19 “Employees Benefit".

c) Welfare fund
Prime Bank's employees' welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes to
the Fund in accordance with Bank Service Rules. The Fund has been established to provide medical support and coverage
in the event of accidental death or permanent disabilities of the employees. Disbursement of loan from the fund is done as
per rules for employees' welfare fund. Retirement benefit are also provided from this fund.
d) Incentive bonus
10% of net profit after tax is given to the employees in every year as incentive bonus. This bonus amount is distributed
among the employees based on their performance. The bonus amount is paid annually, normally in first quarter of every
following year and the costs are accounted for in the period to which it relates.

PRIME BANK 249

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018

2.9.4 Other liabilities

Other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest
payable, interest suspense, accrued expenses, obligation under finance lease 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.

2.9.5 Provision for liabilities

A provision is recognised in the balance sheet when the Bank has legal or constructive obligation as a result of a past event
and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with the BAS
37 "Provisions, Contingent Liabilities and Contingent Assets".
2.9.6 Provision for Off-balance sheet exposures
Off-balance sheet items have been disclosed under contingent liabilities and other commitments as per Bangladesh Bank
guidelines. Banks are maintained provision against Off-balance sheet items as per BRPD Circular # 14, dated September 23,
2012 and BRPD Circular # 07 dated June 21, 2018.
2.9.7 Provision for nostro accounts
As per instructions contained in the circular letter no. FEPD (FEMO) / 01 / 2005-677 dated 13 September 2005 issued by
Foreign Exchange Policy Department of Bangladesh Bank, provision is to be maintained for the un-reconciled debit balance
of nostro account more than 3 months as on the reporting date of these financials. Since there is no unreconciled entries
which are outstanding more than 3 months, no provision is required to be maintained.
2.9.8 Provision for rebate to good borrower
As per BRPD Circular No. 06 (19 March 2015) and BRPD Circular Letter No 03 (16 February 2016) issued by Bangladesh
Banks are required to provide 10% rebate on the interest closed from "Good Borrowers" subject to some qualifying criteria.
Accordingly, the Bank has kept provision in the financial statements.

2.9.9 Provision for climate risk fund

As per GBCSRD Circular No 04 (9 July 2015) issued by Bangladesh Bank, instructs Banks to maintain a climate fund of 10%
of the CSR budget. Accordingly, bank has kept provision against climate risk fund.
2.10 Revenue recognition
2.10.1 Interest income (Conventional Banking)
Interest income is recognised on accrual basis. Interest on unclassified loans and advances are calculated at the prescribed
rates to be taken into income. Interest is ceased to be taken into income when such loans and advances are marked as
classified as per criteria prescribed by the Bangladesh Bank. It is then kept in interest suspense account. Interest/Profit on
classified advances/investment is accounted for on a cash receipt basis.

2.10.2 Profit on investment (Islamic Banking Branches)

Mark-up on investment is taken into income account proportionately from profit receivable account. Overdue charge /
compensation on classified investments is transferred to profit suspense account instead of income account.
2.10.3 Investment income
Interest income on investments is recognised on accrual basis. Capital gain on investments in shares is also included in
investment income. Capital gain is recognised when it is realised.

2.10.4 Fees and commission income

Fees and commission income arising on services provided by the Bank are recognised when those are realized. Commission
charged to customers on letters of credit and letters of guarantee is credited to income at the time of transactions being
recorded in the books of accounts.

2.10.5 Dividend income on shares

Dividend income on shares is recognised during the period when right to receive is established.
2.10.6 Interest paid and other expenses (Conventional Banking Branches)
In terms of the provisions of BAS-1 "Presentation of Financial Statements" interest and other expenses are recognised on
accrual basis.

2.10.7 Profit paid on deposits (Islamic Banking Branches)

Profit paid to mudaraba depositors is recognised on accrual basis as per provisional rate. However, the final profit is
determined and to be paid to the depositors as per Annexure-F.
2.10.8 Dividend payments
Interim dividend is recognised when they are paid to shareholders. Final dividend is recognized when it is approved by the
shareholders.

250 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

The proposed dividend for the year 2018 has not been recognized as a liability in the balance sheet in accordance with the
IAS-10 : Events After the Reporting Period.
Dividend payable to the Bank's shareholders is recognized as a liability and deducted from the shareholders' equity in the
period in which the shareholders' right to receive payment is established.
2.11 Risk management
Risk is inherent to the banking business and Bank adds shareholders' value by converting opportunities into profit. The
Bank evaluates its opportunities in terms of risk-reward relationship. The risks that are taking by the Bank are reasonable,
controlled, within its financial resources and credit competence.
In Prime Bank, risk is managed through a clear organizational structure, risk management and monitoring process that are
closely aligned with the activities of the Bank’s risk management policy and process as well as in line with the guidelines
provided by the country's central bank, Bangladesh Bank.
The Bank’s risk management policy and process is composed with all the structure, policies, process and strategies within
the Bank so that it does not conflict with other risk management policies.
The essential elements of an effective risk management framework are:
1. Clearly defined roles and responsibilities to avoid conflict of interest between business lines.
2. Developing a risk culture where everyone will understand the impact of risk before taking any business decision.
3. Robust risk management and governance by the board for understanding the risks taken by the Bank for safety and
protection of the assets.
2.12 Core risk management
BRPD circulars no. 17 dated 07 October 2003 and BRPD circular no. 04 dated 05 March 2007 require banks to put in place an
effective risk management system. The risk management system of the bank covers the following risk areas.
2.12.1 Credit risk
It arises mainly from lending, trade finance, leasing and treasury businesses. This can be described as potential loss arising
from the failure of a counter party to perform as per contractual agreement with the Bank. The failure may result from
unwillingness of the counter party or decline in his / her financial condition. Therefore, the Bank’s credit risk management
activities have been designed to address all these issues.
The Bank has segregated duties of the officers / executives involved in credit related activities. A separate Corporate Division
has been formed at Head Office which is entrusted with the duties of maintaining effective relationship with the customers,
marketing of credit products, exploring new business opportunities, etc. Moreover, credit approval, administration,
monitoring and recovery functions have been segregated. For this purpose, three separate units have been formed within
the credit division. These are (a) Credit Risk Management Unit (b) Credit Administration Unit and (c) Credit Monitoring and
Recovery Unit. Credit Risk Management Unit is entrusted with the duties of maintaining asset quality, assessing risk in lending
to a particular customer, sanctioning credit, formulating policy / strategy for lending operation, etc. Adequate provision has
been made on classified loans / investments is shown in (note-14a.3).
A thorough assessment is done before sanction of any credit facility at Credit Risk Management Unit. The risk assessment
includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security of the
proposed credit facility, etc. The assessment process at Head Office starts at Corporate Division by the Relationship Manager
/ Officer and ends at Credit Risk Management Unit when it is approved / declined by the competent authority. Credit approval
authority has been delegated to the individual executives. Proposals beyond their delegation are approved / declined by the
Executive Committee and / or the Management of the Bank. Concentration of credit risk is shown in (note -7a. 4).
In determining Single borrower / Large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit
is conducted at periodical intervals to ensure compliance of Bank’s and Regulatory polices. Loans are classified as per
Bangladesh Bank’s guidelines. Concentration of single borrower / large loan limit is shown in (note-7a.8).
2.12.2 Foreign exchange risk
Foreign exchange risk is the exposure of an institution to the potential impact of movements in foreign exchange rates.
The risk is that adverse fluctuations in exchange rates may result in a loss in earnings. As per the guidelines of Bangladesh
Bank, Prime Bank Limited has developed a detailed Foreign Exchange Risk Management policies to minimize different types
of risks associated with foreign exchange transactions. The Bank has also developed different strategies to handle foreign
exchange risk by setting different types of limits and risk parameters to measure and monitor foreign exchange risk exposure
of the Bank.

The foreign exchange desk of treasury division is involved in foreign exchange dealing activities with different counterparts;
the treasury back office is engaged in transfer of funds and passing of the transaction entries in the books of accounts, and
the mid office is responsible for verification of the deals. All foreign exchange transactions are revalued at market rate as per
the directive of Bangladesh Bank. All Nostro Accounts are reconciled on a monthly basis and outstanding entries beyond 30
days are reviewed by the management for its settlement.

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Notes to the Financial Statements

as at and for the year ended 31 December 2018

2.12.3 Asset liability management

Banks are exposed to the several risks such as Liquidity Risk, Interest Rate Risk, Foreign Exchange Risk, Credit Risk and
Operational Risk etc. Monitoring and controlling of these risks is vital to the survival of a financial institution. Asset-Liability
Management is a tool to oversee whether different balance sheet risks are properly identified, appropriate policies and
procedures are well established to control and limit these risks.
Asset-Liability Committee (ALCO) reviews country’s overall economic position, the Bank’s liquidity position, key performance
ratios, interest rate risk, deposit and advance growth, cost of deposit & yield on advances, deposit & lending pricing strategy
and different forecasted balance sheet risks of the Bank.
2.12.4 Money laundering risk
Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and
control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.
If money laundering is done successfully, it allows the criminals to maintain control over their proceeds and ultimately to
provide a legitimate cover for their source of income. Money laundering plays a fundamental role in facilitating the ambitions
of the drug trafficker, the terrorist, the organized criminal, the insider dealer, the tax evader as well as the many others who
need to avoid the attention from the authorities that sudden wealth brings from illegal activities. By engaging in this type of
activity it is hoped to place the proceeds beyond the reach of any asset forfeiture laws.
Prime Bank Ltd (PBL) has implemented an enterprise-wide AML (Anti-Money Laundering) and CFT (Combating the Financing
of Terrorism) compliance program, which covers all the activities of the Bank and is reasonably designed to comply with
applicable laws and regulations. It is the policy of PBL to take all reasonable and appropriate steps to prevent persons
engaged in money laundering, fraud, or other financial crime, including the financing of terrorists or terrorist operations,
from utilizing PBL products and services. PBL makes every effort to remain in full compliance with all applicable AML and
CFT laws, rules and standards in the jurisdictions in which it does business.
In order to facilitate compliance with AML and CFT requirements, PBL has appointed one of its Senior Executives as the
CAMLCO (Chief Anti-Money Laundering Compliance Officer) and a team of employees with experience on AML and CFT
requirements under law, as well as money laundering detection and prevention, to oversee PBL AML and CFT program. PBL
has developed and implemented written AML and CFT policies, procedures, internal controls and systems, which include
(but are not limited) a customer identification program and procedures; procedures to collect and refresh, as appropriate,
customer due diligence information; processes to assess risk; processes and systems to monitor customer transactions
and activity; processes and systems to identify and report suspicious activity; and, processes to keep required records.
PBL educates its all employees on AML and CFT requirements and activities and also subjects its AML and CFT program
to regular independent testing. PBL cooperates fully with law enforcement and regulatory investigations and inquiries in
identifying the criminals involve in Money Laundering and Terrorist Activities/Financing.

2.12.5 Internal control & compliance risk

Internal control is fundamental to the successful operation and day-to-day running of a business and it assists the bank in
achieving its business objectives. It encompasses all controls incorporated into the strategic, governance and management
processes, covering the bank’s entire range of activities and operations, and not just those directly related to financial
operations and reporting. Its scope is not confined to those aspects of a business that could broadly be defined as
compliance matters, but extends also to the performance aspects of a business.
Prime Bank Ltd has established a System of Internal Control, which is designed to manage all the risks of failure to a
reasonable level, achieve aims and objectives/goals of the Bank and this System provides reasonable assurance of effective
& efficient operations covering all controls including financial & operational controls, reliability of the financial information,
compliance with applicable laws & regulations, adherence to management policies, safeguarding of Banks Assets, prevention
& detection of fraud & errors, and accuracy & completeness of the accounting records.

The Board of Directors of Prime Bank Ltd regularly reviews the effectiveness of internal control process through its Audit
Committee and Executive Committee and the Audit Committee plays an effective role amongst the Board of Directors,
Management, Shareholders, Depositors and develops an efficient, powerful and a safe Banking System. The committee also
performs a very important role for publishing Bank’s financial statements, developing an appropriate internal control system
and maintains an effective communication with internal and external Auditors. It significantly contributes in controlling
and monitoring various risks factors that arise from the business activities of the Bank. Board Audit Committee reviews the
actions taken on internal control issues identified in the reports prepared by the Internal & External Auditors and Regulatory
Authorities. It has active oversight on the internal audit’s independence, scope of work and resources and it also reviews
the functions of Internal Control & Compliance Division of Head Office, particularly the scope of the annual audit plan and
frequency of the internal audit activities.

252 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

2.12.6 Information and communication technology

The rapid development of information and communication technologies (ICTs) has effectively facilitated in reorganizing
business processes and streamlining the provision of its products and services in today’s dynamic business environment.
Such adoption helps the bank to develop and maintain competitive advantage for ensuring bank’s profitability and
survivability in the market place. The competitive advantage often brings bank numerous benefits including fast business
transactions, increasing automation of business processes, improved customer service, and provision of effective decision
support in a timely manner. However, the adoption of ICT applications has also brought organizations risks related to ICT
such as strategic risk, financial risk, operational risk and technological risk. Risk management plays a critical role in protecting
the bank’s information assets. An effective risk management process is an important component of a successful IT security
program. ICT risk management is referred to as the essential process to aid enterprise achieving “the new business changes,
future investment in information technology system, an increasing ICT threats and an increasing dependence on delivering
information in system”.
In order to minimize and control these risks successfully, The Bank has developed and implemented ICT risk management
policies and strategies, strengthened ICT security infrastructure, acquired centralized real time security monitoring system,
implemented centralized hardware system with high availability facility and implemented Disaster Recover Site (DRS),
developed Business Continuity Plan (BCP) and human resource backup plan with segregation of duties for different ICT tasks.

2.12.7 Liquidity risk

The object of liquidity risk management is to ensure that all foreseeable funding commitments and deposit withdrawals can
be met when due. To this end, the Bank is maintaining a diversified and stable funding base comprising of core retail and
corporate deposits and institutional balance (note - 13a). Management of liquidity and funding is carried out by Treasury
Department under approved policy guidelines. Treasury front office is supported by a very structured Mid office and Back
office. The Liquidity management is monitored by Asset Liability Committee (ALCO) on a regular basis. A written contingency
plan is in place to manage extreme situation.

2.12.8 Market risk

The exposure of market risk of the Bank is restricted to foreign exchange risk, interest rate risk and equity risk.
Foreign exchange risk
Foreign exchange risk is defined as the potential change in earnings due to change in market prices. The foreign exchange risk
of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying L/C commitments
and other remittance requirements. No foreign exchange dealing on Bank's account was conducted during the year.
Treasury Department independently conducts the transactions and the back office of treasury is responsible for verification
of the deals and passing of their entries in the books of account. All foreign exchange transactions are revalued at Mark-to-
Market rate as determined by Bangladesh Bank at the month-end. All Nostro accounts are reconciled on a monthly basis and
outstanding entry beyond 30 days is reviewed by the management for its settlement. The position maintained by the bank
at the end of day was within the stipulated limit prescribed by the Bangladesh Bank.
Interest rate risk
Interest rate risk may arise either from trading portfolio or non-trading portfolio. The trading portfolio of the Bank consists
of Government treasury bills of 28 days maturity. The short-term movement in interest rate is negligible or nil. Interest rate
risk of non-trading business arises from mismatches between the future yield of an asset and its funding cost. Asset Liability
Committee (ALCO) monitors the interest rate movement on a regular basis.
Equity risk
Equity risk arises from movement in market value of equities held. The risks are monitored by Investment Committee under
a well designed policy framework. The market value of equities held was, however, lower than the cost price at the balance
sheet date (Annexure-B).

2.12.9 Reputation risk arising from money laundering incidents

Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention
of money laundering. For mitigating the risks, the Bank has a designated Chief Compliance Officer at Head Office and
Compliance Officers at branches, who independently review the transactions of the accounts to verify suspicious transactions.
Manuals for prevention of money laundering have been established and transaction profile has been introduced. Training
is continuously given to all category of Officers and Executives for developing awareness and skill for identifying suspicious
activities / transactions.

PRIME BANK 253

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Notes to the Financial Statements

as at and for the year ended 31 December 2018

2.12.10 Operational risk

Operational risk may arise from error and fraud due to lack of internal control and compliance. Management through Internal
Control and Compliance Division controls operational procedure of the Bank. Internal Control and Compliance Division
undertakes periodical and special audit of the branches and divisions at the Head Office for review of the operation and
compliance of statutory requirements. The Audit Committee of the Board subsequently reviews the reports of the Internal
Control and Compliance Division.
2.12.11 Audit committee disclosures
Audit Committee (AC) of the Board was formed and its roles and responsibilities were defined in line with Corporate
Governance Code issued by Bangladesh Securities and Exchange Commission (BSEC) vide BSEC notification BSEC/
CMRRCD/2006-158/Admin/80 dated June 03, 2018 and BRPD Circular no.11 dated October 27, 2013 issued by Bangladesh
Bank. The current Audit Committee (AC) was re-constitued by the Board of Directors of the Bank in its 463rd meeting held
on 11 May 2017.
Status with
Sl No. Name Status with Bank
Committee
i) Mr. Shamsuddin Ahmad, Ph.D. Independent Director Chairman
ii) Mr. Md. Nader Khan Director Member
iii) Dr. G M Khurshid Alam Independent Director Member
iv) Mr. M Farhad Hussain FCA Independent Director Member
During the year 2018, the Audit Committee of the Board conducted 10 (Ten) meetings in which the important issues were
discussed / reviewed are presented in (note no. 48).

2.12.12 Risk management committee disclosures

The Board of Directors constituted with the following 4 (Four) members Risk Management Committee of the Board, the third
Committee of the Board besides the Executive Committee and the Audit Committee in accordance with Bank Company
(Amendment) Act 2013 and it does comply with the BRPD Circular no. 11, dated October 27, 2013.
Status with
Sl No. Name Status with Bank Committee
i) Dr. G M Khurshid Alam Independent Director Chairman
ii) Mr. Shamsuddin Ahmad, Ph.D. Independent Director Member
iii) Mr. Mohammad Mushtaque Ahmed Tanvir Director Member
iv) Mr. M Farhad Hussain FCA Independent Director Member
The Risk Management Committee of the Board has been formed after the Central Bank’s instruction issued in October 27,
2013. The Committee conducted 4 (Four) meeting during the year where the following important issues were discussed /
reviewed:
i) Discussion of Sustainable Finance Activities
ii) Review of restructured Large loans
iii) Review of Information Security Policy and Procedures of the Bank
iv) Review of Fraud Detection and Management Process
v) Review of Comprehensive Risk Management Report
vi) Review of Borrower Rating and Capital Management status
vii) Review of Stress Testing of the Bank
viii) Review of Green Banking Policy
ix) Risk Appetite Statement of the Bank
x) Internal Capital Adequacy Assessment Process of the Bank
xi) Review of Quarterly Risk Management Report
xii) Discussion on Annual Report of AML/CFT activities of last year

2.13 Earnings per share

Basic earnings per share
Basic earnings per share has been calculated in accordance with BAS 33 "Earnings per Share" which has been shown on the
face of the profit and loss account. This has been calculated by dividing the basic earnings by the weighted average number
of ordinary shares outstanding during the year.

Diluted earnings per share

Diluted earnings per share is not required to be calculated for the year as there was no scope for dilution during the year
under review.

254 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

2.14 Events after the reporting period

Where necessary, all the material events after the reporting period have been considered and appropriate adjustment /
disclosures have been made in the financial statements.
2.15 Memorandum items
Memorandum items are maintained to have control over all items of importance and for such transactions where the Bank
has only a business responsibility and no legal commitment. Bills for collection, savings certificates, wage earners bonds
etc. fall under the memorandum items. However, Bills for Collection is shown under contingent liabilities as per Bangladesh
Bank's format of reporting.
2.16 Related party transaction
Related party transaction is a transfer of resources, services or obligation between related parties, regardless of whether a
price is charged. Detail of related parties transaction are given in (note-49).

2.17 Information about business and geographical segments

Segmental information is presented in respect of the Group's business and of Prime Bank Limited.
Business segments
Business segments report consists of products and services whose risks and returns are different from those of other
business segments. These segments comprise Conventional Banking including Off-shore Banking Units, Islamic Banking,
Prime Bank Investment Limited and Prime Bank Securities Limited. Business segments report are shown in Annexure-H.
Geographical segments
Geographical segments report consists of products and services within a particular economic environment where risks and
returns are different from those of other economic environments. These segments comprise of Prime Bank Limited, Off-
shore Banking Units, Prime Bank Investment limited, Prime Bank Securities Limited, Prime Exchange Co. (Pte.) Ltd. Singapore,
PBL Exchange (UK) Ltd. and PBL Finance (Hong Kong) Limited. Geographical segments report are shown in 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 2018 and segmental profit and loss account for the year ended 31 December
2018 have been prepared.
2.18 Compliance report on International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS)
The Institute of Chartered Accountants of Bangladesh (ICAB) is the sole authority for adoption of Bangladesh Accounting
Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS). While preparing the financial statements, Prime
Bank applied all the applicable IAS and IFRS as adopted by ICAB. Details are given below:
Name of the IAS IAS no Status
Presentation of Financial Statements 1 Applied*
Inventories 2 N/A
Statement of Cash Flows 7 Applied
Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied
Events after the reporting period 10 Applied
Construction Contracts 11 N/A
Income Taxes 12 Applied
Property, Plant and Equipment 16 Applied
Leases 17 Applied
Employee Benefits 19 Applied
Accounting for Government Grants and Disclosure of Government Assistance 20 N/A
The Effects of Changes in Foreign Exchange Rates 21 Applied
Borrowing Costs 23 N/A
Related Party Disclosures 24 Applied
Accounting and Reporting by Retirement Benefit Plans 26 N/A **
Separate Financial Statements 27 Applied
Interests in Joint Ventures 31 N/A
Financial Instruments: Presentation 32 Applied *
Earnings per share 33 Applied
Interim Financial Reporting 34 Applied ***
Impairment of Assets 36 Applied
Provisions, Contingent Liabilities and Contingent Assets 37 Applied
Intangible Assets 38 Applied
Investment Property 40 N/A
Agriculture 41 N/A

PRIME BANK 255

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Notes to the Financial Statements

as at and for the year ended 31 December 2018

Name of the IFRS IFRS no. Status

First time adoption of Bangladesh Financial Reporting Standards 1 N/A
Share Based Payment 2 N/A
Business Combinations 3 Applied
Insurance Contract 4 N/A
Non-current Assets Held for Sale and Discontinued Operations 5 N/A
Exploration for and Evaluation of Mineral Resources 6 N/A
Financial Instruments: Disclosure 7 Applied
Operating Segments 8 Applied
Financial Instrument 9 Applied
Consolidated Financial Statements 10 Applied
Joint Arrangement 11 N/A
Disclosure of Interest in other entities 12 N/A
Fair Value Measurement 13 Applied
Regulatory defrral accounts 14 N/A 14 N/A
Revenue from contractors with customers 15 Applied 15 Applied
N/A= Not Applicable
* In order to comply with certain specific rules and regulations of the local Central Bank (Bangladesh Bank) which are
different to IAS/IFRS, some of the requirements specified in these IAS/IFRSs are not applied. Refer below (note-2.19) for such
recognition and measurement differences that are most relevant and material to the Bank and the Group.

** This 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.

*** 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.

New accounting standards not yet adopted:

The Bank has consistently applied the accounting policies as set out in Note 2 to all periods presented in these financial
statements. The various amendments to standards, including any consequential amendments to other standards, with the
date of initial application of 1 January 2018 have been considered. However, these amendments have no material impact on
the financial statements of the Bank.
A number of standards and amendments to standards are effective for annual periods beginning after 1 January 2018 and
earlier application is permitted. However, the Bank has not early applied the following new standards in preparing these
financial statements.
(a) IFRS 16 Leases
IFRS 16, issued in January 2016 replaces existing leases guidance and effective for reporting period beginning on or after 1
January 2019. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating
and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability
to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not
significantly change. The Bank has not yet assessed any potential impact of IFRS 16 on its financial statements.
(b) IFRS 17 Insurance Contracts
IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning on or after 1 January 2021. IFRS 17 establishes
the principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the
standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those
contracts. The Bank has not yet assessed in potential impact of IFRS 17 on its financial statements.
There are no other standards that are not yet effective and that would be expected to have a material impact on the Bank in
the current or future reporting periods and on foreseeable future transactions.

256 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

2.19 Departures from IAS/IFRS

The consolidated financial statements of the Group and the financial statements of the Bank as at and for the year ended
31 December 2018 have been prepared under the historical cost convention except investments and in accordance with
the "First Schedule" (section 38) of the Bank Companies Act 1991, as amended by Bangladesh Bank (the Central Bank of
Bangladesh) through BRPD Circular No. 14 dated 25 June 2003, other Bangladesh Bank Circulars, Bangladesh Financial
Reporting Standards (BFRSs), the Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka and Chittagong
Stock Exchange's listing regulations. In case, any requirement of provisions and circulars issued by Bangladesh Bank differs
with those of other regulatory authorities, the provisions and circulars issued by Bangladesh Bank shall prevail. Material
departures from the requirements of BFRS are as follows:
i) Investment in shares and 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 Banking Regulation and Policy Department (BRPD) circular no. 14 dated 25 June 2003 investments
in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited
balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment; otherwise
investments are recognised at cost.
ii) Revaluation gain/loss on Government securities
IFRS: As per requirement of IFRS 9 where securities will fall under the category of fair value through profit or loss account,
any change in the fair value of assets is recognised through the profit and loss account. Securities designated as amortised
cost are measured at effective interest rate method and interest income is recognised through the profit and loss account.
T-bills and T-Bonds designated as "held to maturity" are measured at amortised cost method and interest income is
recognised through the profit and loss account.
Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at year end 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 are recognised in the profit and loss account.
HTM securities which have not matured as at the balance sheet date are amortised at the year end and gains or losses on
amortisation are recognised in other reserve as a part of equity.

iii) 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.15 (27 September 2017), BRPD circular No.16 (18 November 2014), BRPD circular
No.14 (23 September 2012), BRPD circular No. 19 (27 December 2012), BRPD circular No. 05 (29 May 2013) and BRPD circular
No.1 (20 February 2018) 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. Also specific provision for sub-standard loans,
doubtful loans and bad losses has to be provided at 5%, 20%, 50% and 100% respectively for loans and advances depending
on time past due. Again as per BRPD circular no. 10 dated 18 September 2007 and BRPD circular no. 14 dated 23 September
2012, a general provision at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not
specifically in line with those prescribed by IFRS 9.
iv) 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
subsequntly become credit-impaired, the entity shall apply the effective interest rate to the amortised cost of these loans
and advances.
Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, 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 liability in the balance sheet.

PRIME BANK 257

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018

v) Other comprehensive income

IFRS: As per IAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of OCI are to
be included in a single other comprehensive income statement.
Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly 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 include in a Single Comprehensive Income (OCI) Statement.
As such the company does not prepare the other comprehensive income statement. However elements of OCI, if any, are
shown in the statements of changes in equity.

vi) Financial instruments – presentation and disclosure

In several cases Bangladesh Bank guidelines categorise, recognise, 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.
vii) 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 entitys 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 DOS Circular letter no. 6 dated 15 July 2010 and subsequent clarification in DOS circular no.2
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 transactions and the financial assets are derecognized in the seller’s book and recognized 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 collaterallisedrepo arrangements with Bangladesh
Bank. Here the selling bank accounts for the arrangement as a loan, thereby continuing to recognise the asset.

viii) 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 14, financial guarantees such as letter of credit, letter of guarantee will be treated as Off-
Balance Sheet items. No liability is recognized for the guarantee except the cash margin.
ix) Cash and cash equivalent
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, 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.

x) Non-banking asset
IFRS: No indication of Non-banking asset is found in any IFRS.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, there must exist a face item named Non-banking asset.
xi) Cash flow statement
IFRS: Cash flow statement can be prepared either in direct method or in indirect method. 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 is the mixture of direct and indirect method.
xii) Balance with Bangladesh Bank: (CRR)
IFRS: Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations
as per BAS 7.
Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

258 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

xiii) Presentation of intangible asset

IFRS: An intangible asset must be identified and recognized, and the disclosure must be given as per BAS 38.
Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD 14.
xiv) Off-balance sheet items
IFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement of disclosure of off-balance
sheet items.
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 balance sheet.
xv) 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.
xvi) Loans and advance net of provision
IFRS: Loans and advances should be presented net of provisions.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, provision on loans and advances are presented separately
as liability and cannot be netted off against loans and advances.
2.20 The Bank’s compliance with related pronouncements by Bangladesh Bank:
i) Internal Control
The objective of internal control is to ensure that management has reasonable assurance that (i) operations are effective,
efficient and aligned with strategy, (ii) financial reporting and management information is reliable, complete and timely
accessible, (iii) the entity is in compliance with applicable laws and regulations as well as its internal policies and ethical
values including sustainability, and (iv) assets of the company are safeguarded and frauds & errors are prevented or detected.
Prime Bank Limited has established an effective internal control system whose primary aim is to ensure the overall control
of risks and provide reasonable assurance that the objectives set by the Bank will be met. It has designed to develop a high
level risk culture among the personnel of the Bank, establish efficient and qualified operating model of the Bank, ensure
reliability of internal and external information including accounting and financial information, secure the Banks operations
and assets, and comply with laws, regulatory requirements and internal policies.

The Board of Directors of Prime Bank, through its Audit Committee, periodically reviews the effectiveness of Bank’s internal
control system covering all the material controls, including financial, operational and compliance controls, risk management
systems, the adequacy of resources, qualifications and experience of staff of the accounting and financial reporting function,
training programs, budget, etc. Audit Committee of the Board reviews the actions taken on internal control issues identified
by the Internal & External Auditors and Regulatory Authorities. It has active oversight on the internal audit’s independence,
scope of work and resources and it also reviews the functions of Internal Control & Compliance Division of Head Office,
particularly the scope of the annual audit plan and frequency of the internal audit activities.
ii) Internal Audit
Internal Audit is the continuous and systematic process of examining and reporting on the activities of an organization
undertaken by the specially assigned staff(s). Internal Auditor works as the Eyes & Ears of the management. It may therefore
be used to bridge the gap between management & shop floor. It can assure the management that the Internal Controls are
adequate and in operations, the policies and systems laid down are being adhered to and accounting records provided by
the lower level are correct.

Internal Audit Mechanism is used as an important element to ensure good governance of PBL. Internal Audit Activity of
PBL is effective and it provides senior management with a number of important services. These include detecting and
preventing fraud, testing internal control, and monitoring compliance with own policies & procedures, applicable rules &
regulations, instructions/ guidelines of regulatory authority etc.

During the year 2018, ICCD conducted inspection on many of the Branches/ Divisions of Head Office of the Bank and
submitted reports presenting the findings of the audits/ inspections. Necessary control measures and corrective actions
have been taken on the suggestions or observations made in these reports. The reports or key points of the Reports have
also been discussed in the meetings of the Audit Committee of the Board and necessary steps have been taken according
to the decision of the said Committee for correct functioning of Internal Controls & Compliance.

PRIME BANK 259

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018

iii) Fraud and Forgeries

The increasing wave of fraud and forgery cases in the banking sector in recent time calls for concerted steps in identifying
ways for reducing or preventing frauds and forgeries by analyzing the causes and effect of frauds and forgeries, and
prescribing effective control strategies for salvaging frauds in the banking sector. Prime Bank does always pay due attention
on anti-fraud internal controls for prevention of fraud and forgery. The Bank has already implemented some strategies like
Financial Control Strategy, Personnel Control Strategy, Accounting Control Strategy, Credit Control Strategy, Cost Control
Strategy, Administrative Control strategy, Process Control Strategy etc. in order to strengthening the control system further.
Although it is not possible to eliminate all frauds because of the inherent limitations of Internal Control System, the Board of
Directors and Management have taken all the measures to keep the operational risk in a very minimum level. Internal Control
and Compliance Division (ICCD) assesses and evaluates the effectiveness of Bank's anti-fraud internal control measures,
recommends for further improvement in implementation of aforesaid strategies and reports to the Bangladesh Bank on
effectiveness of controls at the end of each quarter following their prescribed format.
2.21 The financial statements were approved by the Board of Directors on 03 April 2019.
Amount in Taka
2.22 Shareholders' Equity 2018 2017
Paid up capital 11,322,834,770 10,293,486,160
Share premium 1,211,881,786 2,241,230,396
Statutory reserve 10,353,413,584 9,565,853,177
Revaluation gain / (loss) on investments 22,087,009 17,749,598
Revaluation reserve 1,496,759,104 1,496,759,104
Foreign currency translation gain 14,920,954 13,414,088
Surplus in profit and loss account / Retained earnings 1,759,002,003 1,079,304,405
26,180,899,209 24,707,796,928

2.23 Earning Per Share (EPS) has been calculated in accordance with IAS-33: "Earnings Per Share (EPS)". Previous year/period
figures have been adjusted for the issue of Bonus Shares during the year.
Calculation of EPS
Profit after tax for the year (Solo) 2,187,802,036 1,058,974,674
Profit after tax for the year (Consolidated) 2,253,633,866 1,215,528,259
Weighted average number of share 1,132,283,477 1,029,348,616
Earnings per share (Solo) 1.93 1.03
Earnings per share (Consolidated) 1.99 1.18
Calculation of EPS (Diluted)
Profit after tax for the period (Solo) 2,187,802,036 1,058,974,674
Profit after tax for the period (Consolidated) 2,253,633,866 1,215,528,259
Weighted average number of share 1,132,283,477 1,132,283,477
Earnings per share (Solo) 1.93 0.94
Earnings per share (Consolidated) 1.99 1.07
2.24 Calculation of Net Asset value per Share (NAVPS)
Shareholdersrs' Equity (Solo) 26,180,899,209 24,707,796,928
Shareholdersrs' Equity (Consolidated) 26,298,596,289 24,812,947,765
Weighted average number of share 1,132,283,477 1,132,283,477
Net Asset value per Share (NAVPS) (Solo) 23.12 21.82
Net Asset value per Share (NAVPS) (Consolidated) 23.23 21.91
2.25 Calculation of Net Cash Flow Per Share (NOCFPS)
Net Cash from Operating Activities (Solo) (3,240,683,235) 7,369,206,532
Net Cash from Operating Activities (Consolidated) (3,290,909,793) 7,483,240,015
Weighted average number of share 1,132,283,477 1,132,283,477
Net operating cash flow per share (Solo) (2.86) 6.51
Net operating cash flow per share (Consolidated) (2.91) 6.61

260 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

Amount in Taka
2018 2017
2.26 Reconcilation of statement of cash flows from operating activities
Profit before provision 5,719,402,036 5,373,374,674
Adjustment for non cash items
Depreciation on fixed asset 277,008,743 256,178,233
Amortization on software 53,198,524 20,823,123
House Furnishing 3,183,630 2,965,506
Adjustment with non-operating activities 333,390,897 279,966,863
Recovery of writeoff loan 203,780,138 409,904,161
Accounts Receivable 111,948,340 (244,807,126)
Accounts payable on deposits 959,283,342 (147,116,993)
Gain on sale of asset (1,890,136) (567,374)
Prime Bank Foundation 85,153,094 (21,442,675)
Employees Welfare fund 4,257,654 (1,072,133)
Incentive Bonus 120,314,572 (115,553,676)
Incentive paid to good borrower - (9,792,890)
1,482,847,004 (130,448,705)
Changes in operating assets and liabilities
Changes in loans & advances (9,900,768,555) (29,772,028,217)
Changes in deposit and other accounts (3,837,869,135) (640,449,124)
Changes in investment (2,698,687,081) 16,912,134,608
Changes in borrowings 6,739,373,030 8,766,832,663
Changes in other assets 92,178,274 6,944,608,143
Changes in other liabilities (678,988,274) 222,731,088
(10,284,761,741) 2,433,829,161
Income Tax Paid (491,561,431) (587,515,461)
Net cash flows from operating activities (3,240,683,235) 7,369,206,532

2.27 General

a) These financial statements are presented in Taka, which is the Bank's functional currency. Figures appearing in these
financial statements have been rounded off to the nearest Taka.

b) The expenses, irrespective of capital or revenue nature, accrued / due but not paid have been provided for in the
books of the Bank.

c) Figures of previous year have been rearranged whenever necessary to conform to current years presentation.

PRIME BANK 261

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
3 Consolidated cash
i Cash in hand
Prime Bank Limited (note-3a.1) 3,100,264,070 3,031,607,478
Prime Bank Investment Limited 32,496 13,263
Prime Bank Securities Limited 100,000 13,004
Prime Exchange Co. Pte. Ltd., Singapore 32,337,601 108,954,552
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
3,132,734,166 3,140,588,297
ii Balance with Bangladesh Bank and its agent bank(s)
Prime Bank Limited (note-3a.2) 14,539,287,480 14,973,037,651
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
14,539,287,480 14,973,037,651
17,672,021,646 18,113,625,948
3a Cash of the Bank
3a.1 Cash in hand
In local currency 3,035,272,918 2,969,745,031
In foreign currency 64,991,152 61,862,447
3,100,264,070 3,031,607,478
3a.2 Balance with Bangladesh Bank and its agent bank(s)
In local currency 11,860,895,553 13,327,279,601
In foreign currency 1,980,765,411 882,931,213
13,841,660,963 14,210,210,815
Sonali Bank as agent of Bangladesh Bank (Local currency) 697,626,516 762,826,836
14,539,287,480 14,973,037,651
17,639,551,549 18,004,645,129
Reconciliation statements regarding Bangladesh Bank balance are given Annexure-A-1
3a.3 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)
Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with
section 33 of Bank Companies Act, 1991 and MPD circular nos.01 & 02, dated June 23, 2014 and December 10, 2013 &
DOS circular no.1 dated 19 January 2014 and MPD Circular no.01 dated April 03, 2018.
The Cash Reserve Requirement on the Bank's time and demand liabilities at the rate of 5.5% has been calculated and
maintained with Bangladesh Bank and 13% Statutory Liquidity Ratio for conventional banking and 5.50% Statutory
Liquidity Ratio for Islamic banking , excluding CRR, on the same liabilities has also been maintained in the form of
treasury bills, bonds and debentures including FC balance with Bangladesh Bank. Both the reserves maintained by the
Bank are in excess of the statutory requirements, as shown below:
a) Cash Reserve Requirement
Required reserve 11,399,365,000 12,819,834,250
Actual reserve maintained (note-3a.2) 11,860,895,553 13,327,279,601
Surplus / (deficit) 461,530,553 507,445,351
b) Statutory Liquidity Ratio
Required reserve 25,888,369,000 24,618,572,690
Actual reserve maintained- (note-3a.5) 30,425,462,235 28,335,052,502
Surplus / (deficit) 4,537,093,235 3,716,479,812

Total required reserve 37,287,734,000 37,438,406,940

Actual reserve held 42,286,357,788 41,662,332,104
Total surplus 4,998,623,788 4,223,925,164
3a.4 Maturity grouping of cash
Payable on demand - -
Up to 1 month 6,240,186,549 5,184,810,879
Over 1 month but not more than 3 months - -
Over 3 months but not more than 6 months - -
Over 6 months but not more than 1 year - -
Over 1 year but not more than 5 years - -
Over 5 years 11,399,365,000 12,819,834,250
17,639,551,549 18,004,645,129

262 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

3a.5 Held for Statutory Liquidity Ratio

Cash in hand (note -3a.1) 3,100,264,070 3,031,607,478
Balance with Bangladesh Bank and its agent bank(s) (note-3a.2) 2,678,391,927 1,645,758,050
Government securities ([Link]) 5,000,000,000 -
Government bonds ([Link]) 19,646,806,239 21,356,374,056
Bangladesh Bank bills ([Link]) - 2,301,312,919
Debenture of HBFC ([Link]) - -
30,425,462,235 28,335,052,502
4 Consolidated balance with other banks and financial institutions
In Bangladesh
Prime Bank Limited (note-4a.1) 10,174,200,785 7,380,647,955
Prime Bank Investment Limited 16,805,232 5,988,774
Prime Bank Securities Limited 133,701,566 98,508,380
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
10,324,707,583 7,485,145,109
Less: Inter-company transaction 24,296,336 13,678,732
10,300,411,247 7,471,466,377
Outside Bangladesh
Prime Bank Limited (note-4a.2) 3,230,634,401 2,701,942,497
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore 52,263,514 -
PBL Exchange (UK) Ltd. 17,400,313 32,063,881
PBL Finance (Hong Kong) Limited 27,256,749 39,242,956
3,327,554,977 2,773,249,334
13,627,966,225 10,244,715,711
4a Balance with other banks and financial institutions of the Bank
In Bangladesh (note-4a.1) 10,174,200,785 7,380,647,955
Outside Bangladesh (note-4a.2) 3,230,634,401 2,701,942,497
13,404,835,186 10,082,590,452
4a.1 In Bangladesh
Current account
Agrani Bank Ltd., Principal Branch, Dhaka 437,202 438,502
Agrani Bank Ltd., Purana Paltan Branch, Dhaka - 87,989
Agrani Bank Ltd., Bhairab Bazar, Kishoregonj - -
Agrani Bank Ltd., Mirzapur Branch, Mirzapur 12,502,496 64,033,648
Agrani Bank Ltd., Takerhat Branch 4,537,425 -
AB Bank Ltd. Principal Branch, Dhaka - 2,997,108
Bank Al-Falah, Motijheel Branch 640,000,000 770,000,000
The City Bank Ltd, Dhaka 269,069 272,289
Dutch-Bangla Bank Ltd., Mirzapur Branch, Tangail - -
Exim Bank Ltd., Motijheel Branch, Dhaka - 1,695,541
Islami Bank BD Ltd., Local Office, Dhaka 7,252,671 7,265,821
Islami Bank BD Ltd., Jhikorgacha - 569
Janata Bank Ltd., Local Office, Dhaka 3,325,786 3,351,936
Janata Bank Ltd., Ishwardi Branch 64,984 175,548
Janata Bank Ltd., Corporate Branch, Bogra - -
National Bank Ltd., Rangpur Branch 42,755 43,905
Pubali Bank Ltd., Dhaka Stadium Branch, Dhaka - 1,179,599
Rupali Bank Ltd. ,Motijheel Branch, Dhaka - 3,110,214
Sonali Bank Ltd., Rangpur Branch 74,833,784 35,012,289
Sonali Bank Ltd., Sunamganj Branch - -
Sonali Bank Ltd., Local Office, Dhaka 7,014,140 7,041,308
Sonali Bank Ltd., Narayanganj 23,915 3,248,044
Sonali Bank Ltd., Fakirapool Branch, Dhaka - 490,928
Sonali Bank Ltd., Faridpur Branch, Faridpur 2,449,013 16,054,398
Sonali Bank Ltd., Narsingdi Branch 2,158,438 11,570,045
Sonali Bank Ltd., Satkhira - -
Standard Chartered Bank, Bangladesh 11,386,185 37,309,911
United Commercial Bank Ltd., Principal Branch, Dhaka - 7,436,592
Off-shore Banking Units 799,683,971 243,518,761
Uttara Bank Ltd., Local Office, Dhaka - 168,541
1,565,981,835 1,216,503,484
Less: Off-shore Banking Units 799,683,971 243,518,761
766,297,864 972,984,724

PRIME BANK 263

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

Special notice deposit accounts

Agrani Bank Ltd., Principal Branch, Dhaka 364,633 355,201
Agrani Bank Ltd., Takerhat Branch - 7
ICB Islamic Bank Ltd., Principal Office, Motijheel, Dhaka 13,069 13,069
ICB Islamic Bank Ltd., Sylhet 16,786 16,786
Dutch-Bangla Bank Ltd., Local Office 875,130 844,817
Janata Bank Ltd., Local Office, Dhaka 6,432,920 6,232,963
National Bank Ltd., Narayanganj Branch, Dhaka - 5
Sonali Bank Ltd., Bhairab Bazar, Kishoregonj 950 950
Social Islami Bank Ltd., Principal Branch, Dhaka - 10,158
7,703,487 7,473,954
Savings accounts

Al Arafah Islami Bank Ltd., Dhaka 74,667 74,667

Bank Al Falah Ltd., Dhaka 39,011 39,011
Social Islami Bank Ltd., Principal Branch, Dhaka 85,756 75,599
199,434 189,277
Fixed deposits
NCC Bank Limited 500,000,000 -
Shahjalal Islami Bank Limited 1,000,000,000
BRAC Bank Limited 1,000,000,000 1,900,000,000
Bank Al-falah 100,000,000 -
The City Bank Limited 1,700,000,000 -
Dhaka Bank Limited - 500,000,000
Southeast Bank Limited 500,000,000 500,000,000
IFIC Bank Limited - 1,000,000,000
EXIM Bank Limited 3,600,000,000 1,200,000,000
Commercial Bank of Ceylon - 300,000,000
IDLC Finance Limited 500,000,000 -
Delta Brac Housing Finance Corporation 500,000,000 1,000,000,000
9,400,000,000 6,400,000,000
10,174,200,785 7,380,647,955
4a.2 Outside Bangladesh (NOSTRO Accounts)
Current account
AB Bank Ltd., Mumbai, India 212,047,667 60,485,930
Banca Nazionale, del Lavoro, Rome, Italy - -
Bank of Bhutan Phuentsholing, Bhutan 844,572 2,272,171
The Bank of Tokyo Mitsubishi Ltd., Japan 15,545,921 13,095,533
SMBC, Tokyo, Japan 16,355,245 31,559,036
Citibank N.A., Mumbai, India - -
Citibank N.A., London , UK 9,317,124 6,610,183
Citibank N.A., New York, USA 1,875,244,629 861,507,600
Citibank N.A., New York, USA (Off-shore Banking) - -
Commerz Bank AG, Frankfurt , Germany (EURO) 91,921,420 32,985,576
Commerz Bank AG, Frankfurt , Germany (US$) 22,015,572 29,696,789
Commonwealth Bank of Australia, Australia - 5,229,892
Habib American Bank, New York, USA 99,008,962 18,577,471
Habib Metropolitan Bank Ltd, Karachi 3,333,740 40,702,396
Habib Bank Ltd, Karachi - -
Habib Allied International Bank PLC London - -
HDFC Bank Limited, Kolkata, India 58,356,086 46,318,239
HSBC Bank USA, New York, USA - -
ICICI Bank Ltd, Mumbai, India 14,929,683 56,163,133
Intesa Sanpaolo SPA, Milano, Italy 4,283,613 394,565
J. P. Morgan Chase Bank, New York 101,625,582 10,698,366
Korea Exchange Bank Seoul 8,169,962 3,780,822
Kookmin Bank, Seoul, South Korea 84,068 -
Mashreq Bank PSC, New York, USA 102,835,022 16,827,636
Mashreq Bank PSC, Mumbai, India 58,901,096 69,152,037
National Westminister Bank, London, UK 71,731,747 65,243,763
The National Commercial Bank, Jeddah 44,234,984 10,676,322
Nepal Bangladesh Bank Ltd., Kathmandu, Nepal 1,286,480 1,694,191
NCB, Zeddah - -
People's Bank, Colombo, Sri Lanka 19,326,191 20,185,925
Skandinaviska Enskilda Banken, Sweden 4,004,757 2,112,730
Sonali Bank, Kolkata, India 25,493,074 26,084,971
Standard Chartered Bank, Kolkata, India 50,855,337 74,277,724

264 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

Amount in Taka
2018 2017
Outside Bangladesh (NOSTRO Accounts)
Current account
Standard Chartered Bank, New York, USA 61,308,210 1,013,196,068
Standard Chartered Bank, Singapore 122,362,627 86,720,335
Standard Chartered Bank, Frankfurt, Germany 7,823,551 3,346,778
Unicredito Italiano SPA, Milano, Italy 36,362,801 4,995,003
Wells Fargo Bank N. A. Newyork 79,311,246 79,472,060
Zuercher Kantonal Bank, Zurich 11,713,433 7,879,253
(Annexure -A) 3,230,634,401 2,701,942,497
4a.3 Maturity grouping of balance with other banks and financial institutions
Payable on demand 4,004,817,237 3,682,573,417
Up to 1 month 17,949 17,035
Over 1 month but not more than 3 months 9,400,000,000 6,400,000,000
Over 3 months but not more than 6 months - -
Over 6 months but not more than 1 year - -
Over 1 year but not more than 5 years - -
Over 5 years - -
13,404,835,186 10,082,590,452
5 Money at call and short notice - 1,500,000,000
6 Consolidated investments
Government
Prime Bank Limited (note-6a) 24,646,806,239 23,657,686,975
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
24,646,806,239 23,657,686,975

Others
Prime Bank Limited (note-6a) 1,399,611,720 149,457,283
Prime Bank Investment Limited 1,209,235,975 1,286,057,720
Prime Bank Securities Limited 732,616,847 786,934,185
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
3,341,464,542 2,222,449,188
27,988,270,780 25,880,136,163
6a Investments of the Bank
i) Investment classified as per Bangladesh Bank Circular:
Held for trading (HFT) 5,981,242,329 2,301,312,919
Held to maturity (HTM) 18,661,866,610 21,353,998,956
Other securities 1,403,309,020 151,832,383
26,046,417,958 23,807,144,258
ii) Investment classified as per nature:
a) Government securities:
28 days treasury bills - -
91 days treasury bills 5,000,000,000 -
182 days treasury bills - -
364 days treasury bills - -
5 years treasury bills - -
5,000,000,000 -
30 days Bangladesh Bank bills - 2,301,312,919
Government bonds:
Prize bonds 3,697,300 2,375,100
Government bonds - (note-6a.2) 19,643,108,939 21,353,998,956
19,646,806,239 21,356,374,056
24,646,806,239 23,657,686,975
b) Other investments:
Alarafah Islami Bank Subordinated Bond interest rate @ 9.37% (note-6a.3) 1,002,082,222 -
National Bank Subordinated Bond interest rate @ 11.50% (note-6a.4) - -
Lanka Bangla Finance Zero coupon bond interest rate @ 11.50% (note-6a.5) - -
Shares (note-6a.6) 397,529,498 149,457,283
1,399,611,720 149,457,283
26,046,417,958 23,807,144,258

PRIME BANK 265

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
6a.1 Maturity grouping of investments
On demand - -
Up to 1 month 6,869,361,474 2,835,989,800
Over 1 month but not more than 3 months 350,000,000 482,388,935
Over 3 months but not more than 6 months 856,702,690 983,406,822
Over 6 months but not more than 1 year 1,281,628,165 1,557,246,079
Over 1 year but not more than 5 years 10,567,335,899 11,222,086,597
Over 5 years 6,121,389,731 6,726,026,025
26,046,417,958 23,807,144,258
6a.2 Government bonds
Name of the bonds
HTM
3 years T & T bonds - -
2 years Bangladesh Government Islami Investment Bonds 800,000,000 800,000,000
5 years Bangladesh Government treasury bonds (9.66%) 204,145,443 204,094,416
10 years Bangladesh Government treasury bonds(8.75%-11.72%) 10,887,446,655 13,575,624,899
15 years Bangladesh Government treasury bonds(8.69%-14.00%) 4,982,734,122 4,986,920,433
20 years Bangladesh Government treasury bonds(9.10%-10.25%) 1,787,540,389 1,787,359,208
18,661,866,610 21,353,998,956
HFT
3 years T & T bonds - -
2 years Bangladesh Government treasury bonds (8.40%-8.75%) - -
5 years Bangladesh Government treasury bonds (6.24%-9.40%) 922,782,783 -
10 years Bangladesh Government treasury bonds (11.75%) 58,459,546 -
15 years Bangladesh Government treasury bonds(11.60%-12.30%) - -
20 years Bangladesh Government treasury bonds - -
981,242,329 -
19,643,108,939 21,353,998,956
6a.3 Alarafah Islami Bank Ltd. Subordinated Bond
Opening balance - -
Add: Investment during the year 1,000,000,000
Add: Interest accrued during the year 2,082,222 -
Less: Principal redemption during the year - -
Less: Interest received during the year - -
Redeemable value 1,002,082,222.22 -
6a.4 National Bank Ltd. Subordinated Bond
Opening balance - 82,600,391
Add: Interest accrued during the year - 8,871,253
Less: Principal redemption during the year - (81,920,000)
Less: Interest received during the year - (9,551,644)
Redeemable value - -
6a.5 Lanka Bangla Finance Zerocoupon Bond
Opening balance - 31,089,440
Add: Interest accrued during the year - 2,242,560
Less: Principal redemption during the year - (24,518,222)
Less: Interest received during the year - (8,813,778)
Redeemable value - -
6a.6 Investment in shares
Quoted
Activefine 8,234,068 -
KPCL 8,156,284 -
UPGDCL 11,849,780 -
DESCO 19,262,511 19,262,511
Dhaka Bank Ltd. - -
Eastern Bank Ltd. - -
Jamuna Bank Ltd. - -
Mutual Trust Bank Ltd. - -
National Bank Ltd. 27,970,098 27,970,098
One Bank Ltd. - -
Uttara Bank Ltd. 37,009,980 37,009,980
112,482,721 84,242,590
Unquoted
Central Depository Bangladesh Limited (CDBL) 15,694,430 15,694,430
Investment in SWIFT 4,184,430 4,184,430
Market Stabilization Fund 5,000,000 5,000,000
Star Ceramics Preference Share 20,167,917 40,335,833
Share Money Deposit (Golden Harvest Ice Cream Ltd) 240,000,000 -
285,046,776 65,214,693
(Annexure -B) 397,529,498 149,457,283

266 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka

2018 2017
6a.7 (i) Disclosure regarding outstanding Repo
Counterparty name Agreement date Reversal date Amount
-
-
Total -
6a.7 (ii) Disclosure regarding outstanding Reverse Repo
Counterparty name Agreement date Reversal date Amount
AB Bank Limited 27-December-2018 01-January-2019 990,968,699
Total 990,968,699
6a.8 Disclosure regarding Overall transaction of Repo and Reverse Repo
Minimum Maximum Daily average
Counterparty name Outstanding outstanding outstanding
during the year during the year during the year

Securities sold under Repo

With Bangladesh Bank - - -
With other Banks & FIS
Securities purchased under Reverse Repo
From Bangladesh Bank - - -
From other Banks & FIS 406,409,307 5,769,478,177 1,473,340,395
7 Consolidated loans, advances and lease / Investments
Prime Bank Limited (note-7a) 196,456,187,502 183,593,663,315
Prime Bank Investment Limited 5,555,902,000 5,559,563,333
Prime Bank Securities Limited 209,100,070 303,394,498
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
202,221,189,572 189,456,621,146
Less: Inter-company transactions 5,635,048,381 5,390,381,459
196,586,141,191 184,066,239,687
Consolidated bills purchased and discounted (note-8) 11,609,817,551 16,552,939,609
208,195,958,743 200,619,179,296
7a Loans, advances and lease / investments of the Bank
i) Loans, cash credits, overdrafts, etc.
Inside Bangladesh
Secured overdraft / Quard against TDR 34,158,050,229 31,689,318,860
Cash credit / Murabaha 25,398,766,903 27,491,571,481
Loans (General) 65,419,172,348 43,307,835,504
House building loans 2,135,880,724 2,377,824,399
Loans against trust receipt 9,898,090,701 7,549,221,685
Payment against document 10,570,751 5,473,814
Retail loan 15,647,508,179 16,502,624,225
Lease finance / Izara (note - 7a.2) 4,216,164,877 4,574,176,766
Credit card 889,193,726 943,911,975
Hire purchase 11,625,437,610 8,258,639,171
Other loans and advances 27,057,351,455 40,893,065,436
196,456,187,502 183,593,663,315
Outside Bangladesh - -
196,456,187,502 183,593,663,315
ii) Bills purchased and discounted (note-8a)
Payable Inside Bangladesh
Inland bills purchased 5,976,457,767 10,305,266,336
Payable Outside Bangladesh
Foreign bills purchased and discounted 3,376,873,447 4,423,799,140
9,353,331,214 14,729,065,476
205,809,518,716 198,322,728,791

PRIME BANK 267

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
7a.1 Residual maturity grouping of loans, advances and lease / investments including bills purchased and discounted
Repayable on demand - -
Up to 1 month 29,157,534,079 23,144,262,450
Over 1 month but not more than 3 months 39,103,808,556 31,295,326,603
Over 3 months but not more than 1 year 57,799,704,441 83,989,675,643
Over 1 year but not more than 5 years 52,666,655,839 45,614,227,622
Over 5 years 27,081,815,801 14,279,236,473
205,809,518,716 198,322,728,791
7a.2 Lease finance / Izara
Lease rental receivable within 1 year 8,188,288 244,836,425
Lease rental receivable within 5 years 3,628,901,926 3,798,348,175
Lease rental receivable after 5 years 579,340,035 638,973,778
Total lease / Izara rental receivable 4,216,430,249 4,682,158,378
Less: Unearned interest receivable 265,371 107,981,612
Net lease / Izara finance 4,216,164,877 4,574,176,766
7a.3 Loans, advances and lease / investments under the following broad categories
Loans 136,899,370,370 124,412,772,975
Cash credits 25,398,766,903 27,491,571,481
Overdrafts 34,158,050,229 31,689,318,860
196,456,187,502 183,593,663,315
Bills purchased and discounted (note-8) 9,353,331,214 14,729,065,476
205,809,518,716 198,322,728,791
7a.4 Loans, advances and lease / investments on the basis of significant concentration including bills purchased and discounted.
a) Loans, advances and lease / investments to Directors of the Bank - -
b) Loans, advances and lease / investments to Chief Executive and
other senior executives 1,585,332,990 1,636,356,279
c) Loans, advances and lease / investments to customer groups:
i) Commercial lending 21,402,828,923 17,627,433,722
ii) Export financing 12,646,307,936 10,129,882,686
iii) House building loan 2,135,880,724 2,377,824,399
iv) Retail loan 15,647,508,179 16,502,624,225
v) Small and medium enterprises 21,120,427,019 22,231,588,927
vi) Special program loan - -
vii) Staff loan 5,087,552 7,732,483
viii) Industrial loans / investments detail (note-7a.4 d) 116,741,211,670 109,857,118,491
ix) Other loans and advances 14,524,933,723 17,952,167,579
204,224,185,726 196,686,372,513
205,809,518,716 198,322,728,791
d) Details of Industrial loans / investments
i) Agricultural industries 3,560,515,101 6,283,463,091
ii) Textile industries 18,031,708,413 6,011,362,136
iii) Food and allied industries 6,490,120,166 10,289,786,237
iv) Pharmaceutical industries 4,512,883,566 3,885,498,731
v) Leather, chemical, cosmetics, etc. 1,599,424,308 1,083,580,056
vi) Tobacco industries 704,309,679 847,605,401
vii) Cement and ceramic industries 4,677,228,243 3,941,484,392
viii) Service Industries 23,230,202,318 25,641,663,347
ix) Transport and communication industries 5,334,170,299 5,116,391,088
x) Other industries including bills purchase and discounted 48,600,649,576 46,756,284,011
116,741,211,670 109,857,118,491

268 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

7a.5 Loans, advances and leases / investments -geographical location-wise

Inside Bangladesh
Urban
Dhaka Division 164,990,041,043 149,538,338,568
Chittagong Division 24,240,077,235 29,925,870,752
Khulna Division 3,651,277,404 5,471,505,539
Rajshahi Division 4,586,418,614 4,779,369,324
Barisal Division 104,612,625 146,758,907
Sylhet Division 1,497,137,414 1,719,183,890
Rangpur Division 1,929,889,391 1,846,482,273
200,999,453,727 193,427,509,253
Rural
Dhaka Division 1,967,700,720 2,156,302,898
Chittagong Division 1,182,314,336 1,127,151,461
Khulna Division 76,784,961 78,185,093
Rajshahi Division 1,162,391,550 1,025,031,309
Rangpur Division 161,132,665 153,584,182
Sylhet Division 259,740,757 354,964,595
4,810,064,989 4,895,219,538
Outside Bangladesh - -
205,809,518,716 198,322,728,791

7a.6 Sector-wise loans, advances and lease / investments including bills purchased and discounted
Public sector 50,475,310 342,952,738
Co-operative sector - -
Private sector 205,759,043,407 197,979,776,053
205,809,518,716 198,322,728,791

7a.7 Details of pledged collaterals with the Bank

Collateral of movable / immovable assets 103,698,747,416 88,446,175,401
Local banks and financial institutions guarantee 20,199,488,160 6,232,329,801
Government guarantee - -
Foreign banks guarantee - 1,778,513,368
Export documents 4,082,620,864 1,073,179,498
Fixed deposit receipts 7,774,653,686 17,136,628,698
FDR of other banks 10,314,677 2,733,767,420
Government bonds - 70,873,554
Personal guarantee 17,988,201,327 8,826,197,321
Other securities 52,055,492,585 72,025,063,730
205,809,518,716 198,322,728,791

PRIME BANK 269

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

7a.8 Details of large loans, advances and lease / investments

Number of clients with outstanding amount and classified loans / investments exceeding 10% of total capital of the
Bank. Total capital of the Bank was Taka 38,259.02 million as at 31 December 2018 (Taka 32,250.88 million in 2017).

Number of clients 46 29
Amount of outstanding advances / investments 132,469,800,000 117,967,600,000
Amount of classified advances / investments - -
Measures taken for recovery N/A N/A

Outstanding (Tk. in million) Total Total

Name of clients
Funded Non-funded (Tk. in million) (Tk. in million)
Abdul Monem Group 364.80 865.80 1,230.60 3,350.00
ACI Group 2,809.10 2,204.80 5,013.90 4,861.70
Annata Apparel Group 1,396.40 1,733.90 3,130.30 3,170.60
Abul Khair Group 2,012.90 3,610.30 5,623.20 4,474.10
BSRM Group 896.70 3,470.00 4,366.70 4,405.30
BSRM Limited 517.90 250.30 768.20 947.50
BRAC 4,648.40 21.00 4,669.40 4,226.70
BSM Group - - - 1,223.40
BSA Group 81.80 488.60 570.40 150.70
BPC Group - 90.80 90.80 1,155.30
BRB Group 140.50 535.60 676.10 2,726.40
Birds Group 1,426.40 809.50 2,235.90 -
City Group 1,512.70 1,344.70 2,857.40 4,685.90
Confidence Group 2,183.20 4,457.30 6,640.50 5,781.10
CPCL Group 146.50 990.50 1,137.00 -
Dipon Group 1,257.70 616.50 1,874.20 1,367.10
DBL Group 982.30 191.40 1,173.70 -
Energypac Group - - - 1,179.10
Envoy Group 595.70 270.80 866.50 554.70
FGS Group 1,097.70 1,930.50 3,028.20 -
Globe Group - - - 2,015.70
GMS Group 1,146.50 1,646.50 2,793.00 622.90
Hameem Group 1,291.60 924.70 2,216.30 1,402.00
Index Group 1,616.50 3,759.00 5,375.50 -
Kabir Group 2,824.90 1,453.10 4,278.00 4,155.10
KDS Group 2,202.60 1,548.90 3,751.50 3,775.40
Labib Group 1,844.20 1,018.60 2,862.80 2,988.90
Meghna Group - 4,722.80 4,722.80 4,800.60
Molla Group 2,085.00 1,327.20 3,412.20 3,310.00
Monico Group 144.70 982.70 1,127.40 -
Nasir Group 2,538.90 706.30 3,245.20 4,283.60
Noman Group 2,441.20 850.90 3,292.10 3,075.60
NZ Group 1,511.20 622.80 2,134.00 -
NDE Group 905.30 1,778.70 2,684.00 3,011.20
Prime Bank Investment Ltd & Prime 3,420.10 100.00 3,520.10 3,711.90
Bank Securities Ltd.
Pran-RFL Group 2,087.20 1,636.50 3,723.70 4,018.20
Pakiza Group 2,293.40 80.40 2,373.80 2,307.40
Reedisha Group 704.60 944.00 1,648.60 1,404.00
RB Group 1,471.70 1,056.00 2,527.70 2,053.40
Square Group 224.40 700.60 925.00 1,180.70
Seacom Group 555.20 1,364.80 1,920.00 -
Standard Group 5,394.20 2,270.50 7,664.70 3,576.80
Summit Group 1,331.10 4,869.40 6,200.50 10,608.70
TK Group 969.60 2,370.40 3,340.00 2,493.00
Transcom Group 1,612.60 1,325.80 2,938.40 1,612.90
Toma Group 1,399.70 536.60 1,936.30 3,462.10
Uttara Group 25.80 2,258.50 2,284.30 2,743.50
Youth Group 1,160.20 559.70 1,719.90 -
Viyellatex Group 889.90 1,009.10 1,899.00 1,094.40
66,163.00 66,306.80 132,469.80 117,967.60

270 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

7a.9 Large loan restructuring

i) The outstanding liability against the restructured Loan (General) of Jamuna Denims Limited stands at BDT 170,54,61,356.43
as on 31.12.2018. Earlier, the said liability was restructured on 19.11.2015 with the approval of Bangladesh Bank vide their
letter dated 02.09.2015 for a period of 12 years (including 12 months’ moratorium period) under the purview of BRPD
Circular No. 04 dated 29.01.2015 on “Large Loan Restructuring”.
ii) The outstanding liabilities against the restructured Loan (General) of S. A. Oil Refinery Limited and Samannaz Super Oil
Limited amounting to BDT 75,92,08,244.16 have been written-off on 30.11.2018. Earlier, the said liabilities were restructured
on 15.02.2016 with the approval of Bangladesh Bank vide their letter dated 27.09.2015 for a period of 6 years (including 12
months’ moratorium period) under the purview of BRPD Circular No. 04 dated 29.01.2015 on “Large Loan Restructuring”.
7a.10 Particulars of loans, advances and lease / investments
i) Loans/investments considered good in respect of which the Bank is
fully secured 128,320,244,922 120,031,688,735
ii) Loans/investments considered good against which the Bank holds no
security other than the debtors' personal guarantee 20,717,880,162 18,886,692,414
iii) Loans/investments considered good secured by the personal undertaking

of one or more parties in addition to the personal guarantee of the debtors 56,771,393,633 59,404,347,642
iv) Loans/investments adversely classified; provision not maintained
there against - -
205,809,518,716 198,322,728,791
v) Loans / investments due by directors or officers of the banking company
or any of them either separately or jointly with any other persons 1,590,420,542 1,644,088,762
(note-7a.4b+[Link])
vi) 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 - -

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. 1,590,420,542 1,644,088,762
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 banking companies - -
x) Classified loans and advances / investments
a) Classified loans and advances / investments on which interest
has not been charged (note-7a.11) 12,685,766,955 10,799,049,005
b) Provision on classified loans and advances / investments 4,567,284,783 4,269,942,337
(for details see note-14a.3 & 14a.5)
c) Provision kept against loans / investments classified as bad debts 3,489,303,892 4,116,989,852
d) Interest credited to Interest Suspense Account (note-14a.6) 4,026,761,377 4,693,505,469

xi) Cumulative amount of written off loans / investments

Opening Balance 18,236,775,825 15,428,923,708
Amount written off during the year 3,941,444,000 3,378,479,304
22,178,219,825 18,807,403,012
Amount realised against loans / investments previously written off 267,057,851 570,627,187
21,911,161,974 18,236,775,825
The amount of written off / classified loans / investments
for which law suits have been filed (note-7a.14) 31,968,454,595 27,933,517,037

PRIME BANK 271

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

7a.11 Classification of loans, advances and lease / investments

Unclassified
Standard including staff loan 184,598,901,214 183,760,782,299
Special mention account (SMA) 8,524,850,547 3,762,897,487
193,123,751,761 187,523,679,786
Classified
Sub-standard 1,372,812,160 1,263,564,872
Doubtful 2,603,299,522 441,392,332
Bad / Loss 8,709,655,272 9,094,091,802
12,685,766,955 10,799,049,005
205,809,518,716 198,322,728,791
7a.12 Particulars of required provision for loans, advances and lease / investments
Base Rate
Status for provision (%)
General Provision
Loans/investments 193,123,751,761 *Various 3,700,870,137 4,635,009,488
(Including SMA)
Interest receivable on loans/ 629,742,526 1 6,297,425 6,978,955
investments (Less: Staff loan)
3,707,167,562 4,641,988,443

*General provision is kept @ 1% on general loans and advances / investments and 0.25% on small enterprise financing,
2% on certain other types of lending and 5% on consumer financing.

Base Rate
Status for provision (%)
Specific provision
Sub-standard 817,140,224 20 163,428,045 92,552,409
Doubtful 1,820,512,780 50 910,256,390 56,575,819
Bad / Loss 3,489,303,892 100 3,489,303,892 4,116,989,852
4,562,988,327 4,266,118,080
Required provision for loans, advances and lease / investments 8,270,155,889 8,908,106,523
Total provision maintained (note - 14, 14a3 & 14a.5) 8,293,445,807 8,915,603,361
Excess / (short) provision at 31 December 2018 23,289,918 7,496,838

7a.13 Particulars of required provision on Off-balance Sheet Exposures

Base Rate
for provision 1%
Acceptances and endorsements 52,944,055,583 529,440,556 497,217,973
Letter of guarantee 57,826,844,429 578,268,444 729,664,353
Letter of credit 38,072,832,383 380,728,324 341,129,383
Bills for collection - - 107,668,519
Forward assets purchased and forward deposits placed 2,095,175,884 20,951,759 2,408,235
Required provision on Off-balance Sheet Exposures 1,509,389,083 1,678,088,462
Total provision maintained (note - 14a.4) 1,513,090,000 1,678,090,000
Excess / (short) provision at 31 December 2018 3,700,917 1,538

272 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
7a.14 Suits filed by the Bank (Branch wise details)
Agrabad Branch 1,716,337,121 692,305,532
Aganagar SME Branch 1,088,682 -
Adamjee EPZ Branch 4,666,098 4,082,489
Asad Gate Branch 992,814,700 193,769,474
Ashugonj Branch 1,506,854 1,506,854
Ashulia Branch 43,619,421 7,494,867
Banani Branch 1,325,720,369 29,396,548
Baridhara Branch 4,628,918 4,628,918
Baneswar Branch 30,056,919 19,606,885
Bangshal Branch 70,768,397 64,317,413
Banshkhali Branch 1,158,246 647,875
Barisal Branch 545,085 545,085
Bashaboo Branch 151,674,495 8,477,376
Barelekha Branch 690,540 616,180
Bashundhara Branch 12,463,323 12,643,147
Beani Bazar Branch - -
Bhairab Bazar Branch 27,622,000 18,128,714
Biswanath Bracnh 2,659,792 904,834
Bogra Branch 522,870,322 158,028,634
Boalmari Branch 144,527 811,952
Bijoynagar Branch 4,554,562 3,081,752
Head Office, FAD,FMD,CBD & Card 154,074,816 1,856,974,074
Chaumuhani Branch 52,736,750 3,560,816
Chaudagram Branch 5,099,438 2,914,012
Chapai Nawabgonj Branch 2,827,406 -
Comilla Branch 25,432,722 3,314,780
Court Road Branch 4,474,906 6,660,446
Cox's Bazar Branch 25,058,342 22,290,295
Damudya Branch 557,489 1,148,617
Dhanmondi Branch 9,517,290 6,892,292
Dagonbhuiyan Branch 3,078,598 -
Dinajpur Branch 18,214,219 29,458,667
Elephant Road Branch 1,403,884,142 1,297,155,209
Fatickchari Branch 1,481,393 553,169
Faridpur Branch 114,679,187 141,488,899
Foreign Exchange Branch 48,874,585 149,220,985
Ganakbari Branch 3,600,000 4,100,000
Garib-e-Newaz Branch 14,527,992 13,747,889
Gulshan Branch 1,976,883,575 1,761,037,856
Hajigonj Branch 116,839 1,424,380
Halishahar Branch 16,415,954 20,097,408
Hathazari Branch 2,166,294 3,766,490
Hobiganj Branch 3,717,961 735,107
Hemayetpur Branch 500,000 -
IBB, Amberkhana Branch 8,445,243 9,434,520
IBB, Dilkusha Branch 1,487,789,799 1,496,574,340
IBB, Mirpur Branch 377,319,559 447,801,558
IBB, O.R. Nizam Road Branch 484,514,975 481,498,474
IBB, Pahartali Branch 96,490,039 100,594,841
Ibrahimpur Branch 1,169,950 2,852,450
Ishwardi Branch 18,932,725 19,276,422
Islampur Branch - 738,175
Jamalpur Branch 7,051,256 2,434,493
Jatrabari Branch 462,355 6,807,034
Jessore Branch 518,194,472 1,474,495,409
Joypara Branch 1,399,000 1,399,000
Joydevpur Chowrasta Branch - -
Joypurhat Branch 12,287,551 9,489,398

PRIME BANK 273

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

Suits filed by the Bank (Branch wise details)

Jikorgacha Branch 760,282 1,463,573
Jubilee Road Branch 3,415,115,501 3,220,024,882
Kadomtoli Branch 1,639,593 1,639,593
Kawran Bazar Branch 233,428,706 89,514,577
Khatunganj Branch 1,796,533,826 1,773,622,169
Khulna Branch 1,296,416,094 1,297,403,290
Khajanagar SME Branch 497,250 -
Kishoreganj 4,514,158 4,514,158
Kustia Branch 63,144,139 123,452,204
Laldighi East Branch 1,339,297,606 1,342,446,934
Madhabdi Branch 87,253,576 48,788,555
Madhabpur Branch 4,508,531 1,057,930
Mirpur-1 Branch 119,690,010 141,907,012
Motijheel Branch 5,528,368,125 4,832,966,325
Modhukhali Branch 195,443 -
Mohakhali Branch 487,970,876 484,640,847
Mouchak Branch 819,264,039 21,915,354
Modhunaghat Branch 425,000 2,030,545
Moulvibazar Branch, Dhaka 110,060,588 84,005,965
Muradpur Branch 4,195,460 2,197,743
Mymensingh Branch 60,810,381 99,296,368
Nabiganj Branch 37,031,429 39,831,964
Natore Branch 49,790,106 6,835,670
Naogaon Branch 36,576,050 33,365,892
Narayanganj Branch 44,657,833 44,657,833
New Eskaton Branch 113,102,974 1,359,559
Oxygen More Branch 4,611,696 3,089,696
Off-shore Banking Unit, CEPZ 905,255,530 905,255,530
Pabna Branch 24,848,846 10,742,582
Pallabi Branch 51,699,039 15,548,584
Panthapath Branch 1,057,484,729 1,058,406,742
Pragati Sarani Branch 21,733,216 14,061,665
Prabortak More Branch 30,599,697 25,613,821
Rajshahi Branch 789,557,450 217,126,312
Rangpur Branch 9,289,604 3,431,513
Retail Banking Division 255,835,320 240,292,691
Ring Road Branch 216,898,203 226,611,409
Satkhira Branch 1,377,625 840,146
Sat Masjid Road Branch 170,811,800 165,937,724
Savar Branch 335,087,706 236,229,343
SBC Tower Branch 230,637,073 171,847,201
Sherpur Branch 176,797 -
Shibpur Branch 18,432,371 2,588,636
Simrail Branch 10,197,144 10,070,627
Sirajdikhan Branch 6,154,700 6,469,700
SME Banking, Dhaka 117,824,556 115,291,681
Sunamganj Branch 1,760,503 -
Sremangal Branch 38,524,232 39,135,560
Sylhet Branch 4,571,214 4,571,214
Subidbazar Branch, Sylhet 54,513,305 61,693,478
Tangail Branch 2,820,796 3,146,348
Takerhat SME Branch 533,465 -
Tajpur Branch 8,117,901 709,840
Tongi Branch 9,022,266 9,022,266
Uposhahar Branch, Sylhet 253,000 253,000
Uttara Branch 27,491,957 31,825,048
Vatiari Branch 83,340,683 49,775,104
Wari Bracnh 6,177,400 4,058,600
31,968,454,595 27,933,517,037

274 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

8 Consolidated bills purchased and discounted

Prime Bank Limited (note-8a) 9,353,331,214 14,729,065,476
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited 2,256,486,337 1,823,874,133
11,609,817,551 16,552,939,609
8a Bills purchased and discounted
Payable in Bangladesh 5,976,457,767 10,305,266,336
Payable outside Bangladesh 3,376,873,447 4,423,799,140
9,353,331,214 14,729,065,476
8a.1 Maturity grouping of bills purchased and discounted
Payable within one month - 3,425,855,329
Over one month but less than three months - 6,799,206,546
Over three months but less than six months - 3,966,558,122
Six months or more - 537,445,480
- 14,729,065,476
9 Consolidated fixed assets including premises, furniture and fixtures
Prime Bank Limited (note-9a) 6,943,348,521 6,434,047,671
Prime Bank Investment Limited 34,308,053 30,507,630
Prime Bank Securities Limited 10,584,742 9,902,298
Prime Exchange Co. Pte. Ltd., Singapore 1,954,177 3,702,920
PBL Exchange (UK) Ltd. 6,103,108 8,707,332
PBL Finance (Hong Kong) Limited 205,415 173,360
6,996,504,016 6,487,041,211
9a Fixed assets including premises, furniture and fixtures of the Bank
Property, Plant & Equipment
Land 3,719,444,788 3,719,444,788
Building 1,861,157,701 1,725,237,651
Furniture and fixtures 1,090,342,100 986,584,385
Office equipment and machinery 2,343,057,650 2,004,869,646
Vehicles 443,738,007 424,505,118
Library books 1,820,037 1,820,037
9,459,560,283 8,862,461,626
Less: 2,800,589,304 2,538,930,494
Accumulated depreciation
6,658,970,979 6,323,531,132
Intangibles assets
Software-core banking 565,524,078 353,144,552
Software-ATM 57,892,614 43,212,614
Cost of intangibles assets 623,416,692 396,357,165
Less: Accumulated amortization 339,039,150 285,840,626
284,377,542 110,516,539
Net book value at the end of the year (See annexure-C for detail) 6,943,348,521 6,434,047,671

The fixed assets recognised and measurements policy are described in note 2.2.4

PRIME BANK 275

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
10 Consolidated other assets
Prime Bank Limited (note-10a) 23,836,555,730 22,903,009,700
Less: Investment in Prime Bank Investment Limited (note-10a.5) (2,999,999,940) (2,999,999,940)
Less: Investment in Prime Bank Securities Limited (note-10a.5) (712,500,000) (712,500,000)
Less: PBIL investment in Prime Bank Securities Ltd.(below) (37,500,000) (37,500,000)
Less: Investment in PBL Exchange (UK) Ltd. (note-10a.5) (56,352,624) (56,352,624)
Less: Investment in Prime Exchange Co. Pte. Ltd., Singapore (note-10a.5) (10,993,235) (10,993,235)
Less: Investment in PBL Finance (Hong Kong) Limited (note-10a.5) (34,365,722) (34,365,722)
Less: Dividend of Prime Bank Investment Limited (note-10a) - -
Less: Interest receivable from PBL Finance (Hong Kong) Limited - -
Less: Due from Investment in PBL Finance (Hong Kong) Limited - -
19,984,844,209 19,051,298,179
Prime Bank Investment Limited (investment in PBSL) 37,500,000 37,500,000
Prime Bank Investment Limited 97,132,285 101,594,607
Prime Bank Securities Limited 141,520,263 96,018,372
Prime Exchange Co. Pte. Ltd., Singapore 5,145,002 5,204,094
PBL Exchange (UK) Ltd. 6,829,618 7,347,628
PBL Finance (Hong Kong) Limited 37,131,779 30,779,137
325,258,948 278,443,839
20,310,103,156 19,329,742,018
10a Other assets of the Bank
Stationery and stamps 50,406,794 38,027,828
Exchange adjustment account 13,996,548 -
Investment in subsidiary (note-10a.5) 3,814,211,521 3,814,211,521
Off-shore Banking Units 8,886,688,000 9,360,494,044
Due from Off-shore Banking Units 292,652,897 248,339,125
Prepaid expenses 44,754,439 20,129,129
Interest / profit receivable on loan (note-10a.1) 884,460,124 963,842,394
Interest receivable on Govt. securities 582,323,336 614,889,406
Advance deposits and advance rent 284,080,601 355,000,715
Prepaid expenses against house furnishing 11,344,418 8,460,103
Balance with PBSL 71,760,010 -
Branch adjustments account 18,517,480 18,516,520
Suspense account (note-10a.2) 244,727,208 283,396,487
Encashment of PSP / BSP 997,709,958 457,207,387
Advance income tax paid (note-10a.6) 16,673,978,174 16,182,416,743
Credit card 96,028,502 92,911,810
Sundry assets (note-10a.3) 48,256,616 53,999,656
33,015,896,627 32,511,842,870
Less: Off-shore Banking Units 9,179,340,897 9,608,833,170
23,836,555,730 22,903,009,700
10a.1 Interest / profit receivable: Amount represents interest / profit receivable on loans, advances and lease / investments,
interest on term placement, Government securities & foreign currency balance, etc.
10a.2 Suspense account includes TT / DD in transit, advance against Land/ Building, advance against new branch, advance
against TA/ DA, printing and stationery, postage, suspense- others, clearing adjustment account etc.
10a.3 Sundry assets
Protested Bills 17,978,649 17,827,354
Islamic Transit Account 5,894,000 2,876,066
Others 24,383,967 33,296,235
48,256,616 53,999,656
10a.4 Particulars of required provision for other assets
Rate
Purchase of credit card bills 71,000,000 100% 71,000,000 71,000,000
Protested bills 17,978,649 100% 17,978,649 17,827,354
Legal Expenses 2,139,894 100% 2,139,894 1,170,272
Others 166,253,245 100% 166,253,245 114,085,282
Required provision for other assets 257,371,788 204,082,908
Total provision maintained (note - 14a.8) 257,383,148 204,083,148
Excess / (short) provision at 31 December 11,359 239

276 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

10a.5 Investment in subsidiaries

Prime Bank Investment Limited 2,999,999,940 2,999,999,940
Prime Bank Securities Limited 712,500,000 712,500,000
Prime Exchange Co. Pte. Ltd., Singapore 10,993,235 10,993,235
PBL Exchange (UK) Ltd. 56,352,624 56,352,624
PBL Finance (Hong Kong) Limited 34,365,722 34,365,722
3,814,211,521 3,814,211,521

As per the provision of the Exchange Demutualization Act-2013 and in accordance with the Bangladesh Security Exchange
Commission (BSEC) approved Demutualization Scheme, Dhaka Stock Exchange Ltd. (DSE) alloted total 72,15,106 ordinary
shares at a face value of Tk 10.00 each and Chittagong Stock Exchange Ltd. (CSE) alloted total 42,87,330 ordinary Shares
at face value of Tk 10.00 each against the Membership of DSE and CSE respectively. Out of the above DSE transferred
2,886,042 shares and CSE transferred 1,714,932 shares directly to the credit of the Beneficiary Owner's account of the
company. The remaining shares were credited to blocked accounts as per provisions of the Exchange Demutualization
Act, 2013. As there is no active market for shares of DSE and CSE, we have shown the value at original cost as investment.
However, during the year 31 December 2018 DSE sold 25% of DSE's shares to strategic investor, Shenzhen Stock
Exchange (SZSE) and Shanghai Stock Exchange (SSE) Consortium which equivalents to 18,03,777 no. of shares. As such
current holding of Prime Bank Securities Ltd. in DSE's shares came down to 54,11,330 no. of shares.
10a.6 Advance income tax paid
Opening Balance 16,182,416,743 15,594,901,282
Add: Paid during the year 491,561,431 587,515,461
16,673,978,174 16,182,416,743
11 Non-Banking Assets
Name of Parties Possession date
M/s Rima Flour Mills 18.03.2014 124,438,400 124,438,400
M/s Ripon Motors 18.03.2014 51,902,240 51,902,240
M/s Megna Bangla Trade 28.04.2014 18,399,360 18,399,360
M/s Ampang Food Industries 28.04.2014 25,760,640 25,760,640
220,500,640 220,500,640

The Bank has been awarded ownership of the mortgage properties of the above mentioned parties according
to the verdict of the Honorable Court in accordance with the section 33(7) of “Artharin Adalat-2003”. An amount of
Tk.220,500,640/- is reported in the financial statements as Non -Banking assets. The value of Non-Banking Assets has
been determined on the basis of valuation report of an Independent valuer.
12 Consolidated borrowings from other banks, financial institutions and agents
Prime Bank Limited (note-12a) 33,944,516,693 22,087,479,113
Prime Bank Investment Limited 3,026,635,625 3,228,886,961
Prime Bank Securities Limited 393,452,756 433,499,527
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited 2,214,960,000 1,778,513,368
39,579,565,074 27,528,378,969
Less: Inter-company transactions 5,635,048,381 5,390,381,459
33,944,516,693 22,137,997,510

12a Borrowings from other banks, financial institutions and agents of the Bank
In Bangladesh (note-12a.1) 18,612,725,751 8,728,345,506
Outside Bangladesh (note-12a.2) 15,331,790,942 13,359,133,607
33,944,516,693 22,087,479,113

12a.1 In Bangladesh
Priem Bank Subordinated Bond 9,000,000,000 2,500,000,000
Financial Sector Support Program 1,079,099,944 762,068,738
EDF borrowings from Bangladesh Bank 8,439,710,789 5,397,210,402
Refinance against SME loan from Bangladesh Bank 93,915,018 69,066,366
18,612,725,751 8,728,345,506

PRIME BANK 277

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
12a.2 Outside Bangladesh
Emirates NBD, Dubai, UAE - 573,524,500
Emirates Islami Bank - 1,930,032,752
Abudhabi Commercial Bank 1,468,250,000
Bank MUSCAT - 855,696,900
Bank of Montreal, CANADA 1,187,185,000 -
ICD, GULF 367,805,022 -
HDFC Bank, Mumbai 776,075,000
First Gulf Bank, UAE - -
First Abu Dhabi Bank 1,119,393,800 643,406,000
FMO, Netherlands 699,166,666 1,378,333,333
Noor Bank Limited 570,520,000 827,000,000
SCB, Singapore 3,408,830,455 691,195,022
SCB, Hong Kong - 1,293,924,200
National Bank of Rash-Al Khaima 167,800,000 481,065,900
Commercial Bank of Qatar 1,037,004,000 -
International Finance Corporation 4,529,761,000 4,684,955,000
15,331,790,942 13,359,133,607
12a.3 Security against borrowings from other banks, financial institutions and agents
Secured (Treasury bills) - -
Unsecured 33,944,516,693 22,087,479,113
33,944,516,693 22,087,479,113
12a.4 Maturity grouping of borrowings from other banks, financial institutions and agents
Payable on demand - -
Up to 1 month 12,086,159,157 6,159,279,140
Over 1 month but within 3 months 3,791,928,339 4,940,887,452
Over 3 months but within 1 year 9,454,562,558 8,918,246,155
Over 1 year but within 5 years 5,700,000,000 2,069,066,366
Over 5 years 2,911,866,639 -
33,944,516,693 22,087,479,113
13 Consolidated deposits and other accounts
Current deposits and other accounts
Prime Bank Limited (note-13a.1.c) 32,742,551,758 33,196,233,861
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
32,742,551,758 33,196,233,861
Less: Inter-company transactions 22,060,841 13,533,538
32,720,490,917 33,182,700,323
Bills payable
Prime Bank Limited (note-13a.1.c) 3,045,875,590 4,212,571,458
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
3,045,875,590 4,212,571,458
Savings bank / Mudaraba savings deposits
Prime Bank Limited (note-13a.1.c) 41,478,074,475 38,397,699,341
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
41,478,074,475 38,397,699,341
Term / Fixed deposits
Prime Bank Limited (note-13a.1.c) 120,251,223,734 123,207,471,241
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
120,251,223,734 123,207,471,241
Less: Inter-company transactions 2,235,495 145,194
120,248,988,239 123,207,326,047
197,493,429,221 199,000,297,168

278 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

13a Deposits and other accounts of the Bank

Deposits from banks (note -13a.1.a) 3,554,678,702 2,172,343,252
Deposits from customers (note-13a.1.b) 193,963,046,856 196,841,632,649
197,517,725,557 199,013,975,901

13a.1 a) Deposits from Banks

Current deposits and other accounts 5,178,979 18,742,909
Savings bank / Mudaraba savings deposits 762,515,592 711,519,437
Special notice deposits 285,077,673 940,174,448
Fixed deposits 2,501,906,458 501,906,458
3,554,678,702 2,172,343,252
b) Customer Deposits
i) Current deposits and other accounts
Current / Al-wadeeah current deposits 14,344,791,527 15,235,757,391
Foreign currency deposits 6,348,181,790 6,458,348,587
Security deposits 7,945,616 8,362,116
Sundry deposits (note - 13a.2) 12,836,137,818 11,718,541,620
33,537,056,750 33,421,009,713
Less: Off-shore Banking Units 799,683,971 243,518,761
32,737,372,779 33,177,490,952
ii) Bills payable
Pay orders issued 3,033,276,813 4,193,952,419
Pay slips issued 2,484,749 2,484,749
Demand draft payable 9,783,228 15,806,529
Foreign demand draft 313,592 313,592
T. T. payable - -
Bill Pay ATM 17,208 14,169
3,045,875,590 4,212,571,458
iii) Savings bank / Mudaraba savings deposits 40,715,558,882 37,686,179,903
iv) Term / Fixed deposits
Fixed deposits / Mudaraba fixed deposits 71,458,093,658 62,175,439,920
Special notice deposits 12,652,594,309 12,567,863,806
Non resident Taka deposits 1,698,132,023 1,516,641,540
Scheme deposits 31,655,419,613 45,505,445,071
117,464,239,603 121,765,390,336
193,963,046,856 196,841,632,649
197,517,725,557 199,013,975,901

c) Deposits and other accounts

Current deposits and other accounts
Deposits from banks (note -13a.1.a) 5,178,979 18,742,909
Deposits from customers (note-13a.1.b.i) 32,737,372,779 33,177,490,952
32,742,551,758 33,196,233,861
Bills payable
Deposits from banks (note -13a.1.a) - -
Deposits from customers ([Link]) 3,045,875,590 4,212,571,458
3,045,875,590 4,212,571,458
Savings bank / mudaraba savings deposits
Deposits from banks (note -13a.1.a) 762,515,592 711,519,437
Deposits from customers ([Link]) 40,715,558,882 37,686,179,903
41,478,074,475 38,397,699,341
Term / Fixed deposits
Deposits from banks (note -13a.1.a) 2,786,984,131 1,442,080,906
Deposits from customers ([Link]) 117,464,239,603 121,765,390,336
120,251,223,734 123,207,471,241
197,517,725,557 199,013,975,901

PRIME BANK 279

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

13a.2 Sundry deposits

F.C. held against back to back L/C 5,311,288,453 5,258,292,710
Sundry creditors 767,157,404 728,433,241
Risk fund and service charges (CCS and lease finance) 55,094,400 56,200,155
Sale proceeds of PSP / BSP 362,071,050 217,085,000
Margin on letters of guarantee 884,411,352 956,397,206
Margin on letters of credit 1,887,199,994 1,891,208,659
Margin on FDBP / IDBP, export bills, etc 118,163,254 167,063,116
Lease deposits 57,823,429 64,845,357
Interest / profit payable on deposits 1,825,658,414 866,375,072
Withholding VAT/Tax /Excise duty payable to Government Authority 562,791,382 546,056,541
Others 1,004,478,687 966,584,562
12,836,137,818 11,718,541,620
13a.3 Payable on demand and time deposits
a) Demand deposits
Current deposits 14,349,970,506 15,254,500,299
Savings deposits (9%) 3,733,026,703 3,455,792,941
Foreign currency deposits (Non interest bearing) 5,548,497,819 6,214,829,826
Security deposits 7,945,616 8,362,116
Sundry deposits 12,836,137,818 11,718,541,620
Bills payable 3,045,875,590 4,212,571,458
39,521,454,051 40,864,598,260
b) Time deposits
Savings deposits (91%) 37,745,047,772 34,941,906,400
Fixed deposits 73,960,000,116 62,677,346,377
Special notice deposits 12,937,671,982 13,508,038,254
Deposits under schemes 31,655,419,613 45,505,445,071
Non resident Taka deposits 1,698,132,023 1,516,641,540
157,996,271,506 158,149,377,641
197,517,725,557 199,013,975,901

13a.4 Sector-wise break-up of deposits and other accounts

Government 2,609,413,915 1,690,935,354
Deposit money banks 3,554,678,702 2,172,343,252
Other public 2,454,425,525 3,261,805,417
Foreign currency 5,548,497,819 6,214,829,826
Private 183,350,709,597 185,674,062,052
197,517,725,557 199,013,975,901

13a.5 Unclaimed deposits and valuables

Current deposits 1,067 -
Savings deposits 4,942 42,537
Demand Draft - -
SND 18 -
Pay order 7,681,828 -
Sundry Deposit 815,778 87,274
8,503,633 129,811
13a.6 Maturity analysis of deposits
a) Maturity analysis of deposits from Banks
Payable on demand - -
Up to 1 month 5,178,979 18,742,909
Over 1 month but within 3 months 788,172,583 796,135,138
Over 3 months but within 1 year 2,501,906,458 501,906,458
Over 1 year but within 5 years 259,420,683 855,558,748
Over 5 years but within 10 years - -
Over 10 years - -
3,554,678,702 2,172,343,252

280 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

b) Maturity analysis of customer deposits excluding bills payable

Payable on demand - -
Up to 1 month 28,481,210,911 24,021,106,165
Over 1 month but within 3 months 42,690,754,047 38,703,976,533
Over 3 months but within 1 year 49,540,944,626 66,433,874,081
Over 1 year but within 5 years 60,631,173,763 32,883,887,194
Over 5 years but within 10 years 9,564,584,284 30,586,087,406
Over 10 years 8,503,633 129,811
190,917,171,265 192,629,061,191
c) Maturity analysis of bills payable
Payable on demand 3,045,875,590 4,212,571,458
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 but within 10 years - -
Over 10 years - -
3,045,875,590 4,212,571,458
197,517,725,557 199,013,975,901
14 Consolidated other liabilities
Prime Bank Limited (note-14a) 36,257,586,840 35,465,414,699
Prime Bank Investment Limited 724,298,400 697,688,931
Prime Bank Securities Limited 238,146,149 169,586,547
Prime Exchange Co. Pte. Ltd., Singapore 40,958,922 57,330,044
PBL Exchange (UK) Ltd. 7,767,563 28,492,648
PBL Finance (Hong Kong) Limited 6,025,124 25,185,674
37,274,782,999 36,443,698,544
Less: Inter-company transactions - -
37,274,782,999 36,443,698,544

14a Other liabilities of the Bank

Exchange adjustment account - 29,385
Expenditure and other payables 147,779,820 142,722,657
Provision for bonus 227,293,459 106,978,887
Provision for income tax (note - 14a.1) 20,085,551,971 18,335,551,971
Deferred tax liability (note-14a.2) 930,373,650 930,373,650
Unearned commission on bank guarantee 7,820,643 32,536,560
Unearned profit (Markup) 291,233,755 156,808,065
Provision for off-balance sheet exposures (note-14a.4) 1,513,090,000 1,678,090,000
Provision for Off-shore Banking Units (note-14a.5) 743,550,000 716,350,000
Fund for employee welfare fund (EWF) 7,875,604 3,617,950
Fund for Prime Bank Foundation (PBF) 157,512,081 72,358,987
Provision for loans and advances / investments (note - 14a.3) 7,540,378,507 8,189,736,061
Provision for Interest receivable on loans and advances / investments 9,517,300 9,517,300
Provision for diminution in value of investments 35,628,249 16,928,249
Interest suspense account (note - 14a.6) 4,026,761,377 4,693,505,469
Provision for Impairement loss for investment in subsidiaries 180,094,092 93,994,092
Provision for climate risk fund 10,000,000 8,000,000
Provision of rebate for good borrower 15,207,111 10,207,111
Other liabilities 70,536,074 64,025,157
Other provision (note - 14a.7) 257,383,148 204,083,148
36,257,586,840 35,465,414,699

PRIME BANK 281

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

14a.1 Provision for income tax

Opening Balance 18,335,551,971 17,585,551,971
Add: Addition during the year 1,750,000,000 750,000,000
20,085,551,971 18,335,551,971
* Corporate tax position of the bank is shown in annexure-D
14a.2 Deferred tax liability
Balance as on 1 January 930,373,650 932,054,703
Add/(Less): Provision for revaluation of land and building - (1,681,053)
Add: Addition / Adjustment during the year (note-40a) - -
Balance as on 31 December 930,373,650 930,373,650
14a.3 Provision for loans, advances and lease / investments
Movement in specific provision on classified loans / investments:
Provision held as on 1 January 3,773,742,337 3,400,363,411
Less: Fully provided debts written off during the year (2,607,437,692) (2,112,525,235)
Add: Recoveries of amounts previously written off 203,780,138 409,904,161
Add: Specific provision made during the year for other accounts - -
Add: Transferred from General Provision - -
Less: Provision no longer required - -
Add: Net charge to profit and loss account (note-39a) 2,690,300,000 2,076,000,000
Provision held as on 31 December 4,060,384,783 3,773,742,337
Movement in general provision on unclassified loans / investments
Provision held as on 1 January 4,415,993,724 3,359,993,724
Add: Amount transferred to classified provision - -
Add: General provision made during the year (note-39a) (936,000,000) 1,056,000,000
Provision held as on 31 December 3,479,993,724 4,415,993,724
7,540,378,507 8,189,736,061
14a.4 Provision for off-balance sheet exposures
Provision held as on 1 January 1,678,090,000 1,385,640,000
Add: Amount transferred from classified provision - -
Add: Provision made during the year (note-39a) (165,000,000) 292,450,000
Provision held as on 31 December 1,513,090,000 1,678,090,000
14a.5 Provision for Off-shore Banking Units
Movement in specific provision on classified loans / investments:
Provision held as on 1 January 496,200,000 423,700,000
Add: Transferred from Unclassified Provision of OBU - -
Add: Net charge to profit and loss account (note-39a) 10,700,000 72,500,000
Provision held as on 31 December 506,900,000 496,200,000
Movement in general provision on unclassified loans / investments

Provision held as on 1 January 220,150,000 169,150,000

Add: Amount transferred to classified provision of OBU - -
Add: General provision made during the year (note-39a) 16,500,000 51,000,000
Provision held as on 31 December 236,650,000 220,150,000
743,550,000 716,350,000
14a.6 Interest suspense account
Balance as on 1 January 4,693,505,469 4,488,241,878
Add: Amount transferred to "interest suspense" account during the year 1,671,697,733 1,875,009,156
Less: Amount recovered from "interest suspense" account during the year (994,628,843) (246,136,963)
Less: Amount written-off during the year (1,343,812,981) (1,423,608,602)
Balance as on 31 December 4,026,761,377 4,693,505,469
14a.7 Other provision for classified assets
Balance as on 1 January 204,083,148 120,116,648
Add: Addition during the year (note-39a) 53,300,000 83,966,500
Less: Adjustment during the year - -
Balance as on 31 December 257,383,148 204,083,148

282 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
15 Share capital
15.1 Authorized capital
2,500,000,000 ordinary shares of Taka 10 each 25,000,000,000 25,000,000,000
15.2 Issued, subscribed and fully paid up capital
30,000,000 ordinary shares of Taka 10 each issued for cash 300,000,000 300,000,000
986,756,137 ordinary shares of Taka 10 each issued as bonus shares 9,867,561,370 8,838,212,760
115,527,340 ordinary shares of Taka 10 each issued as right shares 1,155,273,400 1,155,273,400
11,322,834,770 10,293,486,160
15.3 History of paid-up capital
Given below the history of raising of share capital of Prime Bank Limited:
Accounting
year Declaration No of share Value in capital Cumulative
1995 Opening capital 10,000,000 100,000,000 100,000,000
1996 60% Bonus share 6,000,000 60,000,000 160,000,000
1997 25% Bonus share 4,000,000 40,000,000 200,000,000
1999 Initial Public Offer (IPO) 20,000,000 200,000,000 400,000,000
2000 25% Bonus share 10,000,000 100,000,000 500,000,000
2001 20% Bonus share 10,000,000 100,000,000 600,000,000
2002 16.67% Bonus share 10,000,000 100,000,000 700,000,000
2003 42.86% Bonus share 30,000,000 300,000,000 1,000,000,000
2004 40% Bonus share 40,000,000 400,000,000 1,400,000,000
2005 25% Bonus share 35,000,000 350,000,000 1,750,000,000
2006 30% Bonus share 52,500,000 525,000,000 2,275,000,000
2007 25% Bonus share 56,875,000 568,750,000 2,843,750,000
2008 25% Bonus share 71,093,750 710,937,500 3,554,687,500
2009 30% Bonus share 106,640,620 1,066,406,200 4,621,093,700
25% right share 115,527,340 1,155,273,400 5,776,367,100
2010 35% Bonus share 202,172,848 2,021,728,480 7,798,095,580
2011 20% Bonus share 155,961,911 1,559,619,110 9,357,714,690
2012 10% Bonus share 93,577,147 935,771,470 10,293,486,160
2017 10% Bonus share 102,934,861 1,029,348,610 11,322,834,770
1,132,283,477 11,322,834,770
15.4 Percentage of shareholdings at the closing date

2018 2017 2018 2017

Particulars
Taka Taka % %
Sponsors 4,152,053,350 3,915,393,490 36.67% 38.04%
Financial Institutions 3,076,157,170 2,503,815,050 27.17% 24.32%
Foreign Investors 348,688,820 385,416,330 3.08% 3.75%
Non-resident Bangladeshi 26,774,640 27,819,790 0.24% 0.27%
General Public 3,719,160,790 3,461,041,500 32.84% 33.62%
11,322,834,770 10,293,486,160 100.00% 100.00%
15.5 Shareholding range on the basis of shareholdings as at 31 December 2018
Number of share Taka
Shareholding range holders Shares Percentage
Less than 500 5,177 959,141 0.08%
500 - 5,000 6,352 11,986,539 1.06%
5,001 - 10,000 1,168 8,588,987 0.76%
10,001 - 20,000 857 12,283,372 1.08%
20,001 - 30,000 318 7,857,888 0.69%
30,001 - 40,000 158 5,522,982 0.49%
40,001 - 50,000 102 4,765,815 0.42%
50,001 - 100,000 253 17,868,784 1.58%
100,001 - 1,000,000 354 106,916,630 9.44%
Over 1,000,000 156 955,533,339 84.39%
14,895 1,132,283,477 100.00%

PRIME BANK 283

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

15.6 Name of the Directors and their shareholdings as at 31 December 2018

Name of the directors % of shares as at

Sl Status Opening position Closing position
31.12.2018
1 Mr. Azam J Chowdhury Chairman 20,601,158 22,661,273 2.00

(Representative of East Coast (Share holding of

Shipping Lines Ltd.) East Cost Shipping
Lines Ltd.)
2 Mr. Mafiz Ahmed Bhuiyan Vice Chairman 20,591,099 22,650,208 2.00

3 Mr. Imran Khan Vice Chairman 20,588,337 22,647,170 2.00

4 Mr. Md. Nader Khan Director 38,019,361 41,821,296 3.69
5 Quazi Sirazul Islam Director 20,616,158 22,677,773 2.00
6 Mrs. Marina Yasmin Chowdhury Director 24,225,000 27,288,000 2.41

7 Mr. Md. Shahadat Hossain Director 20,611,583 22,672,741 2.00

8 Mr. Shirajul Islam Mollah Director 20,644,922 22,709,414 2.01

9 Mrs. Nasim Anwar Hossain Director 23,365,749 25,702,323 2.27

10 Mrs. Salma Huq Director 32,254,341 35,479,775 3.13

11 Mr. Nafis Sikder Director 25,826,178 28,408,795 2.51
12 Mr. Waheed Murad Jamil Director 20,587,749 22,646,523 2.00

(Representative of Mawsons (Share holding of

Limited.) Mawsons Limited)
13 Mr. Tarique Ekramul Haque Director 20,600,391 22,660,429 2.00

14 Mr. Mohammad Mushtaque Director 20,760,250 22,836,275 2.02

Ahmed Tanvir

(Representative of Uniglory (Share holding

Cycle Industries Ltd.) of Uniglory Cycle
Industries Ltd.)
15 Mr. Shamsuddin Ahmad, Ph.D Independent - - -
Director
16 Dr. G. M. Khurshid Alam Independent - - -
Director
17 Mr. M. Farhad Hussain, FCA Independent - - -
Director
18 [Link] Z. Bosunia Independent
Director
19 Mr. Rahel Ahmed Managing - - -
Director
329,292,276 362,861,995

Directors of the Bank complies with the requirements at SEC notification no-SEC/CMRRCD/2009-193/119/Admin/34
dated 21/11/2011 regarding holding of shares which states that "each Director other than Independent Directors of any
listed company shall hold minimum 2% (Two percent) share of the Paid-up Capital otherwise there shall be a casual
vacancy of Directors".

284 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

15.7 Capital to risk weighted assets ratio (Consolidated)

In terms of section 13 (2) of the Bank Companies Act, 1991 and Bangladesh Bank BRPD circulars no. 35 dated December
29, 2010, BRPD Circular no. 07 dated March 31, 2014, BRPD Circular no.18 dated 21 December 2014 and BRPD Circular
Letter no. 05 dated May 31, 2016, required capital of the Bank (Consolidated) at the close of business on 31 December 2018
was Taka 27,440,402,113 as against available Tier-I capital of Taka 24,375,723,704 and Tier-II capital of Taka 13,926,265,060
making a total capital of Taka 38,301,988,764 thereby showing a surplus capital / equity of Taka 10,861,586,650 at that
date. Details are shown below:
Tier-1 Capital
Common Equity Tier-1 (CET-1) Capital
Paid-up capital (note-15.2) 11,322,834,770 10,293,486,160
Share premium (note-15.8) 1,211,881,786 2,241,230,396
Non-controlling interest(note-15.9) 63 61
Statutory reserve (note-16) 10,353,413,584 9,565,853,177
General reserve 28,002,888 28,002,888
Surplus in consolidated profit and loss account / Retained earnings (note- 20) 1,798,788,031 1,116,996,544
24,714,921,122 23,245,569,226
Additional Tier-1 (AT-1) Capital
Non-cumulative irredeemable preference shares - -
- -
Less: Regulatory Adjustments for CET-1 Capital
Goodwill and all other intangible assets 285,218,428 110,516,539
Reciprocal Crossholdings 53,978,990 25,271,120
339,197,418 135,787,659
Total Tier-1 Capital 24,375,723,704 23,109,781,567

Tier-2 Capital
General provision maintained against unclassified loan/investments (note-14a.3) 3,479,993,724 4,415,993,724
General provision on off-balance sheet exposures (note-14a.4) 1,513,090,000 1,678,090,000
General provision on off-shore Banking Units (note-14a.5) 236,650,000 220,150,000
Revaluation gain / loss on investments-50% of total 230,897,400 230,897,400
Revaluation reserve-50% of total 751,759,278 751,759,278
Prime Bank Sub-ordinated Bond 8,500,000,000 2,500,000,000
14,712,390,402 9,796,890,402
Less: Regulatory Adjustments
Revaluation Reserves for fixed assets, securities and equity securities 786,125,342 589,594,007
Total Tier-2 Capital 13,926,265,060 9,207,296,395
A) Total Regulatory capital 38,301,988,764 32,317,077,962

Total assets including off-balance sheet exposures 457,564,124,265 450,203,787,174

B) Total risk weighted assets 231,077,070,428 235,119,393,387
C) Required capital based on risk weighted assets (11.875% on B) 27,440,402,113 23,511,939,339
D) Surplus (A-C) 10,861,586,650 8,805,138,624
Capital to risk weighted assets ratio 16.58% 13.74%
Common Equity Tier-I (Against Standard of minimum 6.00%) 10.55% 9.83%
Total Capital to Risk Weighted Asset Ratio (Against Standard of 16.58% 13.74%
minimum 10% with Capital conservation buffer of 1.875%)

Leverage Ratio
Particulars Required Held Required Held
Leverage ratio 3.00% 6.51% 3.00% 6.31%

PRIME BANK 285

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

Capital to risk weighted assets ratio (Solo)

Tier-1 Capital
Common Equity Tier-1 (CET-1) Capital
Paid-up capital (note-15.2) 11,322,834,770 10,293,486,160
Share premium (note-15.8) 1,211,881,786 2,241,230,396
Statutory reserve (note-16) 10,353,413,584 9,565,853,177
Surplus in consolidated profit and loss account / Retained earnings (note-20a) 1,759,002,003 1,079,304,405
24,647,132,143 23,179,874,138
Additional Tier-1 (AT-1) Capital
Non-cumulative irredeemable preference shares - -
- -
Less: Regulatory Adjustments for CET-1 Capital
Goodwill and all other intangible assets 284,377,542 110,516,539
Reciprocal Crossholdings 27,970,098 21,707,400
312,347,640 132,223,939
Total Tier-1 Capital 24,334,784,503 23,047,650,199

Tier-2 Capital
General provision maintained against unclassified loan / investments (note-14a.3) 3,479,993,724 4,415,993,724
General provision on off-balance sheet exposures (note-14a.4) 1,513,090,000 1,678,090,000
General provision on off-shore Banking Units (note-14a.5) 236,650,000 220,150,000
Revaluation gain / loss on investments-50% of total 220,734,813 220,734,813
Revaluation reserve-50% of total 751,759,278 751,759,278
Prime Bank Sub-ordinated Bond 8,500,000,000 2,500,000,000
14,702,227,815 9,786,727,815
Less: Regulatory Adjustments
Revaluation Reserves for fixed assets, securities and equity securities 777,995,273 583,496,455
Total Tier-2 Capital 13,924,232,542 9,203,231,360
A) Total Regulatory capital 38,259,017,045 32,250,881,559

Total assets including off-balance sheet exposures 456,453,527,360 449,083,512,828

B) Total risk weighted assets 224,516,533,725 230,211,415,637
C) Required capital based on risk weighted assets (11.875% on B) 26,661,338,380 23,021,141,564
D) Surplus (A-C) 11,597,678,665 9,229,739,995

Capital to risk weighted assets ratio 17.04% 14.01%

Common Equity Tier-I (Against Standard of minimum 6.00%) 10.84% 10.01%

Total Capital to Risk Weighted Asset Ratio (Against Standard of minimum 10% with Capital conservation buffer of 1.875%) 17.04% 14.01%

Leverage Ratio

Particulars Required Held Required Held

Leverage ratio 3.00% 6.52% 3.00% 6.61%

286 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

Amount in Taka

2018 2017

15.8 Share premium

11,552,734 ordinary shares of Taka 200 each per share 2,310,546,800 2,310,546,800
Less: Income tax deduction at source @ 3% on total premium 69,316,404 69,316,404
2,241,230,396 2,241,230,396
Less: Transferred to Paid-up Capital 1,029,348,610 -
1,211,881,786 2,241,230,396
15.9 Non controlling interest
Share capital 60 60
Retained earnings 3 1.33
63 61
16 Statutory reserve
Balance on 1 January 9,565,853,177 9,204,058,242
Addition during the year ( 20% of pre-tax profit) 787,560,407 361,794,935
Balance at 31 December 2018 10,353,413,584 9,565,853,177

17 Consolidated revaluation gain / loss on investments

Prime Bank Limited (note-17a) 22,087,009 17,749,598
Gain on revaluation of Investment at Prime Exchange Co. Pte. Ltd., Singapore 38,209,946 38,757,000
Gain on revaluation of Investment at Prime Exchange (UK) Ltd. (3,361,374) (480,524)
Gain on revaluation of Investment at PBL Finance (Hong Kong) Limited 14,863,043 (740,786)
71,798,624 55,285,288

17a Revaluation gain / loss on investments of the Bank

Opening balance on 1 January 17,749,598 15,278,978
Add: Amortized/Revaluation Gain 57,349,488 39,631,941
Less: Adjustment of amortization/revaluation gain against sale/maturity (52,987,310) (37,076,239)
Add: Adjustment of revaluation gain/(loss) of OBU fixed assets (24,768) (85,082)
Less: Adjustment of Revaluation loss - -
22,087,009 17,749,598

18 Revaluation reserve
Balance on 1 January 1,767,012,161 1,778,219,183
Adjustment during the year - (11,207,022)
Balance at 31 December 2018 1,767,012,161 1,767,012,161
Less: Provision for deferred tax (270,253,057) (270,253,057)
1,496,759,104 1,496,759,104

The Bank revalued the assets of Land and Buildings details described in note 2.5

19 Consolidated foreign currency translation gain/ (loss)

Prime Bank Limited (note-19a) 14,920,954 13,414,088
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore (8,551) 660,837
PBL Exchange (UK) Ltd. (107,404) 93,100
PBL Finance (Hong Kong) Limited 312,440 1,166,122
15,117,438 15,334,146

19a Foreign currency translation gain/ (loss)

Balance on 1 January 13,414,088 6,637,162
Addition during the year 1,506,866 6,776,926
Balance at 31 December 2018 14,920,954 13,414,088

PRIME BANK 287

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
20 Consolidated retained earnings / movement of profit and loss account
Prime Bank Limited (note-20a) 1,760,508,869 1,086,081,331
Prime Bank Investment Limited 171,979,126 66,646,548
Prime Bank Securities Limited (153,975,418) (58,315,338)
Prime Exchange Co. Pte. Ltd., Singapore 12,441,761 13,487,817
PBL Exchange (UK) Ltd. (30,425,774) (36,245,907)
PBL Finance (Hong Kong) Limited 108,050,252 112,115,577
1,868,578,815 1,183,770,029
Less: Minority Interest (3.44) (1.33)
Less: Transfer to statutory reserve - -
Less: Profit Remitted by Prime Exchange Co. Pte. Ltd., Singapore (10,903,571) (2,706,530)
Less: Profit Remitted by PBL Finance (Hong Kong) Limited (57,183,859) (55,369,969)
Less: Foreign currency translation gains (1,703,351) (8,696,984)
1,798,788,031 1,116,996,544
20a Retained earnings / movement of profit and loss account of the Bank
Balance on 1 January 1,079,304,405 2,017,875,429
Revaluation reserve - 11,207,022
Addition during the year 2,187,802,036 1,058,974,674
Transfer to statutory reserve (787,560,407) (361,794,935)
Cash dividend (720,544,031) (1,646,957,786)
Issue of bonus shares - -
Balance at 31 December 2018 1,759,002,003 1,079,304,405
Add: Foreign currency translation gain/ (loss) 1,506,866 6,776,926
1,760,508,869 1,086,081,331
20.1 Consolidated retained earnings brought forward from previous year
Prime Bank Limited (note-20.1 a) 358,760,374 382,124,666
Prime Bank Investment Ltd. 66,646,548 (22,307,687)
Prime Bank Securities Ltd. (58,315,338) (58,968,820)
Prime Exchange Co. Pte. Ltd., Singapore (122,277) (225,043)
PBL Exchange (UK) Ltd. (36,245,907) (32,358,465)
PBL Finance (Hong Kong) Limited (438,251) (1,715,278)
330,285,148 266,549,373
Foreign currency translation gain on 1 January 2,429,428 (3,286,152)
332,714,576 263,263,221
20.1.a Retained earnings brought forward from previous year of the Bank
Balance on 1 January 1,079,304,405 2,017,875,429
Transferred from revaluation reserve - 11,207,022
Bonus shares issued - -
Cash dividend paid (720,544,031) (1,646,957,786)
Balance at 31 December 2018 358,760,374 382,124,666
Foreign currency translation gain on 1 January - -
358,760,374 382,124,666

21 Consolidated contingent liabilities

21.1 Acceptances and endorsements
Prime Bank Limited (note-21a.1) 52,944,055,583 49,721,797,256
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
52,944,055,583 49,721,797,256

288 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
21.2 Letters of guarantee
Prime Bank Limited (note-21a.2) 57,826,844,429 72,966,435,302
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
57,826,844,429 72,966,435,302
21.3 Irrevocable Letters of Credit
Prime Bank Limited (note-21a.3) 38,072,832,383 34,112,938,262
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
38,072,832,383 34,112,938,262
21.4 Bills for collection
Prime Bank Limited (note-21a.4) 11,613,890,781 10,766,851,918
Prime Bank Investment Limited - -
Prime Bank Securities Limited - -
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
11,613,890,781 10,766,851,918
160,457,623,176 167,568,022,737
21a Contingent liabilities of the Bank
21a.1 Acceptances and endorsements
Back to back bills (Foreign) 46,572,419,905 45,317,201,322
Back to back bills (Local) 5,444,080,575 3,919,321,492
Back to back bills (EPZ) 927,555,103 485,274,442
52,944,055,583 49,721,797,256
Less: Margin (5,311,288,453) (5,258,292,710)
47,632,767,130 44,463,504,546

21a.2 Letters of guarantee

Letters of guarantee (Local) 20,135,357,878 18,760,045,926
Letters of guarantee (Foreign) 37,691,486,551 54,206,389,376
Foreign counter guarantees - -
57,826,844,429 72,966,435,302
Less: Margin (884,411,352) (956,397,206)
56,942,433,077 72,010,038,095
Money for which the Bank is contingently liable in respect of guarantees given favoring:
Directors or officers - -
Government 991,787 -
Banks and other financial institutions 531,591,860 433,397,375
Others 57,294,260,782 72,533,037,927
57,826,844,429 72,966,435,302
Less: Margin (884,411,352) (956,397,206)
56,942,433,077 72,010,038,095
21a.3 Irrevocable Letters of Credit
Letters of credit (Sight) 9,246,043,120 10,929,931,499
Letters of credit (Deferred) 21,554,689,067 16,474,904,713
Back to back L/C 7,272,100,196 6,708,102,050
38,072,832,383 34,112,938,262
Less: Margin (1,887,199,994) (1,891,208,659)
36,185,632,390 32,221,729,603
21a.4 Bills for collection
Outward bills for collection 11,613,890,781 10,766,851,918
11,613,890,781 10,766,851,918
Less: Margin (118,163,254) (167,063,116)
11,495,727,527 10,599,788,801

160,457,623,176 167,568,022,737

PRIME BANK 289

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
22 Income statement
Income:
Interest, discount and similar income (note-22.1) 20,456,296,447 18,934,118,929
Dividend income (note-25a) 88,098,460 80,601,232
Fees, commission and brokerage (note-22.2) 1,096,753,337 1,189,898,112
Gains less losses arising from dealing in securities - -
Gains less losses arising from investment securities - -
Gains less losses arising from dealing in foreign currencies (note-26a.1) 1,111,821,627 1,054,948,294
Income from non-banking assets - -
Other operating income (note-27a) 887,322,424 764,028,440
Profit less losses on interest rate changes - -
23,640,292,294 22,023,595,007
Expenses:
Interest / profit paid on deposits, borrowings, etc. (note-24a) 10,740,853,932 9,875,345,368
Losses on loans, advances and lease/ investments - -
Administrative expenses (note-22.3) 5,613,864,142 5,193,809,625
Other operating expenses (note-38a) 1,235,964,917 1,304,063,983
Depreciation on banking assets (note-37a) 330,207,267 277,001,356
17,920,890,258 16,650,220,333
5,719,402,036 5,373,374,674

22.1 Interest, discount and similar income

Interest income / Profit on investments (note-23a) 18,390,385,430 14,769,140,556
Interest income on treasury bills / reverse repo / bonds (note-25a) 2,011,547,238 2,312,012,468
Gain on Discounted bond / bills (note-25a) 106,804,316 363,253,515
Gain on sale of shares (note-25a) - 45,767,648
Gain on Govt. security trading (note-25a) 19,149,000 1,558,585,966
Interest on debentures (note-25a) 13,548,918 23,452,633
20,541,434,901 19,072,212,786
Less: Loss on revaluation of security trading (note-25a) 85,138,454 138,093,857
20,456,296,447 18,934,118,929

22.2 Fees, commission and brokerage

Commission (note-26a) 1,096,753,337 1,189,898,112
Settlement fee-PBIL (note-26a) - -
1,096,753,337 1,189,898,112

22.3 Administrative expenses

Salary and allowances (note-28a) 4,158,596,820 3,823,661,492
Rent, taxes, insurance, electricity, etc. (note-29a) 961,285,687 906,160,291
Legal expenses (note-30a) 105,967,130 83,038,972
Postage, stamp, telecommunication, etc. (note-31a) 70,375,029 77,943,186
Stationery, printing, advertisement, etc. (note-32a) 226,156,608 197,559,994
Managing Director's salary and fees (note-33) 10,131,935 11,528,936
Directors' fees (note-34a) 3,663,929 4,495,414
Auditors' fees (note-35a) 1,380,000 1,380,000
Repair of Bank's assets (note-37a) 76,307,004 88,041,340
5,613,864,142 5,193,809,625

23 Consolidated interest income / profit on investment

Prime Bank Limited (note-23a) 18,390,385,430 14,769,140,556
Prime Bank Investment Limited 204,509,907 228,663,893
Prime Bank Securities Limited 35,658,560 38,781,210
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited 125,903,479 113,416,557
18,756,457,376 15,150,002,215
Less: Inter-company transactions 232,138,451 296,647,983
18,524,318,925 14,853,354,233

290 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
23a Interest income / profit on investment of the Bank
Loans (General) / Musharaka 4,354,242,269 2,332,224,449
Loans against trust receipts 862,165,886 545,264,437
Packing credit 30,445,555 30,587,404
House building loan 224,070,370 241,614,388
Lease finance / Izara 403,970,698 371,923,591
Hire purchase 949,356,732 709,280,624
Payment against documents 1,882,601 486,990
Cash credit / Bai-Muajjal 2,414,728,893 2,226,030,916
Secured overdraft 2,353,597,073 1,905,603,343
Consumer credit scheme 1,848,861,555 1,835,855,104
Staff loan 104,080,421 109,528,687
Agricultural Loan 340,099,740 338,435,076
Forced loan 70,841,967 10,906,250
Documentary bills purchased 677,248,968 662,156,052
Interest income from credit card 193,734,429 191,397,526
Other loans and advances / Investments 2,365,197,395 2,167,776,750
Total interest / profit on loans and advances / investments 17,194,524,552 13,679,071,587
Interest / profit on balance with other banks and financial institutions 750,383,658 725,912,786
Interest on call loans 85,698,819 43,802,000
Interest / profit received from foreign banks 359,778,401 320,354,183
18,390,385,430 14,769,140,556
24 Consolidated interest / profit paid on deposits, borrowings, etc.
Prime Bank Limited (note-24a) 10,740,853,932 9,875,345,368
Prime Bank Investment Limited 145,820,201 224,300,298
Prime Bank Securities Limited 19,614,470 27,658,506
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited 67,933,775 55,091,265
10,974,222,378 10,182,395,437
Less: Inter-company transactions 232,317,442 297,102,308
10,741,904,936 9,885,293,129
24a Interest / profit paid on deposits, borrowings, etc. of the Bank
i) Interest / profit paid on deposits:
Savings bank / Mudaraba savings deposits 985,917,450 830,159,718
Special notice deposits 294,835,127 339,861,568
Term deposits / Mudaraba term deposits 4,550,173,262 2,428,032,520
Deposits under scheme 3,448,613,099 5,181,353,430
Foreign currency deposits (note-24a.1) 35,836,332 45,121,211
Others 35,606,726 33,804,682
9,350,981,996 8,858,333,129
ii) Interest / Profit paid for borrowings:
Call deposits 7,437,222 4,422,333
Bangladesh Bank-refinance 6,455,038 (26,055,023)
Local bank accounts 199,811,797 268,018,126
Foreign bank accounts 675,836,098 470,951,256
PBL bond 500,331,781 299,675,546
1,389,871,936 1,017,012,239
10,740,853,932 9,875,345,368
24a.1 Foreign currency deposits
Interest / profit paid on F.C 28,366,790 37,368,651
Interest / profit paid on N.F.C.D 7,469,542 7,752,559
Interest / profit paid on R. F.C.D - -
35,836,332 45,121,211

PRIME BANK 291

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
25 Consolidated investment income
Prime Bank Limited (note-25a) 2,154,009,477 4,245,579,605
Prime Bank Investment Limited 133,478,474 130,852,413
Prime Bank Securities Limited 24,740,918 20,070,001
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
2,312,228,869 4,396,502,019
Less: Inter-company transactions - -
2,312,228,869 4,396,502,019
25a Investment income of the bank
Interest on treasury bills / Reverse repo / bonds 2,011,547,238 2,312,012,468
Interest on debentures / bonds 13,548,918 23,452,633
Gain on discounted bond / bills 106,804,316 363,253,515
Gain on sale of shares - 45,767,648
Gain on Govt. security trading 19,149,000 1,558,585,966
Dividend on shares 88,098,460 80,601,232
2,239,147,930 4,383,673,462
Less: Loss on sale/revaluation of security trading 85,138,454 138,093,857
2,154,009,477 4,245,579,605
26 Consolidated commission, exchange and brokerage
Prime Bank Limited (note-26a) 2,208,574,964 2,244,846,406
Prime Bank Investment Limited 40,974,108 60,231,933
Prime Bank Securities Limited 18,031,770 35,429,471
Prime Exchange Co. Pte. Ltd., Singapore 51,488,074 63,746,807
PBL Exchange (UK) Ltd. 59,965,199 49,251,974
PBL Finance (Hong Kong) Limited - -
2,379,034,115 2,453,506,591
26a Commission, exchange and brokerage of the Bank
Commission on L/Cs 296,691,261 291,934,820
Commission on L/Cs-back to back 379,315,318 404,973,354
Commission on L/Gs 311,633,745 390,140,349
Commission on remittance 72,645,024 81,128,241
Underwriting Commission regarding Treasury bill/ Bond 3,865,587 6,187,413
Commission from sale of BSP /PSP/Others 32,602,402 15,533,935
1,096,753,337 1,189,898,112
Exchange gain (note - 26a.1) - including gain from FC dealings 1,111,821,627 1,054,948,294
Settlement fees / Brokerage - -
2,208,574,964 2,244,846,406
26a.1 Exchange gain
Exchange gain 1,125,880,475 1,060,424,884
Exchange gain-credit card - -
Less: Exchange loss (14,058,848) (5,476,591)
1,111,821,627 1,054,948,294
27 Consolidated other operating income
Prime Bank Limited (note-27a) 887,322,424 764,028,440
Prime Bank Investment Limited 9,995,441 11,451,309
Prime Bank Securities Limited 361,559 205,468
Prime Exchange Co. Pte. Ltd., Singapore 304,944 574,238
PBL Exchange (UK) Ltd. 738,094 -
PBL Finance (Hong Kong) Limited 43,577,694 51,377,641
942,300,155 827,637,096
Less: Inter-company transactions 178,991 454,325
942,121,164 827,182,771

292 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
27a Other operating income of the Bank
Locker rent 13,211,290 9,038,754
Service and other charges 265,614,811 159,395,958
Retail Income 246,950,893 207,702,689
Income from ATM service 84,922,844 81,769,391
Credit card income (note-27a.2) 70,583,165 74,957,222
Postage / telex / SWIFT/ fax 28,175,709 49,819,209
Rebate from foreign Bank outside Bangladesh 74,970,816 61,313,177
Profit on sale of fixed assets 1,890,136 567,374
Miscellaneous earnings (note-27a.1) 101,002,762 119,464,667
887,322,424 764,028,440
27a.1 Miscellaneous earnings include syndication fee, commission from foreign remittance house / bank, notice fee and sale
proceeds of various items, etc.

27a.2 Credit card income

Annual fees 15,373,960 22,069,890
Inter-change fees 27,238,099 26,595,506
Others 27,971,106 26,291,826
70,583,165 74,957,222
28 Consolidated salaries and allowances
Prime Bank Limited (note-28a) 4,158,596,820 3,823,661,492
Prime Bank Investment Limited 59,085,758 49,861,605
Prime Bank Securities Limited 35,565,224 19,882,869
Prime Exchange Co. Pte. Ltd., Singapore 25,407,603 26,676,133
PBL Exchange (UK) Ltd. 22,911,272 19,954,135
PBL Finance (Hong Kong) Limited 26,531,634 26,010,894
4,328,098,311 3,966,047,129
28a Salaries and allowances of the Bank
Basic pay 1,865,562,360 1,745,093,391
Allowances 1,252,394,654 1,180,091,308
Bonus 553,557,883 424,296,530
Bank's contribution to provident fund 177,197,328 167,193,128
Retirement benefits/ Leave encashment 36,632,252 24,868,055
Gratuity 273,252,343 282,119,080
4,158,596,820 3,823,661,492

29 Consolidated rent, taxes, insurance, electricity, etc.

Prime Bank Limited (note-29a) 961,285,687 906,160,291
Prime Bank Investment Limited 24,887,863 16,517,556
Prime Bank Securities Limited 10,352,950 8,664,115
Prime Exchange Co. Pte. Ltd., Singapore 12,980,926 12,861,296
PBL Exchange (UK) Ltd. 11,604,398 10,427,747
PBL Finance (Hong Kong) Limited 9,192,189 8,755,653
1,030,304,013 963,386,657

29a Rent, taxes, insurance, electricity, etc. of the Bank

Rent, rates and taxes 661,251,081 616,511,195
Lease rent 136,204 100,229
Insurance 146,869,324 147,851,952
Power and electricity 153,029,078 141,696,916
961,285,687 906,160,291
30 Consolidated legal expenses
Prime Bank Limited (note-30a) 105,967,130 83,038,972
Prime Bank Investment Limited 876,950 678,500
Prime Bank Securities Limited 466,100 681,206
Prime Exchange Co. Pte. Ltd., Singapore 931,032 997,647
PBL Exchange (UK) Ltd. 2,484,915 2,537,403
PBL Finance (Hong Kong) Limited 21,301 82,939
110,747,428 88,016,667

PRIME BANK 293

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

30a Legal expenses of the Bank

Legal expenses 53,910,650 77,411,730
Other professional charges 52,056,480 5,627,242
105,967,130 83,038,972
31 Consolidated postage, stamp, telecommunication, etc.
Prime Bank Limited (note-31a) 70,375,029 77,943,186
Prime Bank Investment Limited 1,633,225 1,167,069
Prime Bank Securities Limited 4,912 782,939
Prime Exchange Co. Pte. Ltd., Singapore 1,527,366 1,417,168
PBL Exchange (UK) Ltd. 882,991 633,103
PBL Finance (Hong Kong) Limited 5,080,341 5,845,658
79,503,863 87,789,124
31a Postage, stamp, telecommunication, etc. of the Bank
Postage & Courier 290,516 226,773
Telegram, telex, fax and internet 1,725,274 3,279,800
Data communication 32,198,709 33,840,555
Telephone - office 35,855,655 40,161,267
Telephone - residence 304,874 434,792
70,375,029 77,943,186
32 Consolidated stationery, printing and advertisements, etc.
Prime Bank Limited (note-32a) 226,156,608 197,559,994
Prime Bank Investment Limited 1,943,607 1,388,901
Prime Bank Securities Limited 718,191 320,813
Prime Exchange Co. Pte. Ltd., Singapore 1,861,453 2,091,687
PBL Exchange (UK) Ltd. 550,087 604,406
PBL Finance (Hong Kong) Limited 354,957 338,247
231,584,903 202,304,048
32a Stationery, printing and advertisements, etc. of the Bank
Office and security stationery 53,943,014 54,069,356
Computer consumable stationery 100,839,578 72,559,959
Publicity and advertisement 71,374,016 70,930,679
226,156,608 197,559,994
33 Managing Director's salary and fees
Basic salary 6,029,032 7,199,033
Bonus 1,100,000 1,210,000
House rent allowance 1,200,000 1,200,000
Bank's contribution to provident fund 602,903 719,903
Utility allowance 360,000 360,000
House maintenance allowance 480,000 480,000
Others 360,000 360,000
10,131,935 11,528,936
34 Consolidated Directors' fees
Prime Bank Limited (note-34a) 3,663,929 4,495,414
Prime Bank Investment Limited 496,800 504,850
Prime Bank Securities Limited 340,400 200,100
Prime Exchange Co. Pte. Ltd., Singapore - -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
4,501,129 5,200,364
34a Directors' fees of the Bank
Meeting fees 1,936,000 2,656,000
Other benefits 1,727,929 1,839,414
3,663,929 4,495,414

294 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
As per BRPD circular letter no. 11 dated 04 October 2015 Taka 8,000/- has been paid as Honorarium to the Directors, for
attending per Board Meeting, Board Audit Committee Meeting and Risk Management Committee Meeting held during
the year 2018.

35 Consolidated Auditors' fees

Prime Bank Limited (note-35a) 1,380,000 1,380,000
Prime Bank Investment Limited 201,250 115,000
Prime Bank Securities Limited 172,500 115,000
Prime Exchange Co. Pte. Ltd., Singapore 245,930 232,132
PBL Exchange (UK) Ltd. 502,949 478,077
PBL Finance (Hong Kong) Limited 298,221 238,450
2,800,850 2,558,659
35a Auditors' fees of the Bank
External Audit fee 1,380,000 1,380,000
1,380,000 1,380,000

36 Charges on loan losses

Loan -written off - -
Interest waived - -
- -
37 Consolidated depreciation and repair of Bank's assets
Prime Bank Limited (note-37a) 406,514,271 365,042,696
Prime Bank Investment Limited 7,663,210 3,793,896
Prime Bank Securities Limited 2,553,230 1,253,339
Prime Exchange Co. Pte. Ltd., Singapore 2,570,717 2,238,221
PBL Exchange (UK) Ltd. 2,846,559 2,814,601
PBL Finance (Hong Kong) Limited 113,750 344,436
422,261,737 375,487,188

37a Depreciation and repair of Bank's assets

Depreciation - (see annexure-C for detail)

Fixed assets 277,008,743 256,178,233

Leased assets -
277,008,743 256,178,233
Amortization-(see annexure-C for detail)
Software-core banking 49,878,083 17,823,268
Software-ATM 3,320,441 2,999,856
53,198,524 20,823,123
Repairs
Building 13,000,362 16,306,568
Furniture and fixtures 12,453,873 18,447,887
Office equipment 36,999,278 38,397,331
Bank's vehicles 11,172,735 10,229,300
Maintenance 2,680,757 4,660,253
76,307,004 88,041,340
406,514,271 365,042,696
38 Consolidated other expenses
Prime Bank Limited (note-38a) 1,235,964,917 1,304,063,983
Prime Bank Investment Limited 31,676,438 21,662,760
Prime Bank Securities Limited 97,704,116 9,586,399
Prime Exchange Co. Pte. Ltd., Singapore 4,761,651 6,956,312
PBL Exchange (UK) Ltd. 13,390,192 9,698,779
PBL Finance (Hong Kong) Limited 1,932,365 1,749,271
1,385,429,678 1,353,717,503

PRIME BANK 295

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017
38a Other expenses of the Bank
Security and cleaning 181,040,250 190,730,775
Entertainment 29,185,987 39,679,632
Car expenses 184,346,159 187,506,794
ATM expenses (note-38a.1) 188,506,382 151,802,042
Retail expenses (note-38a.2) 11,765,091 49,001,212
Books, magazines and newspapers, etc. 1,703,388 1,797,923
Liveries and uniforms 1,470,846 2,077,762
Medical expenses 110,718 107,511
Bank charges and commission paid 9,967,835 9,238,599
Loss on sale of fixed assets 1,157,475 75,138,098
House furnishing expenses 3,183,630 2,965,506
Subscription to institutions 20,516,835 11,266,286
Donations 84,797,444 140,540,489
Sponsorship 27,775,451 27,356,812
Prime Bank Cricket Club 46,288,395 65,049,148
Traveling expenses 29,074,473 49,671,722
Corporate action fees 3,576,528 1,450
Local conveyance, labor, etc. 22,057,885 20,640,566
Business development 42,977,446 47,801,448
Training and internship 13,362,160 20,670,880
Remittance charges 9,525,412 10,092,716
Cash reward to branches 14,348,747 2,547,000
Laundry, cleaning and photographs, etc. 6,660,918 6,266,013
Credit card expenses 45,911,946 39,193,078
Consolidated salary (staff) 33,252,822 32,745,626
Annual General Meeting 2,747,900 3,179,500
Exgratia 16,536,777 16,638,380
Welfare fund 7,875,604 3,617,950
Prime Bank Foundation 157,512,081 72,358,987
Miscellaneous expenses 38,728,332 24,380,079
1,235,964,917 1,304,063,983

38a.1 ATM expenses

NPSB-Issuing Commission 4,165,090 4,236,325
ATM Cash Management Service 17,604,696 15,742,196
VISA/Master Card Service 26,371,223 19,396,708
Salary & Allowances 54,172,124 51,802,313
Rent Rates & Taxes 22,430,568 23,660,328
Insurance & Utility Expenses 9,130,078 9,347,535
Internet/Link Charge 2,530,547 3,048,040
Rep Renovation & Maintenance 37,645,021 22,643,999
Soft. Maintenance Fee - 30,000
Computer/Printing Expense 547,500 221,352
Office Stationery and others 13,909,534 1,673,246
188,506,382 151,802,042

38a.2 Retail expenses

DSE Salary 7,065,454 27,606,727
Service charge 4,699,637 21,394,485
11,765,091 49,001,212

296 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

39 Consolidated provision for loans, investments, off balance sheet exposure & other assets
Provision for bad and doubtful loans and advances/investments-PBL (note-39a) 2,690,300,000 2,076,000,000
Provision for unclassified loans and advances/investments-PBL (note-39a) (936,000,000) 1,056,000,000
Provision for bad and doubtful loans and advances (OBU) (note-39a) 10,700,000 72,500,000
Provision for unclassified loans and advances/investments (OBU) (note-39a) 16,500,000 51,000,000
Provision for off-balance sheet exposure-PBL (note-39a) (165,000,000) 292,450,000
Provision for diminution in value of investments-PBL (note-39a) 18,700,000 (60,516,500)
Provision for diminution in value of investments-PBIL 23,267,108 (83,335,464)
Provision for impairment of client margin loan-PBIL (27,964,899) 95,843,663
Provision for impairement loss for investment (PBSL)-PBIL 4,697,792 2,948,441
Provision for diminution in value of investments-PBSL - 2,175,241
Provision for impairment of client margin loan-PBSL - 10,685,091
Provision for impairment loss for investment in subsidiaries (note-39a) 86,100,000 (15,000,000)
Provision for climate risk fund (note-39a) 2,000,000 3,000,000
Provision for Good Borrower rebate (note-39a) 5,000,000 5,000,000
Provision for other assets (note-39a) 53,300,000 83,966,500
1,781,600,001 3,592,716,972
As per BSEC instruction circular reference # BSEC/Mukhopatro (3rd Khondo)/2011/06 dated July 02, 2018 and BSEC/
CMRRCD/2009-193/212 dated December 10, 2018 , provision has been made by Prime Bank Securities Limited and Prime
Bank Investment Limited against diminution in value of investments and impairment of client margin loan.
39a Provision for loans, investments, off balance sheet exposure & other assets of the Bank
Provision for bad and doubtful loans and advances / investments 2,690,300,000 2,076,000,000
Provision for unclassified loans and advances / investments (936,000,000) 1,056,000,000
Provision for bad and doubtful loans and advances (OBU) 10,700,000 72,500,000
Provision for unclassified loans and advances / investments (OBU) 16,500,000 51,000,000
Provision for off-balance sheet exposure (165,000,000) 292,450,000
Provision for diminution in value of investments 18,700,000 (60,516,500)
Provision for impairment loss for investment in subsidiaries 86,100,000 (15,000,000)
Provision for climate risk fund 2,000,000 3,000,000
Provision for Good Borrower rebate 5,000,000 5,000,000
Provision for other assets 53,300,000 83,966,500
1,781,600,000 3,564,400,000
40 Consolidated tax expenses
Current tax
Prime Bank Limited (note-40a) 1,750,000,000 750,000,000
Prime Bank Investment Limited 9,876,612 7,035,706
Prime Bank Securities Limited 6,357,815 11,831,212
Prime Exchange Co. Pte. Ltd., Singapore - 729,998
PBL Exchange (UK) Ltd. 1,471,288 857,793
PBL Finance (Hong Kong) Limited 7,468,686 10,757,898
1,775,174,401 781,212,608
Deferred tax
Prime Bank Limited (note-40a) - -
Prime Bank Investment Limited (536,563) (237,468)
Prime Bank Securities Limited 602,979 (4,162)
Prime Exchange Co. Pte. Ltd., Singapore (40,394) -
PBL Exchange (UK) Ltd. - -
PBL Finance (Hong Kong) Limited - -
26,022 (241,630)
1,775,200,423 780,970,978
40a Tax expenses of the Bank
Current tax 1,750,000,000 750,000,000
Deferred tax - -
1,750,000,000 750,000,000
41 Consolidated receipts from other operating activities
Prime Bank Limited (note-41a) 926,247,149 2,583,008,785
Prime Bank Investment Limited 143,473,915 99,224,798
Prime Bank Securities Limited 25,102,477 8,032,443
Prime Exchange Co. Pte. Ltd., Singapore 304,944 574,238
PBL Exchange (UK) Ltd. 738,094 -
PBL Finance (Hong Kong) Limited 43,577,694 51,377,641
1,139,444,273 2,742,217,905

PRIME BANK 297

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

41a Receipts from other operating activities of the Bank

Locker rent 13,211,290 9,038,754
Service and other charges 265,614,811 175,479,365
Retail Income 246,950,893 207,702,689
Income from ATM services 84,922,844 81,769,391
Credit card income 70,583,165 48,908,262
Postage / Telex / Fax / SWIFT charge recoveries 28,175,709 49,819,209
Rebate from foreign Bank outside Bangladesh 74,970,816 61,313,177
Gain from sale of treasury bond / shares 40,814,862 1,829,513,273
Miscellaneous earnings 101,002,762 119,464,666
926,247,149 2,583,008,785
42 Consolidated payments for other operating activities
Prime Bank Limited (note-42a) 1,888,295,683 1,984,631,152
Prime Bank Investment Limited 59,772,526 40,645,735
Prime Bank Securities Limited 109,040,978 20,029,759
Prime Exchange Co. Pte. Ltd., Singapore 20,446,904 22,464,555
PBL Exchange (UK) Ltd. 28,865,444 23,775,109
PBL Finance (Hong Kong) Limited 16,524,418 16,671,971
2,122,945,953 2,108,218,281
42a Payments for other operating activities of the Bank
Rent, rates and taxes 961,285,687 906,160,291
Legal expenses 105,967,130 83,038,972
Postage and communication charges, etc. 70,375,029 77,943,186
Directors' fees 3,663,929 4,495,414
Other expenses 747,003,908 912,993,289
1,888,295,683 1,984,631,152
43 (Increase) / decrease of consolidated other assets
Prime Bank Limited (note-43a) 92,178,274 6,944,608,143
Inter-company capital - -
Prime Bank Investment Limited 4,462,322 (26,559,787)
Prime Bank Securities Limited (45,501,891) (9,949,810)
Prime Exchange Co. Pte. Ltd., Singapore 59,092 501,529
PBL Exchange (UK) Ltd. 518,010 (797,181)
PBL Finance (Hong Kong) Limited (6,352,642) (24,000,895)
45,363,165 6,883,801,999
43a (Increase)/ decrease of other assets of the Bank
T & T bonds 20,645,191,161 21,353,998,956
Stationery and stamps 50,406,794 38,027,828
Advance deposits and advance rent 284,080,601 355,000,715
Branch adjustment account 18,517,480 18,516,520
Suspense account 244,727,208 283,396,487
Encashment of PSP / BSP 997,709,958 457,207,387
Credit card 96,028,502 92,911,810
Sundry assets 4,069,789,153 3,899,569,427
26,406,450,857 26,498,629,131
92,178,274 6,944,608,143
44 Increase / (decrease) of consolidated other liabilities
Prime Bank Limited (note-44a) (678,988,274) 222,731,088
Prime Bank Investment Limited 26,609,469 13,628,159
Prime Bank Securities Limited 68,559,602 20,999,791
Prime Exchange Co. Pte. Ltd., Singapore (16,371,122) 41,575,504
PBL Exchange (UK) Ltd. (20,725,084) 12,972,568
PBL Finance (Hong Kong) Limited (19,160,550) 3,172,624
(640,075,960) 315,079,735

44a Increase / (decrease) of other liabilities of the Bank

Expenditure and other payables 147,779,820 142,722,657
Provision for bonus 8,593,459 1,178,887
Unearned commission on bank guarantee 7,820,643 32,536,560
Interest suspense account 4,026,761,377 4,693,505,469
4,190,955,299 4,869,943,573
(678,988,274) 222,731,088

298 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
Amount in Taka
2018 2017

45 Consolidated earnings per share (CEPS)

Net profit after tax (Numerator) 2,253,633,866 1,215,528,259
Number of Ordinary shares outstanding (Denominator) 1,132,283,477 1,132,283,477
Consolidated earnings per share (CEPS) 1.99 1.07

Earnings per share has been calculated in accordance with IAS - 33: "Earnings Per Share (EPS)". Previous year's figures
have been adjusted for the issue of bonus shares during the year.

45a Earnings per share (EPS) of the Bank

Net profit after tax (Numerator) 2,187,802,036 1,058,974,674
Number of Ordinary shares outstanding (Denominator) 1,132,283,477 1,132,283,477
Earnings per share (EPS) 1.93 0.94

Earnings per share has been calculated in accordance with IAS - 33: "Earnings Per Share (EPS)". Previous year's figures
have been adjusted for the issue of bonus shares during the year.

46 Number of employees of the Bank

The number of employees engaged for the whole year or part thereof who received a total remuneration of Tk. 36,000
p.a. or above were 3,212.

47 Assets pledged as security for liabilities of the Bank

Treasury bills & bonds to Bangladesh Bank for Repo - -

48 Disclosure on Audit Committee of the Bank

a) Particulars of Audit Committee
Audit Committee (AC) of the Board was formed and its roles and responsibilities were defined in line with Corporate
Governance Code issued by Bangladesh Securities and Exchange Commission (BSEC) vide BSEC notification
BSEC/CMRRCD/2006-158/Admin/80 dated June 03, 2018 and BRPD Circular no.11 dated October 27, 2013 issued by
Bangladesh Bank. The current Audit Committee (AC) was re-constitued by the Board of Directors of the Bank in its
463rd meeting held on 11 May 2017 Composition and Qualification of the Audit Committee mention as stated below:

Status with
Name Status with bank Educational Qualification
committee

Mr. Shamsuddin Ahmad, Ph.D Independent Chairman Ph.D (Economic Development),

Director University of Hawaii, USA
Mr. Md. Nader Khan Director Member [Link]
Dr. G. M. Khurshid Alam Independent Member Ph.D (Economic), Boston
Director University, USA
Mr. M Farhad Hussain FCA Independent Member GEC "A" level from Greenmore
Director College, Birmingham, UK.
Accountancy Foundation
Course, Institute of Chartered
Accountants of England and
Wales.

PRIME BANK 299

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018
b) Meetings held by the Audit Committee during the year by date:

Sl No Meeting No Held on
1 134 th
February 27, 2018
2 135th March 27, 2018
3 136th April 9, 2018
4 137 th
May 10, 2018
5 138th June 3, 2018
6 139 th
July 25, 2018
7 140th September 19, 2018
8 141st
October 25, 2018
9 142nd November 27, 2018
10 143 rd
December 20, 2018

c) Activities of the Committee during the year 2018:

Financial Reporting:
• Reviewed Draft Annual Financial statements for the year ended December 31, 2017.
• Reviewed Un-audited quarterly (Q1) financial statements of the Bank as on March 31, 2018.
• Reviewed Un-audited quarterly (Q2) financial statements of the Bank as on 30 June, 2018.
• Reviewed Un-audited quarterly (Q3) financial statements of the Bank as on 30 Sep, 2018.
Internal Control:
• Reviewed self-assessment report on Anti Fraud Internal Controls (SAAFIC) for the half year ended on December
31, 2017.

• Reviewed self-assessment report on Anti Fraud Internal Controls (SAAFIC) for the half year ended on June 30, 2018.
• Reviewed/Evaluated overall effectiveness of the Internal Control Systems and Policies & procedures of the Bank
and recommended it to the Board for endorsement.
• Reviewed of internal Control & Compliance Manual of Prime Bank Limited
Internal Audit:
• Reviewed and approved Audit Plan for the year 2018
• Reviewed major Audit findings and observations on Information Security Division conducted by IT Audit
• Reviewed Draft Internal Audit Manual
• Reviewed & recommended Draft Internal Audit Charter to the Board for approval
• Reviewed Summary Report of the Audit Findings for the year-2017
• Approved the Annual Audit Plan – 2019

• Approved 03 years (2018-2020) Departmental Strategic Planning of the Internal Audit & Inspection division and
recommended to the Board
• Reviewed revision of Internal Audit Charter of the Audit & Inspection Division

External Audit& Auditors:

• Met with the External Auditors in the 136th AC meeting held on 09.04.2018: Representatives of the Audit Firms
namely M/S. Hoda Vasi Chowdhury & Co and Aziz Halim Khair Choudhury on invitation joined the meeting for
sharing their observations/ findings upon completion of the Auditing on the bank’s operational activities and
financials for the year 2017.
• Scrutinized applications of the aspiring External Auditors of the Bank for the year 2018 and recommending to the
Board for consideration at the AGM for final appointment.
• Inspections (Internal& BB):
• Reviewed Inspection Report on the documentation status of different customers of the Bank (branch-wise)
• Reviewed Compliance status of Internal Audit observations and Bangladesh Bank Inspection as on 31.12.2017.
• Reviewed Compliance status of Internal Audit observations and Bangladesh Bank Inspection as on 31.03.2018.

300 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018
• Reviewed Compliance status of Internal Audit observations and Bangladesh Bank Inspection as on 30.06.2018.
• Reviewed Compliance status of Internal Audit observations and Bangladesh Bank Inspection as on 30.09.2018.

Periodical Reporting:
• Reviewed quarterly status report on Complaints received by Service Quality and Central Complaint Management
Cell
Compliance Functions:
• Reviewed Compliance Policy of the Bank
• Reviewed Compliance of the Minutes of the respective Audit Committee Meetings
• Reviewed outstanding compliance status of the Board and EC decisions

Other functions:
• Suggested training for the officials through setting up an ideal Training Academy to suit the purpose and
requirement of the Bank
• Annual Integrated Report on the Health of Prime Bank Limited for the year 2017
• Reviewed status of Deferral(s) given to customers for execution of documentation and other purposes (up to
December 31,2017)
• Reviewed status of Deferral(s) given to customers for execution of documentation and other purposes (up to
March 31,2018)
• Reviewed status of Deferral(s) given to customers for execution of documentation and other purposes (up to June
30,2018)
• Reviewed status of Deferral(s) given to customers for execution of documentation and other purposes (up to Sep
30,2018)
• Suggested recirculation of the ‘Whistleblower Protection Policy’ of the Bank.

49 Related Party Disclosures of the Bank

i) Names of the Directors together with a list of entities in which they have Interest Annexure-E

ii) Significant contracts where Bank is a party and wherein Directors have interest during the year 2018

(Figure in Taka)
Relationship with Approve Outstanding
Name of Directors Nature of transaction
the Bank limit amount
Azam J Chowdhury Chairman Credit Card 1,000,000 10,949
Mr. Imran Khan Vice Chairman Credit Card 1,000,000 221,419
[Link] Khan Director Credit Card 500,000 75,692
Mrs. Marina Yasmin Chowdhury Director Credit Card 1,000,000 43,520
Mrs. Nasim Anwar Hossain Director Credit Card 500,000 122,208
Mrs. Salma Huq Director Credit Card 500,000 59,382
[Link] Sikder Director Credit Card 500,000 29,783
Mr. Tarique Ekramul Haque Director Credit Card 500,000 216,996
Quazi Sirazul Islam Director Credit Card 500,000 865
Mr. Waheed Murad Jamil Director Credit Card 500,000 164,506
Dr. G. M. Khurshid Alam Independent Director Credit Card 500,000 309,356

iii) Shares issued to Directors and Executives without consideration or exercisable at a discount Nil

PRIME BANK 301

ANNUAL REPORT 2018

Notes to the Financial Statements

as at and for the year ended 31 December 2018

iv) Related party transactions

Nature of party/ contract Relationship Amount

Lease agreement Common Director 2,475,168
Lease agreement Common Director 322,920
Lease agreement Common Director 2,054,688
Lease agreement Common Director 60,000
Lease agreement Common Director 738,300

Lease agreement Common Director 4,788,540

Lease agreement Common Director 2,760,000

v) Lending policies in respect of related party

a) Amount of transaction regarding loans and advances, deposits, guarantees and Nil
commitment as on 31.12.2018
b) Amount of transactions regarding principal items of deposits, expenses and commission Nil
c) Amount of provision against loans and advances given to related party Nil
d) Amount of guarantees and commitments arising from other off-balance sheet Nil
exposures

vi) Disclosure of transaction regarding Directors and their related concerns Nil

vii) Business other than banking business with any relation concern to the Directors as per Section 18(2) of the
Bank Companies Act, 1991.

a) Lease agreement made with the Sponsor Director & Independent Director

Name of Director and related

Nature of contract Branch Name Remarks
by
Jubilee Road Mr. Md. Nader Khan Director & Lease period: 01.08.2015
Lease agreement owner of the premises to 31.07.2021
Branch
ATM Booth Mr. Md. Nader Khan Director & Lease period: 12.10.2011
Lease agreement owner of the premises
Jubilee Road Branch to 11.10.2021
Mr. Md. Nader Khan Director & Lease period: 13.12.2014
Lease agreement Store Room (Regional) owner of the premises to 12.12.2020
Mr. Md. Nader Khan Director & Lease period: 28.11.2017
Lease agreement ATM Booth owner of the premises to 27.11.2027
Mrs. Marina Yasmin Chowdhury Lease period: 01.09.2013
Lease agreement Kulaura Branch Director & owner of the premises to 31.08.2019
Quazi Sirajul Islam Lease period: 10.07.2016
Lease agreement Head Office Director & owner of the premises to 09.07.2022
Mr. Azam J Chowdhury & Mrs. Lease period: 01.01.2017
Lease agreement Halishahar Branch Marina Yasmin Chowdhury to 31.12.2025
Director & owner of the premises

b) Service receiving companies where the Directors interest subsisted during the year

Name of party Relationship Nature of transaction Amount

- - - -
viii) Investment in the Securities of Directors and their related concern Nil

302 PRIME BANK

Notes to the Financial Statements
as at and for the year ended 31 December 2018

ix) Business with subsidiary

Name of party Relationship Nature of transaction Outstanding Amount

Prime Bank Investment Limited Subsidiary Company OD Facilities 3,026,635,480
Prime Bank Securities Limited Subsidiary Company OD Facilities 393,452,756
Prime Bank Securities Limited Subsidiary Company Share Trading 184,242,731
PBL Finance (Hong Kong) Ltd Subsidiary Company Term Placement 2,214,960,000

50 Workers Participation Fund and Welfare Fund

SRO-336-AIN/2010 dated 5-10-2010 issued by the ‘Ministry of Labour and Employment’ declares the status of business of
certain institutions and companies along with Bank & insurance companies as “Industrial Undertakings” for the purposes
of Chapter-XV of the Bangladesh Labour Act, 2006 (as amended up to 2013) which deals with the workers’ participation in
company’s profit by way of ‘Workers Participation Fund’ and ‘Welfare Fund’. This Act requires the “Industrial Undertakings”
to maintain provision for workers’ profit participation fund @ 5% on net profit. Since this requirement contradicts with the
‘Section 11’ of the ‘Bank Companies Act 1991 (as amended up to 2013)’, Banks in Bangladesh took up the issue collectively
and sought opinion from ‘Association of Bankers Bangladesh Limited (ABB)’ on the same. ABB wrote a letter to the ‘Ministry
of Finance’ of Government of People’s Republic of Bangladesh on 09.03.2016 to draw attention of the honorable Finance
Minister regarding relevance and applicability of Chapter XV of the Bangladesh Labour Act, 2006 (as amended up to 2013)
for Bank Companies and to obtain a direction on the issue. The ‘Ministry of Finance’ revealed their opinion that WPPF
should not be relevant for Bank Companies and therefore, it should not be applied there. They also sought for an opinion
on this issue from Bangladesh Bank. Subsequently, Bangladesh Bank agreed on all the logics and legal opinion collected by
the ABB and expressed their consensus with them on 29.11.2016. In this backdrop, the ‘Ministry of Finance’ has given their
instruction, vide letter no. 53.00.0000.[Link].130 dated 14.02.2017, for not applying Chapter XV of the Bangladesh
Labour Act, 2006 (as amended up to 2013) in Bank Companies. Therefore, no provision in this regard has been made in the
financial statements for the year ended on December 31, 2018.

51 Events after the Reporting Period

The Board of Directors in its 489th meeting recommend to payment of 12.50% (Twelve and half percent) Cash dividend
for the year 2018. The total amount of dividend is Taka 1,415,354,346 (One hundred forty one crore fifty three lac fifty four
thousand three hundred forty six) only.

Chairman Director Director Managing Director

PRIME BANK 303

304
Balance with Other Banks-Outside Bangladesh (Nostro Account)
of Prime Bank Limited as at 31 December 2018

PRIME BANK
ANNUAL REPORT 2018

Annexure-A
Account 2018 2017
Name of the Bank
type Currency type FC amount Exchange rate Equivalent Taka FC amount Exchange rate Equivalent Taka
AB Bank Ltd., Mumbai, India CD US$ 2,527,386 83.90 212,047,667 731,390 82.70 60,485,930
Bank of Bhutan, Bhutan CD US$ 10,066 83.90 844,572 27,475 82.70 2,272,171
Bank of Tokyo Mitsubishi, Japan CD JP¥ 20,637,091 0.75 15,545,921 17,846,189 0.73 13,095,533
SMBC, Tokyo, Japan CD JP¥ 21,711,463 0.75 16,355,245 43,007,681 0.73 31,559,036
Citibank N.A., London , UK CD EURO 97,833 95.23 9,317,124 66,630 99.21 6,610,183
Citibank N.A., New York, USA CD US$ 22,350,949 83.90 1,875,244,629 10,417,262 82.70 861,507,600
Commerz Bank AG, Frankfurt , Germany CD EURO 965,207 95.23 91,921,420 332,493 99.21 32,985,576
Commerz Bank AG, Frankfurt , Germany CD US$ 262,403 83.90 22,015,572 359,091 82.70 29,696,789
Commonwealth Bank of Australia, Australia CD AUD - - - 81,066 64.51 5,229,892
Habib American Bank, New York, USA CD US$ 1,180,083 83.90 99,008,962 224,637 82.70 18,577,471
Habib Metropolitan Bank, Karachi CD US$ 39,735 83.90 3,333,740 492,169 82.70 40,702,396
HDFC Bank Limited, Kolkata, India CD US$ 695,543 83.90 58,356,086 560,075 82.70 46,318,239
ICICI Bank Ltd, Mumbai, India CD US$ 177,946 83.90 14,929,683 679,119 82.70 56,163,133
Intesa Sanpaolo SPA, Milano, Italy CD EURO 44,979 95.23 4,283,613 3,977 99.21 394,565
J. P. Morgan Chase Bank, New York CD US$ 1,211,270 83.90 101,625,582 129,364 82.70 10,698,366
Korea Exchange Bank Seoul CD US$ 97,377 83.90 8,169,962 45,717 82.70 3,780,822
Kookmin Bank, Seoul, Southkorea CD US$ 1,002 83.90 84,068 - - -
Mashreq Bank PSC, New York, USA CD US$ 1,225,686 83.90 102,835,022 203,478 82.70 16,827,636
Mashreq Bank PSC, Mumbai, India CD US$ 702,039 83.90 58,901,096 836,179 82.70 69,152,037
National Westminister Bank, London, UK CD GBP 676,826 105.98 71,731,747 583,867 111.74 65,243,763
The National Commercial Bank, Jeddah CD SAR 1,978,238 22.36 44,234,984 484,165 22.05 10,676,322
Nepal Bangladesh Bank Ltd., Kathmandu, Nepal CD US$ 15,333 83.90 1,286,480 20,486 82.70 1,694,191
People’s Bank, Colombo, Sri Lanka CD US$ 230,348 83.90 19,326,191 244,086 82.70 20,185,925
Skandinaviska Enskilda, Banken, Sweden CD SEK 434,577 9.22 4,004,757 209,867 10.07 2,112,730
Sonali Bank, Kolkata, India CD US$ 303,851 83.90 25,493,074 315,417 82.70 26,084,971
Standard Chartered Bank, Kolkata, India CD US$ 606,142 83.90 50,855,337 898,159 82.70 74,277,724
Standard Chartered Bank, New York, USA CD US$ 730,730 83.90 61,308,210 12,251,464 82.70 1,013,196,068
Standard Chartered Bank, Singapore CD SG$ 2,001,263 61.14 122,362,627 1,402,731 61.82 86,720,335
Standard Chartered Bank, Frankfurt, Germany CD EURO 82,150 95.23 7,823,551 33,735 99.21 3,346,778
Unicredito Italiano SPA, Milano, Italy CD EURO 381,822 95.23 36,362,801 50,349 99.21 4,995,003
Wells Fargo Bank N. A., New York CD US$ 945,307 83.90 79,311,246 960,968 82.70 79,472,060
Zuercher Kantonal Bank, Zurich CD CHF 139,053 84.24 11,713,433 92,836 84.87 7,879,253
Total 3,230,634,401 2,701,942,497
Reconciliation Statement of Balance with Bangladesh Bank
As at 31 December 2018
Annexure-A-1
1) Balance with Bangladesh Bank-Taka account of the Bank

Detail Total
Balance as per Bank ledger 11,860,895,553

Unresponded debit entries in

Bangladesh Bank statement 55,843,735
Prime Bank’s ledger 7,221,539 63,065,274
11,797,830,279
Unresponded credit entries in
Bangladesh Bank statement 10,335,993
Prime Bank’s ledger 56,100 10,392,093
Balance as per Bangladesh Bank statement 11,808,222,372

2) Balance with Bangladesh Bank-Foreign currency of the Bank

Balance as per Bank ledger 1,980,765,411

Unresponded debit entries in

Bangladesh Bank statement 280,035,332
Prime Bank’s ledger 20,915,221 300,950,553
1,679,814,857
Unresponded credit entries in
Bangladesh Bank statement 562,620,666
Prime Bank’s ledger 574,640,692 1,137,261,358
Balance as per Bangladesh Bank statement 2,817,076,215

PRIME BANK 305

ANNUAL REPORT 2018

Investment in Shares of the Bank

As at 31 December 2018
Annexure-B

Quoted
Total market
SL. Face No of Cost / present Average rate per
Name of the Company value as at
No. Value shares value of holdings cost share as on
31.12.18
31.12.18

Quoted:

1 DESCO 10 329,700 19,262,511 58.42 40.40 13,319,880

2 National Bank Ltd. 10 1,870,176 27,970,098 14.96 9.30 17,392,637
3 Uttara Bank Ltd. 10 968,000 37,009,980 38.23 28.50 27,588,000
4 Activefine 10 271,882 8,234,068 30.29 28.20 7,667,072
5 KPCL 10 79,112 8,156,284 103.10 59.30 4,691,342
6 UPGDCL 10 40,128 11,849,780 295.30 290.70 11,665,210
Sub Total 112,482,721 82,324,140
Unquoted:

1 Central Depository 10 5,711,804 15,694,430 2.75 - 15,694,430

Bangladesh Ltd.
2 Investment in SWIFT 4,184,430 - - 4,184,430
3 Market Stabilization Fund 5,000,000 5,000,000
4 Star Ceramics Preference Share 20,167,917 20,167,917

5 Sharemoney Deposit 240,000,000 240,000,000

Sub Total 285,046,776 285,046,776
Total 397,529,498 367,370,917

306 PRIME BANK

 Schedule of Fixed Assets of the Bank
as at 31 December 2018
Annexure-C
COST DEPRECIATION
Disposals/
Additions Opening Disposals/ Net book value
Particulars Opening balance adjustments Total balance Charge for Total balance as
during the balance as on adjustments as at 31.12.18
as on 01.01.18 during the as at 31.12.18 the year at 31.12.18
year 01.01.18 during the year
year
Taka Taka Taka Taka Taka Taka Taka Taka Taka
Land 3,719,444,788 - - 3,719,444,788 - - - - 3,719,444,788
Building 1,725,237,651 135,920,050 - 1,861,157,701 153,802,458 34,425,301 - 188,227,759 1,672,929,942
Furniture and fixtures 986,584,385 106,230,940 2,473,225 1,090,342,100 536,428,586 55,278,238 1,772,780 589,934,044 500,408,056
Office equipment and machinery 2,004,869,646 347,799,052 9,611,049 2,343,057,650 1,480,785,293 170,770,461 8,615,402 1,642,940,352 700,117,298
Vehicles 424,505,118 24,194,641 4,961,752 443,738,007 366,322,737 16,306,126 4,961,751 377,667,112 66,070,895
Library books 1,820,037 - - 1,820,037 1,591,419 228,618 - 1,820,037 -
Sub-total 8,862,461,626 614,144,682 17,046,026 9,459,560,283 2,538,930,494 277,008,743 15,349,933 2,800,589,304 6,658,970,979

Software-Amortization
Software-Core Banking 353,144,552 212,379,527 - 565,524,078 244,641,610 49,878,083 - 294,519,693 271,004,385
Software-ATM 43,212,614 14,680,000 - 57,892,614 41,199,017 3,320,441 - 44,519,457 13,373,156
Sub-total 396,357,165 227,059,527 - 623,416,692 285,840,626 53,198,524 - 339,039,150 284,377,542
As at 31 December 2018 9,258,818,792 841,204,209 17,046,026 10,082,976,975 2,824,771,120 330,207,267 15,349,933 3,139,628,455 6,943,348,521
As at 31 December 2017 9,168,744,172 285,131,076 195,056,456 9,258,818,792 2,579,061,763 277,001,356 31,291,999 2,824,771,120 6,434,047,671

PRIME BANK
307
 Statement of Tax Position of the Bank

308
as at 31 December 2018
Annexure-D

PRIME BANK
ANNUAL REPORT 2018

Excess/ Excess/
Tax provision as Tax as per
Accounting Assessment Tax paid (shortage) (shortage)
per accounts assessment order Present status
year year of provision of tax paid
Taka Taka Taka Taka Taka
1995 to 2000 - 411,652 411,652 24,947,215 - 24,947,215 Assessment year 1999-2000 is final but the Tax Authority referred
it to High Court Division.
2001 2002-2003 268,743,630 268,743,630 247,455,962 - (21,287,668) Completed
2002 2003-2004 312,590,120 312,590,120 337,138,495 - 24,548,375 Completed
2003 2004-2005 348,903,919 348,903,919 342,757,186 - (6,146,733) Completed
2004 2005-2006 482,287,856 482,287,856 438,405,004 - (43,882,852) Completed
2005 2006-2007 557,500,000 346,638,537 470,158,263 210,861,463 123,519,726 Completed
2006 2007-2008 592,362,815 481,412,744 737,606,389 110,950,071 256,193,645 Completed
2007 2008-2009 1,015,000,000 1,076,933,945 1,019,804,475 (61,933,945) (57,129,470) Completed
2008 2009-2010 1,012,449,724 - 915,627,471 - - Completed
2009 2010-2011 1,735,000,000 - 1,432,194,785 - - Case file to High Court
2010 2011-2012 2,285,000,000 - 2,033,288,558 - - Appealed against some disallowances made by the DCT before
the Appellate Tribunal.
2011 2012-2013 2,866,502,255 - 2,193,417,798 - (102,313,148) Case file to High Court
2012 2013-2014 2,449,800,000 - 1,000,000,000 (259,877,589) - Appealed against some disallowances made by the DCT before
the Appellate Tribunal.
2013 2014-2015 1,616,000,000 - 1,354,221,954 - - Appealed against some disallowances made by the DCT before
the Appellate Tribunal.
2014 2015-2016 1,180,000,000 866,864,811 - - Appealed against some disallowances made by the DCT before
the Appellate Tribunal.
2015 2016-2017 713,000,000 - 683,420,639 - - Appealed against some disallowances made by the DCT before
the Appellate Bench
2016 2017-2018 150,000,000 224,647,577 Return filed but the assessment is yet to completed.
2017 2018-2019 750,000,000 478,121,977 Return filed but the assessment is yet to completed.
2018 2019-2020 1,750,000,000 Submission of Tax return is yet not due.
Total 20,085,551,971 3,317,922,403 14,800,078,559 - 198,449,090
Name of Directors and their
Interest in different entities
Annexure-E
Sl no. Name of Directors Status with PBL Entities where they have interest
East Coast Shipping Lines Ltd.
EC Distribution Ltd.
East Coast Trading (Pvt.) Ltd.
EC Securities Ltd.
EC Holdings Limited
EC Aviation Limited (Corporate Interest)
EC Bulk Carriers Ltd.
Unicom Clean Energy Limited
Clean Fuel Filling Station Limited (Corporate Interest)
Omera Chemicals Limited (Corporate Interest)
Mr. Azam J Chowdhury Radiant Alliance Limited (Corporate Interest)
1 Chairman MJL Bangladesh Ltd. (Corporate Interest)
Bangladesh Trade Syndicate Ltd.
Green Delta Insurance Co. Ltd.
Omera Fuels Ltd. (Corporate Interest)
Nordic Woods Ltd. (Corporate Interest)
ASP Omera Crew Management Ltd. (Corporate Interest)
Union Capital Limited (Corporate Interest)
Consolidated Tea & Plantation Limited (Corporate Interest)
Baraoora (Sylhet) Tea Company Limited (Corporate Interest)
The Consolidated Tea & Lands Co. (BD) Limited (Corporate Interest)
Prime Finance & Investment Ltd. (Corporate Interest)
International Holdings Limited
IPE Technologies Limited
Shepherd World Trade Limited
2 Mr. Mafiz Ahmed Bhuiyan Vice Chairman Shephered Consultant & Management Limited
Native Holdings Limited
Citizen Securities & Investment Limited ( Representing Shephered
World Trade Limited)
Prima Enterprise
PNL Holdings Limited
Polyexprint Limited
Halda Valley Tea Co. Limited
PNL Water Management Limited
3 Mr. Imran Khan Vice Chairman Pedrollo NK Limited
Pedrollo Dairy & Horticulture Limited
Polyexlaminate Limited
Hill Plantation Ltd.
Halda Fisheries Ltd.
Polytape Limited
Pragati Corporation
Pedrollo NK Limited
PNL Water Management Limited
Polyexprint Limited
PNL Holdings Limited
4 Mr. Md. Nader Khan Director Halda Valley Tea Company Limited
Pedrollo Dairy & Horticulture Limited
Polytape Limited
Hill Plantation Ltd.
Cider Education Services Ltd.
Halda Fisheries Ltd.
Amin Jewelers Limited
City Hospital Limited
5 Quazi Sirazul Islam Director
Bangla Gold (Pvt.) Limited
Ducaty Apparels Limited
Parkensine Products Ltd.
East Coast Trading (Pvt.) Ltd.
EC Securities Ltd.
Mrs. Marina Yasmin EC Bulk Carriers Ltd.
6 Director East Coast Shipping Lines Ltd.
Chowdhury
EC Holdings Limited
EC Aviation Ltd.
EC Distribution Ltd
VIP Shahadat Cold Storage
7 Mr. Md. Shahadat Hossain Director
VIP Shahadat Poultry & Hatchery

PRIME BANK 309

ANNUAL REPORT 2018

Sl no. Name of Directors Status with PBL Entities where they have interest
China-Bangla Ceramic Industries Limited
Bengal Tiger Cement Industries Ltd.
Bajnabo Testiles Mills Limited
8 Mr. Md. Shirajul Islam Mollah Director Trustee Securities Limited
United Shipping Lines Limited
SR Telecom Limited
Dhaka-Foshan Mould Company Limited
Prime Cement Ltd.
9 Mrs. Nasim Anwar Hossain Director Lubricants Asia Ltd.
Bengal Tiger Cement Industries Ltd.
GQ Ball Pen Industries Limited
GQ Industries Ltd. (PP Woven Bag)
10 Mrs. Salma Huq Director Maladesh International (Pvt.) Ltd. (Mosquito Coil)
GQ Foods Limited
GQ Enterprise Limited
Marina Apparels Ltd.
Nafa Apparels Ltd.
Ayesha Clothing Co. Ltd.
Ayesha Washing Limited
Ayesha Fashion Limited
Safaa Sweaters Ltd
Aswad Composite Mills Limited
Cortz Apparels Limited
11 Mr. Nafis Sikder Director K.M. Apparels (Pvt.) Ltd.
Hamza Clothing Ltd.
Hamza Trims Ltd.
Modern Needlecraft Ltd.
Palmal Garments Ltd.
Palmal Garments Hosiery Ltd.
Palmal Logistics
Dy-Chroma (BD) Limited
Hamza Fashion Limited
Everest Homes Limited
The Everest Trading Limited
Mr. Waheed Murad Jamil Everest Lancers Security and Logistics Limited
Neon Consumers Products Limited
12 (Representative of Mawsons Director
Exuberant Developers Limited
Limited) Prime Islami Life Insurance limited
Nowhata Green Bricks Limited
Fareast Islami Securities Limited
Bangla Trac Limited
Bangla Trac Communication Limited
Acorn Infrastructure Services Limited
B-Trac Engineering Limited
Prime Islami Life Insurance Limited
PFI Securities Limited
Asian Gate Ltd
13 Mr. Tarique Ekramul Haque Director Acorn Limited
Thane Technology
B-Trac FMCG Limited
Tiffin Box Limited
B-Trac Technoligies Limited
NBM Telecom limited
Bangla ICX Limited
Uniglory Cycle Components Ltd.
Mr. Mohammad Mushtaque Antics Graphics Limited
Uniglory Paper & Packaging Limited
Ahmed Tanvir
14 Director Uniglory Packaging Industries Limited
(Representative of Uniglory Uniglory Button Limited
Cycle Industries Ltd.) Fashion Pro Limited
Satori Limited
None
15 Mr. Shamsuddin Ahmad, Ph.D Independent Director
None
16 Dr. G. M. Khurshid Alam Independent Director
Bay Asset Management Company Limited
17 Mr. M Farhad Hussain FCA Independent Director
Abode of Consultants (Pvt.) Limited
18 Prof. Dr. M. Shamim Z. Bosunia Independent Director

310 PRIME BANK

Distribution of Profit Under
Islamic Banking operation
Annexure-F
Prime Bank Limited has 05 (five) Islamic Banking branches based on Islamic Shariah, which absolutely prohibits receipts and
payments of interest in any form. The operation of these 05 (five) branches are totally different from other conventional banking
branches as they operate on the basis of profit sharing arrangement.

Fixation of final profit rate for the year 2018

Provisional profit are applied to the different types of deposit accounts at the rates decided by the Bank from time to time taking
into consideration of the industry trend and that of the rates of other Islamic Banks in Bangladesh. Final rates of profit are declared
annually as at 31 December in every year on the basis of income earned from different investments and other business by individual
branches and distributed as per weightage of the different deposit products wise weightage are properly disclosed and make
available in all of our islamic banking branches.
For the year ended 31 December 2018, 70% of total investment income has been allocated to the diffrent types of Mudaraba
depositors (except no cost fund) according to the weightage. The remaining 30% of the investment income is retained by the Bank
as Management fee (25%) and Investment loss Off-setting Reserve (5%).

PRIME BANK 311

FINANCIAL STATEMENTS
OF ISLAMIC BANKING
BRANCHES

Balance Sheet

Profit and Loss Account

Cash Flow Statement

Statement of Changes in Equity

Notes to the Financial Statements

Prime Bank Limited-Islamic Branches
Balance Sheet as at 31 December 2018

Annexure-G
Amount in Taka
Particulars Notes
2018 2017
PROPERTY AND ASSETS
Cash in hand 1
Cash in hand (including foreign currencies) 77,287,386 93,632,734
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) - -
77,287,386 93,632,734
Balance with other banks and financial institutions 2
In Bangladesh 229,289 229,289
Outside Bangladesh - -
229,289 229,289
Placement with banks & other financial institutions 3 - -
Investments in share & securities 4
Government - -
Others - -
- -
Investments
General investments etc 5 16,190,147,908 14,684,333,361
Bills purchased and discounted 6 71,299,314 220,116,921
16,261,447,222 14,904,450,282
Fixed assets including premises 7 16,520,812 18,952,884
Other assets 8 3,494,470,435 2,839,487,287
Non - banking assets - -

Total assets 19,849,955,144 17,856,752,477

LIABILITIES AND CAPITAL

Liabilities
Placements from other banks, financial institutions and agents 9 1,152,554,632 1,423,446,539
Deposits and other accounts 10
Mudaraba savings deposits 3,015,944,673 2,915,742,955
Mudaraba term deposits 12,993,580,813 11,045,473,448
Other mudaraba deposits - -
Al-wadeeah current deposits and other deposits accounts 2,208,976,990 1,905,030,556
Bills payable 66,193,519 283,966,377
18,284,695,994 16,150,213,335
Other liabilities 11 412,704,518 283,092,603

Total liabilities 19,849,955,144 17,856,752,477

Capital / Shareholders’ equity
Paid up capital - -
Statutory reserve - -
Revaluation gain / (loss) on investments - -
Revaluation reserve - -
Other reserve - -
Surplus in profit and loss account / Retained earnings - -

Total Shareholders’ equity - -

Total liabilities and Shareholders’ equity 19,849,955,144 17,856,752,477

PRIME BANK 313

ANNUAL REPORT 2018

Prime Bank Limited-Islamic Branches

Balance Sheet as at 31 December 2018

Amount in Taka
Particulars Notes
2018 2017
OFF- BALANCE SHEET EXPOSURE

Contingent liabilities 12
Acceptances and endorsements 12.1 8,377,052,169 4,968,005,506
Letters of guarantee 12.2 679,695,241 467,277,310
Irrevocable letters of credit 12.3 7,070,204,030 5,557,272,523
Bills for collection 12.4 936,084,936 958,404,759
Other contingent liabilities - -
17,063,036,376 11,950,960,098
Other commitments
Documentary credits and short term trade -related transactions - -
Forward assets purchased and forward deposits placed - -
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities , credit lines and other commitments - -
Other commitments - -

- -

Total Off-Balance Sheet exposure including contingent liabilities 17,063,036,376 11,950,960,098

314 PRIME BANK

Prime Bank Limited-Islamic Branches
Profit and Loss Account
for the year ended 31 December 2018

Annexure-G(I)
Amount in Taka
Particulars Notes
2018 2017

Investment income 13 1,453,381,426 1,425,832,680

Profit paid on deposits 14 (933,597,766) (766,173,726)
Net investment income 519,783,660 659,658,954
Income from investment in shares / securities - -
Commission, exchange and brokerage 15 136,365,229 115,797,589
Other operating income 16 53,606,191 48,091,308
Total operating income (A) 709,755,080 823,547,850

Salaries and allowances 17 87,692,033 91,352,918

Rent, taxes, insurance, electricity, etc. 18 26,448,120 26,649,155
Legal expenses 19 526,645 2,313,038
Postage, stamp, telecommunication, etc. 20 3,272,853 5,534,643
Stationery, printing, advertisements, etc. 21 4,232,500 3,746,988
Chief Executive’s salary and fees - -
Directors’ fees & expenses - -
Shariah supervisory committee’s fees and expenses - -
Auditors’ fees - -
Charges on investment losses 22 - -
Depreciation and repair of Bank’s assets 23 6,923,317 5,718,746
Zakat expenses - -
Other expenses 24 13,060,033 14,113,816

Total operating expenses (B) 142,155,501 149,429,305

Profit / (loss) before provision (C=A-B) 567,599,579 674,118,545
Provision for investments 25
Specific provision - -
General provision - -
Provision for off-balance sheet exposures - -
- -
Provision for diminution in value of investments - -
Other provisions - -

Total provision (D) - -

Total profit / (loss) before taxes (C-D) 567,599,579 674,118,545

PRIME BANK 315

ANNUAL REPORT 2018

Prime Bank Limited-Islamic Branches

Cash Flow Statement
for the year ended 31 December 2018

Amount in Taka
Particulars
2018 2017
A) Cash flows from operating activities
Investment income receipts in cash 1,318,653,952 1,076,381,733
Profit paid on deposits (972,028,051) (800,713,044)
Dividend receipts - -
Fees and commission receipts in cash 136,365,229 115,797,589
Recoveries of investments previously written off - -
Cash payments to employees (87,692,033) (91,352,918)
Cash payments to suppliers (4,232,500) (3,746,988)
Income taxes paid - -
Receipts from other operating activities 53,606,191 48,091,308
Payments for other operating activities (47,271,522) (51,292,966)
Cash generated from operating activities before changes
in operating assets and liabilities 397,401,265 293,164,713
Increase / (decrease) in operating assets and liabilities
Statutory deposits - -
Purchase of trading securities (Treasury bills) - -
Investment to other banks - -
Investment to customers (1,648,230,695) (3,941,681,086)
Other assets (914,999,276) (201,165,926)
Deposits from other banks/borrowings 58,751,828 1,906,636,778
Deposits from customers 1,804,838,923 110,062,658
Other liabilities account of customers - -
Trading liabilities - -
Other liabilities 286,419,980 1,366,896,546
(413,219,240) (759,251,029)
Net cash from operating activities (15,817,975) (466,086,316)

B) Cash flows from investing activities

Debentures - -
Proceeds from sale of securities - -
Payments for purchases of securities - -
Purchase of property, plant and equipment (527,374) (896,085)
Payment against lease obligation - -
Proceeds from sale of property, plant and equipment - -
Net cash used in investing activities (527,374) (896,085)
C) Cash flows from financing activities
Dividend paid - -
Net Cash from financing activities - -
D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) (16,345,348) (466,982,401)
E) Effects of exchange rate changes on cash and cash equivalents - -
F) Cash and cash equivalents at beginning of the year 93,862,023 560,844,424
G) Cash and cash equivalents at end of the year (D+E+F) 77,516,675 93,862,023

Cash and cash equivalents at end of the year

Cash in hand (including foreign currencies) 77,287,386 93,632,734
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) - -
Balance with other banks and financial institutions 229,289 229,289
Placement with banks & other financial institutions - -
Prize bonds - -
77,516,675 93,862,023

316 PRIME BANK

 Prime Bank Limited-Islamic Branches
Statement of Changes in Equity
for the year ended 31 December 2018

Statutory Revaluation Revaluation gain / Retained

Particulars Paid-up Capital Total
reserve reserve loss on investments earnings

Taka Taka Taka Taka Taka Taka

Balance as at 1 January 2018 - - - - - -

Changes in accounting policy - - - - - -
Restated balance - - - - - -
Surplus / deficit on account of revaluation of properties - - - - - -
Adjustment of last year revaluation gain on investments - - - - - -
Surplus / deficit on account of revaluation of investments - - - - - -
Currency translation differences - - - - - -
Net gains and losses not recognized in the income statement - - - - - -
Net profit for the year - - - - - -
Dividends (Bonus shares) - - - - - -
Cash dividend - - - - - -
Issue of share capital - - - - - -
Appropriation made during the year - - - - - -
Balance as at 31 December 2018 - - - - - -
Balance as at 31 December 2017 - - - - - -

PRIME BANK
317
ANNUAL REPORT 2018

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements as at and 31 December 2018
Please see PBL notes 1-2
Amount in Taka
2018 2017
1 Cash in hand
i) In local currency 75,869,476 92,739,574
ii) In foreign currency 1,417,910 893,160
Sub-total (a) 77,287,386 93,632,734
Cash with Bangladesh Bank and its agents
Balance with Bangladesh Bank - -
Balance with Sonali Bank (as agent of Bangladesh Bank) - -
Sub-total (b) - -
Grand total (a+b) 77,287,386 93,632,734
Required CRR and SLR of Islamic Branches are maintained at Head Office
2 Balance with other banks and financial institutions
In Bangladesh (note-2.1) 229,289 229,289
Outside Bangladesh (note-2.2) - -
229,289 229,289
2.1 In Bangladesh
Short-term deposit accounts
ICB Islamic Bank Ltd., Motijheel, Dhaka 13,069 13,069
ICB Islamic Bank Ltd, Sylhet 16,786 16,786
Social Islami Investment Bank Ltd. Dhaka 10,158 10,158
40,012 40,012
Savings accounts
Al Arafah Islami Bank Ltd. Dhaka 74,667 74,667
Bank Al Falah Ltd. Dhaka 39,011 39,011
Social Islami Investment Bank Ltd. Dhaka 75,599 75,599
189,277 189,276
Fixed deposit receipt
The City Bank Ltd - -
2.2 Outside Bangladesh (NOSTRO Accounts) - -
229,289 229,289
3 Placement with banks & other financial institutions - -
4 Investment in share & securities - -
5 Investments
a) In Bangladesh
Quard against TDR 1,622,336,171 1,517,106,695
Bai-Murabaha (cc pledge) 9,460,763,620 3,352,867,944
Bai-Muajjal (cc hypo) 628,904,303 7,256,339,657
Retail investment 448,755,150 540,362,128
Izara (note-5.2) 809,625,772 778,480,535
Bai-Salam (packing credit) 141,970,000 135,516,034
Staff investment 87,314,744 92,096,935
Hire purchase 2,990,478,147 1,011,563,435
16,190,147,908 14,684,333,361
b) Outside Bangladesh - -
16,190,147,908 14,684,333,361
Payable Inside Bangladesh
Inland bills purchased 22,876,468 29,531,644
Payable Outside Bangladesh
Foreign bills purchased and discounted 48,422,847 190,585,277

71,299,314 220,116,921
16,261,447,222 14,904,450,282

318 PRIME BANK

Prime Bank Limited-Islamic Branches
Notes to the Financial Statements as at and 31 December 2018

Amount in Taka
2018 2017
5.1 Investments under the following broad categories
Investments 4,478,143,813 2,558,019,067
Bai-Murabaha / Bai-Muajjal 10,089,667,923 10,609,207,600
Quard against TDR 1,622,336,171 1,517,106,695
16,190,147,908 14,684,333,361
Bills purchased and discounted (Note-6) 71,299,314 220,116,921
16,261,447,222 14,904,450,282
5.2 Izara
Lease rental receivable within 1 year - -
Lease rental receivable within 5 years 809,625,772 779,200,531
Lease rental receivable after 5 years - -
Total lease / Izara rental receivable 809,625,772 779,200,531
Less: Unearned interest receivable - 719,996
Net lease / Izara finance 809,625,772 778,480,535
5.3 Investments on the basis of significant
concentration including bills purchased and discounted.
a) Investments to Directors of the Bank - -
b) Investments to Chief Executive and
other executives & officers 83,453,913 91,972,410
c) Investments to customer groups:
i) Commercial investment 4,632,391,570 4,422,421,319
ii) Export financing 1,671,585,592 2,055,907,773
iii) House building investment 83,364,439 292,515,323
iv) Retail investment 448,755,150 540,362,128
v) Small and medium enterprises 1,139,127,406 1,340,849,834
vi) Special program investment - -
vii) Staff investment 107,441 124,525
viii) Industrial investments 7,553,930,718 5,808,276,299
ix) Other investment 648,730,991 352,020,671
16,177,993,309 14,812,477,872
16,261,447,222 14,904,450,282
d) Details of Industrial investments
i) Agricultural industries - -
ii) Textile industries 902,278,734 95,143,616
iii) Food and allied industries 452,643,010 756,265,450
iv) Pharmaceutical industries 162,836,178 137,384,650
v) Leather, chemical, cosmetics, etc. - -
vi) Tobacco industries - -
vii) Cement and ceramic industries 509,174,749 -
viii) Service Industries 299,836,487 141,192,974
ix) Transport and communication industries 226,553,819 229,098,771
x) Other industries including bills purchase and discounted 5,000,607,741 4,449,190,838
7,553,930,718 5,808,276,299
5.4 Investments -geographical location-wise
Inside Bangladesh
Urban
Dhaka Division 13,123,471,417 9,912,857,150
Chittagong Division 3,034,044,879 4,818,979,989
Khulna Division - -
Rajshahi Division - -
Barisal Division - -
Sylhet Division 103,930,925 172,613,144
16,261,447,222 14,904,450,282
Rural
Dhaka Division - -
Chittagong Division - -
Sylhet Division - -
- -
Outside Bangladesh - -
16,261,447,222 14,904,450,282

PRIME BANK 319

ANNUAL REPORT 2018

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements as at and 31 December 2018

Amount in Taka
2018 2017
5.5 Details of pledged collaterals
Collateral of movable / immovable assets 11,038,808,977 10,276,773,697
Local banks and financial institutions guarantee 618,460,274 -
Export documents 271,463,930 -
Fixed deposit receipts 392,231,702 401,127,511
FDR of other banks - 812,679
Personal guarantee 861,770,380 306,016,373
Other securities 3,078,711,959 3,919,720,023
16,261,447,222 14,904,450,282

5.6 Particulars of investments

i) Investments considered good in respect of which the Bank is fully secured 10,811,052,460 10,678,713,887
ii) Investments considered good against which the Bank holds no
security other than the debtors’ personal guarantee 665,156,705 321,798,507
iii) Investments considered good secured by the personal undertaking 4,785,238,057 3,903,937,889
of one or more parties in addition to the personal guarantee of the
debtors
iv) Investments adversely classified; provision not maintained there against - -
16,261,447,222 14,904,450,282
v) Investments due by directors or officers of the banking company
or any of them either separately or jointly with any other persons 83,561,354 92,096,935
vi) 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 - -
vii) Maximum total amount of investments, including temporary
investment 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. 83,561,354 92,096,935
viii) Maximum total amount of investments, including temporary
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 banking companies - -
x) Classified investments
a) Classified investments on which profit
has not been charged (note-5.7) 424,601,888 458,553,319
b) Provision on classified investments (note-5.8) 66,669,555 78,925,196
c) Provision kept against investments classified as bad debts 60,933,886 67,554,949
d) Profit Suspense Account (note-11) 121,226,422 125,812,975
xi) Cumulative amount of written off investments
Opening Balance - -
Amount written off during the year - -
- -
Amount realised against investments previously written off - -
The amount of written off investments
for which law suits have been filed - -

320 PRIME BANK

Prime Bank Limited-Islamic Branches
Notes to the Financial Statements as at and 31 December 2018

Amount in Taka
2018 2017
5.7 Classification of investments Unclassified
Standard including staff investment 15,692,656,028 14,428,964,000
Special mention account (SMA) 144,189,306 16,932,963
15,836,845,334 14,445,896,963
Classified
Sub-standard 131,220,916 157,198,564
Doubtful 598,054 8,653,052
Bad / Loss 292,782,918 292,701,704
424,601,888 458,553,319
16,261,447,222 14,904,450,282
5.8 Particulars of required provision for investments
Status General Provision Base for provision Rate (%)
Investments (Including SMA) 15,836,845,334 *Various 164,489,546 149,672,882
164,489,546 149,672,882
*General provision is kept @ 1% on general investments and 2% on small enterprise financing and 5% on consumer financing.
Specific provision
Sub-standard 28,309,783 20 5,661,957 9,252,200
Doubtful 147,425 50 73,713 2,118,047
Bad / Loss 60,933,886 100 60,933,886 67,554,949
66,669,555 78,925,196
Required provision for investments 231,159,102 228,598,079
Provision maintained by Head Office 231,159,102 228,598,079
Excess / (short) provision at 31 December 2018 - -
5.9 Particulars of required provision for Off-balance Sheet Exposures
Base for provision Rate 1%
Acceptances and endorsements 8,377,052,169 83,770,522 49,680,055
Letter of guarantee 679,695,241 6,796,952 4,672,773
Letter of credit 7,070,204,030 70,702,040 55,572,725
Bills for collection - - 9,584,048
Forward assets purchased and forward deposits placed - -
Required provision on Off-balance Sheet Exposures 161,269,514 119,509,601
Provision maintained by Head Office 161,269,514 119,509,601
Excess / (short) provision at 31 December 2018 - -
6 Bills purchased and discounted
Payable in Bangladesh 22,876,468 29,531,644
Payable outside Bangladesh 48,422,847 190,585,277
71,299,314 220,116,921
7 Fixed assets including premises, furniture and fixtures
Property, Plant & Equipment
Furniture and fixtures 8,509,967 9,448,492
Office equipment and machinery 8,010,838 9,503,687
Vehicles 6 5
Library books - 700
Net book value at the end of the year 16,520,812 18,952,884

PRIME BANK 321

ANNUAL REPORT 2018

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements as at and 31 December 2018

Amount in Taka
2018 2017
8 Other assets
Stationery and stamps 1,230,978 885,636
Profit receivable 134,727,474 349,450,947
Advance income tax 215,278 215,278
Advance deposits and advance rent 148,416 487,916
Branch adjustments account 3,350,680,863 2,478,879,519
Suspense account 515,244 729,364
Islamic transit account 5,894,000 2,876,066
Sundry assets 1,058,183 5,962,561
3,494,470,435 2,839,487,287
9 Borrowings from other banks, financial institutions and agents
In Bangladesh 1,152,554,632 1,423,446,539
Outside Bangladesh - -
1,152,554,632 1,423,446,539
10 Deposits and other accounts
Deposits from banks (note -10.1.a) 2,286,914,378 1,957,270,642
Deposits from customers (note-10.1.b) 15,997,781,616 14,192,942,693
18,284,695,994 16,150,213,335
10.1 a) Deposits from Banks
Al-wadeeah current deposits - -
Bills payable - -
Mudaraba savings deposits 762,413,775 711,441,716
Mudaraba special notice deposits 14,500,603 745,828,926
Mudaraba fixed deposits 1,510,000,000 500,000,000
2,286,914,378 1,957,270,642
Sl No Name of Bank Type of Account
1 Bank Al-Falah MSB 755,151,371 704,502,594
2 Islami Bank Bangladesh Ltd MSB 7,262,404 6,939,122
Sub Total 762,413,775 711,441,716
3 Exim Bank Ltd MSND 288,387 715,824,644
4 ICB Islamic Bank Ltd MSND 102,581 99,365
5 Social Islami Bank Ltd MSND 7,209 6,983
6 Shahjalal Islami Bank Ltd MSND 1,039,484 484,169
7 Islami Bank Bangladesh Limited MSND 6,651,474 13,605,109
8 The City Bank Limited MSND 2,260,357 844,273
9 Modhumati Bank Limited MSND - 1,584,473
10 Al-Arafah Islami Bank Limited MSND 4,151,113 13,379,910
Sub Total 14,500,603 745,828,926
11 Islami Bank Bangladesh Limited MTDR - 500,000,000
12 The City Bank Limited MTDR 10,000,000 -
13 Exim Bank Limited MTDR 500,000,000 -
14 Shahjalal Islami Bank Ltd MTDR 1,000,000,000 -
Sub Total 1,510,000,000 500,000,000
Grand Total 2,286,914,378 1,957,270,642
b) Customer Deposits
i) Al wadeeah current deposits and other accounts
Al-wadeeah current deposits 582,152,523 649,322,780
Foreign currency deposits 132,313,768 51,657,619
Security deposits 123,869 123,869
Sundry deposits 1,494,386,830 1,203,926,288
2,208,976,990 1,905,030,556

322 PRIME BANK

Prime Bank Limited-Islamic Branches
Notes to the Financial Statements as at and 31 December 2018

Amount in Taka
2018 2017
ii) Bills payable
Pay orders issued 64,982,042 282,754,900
Pay slips issued 70,594 70,594
Demand draft payable 1,140,883 1,140,883
66,193,519 283,966,377
iii) Mudaraba savings deposits 2,253,530,898 2,204,301,239
iv) Mudaraba term deposits
Mudaraba fixed deposits 8,185,407,257 6,294,478,918
Mudaraba special notice deposits 1,484,538,984 719,473,088
Non resident Taka deposits 1,576,159 249,648
Mudaraba special scheme deposits 1,797,557,810 2,785,442,867
11,469,080,209 9,799,644,521
15,997,781,616 14,192,942,693
18,284,695,994 16,150,213,335
c) Deposits and other accounts
Current deposits and other accounts
Deposits from banks (note -10.1.a) - -
Deposits from customers (note-10.1.b.i) 2,208,976,990 1,905,030,556
2,208,976,990 1,905,030,556
Bills payable
Deposits from banks (note -10.1.a) - -
Deposits from customers ([Link]) 66,193,519 283,966,377
66,193,519 283,966,377
Savings bank / mudaraba savings deposits
Deposits from banks (note -10.1.a) 762,413,775 711,441,716
Deposits from customers ([Link]) 2,253,530,898 2,204,301,239
3,015,944,673 2,915,742,955
Term / Fixed deposits
Deposits from banks (note -10.1.a) 1,524,500,603 1,245,828,926
Deposits from customers ([Link]) 11,469,080,209 9,799,644,521
12,993,580,813 11,045,473,448
18,284,695,994 16,150,213,335
11 Other liabilities
Expenditure and other payables 80,424 439,934
Unearned commission on Bank gurantee 20,442 -
Unearned Profit 291,233,756 156,808,065
Other liability 143,474 31,628
Interest suspense account 121,226,422 125,812,975
412,704,518 283,092,603
12 Contingent liabilities
12.1 Acceptances and endorsements
Back to back bills (Foreign) 7,788,445,624 4,648,105,612
Back to back bills (Local) 563,715,780 268,106,850
Back to back bills (EPZ) 24,890,766 51,793,044
8,377,052,169 4,968,005,506
Less: Margin (653,440,335) (687,707,675)
7,723,611,835 4,280,297,831
12.2 Letters of guarantee
Letters of guarantee (Local) 677,891,391 449,438,920
Letters of guarantee (Foreign) 1,803,850 17,838,390
Foreign counter guarantees - -
679,695,241 467,277,310
Less: Margin (32,948,687) (27,069,649)
646,746,553 440,207,661

Money for which the Bank is contingently liable in respect of guarantees given favoring:
Directors or officers - -
Government - -
Banks and other financial institutions
Others 679,695,240 467,277,310
679,695,240 467,277,310
Less: Margin (32,948,687) (27,069,649)
646,746,553 440,207,661

PRIME BANK 323

ANNUAL REPORT 2018

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements as at and 31 December 2018
Amount in Taka
2018 2017
12.3 Irrevocable Letters of Credit
Letters of credit (Sight) 618,389,955 1,029,060,015
Letters of credit (Deferred) 5,559,380,705 3,185,578,448
Back to back L/C 892,433,370 1,342,634,060
Bank’s liabilities PAD - -
7,070,204,030 5,557,272,523
Less: Margin (440,676,285) (315,684,559)
6,629,527,745 5,241,587,964
12.4 Bills for collection
Outward bills for collection 936,084,936 958,404,759
Inward local bills for collection - -
Inward foreign bills for collection - -
936,084,936 958,404,759
Less: Margin (34,299) (21,008,400)
936,050,637 937,396,359
13 Investment income
i) Income from general investment
Quard against TDR 32,006,066 21,270,985
Bai-Murabaha (cc pledge) 343,292,715 354,197,127
Bai-Muajjal (cc hypo) 517,906,493 597,141,201
Retail investment loan 48,658,317 44,382,691
Izara 82,781,880 70,647,155
Bai-Salam (packing credit) 7,790,742 6,381,182
Staff loan 5,420,127 4,378,790
Hire purchase 110,597,030 93,865,863
Other investments 302,540,796 225,585,778
Inland bills purchased 2,387,260 5,822,612
Sub-total (i) 1,453,381,426 1,423,673,383
ii) Profit on deposits with other Islamic banks
In Bangladesh - 2,159,297
Out side Bangladesh - -
Sub-total (ii) - 2,159,297
Grand total (i+ii) 1,453,381,426 1,425,832,680
14 Profit paid on deposits
a) Profit paid on deposits:
Mudaraba savings deposits 62,086,761 55,086,298
Mudaraba special notice deposits 21,305,394 31,097,662
Mudaraba term deposits 489,395,236 265,115,306
Mudaraba special scheme deposits 255,809,875 322,713,736
Foreign currency deposits - -
Others 105,000,500 92,160,724
933,597,766 766,173,726
b) Interest / Profit paid for borrowings:
Bangladesh Bank/ Other Bank/ FI/Agents bank - -
Islamic Bond Fund - -
- -
933,597,766 766,173,726

324 PRIME BANK

Prime Bank Limited-Islamic Branches
Notes to the Financial Statements as at and 31 December 2018

Amount in Taka
2018 2017
15 Commission, exchange and brokerage
Commission on L/Cs-sight 46,537,218 29,806,337
Commission on acceptance 42,984,913 -
Commission on L/Cs-back to back 14,303,434 47,344,629
Commission on L/Gs 7,099,807 4,888,926
Commission on remittance 4,517,432 4,068,374
Other commission 1,829,444 13,794
117,272,247 86,122,059
Exchange gain (note - 15.1) - including gain from FC dealings 19,092,982 29,675,530
Settlement fees / Brokerage - -
136,365,229 115,797,589
15.1 Exchange gain
Exchange gain 19,192,261 29,855,100
Less: Exchange loss (99,280) (179,570)
19,092,982 29,675,530
16 Other operating income
Rent recovered 1,008,125 558,813
Service and other charges 18,633,706 15,794,574
Retail Income 9,616,921 11,186,579
Income from ATM Service 2,831,583 2,689,093
Postage / telex / SWIFT/ fax recoveries 8,927,502 8,133,916
Gain on sale of assets 177 -
Rebate from foreign Bank 5,816,308 5,092,358
Miscellaneous earnings (note-16.1) 6,771,870 4,635,975
53,606,191 48,091,308
16.1 Miscellaneous earnings include syndication fee, commission from foreign
remittance house / bank and sale proceeds of various items, etc.
17 Salaries and allowances
Basic pay 44,220,907 46,345,302
Allowances 31,047,433 31,956,816
Bonus 8,039,819 8,471,481
Bank’s contribution to provident fund 4,383,874 4,579,319
87,692,033 91,352,918
18 Rent, taxes, insurance, electricity, etc.
Rent, rate and taxes 22,096,532 22,227,516
Lease rent 24,000 24,000
Insurance 502,257 543,132
Power and electricity 3,825,331 3,854,507
26,448,120 26,649,155
19 Legal expenses
Legal expenses 526,645 2,256,568
Other professional charges - 56,470
526,645 2,313,038
20 Postage, stamp, telecommunication, etc.
Postage 406,966 376,008
Telegram, telex, fax and e-mail 640,586 2,911,724
Data communication 1,902,724 1,958,635
Telephone - office 317,954 277,211
Telephone - residence 4,623 11,065
3,272,853 5,534,643
21 Stationery, printing and advertisements, etc.
Office and security stationery 1,334,428 1,870,621
Computer consumable stationery 2,606,546 1,577,054
Publicity and advertisement 291,526 299,313
4,232,500 3,746,988
22 Charges on loan losses
Loan -written off - -
Interest waived - -
- -

PRIME BANK 325

ANNUAL REPORT 2018

Prime Bank Limited-Islamic Branches

Notes to the Financial Statements as at and 31 December 2018

Amount in Taka
2018 2017
23 Depreciation and repair of Bank’s assets Depreciation
Fixed assets 2,959,446 3,036,433
Leased assets - -
2,959,446 3,036,433
Repairs
Building 1,839,096 363,335
Furniture and fixtures 264,761 622,235
Office equipment 1,350,438 1,045,308
Bank’s vehicles 361,201 449,835
Maintenance 148,375 201,601
3,963,871 2,682,313
6,923,317 5,718,746
24 Other expenses
Security and cleaning 5,477,188 5,605,864
Entertainment 658,652 736,686
Car expenses 3,561,907 3,813,386
Books, magazines and newspapers, etc. 39,182 44,193
Subscription - 1,505
Donation 10,000 -
Bank charges and commission paid - 32,900
Loss on sale of assets 128,423 -
Retail Expenses 116,750 617,387
Traveling expenses 58,259 596,890
Local conveyance, labor, etc. 471,619 499,849
Business development 49,461 20,507
Training and internship 190,550 203,060
Remittance charges 376,506 268,991
Laundry, cleaning and photographs, etc. 215,154 248,540
Exgratia 403,300 406,500
Miscellaneous expenses 1,303,084 1,017,558
13,060,033 14,113,816
25 Provision for investments & off -balance sheet exposure
Provision for bad and doubtful investments - -
Provision for unclassified investments - -
Provision for off-balance sheet exposure - -
Provision for other assets - -
- -

326 PRIME BANK

 Financial Reporting by Segment of the Group
I) Geographical Segment Annexure-H
Inside Bangladesh Outside Bangladesh
Prime Exchange PBL Finance
Particulars PBL(Conventional Off Shore PBL Exchange
PBIL PBSL Pte. Ltd. (Hong Kong) Total
& Islamic Banking) Banking Units (UK) Ltd.
(Singapore) Ltd.
Income 12,565,171,753 334,266,609 243,137,729 59,178,337 51,793,018 60,703,293 101,547,398 13,415,798,137
Less: Inter-segmental income - - - - -
Total income 12,565,171,753 334,266,609 243,137,729 59,178,337 51,793,018 60,703,293 101,547,398 13,415,798,137
Operating profit (Profit before unallocated expenses and tax) 12,565,171,753 334,266,609 243,137,729 59,178,337 51,793,018 60,703,293 101,547,398 13,415,798,137
Allocated expenses (7,136,915,748) (43,120,578) (128,465,101) (147,877,623) (50,286,677) (55,173,361) (43,524,759) (7,605,363,847)
Provision against loans and advances, others (1,781,600,000) - (1) - - - - (1,781,600,001)
Profit / (loss) before tax 3,646,656,005 291,146,031 114,672,627 (88,699,286) 1,506,342 5,529,932 58,022,639 4,028,834,289
Income tax including deferred tax (1,750,000,000) - (9,340,049) (6,960,794) 40,394 (1,471,288) (7,468,686) (1,775,200,423)
Net profit 1,896,656,005 291,146,031 105,332,578 (95,660,080) 1,546,736 4,058,643 50,553,953 2,253,633,866
Segment assets 259,402,159,514 24,987,512,548 6,950,916,041 1,227,623,488 91,700,294 30,333,039 2,321,080,281 295,011,325,205
Segment liabilities 259,402,159,514 24,987,512,548 6,950,916,041 1,227,623,488 91,700,294 30,333,039 2,321,080,281 295,011,325,205

II) Business Segment

Conventional Banking ** Investment
Particulars Islamic Banking * Remittance (Outside BD) Total
including OBU (PBIL+PBSL)
Income 12,487,565,214 709,755,080 214,043,709 302,316,066 13,713,680,069
Less: Inter segmental income (297,881,932) - - - (297,881,932)
Total income 12,189,683,282 709,755,080 214,043,709 302,316,066 13,415,798,137
Operating profit (Profit before unallocated expenses and tax) 12,189,683,282 709,755,080 214,043,709 302,316,066 13,415,798,137
Allocated expenses (7,037,880,825) (142,155,501) (148,984,797) (276,342,724) (7,605,363,847)
Provision against loans and advances, Others (1,781,600,000) - - (1) (1,781,600,001)
Profit / (loss) before tax 3,370,202,457 567,599,579 65,058,912 25,973,341 4,028,834,288
Income tax including deferred tax (1,750,000,000) - (8,899,580) (16,300,843) (1,775,200,423)
Net profit 1,620,202,457 567,599,579 56,159,332 9,672,498 2,253,633,865
Segment assets 264,539,716,918 19,849,955,144 2,443,113,614 8,178,539,529 295,011,325,205
Segment liabilities 264,539,716,918 19,849,955,144 2,443,113,614 8,178,539,529 295,011,325,205

* Prime Exchange Company Pte. Ltd Singapore, PBL Exchange (UK) Ltd & PBL Finance (Hong Kong) Ltd
** PBIL- Prime Bank Investment Limited

PRIME BANK
** PBSL-Prime Bank Securities Limited

327
328
Liquidity Statement of the Bank
(Analysis of maturity of assets and liabilities)
As at 31 December 2018
Annexure-I

PRIME BANK
ANNUAL REPORT 2018

Particulars Up to 1 month 1-3 months 3-12 months 1-5 years Above 5 years Total
Assets:
Cash in hand (note-3a.4) 6,240,186,549 - - - 11,399,365,000 17,639,551,549
Balance with other banks and financial institutions (note-4a.3) 4,004,835,186 9,400,000,000 - - - 13,404,835,186
Money at call and short notice - - - - - -
Investments (note-6a.1) 6,869,361,474 350,000,000 2,138,330,854 10,567,335,899 6,121,389,731 26,046,417,958
Loans and advances / investments (note-7a.1) 29,157,534,079 39,103,808,556 57,799,704,441 52,666,655,839 27,081,815,801 205,809,518,716
Fixed assets including premises, furniture and fixtures 34,716,743 38,188,417 170,112,039 798,485,080 5,901,846,242 6,943,348,521
Other assets 23,970,398 1,859,386,753 6,058,333,420 408,868,916 15,485,996,243 23,836,555,730
Non banking assets - - - - 220,500,640 220,500,640
Total assets (A): 46,330,604,429 50,751,383,726 66,166,480,754 64,441,345,734 66,210,913,657 293,900,728,300

Liabilities:
Borrowings from Bangladesh Bank, other banks, financial institutions and
12,086,159,157 3,791,928,339 9,454,562,558 5,700,000,000 2,911,866,639 33,944,516,693
agents (note-12a.4)
Deposits (note-13a.6) 28,486,389,890 43,478,926,630 52,042,851,084 60,890,594,446 9,573,087,917 194,471,849,967
Other accounts (note-13a.6) 3,045,875,590 - - - - 3,045,875,590
Provision and other liabilities 1,778,416,345 1,005,076,559 4,963,803,174 2,224,552,298 26,285,738,464 36,257,586,840
Total liabilities (B): 45,396,840,982 48,275,931,528 66,461,216,816 68,815,146,744 38,770,693,020 267,719,829,090
Net liquidity gap (A-B): 933,763,447 2,475,452,198 (294,736,062) (4,373,801,010) 27,440,220,637 26,180,899,209

Chairman Director Director Managing Director

 Consolidated Liquidity Statement
(Analysis of maturity of assets and liabilities)
As at 31 December 2018
Annexure-I(1)
Particulars Up to 1 month 1-3 months 3-12 months 1-5 years Above 5 years Total
Assets:
Cash in hand 6,272,656,646 - - - 11,399,365,000 17,672,021,646
Balance with other banks and financial institutions 4,769,788,172 8,858,178,053 - - - 13,627,966,225
Money at call and short notice - - - - - -
Investments 6,780,363,323 350,000,000 2,138,330,854 10,567,335,899 8,152,240,704 27,988,270,780
Loans and advances / investments 29,165,189,003 39,103,808,556 60,178,489,544 52,666,655,839 27,081,815,801 208,195,958,743
Fixed assets including premises, furniture and fixtures 34,980,671 38,478,738 171,405,287 804,925,270 5,946,714,050 6,996,504,016
Other assets 23,970,398 1,859,386,753 6,058,333,420 408,868,916 11,959,543,669 20,310,103,156
Non banking assets - - - - 220,500,640 220,500,640
Total assets (A): 47,046,948,213 50,209,852,100 68,546,559,105 64,447,785,924 64,760,179,864 295,011,325,205

Liabilities:
Borrowings from Bangladesh Bank, other banks, financial institutions and
12,086,159,157 3,791,928,339 9,454,562,558 5,700,000,000 2,911,866,639 33,944,516,693
agents
Deposits 28,486,389,890 43,478,926,630 52,022,492,097 60,890,594,446 9,569,150,568 194,447,553,631
Other accounts 2,436,700,472 609,175,118 - - - 3,045,875,590
Provision and other liabilities 1,778,416,345 1,005,076,559 6,093,992,955 2,114,190,644 26,283,106,496 37,274,782,999
Total liabilities (B): 44,787,665,864 48,885,106,646 67,571,047,610 68,704,785,090 38,764,123,703 268,712,728,913
Net liquidity gap (A-B): 2,259,282,349 1,324,745,454 975,511,495 (4,256,999,166) 25,996,056,161 26,298,596,289

PRIME BANK
329
ANNUAL REPORT 2018

HIGHLIGHTS OF THE BANK

Annexure-J
(Taka in million)

Sl. # Particulars 2018 2017

1 Paid-up capital 11,323 10,293

2 Total capital (Consolidated) 38,302 32,317

3 Total capital (Solo Basis) 38,259 32,251

4 Capital surplus / (deficit) [Consolidated] 10,862 8,805

5 Capital surplus / (deficit) [Solo Basis] 11,598 9,230

6 Total assets 293,901 281,275

7 Total deposits 197,518 199,014

8 Total loans and advances / investments 205,810 198,323

9 Total contingent liabilities and commitments 162,553 167,809

10 Credit deposit ratio (Conventional)* 82.65% 84.43%

11 Credit deposit ratio (Islamic)* 82.71% 83.25%

12 Percentage of classified loans / investments against total loans and advances / investments 6.16% 5.45%

13 Profit after tax and provision 2,188 1,059

14 Amount of classified loans / investments during the year 12686 10799

15 Provisions kept against classified loans / investments 4,567 4,270

16 Provision surplus / (deficit) against classified loans / investments 23.29 7.50

17 Cost of Deposit 4.72% 4.46%

18 Interest earning assets 245,261 233,712

19 Non-interest earning assets 48,640 47,562

20 Return on investment (ROI) 8.64% 11.78%

21 Return on assets (ROA) [PAT/Average Assets] 0.76% 0.38%

22 Income from investment 2,154 4,246

23 Earnings per share (Taka) [Previous year’s figure restated] 1.93 0.94

24 Net income per share (Taka) [Previous year’s figure restated] 1.93 0.94

25 Price earning ratio (times) [Market price per share/EPS] 9.21 29.30

* Credit deposit ratio has been computed as per Bangladesh Bank guideline.

330 PRIME BANK

FINANCIAL STATEMENTS
OF OFF-SHORE BANKING UNITS

Balance Sheet

Profit and Loss Account

Cash Flow Statement

Notes to the Financial Statements

ANNUAL REPORT 2018

Off-Shore Banking Units

Balance Sheet as at 31 December 2018

Annexure-K
2018 2017
Particulars Notes
USD Taka Taka
PROPERTY AND ASSETS
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

In Bangladesh 3 9,531,394 799,683,971 243,518,761
Outside Bangladesh - - -
9,531,394 799,683,971 243,518,761
Loans and advances
Loans, cash credits, overdrafts, etc. 4 183,376,735 15,385,308,083 8,880,936,782
Bills purchased and discounted 5 100,678,403 8,446,917,982 13,935,500,218
284,055,138 23,832,226,066 22,816,437,000
Fixed assets including premises, furniture and fixtures 6 20,727 1,739,015 1,778,119
Other assets 7 4,217,682 353,863,497 303,277,819
Non - banking assets - - -
Total assets 297,824,941 24,987,512,548 23,365,011,699

LIABILITIES AND CAPITAL

Liabilities
Borrowings from other banks, financial institutions
and agents Deposits and other accounts 8 288,658,867 24,218,478,942 22,719,627,651

Current deposits 9 4,536,845 380,641,294 326,214,865

Bills payable - - -
Savings bank deposits - - -
Term deposits - - -
Bearer certificate of deposit - - -
4,536,845 380,641,294 326,214,865
Other liabilities 10 4,629,229 388,392,312 319,169,183
Total liabilities 297,824,941 24,987,512,548 23,365,011,699
Capital / Shareholders’ equity
Paid up capital - - -
Statutory reserve - - -
Foreign currency gain - - -
Other reserve - - -
Deficit in profit and loss account / Retained
earnings - - -
Total Shareholders’ equity - - -
Total liabilities and Shareholders’ equity 297,824,941 24,987,512,548 23,365,011,699

332 PRIME BANK

Off-Shore Banking Units
Balance Sheet as at 31 December 2018

2018 2017
Particulars Notes
USD Taka Taka
OFF- BALANCE SHEET EXPOSURES
Contingent liabilities 11
Acceptances and endorsements 888,532 74,547,826 -
Letters of guarantee - - -
Irrevocable letters of credit 1,601,064 134,329,237 418,846,066
Bills for collection 12,231,485 1,026,221,630 865,086,893
Other contingent liabilities - - -
14,721,081 1,235,098,693 1,283,932,959
Other commitments
Documentary credits and short term trade-related transactions - - -
Forward assets purchased and forward deposits placed - - -
Undrawn note issuance and revolving underwriting facilities - - -
Undrawn formal standby facilities , credit lines and other commitments - - -
Liabilities against forward purchase and sale - - -
Other commitments - - -
- -
Total Off-Balance Sheet exposures including contingent liabilities 14,721,081 1,235,098,693 1,283,932,959

PRIME BANK 333

ANNUAL REPORT 2018

Off-Shore Banking Units

Profit and Loss Account
for the year ended 31 December 2018

2018 2017
Particulars Notes
USD Taka Taka

Interest income 12 14,072,491 1,174,602,685 965,189,886

Interest paid on deposits, borrowings, etc. 13 (10,492,514) (875,789,150) (739,076,233)
Net interest 3,579,977 298,813,534 226,113,653
Commission, exchange, brokerage, etc. 14 120,180 10,031,208 21,688,249
Other operating income 15 304,570 25,421,866 25,641,011
Total operating income (A) 4,004,728 334,266,609 273,442,913

Salaries and allowances 16 162,904 13,597,302 13,172,594

Rent, taxes, insurance, electricity, etc. 17 21,051 1,757,044 1,574,207
Legal expenses 3,856 321,913 590,684
Postage, stamp, telecommunication, etc. 18 3,977 331,936 269,444
Stationery, printing, advertisements, etc. 19 6,220 519,135 553,996
Auditors’ fees - - -
Depreciation and repair of Bank’s assets 20 2,705 225,822 339,516
Other expenses 21 315,899 26,367,427 15,380,272
Total operating expenses (B) 516,612 43,120,578 31,880,713
Profit / (loss) before provision (C=A-B) 3,488,116 291,146,031 241,562,200
Provision for loans and advances / investments
Specific provision - - -
General provision - - -
- -
Provision for diminution in value of investments - - -
Other provision - - -
Total provision (D) - - -
Total profit / (loss) before taxes (C-D) 3,488,116 291,146,031 241,562,200
Provision for taxation
Current tax - - -
Deferred tax - - -
- - -
Net profit / (loss) after taxation 3,488,116 291,146,031 241,562,200

334 PRIME BANK

Off-Shore Banking Units
Cash Flow Statement
for the year ended 31 December 2018

2018 2017
Particulars
USD Taka Taka
A) Cash flows from operating activities

Interest receipts in cash 14,072,491 1,174,602,685 965,189,886

Interest payments (10,492,514) (875,789,150) (739,076,233)
Fees and commission receipts in cash 120,180 10,031,208 21,688,249
Cash payments to employees (162,904) (13,597,302) (13,172,594)
Cash payments to suppliers (38,188) (3,187,497) (3,282,001)
Receipts from other operating activities 304,570 25,421,866 25,641,011
Payments for other operating activities (313,128) (26,136,178) (15,199,742)
Cash generated from operating activities before
changes in operating assets and liabilities 3,490,507 291,345,632 241,788,577

Increase / (decrease) in operating assets and liabilities

Loans and advances to other banks - - -
Loans and advances to customers (8,161,099) (684,716,220) (4,048,825,225)
Other assets (550,477) (46,185,033) (81,467,600)
Deposits from other banks / borrowings - - -
Deposits from customers (394,601) (33,107,060) 53,830,893
Other liabilities (1,731,359) (145,260,981) (280,543,055)
(10,837,536) (909,269,293) (4,357,004,988)
Net cash from operating activities (7,347,029) (617,923,661) (4,115,216,411)

B) Cash flows from investing activities

Purchase / sale of property, plant and equipment (1,618) (135,728) (119,437)
Proceeds from sale of property, plant and equipment - - -
Net cash used in investing activities (1,618) (135,728) (119,437)
C) Cash flows from financing activities
Borrowing from Prime Bank Limited, Other Bank and
Bangladesh Bank 13,935,437 1,169,183,175 3,754,012,743
Net cash use in financing activities 13,935,437 1,169,183,175 3,754,012,743

D) Net increase / (decrease) in cash and cash equivalents (A+ B + C) 6,586,790 551,123,786 (361,323,105)
E) Effects of exchange rate changes on cash and cash equivalents - 5,041,424 35,694,022
F) Cash and cash equivalents at beginning of the year 2,944,604 243,518,761 569,147,844
G) Cash and cash equivalents at end of the year (D+E+F) 9,531,394 799,683,971 243,518,761

Cash and cash equivalents at end of the year

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 9,531,394 799,683,971 243,518,761
9,531,394 799,683,971 243,518,761

PRIME BANK 335

ANNUAL REPORT 2018

Off-Shore Banking Units

Notes to the Financial Statements
for the year ended 31 December 2018

1.1 Status of the units

Off-shore Banking Units of Prime Bank Limited, governed under the rules and guidelines of Bangladesh Bank. The Bank
obtained the Off-shore Banking Unit permission vide letter no. BRPD (P) 744 (84)/2001-868 dated 19 March 2001. The
Bank commenced the operation of its Off-shore Banking Unit from March 15, 2007. Presently the Bank has 3 (Three) units
in Dhaka, Adamjee EPZ and Chittagong.
1.1.1 Principal activities
The principal activities of the units are to provide all kinds of commercial banking services to its customers through its
Off-shore Banking Units in Bangladesh.
1.2 Significant accounting policies and basis of preparation of financial statements

1.2.1 Basis of accounting

The Off-shore Banking Units maintain its accounting records in USD from which accounts are prepared according to the
Bank Companies Act 1991 (Amendment 2013), Bangladesh Accounting Standards and other applicable directives issued
by Bangladesh Bank.

1.2.2 Use of estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised and in any future periods affected.
1.2.3 Foreign currency transaction
a) Foreign currencies translation

Foreign currency transactions are converted into equivalent Taka using the ruling exchange rates on the dates of
respective transactions as per BAS-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 every month. Balances held in foreign currencies other than US Dollar are converted into
equivalent US Dollar at buying rates of New York closing of the previous day and converted into Taka equivalent.
b) Commitments
Commitments for outstanding forward foreign exchange contracts disclosed in these financial statements are translated
at contracted rates. Contingent liabilities / commitments for letter of credit and letter of guarantee denominated in
foreign currencies are expressed in Taka terms at the rates of exchange ruling on the balance date.
c) Translation gains and losses
The resulting exchange transaction gains and losses are included in the profit and loss account, except those arising on
the translation of net investment in foreign subsidiary.
1.2.4 Cash flow statement
Cash flow statement has been prepared in accordance with the Bangladesh Accounting Standard-7 “Cash Flow
Statement” under direct method as recommended in the BRPD Circular No. 14, dated June 25, 2003 issued by the
Banking Regulation & Policy Department of Bangladesh Bank.
1.2.5 Reporting period
These financial statements cover from January 01 to December 31, 2018.
1.3 Assets and basis of their valuation
1.3.1 Cash and cash equivalents
Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and
highly liquid financial assets which are subject to insignificant risk of changes in their fair value, and are used by the unit
management for its short-term commitments.
1.3.2 Loans and advances / investments
a) Loans and advances of Off-shore Banking Units are stated in the balance sheet on gross basis.
b) Interest is calculated on a daily product basis but charged and accounted for on accrual basis. Interest is not
charged on bad and loss loans as per guidelines of Bangladesh Bank. Records of such interest amounts are kept
in separate memorandum accounts.

336 PRIME BANK

Off-Shore Banking Units
Notes to the Financial Statements
for the year ended 31 December 2018

1.3.3 Fixed assets and depreciation

a) All fixed assets are stated at cost less accumulated depreciation as per BAS-16 “ Property, Plant and Equipment”.
The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the
assets to its working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.
b) Depreciation is charged for the year at the following rates on reducing balance method on all fixed assets.
Category of fixed assets Rate
Furniture and fixtures 10%
Office equipment 20%
c) For additions during the year, depreciation is charged for the remaining days of the year and for disposal
depreciation is charged up to the date of disposal.
1.4 Basis for valuation of liabilities and provisions
1.4.1 Benefits to the employees
The retirement benefits accrued for the employees of the units as on reporting date have been accounted for in
accordance with the provisions of Bangladesh Accounting Standard-19, “Employee Benefit”. Bases of enumerating the
retirement benefit schemes operated by the Bank are outlined below:
a) Provident fund
Provident fund benefits are given to the permanent staffs of the OBU under the Provident Fund Rules of the Bank. The
Commissioner of Income Tax, Taxes Zone - 5, Dhaka has approved the Provident Fund as a recognized provident 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 recognition took effect from 07 July 1997. The Fund is operated by a Board of Trustees consisting six members
(03 members from management and other 03 members from the Board of Directors) of the Bank. All confirmed
employees of the Units are contributing 10% of their basic salary as subscription to the Fund. The units also contribute
equal amount of the employees’ contribution. Interest earned from the investments is credited to the members’ account
on yearly basis.
b) Gratuity fund
The Bank operates a funded gratuity scheme on “Continuing Fund Basis”, in respect of which provision is made annually
according to the recommendation of Actuarial which is covering all its permanent eligible employees in accordance
with Bank Service Rules. The Second Secretary (Tax Exemption), National Board of Revenue, Segun Bagicha, Dhaka has
approved the Prime Bank Limited Employees’ Gratuity Fund as a recognized Gratuity Fund (Letter Ref no. 08.01.0000.03
5.02.0016.2013/217, dated 22/07/2013) within the meaning of Para 2,3 & 4, read with the provisions of Part - C of the First
Schedule of Income Tax Ordinance 1984. The recognition took effect from July 22, 2013. The Fund is operated by a Board
of Trustees consisting six members (03 members from the Board of Directors and other 03 members from management)
of the Bank. Actuarial valuation of gratuity scheme has been made to assess the adequacy of the liabilities provided for
the scheme as per BAS-19 “Employees Benefit”.

c) Welfare fund
Prime Bank’s employees’ welfare fund is subscribed by monthly contribution of the employees. The Bank also contributes
to the Fund from time to time. The Fund has been established to provide coverage in the event of accidental death or
permanent disabilities of the employees. Disbursement from the fund is done as per rules for employees’ welfare fund.
Welfare fund for Off-shore Banking Units are maintained with Head Office, Prime Bank Limited.
d) Incentive bonus
Prime Bank started a incentive bonus scheme for its employees. 10% of net profit after tax is given by the Board of
directors in every year for its employees. These bonus amount distributed among the employees as per performance.
The bonus amount are paid annually, normally first quarter of every following year and the cost are accounted for the
period to which it relates. Provision for incentive bonus for Off-shore Banking Units is kept with Head Office, Prime Bank
Limited.

PRIME BANK 337

ANNUAL REPORT 2018

Off-Shore Banking Units

Notes to the Financial Statements
for the year ended 31 December 2018

1.4.2 Provision for liabilities

A provision is recognized in the balance sheet when the unit has a legal or constructive obligation as a result of a past
event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance with
the BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.

1.5 Revenue recognition

1.5.1 Interest income

In terms of the provisions of the BAS-18 “Revenue”, the interest income is recognized on accrual basis.

1.5.2 Fees and commission income

Fees and commission income arises on services provided by the units are recognized on a cash receipt basis. Commission
charged to customers on letters of credit and letters of guarantee are credited to income at the time of effecting the
transactions.

1.5.3 Interest paid and other expenses

In terms of the provisions of the BAS - 1 “Presentation of Financial Statements” interest and other expenses are recognized
on accrual basis.

2 General

a) These financial statements are presented in Taka, which is the Bank’s functional currency. Figures appearing in
these financial statements have been rounded off to the nearest Taka.
b) Assets and liabilities & income and expenses have been converted into Taka currency @ USs1 = Taka 83.90
(closing rate as at 31st December 2018) and Taka 83.4680 (average rate which represents the year end).

338 PRIME BANK

Off-Shore Banking Units
Notes to the Financial Statements
for the year ended 31 December 2018

2018 2017
USD Taka Taka
3 Balance with other banks and financial institutions
In Bangladesh (note-3.1) 39,531,394 3,316,683,971 2,724,518,761
Outside Bangladesh (note-3.2) - - -
39,531,394 3,316,683,971 2,724,518,761
Less: Inter company transaction 30,000,000 2,517,000,000 2,481,000,000
9,531,394 799,683,971 243,518,761
3.1 In Bangladesh
Prime Bank Limited 39,531,394 3,316,683,971 2,724,518,761
Other Banks and Financial Institutions -
39,531,394 3,316,683,971 2,724,518,761

3.2 Outside Bangladesh (Nostro accounts)

Current account
Citibank N.A., New York, USA - - -
4 Loans and advances
i) Loans, cash credits, overdrafts, etc.
Loan (General) 126,003,525 10,571,695,779 4,663,068,686
Hire purchase 11,837,345 993,153,212 558,090,162
Lease finance 4,602,563 386,155,047 528,876,064
Over Draft 1,848,598 155,097,333 235,394,069
T.R Loan 12,684,705 1,064,246,713 1,116,994,433
Others 26,400,000 2,214,960,000 1,778,513,368
183,376,735 15,385,308,083 8,880,936,782

ii) Bills purchased and discounted (note-5)

Payable Inside Bangladesh

Inland bills purchased 62,392,953 5,234,768,752 9,932,247,248
Payable Outside Bangladesh
Foreign bills purchased and discounted 38,285,450 3,212,149,231 4,003,252,970
100,678,403 8,446,917,982 13,935,500,218
284,055,138 23,832,226,066 22,816,437,000
5 Bills purchased and discounted
Payable in Bangladesh 62,392,953 5,234,768,752 9,932,247,248
Payable outside Bangladesh 38,285,450 3,212,149,231 4,003,252,970
100,678,403 8,446,917,982 13,935,500,218

6 Fixed assets including premises, furniture and fixtures cost

Furniture and fixtures 14,326 1,201,920 1,314,608

Office equipment and machinery 6,402 537,094 463,511
Vehicle - - -
20,727 1,739,015 1,778,119

PRIME BANK 339

ANNUAL REPORT 2018

Off-Shore Banking Units

Notes to the Financial Statements
for the year ended 31 December 2018

2018 2017
USD Taka Taka
7 Other assets
Advance deposits and advance rent 1,339 112,345 110,738
Stationery A/c & Stamp in hand 269 22,601 12,347
Prepaid expenses 377,800 31,697,420 -
Suspense 202 16,923 45,705,987
Interest receivable on deposits and other securities - - 11,459,201
Interest receivable on loans and advances 3,838,072 322,014,208 245,989,546
4,217,682 353,863,497 303,277,819

8 Borrowings from other banks, financial institutions and agents

Bangladesh Bank - - -
Prime Bank Limited 105,920,000 8,886,688,000 9,360,494,044
Other Bank & Financial Institutes 212,738,867 17,848,790,942 15,840,133,607
318,658,867 26,735,478,942 25,200,627,651
Less: Inter company transaction 30,000,000 2,517,000,000 2,481,000,000
288,658,867 24,218,478,942 22,719,627,651

9 Deposits and other accounts

Bank deposits - - -
Customer deposits and other accounts (note-9.1) 4,536,845 380,641,294 326,214,865
4,536,845 380,641,294 326,214,865

9.1 Customer deposits and other accounts

Current deposits 2,205,403 185,033,287 202,121,107
Foreign currency deposits 188,575 15,821,420 16,181,453
Fixed Deposit 46,953 3,939,347 3,844,384
Security deposits receipts - - -
Sundry deposits (note-9.1.1) 2,095,915 175,847,240 104,067,920
4,536,845 380,641,294 326,214,865

9.1.1 Sundry deposits

Sundry Creditors 585,268 49,103,958 7,324,407
Margin on L/G 48,000 4,027,200 3,969,600
Margin on L/C 162,939 13,670,557 36,743,510
Margin on Export Bill 1,802 151,179 341,493
Interest/Profit Payable on Deposit 987,099 82,817,596 41,546,031
Withholding VAT/TAX Payable to Govt. Authority 31,189 2,616,735 11,770,249
Others 279,619 23,460,015 2,372,629
2,095,915 175,847,240 104,067,920

10 Other liabilities
Provision for Expenses/adjusting A/C credit 925,612 77,658,847 53,037,500
Interest Suspense A/c 215,501 18,080,568 17,792,558
Due to Head Office 3,488,116 292,652,897 248,339,125
4,629,229 388,392,312 319,169,183

340 PRIME BANK

Off-Shore Banking Units
Notes to the Financial Statements
for the year ended 31 December 2018

2018 2017
USD Taka Taka
11 Contingent liabilities
11.1 Acceptance & endorsement
Back to Back bills 888,532 74,547,826 -
888,532 74,547,826 -
Less: Margin - - -
888,532 74,547,826 -

11.2 Letters of guarantee

Letters of guarantee (Local) - - -
Letters of guarantee (Foreign) - - -
Foreign counter guarantees - - -
- - -
Less: Margin - - -
- - -
11.3 Irrevocable Letters of credits
Letters of credits 1,601,064 134,329,237 418,846,066
Back to Back letter of credit - - -
1,601,064 134,329,237 418,846,066
Less: Margin - - -
1,601,064 134,329,237 418,846,066
11.4 Bills for collection
Outward local bills for collection - - -
Outward foreign bills for collection 12,231,485 1,026,221,630 865,086,893
Inward local bills for collection - - -
Inward foreign bills for collection - - -
12,231,485 1,026,221,630 865,086,893
Less: Margin - - -
12,231,485 1,026,221,630 865,086,893
12 Interest income
Loan (general) 4,833,532 403,445,283 170,567,743
SOD 56,466 4,713,092 1,339,810
LTR loan 185,281 15,465,032 26,725,523
Lease finance 249,807 20,850,930 26,139,174
Hire purchase 666,959 55,669,745 10,298,852
Payment against documents - - -
Documentary bills purchased 7,263,087 606,235,355 613,739,585
Others 813,858 67,931,110 55,285,077
Interest on loans and advances 14,068,991 1,174,310,547 904,095,764

Interest on balance with other banks and financial institutions 1,657,439 138,343,122 60,610,355
Interest received from FC account - - 483,767
1,657,439 138,343,122 61,094,122
15,726,430 1,312,653,668 965,189,886
Less: Inter Bank transaction 1,653,939 138,050,984 -
Total Interest income 14,072,491 1,174,602,685 965,189,886

PRIME BANK 341

ANNUAL REPORT 2018

Off-Shore Banking Units

Notes to the Financial Statements
for the year ended 31 December 2018

2018 2017
USD Taka Taka
13 Interest on deposits, borrowings, etc.
a) Interest paid on deposits 1,692 141,255 106,851
b) Interest paid on local bank accounts 2,393,873 199,811,797 268,018,126
c) Interest paid on foreign bank accounts 9,750,888 813,887,082 470,951,256
d) Interest paid on Bangladesh Bank - - -
12,146,453 1,013,840,134 739,076,233
Less: Inter Bank transaction 1,653,939 138,050,984 -
10,492,514 875,789,150 739,076,233
14 Commission, exchange and brokerage
Commission on L/Cs 71,879 5,999,603 9,784,590
Commission on L/Gs - - -
Commission on export bills - - 4,995,047
Commission on bills purchased - - -
Commission on accepted bills 11,789 983,990 2,697,614
Commission on OBC, IBC, etc. - - -
Commission on PO, DD, TT, TC, etc. 29,808 2,488,014 594,877
Commission for services rendered to issue of shares - - -
Other commission 550 45,907 2,844,555
114,026 9,517,515 20,916,685
Exchange gain including gain from FC dealings 6,154 513,694 771,565
Brokerage - - -

120,180 10,031,208 21,688,249

15 Other operating income
Postage charge recovery 5,712 476,792 519,147
Service & other charge 213,380 17,810,370 -
SWIFT charge recovery 11,569 965,641 1,042,530
Miscellaneous earnings 73,909 6,169,063 24,079,334
304,570 25,421,866 25,641,011
16 Salaries and allowances
Basic pay 85,700 7,153,236 6,834,651
Allowances 58,872 4,913,891 4,463,852
Bonus 10,003 834,938 1,216,909
Unit’s contribution to provident fund 8,329 695,237 657,183
Retirement benefits and gratuity - - -
162,904 13,597,302 13,172,594
17 Rent, taxes, insurance, electricity, etc.
Rent, rate and taxes 12,082 1,008,463 899,703
Insurance 1,227 102,429 105,229
Power and electricity 7,741 646,152 569,276
21,051 1,757,044 1,574,207
18 Postage, stamp, telecommunication, etc.
Postage 3,463 289,086 213,273
Telegram, telex, fax and e-mail - - -
Telephone - office 513 42,849 56,171
Telephone - residence - - -
3,977 331,936 269,444

342 PRIME BANK

Off-Shore Banking Units
Notes to the Financial Statements
for the year ended 31 December 2018

2018 2017
USD Taka Taka
19 Stationery, printing and advertisements, etc.
Office and security stationery 4,487 374,481 380,093
Computer consumable stationery 1,591 132,823 165,287
Publicity and advertisement 142 11,832 8,617
6,220 519,135 553,996

20 Depreciation and repair of Bank’s assets

Depreciation
Fixed assets 2,391 199,601 226,377
Leased assets - - -
2,391 199,601 226,377
Repairs
Furniture and fixtures 14 1,200 1,496
Office equipment 300 25,020 104,669
Vehicle - - -
Maintenance - - 6,974
314 26,221 113,139
2,705 225,822 339,516
21 Other expenses
Security and cleaning 17,183 1,434,241 1,348,979
Entertainment 1,072 89,488 60,568
Bank charge & Commission 33,038 2,757,622 2,033,903
Car expenses 13,432 1,121,115 1,301,457
Books, magazines and newspapers, etc. - - 5,758
Travel expenses 213 17,799 42,518
Local conveyance, labor, etc. 720 60,084 73,890
Training & internship - - -
Other Professional Charges - - -
Exgratia 282 23,517 17,000
Laundry and Cleaning 497 41,474 24,465
Miscellaneous expenses 249,462 20,822,086 10,471,733
315,899 26,367,427 15,380,272

PRIME BANK 343

FINANCIAL STATEMENTS
OF PRIME BANK
INVESTMENT LIMITED

Auditors’ Report to the Shareholders

Statement of Financial Position

Statement of Profit or Loss & Other Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS of PRIME BANK INVESTMENT LIMITED
Opinion

We have audited the accompanying financial statements of Prime Bank Investment Limited which comprise the Statement of
Financial Position as at 31 December 2018 and Statement of Profit or Loss and Other Comprehensive Income, Statement of
Changes in Equity and Statement of Cash Flows for the year then ended and a summary of significant accounting policies and
other explanatory information disclosed in Note 1 to 45 to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as
at 31 December 2018, and their financial performance and their cash flows for the year then ended in accordance with International
Financial Reporting Standards (IFRSs) as explained in note # 04 to the financial statements.

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 Financial Statements section of our report. We are
independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code) and Bangladesh Securities and Exchange Commission (BSEC), 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 Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements for the year ended on 31 December 2018. There are no key audit matters to communicate in our report.

Other Matter

The financial statements of Company for the year ended 31 December 2017 were audited by ACNABIN Chartered Accountants,
who expressed an unmodified opinion on those statements on 15 March 2018.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company is responsible for the preparation and fair presentation of these financial statements in accordance with the
International Financial Reporting Standards (IFRSs), as explained in note # 04 to the financial statements, and for such internal
control as management determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout
the audit. We also:

• Identify and assess the risks of material misstatement of the 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.

PRIME BANK 345

ANNUAL REPORT 2018

• 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
Company’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 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 Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

Report on other Legal and Regulatory Requirements

We also report that:

a. we have obtained all the material information and explanations which to the best of our knowledge and belief were necessary
for the purposes of our audit and made due verification thereof;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our
examination of those books; and

c. the Company’s statement of financial position and statement of profit or loss and other comprehensive income together with
the Note 1 to 45 dealt with by the report are in agreement with the books of account.

Dated, Dhaka ACNABIN

04 March 2019 Chartered Accountants

346 PRIME BANK

Statement of Financial Position
As at 31 December 2018
Amount in Taka
Particulars Notes
31.12.18 31.12.17
ASSETS
Non-Current Assets
Property, plant and equipment 5 34,308,053 30,507,630
Investment in Prime Bank Securities Ltd 6 37,500,000 37,500,000
Investment in bond 30,000,000 -
Deferred tax asset 7 1,880,175 1,343,612
Total non-current assets 103,688,228 69,351,242
Current Assets
Advances, deposits and prepayments 8 5,639,014,044 5,639,941,099
Investment in shares 9 1,179,235,975 1,286,057,720
Preliminary and pre-operational expenses 10 522,911 1,045,826
Advance corporate income tax 11 11,617,155 18,827,403
Cash and bank balances 12 16,837,728 6,002,037
Total current assets 6,847,227,812 6,951,874,085

Total Assets 6,950,916,040 7,021,225,328

EQUITY AND LIABILITIES
Capital and Reserve
Share capital 13 3,000,000,000 3,000,000,000
General reserve 28,002,888 28,002,888
Retained earnings 171,979,126 66,646,548
Total equity 3,199,982,014 3,094,649,436
Current Liabilities
Loan facilities 14 3,026,635,625 3,228,886,961
Liability for withholding taxes 15 1,415,528 3,151,784
Client’s dividend suspense A/C 16 371,242 231,494
Security deposit receipt 17 125,761 294,250
Provision for expenses 18 12,022,896 14,262,991
Provision for investment and margin loan 19 550,000,000 550,000,000
Corporate income tax payable 20 9,887,613 16,885,515
Accounts payable 21 1,476,171 1,198,941
Dividend payable 22 10 10
Other payables 23 148,999,179 111,663,946
Total current liabilities 3,750,934,025 3,926,575,892
Total Equity and Liabilities 6,950,916,040 7,021,225,328

The notes 1 to 45 are an integral part of these financial statements.

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka ACNABIN

04 March 2019 Chartered Accountants

PRIME BANK 347

ANNUAL REPORT 2018

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2018
Amount in Taka
Particulars Notes
31.12.18 31.12.17
INCOME
Interest income 24 204,509,907 228,663,893
Settlement fee 29,484,108 60,181,933
Management fee 25 8,295,189 10,161,484
BO A/C Maintenance fee 1,411,650 -
Gain on sale of shares 82,370,261 87,773,489
Dividend on shares 26 51,108,213 43,078,924
Underwriting commission 27 40,000 50,000
Issue management fee & Corporate Advisory Fee 28 11,450,000 800,000
Bank interest on STD accounts 29 240,602 454,325
Documentation fees 48,000 35,500
388,957,930 431,199,548
EXPENDITURE
Interest expenses 30 145,820,201 224,300,298
Settlement and other fees 3,153,155 5,752,173
Salary and allowances 31 59,085,758 49,861,605
Rent, Taxes, Insurance and Electricity 32 24,887,863 16,517,556
Legal & Professional expenses 33 876,950 678,500
Postage, Stamp and Telecommunication 34 1,633,225 1,167,069
Stationery & Printing 35 1,943,607 1,388,901
Directors remuneration 496,800 504,850
Auditor’s fee 201,250 115,000
Depreciation and Repair of assets 36 7,663,210 3,793,896
Entertainment, Travelling & Conveyance 37 4,845,922 1,956,278
Security expense 2,991,220 2,251,970
Development and Marketing Expenses 17,681,595 9,838,256
Other expenses 38 3,004,545 1,864,083
274,285,302 319,990,435
Profit before provision and tax 114,672,628 111,209,113
Add/(Reverse): Provision for diminution in value of investments 19.1 23,267,108 (83,335,464)
Provision for impairment of client margin loan 19.2 (27,964,899) 95,843,663
Provision for impairment of Investment in PBSL 19 4,697,792 2,948,441
Profit before tax 114,672,627 95,752,473
Less: Tax expenses 39 (9,340,049) (6,798,238)
Current Tax expense 9,876,612 7,035,706
Deferred Tax expense/(income) (536,563) (237,468)
Profit after tax 105,332,578 88,954,235
Earnings per share 40 0.35 0.30

The notes 1 to 45 are an integral part of these financial statements.

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka ACNABIN

04 March 2019 Chartered Accountants

348 PRIME BANK

Statement of Changes in Equity
For the year ended 31 December 2018
Paid up capital Retained
Particulars General Reserve Total
Taka earnings
Balance as at 01 January 2018 3,000,000,000 28,002,888 66,646,548 3,094,649,436

Retained Profit for the year - - 105,332,578 105,332,578

Balance as at 31 December 2018 3,000,000,000 28,002,888 171,979,126 3,199,982,014

Balance as at 31 December 2017 3,000,000,000 28,002,888 66,646,548 3,094,649,436

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka
04 March 2019

PRIME BANK 349

ANNUAL REPORT 2018

Statement of Cash Flows

For the year ended 31 December 2018
Amount in Taka
2018 2017
Cash Flows from Operating Activities:

Cash generated from operations (4,947,198) (35,739,861)

Advance Income Tax (95,000) (65,000)
Advance to branches 75,211 (100,573)
Payment for withholding taxes (12,711,070) (5,154,940)
Payment for Security Deposit (1,421,630) -
Advance deposit (2,386,228) (195,092)

Net cash used operating activities (21,485,914) (41,255,466)

Cash Flows from Investing Activities:

Purchase of property, plant and equipment (10,378,005) (25,992,841)

Dividend received 35,763,463 34,795,542
Investment in Bond (30,000,000) -
Sale of shares during the year 544,994,175 935,569,612
Purchase of shares during the year (321,845,472) (878,779,266)
Margin Loan recovered/(provided) 14,664,862 12,791,744

Net cash from investing activities 233,199,024 78,384,791

Cash Flows from Financing Activities:

Proceeds/(Repayments) of loan facilities (200,877,418) (76,972,036)

Net cash used in financing activities (200,877,418) (76,972,036)

Net Cash Inflow/(Outflow) for the Year 10,835,691 (39,842,711)

Opening cash and bank balances 6,002,037 45,844,747

Closing cash and bank balances 16,837,728 6,002,037

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka
04 March 2019

350 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

1. Reporting Entity
1.1 Prime Bank Investment Limited is a subsidiary company of Prime Bank Limited, incorporated as a public limited
company on 28 April 2010 with the Registrar of Joint Stock Companies, Dhaka vide certificate of incorporation no.
C-84266/10 dated 28 April 2010 which has commenced its business on the same date. The functions of investment
banking were separated from Prime Bank Limited by forming a subsidiary company in terms of Bangladesh Bank’s
BRPD circular no. 12 dated 14 October 2009. Bangladesh Securities and Exchange Commission (SEC) thereafter
issued a full fledged merchant banking license in favour of Prime Bank Investment Limited, vide letter no. SEC/Reg/
MB/SUB/2010/03/208 dated 02 June 2010 with effect from 01 June 2010.
1.2 Principal Activities
The main objectives of the Company for which it was established are to carry out the business of full-fledged merchant
banking activities like issue management, portfolio management, underwriting, corporate advisory services etc.
2. Basis of Preparation
2.1 Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS),
the Companies Act 1994, Securities and Exchange Rules 1987 and other applicable laws in Bangladesh.
2.2 Basis of presentation of financial statements
The financial statements are prepared on a going concern basis under historical cost convention in accordance
with generally accepted accounting practice under IFRS. Wherever appropriate, such principles are explained in
succeeding notes:
(i) Statement of Financial Position
(ii) Statement of Profit or Loss and Other Comprehensive Income
(iii) Statement of Cash Flows
(iv) Statement of Changes in Equity
(v) Notes to the Financial Statements
3. Reporting period
The financial year of the Company covers twelve (12) months from 01 January 2018 to 31 December 2018.
4. Significant Accounting Policies
The accounting policies set out below have been applied consistently to all periods.
4.1 Property, plant and equipment
4.1.1 Recognition and measurement
Items of property, plant and equipment (PPE) are initially measured at cost. After initial recognition, an item
of PPE is carried at cost less accumulated depreciation and impairment losses.
4.1.2 Depreciation
Depreciation is recognised in the statement of profit or loss and other comprehensive income on monthly
basis at straight-line method over the estimated useful lives of each item of property, plant and equipment.
Items of property, plant and equipment are depreciated when these come into use or are capitalised.
Rate of depreciation on various items of property, plant and equipment considering the useful lives of
assets are as follows:

Asset category Rate of Depreciation

Furniture and fixtures 10
Office and electrical equipment 20
Books 20
Vehicles 20
4.2 Preliminary and pre-operating expenses
4.2.1 Recognition and measurement
These are recognised as an asset if it is probable that future economic benefits that are attributable to the
asset will flow to the enterprise and cost of the asset can be measured reliably.
4.2.2 Amortisation of preliminary and pre-operating expenses

PRIME BANK 351

ANNUAL REPORT 2018

Prime Bank Investment Limited

Notes to the Financial Statements
For the year ended 31 December 2018

These are amortised over 10 years from the year of their first utilisation at the rate of Taka 522,915 per year
starting from the year ended 31 December 2010.
4.3 Advance, deposits and prepayments
Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions,
adjustments or charges to other account heads such as property, plant and equipment, inventory, etc.
Deposits are measured at payment value.
Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to
Statement of Comprehensive Income.
4.4 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and bank balances, which were held and available for use of the
Company without any restriction.
4.5 Statement of cash flows
Statement of cash flows has been prepared in accordance with the International Accounting Standard-7 “Statement
of Cash Flows” under direct method.
4.6 Investments
All investments in securities were initially recognised at fair value, being fair value of the consideration given, including
acquisition charges associated with the investments. Transaction costs have been treated as expenses in accordance
with IFRS 9, without considering the same. The valuation methods of investments used are:
4.6.1 Investment in listed securities
These are acquired and held primarily for the purpose of selling them in future or held for dividend
income and are reported at cost. Unrealised gains are not recognised in the statement of profit or loss and
other comprehensive income. Provision for diminution in value of investment is provided in the financial
statements on those securities whose market price is below the cost of investment by netting off with
those whose value is more than cost.
4.6.2 Investment in Prime Bank Securities Limited
Investment in Prime Bank Securities Limited is stated at cost in the Company’s financial statements as
the fair market value of the investment is not available. Provision for impairment in value of investment is
provided in the financial statements as the investment is having a negative equity (i.e. total equity is less
than total paid up share capital).
4.7 Intangible assets
(a)  An intangible asset is recognised if it is probable that the future economic benefits that are attributable to
the asset will flow to the entity and the cost of the assets can be measured reliably.
(b) Software represents the value of computer application software licensed for use of the Company other
than those applied for the operating system of computers. Intangible assets are carried at their cost less
accumulated amortisation and impairment loss, if any.
Initial cost comprises license fees paid at the time of its acquisition and other directly attributable
expenditures that are incurred in customising the software for its intended use.
(c) Expenditure incurred for software is capitalised only when it enhances and extends the economic benefits
of software beyond its original specification and life and such cost is recognised as capital improvement
and added to the original cost of software.
(d) Software is amortised using the straight-line method over the estimated useful life of 10 (ten) years
commencing from the date when it becomes available for use.
4.8 Receivables
Receivables are recognised when there is a contractual right to receive cash or another financial asset from another
entity and it is probable that economic benefits will flow to the entity.
4.9 Share capital
Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial
assets.

352 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

4.10 Borrowing funds

Borrowing funds include borrowings from Prime Bank Limited and Bank Asia Limited, which is stated in the statement
of financial position at amounts payable.
4.11 Provision for current taxation
Provision for current income tax has been made @ 37.5% on business income as per Income Tax Ordinance- 1984,
and the last year’s assessment has also been made at the same rate. Rates of tax on other categories of income
applicable for the company are stated in note 39. It is to be noted that the company has duly paid the assessed tax
by Deputy Commissioner of Taxes, LTU, Dhaka for the financial year 2010,2011, 2012, 2013 & 2014 and submitted tax
return for the financial year 2015, 2016 & 2017.
4.12 Provision for Deferred Taxation
Deferred tax liabilities are amount of income taxes payable in future periods in respect of taxable temporary
differences. Deferred tax assets are the amount of income taxes recoverable in future periods in respect of deductible
temporary differences. Deferred tax assets and liabilities are recognised for the future tax consequences of timing
differences arising between the carrying values of asset, liabilities, income and expenditure and their respective
tax bases. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or
substantially enacted at the date of statement of financial position. The impact on the account of changes in the
deferred tax assets and liabilities has also been recognised in the statement of comprehensive income as per IAS-12
“Income Taxes”.
4.13 Benefits to the Employees
The retirement benefits accrued for the employees of the Company as on reporting date have been accounted for in
accordance with the provisions of International Accounting Standard-19, “Employee Benefits”. Bases of enumerating
the retirement benefit schemes operated by the Company are outlined below:
(a) Provident Fund
Provident fund benefits are given to the permanent employees of the Company in accordance with the
Company’s service rules. All confirmed employees of the Company are contributing 10% of their basic
salary as contribution to the Fund. The Company also contributes equal amount of the employees’
contribution. Interest earned from the investments is credited to the members’ account on yearly basis.
The fund is administered by Prime Bank Limited.
(b) Gratuity Fund
The Company operates an unfunded gratuity scheme, provision in respect of which is made annually
covering all its permanent eligible employees. Actuarial valuation of gratuity scheme had been made to
assess the adequacy of the liabilities provided for the scheme as per BAS-19 “Employee Benefits”. The fund
is administered by Prime Bank Limited.
(c) Welfare Fund
Prime Bank Investment Employees’ Welfare Fund is subscribed by monthly contribution of the employees.
The Company also contributes to the fund from time to time. The fund has been established to provide
financial assistance in the event of death or permanent disabilities of the employees. Disbursement of loan
from the fund is regulated as per rules of said fund. The fund is administered by Prime Bank Limited.

(d) Incentive Bonus

Prime Bank Investment Limited started an incentive bonus scheme for its employees. Maximum 10% of
net profit after tax is given to the employees in every year as incentive bonus. This bonus amount is being
distributed among the employees based on their performance and is paid annually, normally first quarter
of every following year and the costs are accounted for in the period in which it relates.
4.14 Provision for Liabilities
A provision is recognised in the statement of financial position when the Company has a legal or constructive
obligation as a result of a past event and it is probable that an outflow of economic benefit will be required to settle
the obligations, in accordance with the IAS-37 “Provisions, Contingent Liabilities and Contingent Assets”.

PRIME BANK 353

ANNUAL REPORT 2018

Prime Bank Investment Limited

Notes to the Financial Statements
For the year ended 31 December 2018

4.15 Revenue Recognition

The PBIL has applied IFRS 15 in the current year’s financial statements where it is applicable and comparative
information has not been restated. Under IFRS 15, revenue is measured based on the consideration specified in a
contract with a customer. The company recognised revenue when it satisfies a performance obligation by transferring
control over service to the customer.
4.15.1 Investment income
Interest income on investments is recognised on an accrual basis. Capital gains on investments in shares are also
included in investment income. Capital gains are recognised when these are realised.
4.15.2 Fees and commission income
Fees and commission income arising on services provided by the PBIL are recognised when it expects to be entitled
in exchange for arranging for other parties to provide services to the clients and customers as per IFRS 15.
4.16 Interest income
Interest income is accrued on a time proportion basis that reflects an effective yield on the gross outstanding loans.
4.17 Dividend income on shares
Dividends are recognized in profit or loss as per IFRS 9 only when:
- the entity’s right to receive payment of the dividend is established;
- it is probable that the economic benefits associated with the dividend will flow to the entity; and
- the amount of the dividend can be measured reliably.
4.18 Earnings per share
Basic earnings per share have been calculated in accordance with IAS-33 “Earnings per Share” which have been
shown on the face of statement of comprehensive income. This has been calculated by dividing the basic earnings
by the number of ordinary shares outstanding during the year.
4.19 Events after the reporting period
Where necessary, all the material events after the reporting period date have been considered and appropriate
adjustment/disclosures have been made in the financial statements.
4.20 Managements’ responsibility on financial statements
The management of the company is responsible for the preparation and presentation of these financial statements.
4.21 Related party transactions
Related party transaction is a transfer of resources, services or obligation between related parties, regardless of
whether a price is charged. Details of related party transactions are given in note 45.
4.22 Compliance report on International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS)
While preparing the financial statements, Prime Bank Investment Limited applied most of IAS and IFRS as adopted by
The Institute of Chartered Accountants of Bangladesh. Details are given below:
Name of IAS No. Status
Presentation of Financial Statements 1 Applied
Inventories 2 N/A
Statement of Cash Flows 7 Applied
Accounting Policies, Changes in Accounting Estimates and Errors 8 Applied
Events after the Reporting Period 10 Applied
Income Taxes 12 Applied
Property, Plant and Equipment 16 Applied
Leases 17 Applied
Employee Benefits 19 Applied
Accounting of Government Grants and Disclosure of Government Assistance 20 N/A
The Effects of Changes in Foreign Exchange Rates 21 N/A
Borrowing Costs 23 Applied
Related Party Disclosures 24 Applied
Separate Financial Statements 27 N/A
Investment in Associates and Joint Ventures 28 N/A
Financial Reporting in Hyperinflationary Economies 29 N/A
Financial Instruments: Presentation 32 Applied
Earnings per Share 33 Applied

354 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Name of the IFRS No. Status

Interim Financial Reporting 34 Applied
Impairment of Assets 36 Applied
Provisions, Contingent Liabilities and Contingent Assets 37 Applied
Intangible Assets 38 Applied
Investment Property 40 N/A
First-time Adoption of International Financial Reporting Standards 1 N/A
Share-based Payment 2 N/A
Business Combinations 3 N/A
Insurance Contracts 4 N/A
Non-current Assets Held for Sale and Discontinued Operations 5 N/A
Exploration for and Evaluation of Mineral Resources 6 N/A
Financial Instruments: Disclosures 7 Applied
Operating Segments 8 N/A
Financial Instruments 9 Applied
Financial Statements 10 N/A
Joint Arrangements 11 N/A
Disclosure of Interests in Other Entities 12 N/A
Fair Value Measurement 13 Applied
Regulatory Deferral Accounts 14 N/A
Revenue from contracts with customers 15 Applied
4.23 Departures from IFRS
The Financial Reporting Act 2015 (FRA) was enacted in 2015 and the Financial Reporting Council (FRC) under the
FRA is formed in 2017 which, among other things, will issue financial reporting standards for public profit entities
including Merchant banks. The FRC has been formed, but no financial reporting standards have yet been issued
as per the provisions of the FRA. Hence, the financial statements of the Company as at and for the year ended
31 December 2018 have been prepared in accordance with International Financial Reporting Standards (IFRSs) as
adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) and the requirements of The Bangladesh
Securities and Exchange Commission provisions, circulars, rules and regulations issued by Bangladesh Securities
and Exchange Commission (BSEC) and The Companies Act 1994. In case any requirement of Bangladesh Securities
and Exchange Commission provisions, circulars, rules and regulations differ with those of IFRS, the requirements
of BSEC provisions, circulars rules and regulations shall prevail, and such departures from IFRS have been followed
accordingly. In addition, there has been a departure from the provisions of IFRS 9 with regard to interest income.
Material departures from the requirements of IFRS are as follows:
i) Provision for impairment of client margin loan
IFRS: In accordance with IFRS 9, an entity should recognize a loss allowance for expected credit losses on a financial
asset and shall not reduce the carrying amount of the financial asset in the statement of financial position. The
objective of the impairment requirements is to recognize lifetime expected credit losses for all financial instruments
for which there have been significant increases in credit risk since initial recognition whether assessed on an individual
or collective basis considering all reasonable and supportable information, including that which is forward-looking.
An entity shall directly reduce the gross carrying amount of a financial asset when the entity has no reasonable
expectations of recovering a financial asset in its entirety or a portion thereof.
BSEC: As per BSEC instruction circular reference #BSEC/Mukhopatro(3rd Khondo)/2011/06 dated July 02, 2018,
provision has been made for impairment of margin loan arising out of year-end (31.12.2018) revaluation of shares
purchased through margin loan complying the relevant instruction. Prime Bank Investment Limited has opted the
option to maintain minimum 20% of total impairment of margin loan arising from diminution in value of investments
as provision as on 31.12.2018 in accordance with the aforesaid circular.
ii) Recognition of interest income from margin loan
IFRS: In accordance with IFRS 9, interest revenue should be calculated by using the effective interest method by
applying the effective interest rate to the gross carrying amount of the financial asset. Interest income should be
recognized when the financial asset is no longer credit-impaired and the improvement can be related objectively.
Departure: In accordance with IFRS 9, the Company recognized interest from margin loan when the loan is no
longer credit-impaired (negative equity). However, some margin loan interest was recognized as income from credit-
impaired (negative equity) portfolios considering the fundamental strength of the holding scripts and future capital
market prospects of Bangladesh as the demutualization of stock exchanges has already been occurred, foreign
strategic investment has been done in DSE, stability in political environment and other favorable macroeconomic
indicators in Bangladesh.

PRIME BANK 355

ANNUAL REPORT 2018

Prime Bank Investment Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
5. Property, Plant and Equipment
Cost
Opening balance 63,444,863 37,452,022
Add: Additions during the year 24,720,272 25,992,841
Less : Disposals/Adjustments (14,342,266) -
Closing balance (A) 73,822,869 63,444,863
Accumulated Depreciation:
Opening balance 32,937,233 30,022,519
Add: Charge for the year 6,577,583 2,914,714
Closing balance (B) 39,514,816 32,937,233
Written down value (A-B) 34,308,053 30,507,631
Category-wise details of PPE are shown in Annex-A.
6. Investment in Prime Bank Securities Limited 37,500,000 37,500,000
An amount of Taka 37,500,000 was invested by the company in 3,750,000 ordinary shares of Taka 10 each of Prime Bank
Securities Limited (PBSL), a subsidiary company of Prime Bank Limited PBSL holds two memberships of Dhaka Stock
Exchange Limited, membership no. 219 and Chittagong Stock Exchange Limited, membership no. 141.
7. Deferred Tax Assets
Deferred tax liabilities recognized in accordance with the
provisions of IAS 12: Income Taxes, is arrived as follows:
Balance as at 1 January 2018 1,343,612 1,106,144
(Addition)/Reversal during the year 536,563 237,468
Deferred tax asset as at 31 Dec 2018 1,880,175 1,343,612
As per section 38(b) of ITO 1984, (b) if the loss cannot be wholly so set off, the amount of the loss not so set off shall
be carried forward to the next assessment year and so on for not more than six successive assessment years. This carry
forward of loss will create a temporary tax difference in deferred tax calculation. But para 35 of IAS 12 suggest that the entity
recognizes a deferred tax asset arising from unused tax losses or tax credits only to the extent that the entity has sufficient
taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against
which the unused tax losses or unused tax credits can be utilized by the entity. Being there is no such indication regarding
sufficient taxable profit availability; no deferred tax asset was recognized on the business loss.
8. Advances, Deposits and Prepayments
Clients’ margin loan (9.01) 5,555,902,000 5,559,563,333
Advance office rent 6,486,258 10,446,853
Advance deposit 2,613,020 226,792
Advance to branches 30,508 105,719
Receivable from brokers (own) 4,223,691 38,180,418
Receivable from brokers (clients) 47,671,418 19,565,746
Dividend Receivable 6,072,382 -
Receivable income including interest on AIBL Bond 6,061,611 -
Security Deposit 10,000 -
Utility receivable from brokers 6,579,718 6,854,580
Car loan 3,236,121 4,281,969
CCS Staff Loan 127,315 190,688

5,639,014,044 5,639,416,099

8.1 Client margin loan

Gross client margin loan 5,620,207,138 5,632,902,945
Less: Suspense account 64,305,138 73,339,612

5,555,902,000 5,559,563,333

356 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
9. Investment in Shares 31.12.2018 31.12.2017
Cost Price Market Price Cost Price Market Price
AB Bank 1st MF - - 4,622,924 4,620,000
Aamra Network Ltd - - 535,533 1,338,490
Active Fine Chemicals Ltd 5,036,243 4,500,720 - -
ADN Telecom Limited 574,040 574,040 - -
Aftab Automobiles Ltd 2,088,628 1,377,000 2,088,628 1,926,000
Apex Tannery Ltd - - 5,457,613 5,349,600
Bangladesh Building System Ltd 14,858,716 9,902,200 13,801,633 11,135,300
Bangladesh Shipping Corporation 9,525,499 6,825,000 9,525,499 8,172,500
Bangladesh Submarine Cable Co. Ltd 12,052,160 9,350,000 12,654,769 10,825,500
Bashundhara Paper Mills Limited 864,560 905,627 3,458,000 3,458,000
Bata Shoe company (BD) Ltd 12,613,867 11,951,062 15,129,570 15,045,912
BBS Cables Ltd 18,214,168 16,611,750 14,407,549 12,155,500
BD Finance & Inv. Co. Ltd 2,875,807 2,852,500 - -
BEXIMCO Pharmaceuticals Ltd 26,011,850 18,984,000 26,011,850 24,912,000
Confidence Cement Ltd 2,683,619 2,691,000 2,471,439 3,050,000
DESCO Limited 72,807,178 39,198,108 72,807,178 44,049,359
Doreen Power General & System Ltd - - 4,976,098 4,510,900
Dhaka Bank Ltd. 2,180,766 2,130,000 - -
Eastern Bank Ltd. 9,352,782 6,912,180 5,117,665 5,110,000
Esquare Knit Composite Ltd 1,885,145 1,885,145 - -
Evince Textiles Limited - - 1,631,213 1,394,000
Fareast Islami Life Insurance Limited 24,544,975 15,089,000 31,664,302 22,022,000
Genex Infosys Limited 107,601 107,601
Grameen Phone Ltd. 10,644,919 9,182,500 10,986,837 11,063,800
Grameen Mutual Fund Two 0 0 4,688,322 4,913,500
Green Delta MF 12,900,556 9,588,750 12,900,556 11,762,200
Heidelberg Cement BD Ltd. 22,718,536 14,726,800 22,718,536 18,695,600
IDLC Ltd 22,801,199 20,580,877 7,706,069 8,530,000
Information Technology Consultants Ltd - - 15,791,919 11,977,452
Intraco Refueling Station Limited 2,611 7,148 - -
Investment Corporation of Bangladesh 3,340,302 2,440,258 3,340,302 3,200,080
IFIL Islamic MF-1 39,213,709 28,019,400 39,213,709 30,903,750
Indo-Bangla Pharmaceuticals Limited 2,744 9,159 - -
IPDC Finance Limited - - 9,235,855 9,769,500
Kattali Textile 111,424 305,541 - -
KDS Accessories Ltd - - 7,302,564 6,293,700
KPCL 14,469,283 7,560,157 8,419,796 7,020,000
LankaBangla Finance Ltd 22,259,231 13,740,000 8,410,003 10,755,000
Linde Bangladesh Ltd 30,318,185 27,232,442 30,318,185 29,193,523
M.L. Dyeing Limited (MLDL) 36,114 125,572 - -
Mercantile Bank Limited 6,457,672 5,103,000 - -
Nahee Aluminum Composite Panel Ltd - - 62,246 502,577
Oimex Electrode Limited - - 64,800 464,746
Olympic Industries Ltd. 27,358,182 20,171,460 27,358,182 26,898,390
Popular Life 1st MF - - 3,859,781 3,720,000
Popular Life Insurance Co. Limited - - 40,064,780 26,452,197
Power Grid Company Limited 41,126,436 26,693,424 41,126,436 29,029,099
Pragati Insurance Limited 40,654,940 11,657,682 40,654,940 11,858,642
Prime Bank 1st ICB AMCL MF 401,456,697 210,276,100 401,456,697 250,974,700
RAK Ceramics Ltd 20,202,354 13,338,000 30,747,747 28,344,680
Runner Automobiles Ltd. 1,085,869 1,085,869 - -
S.S. Steel Limited 137,920 137,920 - -
Shahjibazar Power Co. Ltd. 9,080,092 6,930,869 9,466,291 8,591,400
Silva Pharmaceuticals Ltd 93,450 276,739 - -
SK Trims & Industries Limited 51,933 256,789 - -
Square Pharma 145,074,382 149,060,084 129,798,517 150,900,000
The ACME Laboratories Limited 2,768,478 2,577,000 - -
The City Bank Ltd. 21,172,032 14,971,650 8,024,825 7,980,000
Titas Gas Co. Ltd. 58,126,253 24,516,346 58,126,253 29,769,849
VFS Thread Dyeing Limited 39,195 244,078 - -
Unique Hotel & Resorts Limited 1,386,016 1,325,280 - -
Uttara Bank Ltd. 5,867,657 5,700,000 - -
United Power Generation & Distribution - - 87,852,111 95,258,600
1,179,235,975 779,687,824 1,286,057,720 1,013,898,045
Investment in shares has been recorded at cost and adequate provision has been maintained as per BSEC circular reference
#BSEC/MUKHOPATRO(3rd Khando)/2011/06 dated 02 December 2018 and BSEC/CMRRCD/2009-193/212 dated December
10, 2018 irrespective of compliance of IFRS-9.

PRIME BANK 357

ANNUAL REPORT 2018

Prime Bank Investment Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
10 Preliminary and Pre-Operational Expenses
Opening Balance 1,045,826 1,568,741
Less : Amortised during the year 522,915 522,915
Closing Balance 522,911 1,045,826
11 Advance Corporate Income Tax
Opening balance 18,827,403 10,428,589
Addition during the year: Income tax
withheld from Advance Income Tax
Dividend of Aman Feed Limited - 8,000
Dividend of Aamra Network 2,740 -
Dividend of Aftab Automobiles Ltd 9,600 -
Dividend of Apex Tannery Ltd 16,000 -
Dividend of Bata Shoe Co. Ltd 86,028 35,700
Dividend of BBS Cables 10,000 -
Dividend of BDBS 26,500 -
Dividend of Beximco Pharmaceuticals 60,000 -
Dividend of BSC 35,000 -
Dividend of BSCCL 10,000 24,000
Dividend of City General Insurance - 60,000
Dividend of Confidence Cement 30,000 62,000
Dividend of DBBL 600 -
Dividend of DESCO 194,048 194,048
Dividend of Eastern Bank Ltd 70,000 400,000
Dividend of Doreen Power 7,160 -
Dividend of GrameenPhone 84,500 -
Dividend of Green Delta MF 225,130 122,850
Dividend of Fareast Islami Life Ins co. Ltd. - 76,995
Dividend of Heidelberg Cement 132,000 180,000
Dividend of ICB 11,228 -
Dividend of IDLC 153,000 52,694
Dividend of IFIL Islamic MF-1 736,690 741,690
Dividend of ITCL 30,600 -
Dividend of Jamuna Oil Ltd - 200,000
Dividend of KPCL 132,000 39,200
Dividend of Lanka Bangla Finance 66,750 60,000
Dividend of Linde Bangladesh Ltd 63,627 124,000
Dividend of Nahee Aluminum 1,141 -
Dividend of Meghna Cement Mills Ltd - 6,300
Dividend of Mercantile Bank Ltd 91,800 -
Dividend of Olympic Industries 41,985 -
Dividend of Popular Life Insurance Co. Ltd. - 295,963
Dividend of Power Grid Company 166,834 133,372
Dividend of PBL 1st ICB AMCL MF 4,738,170 4,748,170
Dividend of Pragati Insurance Limited 103,465 75,798
Dividend of RAK Ceramics Ltd 94,640 60,000
Dividend of Social Islami Bank Ltd - 223,190
Dividend of SPCL 20,800 42,000
Dividend of Toshrifa 17,294 -
Dividend of The City Bank Ltd 119,700 48,000
Dividend of Titas Gas 296,351 269,410
Dividend of UPGD 1,036,800 -
Dividend of Square Pharma 350,186
Corporate advisory fee for Shamajik
100,000 -
Healthcare Complex One Project.
Underwriting commission of IDLC Finance Ltd - 5,000
Registrar to the issue & underwriting
54,000 -
commission from Aman Cotton Fibrous
Corporate advisory fee of PBL
100,000 -
Subordinated Bond 3
Corporate advisory fee of Regent Spinning 25,000 -
AIT for cars 95,000 65,000
Interest on bank deposit 17,899 45,433
9,664,266 8,398,814
Less: Adjustment of Advance tax
(16,874,515) -
payment for years 2016 & 2017
Closing balance 11,617,155 18,827,403

358 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
12 Cash and Bank Balances
Cash in hand 32,496 13,263
Bank balances with Prime Bank Limited,
Prime Bank Invest Limited Client Withdraw (A/C # 54501) 2,060,733 1,554,486
Prime Bank Invest Limited Broker Payment (A/C # 54500) 8,446,001 544,876
Prime Bank Invst Limited Client Deposit (A/C # 54503) 1,132,086 1,751,480
Prime Bank Invst Limited Broker Deposit (A/C # 54502) 814,458 819,474
Prime Bank Invst Limited Own(A/C # 54544) 2,492,406 1,283,451
PBIL Public Issue Application A/C 1,770,432 35,006
Credit Balance of OD facilities from Bank Asia Limited 89,117 -
16,837,728 6,002,037
13 Share Capital
This represents amount received from Prime Bank Limited as well as sponsor-directors which was subsequently transferred
to the Company’s bank account. As at 31 December 2010, a total of 300,000,000 ordinary shares of Tk. 10 each were issued
subscribed and fully paid up. Details are as follows:
Authorized capital:
1,000,000,000 ordinary shares of Tk. 10 each 10,000,000,000 10,000,000,000
Issued, subscribed and paid up capital:

No. of shares Percentage (%) Taka

Prime Bank Limited 299,999,994 99.99 2,999,999,940

Individuals 6 0.01 60
300,000,000 100 3,000,000,000
14 Loan Facilities
Balance of OD facilities from Prime Bank Limited 3,026,635,625 3,178,368,564
Balance of OD facilities from Bank Asia Limited - 50,518,397
3,026,635,625 3,228,886,961
PBIL is enjoying OD (General) limit of Tk. 325.00 Crore from Prime Bank Limited, Motijheel Branch bearing interest @ 4.5%
per annum on quarterly basis .
PBIL has discontinued the OD (General) limit of Tk. 15.00 Crore from Bank Asia Limited, Paltan Branch vide reference no. BA/
PAL/CR/2018/2195 dated July 31, 2018.

15 Liability for Withholding Taxes

Opening balance 3,151,784 52,202
Add: Additions during the year 10,969,775 8,155,898
Less: Payment during the year (12,706,032) (5,056,316)
Closing balance 1,415,528 3,151,784
16 Client’s dividend suspense A/C
Opening balance 231,494 192,107
Add: Additions during the year 139,748 39,387
Less: Payment during the year - -
Closing balance 371,242 231,494
In order to comply with BSEC (Merchant Banker & Portfolio Manager Rules) 1996 under section- 28 (3) & 36 (11), PBIL
maintained Client’s dividend suspense A/C until claimed from any MSDA & NMSDA clients till 12 years after which PBIL will
book any outstanding amount as its income.
17 Security Deposit Receipt
Opening balance 294,250 44,100
Add: Additions during the year 1,253,141 250,150
Less: Payment the year (1,421,630) -
Closing balance 125,761 294,250

PRIME BANK 359

ANNUAL REPORT 2018

Prime Bank Investment Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
18 Provision for Expenses
CDBL charges 142,086 546,090
Auditor’s fee 201,250 115,000
Office Rent 66,167 982,253
Electric bill 288,516 341,669
Wasa bill,Dilkusha,Oct-Dec’17 50,166 52,347
Service & maintenance, Datacraft,Jan-Dec’17 - 36,000
Chauffeur Expenses,Dec’18 17,500 -
TVC Broadcasting, Dec’18 687,240 -
Commission share with Infinity Finance(Arif),Q4-2018 2,850 -
Ad on Financial Express - 23,000
Alpine Water bill 76 19,480
Printing & Stationary - 4,600
Sponsorship - 10,000
Plant Maintenance - 29,625
Security Expense 54,000 332,100
Business Development - 1,678,534
Telephone Bill Dec’18 8,600 25,067
Link charge to IT Nov & Dec’17 462 66,800
Internet Bill 425 425
Incentive Bonus 10,503,558 10,000,000
12,022,896 14,262,991
19 Provision for investment and clients’ margin loan
Provision for diminution in value of investments (19.1) 112,693,920 89,426,813
Provision for impairment of client margin loan (19.2) 429,659,847 457,624,746
Provision for impairment of Investment in PBSL (19.3) 7,646,233 2,948,441
550,000,000 550,000,000
19.01 Provision for diminution in value of investments
Investments have been recorded at cost and adequate provision for probable future losses has been made. Market value of
securities has been determined on the basis of the value of securities at the last trading date’s closing price of the year i.e.
27 December 2018.
Opening balance 89,426,813 172,762,277
Add: Provision made for the year 23,267,108 -
Less: Reversal of provision during the year - (83,335,464)
Closing Balance 112,693,920 89,426,813
As per BSEC instruction circular reference # BSEC/Mukhopatro(3rd Khondo)/2011/06 dated July 02, 2018 and BSEC/
CMRRCD/2009-193/212 dated December 10, 2018, Prime Bank Investment Limited has the option to maintain minimum
20% of total unrealized loss arising from diminution in value of investments as provision as at 31.12.2018 i.e. Tk. 75,129,280/-.
We have maintained provision amounting to Tk. 112,693,920/- as on 31.12.2018. The instruction prohibits payment of cash
dividend if the company makes less than 100% provision on such unrealized loss.
19.02 Provision for impairment of client margin loan
As per BSEC instruction circular reference #BSEC/Mukhopatro(3rd Khondo)/2011/06 dated July 02, 2018, provision has been
made for impairment of margin loan arising out of year-end (31.12.2018) revaluation of shares purchased through margin
loan complying the relevant instruction. Prime Bank Investment Limited has the option to maintain minimum 20% of total
impairment of margin loan arising from diminution in value of investments as provision as at 31.12.2018, i.e. Tk. 288,366,430/-.
We have maintained provision amounting to Tk. 429,659,847/- as on 31.12.2018. The instruction prohibits payment of cash
dividend if the company makes less than 100% provision on such impairment of margin loan.
Opening balance 457,624,746 361,781,083
Add: Provision made for the year - 95,843,663
Less: Reversal of provision during the year (27,964,899) -
429,659,847 457,624,746
19.03 Provision for impairment of Investment in PBSL
Opening balance 2,948,441 -
Add: Provision made for the year* 4,697,792 2,948,441
Less: Reversal of provision during the year -
7,646,233 2,948,441

360 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
20 Corporate Income Tax Payable
Balance as of 1 January 2018 16,885,515 9,849,809
Add: Tax expenses for the year 2018 9,876,612 7,035,706
Less: Adjusted for the year 2016 & 2017 (16,874,515) -
9,887,613 16,885,515
21 Accounts Payable
Payable to A.M. Printers 11,645 3,825
Payable to ANYADIN 14,400 -
Payable to BEXIMCO - 5,750
Payable to BTCL 15,158 11,046
Payable to CDBL 490,841 908,636
Payable to Commissioner of Taxes,Taxes Zone-14,Dhaka - 13,181
Payable to Commissioner of Taxes,Taxes Zone-5,Dhaka 8,143 -
Payable to COLORS 19,200 -
Payable to Cooper’s - 80,000
Payable to DSE - 6,000
Payable to Exclusive Communication 42,478 -
Payable to Global Brand Private Ltd 6,534 -
Payable to Grameen Phone 10,000 32,947
Payable to ICAB 150,000 -
Payable to ICT Plus Technologies 13,519 -
Payable to K.I. Trading - 5,130
Payable to Kinsman Printers 4,410 -
Payable to Mahbubul Haque Shakil Shangshad 24,000 -
Payable to Marshal Security Ltd 151,487 -
Payable to National Garden Center 1,330 -
Payable to NKN Security & Employees Service Ltd 89,140
Payable to Ornate Security Service Ltd - 26,730
Payable to Pink Creative Ltd 256,046 -
Payable to Ratasa Company Ltd 108,461 -
Payable to The Financial Express 25,044 -
Payable to Tremendous Media 18,000 9,000
Payable to Watermark 16,335 96,696
1,476,171 1,198,941
22 Dividend Payable
Opening balance 10 10
Add: Dividend payable during the year - -
Less: Payment during the year - -
Closing balance 10 10
23 Other Payables
Payable to Brokers 20,282,836 1,335,917
Payable to Clients (Receivables) 47,671,418 19,565,746
Payable to Clients (Withdrawals) 8,467,608 1,468,706
Payable to Clients (Credit Balance) 72,577,316 88,768,577
148,999,179 111,138,946
24 Interest Income

IFRS 9 requires that interest revenue shall be calculated by using the effective interest method. This shall be calculated
by applying the effective interest rate to the gross carrying amount of a financial asset. Due to the downward trend of the
capital market over the years, there is significant uncertainty about the inflow of economic benefits from interest on margin
loan against most of the loanees with negative equity. However, departing from IFRS 9, in some negative equity portfolios,
the company recognised interest as income amounting to Tk. 44,990,888 considering the fundamental strength of the
holding scripts and future capital market prospects of Bangladesh as the demutualization of stock exchanges has already
been occurred, foreign strategic investment has been done in DSE, stability in political environment and other favorable
macroeconomic indicators in Bangladesh. Subsequently, the majority of the said negative equity portfolios has become
positive (recoverable). However, the company has adequate provision (Note 19.02) against the negative equity.

PRIME BANK 361

ANNUAL REPORT 2018

Prime Bank Investment Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
2018 2017
25 Management Fee
IFRS 9 requires that management fees income arising on services provided by the PBIL are recognised when it expects to be
entitled in exchange for arranging for other parties to provide services to the clients and customers as per IFRS 15. Due to the
downward trend of the capital market over the years, there is significant uncertainty about the inflow of economic benefits
from management fee against most of the loanees with negative equity. Hence we did not recognize management fee from
margin loan as income in such cases where it is probable that such income will not flow to the company. However, departing
from IFRS 9, in some negative equity portfolios, the company recognised management fee as income amounting to Tk.
724,328 considering the considering the fundamental strength of the holding scripts and future capital market prospects
of Bangladesh as the demutualization of stock exchanges has already been occurred, foreign strategic investment has been
done in DSE, stability in political environment and other favorable macroeconomic indicators in Bangladesh. Subsequently,
the majority of the said negative equity portfolios has become positive (recoverable). However, the company has adequate
provision (Note 19.02) against the negative equity.
26 Dividend on Shares
Aman Feed Ltd - 40,000
Aamra Networks 13,700 -
Aftab Automobiles* 84,000 -
Apex Tannery* 80,000 -
Bangladesh Shipping Corporation* 280,000 -
Bashundhara Paper Mills Limited 21,614 -
BSCCL 50,000 120,000
Bata Shoe Co (BD) Ltd* 450,804 414,756
BBS Cables* 200,000 -
BDBS* 132,500 -
Beximco Parma* 600,651 -
City General Insurance Co Ltd - 300,000
Confidence Cement Ltd 150,000 310,000
DBBL 3,000 -
DESCO 970,241 970,241
Eastern Bank Ltd 350,000 2,000,000
Fareast Islami Life Ins co. Ltd. 596,875 384,975
Green Delta MF 1,150,650 639,250
GP* 422,500 -
Heidelberg Cement 660,000 900,000
ICB* 116,550 -
IDLC Finance Ltd. 765,000 263,472
IFIL Islamic MF-1 3,708,450 3,708,450
Intraco Refueling Station Limited 2,667 -
ITCL* 153,000 -
Doreen Power* 35,800 -
Jamuna Oil Ltd - 1,000,000
Khulna Power Company Limited* 1,007,700 196,000
Lanka Bangla Finance 333,750 300,000
Linde BD Ltd 318,136 620,000
Meghna Cement Mills Ltd - 31,500
Mercantile Bank Ltd 459,000 -
Nahee Aluminum 5,712 -
Olympic Industries* 867,690 -
PBL 1st ICB AMCL MF 23,740,850 23,740,850
Power Grid Company 834,170 666,860
Pragati Insurance Ltd 517,323 379,008
Popular Life Insurance Co Ltd - 1,479,816
RAK Ceramics Ltd 473,200 300,000
Social Islami Bank Ltd - 1,115,950
Shahjibazar Power Co. Ltd. 104,000 210,000
SK Trims & Industries Limited 1,008 -
Square Pharma* 2,303,906 1,400,743
Toshrifa* 86,471 -
The ACME Laboratories Limited 105,000 -
The City Bank Ltd 598,500 240,000
Titas Gas Transmission & Dist. Co. Ltd.* 3,165,572 1,347,052
VFS Thread Dyeing Limited 4,223 -
United Power Generation & Distribution Company Ltd. 5,184,000 -
51,108,213 43,078,924
*Due to oversight, the company did not recognize dividend income of Tk. 4,361,101 in the prior year which was recognized
subsequently in the current year. The financial statements were not restated as per IAS 8 due to immateriality

362 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018
Amount in Taka
2018 2017
27 Underwriting Commission
IDLC Finance Ltd - 50,000
Aman Cotton Fibrous Ltd 40,000 -
40,000 50,000
28 Issue Management & Corporate Advisory Fee
Corporate advisory fee-Regent Spinning Mills Ltd 150,000 100,000
Issue Mgt & Lead Arranger’s Fee-Al-Arafah Islami Bank Ltd 8,500,000 -
Issue Mgt & Corporate Advisory Fee-Everway Yarn Dyeing Ltd - 100,000
Corporate Advisory Fee - Genvio Pharma Ltd - 50,000
Issue Mgt & Corporate Advisory Fee-Flagship Dhaka CETP (BD) Ltd 450,000 300,000
Corporate advisory fee-Baraka Potenga 100,000 -
Corporate Advisory Fee-from PBL for PBL Bond-3 1,000,000 -
Registrar to the issue fee of Aman Cotton Fibrous Ltd 500,000 -
Corporate advisory fee for Health Complex One Project 750,000 250,000
11,450,000 800,000
29 Bank Interest on STD Accounts
Prime Bank Limited
Clients’ deposit 59,791 105,379
Broker’s deposit 25,351 153,411
Own Investment 69,877 89,378
Public Issue Application A/C 23,973 106,158
Interest on AIBL 2nd Mudaraba Subordinated Bond 61,611 -
240,602 454,326
30 Interest expenses
Interest on loan from Prime Bank Limited 144,590,206 213,898,212
Interest on loan from Bank Asia Limited 1,229,995 10,266,121
Interest on loan from ICB - 135,965
145,820,201 224,300,298
31 Salary and Allowances
Basic pay 26,502,299 19,057,974
Allowances includes House rent, Medical, Conveyance 17,652,932 14,633,703
Bonus 13,595,821 13,290,643
Bank’s contribution to provident fund 1,131,706 1,267,301
Gratuity - 1,371,984
Leave Encashment 63,000 240,000
Chauffeur Expenses 140,000 -
59,085,758 49,861,605
32 Rent, Taxes, Insurance and Electricity
Rent, rate and taxes 20,901,661 13,804,355
Insurance 217,482 140,516
Electricity, water & service maintenance bill 3,768,720 2,572,685
24,887,863 16,517,556
33 Legal & professional expenses
Professional charges 681,950 563,500
Legal fees 195,000 115,000
876,950 678,500
34 Postage, Stamp and Telecommunication
Postage & Newspaper 188,013 82,933
Internet Bill & TV Dish bill 786,371 211,432
Link Charge 166,964 456,794
Telephone-office 491,878 415,910
1,633,225 1,167,069

PRIME BANK 363

ANNUAL REPORT 2018

Prime Bank Investment Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
2018 2017
35 Stationery, Printing and Advertisement
Office and printing stationery & Photocopy 1,943,607 1,388,901
1,943,607 1,388,901
36 Depreciation, Amortization and Repair of assets
Depreciation/amortization 6,577,583 2,914,704
Amortization of preliminary expenses 522,915 522,915
Networking & Cabling 101,504 -
Repair and maintenance 461,208 356,277
7,663,210 3,793,896

37 Entertainment, Traveling & Conveyance

Entertainment 1,960,577 1,665,765
Traveling Expenses 2,649,399 78,693
Conveyance 235,946 211,820
4,845,922 1,956,278
38 Other Expenses
Bank charges 200,566 132,068
Annual renewal fee 170,000 168,600
Car expenses 819,950 417,726
Cleaning Expense 182,499 151,940
Exgratia 351,300 229,300
Subscription 62,775 145,499
Labor Charge 246,050 46,100
Miscellaneous 109,396 25,347
Plant Maintenance 67,850 125,825
Training and internship 790,313 410,128
NITA A/C Commission Expense 3,845 -
Souvenir/Calendar/Diary - 11,550
3,004,545 1,864,083
39 Tax Expenses
Current tax expenses
Head of Income Applicable tax Tax Liability Tax Liability
(Tk.) rate (%) 31.12.18 (Tk.) 31.12.17 (Tk.)

Capital gains on sale of shares 82,370,261 -

Less: Capital gain of UPGDL as per SRO
No:211/law/Income tax/2013 dated July
(73,625,798)
01, 2013 of Internal Asset Department
of Finance Ministry
Less: Carry forward capital loss -
8,744,463 10% 874,446 2,359,285
Dividend on shares 51,108,213
Receivable Dividend (6,072,382)
Less: Exemption (25,000)
45,010,831 20% 9,002,166 8,610,785
Business income - 37.5% - -
9,876,612 10,970,070
Adjustment for the AY 2014-2015 - (3,934,364)
Current Tax Expenses 9,876,612 7,035,706
Deferred tax expense/(Income) (536,563) (237,468)
9,340,049 6,798,238
40 Earnings per share
Net profit after tax 105,332,578 88,954,235
Weighted average outstanding number of shares 300,000,000 300,000,000

0.35 0.30

364 PRIME BANK

Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

41 Payments to Director and Officers

Disclosure as per requirement of schedule XI, Part II, Para 4
of Company Act 1994

Payment to Directors 2018 2017

Basic Salary 5,841,756 4,879,215
House Rent 1,797,468 1,501,302
Medical 1,348,092 1,125,971
Bonus/ incentives 3,699,779 4,291,095
Board meeting attendance fees 496,800 504,850
Total 13,183,895 12,302,433

42 Employee position for Prime Bank Investment Limited

Disclosure as per requirement of schedule XI part II of
Company Act 1994
2018 2017
Officer/Staff Worker
Total Employees Total Employees
28 - 28 27

43 Aging analysis of Debtors:

Particulars 1-3 Months 4-6 Months Above 6 months
Receivable from brokers (own) 4,223,691 N/A N/A
Receivable from brokers (clients) 47,671,418 N/A N/A
Other Receivable 458,438 480,964 5,550,688

44 Others
44.1 Figures in these notes and in the annexed financial statements have been rounded off to the nearest Taka.
44.2 These notes form an integral part of the annexed financial statements and accordingly are to be read in conjunction therewith.
Wherever considered necessary, previous year’s figures have been rearranged to conform to current year’s presentation and
44.3
for the purpose of comparison.

PRIME BANK 365

366
Prime Bank Investment Limited
Notes to the Financial Statements

PRIME BANK
ANNUAL REPORT 2018

For the year ended 31 December 2018

45 Related Party Transactions:

During the year under review, the Company carried out a number of transactions with related parties in the normal course of business and arms’ length basis. The name of related parties, nature
of these transactions and their value have been set out below in accordance with the provision of BAS 24 “Related Party Disclosure”:
Opening Transaction During the Period
Name of Party Nature of Relationship Nature of Transaction Closing Balance
Balance Debit Credit
Prime Bank Ltd. Parent Company OD (General) facility 3,178,368,564 1,118,767,061 1,270,500,000 3,026,635,625
Prime Bank Ltd, Head office Mutual agreement for sharing Collection of Facility charges
27.65% space of Uttara br (2nd fl)
Prime Bank Securities Ltd. Associate company Equity investment (5% of total
37,500,000 - - 37,500,000
equity Tk. 75 Cr)
Prime Bank Securities Ltd. Prime Bank Securities Ltd is a Collection of Facility charges
enlisted broker of PBIL & shared the
facility charges 16.67 % on Dilkusha - - - -
office (Rent, Electricity & Wasa)

Prime Bank Ltd, Uttara br. Mutual agreement for sharing 50% Collection of Facility charges
- - - -
space of Uttara br (2nd fl)
Mr. M Farhad Hussain, FCA Representing Chairman Board meeting attendance fee
- 92,000 - 92,000
Prime Bank Ltd.
Ms. Saheda Pervin Trisha Representing Prime Former Vice Chairperson Board meeting attendance fee
- 64,400 - 64,400
Bank Ltd.
Capt. Imam Anwar Hossain Representing Director Board meeting attendance fee
- 73,600 - 73,600
Prime Bank Ltd.
Dr. GM Khurshid Alam Independent Director Board meeting attendance fee
- 82,800 - 82,800

Mr. M Habibur Rahman Chowdhury FCA Director Board meeting attendance fee
- 92,000 - 92,000
 Prime Bank Investment Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Details of property, plant and equipment at 31 December 2018

Annexure- A
Amount in Taka
Cost Depreciation
Adjustment/ Adjustment/ Written
Charge
Balance at Disposal Balance at Disposal down value
Particulars Total at 31 during the Total at 31
01 January Additions during the Rate % 01 January during the at 31 Dec
Dec 2018 period Dec 2018
2018 period 2018 period 2018
the period
Disposal Disposal
Furniture and fixtures 16,022,718 15,215,033 - 31,237,751 10 11,852,360 2,973,927 - 14,826,287 16,411,464
Office equipment 16,238,531 5,453,113 - 21,691,644 20 13,069,777 1,562,722 - 14,632,499 7,059,145
Vehicles 12,570,000 3,972,000 - 16,542,000 20 4,988,243 1,606,146 - 6,594,389 9,947,612
Capital Work-In-Progress 14,342,266 - (14,342,266) - - - - - - -
Books 10,172 80,126 - 90,298 20 8,482 8,671 - 17,153 73,145
Sub-total (a) 59,183,688 24,720,272 (14,342,266) 69,561,693 29,918,862 6,151,466 - 36,070,327 33,491,366

Amortization
Software 4,031,176 - - 4,031,176 10 2,946,050 403,118 - 3,349,168 682,008
Website 230,000 - - 230,000 10 72,322 23,000 - 95,322 134,678
Sub-total (b) 4,261,176 - - 4,261,176 3,018,372 426,118 - 3,444,490 816,686
Grand Total at 31 Dec 2018 (a+b) 63,444,864 24,720,272 (14,342,266) 73,822,869 32,937,234 6,577,583 - 39,514,817 34,308,052

PPE as at December 2017 33,190,846 25,992,841 - 59,183,688 27,430,266 2,488,596 - 29,918,862 29,264,826
Software as at December 2017 4,261,176 - - 4,261,176 2,592,255 426,118 - 3,018,372 1,242,804
Grand total as at 31 Dec 2017 37,452,022 25,992,841 - 63,444,864 30,022,521 2,914,714 - 32,937,234 30,507,629

PRIME BANK
367
FINANCIAL STATEMENTS
OF PRIME BANK
SECURITIES LIMITED

Auditors’ Report to the Shareholders

Statement of Financial Position

Statement of Profit or Loss & Other Comprehensive Income

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

INDEPENDENT AUDITOR’S REPORT
To The Shareholders of Prime Bank Securities Limited
Opinion

We have audited the accompanying financial statements of Prime Bank Securities Limited which comprise the Statement of
Financial Position as at 31 December 2018 and Statement of Profit or Loss and Other Comprehensive Income, Statement of
Changes in Equity and Statement of Cash Flows for the year then ended and a summary of significant accounting policies and
other explanatory information disclosed in Note 1 to 33 to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as
at 31 December 2018, and their financial performance and their cash flows for the year then ended in accordance with International
Financial Reporting Standards (IFRSs) as explained in note # 1.3 to the financial statements.

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 Financial Statements section of our report. We are
independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code) and Bangladesh Securities and Exchange Commission (BSEC), 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 Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements for the year ended on 31 December 2018. There are no key audit matters to communicate in our report.

Emphasis of Matter

Without qualifying our opinion, we draw attention to note # 5 to the financial statements, where the Company explain the valuation
procedure of investment in shares of DSE and CSE.

Other Matter

The financial statements of Company for the year ended 31 December 2017 were audited by ACNABIN Chartered Accountants, who
expressed an unmodified opinion on those statements on 21 March 2018.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company is responsible for the preparation and fair presentation of these financial statements in accordance with the
International Financial Reporting Standards (IFRSs), as explained in note # 1.3 to the financial statements, and for such internal
control as management determines it is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial
statements

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout
the audit. We also:

• Identify and assess the risks of material misstatement of the 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.

PRIME BANK 369

ANNUAL REPORT 2018

• 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
Company ’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 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 Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

Report on other Legal and Regulatory Requirements

We also report that:

a. we have obtained all the material information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit and made due verification thereof;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our
examination of those books; and

c. the Company’s statement of financial position and statement of profit or loss and other comprehensive income together
with the Note 1 to 33 dealt with by the report are in agreement with the books of account.

Dated, Dhaka ACNABIN

04 March 2019 Chartered Accountants

370 PRIME BANK

Prime Bank Securities Limited
Statement of Financial Position
As at 31 December 2018

Amount in Taka
Particulars Notes
31.12.18 31.12.17

ASSETS
Non-Current Assets
Property, Plant & Equipment 3.00 10,425,864 9,799,540
Intangible assets 4.00 158,878 102,758
Deferred tax 16.02 177,507 780,486
Long Proprietary Securities Positions 5.01 271,524,965 398,400,000
Total Non-Current Assets (A) 282,287,214 409,082,784

Current Assets
Long Proprietary Securities Positions 5.02 265,600,000 265,600,000
Advances, deposits and prepayments 6.00 12,331,380 4,019,080
Advance income tax 7.00 74,730,135 64,342,135
Investment in securities 8.00 195,491,882 122,934,185
Accounts receivable 9.00 54,281,240 26,876,671
Loan to customers 10.00 209,100,070 303,394,498
Cash and cash equivalents 11.00 133,801,566 98,521,384
Total Current Assets (B) 945,336,273 885,687,953
Total Assets (A+B) 1,227,623,487 1,294,770,736

EQUITY & LIABILITIES

Capital & Reserves
Share capital 12.00 750,000,000 750,000,000
Retained earnings 13.00 (153,975,417) (58,315,338)
Shareholders equity (C) 596,024,583 691,684,662

Non-Current Liabilities
Loan from Bank 14.00 393,452,756 433,499,527
Total Non-Current Liabilities (D) 393,452,756 433,499,527

Current Liabilities
Accounts payable 15.00 167,930,364 97,903,151
Provision for taxation 16.00 41,787,639 35,429,824
Provision for diminution in value of investment 17.00 8,348,609 8,348,609
Provision for impairment of margin loan 18.00 14,682,620 25,885,007
Provision for expenses 19.00 5,396,917 2,019,956
Total Current Liabilities (E) 238,146,149 169,586,547

Total Equity & Liabilities (C+D+E) 1,227,623,487 1,294,770,736

These financial statements should be read in conjunction with annexed notes 1 to 33.

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka ACNABIN

04 March 2019 Chartered Accountants

PRIME BANK 371

ANNUAL REPORT 2018

Prime Bank Securities Limited

Statement of Profit or loss and Other Comprehensive income
For the year ended on 31 December 2018

Amount in Taka
Particulars Notes
2018 2017

Operating Income
Revenue from brokerage commission 20.00 18,031,770 35,429,471
Interest income 21.00 35,658,560 38,781,210
Other income 22.00 361,559 205,468
Capital Gain 23.00 10,191,253 7,826,975
Dividend Income 24.00 14,549,665 12,243,026
Total operating income (A) 78,792,808 94,486,150

Operating expenses 25.00 54,779,944 35,965,346

Financial expenses 26.00 20,236,100 27,995,991
Direct expenses 27.00 3,480,332 5,183,949
Total operating expenses (B) 78,496,376 69,145,286

Operating profit before provision C=(A-B) 296,432 25,340,864

Less: Loss on Sell of DSE Share to Strategic Investor 28.00 88,995,718 -

Provision for diminution in value of investment in shares 17.00 - 2,175,241
Provision for impairment of margin loan 18.00 - 10,685,091
Total provision and loss on sell of DSE share to strategic investor (D) 88,995,718 12,860,332

Operating profit before taxation E=(C-D) (88,699,286) 12,480,532

Current tax 16.01 6,357,815 11,831,212
Deferred tax 16.02 602,979 (4,162)
Total provision for tax (F) 6,960,793 11,827,050
Net profit after tax [G=E-F] (95,660,080) 653,482

Earnings per share 28.00 (1.2755) 0.0087

These financial statements should be read in conjunction with annexed notes 1 to 33.

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka ACNABIN

04 March 2019 Chartered Accountants

372 PRIME BANK

Prime Bank Securities Limited
Statement of Changes in Equity
For the period ended on 31 December 2018

Retained
Particulars Share capital Total
earnings

Balance as at January 01, 2017 750,000,000 (58,968,820) 691,031,180

Profit for the year 2017 - 653,482 653,482

Balance as at December 31 2017 750,000,000 (58,315,338) 691,684,662

Balance as at January 01, 2018 750,000,000 (58,315,337) 691,684,663

Profit for the year 2018 - (95,660,080) (95,660,080)

Balance as at December 31 2018 750,000,000 (153,975,417) 596,024,583

These financial statements should be read in conjunction with annexed notes 1 to 33.

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka
04 March 2019

PRIME BANK 373

ANNUAL REPORT 2018

Prime Bank Securities Limited

Statement of Cash Flows
for the year ended 31 December 2018

Amount in Taka
Particulars Note
31.12.18 31.12.17
A Cash flow from operating activities
Cash inflows from Brokerage Commission & charges 18,393,329 40,781,118
Cash inflows from Investment Income 13,487,458 58,851,210
Cash Outflows to Suppliers & Employees 12,865,159 (45,515,088)
Commission & charges Paid (3,480,332) (5,183,949)
Income taxes paid (10,388,000) (11,304,045)
Financial expenses Paid (20,236,100) (27,995,991)
Net cashflow from operating activities 10,641,515 9,633,255

B Cash flow from investing activities

Acquisition of Property plant and equipment (3,150,103) (10,775,352)
Acquisiton of Intangible assets (85,575) (52,250)
Disposal of Property plant and equipment 650,000 3,329,150
Investments in securities (72,557,697) (44,820,992)
Long Proprietary Securities Positions 37,879,317 -
Net cash flows from investing activities (37,264,058) (52,319,444)

C Cash flows from financing activities

Issue of share capital - -
Dividend paid - -
Borrowing/ (Paid) Loan from Bank (40,046,771) (17,428,124)
Loans to customers 101,949,496 51,234,562
Net cash from financing activities 61,902,725 33,806,438

D Net cash increase / (decrease) (A+B+C) 35,280,182 (8,879,751)

E Cash and cash equivalents at the beginning of the year 98,521,384 107,401,135
F Cash and cash equivalents at the end of the year (D+E) 133,801,566 98,521,384

Cash in hand 100,000 13,004

Cash at Bank 133,701,566 98,508,380

133,801,566 98,521,384

These financial statements should be read in conjunction with annexed notes 1 to 33.

Chief Financial Officer Managing Director & CEO Director Chairman

Dated, Dhaka
04 March 2019

374 PRIME BANK

Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

1.1 Status of the Company

Prime Bank Securities Limited (“the Company”) was incorporated as a private limited company in Bangladesh under
The Companies Act, 1994 vide certificate of incorporation no. C-84302 /10. It commenced its broker business with one
extension office from May 18, 2011 under license issued by Bangladesh Securities and Exchange Commission. Presently
the company has 2 (two) offices including Head Office at Dhaka, Bangladesh.
The registered office of the company is located at people’s Insurance Bhaban (11th floor) 36, Dilkusha Commercial Area,
Dhaka-1000.

1.2 Nature of Business

Principal objectives of the Company are to act as a member of Dhaka Stock Exchange Ltd. and Chittagong Stock
Exchange Ltd. to carry on the business of stock brokers / dealers in relation to shares and securities dealings and other
services as mentioned in the Memorandum and Articles of Association of the Company.

1.3 Significant accounting policies and basis of preparation of financial statements

1.3.1 Basis of accounting

1.3.2 Statement of compliance

These financial statements have been prepared under the historical cost convention on a going concern basis and in
accordance with Bangladesh Financial Reporting Standards (IFRS), The Companies Act-1994, Securities and Exchange
Rules-1987 and other laws and rules applicable in Bangladesh.

1.3.3 Components of Financial Statements

The financial statements referred to here comprises:

a) Statement of Financial Position
b) Statement of Profit or Loss and Other Comprehensive Income
c) Statement of Changes in Equity
d) Statement of Cash Flows and
e) Notes to the Financial Statements

1.3.4 Use of estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. It also
requires disclosures of contingent assets and liabilities at the date of the financial statements. Actual results may differ
from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing concern basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised and in any future periods affected.

1.3.5 Statement of cash flows

Statement of cash flows is prepared in accordance with the International Accounting Standard-7 “ Statement of Cash
Flows” and the cash flows from operating activities have been presented under indirect method.

1.3.6 Reporting period

These financial statements cover one calendar year from 1 January 2018 to 31 December 2018

1.3.7 Share capital

Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.

1.3.8 Property, plant and equipment

All fixed assets are stated at cost less accumulated depreciation as per IAS-16 “ Property, Plant and Equipment”. The
cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the asset to its
working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.

PRIME BANK 375

ANNUAL REPORT 2018

Prime Bank Securities Limited

Notes to the Financial Statements
For the year ended 31 December 2018

The Company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part
of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item
will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have
been put into operation, such as repairs and maintenance is normally charged off as revenue expenditure in the period
in which it is incurred.

Depreciation is charged on the basis of straight line method on all fixed assets at the following rate:

Category of assets Rate(%)

Furniture and fixtures 20
Office equipment 25
Air conditioners 25
Computer and hardware 25
Vehicle 20

For additions during the year, depreciation is charged for the remaining days of the year and for disposal depreciation is
charged up to the date of disposal.

On disposal of fixed assets, the cost and accumulated depreciation are eliminated from the fixed assets schedule and
gain or loss on such disposal is reflected in the income statement, which is determined with reference to the net book
value of the assets and net sale proceeds.

1.3.9 Intangible assets and amortization of intangible assets

An intangible asset is recognized if it is probable that the future economic benefits that are attributable to the asset will
flow to the entity and the cost of the assets can be measured reliably.

Software represents the value of computer application software licensed for use of the Company other than those
applied for the operating system of computers. Intangible assets are carried at their cost, less accumulated amortization
and impairment loss, if any.

Initial cost comprises license fees paid at the time of its acquisition and other directly attributable expenditures that are
incurred in customizing the software for its intended use.

Expenditure incurred for software is capitalized only when it enhances and extends the economic benefits of software
beyond its original specification and life and such cost is recognized as capital improvement and added to the original
cost of software.

Software is amortized using the straight-line method over the estimated useful life of 5 (five) years commencing from the
date of the acquisition available for use over the best estimates of its useful economic life.

1.3.10 Advance, deposits and prepayments

- Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions,
adjustments or charges to other account heads such as property, plant and equipment, inventory, etc.

- Deposits are measured at payment value.

- Prepayments are initially measured at cost. After initial recognition, prepayments are carried at cost less charges to
Statement of Comprehensive Income.

1.3.11 Advance Income tax

The amount of advance income tax are mainly deduction at sources by DSE & CSE on daily transaction of broker & dealer
operation. Tax deduction on interest income and dividend income are also included here.

1.3.12 Investments in securities

Investment in marketable and non-marketable ordinary shares has been shown at cost. Full provision for diminution in
value of shares (Quoted) as on closing of the year on an aggregate portfolio basis has been made in the account.

376 PRIME BANK

Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

1.3.13 Account receivables

Receivables are recognized when there is a contractual right to receive cash or another financial asset from another entity.

1.3.14 Loans to customers

Loans to customers are stated in the balance sheet on gross basis. Interest is calculated on a daily product basis but
charged and accounted for on accrual basis. Interest on customer loans is realized quarterly.

1.3.15 Preliminary and pre-operating expenses

These are recognized as an asset if it is probable that future economic benefits that are attributable to the asset will flow
to the enterprise and cost of the asset can be measured reliably. These are amortized over 3 years from the year of their
first utilization at the rate of Tk. 631,372, Tk. 614,122 and Tk. 614,121 for the year 2011, 2012 and 2013 respectively.

1.3.16 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Banks and highly liquid
financial assets which are subject to insignificant risk of changes in their fair value, and are used by the Company
management for its short-term commitments.

1.3.17 Provision for taxation

Provision for current income tax has been made in compliance with relevant provisions of Income Tax law.

1.3.18 Deferred taxation

Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets are the amount of income taxes recoverable in future periods in respect of deductible temporary
differences. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences
arising between the carrying values of assets, liabilities, income and expenditure and their respective tax bases. Deferred
tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted at
the balance sheet date. The impact on the account of changes in the deferred tax assets and liabilities has also been
recognized in the profit and loss account as per IAS-12 “Income Taxes”.

1.3.19 Incentive bonus

Prime Bank Securities Ltd. started a incentive bonus scheme for its employees based on profitability. This bonus amount
is being distributed among the employees based on their performance. The cost are accounted for the period to which
it relates.

1.3.20 Provision for liabilities

A provision is recognized in the balance sheet when the Company has a legal or constructive obligation as a result of a
past event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance
with the IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.

1.3.21 Brokerage commission

Brokerage commission is recognized as income when selling or buying order executed

1.3.22 Interest income on marginal loan

Interest income on margin loan is recognized on accrual basis. Such income is calculated on daily margin loan balance of
the respective customers. Income is recognized on monthly but realized quarterly except negative equity clients where
interest is recognized based on effective interest rate which is estimated recoverable amount as per IFRS 9.

1.3.23 Capital gain on sale of share

Capital gain on investments in shares is recognized when it is realized.

1.3.24 Fees income

Fees income arises on services provided by the Company are recognized on accrual basis.

1.3.25 Dividend income on shares

Dividend income on shares is recognized when the shareholder’s right to receive payment is established.

PRIME BANK 377

ANNUAL REPORT 2018

Prime Bank Securities Limited

Notes to the Financial Statements
For the year ended 31 December 2018

1.3.26 Interest paid and other expenses

In terms of the provisions of IAS-1 “Presentation of Financial Statements” interest and other expenses are recognized on
accrual basis.

1.3.27 Earnings per share

Basic earnings per share has been calculated in accordance with IAS 33 “Earnings per Share” which has been shown
on the face of the profit and loss account. This has been calculated by dividing the profit attributable to the ordinary
shareholders by the weighted average number of ordinary shares outstanding during the year.

1.3.28 Events after the reporting period

Where necessary, all the material events after the reporting period date have been considered and appropriate
adjustment/disclosures have been made in the financial statements.

1.3.29 Management’s responsibility on financial statements

The management’s of the company is responsible for the preparation and presentation of these financial statements.

1.3.30 Departures from IFRS

The Financial Reporting Council (FRC) has been formed in 2017, but no financial reporting standards have yet been issued
as per the provisions of the Financial Reporting Act (FRA) 2015. Hence, the financial statements of the Company as at and
for the year ended 31 December 2018 have been prepared in accordance with International Financial Reporting Standards
(IFRSs) as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) and as per the requirements of the
provisions, circulars, rules and regulations issued by the Bangladesh Securities and Exchange Commission (BSEC) and
The Income Tax Ordinance 1984. In case any requirements of the BSEC provisions, circulars, rules and regulations differ
from those of IFRS, the requirements of BSEC provisions, circulars rules and regulations shall prevail, and such departures
from IFRS have been followed accordingly. In addition, there has been a departure from the provisions of IFRS 9 with
regard to interest income. Material departures from the requirements of IFRS are as follows:

i) Provision for impairment of client margin loan

IFRS: In accordance with IFRS 9, an entity should recognize a loss allowance for expected credit losses on a financial
asset and shall not reduce the carrying amount of the financial asset in the statement of financial position. The objective
of the impairment requirements is to recognize lifetime expected credit losses for all financial instruments for which there
have been significant increases in credit risk since initial recognition, whether assessed on an individual or collective basis
considering all reasonable and supportable information, including that which is forward-looking. An entity shall directly
reduce the gross carrying amount of a financial asset when the entity has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof.

BSEC: As per BSEC press release #BSEC/Mukhopatro(3rd Khondo)/2011/06 dated July 02, 2018, provision has been made
for impairment of margin loan arising out of year-end (31.12.2018) revaluation of shares purchased through margin loan
complying with the relevant instruction. Prime Bank Securities Limited has opted for the option to maintain minimum
20% of total impairment of margin loan arising from diminution in value of investments as provision as on 31.12.2018 in
accordance with the aforesaid press release.

ii) Recognition of interest income from margin loan

IFRS: In accordance with IFRS 9, interest revenue should be calculated by using the effective interest method by applying
the effective interest rate to the gross carrying amount of the financial asset. Interest income should be recognized when
the financial asset is no longer credit-impaired and the improvement can be related objectively.

Departure: The Company recognized interest from margin loan when the loan is no longer credit-impaired (negative
equity). However, some margin loan interest was recognized as income from credit-impaired (negative equity) portfolios
considering the fundamental strength of the holding scripts and future capital market prospects of Bangladesh as the
demutualization of stock exchanges has already occurred, foreign strategic investor has already invested in the shares
in DSE, political environment has been stabilized and other favorable macroeconomic indicators have been acclaimed
under the present Government in Bangladesh.

378 PRIME BANK

Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

iii) Valuation of shares of DSE and CSE

IFRS: As per para-5.2.2 of IFRS-9, an entity shall apply the impairment requirements to financial assets that are measured
at amortized cost in accordance with paragraph 4.1.2 of IFRS-9 and to financial assets that are measured at fair value
through other comprehensive income in accordance with paragraph 4.1.2A of IFRS-9.

Depurture: There is no active market for shares in DSE and CSE and the sale price to Strategic Investor, Shenzhen
Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE), has been determined through negotiation. The sale had
to be made within the time limit as given in the Exchange Demutualization Act-2013 and approved by the Bangladesh
Securities and Exchange Commission (BSEC). This was not a transaction in active market. And we strongly believe that
with the involvement of the strategic partners and the development of capital market under the guidance of the BSEC,
the share price of the exchanges will increase significantly.

2.00 General

a) These financial statements are presented in Taka, which is the Company’s functional currency. Figures appearing in
these financial statements have been rounded off to the nearest Taka.

b) The expenses, irrespective of capital or revenue nature, accrued / due but not paid have been provided for in the
books of the Company.

c) Figures of previous year have been rearranged whenever necessary to conform to current years presentation.

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ANNUAL REPORT 2018

Prime Bank Securities Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
3.00 Property, Plant & Equipment less depreciation
Office equipment 2,280,460 1,523,534
Vehicle 3,033,000 3,371,700
Computer & hardware 6,654,264 5,728,004
Furniture & fixtures 8,422,409 6,955,492
20,390,133 17,578,730
Depreciation -
Opening balance 7,779,190 9,914,339
Less : Sale/Disposal of Fixed Assists 338,696 3,320,098
7,440,494 6,594,241
Add: Charged during the year 2,523,775 1,184,949
Closing balance 9,964,269 7,779,190
10,425,864 9,799,540
4.00 Intangible assets
Back office software-Broker 1,163,250 1,163,250
Back office software-Dealer 150,000 150,000
Web development 200,000 200,000
Anti virus software 152,450 66,875
IPO Module 69,000 69,000
1,734,700 1,649,125
Amortization -
Opening balance 1,546,367 1,481,427
Add: Amortization during the year 29,455 64,940

Closing balance 1,575,822 1,546,367

158,878 102,758
Details shown in Annexure-A
5.00 Long proprietary securities positions at market value*
Shares in DSE 380,624,965 507,500,000
Shares in CSE 156,500,000 156,500,000
537,124,965 664,000,000
This represents total share value of investment in DSE (currently held 75% by the Company including 35% blocked shares)
and in (CSE currently held 100% by the Company including 60% blocked shares). The share investment value has been
shown at cost as disclosed in note #1.3.30 to the financial statements.
The total amount Tk. 664,000,000 is our original investment at cost for DSE and CSE memberships in exchange of which
shares at face value of Tk. 10 each was allotted in favour of the Company in November 2013 for DSE and in October
2013 for CSE. As per the provision of the Exchange Demutualization Act-2013 and in accordance with the Bangladesh
Securities and Exchange Commission (BSEC) approved Demutualization Scheme, Dhaka Stock Exchange Ltd. (DSE)
allotted total 72,15,106 ordinary Shares (including 25% shares for sale to strategic partner and 35% block shares) at face
value of Tk.10.00 each and Chittagong Stock Exchange Ltd. (CSE) allotted total 42,87,330 ordinary Shares (including 25%
shares for sale to strategic partner and 35% block shares) at face value of Tk.10.00 each against the membership of DSE
and CSE respectively.
The Company has also received a Trading Right Entitlement Certificate (TREC) from Dhaka Stock Exchange Limited (DSE)
and also from Chittagong Stock Exchange Limited (CSE) against their DSE and CSE memberships, as stated in Note# 5.01
below. Such TRECs allow the Company to operate as broker and dealer in the DSE and CSE platforms. This is in addition
to the Company’s right to receive dividend, etc. as shareholders of DSE and CSE. Though these two TRECs are intangible
assets, no value has been assigned to and recorded against, the same. This is because TREC is not a commonly tradable
instrument and fair market value cannot be measured reliably.
In accordance with the provision of the Exchange Demutualization Act-2013 and Bangladesh Security Exchange
Commission (BSEC) approved Demutualization Scheme, DSE has sold 25% of it’s share to Strategic Investor, Shenzhen
Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE) Consortium @ Tk. 21 per share. Subsequently, Prime Bank
Securities has received Tk. 37,879,317 from DSE against the sale proceeds. The approximate cost price of each share is Tk.
70.34 excluding the value of TREC License. As such, by considering a conservative approach, we have realized the loss
against sale of 25% shares of DSE in our books of accounts.

380 PRIME BANK

Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
5.01 Long Proprietary securities positions at market value (Blocked Share)
Shares in DSE (35% Blocked Share) 177,624,965 304,500,000
Shares in CSE (60% Blocked Share) 93,900,000 93,900,000
271,524,965 398,400,000
The 35% DSE shares (i.e. 25,25,287 shares) and 60% CSE shares (i.e. 25,72,398 shares) were kept in blocked accounts as
per the provisions of the Exchange Demutualization Act, 2013. As such the value of these shares have been classified as
Long Proprietary Securities Position (Blocked Share) and considered under non-current assets in the books of accounts
on a relevant historical basis.
By considering a conservative approach, we have realized the loss against sale of 25% shares of DSE in our books of accounts.
The spirit of stock exchange demutualization and involving the strategic investor is to strengthen the capital market and
to become an international grade stock exchange. As such, The strategic Investor’s will get some additional benefits
as per their investment as Strategic Investor in DSE, i.e. a) Get Directorship in the Board of Dhaka Stock Exchanges, b)
Run the management of Stock Exchanges, c) Co-operation & Investment on Technological advancement of DSE, d)
Co-operation on market cultivation and product development (Like Commodity Market and Derivative Market). Overall
the sale has been incurred to achieve higher-quality growth of the market and the economy. The sale is expected to
eventually contribute to take forward the business of DSE and Bangladesh capital market into a growth path and assist
DSE in its transformational journey to becoming an international grade stock exchange. So, the selling price @Tk. 21
cannot be considered as a fair market price. Thus the investment has been shown in cost.
There is no active market for shares in DSE and CSE and the sale price to Strategic Investor, Shenzhen Stock Exchange
(SZSE) and Shanghai Stock Exchange (SSE), has been determined through negotiation. The sale had to be made within the
time limit as given in the Exchange Demutualization Act-2013 and approved by the Bangladesh Securities and Exchange
Commission (BSEC). This was not a transaction in active market. And we strongly believe that with the involvement of
the strategic partners and the development of capital market under the guidance of the BSEC, the share price of the
exchanges will increase significantly.

5.02 Long Proprietary securities positions at market value (Free Share)

Shares in DSE (40% Free Share) 203,000,000 203,000,000

Shares in CSE (40% Free Share) 62,600,000 62,600,000

265,600,000 265,600,000

This represents total share value of investments in DSE (currently held 40% by the Company) and in CSE (currently held
40% by the Company). The share investment value has been shown at cost as disclosed in note # 1.3.30 to the financial
statements.
The total amount Tk. 664,000,000 is our original investment at cost for DSE and CSE memberships in exchange of which
shares at face value of Tk. 10 each was allotted (including 60% blocked shares) in favour of the Company in November 2013
for DSE and in October 2013 for CSE. As per the provision of the Exchange Demutualization Act-2013 and in accordance
with the Bangladesh Securities and Exchange Commission (BSEC) approved Demutualization Scheme, Dhaka Stock
Exchange Ltd. (DSE) allotted total 72,15,106 ordinary Shares (including 25% shares for sale to strategic partner from 60%
blocked shares and remaining 35% blocked shares) at face value of Tk.10.00 each and Chittagong Stock Exchange Ltd.
(CSE) allotted total 42,87,330 ordinary Shares (including 25% shares for sale to strategic partner from 60% blocked shares
and remaining 35% blocked shares) at face value of Tk.10.00 each against the membership of DSE and CSE respectively.
Out of the above DSE transferred 2,886,042 shares and CSE transferred 1,714,932 shares, directly credited to the Beneficiary
Owner’s account of the Company which is 40% of the total holding of the shares (i.e., excluding 60% blocked shares).
Meanwhile, PBSL has intended to sell 40% of it’s current holding and take initiative accordingly and explored in the market
for potential buyers. But, we could not execute the sale as we have not yet got our expected price from the potential
buyers. Besides, we are also expecting a positive market movement in 2019 as per our investment outlook 2019. In view
of that, we are expecting that price will increase within next year and we can then be able to sell it by September 2019.

6.00 Advances, deposits and prepayments

Security deposit with CDBL 200,000 200,000

Security deposit with CSE 25,000 25,000
Security deposit with T&T 6,300 6,300
Advance Against IPO 2,809,535 553,280

PRIME BANK 381

ANNUAL REPORT 2018

Prime Bank Securities Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
Advance Rent 1,606,500 3,034,500
Loan to Employee 6,884,045 -
Advance to LEAD Soft Bangladesh Limited 200,000 200,000
Advance against Salary 600,000 -

12,331,380 4,019,080

7.00 Advance income tax

Dhaka Stock Exchange-Broker 7.01 55,423,301 51,515,661
Chittagong Stock Exchange-Broker 7.02 217,988 198,537
Dhaka Stock Exchange-Dealer 7.03 771,873 454,538
Income from dividend 7.04 3,045,996 2,412,176
Income from interest on deposit-Broker 7.05 1,257,664 973,885
Income from interest on deposit-Dealer 7.06 90,347 41,896
Direct Income Tax 7.07 8,537,194 4,823,463
Chittagong Stock Exchange-Dealer 7.08 27,749 6,977
Income from Dividend -DSE & CSE 7.09 5,358,023 3,915,002
74,730,135 64,342,135

7.01 Dhaka Stock Exchange-Broker

Opening Balance 51,515,661 43,127,417

Add: AIT for the year 3,907,640 8,388,244
55,423,301 51,515,661
7.02 Chittagong Stock Exchange-Broker
Opening Balance 198,537 193,399
Add: AIT for the year 19,451 5,138
217,988 198,537
7.03 Dhaka Stock Exchange-Dealer
Opening Balance 454,538 338,753
Add: AIT for the year 317,335 115,785
771,873 454,538
7.04 Income from dividend
Opening Balance 2,412,176 1,947,197
Add: AIT for the year 633,820 464,979
3,045,996 2,412,176
7.05 Income from interest on deposit-Broker
Opening Balance 973,885 643,757
Add: AIT for the year 283,779 330,128
1,257,664 973,885
7.06 Income from interest on deposit-Dealer
Opening Balance 41,896 5,617
Add: AIT for the year 48,451 36,279
90,347 41,896
7.07 Direct Income Tax
Opening Balance 4,823,463 4,823,463
Add: AIT for the year 3,713,731 -
8,537,194 4,823,463
7.08 Chittagong Stock Exchange-Dealer
Opening Balance 6,977 986
Add: AIT for the year 20,772 5,991
27,749 6,977
7.09 Income from Dividend -DSE & CSE
Opening Balance 3,915,002 1,957,501
Add: AIT for the year 1,443,021 1,957,501

5,358,023 3,915,002
74,730,135 64,342,135
195,491,882 122,934,185

382 PRIME BANK

Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
8.00 Investment in securities
All investments in marketable securities are valued on an aggregate portfolio basis at cost price, at the balance sheet
date. As on 31 December, 2018 there unrealized loss Tk. 29,212,803.68. Sufficient provision has maintained as per SEC
guidelines against this unrealized loss. Please see note 17.00 for details.
Cost Price Market Price
Details of Marketable Securities are given below,
Business Segments
Bank 15,407,867 15,244,032
Cement 911,674 840,551
Engineering 13,632,884 12,598,044
Financial Institutions 26,956,691 22,036,931
Food & Allied 240,946 216,200
Fuel & Power 75,701,364 64,842,937
IT & Miscelleneous 305,640 231,942
Mutual Fund 32,342,572 22,270,869
Pharmaceuticals & Chemicals 22,420,921 21,068,838
Paper & Printing 7,117,103 5,594,320
IPO Investment 454,220 1,334,415
195,491,882 166,279,078

31.012.2018 31.12.2017
9.00 Accounts receivable
Receivable from Dhaka Stock Exchange Ltd. 42,992,205 22,449,801
Receivable from Dhaka Stock Exchange Ltd. (Dealer Account) 4,187,463 4,382,849
Receivable from Prime Bank Investment Ltd. 3,036,379 44,021
Receivable from Dividend_Dealer 1,921,528 -
Receivable from Dividend _CSE 2,143,665 -
54,281,240 26,876,671
Aging Schedule of Accounts Receivable
Name of Clients 0- 30 Days 30- 60 Days 60-90 Days Above 90 Days
Dhaka Stock Exchange Ltd. 42,992,205 - - -
Dhaka Stock Exchange Ltd. (Dealer A/c) 4,187,463 - - -
Prime Bank Investment Ltd. 3,036,379 - - -
Receivable from Dividend_Dealer 1,921,528 - - -
Receivable from Dividend _CSE 2,143,665 - - -
54,281,240 - - -
10.00 Loan to Customer
Opening balance 303,394,498 354,629,060
Add: Accrued Interest 18,857,455 -
Add: Addition during the year - -
322,251,953 354,629,060
Less: Adjustment during the year 101,949,496 51,234,562
Less: Written off during the year 11,202,387 -
Closing balance 209,100,070 303,394,498
11.00 Cash and cash equivalents
Cash in Hand 100,000 13,004
Cash at Bank:
One Bank Limited (SND)-DSE Broker 125,700,854 79,053,159
One Bank Limited (SND)-DSE Dealer 420,502 11,765,262
Prime Bank Limited (CD)-Operation 978,865 1,332,065
Prime Bank Limited (CD)-CSE Dealer 205,364 1,775,714
Prime Bank Limited (CD)-CSE Broker 5,930,918 4,471,992
Prime Bank Limited (SND)-IPO A/C 37,119 110,188
Prime Bank Limited (SND)-Principal 427,944 -
133,701,566 98,508,380
133,801,566 98,521,384

PRIME BANK 383

ANNUAL REPORT 2018

Prime Bank Securities Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
12.00 Share capital
Authorized capital
150,000,000 ordinary shares of Tk.10 each 1,500,000,000 1,500,000,000
Issued, subscribed and paid-up capital
75,000,000 ordinary shares of Taka 10 each issued and fully paid each 750,000,000 750,000,000
Shareholding position of the company is as under Number of shares Taka
Prime Bank Limited 71,250,000 712,500,000
Prime Bank Investment Limited 3,750,000 37,500,000
75,000,000 750,000,000
13.00 Retained earnings
Opening balance (58,315,338) (58,968,820)
Add: Net profit during the year (95,660,080) 653,482
(153,975,417) (58,315,338)
Less: Dividend - -
Closing balance (153,975,417) (58,315,338)
14.00 Loan from Bank 393,452,756 433,499,527
This amount represents a renewable OD (Gen) facility from Prime Bank Limited, the parent company of Prime Bank
Securities Limited. The loan has renewed vide sanction advise no. Prime/HO/CAD/CnIB/2018/69, Dated: January 02, 2018
for a period of 12 Months. The facility was initially provided on September 2011 with a limit of Tk.24 crore. The amount of
facility was increased to the current limit of Tk 550,000,000 on 18 March 2013. The bank has extended the loan facility to
PBSL to repay the loan after 24 months of being called, if required, on its 474th Board Meeting dated 25 February 2018. As
per BAS 1, Para 73 & 75, the loan has been shown as Non-current liability instead of Current Liability on a historical basis.
15.00 Accounts Payable
Security Deposits 237,496 165,680
Payable to DSE 679,249 183,902
Payable to DSE DLR 2,384 2,534
Payable to CDBL 62,567 21,848
Payable to Customer (Credit Balance) 115,790,428 37,290,483
Payable in transit (General) 46,340,504 16,578,351
Cheque in transit (PBIL) 3,790,561 20,306,902
Cheque in transit (026) 686,002 23,103,137
VAT Payable 178,430 111,753
Tax Payable 162,743 138,561
167,930,364 97,903,151
16.00 Provision for taxation
16.01 Current tax
Opening balance 35,429,824 23,598,612
Add: Provision for the during year 6,357,815 11,831,212
Less: Settlement during the period - -
Closing balance 41,787,639 35,429,824
16.02 Deferred tax
Opening balance (780,486) (776,323)
Add: Provision for the during year - (4,162)
Less: Adjustment during the year 602,979 -
Closing balance (177,507) (780,486)
41,610,132 34,649,339
The provision for income tax has been calculated based on the profit before provision considering admissible &
inadmissble expenses as per provision of the Income Tax Ordinance 1984.
17.00 Provision for diminution in value of investment in shares
Opening balance 8,348,609 6,173,367
Add: Addition during the year - 2,175,241
8,348,609 8,348,609
* As per BSEC instruction circular reference SEC/CMRRCD/2009-193/196 dated 28 December 2016 and SEC/
CMRRCD/2009-193/203 dated 28 December 2017 and subsequent press release no. BSEC/Mukhopatro(3rd
Khondo)/2011/60; Date: 19 December, 2018 Prime Bank Securities Ltd has the option to maintain provision @ 20% of total
unrealized loss arising from diminution in value of investments as at 31/12/2018. i.e. Tk. 3,828,727. But, we have maintained
provision amounting to Tk. 8,348,609.00 which is 29% of total unrealized loss as of 31/12/2018.
See Details in note 8.

384 PRIME BANK

Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
31.12.18 31.12.17
18.00 Provision for impairment of margin loan
Opening balance 25,885,007 15,931,966
Add: Addition during the year - 10,685,091
Less : Written Off during the year (11,202,387) (732,049)
14,682,620 25,885,007
* As per BSEC instruction circular reference SEC/CMRRCD/2009-193/196 dated 28 December 2016 and SEC/
CMRRCD/2009-193/203 dated 28 December 2017, subsequent press release no. BSEC/Mukhopatro(3rd Khondo)/2011/61;
Date: 26 December, 2018, Prime Bank Securities Ltd has the option to maintain provision @ 20% of total negative equity
arising from margin loan as at 31/12/2018. i.e. Tk. 81,65,495.40 But, we have maintained provision amounting to Tk.
14,682,620 which is around 36% of total negative equity balance as of 31/12/2018.
19.00 Provision for expenses

Water bill 4,450 4,000

Telephone bill 35,000 35,000
Electricity bill 165,000 130,000
Wasa bill 40,000 28,000
Audit fee 172,500 115,000
Software maintenance 120,000 120,000
Internet bill - 20,000
Fuel Expenses-Generator - 2,000
Incentive bonus - 1,517,556
WAN Connectivity - 48,400
Professional fees 74,750 -
Gratuity Fund 4,100,000 -
Howla & Commission 578,887
Driver Allowance 4,355 -
Internship Allowance 5,400 -
Business Associate Commission 96,574 -
5,396,917 2,019,956
20.00 Revenue from brokerage commission
Commission from Merchant Bank
Dhaka Stock Exchange 6,662,783 17,516,727
Chittagong Stock Exchange 1,575 2,063
6,664,358 17,518,790
Commission from PBSL
Dhaka Stock Exchange 11,260,104 17,874,066
Chittagong Stock Exchange 107,308 36,615

11,367,412 17,910,681

18,031,770 35,429,471
21.00 Interest income
Interest income from margin loan 32,354,840 35,117,057
Interest on deposits 3,293,316 3,664,153
Interest on EHBL Loan 10,404 -
35,658,560 38,781,210
IFRS 9 requires that interest revenue shall be calculated by using the effective interest method. This shall be calculated
by applying the effective interest rate to the gross carrying amount of a financial asset. Due to the downward trend of
the capital market over the years, there is significant uncertainty about the inflow of economic benefits from interest on
margin loan against most of the loanees with negative equity. However, departing from IFRS 9, in some negative equity
portfolios, the company recognised interest as income amounting to Tk. 18,857,455 considering the fundamental strength
of the holding scripts and future capital market prospects of Bangladesh as the demutualization of stock exchanges has
already been occurred, foreign strategic investment has been done in DSE, stability in political environment and other
favorable macroeconomic indicators in Bangladesh. Subsequently, the majority of the said negative equity portfolios
has become positive (recoverable). However, the company has adequate provision (Note 18) against the negative equity.

PRIME BANK 385

ANNUAL REPORT 2018

Prime Bank Securities Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
2018 2017
22.00 Other operating income
BO Opening charge 76,000 25,000
CDBL income 56,109 11,897
BO Account Maintenance Fee 120,350 69,500
Margin A/C Annul Maintenance Fee 97,500 93,500
Account Closing Charge 8,455 3,536
IPO Income 2,345 2,035
Cheque Dishonor Charge 800 -
361,559 205,468
23.00 Capital Gain
Gain from Investment in Share 9,541,257 7,570,227
Gain on Sale of Fixed Assets 649,996 256,748
10,191,253 7,826,975
24.00 Dividend Income
Dividend Income from DSE 7,215,106 7,215,106
Dividend Income from CSE 2,143,665 2,572,398
Dividend Income from Investment in Share 5,190,894 2,455,522
14,549,665 12,243,026
25.00 Operating expenses
Salary & allowances 25.01 32,753,172 17,747,130
Festival Bonus 2,812,052 1,731,742
Incentive Bonus - 1,351,381
Office rent 7,813,302 7,470,725
Utility bills 25.02 2,539,648 1,967,694
Conveyance Bill 90,411 76,765
Postage & Courier 4,912 8,635
Board Meeting Attendance Fees 340,400 200,100
Business Development Expenses 564,847 150,927
Advertisement 46,000 39,150
Audit Fee 172,500 115,000
Legal Fee 80,850 -
Fees and renewal 25.03 335,146 429,404
Professional fee 385,250 681,206
Training expenses 132,000 78,210
Security & Cleaning 986,208 666,169
Newspaper & magazine 23,308 26,037
Internship Allowance 160,500 -
Entertainment 619,516 462,689
Vehicle expenses 1,260,589 920,128
Travelling Alloawnce 106,208 -
Computer Consumables 260,205 144,834
Cleaning Material 112,291 67,124
Office Supply 181,413 90,672
Stationery 187,400 114,289
Printing 224,586 22,540
Car Parking Expenses 34,000 -
Depreciation and amortization 25.04 2,553,230 1,249,889
Repair & maintenance - 3,450
Donation - 40,000
Bidding Fee - 5,000
Misc Expenses - 10,000
Office Shifting Cost - 94,456
54,779,944 35,965,346

386 PRIME BANK

Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
2018 2017
25.01 Salary & allowances

Basic salary 15,249,000 9,470,046

House rent 6,185,988 3,987,075
Conveyance allowance 744,270 349,226
Medical allowance 2,182,129 1,248,987
Leave fare assistance 1,433,439 816,773
Provident fund 1,246,893 927,639
Car Alloawnce 1,560,158 947,384
Cessation Adjustment Allowance 1,388 -
Gratuity Fund 4,100,000 -
Earned Leave Encashment 49,907 -
32,753,172 17,747,130
25.02 Utility bills
Electricity bill 1,376,424 1,028,679
Telephone bill 345,179 273,904
Wasa bill 148,971 125,872
Water bill (Drinking) 54,257 38,626
Fuel-Generator 3,517 213
Internet bill 145,978 118,000
WAN Connectivity 465,322 382,400
2,539,648 1,967,694
25.03 Fees & renewal
Dhaka Stock Exchange Ltd 1,700 20,700
Chittagong Stock Exchange Ltd - 122,000
Bangladesh Securities Exchange Commission 43,500 -
Register of Joint Stock Companies & Firms 24,046 20,414
Central Depository Bangladesh Limited 4,600 4,600
Trade Licence Fees 17,000 24,490
TREC Renewal - Dhaka Stock Exchange Ltd 50,000 50,000
TREC Renewal - Chittagong Stock Exchange Ltd 50,000 50,000
Trade Certificates Renewal 75,000 115,000
DBA Membership Subscription 12,500 -
IPO Bidding & Subscription Fee 15,000 -
Entrance Fee 4,800 1,200
IPO Subscription Fee (DLR) 30,000 11,000
TWS Shifting Charge 7,000 5,000
New Branch Application Fee - 2,500
Office Relocation Fee - 2,500
335,146 429,404
25.04 Depreciation & amortization
Furniture & fixture 1,489,619 964,426
Computer & hardware 267,867 111,422
Office equipment 159,689 25,016
Vehicles 606,600 84,085
2,523,775 1,184,949
Software 29,455 64,940
2,553,230 1,249,889
26.00 Financial Expenses
Bank charge & commission 161,630 107,485
BG charge & commission 460,000 230,000
Interest on Bank loan 19,614,470 27,658,506
20,236,100 27,995,991
27.00 Direct expenses
Howla & Commission 578,957 211,364
Laga 2,113,452 4,255,143
CDBL charge 621,931 700,055
Investor protection fund 6,850 17,387
Business Associate Commission 159,142 -
3,480,332 5,183,949

PRIME BANK 387

ANNUAL REPORT 2018

Prime Bank Securities Limited

Notes to the Financial Statements
For the year ended 31 December 2018

Amount in Taka
2018 2017

28.00 Loss on Sale of DSE Share to Strategic Investor 88,995,718 -

In accordance with the provision of the Exchange Demutualization Act-2013 and Bangladesh Security Exchange
Commission (BSEC) approved Demutualization Scheme, DSE has sold 25% of it’s share to Strategic Investor, Shenzhen
Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE) Consortium @ Tk. 21 per share. Subsequently, Prime Bank
Securities has received Tk. 37,879,317 from DSE against sale proceeds. But, the cost price of each share of DSE cannot
be measured reliably, as no value has been assigned to, and recorded against, the TREC License as mentioned in note
# 5. However, the approximate cost price of each share is Tk. 70.34 excluding the value of TREC License. As such, by
considering a conservative approach, we have realized the loss against sell of 25% share of DSE in our books of accounts.
29.00 Earnings per share

Net profit after tax (95,660,080) 653,482

Weighted average outstanding number of shares 75,000,000 75,000,000
Earnings per share (1.275) 0.009
30.00 Bank guarantee

Prime Bank Limited has issued Prime Bank Securities Limited a Bank Guarantee no. Prime/BG(L)/MTJ/04/2018 dated
11.01.2018 for maintaining additional member’s margin as specified in sub-regulation (3) of regulation (4) of Dhaka Stock
Exchange (TREC HOLDER’S MARGIN) Regulataions 2013 worth of Tk. 100,000,000 (Taka Ten Crore) from dated 12.01.2018
to 31.12.2018 under sanctioned advice no. Prime/HO/CAD/CnIB/2018/69, Dated: January 02, 2018.

31.00 Disclosure on Payments/Perquisites to Directors and Key Management Personnel (As per requirement of Companies
Act 1994, Schedule-XI, part-II)

31.01 Paid to Directors

Board Meeting Attendance Fees 340,400 200,100
340,400 200,100
31.02 Paid to Key Management Personnel
Short Term Employee Benefits 13,029,247 6,021,250
Post Employment Benefits 457,721 313,048
13,486,968 6,334,298
Key management Personnel are those Persons having authority and responsibility for Planning, Directions and Controlling
the activities of the Company.
i) No Compensation/ Other allowance/ commission was allowed to Directors including Managing Director, Managing
Agent or manager of the company except as stated above.
ii) There is no amount payable to Directors including including Managing Director, Managing Agent or manager of the
Company for any sort of commission on purchases, profit or guarantee.
iii) BOD Meeting attendance fee for attending each Board Meeting was Tk 5,000 for each director. The remuneration was
enhanced to Tk. 8,000 for each director in it’s 33rd Board of Directors Meeting held on July 20, 2017.

32.00 Disclosure regarding Information of Employees (As per requirement of Companies Act 1994, Schedule-XI, part-II)
The number of employees and expenses incurred for employees during the year as follows.
Particulars
Number of employees:
(i) Below Tk. 36,000 p.a. - -
(ii) Tk. 36,000 p.a. and above 36 24
Salary & Allowance Paid/ Payable to Employees:
(i) Below Tk. 36,000 p.a. - -
(ii) Tk. 36,000 p.a. and above 35,565,224 19,882,869
35,565,224 19,882,869

388 PRIME BANK

 Prime Bank Securities Limited
Notes to the Financial Statements
For the year ended 31 December 2018

33 Related Party Transaction:

During the year under review, the Company carried out a number of transactions with related parties in the normal course of business and arms’ length basis. The name of related parties, nature
of these transactions and their value have been set out below
Opening Transaction During the Period
Name of Party Nature of Relationship Nature of Transaction Closing Balance
Balance Debit Credit
Equity investment(95% of
Prime Bank Limited Parent Company 712,500,000 - - 712,500,000
total Equity Taka 75 Crore)
Prime Bank Limited Parent Company OD (General) facility 433,499,527 205,241,350 245,288,122 393,452,756
Equity investment(5% of
Prime Bank Investment Limited Shareholder 37,500,000 - - 37,500,000
total Equity Taka 75 Crore)
Prime Bank Investment Limited. Shareholder Rent Expense - 2,776,302 - 2,776,302
Brokerage Transaction
Prime Bank Investment Limited. Shareholder 44,021 261,300,440 258,308,082 3,036,379
(Payable)
Board meeting attendance
Prime Bank Investment Limited. Shareholder 20,306,901 873,104,117 856,587,777 3,790,561
fee
Independent Director & Board meeting attendance
Shamsuddin Ahmed Ph.D. Representing Prime Bank Ltd. - 82,800 - 82,800
Chairman fee
Board meeting attendance
Md. Shahadat Hossain Representing Prime Bank Ltd. Director - 73,600 - 73,600
fee
Md. Tabarak Hossain Bhuiyan Representing Prime Bank Board meeting attendance
Director - 46,000 - 46,000
Investment Ltd. fee
Mohammad Habibur Rahman Chowdhury, FCA Board meeting attendance
Director - 73,600 - 73,600
Representing Prime Bank Ltd. fee

MBM Lutful Hadee, FCA Representing Prime Bank Ltd. Director - 64,400 - 64,400

PRIME BANK
389
 Prime Bank Securities Limited

390
Fixed Asset Schedule
As at 31 December 2018

PRIME BANK
Annexure-A
ANNUAL REPORT 2018

Amount in Taka

Cost Depreciation
Total written
Particulars
Opening Addition Disposal Opening Charged Disposal Total down value
Total cost Rate
balance during the year during the year balance during the year during the year depreciation

Office equipment 1,523,534 756,926 - 2,280,460 25% 1,280,573 159,689 - 1,440,262 840,198

Vehicles 3,371,700 - 338,700 3,033,000 20% 378,582 606,600 338,696 646,486 2,386,514
Computer & hardwares 5,728,004 926,260 - 6,654,264 25% 5,158,060 267,867 - 5,425,926 1,228,338

Furniture & fixtures 6,955,492 1,466,917 - 8,422,409 20% 961,973 1,489,619 - 2,451,593 5,970,816

17,578,730 3,150,103 338,700 20,390,133 7,77,190 2,523,775 338,696 9,964,268 10,425,865

Prime Bank Securities Limited

Intangible Asset Schedule
As at 31 December 2018
Cost Amortization
Total written
Particulars Opening Addition Disposal Opening Charged Disposal Total
Total Cost Rate down value
balance during the year during the year balance during the year during the year amortization

Software 1,649,125 85,575 - 1,734,700 20% 1,546,367 29,455 - 1,575,822 158,878

1,649,125 85,575 - 1,734,700 1,546,367 29,455 - 1,575,822 158,878
FINANCIAL STATEMENTS
OF PRIME EXCHANGE CO.
PTE. LTD., SINGAPORE

Independent Auditors’ Report to the Member

of Prime Exchange Co. Pte. Ltd.

Statement of Profit or Loss & Other Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

ANNUAL REPORT 2018

INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF

Prime Exchange Co. Pte. Ltd.
(Incorporated in the Republic of Singapore)
Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Prime Exchange Co. Pte. Ltd. (the “Company”), which comprise the statement of
financial position as at 31 December 2018, and the statement of profit or loss and other comprehensive income, statement of
changes in equity and statement of cash flows of the Company for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.

In our opinion, the accompanying financial statements are properly drawn up in accordance with the provisions of the Companies
Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (FRSs) so as to give a true and fair view of the financial
position of the Company as at 31 December 2018 and of the financial performance, changes in equity and cash flows of the
Company for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (SSAs). Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the Accounting and Corporate Regulatory Authority (ACRA) Code of Professional
Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that are
relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information comprises the Directors’ Statement set out on pages
1 and 2.

Our opinion on the 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 financial statements, our responsibility is to read the other information 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. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the
provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a
reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly
authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain
accountability of assets.

In preparing the financial statements, management is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 assurance, but is not a guarantee that an audit conducted in accordance with SSAs 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 financial statements.

392 PRIME BANK

INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF
Prime Exchange Co. Pte. Ltd.
(Incorporated in the Republic of Singapore)

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout
the audit. We also:

• Identify and assess the risks of material misstatement of the 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, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• 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
Company’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 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 Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors 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.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in
accordance with the provisions of the Act.

C. C. YANG & CO.

PUBLIC ACCOUNTANTS AND

CHARTERED ACCOUNTANTS

SINGAPORE

04 March 2019

PRIME BANK 393

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Statement of Profit or Loss and other Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2018

(Expressed in Singapore Dollars)

$
Note
2018 2017

Revenue 3 330,401 348,459

Other Items of Income

Other Income 4 4,960 9,895

Foreign Currency Gains 507,040 749,997

Other Items of Expense

Employee Benefits Expense 5 (412,472) (459,671)

Depreciation 8 (32,407) (29,643)
Other Expenses 6 (373,022) (432,067)

Profit Before Tax from Continuing Operations 24,500 186,970

Income Tax Expense 7 657 (12,579)

Profit from Continuing Operations,

Net of Tax 25,157 174,391

Other Comprehensive Income

Other Comprehensive Income, Net of Tax - -

Total Comprehensive Income $ 25,157 $ 174,391

The accompanying notes form an integral part of these financial statements

394 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Statement of Financial Position
As At 31 December 2018
(Expressed in Singapore Dollars)

$
Note
2018 2017

ASSETS

Non-Current Assets
Property, Plant and Equipment 8 31,961 59,896

Total Non-Current Assets 31,961 59,896

Current Assets
Deposits 73,190 73,287
Prepayments 10,957 10,891
Cash and Bank Balances 9, 10 1,383,667 1,762,377

Total Current Assets 1,467,814 1,846,555

Total Assets $ 1,499,775 $ 1,906,451

EQUITY AND LIABILITIES

Equity
Share Capital 11 804,727 804,727
Retained Earnings 25,157 174,391

Total Equity 829,884 979,118

Non-Current Liabilities
Deferred Tax Liabilities 12 3,632 4,677

Total Non-Current Liabilities 3,632 4,677

Current Liabilities
Income Tax Payable 3,105 11,715
Trade and Other Payables 13 663,154 910,941

Total Current Liabilities 666,259 922,656

Total Liabilities 669,891 927,333

Total Equity and Liabilities $ 1,499,775 $ 1,906,451

The accompanying notes form an integral part of these financial statements

PRIME BANK 395

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Statement of Changes in Equity
For The Year Ended 31 December 2018

(Expressed in Singapore Dollars)

$
Note Share Retained
Total Equity
Capital Earnings

Balance at 1/1/2018 979,118 804,727 174,391

Distributions to Owner

Dividends 14 (174,391) - (174,391)

Total Distributions to Owner (174,391) - (174,391)

Total Comprehensive
Income for the Year - 2018 25,157 - 25,157

Balance at 31/12/2018 $ 829,884 $ 804,727 $ 25,157

Balance at 1/1/2017 850,474 804,727 45,747

Distributions to Owner

Dividends 14 (45,747) - (45,747)

Total Distributions to Owner (45,747) - (45,747)

Total Comprehensive
Income for the Year - 2017 174,391 - 174,391

Balance at 31/12/2017 $ 979,118 $ 804,727 $ 174,391

The accompanying notes form an integral part of these financial statements

396 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Statement of Cash Flows
For The Year Ended 31 December 2018

(Expressed in Singapore Dollars)

$
Note
2018 2017

Operating Activities
Profit Before Tax from Continuing Operations 24,500 186,970

Total Adjustment 32,407 29,643

Depreciation 32,407 29,643

Operating Cash Flows Before Changes In

Working Capital 56,907 216,613

Decrease in Other Receivables 97 21,453

Increase in Prepayments (66) (446)
Increase (Decrease) in Trade and Other Payables (247,787) 626,185

Cash Flows From (Used In) Operations (190,849) 863,805

Income Tax Paid (8,998) (1,871)

Net Cash Flows From (Used In) Operating

Activities (199,847) 861,934

Investing Activities
Purchase of Property, Plant and Equipment (4,472) (33,595)

Net Cash Flows Used In Investing Activities (4,472) (33,595)

Financing Activities
Dividends Paid on Ordinary Shares (174,391) (45,747)

Net Cash Flows Used In Financing Activities (174,391) (45,747)

Net Increase (Decrease) in Cash and Cash

Equivalents (378,710) 782,592
Cash and Cash Equivalents, Statement of
Cash Flows, Beginning Balance 1,762,377 979,785

Cash and Cash Equivalents, Statement of

Cash Flows, Ending Balance 10 $ 1,383,667 $ 1,762,377

The accompanying notes form an integral part of these financial statements

PRIME BANK 397

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. CORPORATE INFORMATION

Prime Exchange Co. Pte. Ltd. is a limited liability company incorporated and domiciled in the Republic of Singapore whose
registered office and principal place of business is located at 2A Desker Road Singapore 209549 and another two branches
at Block 134 #01-305 Jurong Gateway Road Singapore 600134 and 55 Benoi Road #01-14 Joo Koon Bus Interchange
Singapore 629907.

The Company is a wholly-owned subsidiary of Prime Bank Limited, incorporated in Bangladesh, which is also the Company’s
ultimate holding company.

The principal activities of the Company are to carry on the remittance business and to undertake and participate in
transactions, activities and operations commonly carried on or undertaken by remittance and exchange house.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Singapore Financial Reporting Standards
(FRS).

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies
below.

Functional currency

The management has determined the currency of the primary economic environment in which the Company operates i.e.
functional currency, to be the Singapore dollars. Revenue and major costs of providing services including major operating
expenses are primarily influenced by fluctuations in Singapore dollars.

The financial statements are presented in Singapore dollars.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except in the current financial year,
the Company has adopted all the new and revised standards that are relevant to its operations and effective for annual
financial periods beginning on or after 1 January 2018. The adoption of these standards did not have any effect on the
financial performance or position of the Company except as discussed below.

FRS 109 Financial Instruments

FRS 109 replaces FRS 39 Financial instruments: Recognition and Measurement for annual periods beginning on or after 1
January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement;
impairment; and hedge accounting.

The Company applied FRS 109 retrospectively, with an initial application date of 1 January 2018. The Company has not
restated comparative information which continues to be reported under FRS 39 and the disclosure requirements of FRS
107 Financial Instruments: Disclosures relating to items within the scope of FRS [Link] adoption did not have any significant
impact to the Company’s opening retained earnings and net assets.

Classification and measurement

Under FRS 109, debt instruments are subsequently measured either at fair value through profit or loss (FVPL), amortised
cost or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Company’s
business model for managing the assets; and whether the instruments’ contractual cash flows represent ‘solely payments of
principal and interest’ on the principal amount outstanding.

The assessment of the Company’s business model was made as of the date of initial application, 1 January 2018. The
assessment of whether contractual cash flows on debt instruments solely comprised principal and interest was made based
on the facts and circumstances as at the initial recognition of the assets.

398 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Notes to the Financial Statements
31 December 2018

The classification and measurement requirements of FRS 109 did not have a significant impact to the Company. The following
are the changes in the classification and measurement of the Company’s financial assets:

• Other receivables classified as loans and receivables as at 31 December 2017 are held to collect contractual cash flows and
give rise to cash flows representing solely payments of principal and interest. These were classified and measured as debt
instruments at amortised cost beginning 1 January 2018.

The Company has not designated any financial liabilities at FVPL. These are no changes in classification and measurement
for the Company’s financial liabilities.

Impairment

The adoption of FRS 109 has fundamentally changed the Company’s accounting for impairment losses for financial assets
by replacing FRS 39’s incurred loss approach with a forward-looking expected credit loss (ECL) approach. FRS 109 requires
the Company to recognise an allowance for ECLs for all debt instruments not held at FVPL. Upon adoption of FRS 109, no
further impairment loss was provided for the previous financial year.

FRS 115 Revenue from Contracts with Customers

FRS 115 supersedes FRS 11 Construction Contracts, FRS 18 Revenue and related interpretations and it applies, with limited
exceptions, to all revenue arising from contracts with customers. FRS 115 establishes a five-step model to account for revenue
arising from contracts with customers and requires that revenue be recognised at an amount that reflect the consideration
to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

FRS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when
applying each step of the model to contracts with their customers. The standard also specifies the accounting for the
incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard
requires extensive disclosures.

The Company adopted FRS 115 using the modified retrospective method of adoption with the date of initial application of 1
January 2018. Under this method, the standard can be applied either to all contracts at the date of initial application or only
to contracts that are not completed at this date. The Company elected to apply the standard to all contracts as at 1 January
2018.

The cumulative effect of initially applying FRS 115 is recognised at the date of initial application as an adjustment to the
opening balance of retained earnings. Therefore, the comparative information was not restated and continues to be reported
under FRS 11, FRS 18 and related interpretations. The adoption did not have any significant impact to the Company’s opening
retained earnings and net assets.

2.3 Standards issued but not yet effective

The Company has not adopted the following standards and interpretations that have been issued but are only effective for
annual financial periods beginning on or after the respective dates.

Effective 1 January 2019

Amendments to FRS 19 Plan Amendment, Curtailment or Settlement
Amendments to FRS 109 Prepayment Features With Negative Compensation
FRS 116 Leases
INT FRS 123 Uncertainty Over Income Tax Treatments

Improvements to FRSs (March 2018)

Amendments to FRS 12 Income Taxes

PRIME BANK 399

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

Except for FRS 116, the directors expect that the adoption of the other standards above will have no material impact on
the financial statements in the period of initial application. The nature of the impending changes in accounting policy on
adoption of FRS 116 is described below.

FRS 116 Leases

FRS 116 supersedes FRS 17 Leases and introduces a new single lease accounting model which eliminates the current
distinction between operating and finance leases for lessees. FRS 116 requires lessees to recognise right-of-use assets and
lease liabilities for all leases with a term of more than 12 months, except where the underlying asset is of low value. The right-
of-use asset is depreciated and interest expense is recognised on the lease liability. The accounting requirements for lessors
have not been changed substantially, and continue to be based on classification as operating and finance leases. Disclosure
requirements have been enhanced for both lessors and lessees. The directors are currently assessing the impact of FRS 116
on the financial statements.

2.4 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and
equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost includes
the cost of replacing part of the property, plant and equipment. The cost of an item of property, plant and equipment is
recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably.

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying
amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. Other subsequent expenditure is recognised as repair and maintenance
expense in the profit or loss during the financial year in which it is incurred.

Depreciation is computed on the straight-line method to write off the cost of property, plant and equipment over the
estimated useful lives. The estimated useful lives of property, plant and equipment are as follows:

Furniture & fittings 3 years

Office equipment 3 years
Renovation 3 years

Fully depreciated assets are retained in the accounts until they are no longer in use and no further charge for depreciation
is made in respect of these assets.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at the end of each reporting year to ensure that the
amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption
of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on de-recognition of the asset is included in the profit or loss in the financial
year the asset is de-recognised.

2.5 Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when an annual impairment assessment for an asset is required, the Company makes an estimate of the
asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and
its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Impairment losses of continuing operations are recognised in the profit or loss, except for assets that are previously revalued
where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.

400 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Notes to the Financial Statements
31 December 2018

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine
the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of
the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in the
profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.6 Financial instruments

These accounting policies are applied on and after the initial application date of FRS 109, 1 January 2018:

(a) Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when the Company becomes a party to the contractual provisions of the
instruments.

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at FVPL,
transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets
carried at FVPL are expensed in profit or loss.

Trade receivables are measured at the amount of consideration to which the Company expects to be entitled in exchange
for transferring promised goods or services to a customer, excluding amounts collected on behalf of third party, if the trade
receivables do not contain a significant financing component at initial recognition.

Subsequent measurement

Investments in debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the
contractual cash flow characteristics of the asset. The three measurement categories for classification of debt instruments
are amortised cost, FVOCI and FVPL. The Company only has debt instruments at amortised cost.

Financial assets that are held for the collection of contractual cash flows where those cash flows represent solely payments
of principal and interest are measured at amortised cost. Financial assets are measured at amortised cost using the effective
interest method, less impairment. Gains and losses are recognised in profit or loss when the assets are de-recognised or
impaired, and through the amortisation process.

De-recognition

A financial asset is de-recognised where the contractual right to receive cash flows from the asset has expired. On de-
recognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration
received and any cumulative gain or loss that had been recognised in other comprehensive income for debt instruments is
recognised in profit or loss.

(b) Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Company becomes a party to the contractual provisions of the
financial instrument. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at FVPL, directly attributable
transaction costs.

Subsequent measurement

After initial recognition, financial liabilities that are not carried at FVPL are subsequently measured at amortised cost using
the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are de-recognised, and
through the amortisation process.

De-recognition

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expired. On de-
recognition, the difference between the carrying amounts and the consideration paid is recognised in profit or loss.

These accounting policies are applied before the initial application date of FRS 109, 1 January 2018:

PRIME BANK 401

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

(a) Financial assets

Financial assets are recognised when, and only when, the Company becomes a party to the contractual provisions of the
financial instrument. The Company determines the classification of its financial assets at initial recognition.

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified
as loans and receivables. Such assets are initially recognised at fair value, plus directly attributable transaction costs and
subsequently carried at amortised cost using the effective interest method, less impairment. Gains and losses are recognised
in the profit or loss when the loans and receivables are de-recognised or impaired, and through the amortisation process.

A financial asset is de-recognised when the contractual right to receive cash flows from the asset has expired. On de-recognition
of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and
any cumulative gain or loss that had been recognised directly in other comprehensive income is recognised in the profit or loss.

The Company classifies the following financial assets as loans and receivables:

• Cash and bank balances

• Other receivables

(b) Financial liabilities

Financial liabilities are recognised when, and only when, the Company becomes a party to the contractual provisions of the
financial instrument. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at FVPL, directly attributable
transaction costs.

Subsequent to initial recognition, derivatives are measured at fair value. Other financial liabilities (except for financial
guarantee) are measured at amortised cost using the effective interest method.

For financial liabilities other than derivatives, gains and losses are recognised in the profit or loss when the liabilities are de-
recognised, and through the amortisation process. Any gains or losses arising from changes in fair value of derivatives are
recognised in the profit or loss. Net gains or losses on derivatives include exchange differences.

A financial liability is de-recognised when the obligation under the liability is discharged, cancelled or expired. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the
recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit or loss.

(c) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is presented in the statement of financial position, when
and only when, there is a currently enforceable legal right to set off the recognised amounts and there is an intention to settle
on a net basis, or to realise the assets and settle the liabilities simultaneously.

2.7 Impairment of financial assets

These accounting policies are applied on and after the initial application date of FRS 109, 1 January 2018:

The Company recognises an allowance for expected credit losses (“ECLs”) for all debt instruments not held at FVPL and
financial guarantee contracts. ECLs are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12
months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial
recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of
timing of the default (a lifetime ECL).

For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not
track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The
Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-
looking factors specific to the debtors and the economic environment which could affect debtors’ ability to pay.

402 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Notes to the Financial Statements
31 December 2018

The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain
cases, the Company may also consider a financial asset to be in default when internal or external information indicates
that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit
enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering
the contractual cash flows.

These accounting policies are applied before the initial application date of FRS 109, 1 January 2018:

The Company assesses at the end of each reporting year whether there is any objective evidence that a financial asset or
group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred,
the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the
discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is
reduced through the use of an allowance account. The impairment loss is recognised in the profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent
that the carrying amount of the financial asset does not exceed its amortised cost at the reversal date. The amount of
reversal is recognised in the profit or loss.

2.8 Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances that are readily convertible to known amount of cash and
which are subject to an insignificant risk of changes in value.

2.9 Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount
of the obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting year and adjusted to reflect the current best estimate. If it is no longer
probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect
of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.

2.10 Employee benefits

Defined contribution plan

As required by law, the Company makes contributions to the Central Provident Fund (CPF) scheme in Singapore, a defined
contribution pension scheme. CPF contributions are recognised as compensation expenses in the same period as the
employment that gives rise to these contributions.

2.11 Leases

As lessee

Operating leases

Leases where substantially all the risks and rewards incidental to ownership are retained by the lessors are classified as
operating leases. Operating lease payments are recognised as an expense in the profit or loss on a straight-line basis over
the lease term.

The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term
on a straight-line basis.

2.12 Revenue recognition

These accounting policies are applied on and after the initial application date of FRS 115, 1 January 2018:

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring
promised goods or services to a customer, excluding amounts collected on behalf of third parties.

PRIME BANK 403

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

Revenue is recognised when the Company satisfies a performance obligation by transferring a promised good or service to
the customer, which is when the customer obtains control of the good or service. A performance obligation may be satisfied
at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance
obligation.

Commission income

Commission income is recognised when the entity satisfies the performance obligation at a point of time when the significant
acts have been completed as the services are provided.

These accounting policies are applied before the initial application date of FRS 109, 1 January 2018:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue
can be reliably measured regardless of when the payment is made. Revenue is measured at the fair value consideration
received or receivable, taking into account contractually defined terms of payments and excluding taxes or duty.

Commission income

Commission income is recognised upon completion and delivery of the service to the customers.

2.13 Government grants

Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching
conditions will be complied with. Where the grant relates to an expense item, the fair value is recognised as income in the
profit or loss over the periods necessary to match them on a systematic basis to the costs for which the grants are intended
to compensate.

2.14 Income taxes

(i) Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the Income Tax Authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted at the end of the reporting year.

Current taxes are recognised in the profit or loss except to the extent that the tax relates to items recognised outside profit
or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in
the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.

(ii) Deferred tax

Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting year between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax asset is reviewed at the end of each reporting year and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

Unrecognised deferred tax assets are reassessed at the end of each reporting year and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end
of each reporting year.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

404 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Notes to the Financial Statements
31 December 2018

(iii) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

• Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case
the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with the amount of sales tax included.

2.15 Foreign currency transactions

Transactions in foreign currencies are measured and recorded in Singapore dollars on initial recognition at exchange rates
approximating those ruling at the dates of transactions. Monetary assets and liabilities denominated in foreign currencies
are translated at the rate of exchange ruling at the end of the reporting year. Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-
monetary items measured at fair value in foreign currency are translated using the exchange rates at the date when the fair
value was measured.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the
reporting year are recognised in the profit or loss.

2.16 Share capital

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable
to the issuance of ordinary shares are deducted against share capital.

2.17 Dividend

Interim dividend is recorded in the financial year in which it is declared payable. Final dividend is recorded in the financial
year in which the dividend is approved by the shareholders.

2.18 Significant accounting judgements and estimates

The preparation of the Company’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent
liabilities at the end of each reporting year. Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting
year are discussed below. The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change
due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.

Useful lives of property, plant and equipment

The cost of property, plant and equipment is depreciated on a straight-line basis over the property, plant and equipment
estimated useful lives. Management estimates the useful lives of these property, plant and equipment to be 3 years.
Changes in the expected level of usage and technological developments could impact the economic useful lives of these
assets, therefore, future depreciation charges could be revised. The carrying amounts of the Company’s property, plant and
equipment at the end of the reporting year are disclosed in Note 8 to the financial statements.

Income taxes

Significant judgement is involved in determining the Company’s provision for income taxes. There are certain transactions
and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The
Company recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where
the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will
impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amounts
of the Company’s income tax payable and deferred tax liabilities at 31 December 2018 were $3,105 (2017 – $11,715) and $3,632
(2017 – $4,677) respectively.

PRIME BANK 405

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

3. REVENUE

$
2018 2017
Commission income $ 330,401 $ 348,459

The above revenue from commission income is recognised at a point in time. The contract is for a duration of less than 12
months.

4. OTHER INCOME

$
2018 2017
Government grants $ 4,960 $ 9,895

5. EMPLOYEE BENEFITS EXPENSE

$
2018 2017

Salaries, bonuses and other

related costs 391,773 438,398
Employer’s contributions
to Central Provident Fund 20,699 21,273

$ 412,472 $ 459,671

The above includes remuneration of key management personnel as shown in Note 16(b) to the financial statements.

6. OTHER EXPENSES

The following items have been included in arriving at other expenses:

$
2018 2017

Advertisement 21,335 27,202

Bank and nets charges 34,378 65,942
Casual labour 7,190 14,429
Entertainment 7,659 8,471
General expenses 4,285 8,761
Insurance 31,335 29,112
Licence fees 6,000 6,250
Printing and stationery 8,941 8,841
Professional and legal fees 10,213 11,191
Rental of premises 162,860 175,110
Repair & maintenance 9,405 8,925
Telephone charges 23,897 23,081
Transportation 9,300 9,197
Travelling 5,326 5,874
Utilities 16,937 17,398

406 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Notes to the Financial Statements
31 December 2018

$
2018 2017
7. INCOME TAX EXPENSE
Based on results for the year
Current tax 3,118 11,728
Deferred tax (Note 12) (2,619) (428)
499 11,300
Under (Over) provision in
respect of prior years
Current tax (2,730) (13)
Deferred tax (Note 12) 1,574 1,292
$ (657) $ 12,579

The reconciliation between the tax expense (benefit) and the product of accounting profit multiplied by the applicable
corporate tax rate for the years ended 31 December 2018 and 2017 is as follows:

Profit before income tax $ 24,500 $ 186,970

Tax expense calculated at tax

rate of 17% (2017 – 17%) 4,165 31,785

Expenses not deductible

for tax purposes 2,147 778

Income not subject to tax (285) (1,156)

Productivity and innovation credit - (1,665)

Singapore statutory stepped

income exemption (4,748) (15,510)

Corporate income tax rebate (780) (2,932)

Under (Over) provision in

respect of prior years
Current tax (2,730) (13)
Deferred tax (Note 12) 1,574 1,292
$ (657) $ 12,579

PRIME BANK 407

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

8. PROPERTY, PLANT AND EQUIPMENT

$
Furniture Office
Renovation Total
& fittings equipment
2018
Cost:

At 1.1.2018 10,781 161,741 265,082 437,604

Additions 949 3,523 - 4,472
At 31.12.2018 11,730 165,264 265,082 442,076
Accumulated
depreciation:

At 1.1.2018 10,591 145,650 221,467 377,708

Depreciation
for the year 287 9,293 22,827 32,407

At 31.12.2018 10,878 154,943 244,294 410,115

Net book value:

At 31.12.2018 $ 852 $ 10,321 $ 20,788 $ 31,961

2017
Cost:
At 1.1.2017 10,781 155,626 237,602 404,009
Additions - 6,115 27,480 33,595
At 31.12.2017 10,781 161,741 265,082 437,604
Accumulated
depreciation:

At 1.1.2017 9,953 137,182 200,930 348,065

Depreciation
for the year 638 8,468 20,537 29,643
At 31.12.2017 10,591 145,650 221,467 377,708
Net book value:

At 31.12.2017 $ 190 $ 16,091 $ 43,615 $ 59,896

408 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Notes to the Financial Statements
31 December 2018

9. CASH AND BANK BALANCES

The cash and bank balances include an amount of $647,144 (2017 – $880,412) (Note 13) received from customers for outward
remittance at year end date. The amount was subsequently remitted on 4 January 2019 (2017 – 4 January 2018).

10. CASH AND CASH EQUIVALENTS

Cash and cash equivalents are denominated in the following currencies:

$
2018 2017

Singapore Dollars 1,167,225 1,426,216

Taka 178,851 177,001
Indian Rupees 21,265 143,375
Philippine Peso 16,326 15,785
$ 1,383,667 $ 1,762,377

11. SHARE CAPITAL

$
2018 2017
Issued and fully paid
804,727 (2017 – 804,727) ordinary shares $ 804,727 $ 804,727

The holder of ordinary shares is entitled to receive dividends as and when declared by the Company. All ordinary shares of
no par value carry one vote per share without restriction.

12 DEFERRED TAX LIABILITIES

$
2018 2017
Deferred tax liabilities $ 3,632 $ 4,677

The movements in deferred tax liabilities during the year are as follows:

$
Accelerated
Tax Total
Depreciation

Balance at 1.1.2017 3,813 3,813

Charged (Credited) to profit or – 2017

- Current year (Note 7) (428) (428)
- Under provision in prior year (Note 7) 1,292 1,292

Balance at 31.12.2017 4,677 4,677

Charged (Credited) to profit or loss – 2018

- Current year (Note 7) (2,619) (2,619)
- Under provision in prior year (Note 7) 1,574 1,574

Balance at 31.12.2018 $ 3,632 $ 3,632

PRIME BANK 409

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

13. TRADE AND OTHER PAYABLES

$
2018 2017

Accruals 15,405 30,529

Funds received from customers (Note 10) 647,144 880,412
Advance receipt 605 -
$ 663,154 $ 910,941

14. DIVIDENDS

$
2018 2017

Exempt one-tier final dividend

of $0.21671 (2017 – $0.05685)
per ordinary share in respect of
year ended 31 December 2017
(2017 – 31 December 2016) $ 174,391 $ 45,747

15. OPERATING LEASE COMMITMENTS

At the end of the reporting year, the Company was committed to making the following payments in respect of rental
commitments under non-cancellable operating leases:

$
2018 2017

Leases which expire:

Within one year 149,210 159,500
Later than one year
but within five years 310,000 457,250
$ 459,210 $ 616,750

16. RELATED PARTY TRANSACTIONS

An entity or individual is considered a related party for the purpose of these financial statements if it has the ability (directly
or indirectly) to control or exercise significant influence over the operating and financial decisions of the Company or vice
versa, or where it is subject to common control or common significant influence.

The Company has the following significant related party transactions entered with its related parties and the effect of these
transactions at terms agreed between the parties are reflected in these financial statements:

(a) Transactions with related parties

$
2018 2017

Related party
Professional fee 5,618 5,350
Other expenses 495 794

410 PRIME BANK

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE
Notes to the Financial Statements
31 December 2018

(b) Compensation of key management personnel

$
2018 2017
Key Executive Officer
Salary, bonus and other
related costs $ 111,522 $ 119,065

17. CATEGORIES OF FINANCIAL INSTRUMENTS

The categories of financial instruments as at the end of the reporting year are as follows:

$
2018 2017

Financial assets

Financial assets at amortised cost 1,456,857 -

Loans and receivables (including cash and bank balances) - 1,835,664
$ 1,456,857 $ 1,835,664

Financial liabilities

Financial liabilities at amortised cost $ 663,154 $ 910,941

18. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company is exposed to financial risks arising from its operations and the use of financial instruments. The Company’s
financial instruments comprise financial assets and liabilities. Financial assets and liabilities mainly relate to receivables and
payables which arise directly from its operations.

The main purpose for holding or issuing financial instruments is to raise and manage the finances for the Company’s
operating, investing and financing activities. There is exposure to the financial risks on the financial instruments such as
credit risk, liquidity risk and market risk comprising interest rate risk, foreign currency risk and other price risk exposures.
The management has certain practices for the management of financial risks. However, these are not documented in
formal written documents. The following guidelines are followed: All financial risk management activities are carried out
and monitored by senior management staff. All financial risk management activities are carried out following good market
practices.

The Company does not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations
in interest and foreign exchange rates.

The following sections provide details regarding the Company’s exposure to the above mentioned financial risks and the
objectives, policies and processes for the management of these risks. There has been no change to the Company’s exposure
to these financial risks or the manner in which it manages and measures the risks.

Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations.
The Company’s exposure to credit risk arises primarily from other receivables. For other financial assets (including cash and
cash equivalents), the Company minimises credit risk by dealing exclusively with high credit rating counterparties.

The Company has no significant concentration of credit risk. The Company has policies in place to ensure that transactions
are entered into only with counterparties that are of acceptable credit quality. In addition, receivable balances are monitored
on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.

The maximum exposure to credit risk is represented by the net carrying amount of financial assets recorded in the financial
statements.

Other receivables that are neither past due nor impaired are with creditworthy debtors with good payment record with the
Company. Cash and cash equivalents that are neither past due nor impaired are placed with or entered into with reputable
financial institutions or companies with high credit ratings and no history of default.

PRIME BANK 411

ANNUAL REPORT 2018

PRIME EXCHANGE CO. PTE. LTD., SINGAPORE

Notes to the Financial Statements
31 December 2018

Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds.
The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.
The Company maintains sufficient cash and cash equivalents, and internally generated cash flows to finance their activities.
As at the end of the reporting year, the expected contractual undiscounted cash outflows of financial liabilities are due in
less than a year.
Interest rate risk
The Company has no exposure to movements in market interest rates.
Foreign currency risk
The Company’s remittance activities are transacted in Taka (BDT), Indian Rupees (INR), United States dollars (USD) and
Philippine Peso (PESO). Exchange rate movements in Taka, the Indian Rupees, the United States dollars, Philippine Peso and
the Singapore dollars, the Company’s functional currency, exposed the Company to foreign currency risk.
The Company does not use derivative financial instruments to hedge against the volatility associated with foreign currency
transactions as the Company’s exposure to foreign currency risk is minimal.
Sensitivity analysis for foreign currency risk

$
2018 2017
Increase Increase
(Decrease) in (Decrease) in
profit net of tax profit net of tax

BDT/SGD - strengthened Nil % (2017 – 9%) - 13,222

- weakened Nil% (2017 – 9%) - (13,222)
INR/SGD - strengthened 6% (2017 – 1%) 1,090 1,190
- weakened 6% (2017 – 1%) (1,090) (1,190)
PESO/SGD strengthened 5% (2017 – 7%) 625 917
weakened 5% (2017 – 7%) (625) (917)
Equity price risk
The Company has no exposure to equity price risk.
Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The total capital of the Company as at the end of the reporting year is the “Total equity” as presented on the statement of
financial position.
The Company is not subject to any externally imposed capital requirements.

19. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between
knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale.
Financial instruments whose carrying amounts approximate fair values
Management has determined that the carrying amounts of cash and bank balances, deposits and trade and other payables,
based on their notional amounts, reasonably approximate their fair values because these are mostly short term in nature.

20. AUTHORISATION OF FINANCIAL STATEMENTS

The financial statements for the year ended 31 December 2018 were authorised for issue in accordance with a resolution of
the directors on 4 March 2019.

412 PRIME BANK

FINANCIAL STATEMENTS
OF PBL EXCHANGE (UK) LTD.

Independent Auditors’ Report to the Members

of PBL Exchange (UK) Ltd.

Profit and Loss Account

Balance Sheet

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

ANNUAL REPORT 2018

PBL EXCHANGE (UK) LIMITED

Independent Auditor’s Report
To the Members of PBL Exchange (UK) Limited

Opinion

We have audited the financial statements of PBL EXCHANGE (UK) LIMITED (the ‘company’) for the Period ended 31 December 2018
which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes
in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting
Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom
Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company’s affairs as at 31 December 2018 and of its profit for the Period then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit
of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

• the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

• the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.

Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information 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. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of
the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors’ report for the financial Period for which the financial statements
are prepared is consistent with the financial statements; and

• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

414 PRIME BANK

PBL EXCHANGE (UK) LIMITED
Independent Auditor’s Report
To the Members of PBL Exchange (UK) Limited

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have
not identified material misstatements in the Strategic Report and the Directors’ Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our
opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches
not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit; or

• the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take
advantage of the small companies’ exemption in preparing the Directors’ Report.
Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’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 the
directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the 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 (UK) 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 financial
statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: [Link] This description forms part of our auditor’s report.
Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.

Seema Siddiqui (Senior Statutory Auditor)

for and on behalf of Reddy Siddiqui LLP 18 February 2019

Chartered Accountants
Statutory Auditor 183-189 The Vale
Acton
London
W3 7RW

PRIME BANK 415

ANNUAL REPORT 2018

PBL EXCHANGE (UK) LIMITED

Profit and Loss Account
For the year ended 31 December 2018

£
2018 2017
Turnover 550,830 473,691
Administrative expenses (506,805) (453,452)
Other operating income 6,780 _
Operating profit 50,805 20,239
Interest payable and similar expenses (8) (6)
Profit before taxation 50,797 20,233
Tax on profit (13,515) (8,250)
Profit for the financial Period 37,282 11,983

416 PRIME BANK

PBL EXCHANGE (UK) LIMITED
Statement of Comprehensive Income
For the year ended 31 December 2018

£
2018 2017
Profit for the year 37,282 11,983
Other comprehensive income - -
Total comprehensive income for the Period 37,282 11,983

PRIME BANK 417

ANNUAL REPORT 2018

PBL EXCHANGE (UK) LIMITED

Balance Sheet
As at 31 December 2018

£
Notes
2018 2017
Fixed assets
Tangible assets 4 57,586 77,922
Current assets
Debtors - deferred tax 46,322 59,838
Debtors - other 5 18,119 5,916
Cash at bank and in hand 164,181 286,940
228,622 352,694
Creditors: amounts falling due within one year 6 (73,291) (254,981)
Net current assets 155,331 97,713
Total assets less current liabilities 212,917 175,635
Capital and reserves
Called up share capital 7 500,000 500,000
Profit and loss reserves (287,083) (324,365)
Total equity 212,917 175,635

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small
companies regime.

The financial statements were approved by the board of directors and authorised for issue on 18 February 2019 and are signed on
its behalf by:

Gazi Mohammed Khurshid Alam Rahel Ahmed

Director Director

Company Registration No. 07081093

418 PRIME BANK

PBL EXCHANGE (UK) LIMITED
Statement of Changes in Equity
For the year ended 31 December 2018
£
Profit and
Share capital Total
loss reserves
Balance at 1 January 2017 500,000 (336,348) 163,652
Year ended 31 December 2017:
Profit and total comprehensive income for the period - 11,983 11,983
Balance at 31 December 2017 500,000 (324,365) 175,635
Year ended 31 December 2018:
Profit and total comprehensive income for the period - 37,282 37,282
Balance at 31 December 2018 500,000 (287,083) 212,917

PRIME BANK 419

ANNUAL REPORT 2018

PBL EXCHANGE (UK) LIMITED

Statement of Cash Flows
For the year ended 31 December 2018

£
Notes
2018 2017

Cash flows from operating activities

Cash (absorbed by)/generated from operations 9 (121,743) 131,115
Interest paid (8) (6)
Income taxes refunded/(paid) 1 -
Net cash (outflow)/inflow from operating activities (121,750) (131,109)
Investing activities
Purchase of tangible fixed assets (1,009) (1,060)
Net cash used in investing activities (1,009) (1,060)
Net cash used in financing activities - -
Net (decrease)/increase in cash and cash equivalents (122,759) 130,049
Cash and cash equivalents at beginning of Period 286,940 156,891
Cash and cash equivalents at end of Period 164,181 286,940

420 PRIME BANK

PBL EXCHANGE (UK) LIMITED
Notes to the Financial Statements
For the year ended 31 December 2018

1 Accounting policies

Company information
PBL EXCHANGE (UK) LIMITED is a private company limited by shares incorporated in England and Wales. The registered
office is 16 Brick Lane, London, UK, E1 6RF.
1.1 Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable
in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies
subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than
where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in
these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to certain financial instruments
at fair value. The principal accounting policies adopted are set out below.

1.2 Turnover
Turnover represents amounts received as commission from customers.

Turnover is recognised at the fair value of the consideration received or receivable in the form of consumers’ money
transfer transaction fees. The transaction fees are based on the principal amount of the money transfer transaction and the
locations from and to which funds are transferred. Transaction fees are set by the Company and recorded as revenue at the
time of sale. The Company does not charge VAT on transactions owing to money transfer services being an exempt supply.

The Company also generates revenue based on the difference between the exchange rate set by the Company to the
customer and the rate at which the Company or its agents are able to acquire the currency. This foreign exchange revenue
is recognised at the same time at which the related money transfer transaction fee revenue is recognised.

1.3 Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation
and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives
on the following bases:

Land and buildings Leasehold 10 years over the life of the lease

Fixtures, fittings & equipment 25% straight line

Computer equipment 25% srtaight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the
carrying value of the asset, and is credited or charged to profit or loss.

1.4 Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible
to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-
generating unit to which the asset belongs.

PRIME BANK 421

ANNUAL REPORT 2018

PBL EXCHANGE (UK) LIMITED

Notes to the Financial Statements
For the year ended 31 December 2018

Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows
have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss
is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where
an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.5 Cash at bank and in hand

Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks, other short-
term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities.

1.6 Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial
Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company’s balance sheet when the company becomes party to the contractual
provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally
enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset
and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price
including transaction costs and are subsequently carried at amortised cost using the effective interest method unless
the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future
receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after
deducting all of its liabilities.
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are
classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction,
where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently
measured at amortised cost using the effective interest method.

422 PRIME BANK

PBL EXCHANGE (UK) LIMITED
Notes to the Financial Statements
For the year ended 31 December 2018

1.7 Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends
payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.8 Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently
remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately
unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in
profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is
recognised as a financial liability.

1.9 Taxation

The tax recoverable represents the sum of deferred tax calculated based on accumulated losses brought forward. The
deferred tax asset balance was £46,322 as at 31.12.2018 (2017 was £59,838).

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent
that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of
other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax
is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset
when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and
liabilities relate to taxes levied by the same tax authority.

1.10 Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be
recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate
the employment of an employee or to provide termination benefits.
1.11 Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.12 Leases

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line
basis over the term of the relevant lease except where another more systematic basis is more representative of the time
pattern in which economic benefits from the lease asset are consumed.

1.13 Foreign Currency Transactions

Transactions in foreign currency are measured and recorded in Sterling by use of the exchange rate in effect at the date of
transaction. At each statement of financial position date, recorded monetary balances that are denominated in a foreign
currency are adjusted to reflect the rate at the statement of financial position date. All realized and unrealized exchange
adjustment gains and losses are taken to the statement of movements on profit and loss account.

PRIME BANK 423

ANNUAL REPORT 2018

PBL EXCHANGE (UK) LIMITED

Notes to the Financial Statements
For the year ended 31 December 2018

2 Auditor’s remuneration

£
2018 2017
Fees payable to the company's auditor and associates:
For audit services
Audit of the financial statements of the company 4,620 4,598
For other services
All other non-audit services 4,620 4,598

3 Employees

The average monthly number of persons (including directors) employed by the company during the Period was 14 (2017 - 14).

4 Tangible fixed assets

£
Land and
Fixtures, fittings Computer
buildings Total
& equipment equipment
Leasehold
Cost
At 1 January 2018 173,332 7,621 9,033 189,986
Additions - - 1,009 1,009
At 31 December 2018 173,332 7,621 10,042 190,995
Depreciation and impairment
At 1 January 2018 96,759 7,480 7,825 112,064
Depreciation charged in the Period 21,017 64 264 21,345
At 31 December 2018 117,776 7,544 8,089 133,409
Carrying amount
At 31 December 2018 55,556 77 1,953 57,586
At 31 December 2017 76,573 141 1,208 77,922

5 Debtors
£
2018 2017
Amounts falling due within one year:
Other debtors 18,119 5,916
Amounts falling due after more than one year:
Deferred tax asset 46,322 59,838
Total debtors 64,441 65,754

6 Creditors: amounts falling due within one year

£
2018 2017
Trade creditors 71,863 245,301
Other taxation and social security 340 2,554
Other creditors 1,088 7,126
73,291 254,981

424 PRIME BANK

 PBL EXCHANGE (UK) LIMITED
Notes to the Financial Statements
For the year ended 31 December 2018

7. Called up share capital

£
2018 2017
Ordinary share capital
Issued and fully paid
500,000 500,000
500,000 Ordinary of £1 each
500,000 500,000

8. Operating lease commitments

Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-
cancellable rent operating leases, as follows:

£
2018 2017
58,848 58,848

9 Cash generated from operations

£
2018 2017

Profit for the year after tax 37,282 11,983

Adjustments for:
Taxation charged/(credited) 13,515 8,250
Finance costs 8 6
Depreciation and impairment of tangible fixed assets 21,345 23,134
Movements in working capital:
(Increase) in debtors (12,203) (5,916)
Increase/(decrease) in creditors (181,690) 93,658
Cash (absorbed by)/generated from operations (121,743) 131,115

PRIME BANK 425

FINANCIAL STATEMENTS
OF PBL FINANCE (HONG KONG) LTD.

Independent Auditors’ Report to the Members

of PBL Finance (Hong Kong) Ltd.

Statement of Income and Retained Earnings

Statement of Financial Position

Statement of Cash Flows

Notes to the Financial Statements

INDEPENDENT AUDITOR’S REPORT
To The Members of PBL Finance (Hong Kong) Limited
(incorporated in Hong Kong with limited liability)

Opinion

We have audited the financial statements of PBL Finance (Hong Kong) Limited (“the Company”) set out on pages 6 to 17, which
comprise the statement of financial position as at 31st December, 2018, and the statement of income and retained earnings
and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31st December, 2018,
and of its financial performance and its cash flows for the year then ended in accordance with Hong Kong Financial Reporting
Standard for Private Entities (“HKFRS for Private Entities”) issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”) and have been properly prepared in compliance with the Hong Kong Companies Ordinance.

Basis for Opinion

We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the HKICPA. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of
our report. We are independent of the Company in accordance with the HKICPA’s Code of Ethics for Professional Accountants
(“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information Other than the Financial Statements and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises the information included in the Annual
Report, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the 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 financial statements, our responsibility is to read the other information 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. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Directors and Those Charged with Governance for the Financial Statements

The directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with
HKFRS for Private Entities issued by the HKICPA and the Hong Kong Companies Ordinance, and for such internal control as the
directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company’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 the
directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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. Our report is made solely to
you, as a body, in accordance with section 405 of the Hong Kong Companies Ordinance, and for no other purpose. We do not assume
responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with HKSAs 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 financial statements.

As part of an audit in accordance with HKSAs, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also :-

-- Identify and assess the risks of material misstatement of the 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.

PRIME BANK 427

ANNUAL REPORT 2018

INDEPENDENT AUDITOR’S REPORT

To The Members of PBL Finance (Hong Kong) Limited
(incorporated in Hong Kong with limited liability)

-- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

-- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.

-- Conclude on the appropriateness of the directors’ 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
Company’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 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 Company to cease to continue as a going concern.

-- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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.

T. O. Yip & Co. Limited

Certified Public Accountants (Practising)
Hong Kong

Samuel Ming Sum Yip

Practising Certificate Number : P05704
26th February 2019

428 PRIME BANK

PBL FINANCE (HONG KONG) LIMITED
Statement of Income and Retained Earnings
for the year ended 31st December, 2018

HK$
Notes
2018 2017

Interest income 11,821,096 10,939,730

Interest expenses 4 (6,378,312) (5,313,894)

Net interest income 5,442,784 5,625,836

Other operating income 5 4,091,516 4,955,692

Total operating income 9,534,300 10,581,528

Staff costs (2,491,059) (2,508,912)

Depreciation 11 (9,550) (31,165)
Other operating expenses (1,585,937) (1,642,799)

Total operating expenses (4,086,546) (4,182,876)

Profit before taxation 8 5,447,754 6,398,652

Income tax expense 9 (701,236) (1,037,666)

Profit for the year 4,746,518 5,360,986

Retained earnings at start of the year 5,360,986 5,286,239

Dividends 10 (5,360,986) (5,286,239)

Retained earnings at end of the year 4,746,518 5,360,986

The notes on pages 9 to 17 form part of these financial statements.

PRIME BANK 429

ANNUAL REPORT 2018

PBL FINANCE (HONG KONG) LIMITED

Statement of Financial Position
As At 31St December, 2018

HK$
Notes
2018 2017

Non-current assets

Property, plant and equipment 11 19,168 16,378

Current assets

Discounted bills receivable 210,560,500 172,308,731

Deposits, prepayments and other receivables 3,303,464 2,907,829
Income tax refundable 161,430 -
Cash and bank balances 2,543,421 3,707,440

216,568,815 178,924,000

Current liabilities

Accrued liabilities and other payables 562,225 2,371,236

Amount due to ultimate holding company 12 207,779,240 167,700,000
Income tax payable - 8,156

208,341,465 170,079,392

Net current assets 8,227,350 8,844,608

8,246,518 8,860,986

Equity

Share capital 13 3,500,000 3,500,000

Retained earnings 4,746,518 5,360,986

8,246,518 8,860,986

The financial statements on pages 6 to 17 were approved and authorised for issue by the Board of Directors on 26 February 2019
and are signed on its behalf by :-

Rahel Ahmed Shamsuddin Ahmad

Director Director

26 February 2019
The notes on pages 9 to 17 form part of these financial statements.

430 PRIME BANK

PBL FINANCE (HONG KONG) LIMITED
Notes to Statement of Cash Flows
For The Year Ended 31St December, 2018

HK$
Notes
2018 2017
Operating activities

Profit before taxation 5,447,754 6,398,652

Adjustments for :
Depreciation 11 9,550 31,165
Loss on disposal of property, plant and equipment 1,088 -

Operating profit before changes in working capital 5,458,392 6,429,817

(Increase)/Decrease in discounted bills receivable (38,251,769) 32,039,499

Increase in deposits, prepayments and other receivables (395,635) (2,609,714)
(Decrease)/Increase in accrued liabilities and other payables (1,809,011) 202,437
Increase/(Decrease) in amount due to ultimate holding company 40,079,240 (40,598,653)

Cash generated from/(used in) operations 5,081,217 (4,536,614)

Tax paid (870,822) (659,810)

Net cash generated from/(used in) operating activities 4,210,395 (5,196,424)

Investing activities

Purchase of property, plant and equipment 11 (13,428) (9,280)

Net cash used in investing activities (13,428) (9,280)

Financing activities

Dividend paid to equity shareholders of the Company 10 (5,360,986) (5,286,239)

Net cash used in financing activities (5,360,986) (5,286,239)

Net decrease in cash and cash equivalents (1,164,019) (10,491,943)

Cash and cash equivalents at start of year 3,707,440 14,199,383

Cash and cash equivalents at end of year 2,543,421 3,707,440

Analysis of cash and cash equivalents

Cash and bank balances 2,543,421 3,707,440

The notes on pages 9 to 17 form part of these financial statements.

PRIME BANK 431

ANNUAL REPORT 2018

PBL FINANCE (HONG KONG) LIMITED

Accounting Policies and Explanatory Notes to the Financial Statements
For The Year Ended 31St December, 2018

1. GENERAL INFORMATION

PBL Finance (Hong Kong) Limited (“the Company”) is a limited company incorporated in Hong Kong. The address of its registered
office and principal place of business is Suite 1407, 14th Floor, Admiralty Centre, Tower-One, 18 Harcourt Road, Hong Kong. The
principal activities of the Company are money lending in Hong Kong and provides the following services :-

- Advising of documentary credits;

- Endorsing confirmation to the credit upon request of issuing bank;
- Negotiating/discounting of documents; and
- Remittance business.

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES

These financial statements have been prepared in accordance with the Hong Kong Financial Reporting Standard for Private
Entities (HKFRS for Private Entities) issued by the Hong Kong Institute of Certified Public Accountants and the requirements of the
Hong Kong Companies Ordinance. They have been prepared under the historical cost convention.

(a) Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment
losses.

Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful lives, using the
straight-line method. The following annual rates are used for the depreciation of property, plant and equipment :-

Office equipment 33 1/3%

Furniture and fixtures 33 1/3%
Leasehold improvement Over the leased term

If there is an indication that there has been a significant change in the depreciation rate, useful life or residual value of an asset,
the depreciation of that asset is revised prospectively to reflect the new expectations.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.

(b) Trade and other receivables

Trade and other receivables are recognised initially at the transaction price. They are subsequently measured at amortised cost
using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established
when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of
the receivables.

432 PRIME BANK

PBL FINANCE (HONG KONG) LIMITED
Accounting Policies and Explanatory Notes to the Financial Statements
For The Year Ended 31St December, 2018
(c) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits and other short-term highly liquid investments with original
maturities of three months or less. Bank overdraft is shown within borrowings in current liabilities on the statement of financial
position.

(d) Trade and other payables

Trade and other payables are recognised initially at the transaction price and subsequently measured at amortised cost using the
effective interest method.

(e) Borrowings

Borrowings are recognised initially at the transaction price and are subsequently stated at amortised cost. Borrowings are
classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve
months after the reporting date.

Interest expense is recognised on the basis of the effective interest method and is included in finance costs.

(f) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and is shown net of discounts, rebates, returns,
sales-related taxes.

Revenue is recognised in statement of income and retained earnings provided it is probable that the economic benefits will flow
to the Company and the revenue and costs, if applicable, can be measured reliably, as follows :-

(i) from the rendering of confirming and advising, checking, telex, postage and other services, when the services are rendered; and

(ii) interest income; on an accrual basis using the effective interest method by applying the rate that discounts the estimated
future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset.

(g) Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

(h) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement
of comprehensive income and retained earnings because of items of income or expense that are taxable or deductible in other
periods and items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases using in the computation of taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences
can be utilised.

The carrying amount of deferred tax assets is reviewed at the reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting
date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

(i) Foreign currency translation -- transaction and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in statement of
income and retained earnings.

PRIME BANK 433

ANNUAL REPORT 2018

PBL FINANCE (HONG KONG) LIMITED

Accounting Policies and Explanatory Notes to the Financial Statements
For The Year Ended 31St December, 2018

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in statement of income
and retained earnings within “finance costs”. All other foreign exchange gains and losses are presented in statement of income
within “other operating expenses”.

(j) Dividend distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the period in which the dividends are approved
by the Company’s shareholders.

(k) Related parties

A related party is a person or entity that is related to the Company if :-

(a) A person or a close member of that person’s family is related to the Company if that person :-
(i) has control or joint control of the Company;
(ii) has significant influence over the Company; or
(iii) is a member of the key management personnel of the Company or of a parent of the Company.

(b) An entity is related to the Company if any of the following conditions applies :-

(i) the entity and the Company are members of the same group (which means that each parent, subsidiary and fellow
subsidiary is related to the others).
(ii) one entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group
of which the other entity is a member).
(iii) both entities are joint ventures of the same third entity.

(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) the entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related
to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company.
(vi) the entity is controlled or jointly controlled by a person identified in (a).

(vii) a person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel
of the entity (or of a parent of the entity).
(viii) the entity, or any member of a group of which it is a part, provides key management personnel services to the
reporting entity or to the parent of the reporting entity.

(l) Impairment of non-financial assets

At each reporting date, property, plant and equipment is reviewed to determine whether there is any indication that such has
suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset (or
group of related assets) is estimated and compared with its carrying amount. If an estimated recoverable amount is lower, the
carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or
loss.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased to the revised
estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss
been recognised for the asset (group of related assets) in prior years. A reversal of an impairment loss is recognised immediately
in profit or loss.

(m) Operating leases

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease.

3. KEY SOURCES OF ESTIMATION UNCERTAINTY

Property, plant and equipment and depreciation

The Company determines the estimated useful lives and related depreciation charges for the Company’s property, plant and
equipment. This estimate is based on the historical experience of the actual useful lives of property, plant and equipment of
similar nature and functions. The Company will revise the depreciation charge where useful lives are different to those previously
estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned or sold.

434 PRIME BANK

PBL FINANCE (HONG KONG) LIMITED
Accounting Policies and Explanatory Notes to the Financial Statements
For The Year Ended 31St December, 2018

HK$
2018 2017

4. INTEREST EXPENSES
Bank charges and interest 31,821 38,687
Interest on amount due to ultimate holding company 6,346,491 5,275,207

6,378,312 5,313,894

5. OTHER OPERATING INCOME

Advising commission income 302,996 353,055

Handling and checking fee 409,383 542,453
Other charges and commission fee 1,297,499 3,352,650
Exchange gain/(loss) 45,141 (4,891)
Other income 2,036,497 712,425

4,091,516 4,955,692

6. DIRECTORS’ REMUNERATION

Remuneration of the directors disclosed pursuant to the Section 383 of the Hong Kong Companies Ordinance (Cap. 622) and
Companies (Disclosure of Information about Benefits of Directors) Regulation (Cap. 622G) is as follows :-

Fees - -
Other emoluments - -

7. EMPLOYEE BENEFIT OBLIGATIONS

The Company operates a Mandatory Provident Fund Scheme (“the MPF scheme”) under the Hong Kong Mandatory Provident
Fund Schemes Ordinance for employees employed under the jurisdiction of the Hong Kong Employment Ordinance and not
previously covered by the defined benefit retirement plan. The MPF scheme is a defined contribution retirement plan administered
by independent trustees. Under the MPF scheme, the employer and its employees are each required to make contributions to
the plan at 5% of the employees’ relevant income, subject to a cap of monthly relevant income of HK$30,000. Contributions to
the plan vest immediately.

8. PROFIT BEFORE TAXATION

The following items have been recognised as expenses in determining profit before tax :-

Auditors’ remuneration 28,000 23,000

Depreciation 9,550 31,165

9. INCOME TAX EXPENSE

Taxation in the statement of income and retained earnings represents :-

Current tax – Hong Kong Profits Tax

Provision for the year 701,236 1,037,666

The provision for Hong Kong Profits Tax is calculated at 8.25% for the first HK$2 million of estimated assessable profit and 16.5%
for the remaining estimated assessable profit (2017 : 16.5% of the estimated assessable profit) for the year.

No deferred tax has been provided as the effect of all temporary difference is immaterial.

PRIME BANK 435

ANNUAL REPORT 2018

PBL FINANCE (HONG KONG) LIMITED

Accounting Policies and Explanatory Notes to the Financial Statements
For The Year Ended 31St December, 2018

HK$
2018 2017

10. DIVIDENDS

Dividends payable to equity shareholders of the Company attributable to the year :-

Interim dividend declared and paid of HK$ 1.53171 per ordinary share (2017: HK$ 1.510354 per ordinary share)

5,360,986 5,286,239

11. PROPERTY, PLANT AND EQUIPMENT

Office Leasehold
Furniture Total
equipment improvement
HK$ HK$
HK$ HK$
Cost

At 31st December, 2017 261,339 81,701 238,742 581,782

Additions 13,428 - - 13,428
Written off (5,598) - - (5,598)

At 31st December, 2018 269,169 81,701 238,742 589,612

Accumulated depreciation and impairment

At 31st December, 2017 252,683 73,979 238,742 565,404

Charge for the year 5,314 4,236 - 9,550
Written back (4,510) - - (4,510)

At 31st December, 2018 253,487 78,215 238,742 570,444

Carrying amount

At 31st December, 2018 15,682 3,486 - 19,168

At 31st December, 2017 8,656 7,722 - 16,378

12. AMOUNT DUE TO ULTIMATE HOLDING COMPANY

The amount due to ultimate holding company (Note 16) is unsecured, interest-bearing at agreed rates and repayable within
agreed maturity.

13. SHARE CAPITAL

Issued and fully paid :-

3,500,000 ordinary shares 3,500,000 3,500,000

436 PRIME BANK

PBL FINANCE (HONG KONG) LIMITED
Accounting Policies and Explanatory Notes to the Financial Statements
For The Year Ended 31St December, 2018

HK$
2018 2017

14. OPERATING LEASE COMMITMENTS

The Company rents an office under an operating lease for a fixed period of two years, with fixed rental over the same period.

Minimum lease payments under operating leases recognised as an expense during the year

818,064 795,040
At the year-end, the Company had outstanding commitments under non-cancellable operating leases that fall due as follows :-

Within one year 303,475 818,064

In the second to fifth years, inclusive - 303,475

303,475 1,121,539

15. RELATED PARTY TRANSACTIONS

In addition to the transactions, balances and guarantees disclosed elsewhere in these financial statements, the Company has the
following material related party transactions during the year :-

Transactions and balances with ultimate holding company :-

Discounted bills receivable 169,790,395 106,786,146

Bank balance 526,002 827,270

Interest expenses 6,346,491 5,275,207

16. PARENT AND ULTIMATE HOLDING COMPANY

At 31st December, 2018, the directors consider the immediate parent and ultimate controlling party of the Company to be Prime
Bank Limited, which is incorporated in Bangladesh. This entity produces financial statements available for public use.

PRIME BANK 437

FINANCIAL STATEMENTS
OF PRIME BANK FOUNDATION

Independent Auditors’ Report to the Members of the Foundation

Statement of Financial Position (Balance Sheet)

Statement of Profit or Loss and other Comprehensive Income

(Income and Expenditure Statement)

Receipts and Payments Statement

Prime Bank Foundation
Independent Auditors’ Report to the Members of the Foundation
For the year ended 31 December 2018

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Prime Bank Foundation (the Foundation), which comprise the
statement of financial position (balance sheet) as at 31 December 2018, and the related statement of profit or loss and other
comprehensive income (income and expenditure statement) and receipts and payments statement for the year then ended, and
a summary of significant accounting policies and other explanatory information.

In our opinion, the financial statements give a true and fair view of the financial position of the Foundation as at 31 December
2018, and of its financial performance and its cash flows for the year then ended in accordance with International Financial
Reporting Standards and comply with the Companies Act 1994 and other applicable laws and regulations.

Basis of 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 Financial Statements section of our report. We are
independent of the Foundation accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial
statements in [jurisdiction], and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
IESBA Code. 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 financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matter described below to be the key audit matter to be communicated in our report.

Key Audit Matter How our audit addressed the key audit matter

Information technology (IT) systems and controls over financial reporting

A significant part of the financial reporting process is We focused our audit on those IT systems and controls
heavily reliant on IT systems with automated processes that are significant for the financial reporting process. As
and controls over the capture, storage and extraction of Audit procedures over IT systems and controls require
information. A fundamental component of these processes specific expertise, we involved IT specialists in our audit.
and controls is ensuring appropriate user access and change We assessed and tested the design and operating effectiveness
management protocols exist, and are being adhered to. of the IT controls, including those over user access and changed
These protocols are important because they ensure management as well as data reliability. In a limited number
that access and changes to IT systems and related data of cases we adjusted our planned audit approach as follows:
are made and authorised in an appropriate manner.
i) we extended our testing of identify whether there
As our audit sought to place a high level of reliance on
had been unauthorised or inappropriate access or
IT systems and application controls related to financial
changes made to critical IT systems and related data;
reporting, a high proportion of overall audit effort was in
ii) whether automated procedures were supported by
this area.
systems with identified deficiencies, we extended our
procedures to identify and test alternative controls; and
iii) whether required, we performed a greater level of testing to
validate the integrity and reliability of associated data and reporting.

Responsibilities of Management and Those Charged with Governance for the Financial Statements and Internal Controls

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and
for such internal control as management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Foundation’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 Foundation or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Foundation’s financial reporting process.

PRIME BANK 439

ANNUAL REPORT 2018

Prime Bank Foundation

Independent Auditors’ Report to the Members of the Foundation
For the year ended 31 December 2018

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis
of these 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 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, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
control.
• 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 Foundation’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 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 Foundation to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

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.

Report on Other Legal and Regulatory Requirements

In accordance with the Companies Act 1994, we also report the following:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for
the purposes of our audit and made due verification thereof;

(b) in our opinion, proper books of account as required by law have been kept by the Foundation so far as it appeared from
our examination of those books; and

(c) the statement of financial position (balance sheet) and statement of profit or loss and other comprehensive income
(income and expenditure statement) dealt with by this report are in agreement with the books of account and returns.

Dhaka, Bangladesh S. F. AHMED & CO

Dated, 07 March 2019 Chartered Accountants

440 PRIME BANK

Prime Bank Foundation
Statement of Financial Position (Balance Sheet)
As at 31 December 2018

2018 2017
Particulars
BDT BDT
Sources of funds

Fund account 1,760,333,576 1,687,884,889

Retained earnings/(losses) (348,716,782) (314,693,893)
1,411,616,794 1,373,190,996
Applications of funds

Non-current assets
Property, plant and equipment 919,242,663 485,512,929

Current assets
Investment in fixed deposit 422,924,259 465,417,814
Interest receivable 28,804,878 14,533,231
Advance income tax 36,453,195 33,371,994
Stock - Prime Bank Eye Hospital 909,099 1,031,908
Advances, deposits and prepayments 3,884,939 378,750,584
Cash and bank balances 8,375,997 2,019,693
501,352,366 895,125,223
Less: Current liabilities
Provision for expenses 3,120,994 3,582,558
Other payable 2,648,035 1,496,492
Security money 3,209,206 2,368,106
Net current assets 492,374,131 887,678,066
Net assets 1,411,616,794 1,373,190,996

For and on behalf of Prime Bank Foundation

Member Secretary Member Chairman

See annexed report of the date

Dhaka, Bangladesh S. F. AHMED & CO

Dated, 07 March 2019 Chartered Accountants

PRIME BANK 441

ANNUAL REPORT 2018

Prime Bank Foundation

Statement of Profit or Loss and other Comprehensive Income
(Income and Expenditure Statement)
For the year ended 31 December 2018

2018 2017
Particulars
BDT BDT
Income
Interest on fixed deposit 41,686,880 32,719,037
Income from Prime Bank Eye Hospital 27,552,651 27,415,320
Income from Prime Bank English Medium School (PBEMS), Uttara 29,843,685 24,269,553
Income from Prime Bank College of Nursing (PBCN) 12,542,930 7,186,093
Income from PBEMS, Mirpur 5,302,015 4,037,983
Interest on short-term deposit 51,089 121,439
Other income 429,512 1,731,345
Profit on sale of vehicle 125,125 -
117,533,887 97,480,770
Expenditure
Salary and allowances 56,213,337 52,235,650
Awardees stipend 35,574,400 39,348,000
Depreciation 6,275,534 8,827,035
Office rent 11,217,412 11,080,312
Repair and office maintenance 4,844,633 5,346,965
OT expenses 7,455,443 8,882,028
Car maintenance 2,155,779 2,346,330
Security service 2,178,486 2,115,143
Utility 2,816,191 2,496,551
Legal and professional fees 111,800 233,800
Advertisement 1,864,785 1,498,806
Seminar, training and workshop 284,912 312,277
Printing and stationery 1,326,782 1,288,970
Award giving ceremony 919,139 2,436,283
Gratuity 1,842,000 2,970,200
Telephone and internet 519,206 740,335
Expenses - Medicine shop 1,644,814 1,628,542
Expenses - Eye camp 420,545 525,732
Expenses - Optic shop 1,110,681 998,123
Travelling and conveyance 293,127 312,152
Education affairs expenses 1,717,363 1,196,056
Books and teaching materials 1,812,459 1,418,382
Entertainment 470,955 450,895
Feasibility study 7,710,175 -
Excise duty 340,950 228,450
Audit fee 115,000 115,000
Honorarium 137,500 45,000
Newspaper 59,363 48,405
Communication expense 62,593 87,671
Pathology 36,783 23,765
Bank charges 24,629 34,977
151,556,776 149,271,835
Deficit for the year (34,022,889) (51,791,065)

For and on behalf of Prime Bank Foundation

Member Secretary Member Chairman

See annexed report of the date

Dhaka, Bangladesh S. F. AHMED & CO

Dated, 07 March 2019 Chartered Accountants

442 PRIME BANK

Prime Bank Foundation
Receipts and Payments Statement
For the year ended 31 December 2018

2018 2017
Particulars
BDT BDT
Opening cash and bank balances
Cash in hand 321,126 84,624
Bank balances 1,698,566 3,787,846
Fixed deposit 465,417,814 530,462,798
467,437,506 534,335,268

Receipts

Contribution from Prime Bank Limited 72,358,987 93,801,662

Collection from Prime Bank Eye Hospital 27,489,941 26,716,440
Interest on fixed deposit 27,415,234 35,561,910
Sales proceed of non-current assets 125,125 -
Collection from PBEMS 34,411,113 14,946,009
Collection from PCND 14,031,264 48,483
Interest on short-term deposit 51,089 121,439
Security money 953,200 556,000
Prime sight fund 28,000 23,000
VAT Students - 122,543
Suspense Account 90
Award giving ceremony from bank - 1,500,000
Other Income 132,949 -
176,996,902 173,397,575
644,434,408 707,732,843
Payments

Salary and allowances 55,209,210 50,259,817

Awardees stipend 35,512,700 39,348,000
Office rent 11,089,214 9,438,586
Advances 70,436,794 106,377,801
Stock 18,000 -
Repair and office maintenance 2,733,625 3,445,723
Car maintenance 1,891,594 2,049,997
Advertisement 1,470,352 1,187,500
Security service 1,695,638 2,014,140
Advance income tax 2,776,200 3,595,657
Income tax (salaries) 105,295 -
Income tax (vendors) 128,227 -
Books and teaching materials 1,643,399 1,336,079
Printing and stationery 1,156,168 1,231,757
Gratuity 2,970,200 -
Telephone 472,887 700,237
Award giving ceremony 531,839 1,001,772
Optic shop 68,400 538,270

PRIME BANK 443

ANNUAL REPORT 2018

Prime Bank Foundation

Receipts and Payments Statement
For the year ended 31 December 2018

2018 2017
Particulars
BDT BDT
Eye camp 344,609 171,286
OT expenses 2,949,701 3,698,008
Provision for expenses - 7,781,463
Furniture & fixtures 404,862 252,621
Other payables - 3,428,697
Travelling and conveyance 268,327 293,152
Entertainment 395,554 433,684
Seminar, training and workshops 61,718 145,333
Education affairs expenses 342,775 162,269
Office equipment 239,077 100,673
Utility 285,692 272,702
Legal and professional fees 111,800 167,550
Medical equipment - 300,840
Audit fee 115,000 90,000
Security money 15,000 29,880
Computer 66,982 10,800
Accounts payable 9,018,884 -
Library and books - 19,131
Bank charges 24,629 34,895
Excise duty 340,950 228,450
VAT (vendors) 181,585 -
Secured Loans (UFL) 163,350 -
Feasibility Study 7,710,175 -
Honorarium 25,000 -
Communication expenses 62,593 76,397
Newspaper 59,363 48,405
Pathology 36,783 23,765
213,134,151 240,295,337

Closing cash and bank balances

Cash in hand 227,897 321,126
Bank balances 8,148,100 1,698,566
Fixed deposit 422,924,260 465,417,814
431,300,257 467,437,506
644,434,408 707,732,843

For and on behalf of Prime Bank Foundation

Member Secretary Member Chairman

Dhaka, Bangladesh
Dated, 07 March 2019

444 PRIME BANK

SUPPLEMENTARY INFORMATION

Human Resource Accounting

Glimpses of 23rd Annual General Meeting

Branch Network

Notable Activities During 2018

Redressal of Investors Complaints

Minutes of 23rd Annual General Meeting

Notice of the 24th Annual General Meeting

List of Acronyms

Proxy Form
ANNUAL REPORT 2018

HUMAN RESOURCE ACCOUNTING

Human resource accounting is accounting for people as an replacement cost of an executive in middle management level
organizational resource. It involves measuring the costs incurred is about 1.5 to 2 times the current salary paid in that position.
by business firms and other organizations to recruit, select, hire, Replacement cost is much better indicator of value of human
train and develop human assets. It also involves measuring the assets though it may present certain operational problems.
economic value of people to the organization.
Standard Cost
Concept of Human Resource Accounting
Instead of using historical or replacement cost, many companies
Thus, human resource accounting is primarily involved in use standard cost for the valuation of human assets just as
measuring the various aspects related to human assets. Its basic used for physical and financial assets. For using standard cost,
purpose is to facilitate the effective management of human employees of an organization are categorized into different
resources by providing information to acquiring, develop, retain, groups based on their hierarchical positions.
utilize, and evaluate human resources.
Present value of future earnings
Objectives of human resource accounting are as follows
In this method, the future earnings of various groups of
To provide cost value date for managerial decisions regarding employees are estimated up to the age of their retirement and
acquiring, developing, allocating and maintaining human are discounted at a predetermined rate to obtain the present
resource so as to attain cost effective organizational objectives. value of such earnings. This method is similar to the present
value of future earnings used in the case of financial assets.
1. To provide information for effectiveness of human resource
However, this method does not give correct value of human
utilization.
assets as it does not measure their contributions to achieving
2. To provide information for determining the status of human organizational effectiveness.
asset whether it is conserved properly; it is appreciating or
depleting. Acquisition Cost Method
3. To assist in the development of effective human resource Under this method the costs of acquisition, namely, the costs
Management practices by classifying the financial incurred in recruitment, hiring and induction of employees
consequences of these practices. are taken into account. The process involves capitalization
of historic costs. The cost so capitalized has to be written off
Methods of Valuation of Human Assets over a period of time for which the employee remains with the
There are a number of methods suggested for the valuation of firm. If for some reason the employee leaves the organization
human assets. Many of these methods are based on the valuation prematurely, the unamortized cost remaining in the books
of physical and financial assets while others take into account has to be written off against the profit and loss account of the
human consideration. Major methods of valuation of human particular year.
assets are historical cost, replacement cost, standard cost,
present value of future earnings, and expected realizable value. Replacement Cost Method

While in the case of acquisition cost past costs are considered,

Historical Cost under this approach one takes in to account how much it costs
Historical cost is based on actual cost incurred on human to replace a firm’s existing resources and thus represents a
resources. Such a cost may be of two types – acquisition cost current value approach. So this is a method resource and thus
and learning cost. Acquisition cost is the expense incurred represents a current market conditions. This exercise may
on training and development. This method is very simple in be redundant unless the management desires to replace its
its application but it does not reflect the true value of human present resources. It is also difficult exercise as in many cases
assets. For example, an experienced employee may not require the replacement may not be exactly similar.
much training and, therefore, his value may appear to below
though his real value is much more than what is suggested by Present Value of Future Earnings Method
historical cost method. This is also known as capitalization of salary method. Under
this method the future earnings of an employee or grades of
Replacement Cost employees are estimated up to the age of retirement and are
As against historical cost method which takes into account the discounted at a rate appropriate to the person or the group in
actual cost incurred on employees, replacement cost takes order to obtain the present value.
into account the national cost that may be required to acquire
a new employee to replace the present one. In calculating Expected realizable value
the replacement cost, different types of expenses are taken The above methods discussed so far are based on cost
into account which may be in the form of acquisition and consideration. Therefore, these methods may provide
learning cost. Replacement cost is generally much higher than information for record purpose but do not reflect the true value
the historical cost. For example, XYZ has estimated that the of human assets. As against these methods,

446 PRIME BANK

Expected realizable value is based on the assumption that 1. There is no well-set standard accounting practice for
there is no direct relationship between cost incurred on an measuring the Value of human resources. In the case of
individual and his value to organization can be defined as the financial accounting, there are certain specified standards
present worth of the set of future services that he is expected which every organization follows. However, in the case of
to provide during the period he remains in the organization. human resource accounting, there are no such standards.
Therefore, various organizations that adopt human asset
Economic Value Method valuation use their own models. With the result, value of
The economist’s concept of the value of an asset is equal to human assets of two organizations may not be comparable.
the present worth of its estimated future economic benefits. 2. The valuation of human assets is based on the assumption
This approach has a strong theoretical appeal. But this method that the Employees may remain with the organization for
involves the following steps: certain specified period. However, this assumption may not

BDT in million
Particulars 2018 2017 2016 2015 2014
Operating cost per employee 2.26 1.95 2.12 2.10 2.01
Training cost per employee 0.004 0.01 0.01 0.005 0.01
Operating profit per employee 1.78 1.54 1.94 2.01 2.15
Gross turn over per employee 7.38 6.31 7.67 8.97 9.58

Competitive Bidding Method hold true in today’s context because of increased human
This is also known as the opportunity cost method. Opportunity resource mobility.
cost is defined as the measurable value of benefits that could 3. There is also a possibility that trade unions may oppose the
be obtained by choosing an alternative course of action. In the use of human resource accounting. They may want parity
case of HRA. Opportunity costs are determined by a process of of wages/ salaries and value of employees.
competitive bidding in which various divisions and departments
bid for the services of various officers. The amount of bid is
added to the capital employed of the successful bidder for
determining the return on investment.

Financial reporting standards

IFRS do not currently contain any standards regarding HRA.

It could be argued that they are moving closer to providing
more flexible approaches to accounting measurements and
reporting. For example, the international standards IAS 38
Intangible Assets and IFRS 3 on Business Combinations allows
for the recognition of the intangible asset goodwill, which
indicates a willingness to allow for valuation of assets that are
not traditional tangible assets, such as human resources.

Practice in Prime Bank

In Prime Bank, as there are no specific accounting standards,

we are following conventional accounting practice and not
capitalizing any HR cost, rather amortize it over service life of
employees. However, we are taking benefits of HR accounting
concepts and using HR accounting information (such as
per employee cost to the company, expected service life of
employees, per employee productivity and its growth over
periods and many more) in making important management
decisions that will benefit the long-run strategic goals and
profitability of the Company.

Problems in Human Resource Accounting

There are certain operational problems in human accounting

because it attempts to measure intangibles. Therefore,
subjective factors may play crucial role.

Thus, the major operational problems involved in human

resource accounting are of the following types:

PRIME BANK 447

ANNUAL REPORT 2018

GLIMPSES OF 23rd AGM

448 PRIME BANK

BRANCH NETWORK
Dhaka Division
Md. Shahidul Islam Md. Abdur Rouf Md Rabiul Islam
First Assistant Vice President & Head(CC) First Assistant Vice President & Head First Assistant Vice President & Head
Baridhara Branch Damudya Branch Adamjee EPZ Branch, Narayanganj
Concord I. K Tower(1st Floor) Holding # 264 (1st & 2nd floor), Sadar Road Adamjee EPZ Holding # 4
Plot #02, Block # CEN(A) North P.S: Damudya, Dist: Shariatpur Siddirganj, Narayanganj
Avenue, Gulshan – 2 Dhaka-1212 Cell : 01730-096615 Cell : 01730-076155
Cell : 01730-781181 Phone : 06023- 56396 Phone 02- 7692025-26, 7692024
Phone : 02-9850376,9850392 Fax : 06023- 56390 Fax : 02- 7692027
Fax:02-9850384

Saifuddin Ahmed Md. Nasimuzzaman Md. Nazrul Islam

Assistant Vice President & Head First Assistant Vice President & Head Vice President & Head
Asad Gate Branch Bashaboo Branch Dhanmondi Branch
2/6, Sir Sayed Road, Mohammadpur (Mirpur Shapnil (2nd & 3rd Floor), 60-61 South Mamtaz Plaza (1st Floor)
Road), Dhaka. Bashaboo, Dhaka House # 7, Road # 4, Dhanmondi R/A, Dhaka
Cell : 01730-031819 Cell : 01709-655689 Cell : 01714-133777
Phone: 02-9125400, 8142106, 8142134, 9136214 Phone : 02- 7219201, 7219205, 7219206 Phone : 02- 8622304, 8621556, 9662704,
Fax : 02- 9122640 Fax : 02- 7219205 8621557
Fax : 02- 9662705

Mollah Asaduzzaman Sabina Easmin Nazneen Akhter

Assistant Vice President & Head Assistant Vice President & Head Bashundhara Senior Assistant Vice President & Head
Ashulia Branch Branch Elephant Road Branch
Sharif Mansion (1st floor) Plot # 236, Block – B Ananta Plaza, 136,Elephant Road
Diakhali, Jamgora Bazar, P.S. Ashulia, Dist. : Bashundhara R/A, Dhaka Dhaka-1205
Dhaka Cell : 01730-373920 Cell : 01730-016896
Cell : 01713-409183 Phone : 02-8845213, 8415276, 8845215 Phone : 02- 9662776-7, 8622592,9673783,
Phone: 02- 7788290, 7788326, 7788325 Fax : 02- 8845214 9673786
Fax : (02) 7788291 Fax :02- 8622591

Faria Azad Sheme Mohammad Mazharul Islam Siddique Ahmed

Assistant Vice President & Head First Assistant Vice President & Head Assistant Vice President & Head
Banani Branch Bhairab Bazar Branch, Kishoreganj Foreign Exchange Branch
House # 62, Block – E, Kemal Ataturk Avenue 181, Tin Potty Road, Bhairab Pawrashava, Al-Haj Mansion, 82, Motijheel CIA
Banani Dhaka-1212 Bhairab, Kishoregonj Dhaka-1000
Cell : 01711-218967 Cell : 01709-648747 Cell : 01701-204140
Phone: 02- 8815754, 9889868, 8854988, Phone : 02-9470723, 9470771, 9470733 Phone : 02- 9551682, 9570751, 7161146
8852899, 8850329, 8836890 Fax : 02- 9471755 Fax : 02- 9553078
Fax: 02- 8853616

Syed Delwar Hossain Masood Mizan Mohammad Harunar Rashid

Senior Assistant Vice President & Head Senior Assistant Vice President & Head First Assistant Vice President & Head
Banasree Branch Bijoy Nagar Branch Faridpur Branch
Arcadia (1st Floor), Plot # 14, Block-C Akram Tower (1st Floor) KMA Arcadia (1st floor), Holding # 60/116/A,
Banasree Main Road, Rampura, Dhaka 15/5 Bijoy Nagar, Dhaka Moirapotty, Faridpur
Cell : 01708-466534 Cell : 01709-658447 Cell : 0173 0-327673
Phone: 02- 8399548, 8399591 Phone : 02- 9335732 ,9335762, 9334123 Phone : 0631- 65133
Fax:02-8399547 Fax : 02- 9332639 Fax : (0631) 65128

Mohammad Ashraf –Us-Salehin Md. Abdur Razzaque Afsana Kishwar

First Assistant Vice President & Head First Assistant Vice President & Head Assistant Vice President
Jamalpur Branch Boalmari Branch Gareb-E-Newaz Avenue Branch
Jibon Mantion, Station Road, Jamalpur Ajhar Tower, 503 Station Road, Boalmari Bazar, Holding # 1, Gareb-E-Newaz Avenue
Cell : 01755-524165 Faridpur Sector # 11, Uttara R/A, Dhaka
Phone : 0981-65361, 0981-65360 Cell : 01755-607991 Cell : 01730-312515
Tele-Fax : 0981- 65362 Phone : 06324-56132, 56130 Phone : 02- 8950997, 8921161,8991781
Fax : 06324-56139 Fax : 02-8931687

Md. Rabiul Islam Mohammad Abdus Sattar Md. Azharul Islam

Senior Assistant Vice President & Head Assistant Vice President & Head Assistant Vice President & Head
Ganakbari Branch Bangshal Branch Kishoreganj Branch
Somsher Plaza (1st floor), (Opposite Dhaka Holding # 23 (old), 4(new), Mazed Sardar Road Shamsuddin Bhuiyan Plaza,
EPZ), Balibhadra Bazar Bas stand, Dhamsona, Bangshal, Dhaka-1100 Teripotty, Kishoreganj
Ganakbari Savar Dhaka-1340 Cell : 01715-416860 Cell : 01730-727296
Cell : 01709-655683 Phone : 02- 7123480, 9561501, 9556635, Phone : 0941-62590, 0941-62592
Phone : 02-789863, 7789378-9, 7788100 7175185, 7113310 Fax: 0941-62591
Fax : 02-7789378 Fax : 02- 7123480

PRIME BANK 449

ANNUAL REPORT 2018

Md. Ramiz Uddin Miah Md. Jafar Hasan AKM Amirul Islam
Senior Vice President & Head Vice President & Head First Assistant Vice President & Head
Gulshan Branch Jatrabari Branch Madhabdi Branch
Plot # 01, Block-CEN(H), Road # 109 Gulshan Nur Tower, 76/Ga, Bibir Bagicha Plot # 17, Madhabdi Bazar
Avenue (Near Wonder Land), Dhaka-1212 North Jatrabari, Dhaka-1204 Narsingdi-1604
Cell : 01700-711458 Cell : 01730-338785 Cell : 01713-082807
Phone : 02- 9890898, 9886171, 8815885, Phone :02- 7552158, 7552178 Phone : 02-9446682,9446683
8829975 , 8817460, 9884977, 9862937, 8817460 Fax :02- 7552169 Fax : 02-9446683
Fax :  02- 9884977

Abu Zafar Md. Sheikhul Islam Mollah Farid Ahmed Md. Aminur Rahman Akanda
Executive Vice President & Head Vice President & Head Senior Assistant Vice President & Head
Islamic Banking Branch, Dilkusha Joydevpur Chowrasta Branch Mirpur-1 Branch
19, Dilkusha Commercial Area Shapla Masnion (1st Floor) Rabiul Plaza (1st floor), Plot # Shee-1/Kha,
Dhaka-1000 Joydevpur Chowrasta Section # 1, Mirpur
Cell : 01711-612438 P.O. Chandana Dhaka-1216
Phone : 02-  9567227, 9514927, 9567228, Dhaka-Tangail Road Gazipur Cell : 01730-086827
9587494, 9577582,  9576414, 9514928, Cell : 01713-068094 Phone : 02- 8034590, 8034126, 8054007
9587506 & 9551678 Phone : 02- 9164103, 9264135 Fax : (02) 8034591
Fax : 02- 9567228 Tele-Fax : 02- 9264097

Md. Emdadul Haque [Link] Hossain Mian  Golam Mostofa

Assistant Vice President & Head First Assistant Vice President & Head First Assistant Vice President & Head
Hemayetpur Branch Joypara Branch Mirzapur Brach
Madhu Bhaban, Hemayetpur, Saver, Dhaka Azahar Ali Mozahar Ali Shopping Complex, Nazmul traders Building
Cell : 01730-781154 Latakhola, Joypara, Dohar, Dhaka 1215 College Road
Phone : 02-7742096 Cell : 01730-034861 Mirzapur, Tangail
Tele Fax : 02-7742096 Phone : 02-7768053 & 7768054,7768055 Cell : 01730-727297
Fax : 02-7768052 Phone : 09229- 56591, 09229- 56592
Fax: 09229- 56593

A.K.M. Abdul Alim Ibne Khabir Md. Abul Kalam Azad K M Nazmul Islam
Vice President Vice President & Head First Assistant Vice President & Head
Islamic Banking Branch, Mirpur Kawran Bazar Branch, Modhukhali Branch
Mamoni Tower, 1244 East Monipur 54, Kawran Bazar C/A., Dhaka-1215 Modhuban Shopping Mall(1st Floor)
Begum Royeya Sarani, Mirpur, Dhaka-1216 Cell : 01787-688695 Modhukhali ,Faridpur
Cell : 01713-019530 Phone : 02-9124296–7, 9145397 Cell : 01730-791547
Phone : 02- 9031711, 9030180 Fax : 02- 9129004 Phone : 06326- 56018, 56017
Fax : 02- 9031700 Fax : 06326- 56019

Md. Nazimuddin Sheikh Mohammad Feroz Alam Md. Amanullah

Assistant Vice President & Head Senior Executive Officer & Head Senior Vice President & Head
Ibrahimpur Branch Kaliakoir Branch Mohakhali Branch
Sumona Sahadat Center Ahmed Ali Plaza (1st Floor) 69,Mohakhali C/A. Dhaka-1212
80, Ibrahimpur, Kafrul College Road, Kaliakoir, Gazipur. Cell : 01730-320022
Dhaka-1206 Cell : 01709-655673 Phone : 02- 9882291, 8826483, 8817210,
Cell : 01755-582852 Phone : 06822-51622, 06822-51620 9850302, 9887188
Phone : 02- 8872503, 8872423, 8872557 Fax: 06822-51621 Fax :02- 9886052
Fax : 02- 8872501

Md. Salah Uddin Kazi Azaharul Islam Nazrul Islam

Senior Vice President & Head Vice President & Head Vice President & Head
Motijheel Branch New Eskaton Branch Sat Masjid Road Branch
Adamjee Court Annexe Building-2 133, New Eskaton Road House # 99, Road # 11/A
119-120, Motijheel C/A, Dhaka-1000 Dhaka- 1000 Dhanmondi RIA, Dhaka-1209
Cell : 01730-794632 Cell : 01708-149555 Cell : 01709-655672
Phone : 02- 9567265, 7175491, 9567225, Phone : 02- 9354738, 9354044, 9359683 Phone : 02- 9122374, 58153602, 9130466,
9559876, 9515341, 7175492, 9562982 Fax : 02- 9354826 9135982,58151936
Fax : 9567223 Fax: 02- 8121652

Sbubir Kumar Barua Md. Rezaul Karim Md. Adil Uddin

Senior Assistant Vice President & Head Assistant Vice President & Head Assistant Vice President & Head
Mouchak Branch Pallabi Branch Savar Branch
Manhattan Tower (1st Floor) Setara’s Dream, 1/11 & 1/12 Pallabi K.K. Plaza (1st floor), A-91, Savar Bazar Road,
83, Siddaswari Circular Road, Malibagh, Mirpur, Dhaka Savar, Dhaka
Dhaka-1217 Cell : 01755-534924 Cell : 01709-658411
Cell : 01709-658422 Phone : 02-9000559, 02-9001913, 9013629 Phone : 02- 7744862, 7744861
Phone : 02-9347757, 8352832, 9360292, Fax : 02-9001813 Fax :02- 7744863
8352831, 9360162
Fax : 880-2-9338883

Md. Abdul Bari Mollah  B M Touhiduzzaman Md. Shahtab Rizvi

Vice President & Head Assistant Vice President & Head Assistant Vice President & Head
Moulvi Bazar Branch Panthapath Branch SBC Tower Branch
77/4, Moulvi Bazar, Dhaka-1100 Firoz Tower, 152/3-B, Green Road Sadharan Bima Tower
Cell : 01701-204151 Panthapath, Dhaka 37/A, Dilkusha C/A, Dhaka
Phone :  02 - 7311017, 7313407,  7316696 Cell : 01708-130725 Cell : 01714-014890
Fax : 02-7318305 Phone : 02-9142879, 8128100, 8152852 Phone : 02- 9559943, 9571250, 9561221
Fax : (02) 9137887 Fax : 02-9564189

450 PRIME BANK

[Link] Ahsan Mohammad Mahfuzur Rahman Md. Anowar Hossain
Assistant Vice President & Head Assistant Vice President & Head First Assistant Vice President & Head
Mymensingh Branch Patuatuli Branch Shibpur Branch
10, Swadeshi Bazar, Mymensingh Bishal Hafiz Market (1st & 2nd Floor) Khan Tower, Shibpur Bazar, Narsingdi.
Cell : 01713-069631 10, Wayse Ghate Road, Patuatuly, Dhaka Cell : 01755-645474
Phone : 091- 52390, 62228, 52391, 62243 Cell : 01708-130755 Phone : 06256- 75130, 06256- 75131
Tele-Fax : (091) 52391 Phone : 02--7343474, 57396161 Fax : 06256- 75134
Fax : 88-02-57396161

B M Mizanur Rahman Md. Arman Uddin Bhuiyan Shakil Ahmed Khan

First Assistant Vice President & Head Vice President & Head Assistant Vice President & Head
Narayanganj Branch Pragati Sarani Branch Wari Branch
Modern Model Complex, 56,[Link] Road, Facilities Tower, Kha-199/2 Tanin Roseate, 43 Rankin Street, Wari, Dhaka
Narayanganj-1400 Maddhya Badda, Dhaka Cell : 01709-658412
Cell : 01709-658421 Cell : 01711-439003 Phone : 02- 9512085,7118169, 7118311
Phone : 02- 7630150, 7646894 Phone : 02- 98406895,8816938, 9840685 Fax :02- 9512084
Fax : 02- 7630140 Fax : 02- 8837531

Md. Moshiar Rahman Shamima Pervin Mohammod Ashaduzzaman

Senior Executive Officer & Head Senior Assistant Vice President & Head Senior Executive Officer & Head
Nawabgonj Branch Ring Road Branch Sirajdikhan Branch
B.K.N. Point Baitul Aman Tower (1st Floor) Hazi Mustafa Plaza, (1st floor) Dag # 284,
Kasimpur, Nawabgonj, Dhaka. Holding # 840/841, Ring Road, Adabor, Dhaka Bazar Road, Sirajdikhan, Munshiganj
Cell : 01709-658436 Cell : 01711-824628 Cell : 01730-317443
Phone : 02- 7765298, 7765299 Phone : 02- 8158866, 58150666 Phone : 02- 7628320, 7628381
Fax : 02- 7765297 Fax : 02- 8117010 Fax : 02-7628310

Md. Mukter Hossain Md. Shahadat Hossain [Link] Ali Mollah

Senior Executive Officer & Head Senior Executive Officer & Head Senior Assistant Vice President & Head
Sreenagar Branch Tangail Branch Tongi Branch
Rahman Complex, Sreenagar Bazar, Main Building, Ward # 6 Sena Kalyan Commercial Complex (1st floor)
Munshigonj Holding # 414-417, Main Road, Tangail Plot # 09, Block-F, Tongi, Gazipur.
Cell : 01730-781191 Cell : 01713-082745 Cell : 01701-204081
Phone : 02-7627210, 7627202 Phone : 0921-61248, 0921-61271 Phone : 02- 9813811, 9813874
Fax : 0921- 61322 Fax : 02-9813835

Sharmin Akther K. M. Sakhawat Hossain Md. Monirul Haque Bhuiyan

Vice President & Head Senior Assistant Vice President & Head Assistant Vice President & Head
Uttara Branch Shimrail Branch Tejgaon Branch
Siaam Tower (1st Floor), Plot # 15, Sector # 03, Haji A. Rahman Super Market and Shopping Shanta Western Tower (Level-2)
Dhaka Mymensingh Road, Uttara Model Town, Tower, Holding No.96, Shimrail Morr, Chattogram 186, Bir Uttam Mir Shawkat Sarak, Tejgaon,
Dhaka Road Chowrastha, Siddirganj, Narayanganj Dhaka
Cell : 01709-658441 Cell : 01714-039543 Cell : 01709-658414
Phone : 02-58956233, 02-8950341-2, Phone : 02-7691670,02-7692913, 7692912 Phone : 02- 8879157-8, 8879160
8950016 Fax : 02-7691671 Fax : 02- 8879156
Fax : 02-58954248

Chattogram Division
Sirajul Hoque Suman Kanti Dhar AKM Shah Arefin
Senior Assistant Vice President & Head First Assistant Vice President & Head First Assistant Vice President & Head
Agrabad Branch Fatickchari Branch Ashugonj Branch
[Link] (1st floor), 318 Sheikh Mujib Road Haji Hossain Plaza, College Road, Bibirhat, Seriya Sayed Tower, Post Office Road,
Badamtoli, Agrabad, Chattogram Dhurang Union, Fatickchari, Chattogram Ashugonj Bazar, Ashugonj, Brahamanbaria
Cell : 01709-658464 Cell : 01713-103661 Cell : 01755-534933
Phone : 031-716724-5, 2521659, 2526396, Phone : 03022- 56006 Phone : 08528-74596, 08528-74595
2526397, 727018, 710970, 2526160 Tele-Fax : 03022- 56006 Fax: 08528-74594
Fax : 031-718971

Abu Jafar Md. Iqbal Md. Mizanur Rahman Md. Tajul Islam
First Assistant Vice President & Head Senior Executive Officer & Head First Assistant Vice President & Head
Cox’s Bazar Branch Chaumuhani Branch Hajigonj Branch
Hajera Shopping Center Holding # 180-182 (1st floor); Feni Road, Ananda Complex, Holding#191, Hajiganj
Holding # 256, Main Road, Cox’s Bazar Chaumuhani, Begumganj; Noakhali. Bazar, Hajiganj, Chandpur
Cell : 01713-129263 Cell : 01730-338459 Cell : 01730-338463
Phone : 0341- 51085,0341- 51083 Phone : 0321- 54096 Phone : 08424 -75110, 08424-75111
Fax : 0341- 51084 Fax : 0321- 56096 Fax : 08424- 75111

S. M. Shahidul Islam Md. Shoharab Khan Md. Abul Hasanat

Senior Assistant Vice President & Head First Assistant Vice President & Head Assistant Vice President & Head
Halishahar Branch Keranihat Branch Race Course Branch
Mobil House,Plot-2,Road-3,Block-K, Halishahar Hazi Ulamia Market (1st Floor) Anandodhara Hamidum Mazid Plaza
Housing Estate, Halishahar, Chattogram. Keranihat, Satkania, Chattogram Holding # 1369/1
Cell : 01713-255773 Cell : 01755-551601 Race Course, Comilla
Phone : 031- 2512039, 031- 2512064 Phone : 03036-56134, 03036-56133 Cell : 01755-645483
Fax : 031- 2512054 Fax: 03036-56135 Phone : 081-73964, 081-73963
Fax : 081-73965

PRIME BANK 451

ANNUAL REPORT 2018

Md. Nurul Amin Md. Mainul Kabir Md. Younus

First Assistant Vice President & Head Senior Assistant Vice President & Head Assistant Vice President & Head
Hathazari Branch Khatunganj Branch Raozan Branch
N. Zahur Shopping Center (1st Floor) Kachari 142, Chand Mia Lane Fazal Tower (1st Floor), Jalil Nagar Raozan,
Road, Hathazari Chattogram Khatunganj, Chattogram-4000 Chattogram
Cell : 01711-809292 Cell : 01711-430916 Cell : 01730-031850
Phone : 031-2601524,031- 2601525 Phone : 031- 623213-14,031- 623212, 627297 Phone : 03026- 56214,03026- 56168
Fax : 031- 2601526 Fax : 031- 610848 Fax : 03026- 56215

Md. Nurul Afsar Mohammad Ruhul Quish Md. Shamsul Alom

First Assistant Vice President & Head Senior Assistant Vice President & Head First Assistant Vice President & Head
Islamic Banking Branch, O. R. Nizam Road Laldighi East Branch Bhatiary Branch
Hazrat Garibullah City Corporation Bhaban 8, Laldighi East Khaleque Tower, Bhatiary, Sitakunda,
(1st Floor) 739/804 CDA Avenue, Bagmoniram, Chattogram Chattogram
Chattogram Cell : 01711-400380 Cell : 01755-545810
Cell : 01714-020266 Phone : 031- 2850773, 2850774,031- 2850771 Phone : 08528-74596, 08528-74595
Phone : 031- 639855, 2861437 Fax : 031- 2850772 Fax: 08528-74594
Fax : 031- 2861434

Mohammad Abu Ali Mohammad Ansarul Karim Shahed Md. Masud Alom
Senior Assistant Vice President & Head Assistant Vice President & Head Assistant Vice President & Head
IBB, Pahartali Muradpur Branch Comilla Branch
B S Plaza, Plot # 305/1390 Abdul Ali Hat, Sorai Shah Alam Plaza,129, CDA Avenue, Muradpur, 10/8 & 9/7 Chatipatti (1st Floor) Rajgonj,
Para Alanker Morr, P. S. Pahartali, Chattogram Chattogram Comilla
Cell : 01714-025275 Cell : 01755-594840 Cell : 01713-082803
Phone : 031-753143, 031- 2771751 - 2, 2773541 - 2 Phone : 031-652505, 031-652503 Phone : 081-72611, 72612
Fax : 031- 753144 Fax: 031-652504 Fax : 081-72646

Shahid Uddin Ahmed Mohammad Majharul Islam Mohammed Nurul Momen

Assistant Vice President & Head First Assistant Vice President & Head – CC Senior Executive Officer & Head (CC)
Jubilee Road Branch Oxygen More Banshkhali Branch
Pedrollo Plaza, 5, Jubilee Road 405 Sekander Center G.S. Plaza (1st floor), Chattogram-Banshkhali
Chattogram-4000 Chattogram Cantonment, Oxygen More, Highway Jaldi, Banshkhali, Chattogram
Cell : 01714-080929 Chattogram Cell : 01730-338465
Phone : 031-613939, 031-614649, 031- Cell : 01730-317446 Phone : 0303-756222
2850319, 031-613650 Phone : 031-2583181, 031-2584181, 031-2584180 Fax: 0303-756223
Fax : 031-618689 Fax : 031-2583180

Shakhawat Hossain Kazi Foorkan Uddin Manash Pal

First Assistant Vice President & Head Assistant Vice President & Head First Assistant Vice President & Head
Karnaphuli EPZ Branch, Prabartak More Branch Dagonbhuiyan Branch
Karnaphuli EPZ, North Patenga, 12/12 O. R. Nizam Road, Prabartak More, R.B Plaza, 391 Falizer Ghat, Dagonbhuiyan,
Chattogram-4204 Panchlish Chattogram Feni
Cell : 01755-607994 Cell : 01730-303555 Cell : 01730-704145
Phone : 031-2502382, 031-2502381 Phone : 031- 2553593, 031- 2553591-2, Phone : 03323- 79248, Direct: 03323- 79249
Fax: 031-2502383 Fax : 031- 2553594 Fax: 03323- 79250

Md. Mahbub Morshed Mohammad Ramjan Shakh Mohammad Rafiqul Haque

Senior Executive Officer & Head First Assistant Vice President & Head First Assistant Vice President & Head
Chauddagram Branch Feni Branch Brahmanbaria Branch
Abdul Gani Shopping Complex (1st floor) Kazi Center, K Das Bhaban, K Das Square
Chauddagram Bazar, Comilla Holding # 106, S. S. K. Road, Feni Brahmanbaria
Cell : 01730-318791 Cell : 01713-069623 Cell : 01755-645488
Phone : 08020-56364, 08020-56363 Phone : 0331- 63091, 63093,0331- 63092 Phone : 0851-61698, 0851-61699
Fax : 08020-56362 Tele-Fax : 0331- 63092 Fax: 0851-58849

Rajshahi Division
Md. Nazmul Hasan Rojina Parvin Md. Moyen Uddin
Senior Executive Officer & Head Assistant Vice President & Head First Assistant Vice President & Head
Joypurhat Branch Baneswar Branch Pabna Branch
Tahera Complex, 306 Main Road, Joypurhat Baneswar, Puthia, Rajshahi 423/1 Sonapatty Road, Pabna
Cell : 01730-704142 Cell : 01755-534922 Cell : 01730-359665
Phone : 0571-51156, 0571-51157 Phone : 08224-56017,038911-82480 Phone : 31- 66426, 0731- 66425
Fax: 0571-51158 Fax: 08224-56004 Fax : 0731- 66399

Abu Hena Md. Mostofa Kamal Md. Zahangir Alam Md. Safikul Islam
Senior Executive Officer & Head First Assistant Vice President & Head First Assistant Vice President & Head
Mohadevpur Branch Sherpur Branch Bogura Branch
Charmatha Boker More, Bridge Road Azhar Complex (1st Floor), 331/364, Rangpur Road, Borogola
Mohadebpur, Naogaon Sherpur Bus Stand, Sherpur, Bogura. Bogura-5800
Cell : 01755-545814 Cell : 01730-791549 Cell : 01730-034948
Phone : 07426-75041, 07426-75088 Phone : 05029- 77229, 05029- 77228 Phone : 051- 78203, 67172
Fax: 07426 - 75044 Fax: 05029- 77225 Fax : 051- 61142

452 PRIME BANK

Shah Md. Abushaleh Md. Abdul Halim Md. Sayeed Imam
First Assistant Vice President & Head Assistant Vice President & Head First Assistant Vice President & Head
Naogaon Branch Ishwardi Branch Chapai Nawabganj Branch
Jagannath Bhaban (1st & 2nd Floor) Holding # 1335/982 Puraton Bazar, Ishwardi Holding No. 29 (1st floor) Islampur, Daudpur
Holding # 320, Main Road, Bridge-er-More, Pabna Road Bara Indira Moor, Chapai Nawabgonj.
Naogaon Cell : 01730-338461 Cell : 01730-061491
Cell : 01713-068095 Phone : 07326-64435, 07326-64650 Phone : 0781-51125, 0781-51126
Phone : 0741-62150, 0741-62151 Fax : 07326-64436 Fax : 0781-51127
Fax : 0741-62152

Md. Obaidul Haque Md. Showkat Kamal Sarker

Assistant Vice President & Head Vice President & Head
Natore Branch Rajshahi Branch
1052, Kanaikhali, Dhaka-Rajshahi Highway 138/144, Shaheb Bazar, Rajshahi-6100
Cell : 01730-338466 Cell : 01713-082804
Phone : 0771- 67001 Phone : 0721- 773981, 774582, 774583
Fax : 0771- 67002 Fax : 0721- 773980

Sylhet Division
Nasir Uddin Ahmed Arunangshu Kumar Das A F M Fakharuddin Jaigirdar
First Assistant Vice President & Head First Assistant Vice President & Head First Assistant Vice President & Head
Barolekha Branch Habiganj Branch Dhaka Dakshin Branch
Hazi Abdul Ali Trade Center Holding # 3794, Commercial Area Bakul Mansion (1st floor). College Road,
842, Barelekha Pawrashava Habiganj Golapganj, Sylhet
Barelekha, Moulvibazar Cell : 01730-351427 Cell : 01755-545817
Cell : 01730-311433 Phone : 0831- 62814,0831- 62813 Phone : 08227-56180, 08227-56187
Phone : 08622- 56519,08622- 56520 Fax : 0831- 62815 Fax : 08227-56308
Fax : 08622- 56522

Mohammad Abdul Mumit Md. Taj Uddin Ahmed Md. Nazrul Islam
Senior Executive Officer & Head Senior Assistant Vice President & Head Senior Asstt. Vice President & Head
Fenchugonj Branch Beanibazar Branch IBB, Amberkhana
Akul Shah Shopping City (1st Floor), Thana Zaman Plaza (1st Floor) Kasablanca Tower (1st Floor)
Road Point, Fenchugonj Bazar Fenchugonj, P. O. &. P. S. : Beanibazar, Dist : Sylhet 982, Dargah Gate, Sylhet-3100
Sylhet Cell : 01714-100497 Cell : 01711-824365
Cell : 01755-630318 Phone : 08223- 56139, 08223- 56140 Phone : 0821- 717332, 0821- 728944
Phone : 08226-56415, 08226-56414 Fax : 08223- 56141 Fax : 0821 - 717337
Fax : 08226-56416

Mohammad Zayed Parvez Harunur Rashid Chowdhury Ibrahim Ali

Senior Executive Officer & Head Vice President & Head Assistant Vice President & Head
Biswanath Branch Court Road Branch Islampur Branch
Al-Burak Shopping Center (1st Floor) Court Road, Moulvi Bazar-3200 Century Park (1st Floor), Majortila
Biswanath Bazar, Biswanath Sylhet Cell : 01711-824364 Sylhet 3100.
Cell : 01714-073330 Phone : 0861- 53877, 0861- 53878, 64940 Cell : 01755-645464
Phone : 08224- 56017,038911- 82480 Fax : 0861- 53878 Phone : 0821-761174, 0821-761157
Fax : 08224- 56004 Fax : 0821-761115

Ranabir Chowdhury Kamrul Hossain Wasim Ahmed Choudhury

First Assistant Vice President & Head Senior Executive Officer & Head First Assistant Vice President & Head
Kadamtali Branch Kulaura Branch Tajpur Branch
Motin Complex Marina Square Maya View Super Market (1st Floor)
Fenchugonj Road, Kadamtali 232, Dakkhin Bazar, Kulaura, Moulvibazar P. O. : Tajpur. P. S. : Osmaninagar
South Surma Sylhet Cell : 01730-794631 Upozilla : Balaganj, Sylhet
Cell : 01755-534926 Phone : 08624-57082, 08624-57081 Cell : 01714-100498
Phone : 0821-728910, Direct : 0821-841319 Fax : 08624-57080 Phone : 08242-56211, 08242-56210
Fax : 0821-728630 Fax : 08242-56212

Md. Abu Sufian Ashis Bhattacharjee Ekhlasur Rahman (FAVP)

First Assistant Vice President & Head Senior Assistant Vice President & Head First Assistant Vice President & Head
Nabiganj Branch Sylhet Branch Sreemangal Branch
Anowara Biponi, Osmani Road, Nabiganj, Laldighirpar, Sylhet-3100 Saptadinga Complex (1st Floor)
Habiganj Cell : 01708-466505 145, Moulvibazar Road, Sreemangal
Cell : 01713-255774 Phone : 0821-721127, 0821-710208 Moulvibazar
Phone : 08328-56025,08328- 56029 Fax : 0821-710673 Cell : 01714-011578
Fax :08328- 56015 Phone : 08626-71183, 08626-71181
Fax : 08626- 71182

Bishwajit Chandra Paul (FAVP) Mohammad Hanif Md. Rezwan Uddin Swhel
First Assistant Vice President & Head Assistant Vice President & Head Senior Assistant Vice President & Head
Sunamganj Branch Subidbazar Branch Upashahar Branch
Subakth Raja Complex Corner View (1st Floor, West side) Alif Center (1st Floor-Front Portion)
414 Old Station Road, Sunamganj 980, Subidbazar, Sylhet Subhanighat, Upashahar, P. S. Sylhet
Cell : 01730-373945 Cell : 01714-069967 Cell : 01714-100499
Phone : 0871- 62516, 0871 – 62515 Phone : 0821- 727688, 0821- 727629 Phone : 0821- 723524, 0821- 811366
Fax: 0871- 62514 Tele-Fax : 0821- 2830942 Fax : 0821- 710094

PRIME BANK 453

ANNUAL REPORT 2018

Khulna Division
Florence Sutopa Majumder Md. Abdur Raafi Md. Saidur Rahman
Senior Assistant Vice President & Head Senior Assistant Vice President & Head Assistant Vice President & Head
Daulatpur Branch Jessore Branch Khulna Branch
Akankha Tower, 454, Khan-A-Sabur Road 47, Netaji Subhas Chandra Road 7, Old Jessore Road, Khulna-9100
Daulatpur, Khulna Jessore Town, Jessore-7400 Cell : 01730-320020
Cell : 01755-545812 Cell : 01714-074014 Phone : 041-725100, 811459, 041-720071
Phone : 041-2850877, 041-2850876 Phone : 0421- 68815,0421- 68814 Fax : (041) 731195
Fax : 041-2850875 Fax : 0421- 68816

Md. Wahidul Islam Mostafa Mhamud Md. Shayed Hasan Khan

First Assistant Vice President & Head First Assistant Vice President & Head First Assistant Vice President & Head
Kushtia Branch Magura Branch Satkhira Branch
Bangabandhu Super Market Monowara Complex (1st Floor), 219 Syed Ator Ali Islam Plaza, 0801/00, Abul Kashem Road,
2,N S Road, Kustia Road, Magura Sadar, Magura Satkhira
Cell : 01730-727290 Cell : 01730-791545 Cell : 01755-582853
Phone : 071- 72431, 071-72432 Phone : 0488-51005, 0488-51105 Phone : 0471-62450,0471- 63007
Fax: 071- 72430 Fax - 0488-51200 Fax : 0471- 63001

Rangpur Division
Pijuce Kumar Roy Abu Khaled Md. Waliullah [Link] Karim
Assistant Vice President & Head Executive Officer & Head - CC Assistant Vice President & Head
Dinajpur Branch Hatibandha Branch Rangpur Branch
Mazeda laza (1st floor) Arif Plaza, Medical More Hatibandha, Shah-Amanat Super Market (1st Floor)
1131/1091 Ganashtala (near Fire Service), Jail Lalmonirhat 268 Station Road
Road, Dinajpur Cell : 01709-658465 Jahaj Companier More, Rangpur
Cell : 01730-061493 Phone : 5923-56101, 5923-56102 Cell : 01714-069972
Phone : 0531- 51289, 0531- 51291 Fax : 5923-56103 Phone : 0521- 64119, 0521- 64120
Fax : 0531- 51296 Fax : 0521- 64118

Md. Mahafuzul Islam

First Assistant Vice President & Head
Saidpur Branch
Ali Plaza
Shahid Dr. Zikrul Haque Road Saidpur,
Nilphamari
Cell : 01709-658453
Phone : 05526-71202, 05526-71201
Fax- 05526-71203

Barishal Division
 Md. Rezwan Ul kader
Senior Executive Officer & Head- CC
Barishal Branch
37, Hemayet Uddin Road
Barishal-8200
Cell : 01711-824362
Phone : 0431- 64011, 0431- 64012
Fax : 0431- 63712

454 PRIME BANK

 SME Branches
Fayek Ahmed Md. Muzibur Rahman [Link] Hoque
Senior Executive Officer & Head First Assistant Vice President First Assistant Vice President & Head
Aganagar SME/Agri. Branch Madunaghat SME/Agri. Branch Sonargaon SME/Agri. Branch
Golden Plaza, Purbo Aganagar Keranigonj, Mabia Emporium Rozzab Ali Mention, Mograpara Chowrasta,
Dhaka Madunaghat Bazar Habibpur, Sonagaon, Narayanganj
Cell : 01730-096612 Hathazari, Chattogram Cell : 01713-255770
Phone : 02- 9571896 Cell : 01755-534932 Phone : 02-7656359
Tele-Fax : 02- 9571896 Phone : 031-2573206 Fax : 02-76 56362
Fax: 031-2573205

Rumal Borua (SEO) Zahid Mahamud Md. Joynal Abedin Chowdhary

Senior Executive Officer & Head First Assistant Vice President & Head Senior Executive Officer & Head
Bhujpur SME/Agri. Branch Narsingdi SME/Ag. Branch Syedpur SME/Agri. Branch
Mokka Shoping Center (1st Floor) Molla Tower, 8 West Kandha Para (2nd Floor), Radhis Shopping Complex
Kazirhat, East Bhujpur Bazirmore, Narsingdi Syedpur, Jagannathpur
Fatickchari Chattogram Cell : 01730-096613 Sunamgonj
Cell : 01713-255771 Phone : 02- 9463343 Cell : 01713-255776

Saiful Islam Shamsul Haque Md. Amzad Hossain

Executive Officer & Head First Assistant Vice President & Head First Assistant Vice President & Head
Chatkhil SME/Agri. Branch Nawabpur SME Service Center Takerhat SME/Agri. Branch
Mamtaz Shopping Center, CNB Road Mollick Plaza (2nd floor) Haji Lalchand Bepari Super Market
(North side) Chatkhil, Noakhali 243-244, Nawabpur Road, Dhaka Takerhat, Rajoir, Madaripur
Cell : 01730-373921 Cell : 01730-096610 Cell : 01713-255772
Phone : 03222- 75113 Phone : 02- 9571896 Phone : 6623-56377, 6623-56338
Fax : 03222- 75119 Tele-Fax : 02- 9571896

Khandaker Md. Mahbubur Rahman Afjal Sharif Md. Abdul Wahed Miah
Senior Executive Officer & Head First Assistant Vice President & Head Executive Officer & Head
Companygonj SME/Agri. Branch Posta SME Service Center Thakurgaon SME/Ag. Branch
Mother Shopping Complex (1st floor), Trish, 90, Water Tank Road, Posta Chowdhury Complex(1st Floor)
Companygonj, Muradpur, Comilla Lalbag, Dhaka 272, College Road, Thakurgaon
Cell : 01730-096614 Cell : 01730-096611 Cell : 01730-373940
Phone : 02-659090 Phone : 02-7343663 Phone : 0561- 52295
Fax : 02-659090 Fax: 0561- 52538

Mir Ahmed Md. Anisuzzaman Md. Salah Uddin Kader

First Assistant Vice President & Head Senior Executive Officer & Head Senior Executive Officer & Head
Heyoko SME/Ag. Branch Poradaha SME/Agri Branch. Ramgarh Branch, Khagrachari
Chowdhury Market (1st floor) Sikder Super Market (1st floor), Holding No # 847
Heakobazar, Bhujpur Poradaha Puraton Bazar, Munshi Market (1st Floor)
Fatickchari, Chattogram P.S. Mirpur, Dist. Kushtia Ward no #09
Cell : 01730-794626 Cell : 01730-373919 Ramgarh Branch,Khagrachari
Cell - 01730-086828

Md. Mehedi Hasan Abu Sadath Mohammad Mostafizur Rahman Bhanu Ranjan Das
Senior Executive Officer & Head Executive Officer Senior Executive Officer & Head
Jhikorgacha SME/Agri. Branch Raipur SME SME/Agri. Branch Sherpur SME/Agri. Branch
Zaman Market (1st Floor) Queen Complex, Holding # 514/15 Main Road, 819 Municipal Road
Holding No. 522, Raipur, Laxmipur Chakbazar, Sherpur
Jhikorgacha, Jessore Cell : 01730-706703 Cell : 01730-373938
Cell : 01755-582854 Phone : 03822-56396 Phone : 0931- 62176
Phone : 04225- 71780 Fax: 03822- 56397 Fax: 0931-62175
Fax : 04225- 71788

Choudhury Md. Zafar Iqbal

Executive Officer & Head
Madhabpur SME/Agri. Branch
Madahbpur Purbo Bazar
Dhaka Sylhet Highway
Madhabpur, Habiganj
Cell : 01713-187920
Phone : 08327- 56342
Fax : 08327- 56343

PRIME BANK 455

ANNUAL REPORT 2018

NOTABLE ACTIVITIES DURING 2018

Donation of taka five crore to Prime Minister’s relief and Welcome reception to the first ever Bangladeshi Speaker to
welfare fund London Tower Hamlet

Inauguration of Prime Bank Cup Golf Tournament 2018 Participatory Agreement signing with Bangladesh Bank

Prime Bank Celebrates 23rd Anniversary Prime Bank Wins Best SME Deal Award from ADB

Prime Bank celebrates Earth Day 2018 Inauguration of Prime Bank National School Cricket
Tournament

456 PRIME BANK

NOTABLE ACTIVITIES DURING 2018

Receiving Financial Branding Award ‘School Banking Conference-2018’

Discussion Session on Ramadan Prize Distribution Ceremony of Prime Bank Cup Golf
Tournament 2018

Extending Medical Services at Biswa Ijtema MOU singing with Dhaka North City Corporation

Loan disbursement among the ten taka (10 Taka) account Distributing blankets to cold-stricken people
holders.

PRIME BANK 457

ANNUAL REPORT 2018

REDRESSAL OF INVESTORS COMPLAINTS

Prime Bank Limited is strongly committed to equitable The bank provides a channel for minority shareholders
treatment of every shareholder, whether they are major to propose issues deemed important and appropriate to
or minority shareholders, institutional investors, or foreign include in the agenda of the bank’s annual general meeting
shareholders. To ensure equal treatment of all shareholders the of shareholders and to nominate candidates with appropriate
bank created various mechanisms, such as: knowledge, abilities and qualifications to be considered for the
position of Director.
Shareholders who are unable to attend the shareholders’
meeting, the bank provides proxy forms which allow The bank continues to have regular communication with the
shareholders to specify their vote on each agenda. The proxy shareholders through periodic updates of performance and at
forms, which are in accordance with the standard format, are any other time when it believes it to be in the best interest of
sent along with the annual report. shareholders generally.

The shareholders’ meetings proceed according to the order Investors’ inquiries/Complaint

of the agenda, without adding new and uniformed agenda,
Any queries relating to shareholdings for example transfer
in order to give the opportunity to shareholders to study the
of shares, changes of name and address, and payment of
information on the given agenda before making a decision.
dividend should be sent to the following address:
Moreover, there are no changes to the important information
in the shareholders’ meeting.

The bank sees the importance of the consideration of

transactions which may have conflict of interest or may Share Department
be connected or related transactions, and abides by good Sarker Mansion (8th Floor)
corporate governance principles, including the rules and 29, Rajuk Avenue, Dhaka – 1000
regulations of the Bangladesh Securities and Exchange Phone: 9567265/261
Commission and the Dhaka Stock Exchange and the Chittagong
Stock Exchange transactions, Directors, management and
those who are related persons do not participate in the
consideration to approve such transactions.

458 PRIME BANK

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PRIME BANK 459

ANNUAL REPORT 2018

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460 PRIME BANK

 PRIME BANK LIMITED
Registered Office
Adamjee Court Annex Building-2, 119-120, Motijheel C/A, Dhaka-1000

Minutes of the 23rd (twenty third) Annual General Meeting:

The Twenty third Annual General Meeting of the shareholders Finally, he informed that bank’s Annual Report 2017 has been
of Prime Bank Limited was held on Thursday, 24th May 2018 at duly sent to all esteemed shareholders, as such, they are
11:00 A.M. at KIB Complex, Khamar Bari, Farm gate, Dhaka. at liberty to discuss on any issue or observation which the
meeting would be obliged to respond.
Mr. Azam J Chowdhury, Chairman, Board of Directors, Prime
Bank Limited, presided over the meeting as per Article # 71 of Mr. Abu Sufian Titu (BO ID 1202490004426478), one of the
the Company where following Directors were present: shareholders on taking the floor expressed satisfaction at the
performance of the Bank and declaration of 17% dividend for
1. Mrs. Nasim Anwar Hossain : Vice Chairman
the year 2017. He hoped that Chairman’s assurance for better
2. Mrs. Salma Huq : Director performance in time ahead would be translated in deeds
3. Mr. Shirajul Islam Mollah : Director as they have full faith and confidence on the Board and the
Management of the bank. He, therefore, on behalf of the
4. Mr. Mafiz Ahmed Bhuiyan : Director
shareholders requested the Chairman to move the Agenda of
5. Mr. Md. Shahadat Hossain : Director the AGM for their endorsement.
6. Mr. Mohammad Mushtaque : Director The Chairman then moved the Agenda of the Meeting in the
Ahmed Tanvir
chronological order resolutions of which are summarised as under:
7. Dr. G.M. Khurshid Alam : Independent Director
Agenda # 1:
8. Mr. M. Farhad Hossain, FCA : Independent Director
“To receive, consider and adopt the Directors’ Report and
9. Mr. Shamsuddin Ahmed PhD : Independent & Director
Audited Financial Statements of the Bank for the year ended
Chairman, Audit Committee
December 31, 2017 together with the Auditors’ Report
10. Mr. Rahel Ahmed : Managing Director thereon”
Company Secretary, Mr. Mohammed Ehsan Habib was also Mr. Md. Abu Sufian Titu (BOID NO: 1202490004426478)
present at the AGM. proposed for approval of the Agenda while Mr. Azad Ahasan
In addition, one hundred and eighty five (185) Shareholders / (BOID NO: 1204820043854201) seconded it. Therefore,
proxy / attorney recorded their attendance in the meeting. following resolution was adopted:

The Meeting commenced as per schedule with the address

Resolution:
of welcome by the Company Secretary followed by recitation
“Resolved that the Directors’ Report and Audited Financial
from the Holy Quran.
Statements of the Bank for the year ended 31 December, 2017
Before proceeding to the businesses /Agenda of the AGM, together with the Report of the Auditors’ are hereby adopted.”
Company Secretary introduced the Board Members present in
the Meeting including the newly appointed Managing Director Agenda # 2:
of the Bank to the shareholders.
“To declare dividend for the year ended December 31, 2017
The Chairman then taking over and receiving confirmation on as recommended by the Board of Directors”
the Quorum, called the 23rd Annual General Meeting to order.
The Chairman informed the Shareholders that the Board of
The Chairman welcomed the shareholders and presented a Directors in its 477th Meeting held on 10.04.2018 recommended
brief on the industry scenario of 2017 and its reflections on 17% dividend (10% stock and 7% cash) for the year 2017 subject
the performance of the Bank. He mentioned that 2017 was to approval of the shareholders. The proposal was, therefore,
a challenging year for various reasons like liquidity crunch, placed before the shareholders for their endorsement.
low pricing & spread, volatility of Foreign Exchange market
Mr. S.M. Moniruzzaman (BOID NO: 1201720000010083)
and top of everything the increasing burden of NPL causing
proposed the resolution on behalf of the Shareholders while
disproportionate allocation of profit for provisioning purposes.
Mr. Md. Afsar Uddin Sarkar (BOID NO: 1202640000050339)
But overcoming all these difficulties, Prime Bank has been able
seconded it. Therefore, following resolution was adopted:
to declare more dividend than last year. He emphasized that
despite the odds bank has been successful in withstanding the
Resolution:
unfavorable circumstances because of its strong fundamentals.
Bank also succeeded in maintaining regulatory compliance “Resolved that 17% dividend (10% stock and 7% cash) be and
and all these have been possible due to unflinching support of are hereby declared to be paid as dividend for the year ended
all, particularly the shareholders. He hoped shareholders could 31st December 2017 to those Members whose name appear in
maintain their confidence on the Board and Management of the Register of Members on the Record Date i.e. 6th May, 2018”
the Bank and help it demonstrate better performance in future. About Sale and Distribution of Fractional Bonus Shares:

PRIME BANK 461

ANNUAL REPORT 2018

With the consent of the shareholders the Meeting adopted 4. Mr. Md. Shahadat Hossain
following resolution:
5. Mr. Mafiz Ahmed Bhuiyan
“Resolved that all accumulated fractional bonus share be
6. Mr. Md. Shirajul Islam Mollah
converted into maximum whole share to sell the same
through Dhaka Stock Exchange Limited and Chittagong Stock be and are re-elected Directors of the Bank subject to approval
Exchange Limited. The sale proceeds thereof be distributed of the regulatory authority and compliance with the Banking
among the shareholders in proportion of their shareholdings Companies Act 1991, the Companies Act 1994, and BSEC
as on 6th May, 2018. Guidelines on Corporate Governance”

It was further resolved that the said shares be issued in the Agenda # 4:
name of the Company Secretary as trustee holder of the
fractional shares.” “To appoint Auditors for the term until the next Annual
General Meeting and to fix their remuneration”
Agenda # 3: The Chairman informed the Meeting that following Auditing
“To elect/re-elect Directors” Firms were jointly appointed in the 22nd Annual General Meeting
of the Bank held on 8th May 2017:
The Chairman informed the Meeting that following Directors
would retire by operation of law and are eligible for re-election/ 1) M/S Hoda Vasi Chowdhury & Co. and
re-appointment: 2) M/S. Aziz Halim Khair Choudhury, Chartered Accountants
1. Mr. Azam J Chowdhury (representing East Coast Shipping as External Auditors of the Bank and they have audited Bank’s
Lines Ltd) Accounts for the year ended 31 December 2017. Now they have
2. Mr. Nafis Sikder applied for re-appointment until next AGM.

3. Mr. Imran Khan The Chairman also informed that as per BRPD Circular
letter No. 12 dated July 11, 2001 and BSEC order no. SEC/
4. Mr. Shamsuddin Ahmad Ph.D, Independent Director
CMRRCD/2009-193/104/Admin dated July 27, 2011; both the
5. Dr. G M Khurshid Alam, Independent Director firms are eligible for re-appointment. In addition, both the Audit
Committee and the Board has recommended the proposal
6. Mr. M Farhad Hussain FCA,Independent Director
for re-appointment. He, thereafter, placed the agenda for
Among the names noted above, 3 Independent Directors (ID) endorsement of the shareholders.
have been re-appointed by the Board and now placed for
Mr. Bishwajit Ghosh (BO ID NO: 1202050002386324) proposed
endorsement of the Shareholders.
the resolution for approval while Mr. Md. Abdul Kader Sharker
The Chairman further informed that following Directors have (BOID NO: 1203710020402932) seconded it, as such, following
been newly inducted in the Board as per article 103.2 of the resolution was adopted:
Articles of Association of the Bank and the Bank Companies
(amendment) Act 2018, and now placed for endorsement/ re- Resolved that:
election by the shareholders:
1) M/S Hoda Vasi Chowdhury & Co., Chartered Accountants
1. Mr. Md. Shahadat Hossain and
2. Mr. Mafiz Ahmed Bhuiyan 2) M/S. Aziz Halim Khair Choudhury, Chartered Accountants
3. Mr. Md. Shirajul Islam Mollah be and are hereby re-appointed External Auditors of the Bank
The shareholders endorsed the process of appointment/re- at an Annual fee of Tk.6.00 lac (Taka six lac) each totaling
appointment/re-election and following resolution was adopted Tk.12.00 lac only (Excluding VAT) until the next Annual General
unanimously: Meeting of the Bank.”

As there was no further agenda for discussion, the Chairman

Resolution: thanked the valued Shareholders, Directors and dignitaries for
“Resolved that the following Independent Directors namely; their kind presence. He also thanked the Management, Media
personnel, the Executives and Officers of the Bank and all those
1) Mr. Shamsuddin Ahmad Ph.D,
who were instrumental in successful holding of the 23rd Annual
2) Dr. G.M. Khurshid Alam, General Meeting of the Company.
3) Mr. M Farhad Hussain FCA

be and are reappointed for the next term.”

“Further resolved that the following Directors namely;

1. Mr. Azam J Chowdhury (representing East Coast Shipping Azam J Chowdhury

Lines Limited)
Chairman
2. Mr. Nafis Sikder

3. Mr. Imran Khan

462 PRIME BANK

NOTICE OF THE 24th ANNUAL GENERAL MEETING

Registered Office: Adamjee Court Annex Building-2

119-120 Motijheel C/A, Dhaka-1000

Notice is hereby served to all Members of Prime Bank Limited that the 24th Annual General Meeting of the Company will be held on
Thursday, 16th May 2019 at 11:00 a.m. at the following Venue to transact undernoted businesses:

Venue: Krishibid Institution

KIB Complex
Krishi Khamar Sarak
Farmgate, Dhaka-1215

AGENDA

1. To receive, consider and adopt Directors’ Report and Audited Financial Statements of the Bank for the year ended 31st December
2018 together with the Auditors’ Report thereon.

2. To declare dividend for the year ended 31st December 2018 as recommended by the Board of Directors.

3. To elect/re-elect Directors and endorse appointment of Independent Director.

4. To appoint Auditors for the term until the next Annual General Meeting and fix their remuneration.

5. To appoint Certified Professionals (Compliance Auditors) for the year 2019 for certification on corporate governance status and
fix their remuneration.
By order of the Board of Directors
Sd/-
April 03, 2019
Mohammed Ehsan Habib
Company Secretary
Notes:

The ‘Record Date’ shall be Sunday, April 28, 2019.

Shareholders whose names appear in the Members Register of the Company and/or in the Depository on the Record Date will be
eligible to attend the meeting and qualify for dividend.

The Board of Directors has recommended 12.50% cash for the year 2018.

A Member eligible to attend and vote at the Annual General Meeting may appoint a proxy on his/her behalf for which duly stamped
Proxy Form must be submitted to Share Department of the Company at least 72 hours before the scheduled Meeting.

Proxy Form will be available at Bank’s official website and at the Share Department of the Bank.

Practicing Professional Accountants/Secretaries are requested to send applications by April 21, 2019 for appointment as Compliance
Auditor of the Bank for the year 2019 at the AGM.

Shareholders and Proxies are requested to record their entry at the AGM venue well in time.

Directors’ Report and Audited Financial Statements of the Bank for the year ended 31st December 2018 together with the Auditors’
Report thereon shall be available on bank’s website from May 02, 2019 onwards.

Hon’ble Members are requested to update particulars of their Bank Account with e-TIN and email addresses through Depository
Participants (DP) before the “Record Date”.

Members failing to update their e-TIN details before the “Record Date,” Income Tax at source will be deducted from payable Dividend
@15% (Fifteen percent) instead of 10% (ten percent) as per amended Income Tax Ordinance 1984 under Section #54.

Concerned Brokerage Houses are requested to provide us with statement of margin loan account holders along with relevant
details of Prime Bank Shareholders as on the ‘Record date’ to the company’s Share Department on or before May 02, 2019 in the
event dividend to be credited to the respective Loan accounts in compliance with the BSEC rules.

PDF copy of Annual report 2018 will be sent through email addresses of respective shareholders available in their beneficial owner
(BO) accounts with the depository as per BSEC notification No. EC/CMRRCD/2006-158/208/admin/81 dated 20 June 2018.

N.B: No gift or benefit in cash or kind shall be paid/offered to the Shareholders at the 24th AGM as per BSEC Directive No.
SEC/CMRRCD/2009-193/154 dated 24.10.2013.

PRIME BANK 463

ANNUAL REPORT 2018

ACRONYMS
AD Authorized Dealer IPO Initial Public Offering
ALCO Asset Liability Committee LC Letter of Credit
ATM Automated Teller Machine MBID Merchant Banking and Investment Division
BB Bangladesh Bank MTMF Medium Term Macro Economic Framework
B/L Bad/Loss SMT Senior Management Team
BAS Bangladesh Accounting Standards NII Net Interest Income
BIBM Bangladesh Institute of Bank Management NPL Non Performing Loan
CRR Cash Reserve Requirement NCBs Nationalized Commercial Banks
CRG Credit Risk Grading OBU Offshore Banking Unit
CSR Corporate Social Responsibility PCBs Private Commercial Banks
CPI Consumer Price Index PBL Prime Bank Limited
CDBL Central Depository Bangladesh Limited PECL Prime Exchange Co. Pte. Ltd.
CBS Core Banking Software PBIL Prime Bank Investment Ltd.
CRISL Credit Rating and Information Services Ltd. PBSL Prime Bank Securities Ltd.
DCFCL Departmental Control Function Check List POS Point of Sale
DEPZ Dhaka Export Processing Zone PV Present Value
DP Depository Participants RWA Risk Weighted Assets
EPS Earnings Per Share RMG Readymade Garments
EPZ Export Processing Zone ROA Return on Assets (excluding contingent items)
FY Fiscal Year (July to June) ROE Return on Equity
GDP Gross Domestic Product R&D Research and Development
GRI Global Reporting Initiative ROD Rights Share Offer Document
HOB Head of Branch SAFA South Asian Federation of Accountants
ICAB Institute of Chartered Accountants of Bangladesh MSME Micro, Small and Medium Enterprise
IT Information Technology SOP Standard Operating Procedure
IMF International Monetary Fund SLR Statutory Liquidity Ratio
IAS International Accounting Standards

464 PRIME BANK

 Prime Bank Limited
Registered Office
Adamjee Court Annex Building -2
119-120 Motijheel C/A, Dhaka - 1000

PROXY FORM
I/We……………………………………………………………………………………………………………………………………………..................................................................................
of (address) ……………………………………………………………………………………………………………………………….....................................................................................
being the Member of Prime Bank Limited do hereby appoint
Mr./Ms. ………………………………………………………………………………………………………………………………………....................................................................................
of ………………………………………………………………………………………………………………………………………………......................................................................................
or (failing him/her) Mr./ Ms. ………………………………………………………………………………………………………...................................................................................
of ………………………………………………………………………………………………………………………………………………......................................................................................
as my/our proxy to attend and vote on my/our behalf at the 24th Annual General Meeting of the Company to be held on Thursday, 16th
May 2019 at 11.00 a.m. at the Krishibid Institution, KIB Complex, Krishi Khamar Sarak, Farmgate, Dhaka-1215 and at any adjournment
thereof.
Signed this ……………………………………… day of May 2019.

Revenue
Stamp

Signature of the Member ……………………………………………………………………………..........................................................................................................………..

Folio/BO ID Number

Number of Shares held

Signature of the Proxy …………………………………………………………………………………………………………………................……………………………………………………….

Folio/BO ID Number

Number of Shares held

Notes:

I. Signature must be in accordance with the Specimen Signature recorded with the CDBL.
II. A duly completed Proxy Form must be submitted at least 72 hours before the Meeting at the Share Department of the Company.
Incomplete Proxy Form will not be entertained.

……………………………………………………………………………………………………………………………………………………………………………………...............……………..................

Prime Bank Limited

ATTENDANCE SLIP
I/We hereby record my/our presence at the 24th Annual General Meeting of the Company to be held on Thursday, 16th May 2019 at
11.00 a.m. at the Krishibid Institution, KIB Complex, Krishi Khamar Sarak, Farmgate, Dhaka-1215.

Name of the Member (in block letters) ………………………………………………………………………………………………………………………………................………………

Folio/BO ID Number

Number of Shares held

Signature of the Member/Proxy………………………………………………………………………………………………………………………………………….................……..............

Attendance of the Members/Attorney/Proxy shall be recorded from 9:30 a.m. to 11.30 a.m. at the entrance of the Hall.
N.B: No Gift or Entertainment shall be offered to the Shareholders in the 24th AGM as per BSEC Directive [Link]/CMRRCD/2009-193/154 Dated
24.10.2013.
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