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CLICK for USA Today Bangladesh Supplement | To know more about FinanceAsia 'Best Bank 2012' Award | Click to know philosophy behind our new logo | City Bank receives ISO 9001:2008 certification | City Bank wins American Express GNS Marketing Award | Strongest Bank in Bangladesh 2010
Highlights| Vision, Mission & Values| Chairman's Message | Board of Directors | Management Committee
Annual Reports | Financial Statements | Disclosures on Risk Based Capital (Basel II) | Anti-Money Laundering | Request for Proposal

City Bank, being a first generation private commercial bank, committed itself to grow into a financial supermarket that sells a very wide range of financial products and services not limited to banking alone but encompassing brokerage services, investment banking, latest generation tablet/net banking among others. 2013 is a crucial year for us in that direction. This is the year when we plan to launch "City Gems Priority Banking", a platform for our high net worth customers to stretch their arms into brokerage, investment banking and real estate area as well. This is also the year when, I am extremely hopeful, the launch of the "CityTouch Mobile Banking" will smoothly obliterate the dividing lines between banking and net browsing. In 2013 we also plan to go international by opening a remittance company (subject to regulatory approval) in one of the top Bangladeshi workers' markets abroad. And this is also the year when by recognizing the demands of the changing times and environment we hope to get closer to understanding and fulfilling customers' needs by way of restructuring our business model thoroughly. With that kind of a promising year full of projects and tasks lying our way, we can still take a breath and look into what went behind making 2012 a very tough and challenging year for the bank and the industry.

ECONOMIC SCENARIO
In 2012, the global economy showed its varying colors with the European sovereign debt crisis, weak financial performance of EU countries, high unemployment rate in the developing nations, avoidance of fiscal cliff to avert recession in USA etc. In spite of all this, Bangladesh economy showed its resilience amidst global downturn registering 6.3 percent GDP growth against 5.3 percent as average for developing countries. One of the key factors underlying our ability to have done so is the successful controlling of a point-to-point inflation to a single digit.
BANK'S FINANCIAL PERFORMANCE
City Bank's performance was, at its core, a reflection of the macro and micro economic factors as well as changes in the regulatory framework adopted by several of our regulators in 2012. Despite the heavy challenges to grow in the operating profit line, the bank has marked a growth of 9 percent nevertheless. Regulatory pressure on keeping the credit growth at a sustainablelevel as well as maintaining a sufficient liquidity cushion forced the bank to make a steady credit growth of 8% on YOY basis. Recorded 12% deposit growth against the credit growth of 8% caused high pressure on interest cost, which ultimately reflected in the not-so-alluring operating performance of the bank. The bank faced further challenges in managing balance sheet through core banking business in the year 2012 due to major changes in Bangladesh Bank's loan classification and provisioning policy. The changed regulations of Bangladesh Bank and downward trend of non-performing loans caused by macro economic issues forced the bank to make a loan loss provision of Tk. 2804 M in 2012, the resultant effect of which was felt notably in the profit before tax line. We posted a PBT of Tk 1762 M in 2012 compared to the PBT of 3,468 M in 2011. After keeping such a significant amount of provision for loans, another provision of BDT 1,000 M had to be kept for tax charge, hence, profit after tax (PAT) was only BDT 762 M in 2012, which was BDT 1,256 M lower than 2011's (2011 PAT: BDT 2,018 M). Earning per shares in 2012 stood at BDT 1.21 compared to 3.19 of 2011. Capital adequacy ratio stood at 11.7% against the regulatory requirement of 10%, which also reflected a good management of our balance sheet. In regard to loans & advances, NPL rose from 3.44% of 2011 to 7.48% in 2012. The bank has maintained an additional provision of BDT 312 M to cover for any emergencies and to satisfy the confidence of the stakeholders.
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HUMAN RESOURCES
City Bank always gives the highest focus on the right placement of its prime resource - human resources. The bank believes in certain core values as practiced by all employees to meet the mission and the broader vision of the organization. Our new vision and the mission statements launched not so long ago saw its embedding through to the end of 2012. In most part of 2012, our 2,765 full time employees worked together to make possible the technological advancement, expansion and modernization plan that we set for ourselves to achieve. Our aim was to anticipate the customers' needs, and once that was effectively drawn on the boards, we could plan for large scale restructuring by the end of 2012. This restructuring will directly impact 73% of bank's employees in terms of their KPIs in 2013. I am happy that the sewing together of, firstly, our company's newly formed vision and, secondly, the new business model roll out plan occurred one after the other in a natural succession flow, giving the staff enough mental readiness to digest in the changes.

OTHER ACHIEVEMENTS IN 2012
I will not go into so much detail in listing the other few big achievements of ours in 2012 since the bank's Chairman in his speech has touched those upon already. Yet I feel that the projects like operational and technological reengineering undertaken with PWC or the launch of Amex CityMaxx debit card that pays interest to the customers even after the fund has been withdrawn or the bank's handshake with IFC and FMO on strategic alliances will have far reaching strategic impacts for us in the years to come. 2012 in that sense has been the stepping stone for many a thing to happen in the very near future.

PRIORITIES FOR 2013
Sustainable business growth, dynamic and talented human capital driven by values, excellent risk management, and involvement of mid level management in decision making process will surely command some key strengths for City Bank. Few of the major tactical and strategic moves that I have chalked out for myself to drive and supervise for the current year are:
  • Maintain capital base above regulatory requirement
  • Bring down the cost to income ratio to industry average
  • Maintain NPL at 3%
  • Bring change in mix in loans & advances, thus reflecting a truly diversified risk allotment
  • Intensify the growth in SME Business
  • Integrate the Green Banking Model in our overall business model
  • Implement ICAAP, the Pillar-II of BASEL - II requirement
  • And last but in no way the least, implement "Enter prise IT" solution in place of current island-like approach for our applications with a view to integrate CRM and analytics in everything we do
CONCLUSION
The bank has worked hard over the past years to instill the spirit of combating challenges, and accordingly came in lot of capacity building activities. As such it is my firm belief that we have a very skilled workforce equipped enough to ward off crises of any nature and magnitude. I have no worries in my mind in this respect, even if I map out and look at the future challenges and obstacles, which are, to name a few: 1. Sudden policy decisions like increase in CRR & SLR and reduction in Repo; 2. Investment in large infrastructure projects and time gap of return; 3. Inflationary pressure at the end of the year 2013; 4. High Govt. borrowings; 5. High price of property that may act as a deterrent to industrial growth; 6. Bank's recovery of NPL (particularly the investment of merchant bank & brokerage houses); 7. High interest rate and reduction in repayment capacity of the customers in general.
K. Mahmood Sattar
Managing Director & CEO
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