The bank is you!

For over 38 years, City Bank has

built a sound reputation as a pioneer
in Bangladesh’s banking sector,
staying attuned to the times and
serving a generation of customers.

In 2020, we were confronted with the most right up to their doorstep through our varied digital
formidable challenges unleashed by the banking innovations. Thus, despite interruptions
coronavirus pandemic. Yet, we relied on our key and disruptions in the external environment, we
corporate characteristics of ethics and integrity, ensured that our customers could access banking
innovation, people-centricity, operational uninterrupted and in a seamless way.
excellence, accountability and continuous Today, as we stand on the cusp of a better
stakeholder outreach to steer the bank towards tomorrow, we are confident that the bonds of
safer shores and better times. loyalty and trust that we have with so many of our
One of our key focus areas was to re-pivot out stakeholders will remain strong and enable us to
bank to continue to serve the needs and truly mirror the expectations they have placed on
expectations of our most important stakeholder us, thus making us their preferred bank and financial
constituency-our-customers in the restricted and services partner.
truncated environment enforced by the
pandemic. Through a number of initiatives, we City Bank. The bank is you!
ensured that our customers could fulfill their
banking needs with us safely, securely and most
importantly, conveniently, as we took the bank

Scan this QR code with your mobile device

for quick access to this Annual Report.
Bringing glory to Bangladesh as the country’s leading bank!
At City Bank, our relentless efforts in realising our shared vision of
sustainable progress through extending the arch of financial inclusion In the last 9 years
and responsible intermediation, we have created an award-winning City Bank achieved
34 international
financial services platform, reflected in a number of awards and awards
adulations conferred upon us over the years.

.
Awards and adulations

2016 2017 2018 2019 2020 2021

ICMAB Best Corporate Award ICMAB Best Corporate Award Global Climate Best Women Program Best CSR Bank Best Bank in Bangladesh
– ICMA Bangladesh – ICMA Bangladesh Partnership Award Launch Award in Bangladesh - Global Finance World's
– Global Climate – Financial Alliance – Asiamoney Best Best Banks
Best Bank in Bangladesh Best Online Bank Partnership Fund for Women Bank Awards
– Global Finance Best – ICT Division of the Best Digital Bank
Emerging Markets Bank Government of Bangladesh Best Premium Banking Best Premium Banking Leading Partner in Bangladesh
Services in Bangladesh Services in Bangladesh Bank in Bangladesh – Asiamoney Best
Best Bank in Bangladesh Best Bank in Bangladesh – Asiamoney Best – Asiamoney Best – Asian Development Bank Awards
– FinanceAsia – Asiamoney Banking Awards Bank Awards Bank Awards Bank (ADB) under Trade
Best Bank Awards and Supply Chain Finance Best Innovation in
Best Bank in Bangladesh Best Bank in Bangladesh Best Bank in Bangladesh Banks for Digital Loan
Program (TSCFP)
Best Financial – Global Finance Best – FinanceAsia Best – Global Finance Best – Bangladesh Innovation
Institution of the Year Emerging Markets Bank Bank Awards Emerging Markets Bank Award
– DHL-The Daily Star
Bangladesh Business Awards Best Bank in Bangladesh Best Investment Bank Syndicated Loan of the Best CSR Bank
– FinanceAsia in Bangladesh Year Bangladesh in Bangladesh
Best Bank Awards – FinanceAsia – Asian Banking – Asiamoney Best
Country Awards & Finance Bank Awards
Best Bangladesh Deal
– Summit Group's $79.67 million Best Consumer
12-year and 10.5-year syndicated loans Digital Bank
– FinanceAsia Achievement Awards – Global Finance Award
Best Consumer Digital Bank
– Global Finance Award
 CONTENTS
Segmental performance 96 Wholesale Banking
This segment of our report expresses detailed performance of each 99 Treasury
of our major business/support groups, while also indicating how they 101 Commercial Banking
are preparing themselves for the future.
103 Supply Chain Finance
104 Retail Banking
• Citygem- Priotity Banking
• Employee Banking
• Customer Experience
This segment of our report provides an introductory narration, 01 Cover story – The bank is you! • Islamic Banking
including aspects on document control and reporting alignment with 02 Awards and adulations • City Alo - Women Banking
the IIRC’s six capitals. 06 Remembering Mr. M. A. Hashem • Alternate Delivery Channel
10 Letter of transmittal • Branches
111 SME-S
114 SME-M
Purpose-driven organisation 11-31 • The bank is you!
In this segment, we articulate our business identity and elaborate on The City Bank Limited 116 Cards
our theme of "The bank is you!" Integrated Annual Report 2020 119 Digital Financial Services
• Playing a catalytic role in society 121 Trade Services
• Our snapshot in numbers and figures 122 Operations
• Our corporate philosophy
125 Credit Risk Management
• Code of conduct and ethical guidelines
• Key highlights of 2020 128 Risk Management Division
• Our investment case 129 Special Asset Management
• Responding to COVID-19 130 Credit Administration
132 Internal Control and Compliance

Leadership statements 135 Procurement

32-41 • Statement from our Chairman
This segment of our report provides readers with a holistic strategic 136 Brand & Communications and Corporate Affairs
• From the desk of our Managing Director & CEO
and tactical review by our leadership team, comprising our Chairman 137 PR & Media
and MD & CEO. Finance
138
42 Corporate directory 138 Legal
Foundations of City Bank 46 The change makers 139 Information Technology
This segment demonstrates how the Bank was conceived by stalwarts 47 Board of Directors General Administration
141
and is now being led by specialist professional teams with diversified
51 City Bank organogram
experience in business. Subsidiaries 143 City Bank Capital Resources Limited
52 Management committee This section offers a performance review of our subsidiaries to
145 City Brokerage Limited
58 Extended management committee enable our readers to appraise our impact as a diversified financial
services Group. 146 CBL Money Transfer Sdn. Bhd
60 Chief Financial Officer’s report
147 City Bank Hong Kong Limited
Delivering sustainable returns 63-69 • Our operating context Core enablers
As an organisation, we are aligned with best practices in integrated • Engaging with our stakeholders This segment provides readers with crucial information on how the 148 Risk management report
reporting, we have incorporated a strategic overview of our business • Our business model Bank is dealing with major risks influencing its business and also 157 Chief Risk Officer’s review on risk management
with respect to our operating landscape which is elaborated in • How we distribute value about its preparedness for the future.
this section.
Social responsibility
161 Social responsibility report
Transforming our capitals 70-84 • Financial capital Our readers can gather insights into our sustainability and social
• Manufactured capital practices and the impact we create on beneficiary communities.
As one of the leading banks of Bangladesh, we are focused
on harnessing our 6 capitals to create positive outputs and • Human capital 164 Directors’ report
• Natural capital Regulatory statements and governance reports
sustainable outcomes. 179 Economic impact report
This segment of our report provides readers with detailed statutory
• Intellectual capital
information, as mandated by regulatory guidelines. We have 182 Shareholders’ information
• Social and relationship capital summarised the status of our compliance with relevant corporate 185 Segment analysis
governance standards and our efforts to embed best local and
186 Directors’ responsibility statement
Analysis through major management models 85-87 • PESTEL analysis global practices across our bank.
187 Report of the MD & CEO and the Chief Financial Officer
• Porter’s 5 Forces analysis
This segment offers our readers an in-depth insight into our 188 Corporate Governance Report
various business segments, including performance for the • SWOT analysis
198 Report on Executive Committee
year 2020 and strategic outlook.
200 Report on Audit Committee
88 Historical performance 203 Report on Board’s Risk Management Committee
90 Horizontal analysis 206 Our corporate governance structure
92 Vertical analysis
94 Performance at a glance, 2020 228 Independent Auditors report
Financial statements 2020
This segment of our report provides readers with audited financial 233 Consolidated and separate financial statements
information and accompanying notes with explanations. 332 Financial statement of Islamic Banking Branch
337 Financial statement of Off-shore banking unit (OBU)
343 Financial statements of the Subsidiaries
424 Basel III Pillar 3 Market disclosure

Additional information & Shareholder services 445 Branch List

449 Photo album
458 Notice of the 38th AGM
459 Proxy form
View our report online and on the go
Our Annual Report, accounts and other information 461 Glossary
about CBL can be found at www.thecitybank.com
Remembering
Mr. M. A. Hashem
30 August 1943 – 24 December 2020

In respect and reverence of our former Chairman.

As founder of the diversified conglomerate, the Partex

Group, Mr. M. A. Hashem's contribution to trade, commerce
and employment in Bangladesh has been undeniable. He
was also pivotal in the establishment of The City Bank as
a first-generation private sector bank of the country.

Beyond business, Mr. M. A. Hashem was deeply engaged

in fostering a better and more equal society. As a visionary,
he envisaged the important role of education and played a
decisive role as one of the founders of North South University.
Further, Mr. Hashem, as an elected Member of Parliament
from the Noakhali-2 constituency, greatly contributed
to public welfare and to making a difference in
the lives of the common people.

Mr. M. A. Hashem has left behind a formidable legacy.

We will not rest until we have fulfilled his vision of an
inclusive, prosperous and joyous Bangladesh.

Scan to watch
a short video
Industrialist. Philanthropist.
Educationist. Law-maker.
Change-agent!
 Letter of transmittal

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

Sub: Annual Report for the year ended 31 December, 2020

Dear Sir(s)/Madam(s),

We are pleased to present before you The City Bank’s Annual Report 2020 along with the
audited Financial Statements (Consolidated and Separate) including Balance Sheet as at 31
December, 2020 and Income Statement and Cash Flow Statement for the year ended 31
December, 2020 along with notes.

Financial Statements of the Bank comprise those of City Bank On-Shore (main operations) and
Off-Shore Banking Unit whereas Consolidated Financial Statements comprise Financial
Statements of the Bank and those of its subsidiaries (City Brokerage Ltd., City Bank Capital
Resources Ltd., CBL Money Transfer Sdn. Bhd., Malaysia and City Hong Kong Ltd.) presented
separately. Analyses of this report, unless explicitly mentioned otherwise, are based on the
financials of the bank and not the consolidated financials.

Yours Sincerely,

Md. Kafi Khan

Company Secretary

10 Annual Report 2020

The bank is you!
The City Bank Limited
Integrated Annual Report 2020
About our report
Embracing integrated thinking
At City Bank, integrated thinking comprises of making coordinated efforts to interconnect the bank’s strategy,
governance, performance and prospects. We believe that a single ‘dashboard’ of information will help us think more
clearly to articulate our long-term vision and performance expectations, especially in the context of our sector that
has witnessed considerable disruption by the COVID-19 pandemic. We understand that integrated thinking will help
us chart a clear long-term direction to navigate through our operating environment, while continuing on our journey
of value sustainment for all our stakeholders.

Our approach to over time. The report is thus presented in line with the
International Integrated Reporting Framework published
this integrated report by the International Integrated Reporting Council (IIRC).
City Bank’s Integrated Annual Report 2020
communicates the relationships and interdependence of Report boundary and compliance
the many aspects of our business – such as strategy, The overall boundary of this Annual Report comprises
governance, performance and prospects – in the context The City Bank Limited and its subsidiaries. Consistent with
of creating value over time. The reporting approach that the framework adopted in the previous years, key financial
we have adopted balances the need to communicate aspects are discussed in the context of the bank and the
effectively through concise, relevant information (to a Group. The bank’s business is dominated by two principal
large and diverse stakeholder group), while at the same segments: deposit collection and lending activities, while
time providing comprehensive compliance-related the Group’s activities comprise brokerage, investment
disclosures (that would interest a few). banking and money remittance services through
Further, our approach is based on the belief that companies domiciled in Bangladesh and abroad. This
Integrated <IR> Reporting offers a more cohesive and report covers the 12-month period - 1 January to 31 December
efficient methodology to aggregate information and 2020 and is consistent with our annual reporting cycle for
inform our stakeholders about how we generate value financial reporting.

Our reporting frameworks

- IAS and IFRS

11
 Our material matters We look forward
We view the materiality determination process as a tool We welcome your questions regarding this report and
that facilitates integrated thinking and, as such, apply the your suggestions to help us improve the next edition.
principles of materiality in assessing what information is to Please write to us on [email protected]
be included in our integrated report. This ensures that we
report on the major material matters that meet the
interests and expectations of our stakeholders. Forward-looking statements
Accordingly, this report focuses particularly on those
matters, opportunities and challenges that impact This report contains certain forward-looking statements
materially on City Bank and its ability to be a sustainable with respect to the financial condition and results of
business that consistently delivers value to our key operations of City Bank that, by their nature, involve risk
stakeholders over the short, medium and long run. and uncertainty because they relate to events and
depend on circumstances that may or may not occur in
the future. Factors that could cause actual results to differ
Our capitals materially from those in the forward-looking statements
We believe that our relevance as a bank today and in the include national economic conditions, interest rates,
future, and our ability to create long-term value is exchange rates, credit or other risks of lending and
interrelated and fundamentally dependent on the forms investment to update or revise any of them, whether as a
of capital available to us (inputs) and how we transform result of new information, future events or otherwise.
these capitals in order to generate value (outputs and
outcomes). Our six capitals include:
• Financial capital
• Manufactured capital
• Human capital
• Natural capital Please support
• Intellectual capital
• Social and relationship capital Please help us to reduce the bank's carbon footprint by
reading this report online on www.thecitybank.com
Pillars of this report
We have anchored this report on the following
characteristics to ensure that our reporting is thorough,
yet presentable in a manner that promotes readership
and a better understanding of our organisation.
Completeness: Our Annual Report includes
reporting on our strategy, performance,
governance and prospects.
Comparability: Our report includes the perform
ance of current and previous reporting periods
for helping readers to determine the progress
made by the bank.
Clarity: Our report incorporates both text and
visual elements to enhance readability, while
maintaining concision.
Accuracy: The content of our report facilitates
traceability and verifiability of information.

12 Annual Report 2020

Playing a catalytic
role in society
At City Bank, our diverse range of products offering a wide choice
to our customers, combined with our outstanding spirit of service, has
earned us the reputation of being one of the country’s most trusted
bank serving hundreds of thousands across Bangladesh.

Important financial institution Satisfactory risk profile

City Bank is amongst the top private sector commercial City Bank has been assigned credit rating of “AA2” Long
bank in Bangladesh. This is manifest in the fact that at the Term with “Stable” outlook by CRAB (Credit Rating
close of December 2020, the bank had a total balance Agency of Bangladesh Limited) valid till June 2021, which
sheet size of BDT 383 bn and total loans and advances of reflect sound rating for a local private sector bank.
BDT 268 bn, accounting for 2.4% share of private Overall, the bank has a risk profile that reflects a
commercial banking sector’s total loans and advances. conservative risk appetite, selective funding, a relatively
secure level of liquidity, a sound domestic franchise and
Fulfilling our societal purpose stable performance.

Built on decades of customer and stakeholder trust, City

Bank is committed to fulfilling its purpose as a financial
Respectable capitalisation
catalyst for socio-economic progress in the nation. With City Bank held a total Capital Adequacy Ratio of 15.5% as
the belief that long-term sustainable growth is contingent of 31 December, 2020, above the regulatory minimum of
on striking a prudent balance between stakeholder 12.5%. The bank’s growth position remained prudent, with
interests on the one hand and profit stability on the other, on-balance sheet assets as well as risk-weighted assets
City Bank has expanded to emerge the amongst the most remaining at BDT 383 bn and BDT 269 bn, respectively, as
diversified financial services group in Bangladesh, of the end of 2020. Demonstrating the strength of the
relevant to all. Further, a deep country-wide presence franchise, paired with a strong forward outlook, the bank’s
facilitates easy accessibility for our customers, while our share price recovered almost 53% as on end 2020,
digital channels literally put banking in their hands. against its trailing 52-week low.

Dynamic financial intermediation Fairly diversified ownership

City Bank has one of the largest customer deposit Of the approximately 1,016 mn total paid-up shares,
holdings at BDT 254,781 mn (as on 31 December, 2020), Directors/ Promoters of the bank hold 33.19% of the equity
which help fund 67% of total assets, demonstrating the share capital. The other major shareholders, holding a
bank’s robust role as a financial intermediary. In 2020, the combined ownership stake of 27.57%, comprise domestic
bank’s credit to deposits ratio was 74.7%, reflecting near institutions (23.29%) and foreign shareholders (4.28%). The
corresponding growth between loans and deposits. The general public holds the rest of the 39.24% shares of the
bank’s asset quality is pristine and one of the best in the bank.
sector, while its CASA (current accounts and savings
accounts) makes up 41.5% of total deposits, amongst one
of the best in private sector banking.

13
 Our snapshot
in numbers and figures
With a heritage spanning 38 years, City Bank is among the lone
longstanding financial institutions of Bangladesh to have withstood
the test of times, witnessing a number of economic, market and growth
phases across its long and eventful journey, always stepping up
to serve the interests of the country and its citizens.

At City Bank, despite the challenges of an exceptional year 2020, we achieved meaningful
progress, manifest in our statistics below.

4,356 132 116

Employees Branches SME-S Unit Offices

1,800,000+ 7 29,000+
No. of Customers Priority Centers No. of POS

1,450,000+ 1,411+ 17,500+

No. of Cards issued Agent Banking outlets No. of Merchants

CBL Money Transfer Sdn. Bhd City Bank Hong Kong Limited
Malaysia Hong Kong
12 branches, 1 representative office 1 representative office

14 Annual Report 2020

Trade facilitation Credit quality
Exports Gross NPL

USD 1,432 mn 4.0%

Imports Net NPL Provision coverage

USD 2,237 mn 2.6% 95%

Inward remittance Stability

Total remittances Total capital ratio

34,291 mn 15.5%
Tier-1 ratio Leverage ratio

Socio-economic contribution 10.8% 5.7%

Contribution to national exchequer

6,720 mn Loans and advances

S

CSR investments 268,202 mn

249 mn Deposits

254,781 mn
Profitability
Net profit Earnings/ share Market capitalisation

4,012 mn 3.9 25,206 mn

Return on assets Return on equity
Dividend, 2020
1.1% 14.8% (Subject to approval) %
17.5% Cash
5.0% Stock
All figures are for the year 2020 in BDT,
unless otherwise stated.

15
 Scan to
know more

Ekhoni Account
Open a City Bank
account in seconds!
 Scan to
know more

Smart IVR City Bank pioneered the Smart IVR service

in Bangladesh’s banking industry, launched with
the express objective to save precious time for
New Innovation on ‘16234’! our customers by minimising their wait period
at the bank’s call center. With this feature-rich
interactive system, customers can self-manage
a whole host of queries related to their
bank account and credit card.

So now, the bank is you!

16234
WhatsApp Banking
Say ‘hi’ to banking
on WhatsApp!

With a leading focus on emerging as the digital bank of

choice, City Bank initiated the WhatsApp banking service
during the year. Under this secure platform, customers can
access the bank digitally for a variety of information
round-the-clock and free-of-charge related to their
City Bank account or credit card via WhatsApp.

So now, the bank is you!

Add +8801700710144 to your phone contacts

and say “Hi” on WhatsApp from your registered mobile number
 Scan to
know more

The power of one!

City Bank introduced citypay, the revolutionary
interoperable QR-code based payment solution,
for customers to make cashless, contactless
payments in seconds with one single QR code.
Payments can be made across 17,000+ merchants
in Bangladesh via our leading payment partners,
including American Express, VISA, Mastercard
and even UnionPay.

So now, the bank is you!

 Our corporate
philosophy
At City Bank, we manage our business and people with the responsibility
of delivering sustainable financial returns. A commitment to the principles
of good governance and the strategic role of our Board, senior leadership
and skilled workforce collectively contribute to shaping a sustainable
organisation, anchored on the strong foundations of our
corporate philosophy.

Vision Mission

We are driven by our We are focused on our Mission of

Vision of emerging as a becoming the financial services
group of choice in Bangladesh.
financial supermarket with
Towards this extent, we intend to:
a winning culture, while
offering enjoyable experiences • Offer a wide array of products and services
that differentiate and excite all customer
to our stakeholders
segments

• Be the ‘Employer of choice’ by offering an

environment where people excel and
leadership is created

• Continuously challenge processes and

platforms to enhance effectiveness and
efficiency

• Promote innovation and automation with a

view to guaranteeing and enhancing
excellence in service

• Ensure respect for the community, good

governance and compliance in everything
we do

24 Annual Report 2020

 Values
Importantly, our strategy is underpinned by four clear
Our Values define the way we think, work and act. We themes.
believe that we can realise our Vision and Mission when
the expected behaviour from our employees is clearly • First, as a financial services provider, we disburse
defined. Our core values reflect the following: eligible loans for fostering growth opportunities and
also connect Bangladesh to international markets,
• We are ‘results-driven’ thereby also enhancing local competitiveness
• We are ‘engaged’ and ‘inspired’ • Second, we place customer and client convenience
• We are ‘accountable’ and ‘transparent’ at the heart of our business model and pivot ideas
• We are ‘courageous’ and ‘respectful’ and innovation to help meet this central objective
• We are focused on ‘customer delight’ • Third, we are simplifying and reorganising our
business segments and processes to serve our
customers and clients better, while also ensuring
sustainable cost optimisation and efficiency
improvement
• Fourth, we continue to unlock the power of a
Shared Growth knowledgeable and agile workforce, assisted by
state-of-the-art information technology (IT),
We are committed to Shared Growth, which for us automation and innovation, to delight our customers
means partnering the Government in achieving and clients
nationalistic goals, having a positive lasting impact on the
society and delivering shareholder value over the
long-term. We possess a holistic approach to deliver
commercial returns, while proactively responding to In our journey of constant evolution, we identify
stakeholder needs. opportunities that enable us to enhance our market
relevance. In this respect, in 2020, we formulated a more
clear strategy that not only enabled us to show solidarity
Leveraging our competitive for pandemic support, but also advance our goals and
advantages to serve Bangladesh objectives, especially with regards to our digital
ambitions. This is articulated in the section: Key highlights
We are strongly positioned as a fully local bank with of 2020.
regional and international expertise, and aspire to build a
leading financial services platform that caters to
customers holistically in our chosen markets of
Bangladesh and in our selected customer and client
segments. We focus on remaining locally relevant and
competitive in our product suite and within our
geographic coverage.

25
 Code of conduct and
ethical guidelines
At City Bank, we believe that upholding ethics and transparency and
alignment to best-in-class governance standards is not just a business
imperative, but a key growth and sustainability driver too.

We have established sophisticated processes and Conflict of interest

structures that are detailed in our Code of Conduct (CoC)
Employees must not use their position in the bank for any
and ethical guidelines for facilitating responsible and
kind of personal benefits for themselves together with
values-driven management and control. Importantly, our
members of their families/friends. Employees who are
CoC and ethical guidelines reflect our commitment to
members of different school boards, societies or
international standards and industry best practices, and
recreational bodies should be aware of conflicts of interest
are expressed in the following principles:
and declare any such conflict.
Rigorous compliance with Honesty and integrity
laws and statutes Employees are expected to act honestly and with integrity
All employees follow and comply with the laws of the land at all times. They should act in an upright, ethical and equitable
and internal rules, regulations and guidelines of the bank. way while dealing with the public and their co-workers.
Integrity of records Acceptance of gifts
All our employees are expected to maintain books and Employees are discouraged to accept gifts, benefits or any
records with integrity and ensure accuracy and timely sort of invitations of questionable nature from customers
documentation of all transactions, while maintaining and persons with business interests with the bank.
privacy and security of customer data. As per our rules,
employees are barred from divulging the bank’s plans, Harassment, discrimination and
methods, activities and other such information that is inappropriate behaviour
considered to be proprietary, sensitive and classified as
confidential, without proper authorisation. This helps in ring City Bank is committed to the principles of equality and
fencing the integrity of our classified records and documents. meritocracy in its employment practice and fosters a work
environment that respects diversity and individual
Misappropriation of assets differences. It does not tolerate discrimination,
intimidation, harassment, bias or retaliation, whether direct
Employees of the bank are strictly restricted from converting or indirect, by its employees towards anyone else.
any funds or property that is not legitimately theirs for their
own use and benefit, nor are they expected to deliberately Work environment
assist any other person in such misuse and exploitation. It is expected that employees should conduct themselves
with the highest standards of integrity and professionalism
Money laundering and in the workplace, or any other location while on business, and
terrorist financing shall ensure that none of his/her actions cause any nuisance,
disturbance and devolve the image, goodwill or reputation of
City Bank strongly opposes all forms of money laundering
others or of the bank. Employees shall treat all City Bank
and shall take all the necessary steps to prevent its
customers, suppliers, co-workers and others with due respect.
financial channels from being used by others for the
purpose of laundering money. Employees responsible for Ethical responsibility
opening accounts are required to fulfil all formalities, and
City Bank’s goal is to do business ethically and to prevent
also review accounts periodically, as per regulatory
improper business practices. Hence, the bank places
guidelines. Further, employees are expected to remain
importance on ethical validation and appropriate
vigilant of suspected transactions of funds and require to
authorisation of all decisions and actions of the bank’s
report as per guidelines with an aim to combat any sort of
employees before they are initiated.
terrorist financing activity.

26 Annual Report 2020

Key highlights
of 2020
Shared value at City Bank is not just a functional dimension of
our business; in fact, it goes beyond delivering products and services
that caters to the needs of our customers, career expectations of
our employees, growth aspirations of our partners and delivering
returns to our investors and shareholders.

Supporting innovative Caring in the time

solutions of COVID-19
We launched the Ekhoni Account app that We offered our customers various financial
enabled our users to open an account with us relief and support schemes while also
within minutes. This enabled our customers to contributing to numerous efforts on the
access anytime-anywhere banking. In yet ground to contain the pandemic, including
another innovative initiative, we introduced an a total donation of over BDT 50 mn to PM’s
asset-backed Shariah-compliant finance product Relief Fund. We also channelled almost
for SME-Small customers, comprising the BDT 16,000 mn of government stimulus
first-of-its-kind in Bangladesh. to various intended beneficiaries.

Ensuring resiliency Extending comprehensive

of our capital support to our customers
City Bank continues to remain amongst the In addition to extending moratorium as per
strongest capitalised financial services entities regulatory guidelines, we also went beyond to
in the region with a CET1 capital ratio of 10.8% help our longstanding customers tide over
and total capital ratio of 15.5%. the challenging times through extending
credit lines, working capital support, etc.

22.5% total dividend

announced for 2020
Not even the pandemic could dampen our
dividends, also reflecting our optimistic
forward outlook.
* Subject to approval

27
 Our investment case
Despite the onset of the coronavirus pandemic, we were able to
rapidly re-pivot our business to the new normal with the result that
we were able to secure our long-term investment case, which is
anchored on the following key strengths.

Robust capital
and liquidity
- With macroeconomic uncertainty due to the impact of the pandemic, we continued to prioritise
capital and liquidity preservation

- We were able to rely on our prudent stance from past years to remain cautious in our lending
practices

173.5%
Liquidity coverage ratio

Demonstrated
track record
- Our multi-decade track record is testament to our strength in growing together with
Bangladesh, an emerging nation full of potential

- Our established presence paired with a diversified product suite make us best placed to serve a
market place ripe for bounce-back

132
Branch network pan-Bangladesh

Core governance
focus
- Robust independence within the Board of Directors, encompassing diversity in age, gender, as
well as skills and experience

- Upholding an effective risk management system to safeguard our assets and interests of all our
stakeholders

17%
Independent Directors

28 Annual Report 2020

Responding
to COVID-19
Having built bank-wide agility to respond to a dynamic environment,
at City Bank, we were quick to activate our business continuity
processes by March 2020, when the early signs pointed that
COVID-19 would emerge as a major pandemic. We rolled out
progressive measures across our operations to ensure the safety
of our customers and employees while striving to maintain quality
of our services with minimised disruptions. We also examined
closely how the pandemic would create structural shifts and
converted these into sustainable long-term business opportunities.

Customers Employees
• Provided financial relief and support to affected • Activated our Business Continuity Plan to ensure that
customers and clients through moratorium/payment our people are as much reduced to the risk of
deferments, as well as restructuring/rescheduling infection as possible
solutions
• Maintained high standards of hygiene and safe
• Proactive engagement with customers and clients practices in the workplace
enabled us to offer guidance on options available for
financial assistance, while also encouraging • Implemented split operations teams between offices
customers to bank digitally to reduce physical and work-from-home
presence at branches, in line with movement control • Implementation of strict physical distancing, usage of
restriction requirements personal protection equipment, health monitoring
• Accelerated the enhancement and deployment of and deferment of all events requiring physical
digital financial products and services to enable attendance
customers to undertake their daily banking needs • Accelerated implementation of flexible work policies
remotely with minimal disruption and practices that enable mobile working with rollout
• Undertook temporary closures or revised operating of necessary supportive tech infrastructure
hours of branches, when needed • Constant virtual learning and employee engagement
• Conducted regular disinfection/sanitisation exercises initiatives to promote mental, physical and emotional
across all our premises, as well as promoted usage of wellbeing
protective equipment such as masks and barriers at
the counters

29
 Governance

Shareholders Showing
solidarity during
• Continued rewarding shareholders with dividend
pay-outs for 2020 (declared), while still maintaining
capital and liquidity strength
• Live-streamed our first-ever fully virtual AGM for 2019
in 2020, enabling a platform for shareholders to ask
COVID-19
questions to the Board and comply with physical
distancing and other safety measures
Providing relief to the vulnerable
• Hosted quarterly results briefings through webinars sections of society. City Bank provided
• Disclosed the extent of vulnerable portfolios and
mitigating plans for asset quality preservation
food and grocery support to the poor
who have been heavily impacted by
Providing relief
the coronavirus pandemic. The bank
offered food bags, each weighing 18
to the vulnerable
kgs (rice and other food essentials) to
40,000 families through 8 centres sections of society.
Regulators located across the country, thus
• Sufficiently addressed all relief/stimulus directives by positively impacting about 200,000
adhering to all moratorium/lending guidelines and
other directives people for a week. Directly under the
stewardship of our Chairman, Aziz Al
• Continuously undertook stress-tests and simulation Kaiser, the necessary funds were raised
evaluations in response to the rapid changes in the
operating environment to ensure overall resilience with the bank’s staff contributing one day
and preservation of portfolio quality of salary and the rest of the sizeable
contribution made by the bank. Our
Managing Director & CEO, Mashrur
Arefin, supervised the relief distribution
efforts, along with his team.
Communities
Further, well-stocked relief bags
• Contributed over BDT 68.7 mn to the Prime Minister’s
Relief Fund for various COVID-19 related causes and
were provided to some 3,000 families
other initiatives to assist vulnerable communities in 13 districts of Dhaka (via Dhaka Range
of Bangladesh Police via the Uttaran
• Channelled financial assistance and donations raised
via employee contributions to the underserved and
Foundation), about 2,000 families
impacted communities across Bangladesh living on the outskirts of Gulshan
(via DC Gulshan of DMP) and around
• Engaged in other relief drives comprising distribution
of basic provisions, etc.
500 families of tannery workers
Stay safe and always remember to
(Hazaribag area).

30 Annual Report 2020

 Statement from
our Chairman
The Bank Is You!
“City Bank has always been with you. You: Our customers, our
employees, our shareholders and all our other stakeholders. At our
bank, we have always sought to create sustainable value for you
and for achieving this purpose we have sought to choose the road
less travelled, focusing on innovative initiatives, breakthrough products
and step-change solutions. This is manifest in our standing as one of
Bangladesh’s oldest private sector banks that has survived through
and thrived across various time periods and market cycles. Thus,
despite the year 2020 being remembered as an aberration in our
history, we continued with the same spirit in which the bank was
started, doing what we know best: Creating the foundations for
customer and stakeholder value for tomorrow.”
Aziz Al Kaiser
“ Our efforts will be directed
in driving our digitalisation
and digital adoption
Chairman
strategy, deepening our
business relationships with
Dear shareholders and stakeholders challenging circumstances and remain grateful to The COVID-19 pandemic has made the underlying the SME/Retail market
all our staff for showing resilience, agility and structure and resilience of Bangladesh’s financial sector and further
of City Bank, adaptability to work in the new operating markets a critical matter for financial services
environment. Indeed, their determined consumers as well as domestic and international
extending the social and
“
The year 2020 was a tumultuous one for
Bangladesh and the world, as the national and commitment is reflected in our 2020 financial investors, as the nation copes with the challenges of environmental perspective
world economy weakened considerably, with some performance. returning to a sustainable growth path. into all our activities.
parts of the globe even plunging into recession, due It is remarkable that even in a highly challenging Today, despite the regrettable human and social
to the chaos caused by the coronavirus pandemic. backdrop, the bank recorded a net profit expansion costs of the pandemic, the country must deploy it as
What appeared to be a regional outbreak soon of 62.3% to BDT 4,012 mn for the year. Further, a critical mass to push it towards a state where
spread all over the world, and governments despite a highly stressed scenario with certain growth, prosperity and security are the norms and
enforced unprecedented lock up measures to regulations like loan moratorium announced by the not the exception. I am both proud and optimistic that
control the transmission of the contagion. Government to ease stress, our pre-provisioning the resilience and proactive stance of our
With banking declared as an essential financial NPLs remained well-controlled at 4.0% for the year, government will undoubtedly ensure that
service, I am proud of our frontline staff in attending against 5.8% in 2019. Remaining cautious and Bangladesh will achieve its target of becoming a
office and keeping the wheels of the economy watchful on the forward outlook, we set aside BDT middle-income nation despite the severe aftermath
moving. I salute their exemplary courage and 644 mn as provisions for the pandemic-stricken of the pandemic. Indeed, COVID-19 has provided us
determination in serving our customers in highly year boosting NPL coverage to 95%. with many learnings that we cannot discard and must
incorporate into the way we conduct our business in
the future.

32 Annual Report 2020 33

 City Bank donates blankets
to Prime Minister’s Relief
and Welfare Fund
Mr. Aziz Al Kaiser, Chairman of
City Bank handed over the blankets
to Dr. Ahmad Kaikaus, Principal
Secretary to the Prime Minister at
PM office on October 28. 2020. City
Bank has donated 75,000 blankets
to Prime Minister’s Relief and Welfare
Fund for distribution among the
cold affected people. Prime Minister
Sheikh Hasina joins the donation
programme virtually from Ganobhaban.

Some of these critical learnings relate to the need to seen by both regulators and the Government as key
create an enabling environment for financial market to providing financial relief and stimulus and driving
participants. This is to make it easier for financial forward economic recovery programmes.
markets to play the role as an efficient platform for
On the transactional front, customers now expect
mobilising resources to power the country’s growth
a fully immersive experience and COVID-19 is
and prosperity, as well as facilitating trade with the
driving everyone towards a low-contact, low-touch
rest of the world, leveraging Bangladesh’s several
economy. Determining this trend early in a country
intrinsic and inherent advantages, including low
where digital adoption was mostly sitting on the
wage costs. Today, there is no doubt that we will see
side-lines but came to the fore during the pandemic,
more financial and economic volatility as a result of
we further reinforced our digital banking offering,
the pandemic, and this is unlikely to be the last of
adding a suite of new digital products, services and
such global shockwaves. However, Bangladesh’s
partnerships to cater to the evolving needs and
rapidly maturing and strengthening financial
expectations of our customers, along with embracing
markets bode well for our ability to withstand such
other major initiatives to digitalise and centralise
stress tests, as we can pull together to attract our
our operations. Appreciable performance was
fair share of both domestic and international capital,
observed in this regard, which included customer
for the greater good of all Bangladeshis.
onboarding via the City Ekhoni Account digital app
Through the social re-order brought about by the and growth in digital penetration achieved via our
COVID-19 pandemic, what is clear is that in terms of Agent Banking network. With this progress, we are
digital innovation and progress, we have had to poised to further cross our predetermined digital
compress several years of evolution into a very penetration threshold. The bank also recognises
short space of time as everyone has been forced to the role and potential of digital banking to connect
adapt to managing businesses remotely and the with under-banked and unbanked segments of the
deployment of new low-contact or no-contact market, thereby promoting financial inclusion
transactional capabilities. Austrian economist across the nation.
Joseph Schumpeter coined the phrase “Creative
Today, I feel that banks that remain within the
destruction”, which refers to the necessity of
traditional domain will be pushed to the margins by
building a new order – similar to what we are
other competitors and even fintechs who previously
experiencing now.
may not have had a strong appeal with customers.
Business models will begin to alter significantly and Indeed, I find we are moving towards a marketplace
become smarter and leaner in order to survive and environment where various players will be forced
emerge. So what may the post-COVID landscape look to bring their unique solutions to the market, while
like? The banking and financial services ecosystem, of sourcing other capabilities from elsewhere on
which City Bank is a major part, is clearly a part of the behalf of customers.
solution during and post the pandemic, with banks

34 Annual Report 2020

At this point, building an ecosystem that puts the The bank is rightly proud of its long history and
customer at the centre is a major consideration and demonstrable achievements, where it has a proven
at City Bank we are exactly in that pursuit. The ability track record in navigating the ups and downs of the
to exploit big data and digitisation are mere country’s economic fortunes, and we look forward
enablers in the new economy, with the real to thriving in the year ahead.
differentiator comprising the ability to personalise
Looking back at the bank’s long and cherished
the customer experience and provide convenience.
history, we feel a sense of pride and pay our
Enhanced customer experience is going to be the
gratitude to our intrepid founders who took
imperative, and the choice of bank for customers
pioneering steps to incept City Bank and build
will be based on maximum convenience. Thus at
strong foundations for ensuring the sustainability of
City Bank, we are making investments in reinforcing
the institution for today and well into tomorrow.
our capabilities to enable our customers to bank
when they want, where they want, and how they I am grateful to my colleagues on the Board for
want. It is true that City Bank’s digital journey will their contribution for steering the bank in a difficult
fundamentally create a distinct position for the bank year with a focus on long-term sustainability. I thank
amongst peers and fintech competitors. the Managing Director & Chief Executive Officer
and others in the leadership team and all our staff
Despite the difficulties of 2020, accelerated growth for their commitment, courage and dedication in
recovery in 2021 is a possible reality, both for the executing the strategies that helped serve our
bank and the sector as a whole. The Government customers in the best way possible.
forecasts the nation’s economy to grow by 1.6% in
2020-21, which is highly creditable considering that Finally, I wish to convey our sincere good wishes
most countries in the rest of the world will continue to all our stakeholders. Thank you for being a part
to suffer from economic compression. of City Bank. I am positive that better days are
ahead of us.
During the current year, our efforts will be directed
in the areas of achieving prudent growth while Sincerely,
bringing our asset quality further under control,
driving our digitalisation and digital adoption strategy,
deepening our business relationships with the SME
market sector and also retail customers, and further
extending the social and environmental perspective Aziz Al Kaiser
into all our operations and activities. Chairman

35
 From the desk of
our Managing Director & CEO
Working Together To Build Back Better!
“The year 2020 was extraordinary. Yet, in its 38 years history, City Bank
has proven its resilience by overcoming various economic and financial
crises to become a bank that has proven its relevance for generations
and has emerged as a brand synonymous with high-quality, diversified
and reliable financial services in Bangladesh. Though the impact of
the global coronavirus pandemic has been unprecedented by any
measure, we continue to responsibly navigate across the “new normal”,
and the future will see us growing stronger and better. After
almost a year of uncertainty, we now witness new opportunities
for transformation and resilient growth.”
Mashrur Arefin
Managing Director & CEO

“ 2020 was one of resilience

and tenacity and a virtual
stress-test that challenged
Dear stakeholders, colleague and we learnt how precious it is to lend a In 2020, banks assumed a crucial role in primarily
us to remain true to our
helping hand and seeing a smile on someone’s face. assisting the government in the socio-economic
Reflecting on the year 2020, I'm reminded of the Indeed, the year 2020 was one of deep revelation. recovery efforts through channelling relief and purpose of being one with
book “Man’s Search for Meaning” by Viktor Frankl rescue packages to the vulnerable, distressed and our customers. I am happy
which involves his journey in identifying a purpose Year extraordinaire in which we embraced the targetted beneficiaries. As a bank with a pervasive that we passed the litmus
in life as something to feel positive about and then reality and forged ahead with resilience pan-Bangladesh network, we not only assisted in
wholeheartedly pursuing it. Though it was an these efforts but also adopted extraordinary steps to
test, standing unflinchingly
“
unsettling year for many of us, the uncertainty of the The year 2020 was paradoxical on many counts. by our customers in
support businesses, especially small and micro ones,
Yet, one of the most stark was the deep depression
pandemic’s impact and the extended lockdown
and anxiety at the start of the year that transformed
and customers – from regulatory-mandated challenging times.
situations amidst limited social interactions, we yet moratoriums, to extended credit terms to ensuring
found joy in small pleasures like spending quality to one of optimism and hope as the year ended,
uninterrupted access to finance and financing. We
time with the family and in little wins like bagging the with positive news on vaccine efficacy and
focused on prioritising the financial needs of our
emergency use authorisation launch spreading
first-ever online project. customers during the challenging times. With a deep
hope and joy in all corners of the world. Today,
spirit of alliance and solidarity and with a philosophy
At City Bank, even in the middle of all the challenges vaccination has picked up pace in many parts of the
of taking everyone along the path of development,
and angst, we found joy and pleasure in our ability world and represents the most effective counter to
we emerged as a major support system in
to be an integral part of many solutions for our a probable second wave or even virus mutations.
Bangladesh.
customers, employees, partners and communities Vaccination, together with proactive government
who matter to us. We found happiness in going the support from all over the world through fiscal relief Overall, the year 2020 was one of resilience and
extra mile to serve a customer in dire need of funds, is seen as major drivers of economic recovery going tenacity and a virtual stress-test that challenged us to
we discovered satisfaction in extending support to a into 2021 and beyond. remain true to our purpose of being one with our

36 Annual Report 2020 37

 customers’ needs, desires and expectations. I am about is the emergence of green finance as
happy to note that we passed the litmus test, companies look to infuse greater sustainability into
standing by our customers and today we are their operations and supply chains, Islamic finance
helping them emerge stronger in the post-Covid era, as businesses and individuals look to more closely
or the “new normal” as coined by economists. align their financial lives with their spiritual beliefs,
and retail finance as people explore home
Going towards the new normal from a
ownership with the pandemic exposing the other
position of strength and confidence side of living in rented housing. Having built our
Like most other businesses, we generally start every competencies in these fields and with added
year with the expectation that it would be better impetus through investments, etc., we will
than the previous year. The year 2020 was no aggressively explore these and other trends from a
different with some bright spots emerging due to position of strength rather than an opportunistic
optimism surrounding the primary trade deal compulsion.
between the US and China and accommodative
monetary and fiscal policies in Bangladesh and the Adopting accelerated digitalisation at a time
ASEAN region, which was expected to provide a when the customer becomes the bank
boost to economic growth. Bangladesh was on a During the period where time and resources were
strong footing especially, and despite a few intrinsic channelled towards managing a transition to the
challenges, was set to emerge as one of the top new normal, we accelerated ahead with our digital
economies of the world in terms of GDP growth. initiatives, maintaining steady progress towards
However, this optimism evaporated with the initial becoming the digital bank of choice for our
spread of COVID-19 in China turning into a full-fledged customers. Truly, the year has underlined the
global crisis, forcing border closures and movement absolute necessity of fully embracing digitalisation
restrictions that effectively led to staggered in order to support new ways of working and
economic shutdowns globally. With declining global connecting with our customers. Never in the history
demand, subdued commodity prices, supply chain of time has digital been so aggressively adopted
disruptions, weaker domestic demand and labour and that too on a mass scale and this can be nothing
market dislocation, governments and central banks but a permanent trend as companies take a close
worked together to mitigate the impact with the roll hard look at a hybrid working model, entrepreneurs
out of various economic stimulus packages and come up with new virtual business models like
steep interest rate cuts to provide assistance and cloud kitchens, and students become comfortable
relief to affected individuals and businesses. with online learning.
However today, the ravages of peak pandemic are From City Bank’s perspective, the emergence of
now behind us with Bangladesh’s economic growth new businesses, especially digital natives, will
being in the positive territory in 2020, a considerable open up new credit financing opportunities, going
accomplishment reflecting the sheer resilience of forward. Further, as we already had a strong
the economy to bounce-back after a major crisis. digital infrastructure, it was relatively easy to
Today, broken supply chains have begun to mend, adopt split operations and mobilise
commodity prices are recovering from their lows, work-from-home. Our digital platforms also made
consumer demand is coming back and we are it possible for our customers to carry out more
witnessing green shoots in credit demand for banking transactions online, without exposing
brownfield and greenfield expansions, albeit on a themselves to unnecessary risk of visiting our
lower scale. physical branches.
We purposefully used the relative downtime during One strong motivation in pursuing our digital
the pandemic to reflect on our path ahead by agenda is the fact that it enables greater
identifying key structural trends that potentially inclusivity. We saw this clearly with City Ekhoni
demonstrate permanency. While we believe a Account app, a kind of a ‘pocket bank’, which has
business-as- usual approach will soon return, thus emerged as a preferred interface with many of
driving credit demand across the corporate and our customers. The second factor comprises our
SME landscape of the country, what we are intention to enhance customer experience.
particularly convinced Continuing to build on our portfolio of digital
businesses, we
38 Annual Report 2020
 City Bank made a donation
to the Prime Minister’s
Relief Fund
Mr. Mashrur Arefin, Managing
Director & CEO of City Bank handed
over a cheque of BDT 10 crore to Dr.
Ahmad Kaikaus, Principal Secretary
to the Prime Minister Sheikh Hasina
as a contribution to the Prime
Minister’s Relief Fund for flood
affected victims at PM Office on
September 20, 2020. Prime Minister
Sheikh Hasina joined the donation
programme virtually from
Ganobhaban.

launched many initiatives that helped avoid long It was undoubtedly the sheer spirit of our people in
queues and crowded spaces at our branches, upholding their responsibilities in serving our
including the launch of a Smart IVR facility that customers and in looking after each other that we
ensures that customers get access to their services were able to ensure competitive outperformance in
faster without being in long online queues. Going what was an unprecedented 2020. With the storm
forward, we believe that digital financing, supported yet to fully pass, we will ensure that we provide all
by our Digital Financial Services (DFS) division will kinds of support to our people to ensure their
enable a borrower to apply online, and have the loan continued employment in serving our customers in
approved within the space of a few minutes. For the best possible way.
existing eligible customers of City Bank, they may
Outlook for 2021 is premised on hope,
even have the funds deposited into their accounts
within minutes. optimism and vaccine
Bangladesh, our home market, is expected to see
Fostering a people-first policy and keeping sustained economic growth this year on the back of
them safe is our priority accommodative monetary policies and
The human cost of the coronavirus pandemic has expansionary fiscal policies. A further extension of
been huge, with physical isolation, economic stress, the 2020 relief package was launched in January
uncertainty and fear taking a toll on people and their 2021, which will assist in economic recovery.
physical and mental wellbeing. Constant anxiety has In Bangladesh, the economic recovery is expected
also driven many to seek medication. to be V-shaped, premised on the services sector
At City Bank, our topmost priority during the rebounding. The estimated economic growth for
pandemic has been to safeguard the wellbeing of 2021 is pegged at about 8%, as envisaged by the
our employees by assuring a safe workplace and government, but most developmental institutions
ensuring that our people remained productively forecast a 5-7% growth rate for the year. Against the
engaged and employed and in good cheer to backdrop of accommodative monetary policies, we
support their career aspirations and families. We anticipate that the interest rate environment will
ensured that our staff adopted all the SOPs put into remain relatively unchanged, hence resulting in a
place to minimise the risk of infection as well as to flattish net interest margin trend for 2021. Further,
ensure rapid containment in case of any outbreak. with restrictions placed on lending rates, we will
As an essential service provider, it was our continue to leverage fee-based income opportunities
responsibility to ensure that SOPs kept the team, across our major divisions, while accelerating
especially the frontline responders, safe from product rollouts on our digital platform to enhance
COVID-19, as well as ensure the bank’s operational market penetration and generation of fee-based
continuity. revenues.

39
 Capital and liquidity conservation will remain the Acknowledgements and appreciation
utmost priority for the bank, given lingering
uncertainties over a potentially weakening credit It goes without saying that the year 2020 was
environment. Bangladesh is plagued with one of the momentously challenging, yet City Bank has
highest banking NPL rates in the world and a emerged intact. This is because of the unfailing
deteriorating credit environment, especially with dedication of all our employees. Despite the tumult
the lifting of moratorium and other grants, may of the pandemic, our people have given their all to
exacerbate the situation. In this context, we will ensure we continued to serve our customers and
focus on growing low-cost funds in the form of the nation. For this, I would like to express my
CASA in view of the low rate environment to help sincere thanks.
secure our net interest margins, while also adopting I would also like to thank our Chairman and the Board
a cautious stance on fresh lending. I am especially for their wise counsel, which has been particularly
enthused by the fact that our SME-Small business valuable in these times of financial and social stress.
has taken rapid strides in expanding its customer My appreciation extends to all relevant regulatory
base with a pristine book quality. This has not gone bodies for collaborating with financial institutions
unseen with global developmental bodies like and enabling an ecosystem in which we have been
WorldFish and others recognising the impact our able to carry out our responsibilities in a sustainable
division has created and associating with it to and confident manner.
further channel subsidised credit to target
customers. We also foresee strong potential in our Finally, to all other stakeholders – our customers,
women banking platform, City Alo, that is also investors and communities – thank you for your
progressing rapidly by addressing the key continued support. We exist to serve you, and are
challenge of making finance inclusive and more determined than ever before to ensure the
welcoming for the other gender. More than a best possible outcomes for you.
banking platform, City Alo is emerging as a lifestyle Thank you and we look forward to your continued
solution for our women customers in the country. trust and support.
While there are expected challenges to income
growth given the tentative operating landscape, we
Best wishes,
remain focused on driving productivity and
managing costs in line with income growth. We will
also continue monitoring asset quality closely for
potential slippages given the uneven trajectory of
economic recovery expected in some regions’
concentrations. On the back of a soft operating Mashrur Arefin
environment and potentially elevated provisioning, Managing Director & CEO
we have set our plans of differentiating ourselves
through digitalisation and data analytics to better
understand and serve our customers, while
capturing new business opportunities. At the same
time, we will look to increasingly integrate
sustainability into our operating models and
policies, and support stakeholders as they transition
to sustainable practices, especially in the
manufacturing and industrial space. Going through
the current pandemic, we are reminded of the
potential catastrophic impacts of climate change,
and therefore it is critical that all parties pursuing
profitable ventures begin paying attention to the
impact they make on society and the environment.

40 Annual Report 2020

41
 Corporate directory

City Bank and its subsidiaries

Name of entity
The City Bank Limited
Year of incorporation
1983
Legal form
A public limited company incorporated in Bangladesh on 14 March, 1983 with the
primary objective of carrying out banking businesses in and outside of Bangladesh.
The bank commenced banking operations on 27 March, 1983.

Group composition structure

Bank
The City Bank Limited
Subsidiaries
• City Brokerage Limited (Stock brokerage)
• City Bank Capital Resources Limited (Merchant banking operations)
• CBL Money Transfer Sdn. Bhd., Malaysia (Remittance services)
• City Hong Kong Limited (International trade)
Board of Directors
Mr. Aziz Al Kaiser – Chairman

Directors (Other than Chairman)

Name Position
Mr. Hossain Khaled Vice-Chairman
Mr. Hossain Mehmood Nominated Director
Ms. Tabassum Kaiser Director
Mr. Rajibul Huq Chowdhury Director
Mrs. Syeda Shaireen Aziz Director
Mr. Rafiqul Islam Khan Director
Ms. Rebecca Brosnan Nominated Director
Mrs. Savera H. Mahmood Nominated Director
Mr. Farooq Sobhan Independent Director
Dr. Salim Mahmud Independent Director

Company secretary: Mr. Md. Kafi Khan

42 Annual Report 2020

Core business has four product-specific solutions-based units:
_ City Bank is a leading private commercial bank of • Cash Management and Custodian Cluster (CMCC)
Bangladesh with established leadership in corporate
banking and a robust footprint SME and consumer • Structured Finance Unit (SFU)
businesses. • Corporate Strategic Business Management (CSBM)
_ The bank is also among the few in the country to be • Financial Institutions (FI)
offering both conventional as well as Islamic Banking Though City Bank’s operations are geographically
products and services. centralised in Dhaka and Chattogram, it has nationwide
_ The bank offers a wide range of depository, loan and branches, correspondent banks and affiliated networks
card products and a holistic range of services to worldwide to serve the individual, SME and large corporate
cater to virtually every customer segment. banking needs of clients located across the country.
_ From student banking to priority banking to AMEX Branch Banking customers are served through an expansive
credit cards, City Bank offers an expansive range of countrywide network of 132 branches, 311 ATMs, 64 Cash
banking products. Deposits Machines, 116 SME-S Unit Offices, 1,411 Agent Outlets
_ and 7 Priority Centers (as on 31 December, 2020).
On a granular level, the product basket includes:
The bank enjoys a well-entrenched presence in major
• Savings and current accounts
cities/towns of Bangladesh, including Dhaka,
• Personal loans Chattogram, Sylhet, Khulna, Barishal, Rajshahi and Rangpur.
• Debit cards Branch Banking covers both SME-S and retail customers.
• Credit cards, & pre-paid cards City Bank is a pioneer in credit cards in Bangladesh. The
• Internet banking Bank provides a host of credit cards, including AMEX
• Corporate banking (Platinum, Gold, Green and Blue), Master and VISA cards,
• SME banking & pre-paid cards and is continuously adding value for enhancing product
functionality for the satisfaction of its valued customers.
• Investment banking
• Treasury and syndication services Credit rating
• Supply chain finance As per BRPD Circular no. 6 dated 5 July 2006, the bank has
• Agent banking completed its credit rating conducted by Credit Rating
• Citygem priority banking Agency of Bangladesh (CRAB), based on the financial
• City Alo-women banking statements as at and for the year ended 31 December,
2019. City Bank has also been awarded B1 by renowned
• Two wheeler loans
rating agency Moody’s.
• Distributor finance

Network
City Bank’s businesses are broadly segmented into
following divisions:
• Corporate • Cards
B1
Rating by Moody’s
• •

AA2
Commercial SME
• Retail • Agent Banking
The Corporate Banking division has 4 clusters and
under these clusters, there are 9 relationship units - 6 in Rating by CRAB
Dhaka and 3 in Chattogram. To facilitate and
comprehensively support the business units, the bank
Surveillance Ratings by CRAB for last five years:
Particulars Base Period Date of rating Long-term Short-term

Entity Rating January to December 2019 30-Jun-20 AA2 ST-2

Entity Rating January to December 2018 29-May-19 AA2 ST-2
Entity Rating January to December 2017 11-Jun-18 AA2 ST-2
Entity Rating January to December 2016 28-May-17 AA2 ST-2
Entity Rating January to December 2015 23-Jun-16 AA2 ST-2

43
 Committees of the Board of Directors

Executive Committee
Name Status with Bank Status with Committee

Mr. Aziz Al Kaiser Chairman Convener

Mr. Hossain Khaled Vice-Chairman Member
Mr. Hossain Mehmood Nominated Director Member
Mr. Rajibul Huq Chowdhury Director Member

Secretary: Mr. Md. Kafi Khan

This committee was reconstituted on 22 February, 2021

Audit Committee
Name Status with Bank Status with Committee

Mr. Farooq Sobhan Independent Director Convener

Mrs. Syeda Shaireen Aziz Director Member
Mr. Rafiqul Islam Khan Director Member
Mrs. Tabassum Kaiser Director Member
Dr. Salim Mahmud Independent Director Member

Secretary: Mr. Md. Kafi Khan

This committee was reconstituted on 27 October, 2020

Board’s Risk Management Committee

Name Status with Bank Status with Committee

Mr. Hossain Khaled Vice-Chairman Convener

Mr. Hossain Mehmood Nominated Director Member
Mrs. Tabassum Kaiser Director Member
Ms. Rebecca Brosnan Nominated Director Member
Mr. Rajibul Huq Chowdhury Director Member

Secretary: Mr. Md. Kafi Khan

The Boards Risk Management Committee has been reconstituted on 22 February, 2021 and included Mrs. Tabassum Kaiser &
Ms. Rebecca brosnan as member of the Committee.

Shariah Supervisory Committee Executive Risk Management Committee (ERMC)

The ERMC provides oversight and supervision with
Chairman regards to the identifying, measuring and managing
Mr. Md. Anwar Hossain Molla bank’s existing and potential risks through detailed risk
analysis. Assistance is extended to review, guide and
Members manage various risks resulting from the implementation
Prof. Maulana Muhammad Salahuddin of strategies and action plans recommended by the
Principal Maulana Zainul Abedin Board’s Risk Management Committee and Board of
Dr. ANM Rafiqur Rahman Madani Directors
Mr. Md. Fariduddin Ahmed
Advocate Muhammad Nazrul Islam

44 Annual Report 2020

Combating corruption
Committee on Morals, Ethics and Integrity

As part of the effort of combating corruption, In line with the implementation of NIS, the bank has
promoting integrity and establishing good established a ‘Committee on Morals, Ethics and
governance, the Government of Bangladesh has Integrity’ to implement the NIS directives within the
adopted a ‘Commitment for Golden Bengal: National bank. Additionally, the committee is mandated with
Integrity Strategy (NIS) of Bangladesh’. A high-level the task of identifying ways to protect the culture of
‘National Integrity Advisory Council’ has been loan defaults and promote consciousness with a view
constituted for its implementation. Bangladesh Bank to reduce frauds, forgeries, irregularities and other
is entrusted with the responsibility of implementing sources of corruption across the bank.
the National Integrity Strategy (NIS) in the country’s
financial sector.

Ownership composition
As of 31 December, 2020, shareholding position of The City Bank Limited by the Directors, General Public and
Financial Institutions is presented below:

Status
Composition
No. of shares Percentage (%) of total shares
Directors & Sponsors 337,358,737 33.19%
General Public 398,872,265 39.24%
Financial Institutions 236,700,569 23.29%
Foreign Shareholders 43,455,090 4.28%
Total 1,016,386,661 100.00%

Capital: 31 December, 2020 Corporate information

Authorised Capital Chief Financial Officer
Mr. Md. Mahbubur Rahman
BDT 15,000,000,000 Head of Internal Control & Compliance
Mr. A K M Saif Ullah Kowchar
(1,500,000,000 ordinary shares
of BDT 10 each) Auditors
Rahman Rahman Huq (KPMG in Bangladesh)
Chartered Accountants
Paid-up capital
Tax Consultant
BDT 10,163,866,610 ACNABIN
Chartered Accountants
(1,016,386,661 ordinary shares
Legal Retainer
of BDT 10 each)
Law Valley
Listing dates Bangladesh Bank
- Dhaka Stock Exchange Ltd.: 3 February, 1987 License Number- BCD(D)200/37-261
- Chittagong Stock Exchange Ltd.: 27 December, 1995 dated 23 March, 1983
Registered Office/ Head Office
Listing 136 Bir Uttam Mir Shawkat Sarak
Ordinary shares of the bank are listed on both Dhaka (Gulshan Avenue), Gulshan-2
Stock Exchange Limited and Chittagong Stock Dhaka-1212, Bangladesh
Exchange Limited. Shares of City Bank are categorised Telephone No: 880-2-58813483,
as ‘A’ on the stock exchanges and the stock symbol is 880-2-58814375 and 880-2-58813126
CITYBANK. Fax: 880-2-9884446, SWIFT: CIBLBDDH
E-mail: [email protected]
Accounting year-end: 31 December, 2020 Web: www.thecitybank.com

45
 The change makers

We salute the founding fathers of this institution. It was

the visionary entrepreneurship of 12 young businessmen
who braved the uncertainties and risks with courage and
zeal in order to set up the country’s first private
commercial bank back in 1983. Today, we continue to
draw inspiration from their deep spirit of enterprise and
their relentless focus on excellence. They are (from left to
right): Mr. Monowar Ali, Mr. Ibrahim Mia (late), Mr. Abdul
Hadi (late), Mr. M.A. Hashem (late), Mr. Anwar Hossain, Mr.
Abdul Barik Choudhury (late), Mr. Deen Mohammad, Mr.
A.B.M. Feroz, Mr. Md. Ali Hossain, Mr. Azizul Haque
Chowdhury, Mr. N.A. Chowdhury (late) and Mr. A.K. Mehmood.

City Bank is among the five largest

private sector banks in Bangladesh with
a market capitalisation of BDT 25,206 mn
(as on 31 December, 2020).

46 Annual Report 2020

Our Directors’ profile
At City Bank, we have a committed, balanced and diverse Board
of Directors comprising 12 members, of which 2 are Independent
Directors and 4 are female Directors.

During the course of the year 2020, the Board discussed a wide
range of issues, including responsible banking, sustainability, human
resources and culture, regulatory compliance and non-performing
loan provisions and recovery, among others.

Aziz Al Kaiser Hossain Mehmood

Chairman Director
Appointed to the City Bank Board on 23 August, 1999 Appointed to the City Bank Board on 23 March, 2002
Aziz Al Kaiser is a prominent entrepreneur of Bangladesh. A prominent entrepreneur, Hossain Mehmood is the
A graduate from U.S. International University and Watford, Representative Director of A-One Polymer Ltd. He has
London, UK, Kaiser is involved in a diverse range of successfully set up and executed a number of industrial
businesses, including shipping, food, telecoms, ICT, undertakings and has also served as the Vice Chairman
banking, leasing and real estate, among others. He is also of the Board of Directors of City Bank. Mehmood is also a
the Managing Director and Director in a number of member of the Executive Committee of the Bank and is
Partex Star Group Companies. A member of the Sponsor Director of a number of companies of Anwar
Executive Committee of the Board of Directors of City Group of Industries. He is also the Chairman of A-One
Bank, Kaiser is the chairman of City Bank’s subsidiary in Polymer Ltd., Anwar Ispat Ltd and AG Automobiles Ltd. and
Malaysia – CBL Money Transfer Sdn. Bhd. He takes keen the Managing Director of Hossain Dyeing & Printing Mills
interest in cricket and he was a Director of Bangladesh Ltd, Mehmood Industries (Pvt.) Ltd, Anwar Silk Mills Ltd,
Cricket Board and also Chairman of the Marketing & Anwar Galvanizing Ltd and Anwar Pulp Ltd. He is Chairman
Commercial Committee of the Bangladesh Cricket Board. of the Bangladesh Terry Towel and Linen Manufacturer &
Exporters Association, Vice Chairman of BD Securities Ltd
and Vice President of Bangladesh Textile Mills Association.
Hossain Khaled
Vice Chairman
Appointed to the City Bank Board on 09 November, 2000 Tabassum Kaiser
Hossain Khaled is a versatile new-age businessperson. He Director
obtained his BBA in Accounting from the University of Appointed to the City Bank Board 6 March, 2002
Toledo, Ohio, and MBA from International Banking from
Tabassum Kaiser is an accomplished woman entrepreneur
A&M University (TAMU), Texas, USA. Khaled joined the
and philanthropist. Through her rich and varied
family conglomerate of Anwar Group of Industries in the
experience in business, she is the Chairperson of Partex
year 2000. Since then, he has helmed many group
Agro Limited, as well as a Director of Partex Star Group and
company portfolios and also achieved several milestones,
holds board-member positions at many other institutions.
including becoming the youngest President of Dhaka
She was also the former Director of Janata Insurance and
Chamber of Commerce & Industry and also Co-Chairman
GSP Finance. Tabassum Kaiser is a strong supporter of
of Bangladesh Better Business Forum. In fact, he was
local and international humanitarian causes, and is actively
appointed as the President of Dhaka Chamber of
involved in raising awareness on social welfare, community
Commerce & Industry two times. Khaled is also a Director
development, and environmental issues. She holds an
in a number of companies of Anwar Group. At City Bank,
MBA degree from North South University, Bangladesh,
he is a member of the Executive Committee of the Board
where she is an active member of the North South
of Directors and also Convener of the Bank’s Risk
University Alumni. She is currently pursuing her Doctor of
Management Committee. He is also the Chairman of City
Business Administration (DBA) degree in Banking &
Brokerage Ltd. and President of Entrepreneurs’
Finance from University of Dhaka.
Organization (EO) Bangladesh.

47
 Board of Directors
City Bank
City Bank’s Board is lit up by a group of 12 individuals
who are driven by self-motivation. The Board is committed
to helping the bank achieve long-term success. The Board 15 Mix of experience
provides direction to the management by setting the Work experience of the directors
Meetings of the Board of ranges from 15 to 50 years. A great
strategy and overseeing its implementation. Directors held in 2020 mix of youth and experience.
.

Aziz Al Kaiser, Chairman Hossain Khaled, Vice Chairman Savera H. Mahmood, Director Rajibul Huq Chowdhury, Director

Hossain Mehmood, Director Tabassum Kaiser, Director Rebecca Brosnan, IFC Nominated Director Farooq Sobhan, Independent Director

Rafiqul Islam Khan, Director Syeda Shaireen Aziz, Director Dr. Salim Mahmud, Independent Director Mashrur Arefin, Managing Director & CEO

48 Annual Report 2020 49

 Rafiqul Islam Khan Rebecca is an alumna of the General Management Program
Director at Harvard Business School. She holds an MA in History of
Appointed to the City Bank Board on 25 November, 2000 International Relations from London School of Economics,
and a BA in Economics from Trinity College, USA.
A renowned textile merchant of Bangladesh, Rafiqul Islam
Khan is the Chairman of Pakiza Group of Industries. Khan is
also Director of Phoenix Securities Ltd, Phoenix Insurance Farooq Sobhan
Co. Ltd and Phoenix Medical Center Ltd. Independent Director
Appointed to the City Bank Board on 1 June, 2016
Syeda Shaireen Aziz Ambassador Farooq Sobhan is the President and CEO of
Director Bangladesh Enterprise Institute (BEI). He was Executive
Appointed to the City Bank Board on 30 April, 2012 Chairman of Board of Investment (BOI) and Special
Envoy to the Prime Minister from 1997 to 1999 and also
Syeda Shaireen Aziz also serves as a Director in various Foreign Secretary from 1995 to 1997. He has also served
companies, including Partex Corp. Ltd, Sattar Glass as Ambassador/High Commissioner to India, China,
Factory Ltd, etc. She completed her graduation in Malaysia and the United Nations. He is the Chairman of
Business Administration. the Board of Trustees of the independent Centre for
Corporate Social Responsibility (CSR). He played a pivotal
Savera H. Mahmood role in the establishment of the SME Foundation and
Director served on its Board during the period of 2008-09.
Appointed to the City Bank Board on 21 July, 2016
Savera H. Mahmood is also a Director of Partex Star Group and Dr. Salim Mahmud
the Managing Director of Partex Agro Ltd. She holds a Master’s Independent Director
Degree in Social Studies from University of Chittagong. Appointed to the City Bank Board on 14 June, 2020
Dr. Salim Mahmud is an educationist teaching law as Professor
Rajibul Huq Chowdhury in University of Dhaka, as well as an international energy
Director expert. Dr. Mahmud is the member of South Asia Regional
Appointed to the City Bank Board on 18 October, 2011 Initiative/Energy Integration (SARI/EI) for South Asia
Regional Electricity Markets Development (Task Force 3).
Rajibul Huq Chowdhury is a prominent business entrepreneur
Till 2019, he was Chairman of Bangladesh Energy
of Bangladesh. He is involved in a diverse range of business
Regulatory Commission (BERC) Tribunal and played his
sectors, including chemicals, garments, knitting and dyeing,
role as a Commissioner in BERC during 2009-16. With vast
printing and machinery. Chowdhury is a Proprietor, Managing
experiencing in teaching in different universities, Dr.
Director and Director of various companies of Aziz Group. He
Mahmud has also authored a number of international
is also a Director in ASM Chemical Industries Ltd, a renowned
publications. He has also completed various courses and
basic chemicals production unit in the country. He patronises
trainings on energy issues outside his academic and
many educational institutions and is involved with various
research arena. Dr. Mahmud was a Member of Bangladesh
social forums as well.
Bar Council Legal Education Committee (2009-12) and has
served as an independent director (2013-19) in a first
Rebecca Brosnan generation private commercial bank in Bangladesh.
IFC Nominated Director
Appointed to the City Bank Board on 2 November, 2020
Mashrur Arefin
Rebecca Brosnan was appointed on the City Bank Board as Managing Director & CEO
Nominated Director of IFC (International Finance Appointed to the City Bank Board on 17 January, 2019
Corporation). IFC, a member of the World Bank Group, has
been holding a 4.95% share of the bank since 2017. Rebecca Starting his career in 1995 with ANZ Grindlays Bank,
is the Chief Operating Officer of Mother’s Choice, a leading Bangladesh, as a Management Trainee, Mashrur Arefin
NGO dedicated to serving children without families and worked in several divisions before being finally promoted
pregnant teenagers in Hong Kong. She is responsible for as Head of Consumer Finance, Bangladesh. He also
organisation-wide strategic development, financial worked in Standard Chartered Bank, Qatar, as Head of
management and impact measurement and runs seven Credit & Collections, Consumer Banking. Arefin has the
front-line business verticals in the organisation. Prior to joining experience of working at ANZ Banking Group in
Mother’s Choice in 2016, she served in several senior roles at Melbourne, Australia. Later, he held the position of
the Hong Kong Exchanges and Clearing Limited (HKEx), Director & Head of Retail Banking for American Express
including as its Managing Director - Head of Product Bank, Bangladesh. He was also engaged with Citibank
Development, and Head of Asia Commodities. Prior to joining N.A. for a brief period as its Head of Retail/Priority
HKEx in 2010, Rebecca led the execution and origination of Banking, Bangladesh. The last position he held was Head
equity, debt, equity-linked and M&A transactions across Asia of Consumer Banking at Eastern Bank Ltd, before joining
in the Investment Banking Division of Merrill Lynch. City Bank in the year 2007.

50 Annual Report 2020

City Bank organogram

Mashrur Arefin
MD & CEO

Md. Ashanur Rahman

Chief Economist & Country
Md. Kafi Khan Business Manager
Company Secretary

Sheikh Mohammad Mohammad

Maroof Mahbubur Mahia Juned Zabid Iqbal Arup Haider Zafrul Hasan
AMD, Head of Rahman DMD & Chief Chief Risk Officer Head of Retail Head of Digital
Wholesale Banking DMD & Chief Operating Officer & CAMLCO Banking Financial
and Head of Small & Financial Officer Services
Micro Finance

Corporate Branch Credit Risk

Banking Finance Operations Branches Cards
Management

Commercial General Admin Service Credit & Citygem Priority Internet Banking
Banking Delivery Collection Banking (Citytouch
Operations)
Procurement Treasury Special Asset Employee
Offshore Banking
Banking Operation Management
Agent Banking

Card Alternative
Risk Delivery
Supply Chain Operation Management Planning &
Finance Channel (ADC) Business
Development
Financial Treasury Trade Support Legal Customer
Institutions Experience
Digital Finance
Operational Service
Cash Medium Project Credit City Alo
Admin Technology
Management & Business and Support Women Banking
custodial services
Central Fraud Risk Products,
Structured Internal Control Clearing Management Segments & Direct
Finance Unit & Compliance Acquisition
Money
Corporate Human Laundering & Retail Process
Strategic Business Resources Information Terrorist Financing Re-engineering
Management Technology Prevention & Projects

Small & Micro

Finance Business Islamic Banking
Brand &
& Two Wheeler Communications
Business and Corporate Affairs Business
Intelligence Unit
Trade
Services PR and Media

51
 Management
23
committee
Our management committee is focused on protecting
the health and wellbeing of our colleagues and supporting our
customers, clients and other stakeholders, while maintaining
the financial and operational integrity of City Bank.

Mesbaul Asif Siddiqui Md. Zafrul Hasan A K M Saif Ullah Kowchar Md. Arup Haider
Head of Credit Risk Management Head of Digital Financial Services Head of Internal Control Head of Retail Banking
& Compliance

Mashrur Arefin Sheikh Mohammad Maroof Md. Mahbubur Rahman Mohammed Anisur Rahman Nishat Anwar Kamrul Mehedi Nurul Azam Mozumder
Managing Director & CEO Additional Managing Director Deputy Managing Director & CFO Head of Information Technology Head of Human Resources Head of Small Business Head of Medium Business

Mahia Juned Nurullah Chaudhury Zabid Iqbal Faruk Ahmed Md. Ashanur Rahman Md. Safiul Amin Md. Kafi Khan Muhammad Shah Alam
Deputy Managing Director & COO Deputy Managing Director & Chief Risk Officer & Chief Anti Money Head of Trade Services Chief Economist & Country Head of Branches Company Secretary Head of Treasury
Head of Corporate Banking Laundering Compliance Officer Business Manager

52 Annual Report 2020 53

 Our leadership profile
Mashrur Arefin Md. Mahbubur Rahman
Managing Director & CEO Deputy Managing Director & Chief Financial Officer
MA, University of Dhaka Fellow Chartered Accountant, The Institute of Chartered
MBA, Victoria University, Melbourne, Australia Accountants of Bangladesh (ICAB)
Mashrur Arefin started his career in 1995 with ANZ Md. Mahbubur Rahman has rich experience of working in
Grindlays Bank, Bangladesh, as a Management Trainee. leadership roles in various important positions in multinational,
The last position he held at ANZ was as Head of local corporate and developmental organisations.
Consumer Finance, Bangladesh. He also worked in Before joining City Bank, Mahbubur worked for World
Standard Chartered Bank, Qatar and ANZ Banking Group Bank as Financial Management Specialist. He has also
in Melbourne, Australia. Later, he held the position of worked in Leads Corporation Ltd. as Chief Financial
Director for American Express Bank, Bangladesh and Officer and in Grameenphone for five years, where he
also worked in Citibank N.A. for a brief period as its served in various capacities, including Additional General
Resident VP, Bangladesh. The last position he held was of Manager and Head of Revenue.
Head of Consumer Banking at Eastern Bank Ltd, before
He represents The City Bank Limited as one of the
joining City Bank in 2007. Arefin's diverse experience at
nominated Directors on the Board of IDLC Finance
City Bank is showcased in the fact that he worked as
Limited, City Bank Capital Resources Limited and City
Chief Operating Officer (COO) of the Bank and also
Brokerage Limited.
served as its Business Head of SME, Retail Banking,
Cards, Agent Banking and Digital Financial Services
(DFS). From 2007 to 2018, he was also the Chief Mahia Juned
Communications Officer (CCO) of the Bank. Arefin was Deputy Managing Director & Chief Operating Officer
appointed as MD & CEO of the Bank in January 2019. BBA, Assumption University, Bangkok, Thailand

Mahia Juned started her career in 1994 with Citibank,

Sheikh Mohammad Maroof N.A., Bangladesh. The last position she held was as
Additional Managing Director, Head of Wholesale Resident Vice President, leading most of the operations
Banking & Head of SME – Small & Micro Finance teams. She joined City Bank in 2007 as Head of Project
Master of Commerce in Finance, University of Dhaka Management and was subsequently promoted to the
position of Chief Operating Officer in 2019.
Sheikh Mohammad Maroof brings with him over 25 years
She is the first female Deputy Managing Director in the
of experiences and expertise in Corporate, Treasury, SME,
Bank’s history. Mahia represents The City Bank Limited as
Green & Infrastructure Financing. He has played an
a nominated Director on the Board and the Board’s Audit
instrumental role in bringing forth derivative products,
Committee of IDLC Finance Limited.
development of foreign exchange market, development
of money market, merger & acquisition, advisory,
structured finance transactions and development of Nurullah Chaudhury
offshore banking business. Deputy Managing Director & Head of Corporate Banking
Bachelor in Finance, USA
Maroof joined City Bank in June 2007 and in just about 13
years under his leadership, City Bank has established Nurullah Chaudhury joined City Bank as Unit Head of
strong relationships with most of the major multilateral Corporate Banking in 2008, and was subsequently
agencies, such as IFC, ADB, DEG, OeEB, NORFUND, FMO, promoted as Cluster Head of RMG and textiles. Prior to
IDB, CDC, GCPF and many of the major ECA Finance City Bank, in his two-decade long career in the banking
agencies. Previously, Maroof also served Eastern Bank and industry, he served Shamil Bank of Bahrain and Bank Al
American Express. Falah in various divisions, including Corporate Banking.
He is currently heading the Corporate Banking Division of
Maroof started his career with American Express as a the Bank. He also represents The City Bank Limited as one
Management Trainee in 1995 after completing his of the nominated directors in the Board of Directors of
post-graduation in Finance from University of Dhaka. IDLC Finance Limited.

54 Annual Report 2020

Zabid Iqbal Md. Zafrul Hasan
Head of Digital Financial Services
Chief Risk Officer & Chief Anti Money Master in Communication Management, University of
Laundering Compliance Officer Strathclyde, Glasgow, UK
MBA (International Business), Banaras Hindu University,
MBA, IBA, University of Dhaka Varanasi, India
Chartered Financial Analyst (CFA), CFA Institute, USA
Zafrul Hasan embarked upon his career in the year 1995 as
Zabid Iqbal started his career in 1998 with AB Bank as a an Area Manager in Sheba Telecom, now Banglalink. The
Probationary Officer. He held various senior roles at HSBC last position he held there was Manager of Regional
Bank in Bangladesh and Hong Kong, including Head of Operation & Credit Control before leaving the company as a
Wholesale Credit–Bangladesh and Senior Credit result of being awarded a Chevening Scholarship Sponsored
Approver- Hong Kong, overseeing large credit approvals by Vodafone in 2004, which allowed him to leave
of a few Asia-Pacific countries. He has also worked for Bangladesh to pursue his studies. After returning from the
Commercial Bank of Ceylon – Bangladesh, American UK, he joined Pacific Bangladesh Telecom Ltd and left the
Express Bank and Dhaka Bank in senior roles in company as General Manager of Product Development.
Wholesale Banking, Risk, Credit and Credit Administration. Later, he moved to Robi Axiata and through the span of
He was the Deputy CEO of Kathmandu-based Nepal eight years, worked in various positions in Marketing, Sales,
Bangladesh Bank, before joining City Bank in 2019. Supply Chain, Finance and Technology. He spearheaded
many programs and campaigns, applying them for the first
Faruk Ahmed time in Bangladesh by introducing a number of products &
Head of Trade Services services, customer offerings and voice and data plans to the
Masters in Marketing, University of Dhaka market. In 2015, he joined bKash as Head of Strategy and
Business Development. He led the Commercial Division of
Faruk Ahmed started his career in IFIC Bank in 1993 after bKash, before moving out to Enterprise Project
completing his studies from the University of Dhaka. In his Management and then left bKash to continue his career
career, he worked in Dhaka Bank and City Bank, and the last with City Bank in the year 2019. Throughout his career, Zafrul
position he held was in a renowned local corporate prior to has worked in and acclimatised to various professional
re-joining City Bank as the Head of Trade Services Division. environments all the while maintaining his consistent work
He has 28-years of career experience with specialist ethic and standards.
understanding of Branch Banking operations, Offshore
Banking Unit (OBU) operations and Trade operations. A K M Saif Ullah Kowchar
Head of Internal Control & Compliance
Mesbaul Asif Siddiqui Fellow Chartered Accountant, the Institute of Chartered
Head of Credit Risk Management Accountants of Bangladesh (ICAB)
Masters in Bank Management, Bangladesh Institute of A K M Saif Ullah Kowchar, FCA, has more than 20 years of
Bank Management (BIBM) multi-functional and multi-geographic experience,
MBA in Finance, University of Dhaka working in different organisations like Citibank N.A.
(Bangladesh and the Philippines), Pacific BD Telecom Ltd
Mesbaul Asif Siddique started his career in Eastern Bank as and KPMG (Bangladesh and Qatar) prior to joining City
a Management Trainee in 1999 and worked in different Bank as Head of Internal Control & Compliance.
capacities. The last position he held was of AVP & Senior
Relationship Manager under Corporate Banking for almost
6 years. Subsequently, he joined the Commercial Bank of Md. Arup Haider
Ceylon for 2 years. Later, he worked for HSBC Bangladesh Head of Retail Banking
and HSBC Singapore for 9 years in various positions in MBA in Finance, IBA, University of Dhaka
Wholesale Banking. Mesbaul joined City Bank in 2015 as
EVP & Cluster Head – Manufacturing Clients, Corporate Md. Arup Haider started his career as a Management
Banking. Currently, he is heading Credit Risk Management Trainee Officer at Prime Bank Ltd in 2003. He then worked
and Sustainable Finance functions of the Bank. Mesbaul is in BRAC Bank Ltd. for 7 years. The last position he held at
ICA (International Compliance Association) certified in “Anti BRAC Bank was as the Head of SME Underwriting. He has
Money Laundering and Sanctions Compliance”, in also worked as Head of Consumer Credit Policy in
association with The University of Manchester. Standard Chartered Bank, before joining City Bank as
Head of Credit and Collection in 2016. He was
subsequently appointed as Head of Retail Banking in 2018.

55
 Mohammed Anisur Rahman and management of non-performing loans, with special
Head of Information Technology focus on strategy implementation and Credit Risk and
Recovery. In 2017, he joined City Bank as Head of Small &
Microsoft Certified Technology Specialist (MCTS) Information Micro Finance Business. Kamrul secured his MBA from a
Technology Infrastructure Library (ITIL) Certified private university and a Master's Degree in Defense
Advanced Technology Professional, Edutasia, Denmark Strategy. He also holds a Graduate degree in Banking
Technology Professional, Grameen Star Education Leadership from Presencing Institute, CoLab, MIT, USA.
Masters in Business Studies, Dhaka University

Mohammed Anisur Rahman, having over 24 years of

experience, started his career with Smart Technologies as
Nurul Azam Mozumder
Head of Medium Business
an Analyst, IT & Business Development. He then worked
with BEXIMCO and afterwards, joined TechnoVista Limited Master of Science, University of Dhaka
Master in Business Studies, University of Dhaka
and appointed in several roles to lead Software
Engineering and Business Analyst team over 6 years with Nurul Azam Mozumder joined City Bank in 1999 as
the last position as Head of Business Analyst & Quality Management Trainee. During the last 21 years he held a
Control. He worked in BRAC Bank in multiple domains number of roles in the Bank, such as Business
under Information Technology Division that included Development Manager, Branch Manager of Principal
Alternative Delivery Channels, Core Banking Systems, Branch, Cluster Head of Branches & Acting Head of
Infrastructure Management, Information Security, Branches. He was subsequently appointed as the Head
Business Process Reengineering, Project Management, of Medium Business in 2018 and played the key role in
Enterprise Systems Management and Software the restructuring of the SME-M Division.
Development. Anis also worked in Mercantile Bank
Limited as Deputy Head of Information Technology
Division alongside serving HSBC Bangladesh as Md. Ashanur Rahman
Applications & Development Head and Acting CIO (Chief Chief Economist & Country Business Manager
Information Officer) in many occasions prior to joining City Masters in Bank Management, BIBM
Bank as Executive Vice President (EVP) & Head of Bachelors in Statistics, Jahangirnagar University
Information Technology in November 2018.
Md. Ashanur Rahman started his banking career as a
Management Trainee with Mercantile Bank in 2004. He
Nishat Anwar
worked there in different areas, including Retail, Credit,
Head of Human Resources
Research & Planning. In 2008, he joined The City Bank
MBA, North South University Limited and took charge of different areas of Risk
Post Graduate Diploma in Personnel Management, Management, including Credit, Market & Operational
Bangladesh Institute of Management Risks. He joined Royal Bank of Canada (RBC) as a retail
banker where he gained significant experience in retail
Nishat Anwar started her career in 1997 with DHL and business banking and in the area of customer
Express, Bangladesh as an HR Executive. She possesses services. He has more than 16 years of experience in
several years of HR business partnering experience with banking, both in Bangladesh and aboard.
global organisations, including Standard Chartered Bank,
Bangladesh. She has also worked in Banglalink as Senior
Manager in Employee Relations, Recruitment and Md. Safiul Amin
Training. The last position she held was of HR Specialist in Head of Branches
a leading Retail chain in Canada before joining City Bank
M.Com, University of Dhaka
as the Head of HR in 2018.
Masters in Business Administration
ACBA, IBA, University of Dhaka
Kamrul Mehedi
Head of Small Business Md. Safiul Amin started his career as a Lecturer of
Management Department of a Govt. University College
Masters in Business Administration
Masters in Defense Strategy upon completion of his studies from the University of
Dhaka. Later, he started his banking career in Sonali Bank
Kamrul Mehedi started his banking career at BRAC Bank as a Financial Analyst and moved to City Bank in 2003 in
Ltd. in 2011 after a brief stint with Bangladesh Army. He the Project and Corporate Finance Department, which
worked in the SME Division and looked after SME funding was later renamed as Credit Risk Management Division

56 Annual Report 2020

(CRM). In 2012, he moved to Prime Bank in the Corporate Muhammed Shah Alam
Banking Division. Amin re-joined City Bank in 2016 in Retail Head of Treasury
Banking Division as Cluster Head, and in 2018 he was MBA, University of Dhaka
assigned in his present role of as the Head of Branches. MSc in Statistics

Muhammed Shah Alam started his career in Arab

Md. Kafi Khan Bangladesh Bank as a probationary officer and gradually
Company Secretary moved to Treasury. He joined City Bank in 2007 in the
Doctor of Business Administration (Course Completed), Treasury department and then moved to Eastern Bank in
IBA, University of Dhaka the same department. Alam re-joined City Bank in 2013,
Post graduate in Human Resources Management and in 2019, promoted as the Head of Treasury. Besides
Bachelors and Masters in Accounting, University of Dhaka being a treasury and market risk expert, he is keen on
Bachelor of Law staying updated on monetary management, fiscal
Md. Kafi Khan started his career in 1998 at Monno Fabrics management and macroeconomic output of the country.
as Manager - MIS and Support Associate to a Management
Consultant. He possesses more than 23 years of work
experience in various sectors, encompassing areas such
as human resources, accounts, costing & budgeting, cost
audit & financial audit, secretarial audit, planning and
commercial, legal affairs and company secretarial
practices, etc. The last position he held was as Company
Secretary of Apollo Ispat and Group of Companies. He
joined The City Bank Ltd. as Company Secretary in 2004.
He holds Fellow membership of the Institute of Personnel
Management of Bangladesh (IPM), The Institute of
Certified General Accountants of Bangladesh (ICGAB) and
the Institute of Internal Auditors of Bangladesh (IIAB).

57
 Extended
management
committee
Despite the onset of the coronavirus
pandemic, we were able to rapidly
re-pivot our business to the new
normal with the result that we were
able to secure our long-term
investment case thanks to our
specialist team of extended
management committee
members.

>> From Left to Right

BOTTOM ROW Parul Das Sayeeda Sajed Md. Ariful Bari Tahsin Haq Md. Ashanur Rahman Mohammad Jahangir Alam Fahria Huque Nasrin Akter
Vice Chairperson, EMC Head of Customer Cluster Head - Head of Cash Management Chairman, EMC, Chief Cluster Head – Corporate Head of Citygem Regional Head of
Head of Finance Experience Manufacturing & Custodial Cluster Economist & Country Banking and Head of Priority Banking Branches, Dhaka 1
Business Manager Offshore Banking

2ND ROW Farhad Aziz Md. Sajid Mahbub Ahmed Md. Shafiul Alam Mohammed Hasan Uddin Ahmed Md. Mustafizur Rahman Not present in this picture
Head of General Admin I.H. Chowdhury Chowdhury Head of Credit Minhazur Rahman Head of Employee Banking Head of Alternate Delivery
Head of Foreign Exchange Head of Procurement Administration Head Head of Commercial Channels Abul Bashar Mohammad
& SME Credit Risk Nazrul Islam
Regional Head, Medium Business
3RD ROW Md. Arif Bin Idrish Mohammad Waliullah Priyatosh Gupta Subir Kumar Kundu Md. Shaheen Ferdous Khaled Hossain Md. Shoyeb Al Rashid
Head of Islamic Banking Head of Credit & Collection, Head of Imports, TSD Head of Products Head of Project Head of Operations Head of Special Asset Syed Hasnain Mamun
Retail & Small Business & Segments Management Office & Project Support Management Head of Organisation
Development and HR Strategy
TOP ROW Shahriar Jamil Khan Mohammad Mahbub Mohammad Rakib Mirza Golam Yeahia Mohammad Hasan Md. Lablu Masud Al Faruque Ummay Habiba Sharmin
Head of Brand & Sobhan Uddin Ahammad Head of PR & Media Mahmud Gony Head of HR Operations Cluster Head - Head of Legal
Communications and Head of Agent Banking Head of Business Finance Head of Commercial RMG & Textile
Corporate Affairs Banking Arifur Rahman
Head of Cards

58 Annual Report 2020 59

 Chief Financial Officer’s Report
In 2020, against the backdrop of the pandemic, our commitment
to our stakeholders was even stronger, with our priority to safeguard
the health and safety of our employees by implementing measures
such as redefining our way of working and gradual return to the
workplaces amid de-escalation of the lockdown measures.
Md. Mahbubur Rahman
DMD & Chief Financial Officer

The blueprint was, however, completely re-set when COVID 19

spread across the world, capitulating the global economy with
drastic impact on the lives and livelihood of people and
businesses everywhere around the world. As movement
restrictions caused a rapid deceleration of economic activity,
policy rates started to fall hitting record lows.
In order to continue supporting our customer and
stakeholder ecosystem, we ensured that we were doing
so from a position of strength. Thus, we actively managed
our liquidity and capital positions to keep funding
accessible to customers, while closely monitoring any
potential build-up of asset quality slippages that could
place pressure on our capital levels. We also ensured
compliance with all regulations, thus meeting the
authority’s mandate of relief/stimulus transference to
intended beneficiaries. This diligence translated into a
sound performance in 2020 with net profit growth of 62%,
despite the unprecedented challenges of 2020. It is
indeed a testament of the bank’s resilience and
determination to perform against all odds.

Overview
City Bank is one of the largest banks in Bangladesh. As of
31 December, 2020, we had BDT 382,926 mn of assets,
BDT 268,202 mn of loans & advances and BDT 254,781
mn of deposits. Our market capitalisation had reached
Performing with purpose BDT 25,206 mn by the end of the year.
City Bank began the year 2020 with a renewed sense of As a longstanding bank of repute with deep bonds of
optimism, inspired by the consistent high GDP growth the customer and depositor trust, we engage in all types of
country, improvement purchasing power of individuals typical banking activities, operations and services. Our scale,
and huge investment in the infrastructure development business model and diversification accelerate our objective to
of the country, which set forth the template for plans and be the best digital financial services platform, acting
targets for the year. responsibly and earning the lasting loyalty of our
stakeholders.

60 Annual Report 2020

Summarised income statement BDT mn
Metric 2020 2019 Absolute change
Interest income 23,134 26,819 (3,685)
Interest expense 14,771 15,987 1,216
Net interest income 8,363 10,832 (2,469)
Investment income 3,438 2,086 1,352
Commission, exchange, brokerage income 3,355 3,381 26
Other income 1,581 1,986 405
Total operating expenses 9,697 9,998 300
Operating profit 7,040 8,287 (1,247)
Total provisions 644 2,556 1,912
Profit before tax 6,396 5,731 664
Profit after tax 4,012 2,472 1,541
Earnings per share (BDT) 3.9 2.4 1.5
**Standalone FS (all metrics are in BDT mn unless otherwise stated)

In 2020, against the backdrop of the pandemic, our along with additional savings measures adopted since
commitment to our stakeholders was even stronger, the start of the crisis. We remained one of the most
with our priority to safeguard the health and safety of efficient banks in the country with a cost-to-income
our employees by implementing measures such as ratio of 57.9%. Yet, we expect to further improve our
redefining our way of working and gradual return to operational capacity with efficient cost
the workplaces amid de-escalation of the lockdown management.
measures. Further, for our customers, not only did we
channel government stimulus to extend relief amidst • Lower loan-loss provisions as per regulatory
the ill-effects of the pandemic we also showed guidelines gave strong impetus to net profit
solidarity with our customers by providing them with growth. But the bank ended the year with extra
all necessary financial and financing support. We also provision which has resulted in higher NPL
continued to build trust with our investor/shareholder coverage ratio from 78% to 95% to strengthen the
community by keeping them up-to-date with regards balance sheet to withstand any unforeseen
to key material developments, as well as our capital, situation in future.
NPL positions, strong liquidity and efficient cost • Customer loans and advances increased by 8.6%
management, etc. YoY. However, overall loan portfolio remained
Despite operating in a challenging business relatively balanced between Corporate,
Commercial and SME segments.
environment in 2020, City Bank’s business and profit
performance remained good, mainly on account of
strong asset quality, relaxed provisioning norms and • Customer deposits grew by 3.3% during the year.
prudent cost management efforts. While growing our deposit book, we have focused
on CASA acquisition and eventually by end of 2020
Key highlights, 2020 our CASA ratio improved to 41.5% from 36.2% in
2019.
• City Bank’s core performance for the year was
affected by the health crisis caused by the spread Capital management strategies
of COVID-19, which is manifest in a weaker
economic environment, and recalibration of City Bank’s capital management approach is guided
deposit and lending rates as per ceiling fixed via by key capital management objectives as articulated in
regulatory guidelines its capital management framework. The bank’s capital
• Net interest income declined during the year from position, capital mix and capital allocation are
lower activity and a more cautious stance adopted continuously reviewed, taking into consideration
on lending. strategic and organisational requirements as well as
regulatory and business environment in which the
• Cost reduction which encompasses deposit cost to
bank operates. During the year 2020, considering the
all types of OPEX and CAPEX was achieved
substantive adversity unleashed by the coronavirus
through our higher brand value and
pandemic, we ensured prudential capital
trustworthiness among our depositors and the
management with a prioritised focus on safety.
optimisation of plans implemented in recent years,

61
 As a measure to support our balance sheet growth, Overall despite lingering uncertainties, in geopolitics,
City Bank has completed issuance of the first ever financial regulation and development of the pandemic,
Basel-III compliant, Additional Tier-1, Contingent- City Bank begun 2021 with a comfortable liquidity
convertible, Perpetual Bond in Bangladesh. position and a positive funding outlook for the year.
This bond will optimise the bank’s core capital We expect a consistent increase in lending in all our
structure, which will support sustainable growth in segments with high growth in new segments like small
coming years. This debt instrument is the door-opener and micro finance, women segment, supply chain,
to a new era for banks in Bangladesh in terms of nano lending and retail, as well as a good performance
recapitalisation. City Bank expresses sincere gratitude in deposits with low cost. Going forward, we will focus
to all stakeholders whose contributions made this on optimising liquidity to maintain a solid balance
challenging venture a successful one. sheet structure across our footprint. We are also
Our key objectives with regards to our capital focusing with new products and solutions to improve
management focus include the following: in non-funded income windows from trade business to
account services to credit card which is already a core
• Compliance with regulatory capital requirements strength of the bank.
• Alignment of capital levels to the bank’s risk appetite
and strategic business plans
• Maintenance of strong external credit ratings Thank you for your continued interest in us.
• Maintaining an appropriate balance between Sincerely,
optimising returns to shareholders and prudent
capital management

10.8%
Tier 1 capital ratio, 2020 vs. minimum Md. Mahbubur Rahman
regulatory requirement of 8.5% DMD & Chief Financial Officer
15.5%
Total capital ratio, 2020 vs. minimum
regulatory requirement of 12.5%
(Solo basis)

Outlook for 2021

The bank has already started reaping benefit of its
strategy of diversification in its portfolio, products,
services, channels, etc. Revenues from on balance
sheet and off balance sheet position will become
stronger and consistent in coming days. Digital
platform will add more flare in its scale up game
changing strategy.

62 Annual Report 2020

Our operating context

The year 2020 was an unusual one, yet pivotal from the point that
it brought forth major changes in the bank’s operating landscape,
prompting us to maneuver our business cautiously, although rapidly,
to adapt to and embrace the new normal or the new operating
environment, while continuing to serve and deliver value to our
stakeholders even amidst the uncertainties.

2020: An unprecedented year Amongst Bangladesh’s top

The COVID-19 pandemic dramatically altered the
economics and outlook of the banking sector.
community bank
Governments all around the world introduced several Major trends in our operating landscape
proactive measures to contain the swift spread of the l Accelerated need for resilient digital
virus, believed to have originated from Wuhan, China, infrastructure and innovation capabilities with
and carried around the world by the global aviation the new normal setting in, coupled with
industry. heightened competition from financial and
Enforcement of border closures, business shutdowns fintech disruptors
and restricted social activities, along with relief and l Tepid business sentiment and subdued
stimulus comprised major responses and events economy due to the pandemic resulted in
implemented by the authorities during the year. On business slowdown and weaker asset quality
the credit and policy front, the focal point was offering outlook
debt relief to borrowers, supporting financial l Increasing need to support and ensure
intermediation through easing prudential norms and sustainability of SME-S amid the pandemic, as
via providing liquidity to financial markets. The they are significant drivers of the regional
combination of substantive financial support and economy
economic compression caused a surge in l Heightened awareness among financial
government debt and deficits. Critically, global public institutions of the need to support the tenets of
debt approached almost 98% of GDP, exceeding the the UN Sustainable Development Goals (SDGs)
levels seen during the 2008 global financial crisis by
about 8%. Narrowing of fiscal space also worsened for
Bangladesh as RMG and remittances, both mainstays Our response
of the economy, witnessed substantive decline during l Maintained diligence in managing asset quality;
peak pandemic. for e.g., ensured greater focus for COVID-19 credit
While the need for social distancing and general public decision-making
fear had a major impact on trade and l Ensured consistent and proactive customer
consumer-oriented industries, forcing the closure of engagement as well as development of
many businesses, it encouraged others to reinvent needs-based digital solutions, for e.g., City Ekhoni
their operational model. More people worked from app enabling the convenience of pocket banking
home than ever before with mass adoption of digital l Extended instant relief/moratorium as per
and remote technologies. Thus, majorly, the shift in regulatory guidelines
lifestyle accelerated the trend of digital transformation,
particularly for the banking sector. l Provided need-based financial solutions, for e.g.,
attractive and accessible mortgage finance,
vehicle finance solutions, etc.

63
 Mid-term priorities sentiment from the corporate segment. Vaccination
Expected lower interest rate environment on account picking up pace however holds hope for accelerated
of excess liquidity, coupled with enforcement of economic recovery.
lending rate caps exerted pressure on net interest We remain focused on engaging actively with our
margin (NIM). customers to mitigate the adverse impacts while
While the industry and consumer behaviour transition continuing to provide them with integrated and
into the new normal, rapid growth recovery is innovative financial solutions. We will also continue to
anticipated in Bangladesh, largely led by fiscal stimulus strengthen our balance sheet resilience through
and easing of monetary policies in supporting portfolio diversification, accelerate our investments in
households and businesses. The push for inclusive digital capabilities, and ramp up cross-border financial
financial services is likely to persist along with propositions delivering market - driven banking
increasing competition from FinTech and digital-only solutions, especially as ex-im-driven companies
players. reintegrate with the global supply chains.
At City Bank, we remain committed to delivering
meaningful customer-centric solutions that meet our
customers’ and the communities’ needs, while
Strengthening positioning in
sharpening our financial and digital banking Islamic finance
propositions, and also keeping a cautious lookout on Major trends in our operating landscape
asset quality.
l Increasing adoption of Islamic finance in a large
Muslim-dominated country, with growing
consciousness among the public to align their
A diversified banking platform financial lives with religious/spiritual beliefs
linking Bangladesh with the world l Easing and more favourable regulatory
Major trends in our operating landscape environment with a stance of promoting Islamic
l Movement restrictions and contractions in finance in the country
economic activity from the COVID-19 pandemic l Consumer preference shifting towards
caused stress in trade-related businesses businesses that uphold Shariah-compliant and
dependent upon imports/exports, aviation, real sustainable practices
estate and construction, leading to pressure on
asset quality
Our response
l Muted corporate loans growth on account of
l Dedicated focus on Islamic finance as a strong
uncertainty
revenue contributor and deposit mobilisation
base for the bank
Our response l 100% authentic compliance with Shariah
l Proactive and consistent client engagement to principles, backed by Shariah-based audits to win
develop and offer relevant solutions customer trust
l Early detection of asset quality deterioration to l Islamic finance is now offered across all of the
expedite financial relief assistance and mitigation bank’s 132 branches, thus providing strong
plans visibility and footprint
l Expanded customer segment as part of the
portfolio diversification strategy Mid-term priorities
l Continuous development of green banking and Continuous efforts to enhance our Islamic finance
ESG capabilities and participation in green footprint, which is already being reflected in the fact
banking and ESG-related opportunities that Islamic finance accounts with the bank doubled in
the year 2020. We will focus on building specific
Mid-term priorities in-house capabilities around Islamic finance in different
business segments, thus enhancing our go-to
The tail impact of COVID-19 is likely to persist well into
propositions for both individuals and businesses,
2021 leading to continued tepid markets and weaker
especially SME-S.
We also expect to explore and expedite digital
solutions in Islamic finance.

64 Annual Report 2020

Emerging as a digital l We are accelerating ongoing IT infrastructure
and security enhancement programmes to
bank of choice strengthen the protection of customers’ data,
Major trends in our operating landscape maintain operational resilience in the face of
l Unprecedented surge in cashless and digital increased transaction volumes and also thwart
transactions due to the pandemic, intensifying any potential cyber threats
the need for agile and resilient digital capabilities l We are refocusing our efforts to develop
and infrastructure products and services that cater to the pressing
l Heightened need to provide innovative, inclusive needs arising from the pandemic, thus ensuring
and safe solutions in the digital financial services that customers can conduct their daily and even
space that meet customers’ and communities’ major banking remotely
needs
l Rising competitive intensity from existing players Mid-term priorities
as well as digital financial technology companies Competition in the digital space has intensified with
fast-paced landscape changes, further accelerated by
Our response the pandemic. Thus at City Bank, we are putting in
place critical capabilities that enable us to swiftly adapt
l We are continuously adapting and innovating to to new business models and extract value creation
remain relevant in this exciting new space where opportunities to address the needs of consumers in
our customers can access City Bank anytime this environment, while being able to maintain
and from anywhere operational resilience at the same time.
l Established a dedicated and full-fledged Digital
Financial Services (DFS) wing in 2018 that is
spearheading the bank’s digital banking plans

65
 Engaging with our stakeholders
At City Bank, we undertook a deeper and more targetted approach to the
materiality assessment with our stakeholders as part of the development of
the Group’s strategy, where sustainability is one of our key strategic
priorities.

At the bank, the process of shared value creation Some of our key stakeholder priorities include
commences with credible feedback and inputs the following:
gathered from our most critical stakeholders on Shareholders/investors
various dimensions of our operations and business. Governance
Even during the pandemic, we found opportunities to Transparency
Performance
engage with our stakeholders at every touchpoint, in Sustainability
Returns
addition to our focused engagement efforts on an Engagement
annual basis. Our primary intent in our stakeholder
discussions/engagement is to solicit feedback, identify
any emerging issues or areas of concern and, most
importantly, understand their expectations better.
01
Customers
Experience
Product diversity
Reliability
Financial inclusion
Climate Grievance redress
resilience
Grievance
Importance to stakeholders

redress
Board
independence Financial
Talent
attraction 02
inclusion
Employees
Diversity and
Business inclusion Career progression
Managing ethics Transparency
risk Compensation
Compliance Safety and wellbeing
Engagement
Transparency
and trust
Sustainability People
safety

Importance to business
03
Government/regulators
Governance
The greatest weightage was on sustainability, Transparency
Regulatory alignment
especially heightened by the COVID-19 pandemic. It Exchequer contribution
Performance stability
has also been recognised that processes and skillsets
are crucial in the development of products and
solutions that are responsible and take into account
the transition to sustainable growth. Further,
04
managing risk, Board’s independence and diversity, Communities
compliance as well as people safety were some of the Corporate citizenship
Timely assistance
other key facets important to our stakeholders. Volunteerism
At City Bank, such findings give us a better
understanding as to how we should prioritise material
issues and re-define our strategic framework–
including the setting of goals, targets and KPIs – as we 05
continue along our sustainability journey.

66 Annual Report 2020

Our business model

Our world is constantly changing and so are the aspirations of our

fellow citizens as they aspire for and desire a better life. At City Bank, our
stakeholders’ aspirations drive us forward. Thus, especially driven by the
structural shift created by the pandemic, we have chosen to look to the
future through a new lens with a bigger purpose and more lofty goals.

At the bank, as a financial services brand of repute, our purpose mandates that we collaborate with stakeholders to
deliver their dreams and aspirations and thereby create value for the organisation in a responsible manner.
Understanding the pulse of our stakeholders thus becomes the basis of how we formulate our corporate strategy
and this is at the heart of our management agenda in the short-to medium-term.

Our stakeholder relationships are an intrinsic part of our business model

Providers of equity SHAREHOLDERS Total shareholder returns

Origination of revenue CUSTOMERS Product diversity and access

Serving our customer’s needs EMPLOYEES Employee benefits

Provides license to operate SOCIETY Corporate social responsibility

Nurturing strong
relationships for mutual
benefit

CITY
What we get from our stakeholders BANK What we give to our stakeholders

At the bank, we implement the mandate set forth in activities in the value chain. The value creation process
the corporate strategy through a carefully thought results in outcomes of value created to the
value-accretive business model. Our model portrays organisation, to shareholders and other stakeholders
how we add value through each activity we undertake and makes the bank a responsible corporate citizen.
by leveraging our core strengths, our expertise and Value created further helps the bank to contribute to
our resources, thereby adding value to the the United Nations’ Sustainability Development Goals
organisation, to stakeholders and to the community at (UN SDGs).
large. Importantly, these value creation activities are Supported by a sound institutional framework, our
fuelled by inputs from different resources. The business model and operating processes are
differentiation aspects that enable us to transform managed effectively to ensure the highest standards
inputs into value-accretive outputs comprise the are adopted in business conduct, sustainability and
foundation of our strategy and are achieved through stakeholder stewardship.

67
 Diversified workforce of over 4,356 Best employee
SDG#1: No poverty employees
experience
Emphasis on developing talent and Provide robust career development
SDG#8: Decent work and advancement platforms
building a sustainable succession
and Economic Growth Ensure best-in-class compensation
pipeline through upskilling and learning and other benefits

Human

132 branches that enable easy access

SDG#9: Industry, Innovation to banking
Enhance efficiency
focus
and Infrastructure Streamlining operational processes
for greater efficiency through Promote digital/ADC banking to
lift-off branch traffic
SDG#11: Sustainable Cities automation and digitalisation
Ensure cost optimisation for
and Communities Growing strength in internet and sustained efficiency
Manufactured mobile banking

Strong capital and liquidity with CET1

capital ratio of 10.8% and liquidity Reinforce commercial
SDG#8: Decent Work coverage ratio of 173.5% in 2020 performance
and Economic Growth Robust retail franchise that
generates a large customer funding Improve NIM and RoE
SDG#17: Partnerships base (BDT 11 billion in 2020). while also Lower NPLs to also
Financial accessing other diversified wholesale release provisions
for the Goals
funding sources

Strong brand reputation given our

rich history and wide presence
Best customer
Respectable credit rating of ‘B1’ by
experience
SDG#9: Industry, innovation Moody’s Focus on driving customer
and infrastructure experience through technology
Integrated risk management culture
Intellectual encompassing strategies, systems, Attract and migrate customers to
digital banking platforms
processes and people

Channelling investments into Grow our citizenship

SDG#9: Industry, innovation interventions
community/citizenship programmes.
and infrastructure Forging constructive relationships and Enhance the quality and scale of
SDG#11: Sustainable Cities ongoing dialogue with regulators, our social impact
and Communities Social & governments and non-profits Engage in more high-impact
Relationship and relevant initiatives

SDG#12: Responsible Focus on optimising use of natural Focus on technological

Consumption and Production resources, while lowering our carbon excellence
footprint
Expanding green banking book and Enhance efficiency in use
SDG#13: Climate Action also engaging in ESG-related funding of natural resources
Natural

68 Annual Report 2020

How we distribute value

In keeping our assurance to our stakeholders, we distribute value

created in relevant and meaningful ways – and for some stakeholder
groups this measure goes beyond financial metrics, ranging from
employee upskilling initiatives to diverse citizenship programmes,
in our effort to enable a more sustainable future.

At City Bank, value created in 2020 was distributed as follows:

BDT 4,012 mn
For our Shareholders

BDT 5,265 mn
For our Employees
BDT
16,246 mn
BDT 249 mn
For the Community

BDT 6,720 mn
For the Economy

69
 Transforming our capitals
Operating context: Subdued performance in H1 2020 because of COVID-19
On 11 March 2020, the World Health Organization (WHO) declared
COVID-19 a worldwide pandemic. In Bangladesh, an unprecedented
movement control rule was imposed to restrict movement nationwide in
late March 2020 in an effort to stem community transmission of the
disease. These movement restrictions were eventually relaxed in May-June
2020, as the authorities moved towards a more targetted approach in
containing the disease. Thus, City Bank’s total operating income in H2 was
5% more over H1 – BDT 8,161 mn in H1, vs. BDT 8,576 mn in H2. With
recovery gaining pace post lockdown release, the bank’s performance
reported visible improvement, especially in the third quarter of the year.

Financial capital
City Bank’s QoQ performance, 2020 BDT mn
Metric Q1 2020 Q2 2020 Q3 2020 Q4 2020
Net interest income 2,673 1,381 2,003 2,306
Total operating income 4,833 3,328 4,590 3,986
Total operating expenses 2,960 2,502 2,626 1,609
Pre-provisioning profit 1,873 825 1,965 2,377
Total provisions (473) (341) 551 (381)
Net profit after tax 657 246 1,900 1,209
Earnings per share (BDT) 0.7 0.2 1.9 1.2

Delivering on our strategy: On the path to recovery Robust profitability accretion: Driven by cost
The year under review proved to be a litmus test for control measures and relaxed provisions
the effectiveness of City Bank’s strategies and business City Bank’s profit after tax witnessed a sharp rebound –
continuity plans. Over the last few years, we have from BDT 903 mn in the first half of 2020, to BDT 3,109
invested substantial time and resources to enhance mn in the second half, representing an expansion of
our marketplace standing and reputation and improve 244%. This manifests the success of our strategy in
the reliability of our systems and processes such that ensuring business continuity, while also indicating
our organisation can continue to operate and fulfill traction achieved in our cost efficiency programs
especially our commercial obligations to our comprising both fixed and variable costs, as we
stakeholders, including in the event of a crisis or endeavoured to align our expenses with the business
emergency. Thus, despite the challenges posed by the environment during the year. Our profitability was also
COVID-19 pandemic, City Bank emerged relatively supported by relaxed provisioning measures.
unscathed, and managed to preserve the immediate- However, the central bank’s actions to vacate various
and long-term confidence in not only its operations, moratoriums/relief programs will create a deteriorating
but also in its role in society as a responsible credit environment, contributing further to the
public-facing institution. country’s burgeoning NPLs (non-performing loans).
This condition is expected factoring the adverse
economic effects of the pandemic on businesses, as
well as worsening credit culture.

70 Annual Report 2020

At City Bank, we have prepared against this scenario borrow from Bangladesh Bank’s low-cost refinance
by enhancing vigilance on our portfolio quality, as well windows, especially mobilising credit for expanding
as by keeping a sharp lookout on credit risk hotspots. our Green Banking book and also for projects that are
We will also endeavour to enhance collaboration and environment-friendly or are modernising assets to
cooperation between the various wings of the bank, make them more environmentally-compliant.
like Credit Risk Management and Legal divisions with a
view to ensure timely action for protection of credit.
The near-term: Case for being circumspect
Thus, we do not foresee any major credit slippages
during the current year. COVID-19 has created much uncertainty and
complexity and hence it has become highly
challenging to make any reliable predictions. Already,
Sharp rebound in Q3 2020: Setting a cautious tone the second wave of the virus has hit Bangladesh,
for the near-term especially metropolitan Dhaka, the economic and
Resilience of Bangladesh’s economy, boosted by the financial centre of the country, and there is increasing
Government’s financial stimulus programs, plus an proclivity by the Government to impose targetted
intrinsic entrepreneurial spirit to perform against lockdowns, which may negatively impact gross value
adversity, led to an overall economic rebound in the added. However, vaccination picking up pace can
country. Thus, the bank’s total operating income in Q3 counter the rise in transmission and caseloads and
2020 also grew sequentially by 37.9% to BDT 4,590 restore economic semblance. Further, some long-term
mn, led by growth in loans and advances, mainly trends also bode well for the country, including
comprising existing credit lines and working capital increasing shift in foreign investments in low-cost and
loans. Further, net profit also expanded by 672.3% to stable destinations like Bangladesh to as
BDT 1,900 mn in Q3, vs. Q2 of the year. manufacturers and OEMs de-risk from excessive
Increasing savings propensity, or the trend of geographic concentration threats. Vaccination is in
financialisation of savings, also increased total deposits advanced stages in a growing part of the developed
to BDT 255 bn in 2020, as against BDT 247 bn in 2019. world and hence global economic normalisation,
Particularly, low-cost deposits – CASA or current especially for Bangladesh as it is closely integrated
account savings account was near stable at 41.5% of with the global economy, might be closer than earlier
total deposits during the year. We will also continue to anticipated.

Addressing key investor focus areas

Material risks Opportunities and risk control

Policies and regulations Our priority is to mitigate NIM pressure, given the
rate cuts seen across our home market and globally.
We are focusing on growing our low-cost fund pool
(CASA, etc.), while also focusing on cost optimisation
to protect profitability.

Operations With a view to secure against the operational impact

of the pandemic, we have rapidly rolled out
measures for business continuity and sustenance
and, most importantly, to safeguard operational
resilience and the well-being of all our stakeholders.

Asset quality The central bank’s guidelines on moratorium/

repayment relaxation and other pandemic-induced
relief measures, as well as our exposure to
vulnerable/high-risk sectors directly and indirectly
impacted by COVID-19 raised concerns around our
asset book. We are focused on this dimension by
remaining highly vigilant on loan slippages, while
also exercising maximum caution in fresh credit
underwriting, focusing on thorough due diligence.

71
 Material risks Opportunities and risk control

Growth impetus Large-scale shutdowns and mobility restrictions

enforced economic suspension for about three
months in 2020. While this was reflected in lower
loan growth (our core business), we strived to offset
pressures here by focusing on other revenue drivers,
including treasury, investment income, etc.

Digital banking The adoption of digital initiatives was rapid during

the pandemic. Banking also moved digital, with
more and more people embracing online banking,
cashless transactions, etc. Having invested time and
resources in building our digital capabilities, we
remained on a sound footing with our resilient tech
infrastructure supporting the surge of digital
banking traffic. We also timed a few digital launches
like the City Ekhoni app that was received well by our
customers.

Manufactured capital

Consolidating physical, expanding digital

At the bank, our manufactured capital, represented by the close of the year, we had 311 ATMs and 64 CDMs
our infrastructure, comprises the physical and digital spread out well across the delta. Over the last two
infrastructure that determines our vital ability to reach years we commissioned new ATMs and CDMs, thus
out to our customers and conduct our business. Thus, not only reaching out to a larger customer base, but
over the years, the growth of our business has largely also enhancing their convenience through bringing
been contingent on our ability to expand our closer access to the bank.
infrastructure, which we have done in two primary
ways: One, enhance our channel network or our
Our digital channels
branches, and two, invest in our digitisation and digital
banking channel. City Bank is widely recognised as one of the pioneers
of digital banking in Bangladesh, and amongst the few
Today, more than ever before, the robust ecosystem
to have a dedicated Digital Financial Services (DFS)
that we have been able to create provides our
wing, reflecting deep commitment to this exciting
customers seamless access to our bank's diverse
new-age banking model. Over the past few years, we
products and services.
have accelerated our digital strategy, which has led to
numerous other initiatives such as the City Bank
Our branch network mobile app (Citytouch and City Ekhoni), digital loans
City Bank's branch network comprising of 132 dispensed through bKash (nano loan) etc., which have
branches (as on end December 2020) is amongst the all contributed towards expanding the bank's digital
largest in the private sector banking industry of the presence and empowering customers with an
country. Further, this network is also one of the most anytime-anywhere banking convenience. Notably,
geographically-widespread, which is the outcome of a these self-service channels have revolutionised money
planned branch investment strategy pivoted around transfer and payments and given customers greater
expanding the bank’s market reach in each location control and freedom to manage their bank accounts.
and thus also enabling financial inclusion and formal The surge in 2020 was primarily on account of the
financial intermediation. Having made significant pandemic and reflects deep operational and
investments in the past to build a solid country-wide infrastructural resilience that enabled us to handle
branch footprint, only 12 new branches were added growing digital traffic volumes. Further we also
over the last four years. However, we continued to launched banking services on WhatsApp, with our
invest in expanding the number of physical customers able to easily access routine services
touch-points by expanding our ATM/CDM network. At securely through this channel.

72 Annual Report 2020

Agent Banking advancement. Further, our employee proposition is not
Identifying newer ways to expand City Bank's reach, limited to financial benefits alone, but encompasses a
especially in rural and semi-urban areas where a host of qualitative aspects, including workplace
full-fledged branch is unviable, we adopted the Agent environment, recognition, identity and the
Banking model to support our endeavour to enhance understanding that their work directly makes a
our customer base, expand deposit mobilisation and difference.
enable financial inclusion. The model comprises a Thus, our team reflects the diversity of our communities
network of City Bank Agents who are granted the and adapts to the new business environment, inspiring
authority to perform routine banking services with the customer trust and meeting society's needs.
help of a POS terminal provided by the bank. Agents
are selected by the bank based on their reputation and
credibility in the community. They are well-known in
their area and are typically owners of small
4,356
establishments with high footfalls. As at 31 December, Staff strength
2020, the network consisted of 1,411 Agents (2019: 331
Agents). By expanding the agency model further over 6 mn
the coming years, our objective is to serve our People training expenses
customers better by bringing services closer to them
and, thus eliminating the need for visiting the branch. 8 hr
For more information on our network please go to the Avg. learning hours per employee
section on “Segmental Performance.”

Developing an agile, innovative and engaged pool

Human capital of talent
At City Bank, our talent management strategy helps us
An employer of choice attract and retain the most talented and skilled
At City Bank, we have always believed that good employees. It also contributes to accelerating our
employers find it easier to attract good talent. Thus, it is transformation by fostering their continuous
imperative that we brand the Company positively as a development. An essential facet of this is continuous
model employer and as an employer of choice to be learning, which enables our employees to adapt to a
able to retain high-quality talent in a competitive fast-paced and ever-changing environment. We have a
environment. robust induction, training and development policy to:
At the bank, we operate a unit within the HR structure to l Transform our business
manage employer branding and candidate/recruitment l Manage talent, encourage innovation, share
management. The unit has implemented several knowledge and identify key employees in various
innovative programmes and platforms designed to areas
cement City Bank’ employer brand and to attract the l Embed our culture in line with the governance
right talent. Such signature programmes include standards of the bank, which include our
campus hiring events and future talent internship corporate culture and code of conduct
programs that help in not only building employee For the bank’s Human Resource Division (HRD), the
connect with the institution, but also in providing clear year 2020 was an important one as it embraced
pathways for career advancement and growth. Further, several initiatives that were crucial for organisational
social media management also plays a key role in sustainability, especially due to the onset of COVID-19.
strengthening our employer brand. At the bank, the The year was an unprecedented period during which
strongest endorsement is the constant recognition we the HRD strived to achieve the balance between
receive from key institutions for our HR practices, which employee safety on the one hand and business
only encourages us to formulate even better processes continuity on the other. While it was important to foster
and practices for our human resources. a ‘business-as-usual’ approach to enable our people to
Making work enjoyable and rewarding represents our remain focused on the task and fulfil our responsibility
core employee value proposition and is the key driver as a public-facing institution dispensing an essential
of talent attraction, engagement and retention at the service, it was equally crucial for us to ensure that our
bank. This value proposition is premised on the people and customers remain safe. Thus, we provided
philosophy of offering our employees a balanced extensive training, especially to our frontline staff who
work-reward structure that recognises employee had to visit our offices, to embrace all health and safety
performance, while exposing them to diverse guidelines, while maintaining COVID-19 appropriate
opportunities for skills building and professional behaviour at all times. We also ensured thorough

73
 sanitisation of our premises as per government Employee capability development
guidelines. Further, we also organised a number of At City Bank, internal training is the primary approach
online health, wellness and welfare sessions, while to developing internal talent. With our continued
making provision for a doctor-on-call service at all emphasis on fostering a culture of learning, year-round
times. events were organised under various categories,
Beyond pandemic-related affairs, the year also marked including specialised learning interventions,
several initiatives during which HRD focused on need-based tailor-made solutions, compliance training
creating a bridge between the management and programs and orientation programs for new recruits,
employees, while enhancing trust and communication etc., to meet the learning needs and requirements of
between them. This helped in two ways: one, ensured different divisions.
faster decision-making and implementation, and two,
created more focus within teams around both team
Learning initiatives at City Bank
and individual goals and objectives. Thus, our strong
and united team spirit allowed us to build a In 2020, the focus of our Learning & Development
collaborative, agile and empathetic work environment team (L&D) was majorly on transforming the learning
that enabled employees to achieve their best experience through digital platforms. Our annual
performance, supported by an array of interventions in training plan for 2020 included 75 mandatory sessions
2020. These are enumerated below. covering 3,100+ participants. These learning initiatives
were broadly categorised under functional, general
and soft skills training.
Ensuring closer alignment to our values through our
Value Ambassadors
Learning through new pedagogics
City Bank’s values guide our actions and our
day-to-day conduct, thus enabling us to embed a Beyond classroom sessions, L&D introduced virtual
culture unique to the bank. Indeed, our values platforms and e-learning methodologies during the
represent the DNA of our organisation, encompassing year to create maximum learning impact.
members across hierarchies and geographies. The
foundations of our success is laid by our vision of
being a financial supermarket, nurturing a winning
64
culture that is powered by our core values of being: Soft skill sessions were organised covering
3,173 participants
l Results-driven
l
l
Engaged and inspired
Accountable and transparent
209
Functional training sessions were organised
l Courageous and respectful
covering 5,900 participants
l Focused on customer delight
At the bank, our ‘Value Ambassadors’ personify the
spirit and essence of our values and shape our culture
245
through manifesting and making recognisable the General training sessions were organised
behavioural indicators of our values, which are covering 12,171 participants
promoted as inseparable parts of our everyday
working life. Total participation is inclusive of multiple attendance of an
individual employee.
In 2020, we welcomed Mr. Kamrul Mehedi, Head of
Small Business, to the Value Ambassador team as the Transformation of the learning platform
‘Courageous and Respectful’ Value Ambassador who, Pivoting learning to the new module, diverse learning
along with the other four Value Ambassadors at the solutions were launched digitally to cover various
bank, lead the communication and guidance practice divisions across the bank, thus covering the assorted
around our values, vision, mission and culture. learning needs of the different departments of the
Further, we also sparked an HR campaign “Living the bank. L&D organised:
Values” with our five Value Ambassadors. The
campaign consisted of 15 sessions covering 38 237
branches, 8 divisions and 964 participants across the Live webinars covering
country. The Ambassadors connected and engaged 13,319 participants
with the teams digitally and discussed several topics,
such as nurturing the right mindset for practicing our
values, shaping our culture, living our values as every
39
e-learning courses covering
day habits, health and safety, work-life balance and way 3,798 participants
forward for 2021, among others.

74 Annual Report 2020

Classroom events colleagues and co-workers. Case studies were used to
To cater to the in-class and in-person needs of some explain how a situation can be extrapolated from
departments, L&D arranged classroom-based training different perspectives and their probable outcomes
sessions, maintaining all health and safety protocols and consequences.
and guidelines.
Fostering work-life harmony

242 At City Bank, we understand a major criterion for

fostering highly effective teams is to maintain
Classroom sessions were organised equilibrium between personal and professional life, or
covering 4,127 participants the “work-life balance”. We also understand that
flexibility is the key response that enables our
employees to manage their time and work better.
Management trainee program In this regard, during the COVID-19 pandemic, we
As part of the bank’s efforts to involve and engage the instituted the practice of work-from-home (WFH) and
youth in a real workplace environment, we conceived also prepared extensive and sustainable WFH
the City Bank Management Trainee program guidelines for our employees. The flexibility has
comprising a year-long engagement where trainees enabled them to drive excellent business outcomes
become a part of 10 cross-functional divisions. The without compromising on their health and safety. The
real-life business experience starts from day one, bank was especially considerate for expecting female
which makes it a unique program where trainees are employees and ensured that they fully transitioned to
drafted into several projects/challenges. At the end of the WFH model.
every stint – 12 in all, trainees are assessed via a
rigorous multi-layered review process. Throughout
Rewards and recognition
their journey, our senior leadership provide guidance
and share their experiences with them. In 2020, a total At City Bank, we find that it is crucial to recognise the
of 14 Management Trainees successfully completed performance of individuals and teams regularly to
the program. Each of them also completed 47 learning keep up motivation and ensure that they put in their
interventions, including numerous functional and best efforts at all times. More importantly, by
soft-skill development initiatives. recognising their performance, we reinforce the
actions and behaviours we expect from our
employees.
14 Notably, despite the ravages of the COVID-19
Management trainees who completed the pandemic and the associated disruptions, we are
program during 2020 proud that our employees remained focused on their
path and achieved results against adversity. In
recognition of their commitment and efforts, a total of
492 employees were rewarded for their contribution
Code of Conduct
and dedication during the year.
City Bank’s Code of Conduct (CoC) defines what we
In addition, we also conceptualised and finalised a
expect from our staff and stakeholders and sets out
renewed Reward and Recognition Framework, which
guidelines for each individual to follow. The underlying
aims to partly decentralise the recognition process,
philosophy of our CoC is to conduct our business in an
thus having the intended effect of increasing the
ethical and transparent manner as well as create a
frequency of recognising and accentuating exemplary
work environment that is supportive and collaborative
performance. We believe this will go a long way in
and is rooted in our vision, mission and values.
nurturing a happy and more joyful organisation that is
During the year, we effected several key amendments rooted in the spirit of gratitude and thankfulness.
and renewed our CoC policy to make it more effective,
compliant and contemporary to the times. We also
rolled out case-based Code of Conduct (CoC) webinar Gender empowerment: A promising tool for rapid
sessions across the bank, which were conducted in transformation
Bangla for easy understanding for everyone. At City Bank, our ongoing initiative of assigning
Enthusiastic engagement and lead from all MANCOM women ambassadors to discuss work-related issues
members, EMC members, division heads, department and providing support, whenever necessary, has
heads, unit heads, regional heads, cluster managers fostered a deep sense of safety and belonging among
and branch managers and involvement from all our women employees, thus opening up a strong and
employees from across all levels made the campaign a secure platform for discussions and ongoing
huge success and an eye-opening experience for our engagement. Under our signature program on the

75
 prevention of harassment at the workplace – “Speak Grievance redressal
Up”, we have initiated a pan-bank awareness session, To promote a sustainable and progressive workplace
especially for branch managers, department heads, culture, the bank’s HRD introduced a Grievance
unit heads and all female employees separately. Management Policy during the year that will help
address and resolve complicated and sensitive
19 workplace-related issues covering concerns, grief, etc.,
Gender empowerment sessions were conducted while also ensuring a transparent and fear-free
covering 1,087 participants working environment. The policy encourages
employees to be fair and responsible to raise issues in
Further, at City Bank’s City Alo wing, trainings, a prompt and effective manner, thus contributing to
workshops, seminars and community events were the bank’s reputation as a great place to work.
organised related to women’s mental health and
wellbeing, family and childcare, stress management
and other social issues. Moreover, 8 live webinars were
Leadership message
organised from City Alo’s Facebook page to enable We consider it essential that every employee
women to learn skills that can be implemented in their understands how their work supports the short- and
workplace/business. These opportunities were also long-term goals of the bank and the extended group.
open for all female employees of the bank. Our performance management system puts this
mandate into practice. It enables us to track and
monitor the performance of individual employees by
Health, safety and awareness establishing measurements that align the Company’s
Health, safety and wellbeing is a foremost priority in goals with individual employee’s objectives. Further,
fostering a good working environment. Our our performance management system enables us to
comprehensive occupational health and safety policy foster a culture of execution excellence where each of
expresses how we action our responsibilities to create our employees are valued and are provided with a
a safe workplace for all our employees. This focus was challenging and fulfilling career. With ample
heightened during the COVID-19 pandemic, during opportunities to perform and grow, we strive to
which the bank’s HRD adopted a number of initiatives provide them with not just a career but a proud
to minimise the risk of infection, break the chain of identity of association.
transmission and enhance safety for all. Our 2021 and near-term priority is to engage in the
Some of these initiatives included keeping a daily selection of the right talent and placing them in the
check of employee health via reports, forming an right roles, especially with the growing digitalisation
emergency support team, disseminating COVID-19 plans of the bank. Futurising our talent is also a crucial
preventive guidelines and measures with adequate focus area where we will have to ensure that employee
enforcement, arranging telemedicine services and skills continue to evolve and expand with the times. We
organising discounted rates for COVID-19 tests. Further, will also need to prepare the bank for an increasing set
in addition to these initiatives, the bank also provided of specialist roles as automation makes many manual
enhanced life insurance cover for all employees and and even human-intensive tasks redundant. Thus,
also facilitated reimbursement of all treatment developing people capabilities so as to enable them to
expenses related to COVID-19. Moreover, special achieve the bank’s goals and objectives in a new
incentives were also provided to those who needed to operating environment will be our constant focus area.
come to office premises during the pandemic-induced Moreover, special emphasis will also be placed to
lockdown period. retain our best talent, recognise them and motivate
In the spirit of our responsibility towards the society, them to ensure sustained high performance.
we undertook massive relief efforts under ‘CBL
COVID-19 Solidarity Fund’ to provide emergency food,
grocery and other provisions to the affected people
around the country. This fund consist of donations
from both employees and the organisation.
HRD also prepared an exhaustive guideline on
returning to work with the phase-wise lifting of the
lockdown, covering all aspects of keeping the work
environment safe and secure for employees.

76 Annual Report 2020

Human resource accounting
Overview Importance of HRA at City Bank
Human resource accounting (HRA) is the process of At City Bank, we believe that HRA is an essential tool
assigning, budgeting and reporting the cost invested for enabling us to align our resources with prevalent
in employees towards their recruitment, training, needs, thus enabling us to more closely evaluate
payment of salaries and other benefits and, in return, training needs and identify scope for specialisation
evaluating their contribution to organisational growth and manpower value-addition. Our people are our
and profitability. Specifically, it is the process of most precious asset, enabling us to achieve our
identifying and measuring data around human business goals and objectives. Thus, embracing the
resources and communicating this information to the core tenets of HRA, we consider it to be a source of
leadership for ensuring informed decision-making. deep value, not only in terms of informing us of the
Critically, HRA is an attempt to identify and report effectiveness of our HR strategies and initiatives, but
investments made in the human resources of an also whether investments in these are drawing
organisation that are seldom accounted for under expected outcomes.
conventional accounting practices.

Particulars 2020 2019

Revenues [A] (BDT mn) 16,737 18,285
Salary and other benefits [B] (BDT mn) 5,265 5,266
Net value-add [A-B=C] (BDT mn) 11,472 13,018
Number of employees [D] 4,356 4,493
Net value-add per employee [C/D=E] (BDT mn) 2.63 2.89

Note: Other benefits includes all direct and indirect benefits extended to employees.

Our focus on specialisation will only grow henceforth, ESMS and our sustainability journey
as we align our organisation to a more dynamic, Our green and ESMS impact
complex and regulatory-intense environment, and At City Bank, we believe that as a responsible financial
even greater digitalisation, especially driven by the institution, we can expand our green credentials and
pandemic. Thus, we intend to allocate a greater part of imprint through sustainable green finance, thus
our budget for manpower skilling and multiplying efforts in ecological sustainability and
capacity-building, while also focusing on promoting environmental preservation across the delta. This
self-learning, with a view to sustainably enhance City impetus received a huge boost during the year 2020
Bank’s net value-add per employee, going forward. when Bangladesh’s banking industry underwent a
monumental shift from Green Banking to Sustainable
Banking through the introduction of the Sustainable
Natural capital Finance Policy by Bangladesh Bank.
Thus, our longstanding green practices, coupled with
Expanding the ambit of responsible finance the regulatory thrust, ensures that environmental
As a banking enterprise, the impact on the management continues to remain a material topic of
environment caused by our operations is negligible. consideration for City Bank, and spearheading our
Notwithstanding, we remain committed to manage journey towards becoming a truly sustainable bank is
even the smallest environment impact arising as a our Environmental and Social Management System
result of our operations, for we believe it is key to (ESMS). The success of our ESMS is supported by a
ensuring our business is truly sustainable. As such, strong implementation framework that defines clear
Environmental Management is deemed a material lines of accountability, accompanied by specific goals,
topic of matter for the bank. Spearheading our journey that enable us to manage the bank’s environmental
towards becoming a truly sustainable bank is our performance and create long lasting change.
Environmental and Social Management System
(ESMS), which is supported by a strong
implementation framework that defines clear lines of
accountability accompanied by specific goals to
manage the bank’s environmental performance and
also drive continuous improvement.

77
 Our ESMS framework
Resource efficiency : Reduce the bank’s
environmental footprint by embedding 15
environmental best practices into Training programs organised in 2020
everyday operations
804
Responsible finance : Harness finance for Employees underwent training, including new
mitigating environmental and social risks
while also raising awareness on best recruits
practices in industrial ecology

Green products : Develop relevant green Achieving sound progress in 2020

products/services, while also drafting By drafting the ‘Go Green, Think Green, Act Green’
support of stakeholders in achieving slogan in October 2015, we have focused on creating
the bank’s environmental initiatives green and environmental awareness across the bank
in a bid to encourage our people to reduce waste and
Overview use resources sustainably. This is further
supplemented by our own green office guidelines that
City Bank’s journey in green and sustainable finance aim to foster behavioural change among our people.
commenced in 2012 when Bangladesh Bank, the
country’s central bank, first introduced the concept of
green banking in the country. Learning from our Installation of smart printers
experiences over these years, City Bank developed its In 2020, smart printers were installed across a few of
ESMS framework, comprising a set of policies, the bank’s premises to reduce our carbon footprint as
procedures, tools and knowhow to identify and well as track paper usage. It is believed that
manage exposure to environmental and social risks. implementing these devices will raise employee
Further, the bank appointed a senior management consciousness about paper use, while ensuring
official as E&S Manager, entrusted with the overall decline in paper consumption by about 30
responsibility of being in-charge of ensuring the percent.
bank-wide implementation of ESMS. An E&S officer
was also assigned for ensuring day-to-day operations
in terms of developing and implementing the
Environmental and Social Management System. To 13
further facilitate the ESMS process, in 2018, the bank City Bank branches installed with solar panels
launched its own environmental and social risk
categorisation tool, representing a software that
determines the E&S risk category of a transaction and In a major initiative in sustainable electrification, 13 of
provides instructive information for better the bank’s branches have solar panels installed,
understanding of E&S issues. enabling the premises to meet a decent proportion of
their electricity requirement via solar energy. We hope
Resource training is highly crucial to build capacity to expand our solar footprint to other branches too.
among people on matters relating to E&S risk
management and environmental business Ensuring less-paper use
opportunities. Thus, we develop a dedicated training
roadmap and allocate a budget accordingly at the CityTouch app:
commencement of each year. Further, we have also
drafted a session on sustainable banking in our 242,900
orientation program for all new recruits. Even during CityTouch subscribers
the pandemic-stricken year 2020, we continued to
conduct training, achieving a record number of
training programs on sustainability through online Through the launch of the bank’s internet banking
platforms. A total of 804 employees (including new service, ‘CityTouch’, in October 2013, we have been
recruits) received training across 15 different programs. able to offer improved, prompt, on-demand and
paper-free banking services to a growing proportion of
our subscribers, which stood at 242,900 by the end of
2020.

78 Annual Report 2020

Discontinuation of ATM slips: Green finance
To supplement efforts in fostering a less-paper
environment and reduce our carbon emissions, we BDT 3,187 mn
discontinued ATM slip dispensation, as all of the bank’s City Bank’s green finance book
customers were already subscribed to the SMS alert
service. Thus, we were able to eliminate a major source
of paper consumption, without compromising on
BDT 1,121 mn
compliance. Through this initiative, the bank has Green finance disbursal in 2020
significantly chopped internal paper consumption,
whose annual cost is BDT 2.2 mn. 55
Green products
e-statements:
As per central bank guidelines, banks are required to 32
despatch account statements to customers twice a Sustainable finance helpdesks set up in branches
year. At present, e-statements are sent to customers
whose registered e-mail address is available with us,
and printed statements to those who do not. In The importance of green finance is undisputed as it
H1-2020, the bank despatched 291,237 (Retail: 212,031; supports the sustainable development of various
Agent Banking: 79,206) printed statements. The sectors of the economy. The watchword here is
average cost incurred for printed statements amounts ‘sustainable’.
to BDT 6 mn every year. However, from H2-2020, the With the revision of central bank’s refinance scheme
bank allowed customers to download their half-yearly for environment-friendly products/projects, City Bank
statements via a link sent on their phone. This will not expanded its initial offering from 52 green products to
only enable the bank to minimise statement printing 55. Today, the bank offers green financing in the areas
costs, but also contribute to the bank’s carbon of:
emission reduction targets. l Renewable energy
l Energy and resource efficiency
Outreach initiatives l Liquid and solid waste management
During the year, City Bank pioneered the launch of an l Recycling and recyclable products
External Communications Mechanism (ECM), the l Green brick manufacturing
first-of-its-kind initiative among banks in Bangladesh. l Green establishment (also ensuring safety and
This platform enables external stakeholders and local security of factory workers)
community members to register their
grievances/complaints regarding projects being
financed by City Bank. As a frontrunner in
sustainability, we feel it is important that community
members are able to reach out to us regarding any
dissatisfaction over projects being financed by the
bank.

Segment-wise portfolio BDT mn

Segments 2020 2019 2018 2017 2016
Energy-efficiency 1,053 1,964 1,359 520 639
Renewable energy - 80 - 5 -
Waste management - 11 - 30 25
Establishment of green industry 67.5 - - - -
Work environment and workers’ safety 0.9 96 - 167 144
Total 1,121 2,152 1,359 722 808

79
 Year-wise green finance disbursements

3000 2,152
BDT Million 2000 1,359 1,121
808 722
1000

0
2016 2017 2018 2019 2020

Green finance disbursal

During 2020, City Bank disbursed BDT 1,121 mn in different Case study
green-financing projects. At the end of the year, the Streetlight project of Protostar Limited
bank’s total green finance portfolio stood at BDT 3,187 mn, City Bank disbursed BDT 113 mn to Protostar Limited
among the largest such in private sector banking. for its energy-efficient streetlight project, initiated by
In addition to offering green finance through own funds, Dhaka North City Corporation. Under the project,
the bank also disbursed funds from other sources: Global Protostar will install SMART energy-efficient
Climate Partnership Fund (GCPF), Bangladesh Bank streetlights for which the company has acquired
Refinance Scheme’s and Green Transformation Fund 300+ ST29-80W and ST29-50W street lamps. The
(GTF) for renewable energy projects and other project aims to not only ensure better street
environment-friendly projects by Bangladesh Bank. GTF illumination, but also safety of pedestrians and
is a USD 200 mn and Euro 200 mn refinance scheme of motorists, while also optimising overall energy
Bangladesh Bank from which funds could be drawn for consumption. It also directly contributes to SDG#7:
all export-oriented industries for importing eco-friendly ‘Access to affordable, reliable, sustainable and
machinery. City Bank is one of the consistent mobilisers modern energy for all’.
from the GTF. Till 2020, the bank received USD 24 mn
refinance from this fund for energy-efficient machinery
Case study:
and factory safety equipment.
Funding Indesore Sweater’s green initiative
City Bank successfully arranged USD 3 mn refinance
Installation of green finance helpdesks
from the central bank under GTF for Indesore Sweater
During 2020, City Bank introduced sustainable finance Limited. Under this arrangement, Bangladesh Bank
helpdesks in 32 branches across Bangladesh in an effort agreed to refinance the client’s expenditure for
to scale-up sustainable finance lending. These desks environment - friendly and energy - efficient knitting
provided customers with information regarding machinery as well as factory safety equipment, like
sustainable finance policies and green finance, thus sprinklers. As a sole financer for the client over the
encouraging and influencing customers to pursue green period, City Bank has contributed towards
financing options. establishing a fully-functional ETP (effluent treatment
plant), modern smoke detection system and hydrant
and sprinkler systems.

80 Annual Report 2020

Forward outlook platforms, delivering a whole new level of convenience
During the last quarter of 2020, the central bank and functionality, including the ability to instantly open
introduced a Sustainable Finance Policy, expanding the an account, instantly get a loan (as per terms and
scope of sustainable finance to include any form of conditions) and also access basic financial
financial service, including investments, insurance, management tools. Growing our digital portfolio, this
banking, accounting, trading, economic and financial year we launched City Ekhoni, among others, enabling
advice that integrates environmental, social and us to also fulfil another key objective of achieving
governance (ESG) criteria into the core business greater financial inclusion and inclusivity. Further, we
decisions for the lasting benefit of both clients and are also engaged in a major core banking system
society at large. As per the policy, sustainable finance upgrade at our Islamic Banking division, which will
encompasses green banking, sustainable agriculture, enable us to align purely with the Shariah principles,
sustainable CMSME-S and even sustainable CSR while also ensuring scalability as we ramp up the
activities. Thus the constitution of this policy has also business across all 132 branches of the bank.
opened a new avenue for agriculture, CMSME-S and
socially-responsible financing to be considered as Building our capacities and competencies
sustainable finance.
In pursuing our vision to be the digital bank of choice
we have continuously revisited our technology stack.
In addition to the existing refinancing schemes, the We have introduced self-service capabilities,
central bank also introduced a revolving fund of BDT automated our middle and back-office processes and
10,000 mn for the modernisation and technological refreshed our technologies to support the needs of
development/upgradation of export-oriented industries our digital channels.
in Bangladesh. This fund will create new avenues for Over the recent past, we have placed greater
green financing in the areas of energy-efficiency and emphasis on upgrading our applications on modern
renewable energy machinery, business process digital banking tech stacks, while also building scalable
reengineering or automation, operational machinery, business services. The foundations being laid today
among several others. will enable us to continue to enhance our
customer-centric platforms in line with our vision in
digital banking. Along with our digital transformation,
Leadership quote we have also nurtured a digital culture. This has
“The potential benefits of adopting sustainability as a necessitated investment into building capabilities for
business strategy are unlimited. Banks can tap vast innovation, experimentation and development at
benefits by reassessing their business practices and scale. While reskilling existing talent, we also seek for
engaging in sustainability-oriented risk management and key digital talent and have constituted a DFS wing that
product development practices. In this realm, City Bank has successfully visualised and delivered digital
aims to be a pioneer in sustainable and responsible platforms. Recognising the inherent need for
finance to serve underserved and unserved continuous innovation, we continue to expand our
communities and will help to pave the way for other pool of tech and digital specialists.
banks in emerging markets in the years to come.”
As we grow our digital platforms, we also continuously
upgrade best-in-class cyber security defence tech and
mechanisms. We have invested in creating a team of
cyber security and technology experts who steward
Intellectual capital our security operations and serve to safeguard and
defend our assets at all times, while also ensuring
Emerging as a digital bank of choice safety and security of customer data.
At City Bank, we are engaged in the continuous Going forward, we will continue to innovate and
pursuit of innovation to deliver what our customers enhance our systems as well as digital capabilities to
need today and also what they might need tomorrow. be future-ready, emerging as the preferred digital bank
We constantly push the limits of innovation to deliver of Bangladesh.
cutting-edge digital financial products and services to
meet the evolving needs of our stakeholders,
especially those altered by the coronavirus pandemic.
Adopting a holistic approach, we have streamlined our
back-end processes, deployed advanced technology
for effective credit underwriting and decision-making,
and leveraged enhanced analytics for ensuring more
personalised customer engagement. We have also
reimagined the customer journey on various digital

81
 Social and relationship capital

Delivering value to our customers

Building bonds with all generations of customers targetted approach to various demographics, with key
At City Bank, we are focused on promoting varied messaging that included financial inclusion through
interactions and dialogue with our stakeholders. With opening a City Bank account, safety and prevention
our customers being our most major stakeholder against fraud and forgery and awareness on digital
constituency, we believe the way we treat them is the banking, including City Ekhoni account, WhatsApp
key to building trust and earning their respect. banking, etc.

At the bank, our customers are at the centre of all our We also carried out home, car and personal loan
activities, and we aim to provide them with an campaigns. While the success of these ventures was
unparalleled banking experience. This calls for deeply understandably limited, we believe that they exposed a
understanding our customers – their needs, their wide new segment of retail customers to the bank, and
preferences, their concerns – and responding with this places us in a strong position for 2021 and beyond.
products and services that meet and even exceed
their expectations. Changing customer demographics
Through our commitment to customer convenience,
and a rapidly evolving competitive landscape is
customer health and safety, customer privacy,
increasingly requiring us to re-look at our social and
adherence to marketing regulations and effective
relationship capital and how best we can nurture this
compliant management, we are looking to reinforce
capital to achieve our vision of being the digital bank of
the promise of exceptional customer experiences and
choice for meeting the assorted needs, requirements
project City Bank as materially different from other
and expectations of customers across generations.
private banks on every front. Ultimately, our aim is to
build lasting relationships that would support the
This involves transforming our own processes and bank's growth strategy in the years to come.
remaining agile in a rapidly-changing environment.
Accordingly, the bank carefully segments its diverse
Ensuring product responsibility
customer base and identifies and tailors its services to
serve each group. This targetted approach is what At City Bank, we ensure that our product offerings
allows us to differentiate our value proposition and conform with applicable laws and regulations and
build customer loyalty. Thus, during the year we meets our ethical standards. Information on fees and
continued with our digitisation efforts and embarked charges, product features and terms and conditions
on several process re-engineering initiatives with the (T&Cs) are clearly enunciated to clients and customers
aim of creating more value-generating relationships through branch staff and through our call centre.
with our customers, business partners and the wider Furthermore, product-related information is also
community. readily available through our corporate website.
Moreover, the bank also provides any information
sought on banking products and tariffs by its
Remaining relevant in difficult times customers, thus enhancing levels of transparency and
In the midst of highly unfavourable and challenging openness. Meanwhile, we also continue to carry our
economic conditions unleashed by the coronavirus financial literacy programmes to targetted beneficiary
pandemic, with the second wave now threatening to groups, especially customers in the micro and small
derail the economic recovery process, we stand business segment space to promote greater financial
shoulder-to-shoulder with our customers, providing awareness. We continued with this emphasis during
them with full banking support and advice on the year, relaying government moratorium and relief
recuperating the health of their business and support programs to beneficiary and targetted
preparing for post-pandemic recovery. (vulnerable) sections of the community.

Throughout the year, we rolled out several new

products and campaigns with a view to enhance a
visible presence in the mass market. We took a

82 Annual Report 2020

Securing customer information banking model has several clear advantages, including
At the bank, we continue to invest in technology to the fact that helps us to serve customers in hinterland
ensure customer data security and privacy. We and mofussil areas better by bringing our banking
constantly test our systems, infrastructure and services much closer to them. It also allows them to
processes to ensure that they meet the highest benefit from being under the folds of a formal financial
standards of security and are impregnable to any platform.
security breach. Moreover, latest security protocols
including the use of multi-level authentication and the Effective customer communication
use of a one-time password (OTP) SMS system are
We believe effective and efficient communication is
adopted to ensure complete security across every
fundamental to gaining and retaining customer trust.
transaction. Further, we also focus on revamping and
As such, we ensure that our advertising,
modernising our technology, thus keeping up with the
communication and marketing material is error-free
times.
and fully compliant with all regulatory frameworks
applicable to licensed commercial banks in
Embracing technology and innovation to enhance Bangladesh. Moreover, based on the principles of open
customer experience and proactive communication, we strive to provide our
Customer preferences are unique and fast-evolving customers with additional information to help them
and continue to challenge conventional banking make a more informed decision. All promotional
concepts. To serve our customers better by adapting campaigns conducted in 2020 were premised on this
to their evolving needs, we have enhanced our basis.
reliance on technology and innovation in order to
transform our business holistically and to provide an At the bank, promoting customer engagement is yet
unparalleled customer experience. another key element of our communication strategy.
Our overall intent is to encourage our customers to
While on the one hand we are looking to differentiate interact with us more freely and regularly. Over the
ourselves by using digital channels to deliver past few years, we have been quite focused on
cheaper-better-faster products, our philosophy growing our social media presence with the result that
revolves around encouraging customers to migrate to today we have a solid presence on all the major social
digital products that provide quick and efficient media platforms. These also become a key channel of
solutions to optimise their banking experience. In this communication, especially with the youth. During the
regard, we continue to enhance our internet banking year, we launched 3 TVCs that showcased City Bank’s
portal ‘CityLive’ to give both corporate and individual intrinsic ability to forge lasting bonds with all
users a world-class digital banking experience. generations of customers. These were well-received by
Moreover, in the recent past, we have launched several the market.
ground-breaking new products such as the digital
account opening and loan through the City Ekhoni Prioritising customer needs
app, WhatsApp banking, Smart IVR, contactless and
At City Bank, we understand our customers well and
cashless payments through QR code under ‘citypay’,
provide them with solutions to support their goals and
etc., all in the interest of enhancing customer
aspirations, while serving them quickly, efficiently,
convenience and experience.
reliably and respectfully. Our prioritised focus on
serving our customers in the best possible way is
During the year under report, we also fortified our expressed in the following:
agency banking or agent banking model where a l Offer clients access to relevant products across
wider network of City Bank agents were appointed and channels of their choice, taking into consideration
granted the authority to perform routine banking the substantial adoption by many of our clients of
services with the help of a POS terminal. The POS digital platforms and channels
terminal which is digitally connected to our Core
Banking System, enable our agents to perform key
banking transactions. In this context, the agency

83
 l Interact with our clients to deepen our Delivering value to the community
understanding of their evolving needs and
As part of our socially-responsible CSR model, we
preferred ways of accessing our services,
especially in the post-COVID era, so that we can continue to review and ensure its relevance in the
deliver exceptional experiences and customer current socio-economic context of Bangladesh, where
journeys there is much to do in terms of citizenship and
community service. Thus, we are committed to being
l Improve the quality and range of our digital
an active and supportive member of the community
offerings by improving the stability of our
and, in doing so, we strive to ensure that our
platforms and increasing adoption; WhatsApp
investments are generating sustainable benefits for
banking is a visible reflection of this endeavour
the wider and extended community members.
l Increasingly leverage data and analytics to
To catalyse our commitment and mobilise our
proactively deliver personalised and customised
community goals, we have adopted a
offerings to our clients
socially-responsible CSR model aligned with the UN’s
l Reinforce our direct reach capability to especially Sustainable Development Goals (SDGs). Notably, we
small businesses (M/SMEs) and middle market impact 12 of the 17 goals. A detailed insight on our
clients within Bangladesh community and citizenship programs is available in
l Continue to review our distribution capabilities our ‘Social Responsibility Report’ on page 161 of this
given the growing preference for digital report.
transactional services, while also addressing
customer demands for digital services that
extend beyond purely transactional services
l Continue to offer quick, efficient and reliable
physical channels to serve the needs of clients
who prefer this means of access (Branch banking)
l Remain honest, truthful and transparent in all our
dealings with our clients

84 Annual Report 2020

Analysis through major management models
PESTEL analysis

At City Bank, our PESTEL analysis helps the bank identify the
external forces that could impact our market and analyse how these could
directly influence and impact our business. PESTEL is the abbreviation for
“Political, Economic, Social, Technological, Environmental and Legal”
comprising various dimensions that can have an impact on our business.
Notably, the various facets of PESTEL are interconnected, as a
regulation or a political dimension can have an impact on all the other
dimensions. Thus, ensuring a regulatory-compliant business and
embracing the highest standards of governance is most
essential that ensures the bank’s sustainability and long-term viability.

POLITICAL ECONOMIC

- Stable central Govt. regime - Strong GDP bounce-back potential

- Large Govt. debt relief program - Govt. focus on economic diversification
- Enforcement of key interest rates - Well planned Govt. programs. e.g.,
Digital Bangladesh, etc.
- Regulatory-driven banking stability
- Focus on large infrastructural
projects and increased pvt. sector
PESTEL participation

SOCIAL TECHNOLOGICAL
- Key pandemic-induced consumer shifts - Fast-paced technological change
- Rising trust in digital/greater adoption - Rising penetration of 4G-enabled
- Growing preference for banking devices
through digital platforms - Acceptance of mobile financial services
- Higher propensity for savings and - Digital lending gaining credence
investments

ENVIRONMENTAL LEGAL

- Growing trends in ESG-related financing - Health and safety protocols issued by

- Central bank push in green finance Govt. for COVID-19
- Accessibility of green funds from global - Evolving laws and regulations on data
developmental institutions privacy
- Focus on responsible finance - Growing emphasis on product governance

85
 Analysis through major management models
Porter’s 5 Forces analysis

At City Bank, the underlying idea of the Porter’s 5 forces model is that
it helps us understand the competitive intensity in our industry for
obtaining a competitive advantage by being ahead of the curve. Our
longstanding experience and expertise comprises a natural advantage
that enables us to respond to major shifts and developments with speed,
thus building our lead.
Porter’s 5 Forces analysis has had a profound impact on our corporate
strategy formulation. Applying it to the scrutiny of our strategy has
enabled us to effectively analyse our competitive environment,
with the framework facilitating the aggregation of a large number of
different factors into a simple model.

5- Forces Model

1
Threat of new entrants
2
Threat of substitutes
- Virtually nonexistent, as
3
Bargaining power of buyers
- High, on account of product
- High, with FinTech
banking is an established commoditisation and
companies and digital-first
and essential service availability, yet, service
companies foreseen as
representing the major
possible new entrants
differentiation and hence a
major scope for growth

4
Bargaining power of suppliers
- High, with deposit customers
5
Rivalry among existing players
- High, with a large number of banks and FIs
(major suppliers for banks) having competing for a limited share (mostly the
multiple choices and options metro/urban markets), yet opening up
scope for peripheral expansion

86 Annual Report 2020

Analysis through major management models
SWOT analysis
At City Bank, we consider SWOT analysis to be an incredibly simple, yet
highly powerful tool to help us develop our business strategy and have a
top view or ‘dashboard-like’ information about the bank in a single view.
SWOT is the acronym for “Strengths, Weaknesses, Opportunities and
Threats”.
Notably, strengths and weaknesses are internal to the bank, which
we can exert control over and can influence change. On the other hand,
opportunities and threats are external, enabling us to take advantage of
opportunities for sustainable benefit, while de-risking against threats for
building competitive lead.

Fortifying our Addressing our

strengths weaknesses

STRENGTHS WEAKNESSES
- Well-diversified presence - Portfolio concentration
Internal

- Resilient operational infrastructure - Relatively lower CASA

- Highly experienced leadership team - Relatively higher NPLs
- Pioneering digital banking platform
- Robust B2B and B2C franchisee
- Strong balance sheet
- Experienced sales team
SWOT
analysis
model
OPPORTUNITIES THREATS
- Large unserved regions - Disruption by FinTech companies
External

- Major digital banking scope - Major competitive intensity

- Sound cross-sale opportunities - Deteriorating credit behaviour
- Low-cost deposit mobilisation - Rising non-performing loans
- Participation in Govt. stimulus - Unexpected regulations
program - Economic uncertainty

Leveraging our Mitigating our

opportunities threats

87
 Historical performance

Five-year performance at a glance Figures in BDT million unless specified

Particulars 2020 2019 2018 2017 2016

Balance Sheet
Authorised Capital 15,000 15,000 15,000 15,000 15,000
Paid-up Capital 10,164 10,164 9,680 9,219 8,758
Reserve Fund & Surplus 18,654 15,252 14,750 15,650 11,895
Total Shareholders' Equity 28,818 25,416 24,430 24,869 20,653
Bond 11,600 9,200 8,800 7,250 3,000
Deposits 254,781 246,704 205,170 183,493 174,695
Borrowings 58,769 44,168 60,453 37,906 31,695
Loans and Advances 268,202 246,944 231,391 196,596 175,025
Credit to Deposit ratio (excluding OBU loans) 74.7% 79.1% 82.5% 84.9% 80.4%
Debt - Equity Ratio (times) 12.3 13.0 12.3 10.1 11.3
Investments 46,251 39,452 27,882 25,508 24,432
Fixed Assets 5,920 5,675 3,519 3,277 3,437
Earning Assets 325,011 290,209 273,006 220,875 199,508
Total Assets 382,926 354,689 324,780 275,531 254,776
Off-Balance Sheet Exposures 136,338 118,329 135,748 98,845 61,020
Income Statement
Net Interest Income (excluding investment income) 8,363 10,832 9,201 7,495 6,477
Investment Income 3,438 2,086 1,842 2,791 4,746
Non-interest Income 4,936 5,367 4,859 4,630 3,173
Operating Income 16,737 18,285 15,902 14,916 14,396
Operating Expenses 9,697 9,998 9,223 8,047 6,859
Operating Profit (profit before provision and tax) 7,040 8,287 6,679 6,869 7,537
Provision for Loans, Investment and Other assets 644 2,556 2,324 1,718 2,071
Profit Before Tax 6,395 5,731 4,355 5,152 5,466
Profit After Tax 4,012 2,472 2,018 3,628 3,956
BIS Capital Measures*
Risk Weighted Assets (RWA) 269,322 244,925 259,413 202,210 177,812
Tier I Capital 29,017 23,664 21,507 20,522 18,591
Tier II Capital 12,800 13,471 13,304 9,232 4,831
Total/Regulatory Capital (Tier-I and II) 41,817 37,136 34,811 29,755 23,422
Tier I Capital Ratio 10.8% 9.7% 8.3% 10.1% 10.5%
Tier II Capital Ratio 4.8% 5.5% 5.1% 4.6% 2.7%
Total Capital Adequacy Ratio 15.5% 15.2% 13.4% 14.7% 13.2%
RWA to Total Assets 70.3% 69.1% 79.9% 73.4% 69.8%
Credit Quality
Non Performing/classified Loans (NPLs) 10,850 14,244 12,326 10,678 10,582
Percentage of NPL over Total Loans and Advances 4.0% 5.8% 5.3% 5.4% 6.0%
Provision for Unclassified Loans 5,159 4,240 3,486 2,310 2,091
Provision for Classified Loans 3,933 5,830 4,488 3,737 4,212

88 Annual Report 2020

 Particulars 2020 2019 2018 2017 2016

Foreign Exchange Business

Export 119,987 130,241 117,520 98,593 86,657
Import 180,817 197,590 172,937 164,588 100,749
Remittance 34,291 37,286 28,631 30,464 17,615
Efficiency/Productivity Ratio
Return on Average Equity (ROE) 14.8% 9.9% 8.2% 15.9% 19.0%
Return on Average Assets (ROA) 1.1% 0.7% 0.7% 1.4% 1.7%
Cost to Income Ratio 57.9% 54.7% 58.0% 53.9% 47.6%
Yield on Advance based on average EOD balance 8.4% 10.3% 9.7% 8.7% 9.6%
Cost of Deposit based on average EOD balance 4.6% 5.4% 5.6% 4.4% 5.2%
Net Interest Margin Ratio 3.7% 5.0% 4.1% 4.3% 4.4%
Statutory Liquidity Ratio (SLR)-at the close of the year 17.2% 17.5% 14.6% 15.8% 16.4%
Cash Reserve Ratio (CRR)-at the close of the year 4.9% 6.7% 6.9% 7.4% 7.7%
Current Ratio (Times) 0.9 0.8 0.9 1.1 1.1
Operating Profit per Employee 1.6 1.8 1.7 2.1 2.5
Operating Profit per Branch 53.3 62.8 51.0 52.8 62.8
Share Information
No of Shares Outstanding (in million) 1,016.4 1,016.4 968.0 921.9 875.8
Operating Profit per Share (BDT) 6.9 8.2 6.9 7.5 8.6
Earnings Per Share (BDT) 3.9 2.4 2.1 4.1 4.5
Market price per share (BDT) as on close of the year (DSE) 24.8 21.1 30.2 53.2 27.2
Price Earnings Ratio (Times) 6.3 8.7 14.5 13.0 6.0
Net Assets Value Per Share (BDT) 28.4 25.0 25.2 27.0 23.6
Dividend Cover Ratio (EPS/DPS) 175.4% 162.1% 189.5% 170.4% 188.2%
Total Dividend** 22.5% 15.0% 11.0% 24.0% 24.0%
Cash Dividend 17.5% 15.0% 6.0% 19.0% 24%
Stock Dividend 5.0% - 5.0% 5.0% -
Distribution Network
Number of Branches 121 121 119 118 108
Number of SME Center & Agri Branches 11 11 12 12 12
Number of SME-S Units 116 103 20 - -
Number of Agent Outlets 1,411 331 154 20 -
Number of Priority Centers 7 7 7 7 7
Number of ATMs 311 343 338 339 309
Number of Employees 4,356 4,493 3,858 3,230 2,986
Number of Foreign Correspondents 469 466 491 482 479
No. of CDMs 64 63 30 30 30

* BIS: Bank for International Settlements

** The Board of Directors in its 584th meeting decided to recommend distribution of 17.50% (Seventeen point five percent)
cash dividend and 5.00% ( five percent) stock dividend subject to shareholders' approval.

89
 Horizontal analysis
Balance Sheet as on December 31 (For last five years)

PROPERTY AND ASSETS 2020 2019 2018 2017 2016

Cash
In hand (including foreign currencies) 148.9% 161.8% 143.0% 117.4% 100.0%
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) 81.0% 95.6% 67.7% 93.4% 100.0%
91.5% 105.8% 79.4% 97.2% 100.0%
Balance with other banks and financial institutions
In Bangladesh 186.1% 154.4% 224.4% 99.5% 100.0%
Outside Bangladesh 656.7% 651.2% (15.2%) 91.3% 100.0%
210.3% 180.0% 212.1% 99.1% 100.0%
Money at call and short notice 0.0% 0.0% 97.8% 97.8% 100.0%
Investments
Government 190.8% 163.7% 107.2% 100.2% 100.0%
Others 175.8% 141.2% 178.2% 143.0% 100.0%
189.3% 161.5% 114.1% 104.4% 100.0%
Loans and advances/investments
Loans, cash credits, overdrafts, etc./investments 158.6% 145.6% 136.0% 114.4% 100.0%
Bills purchased and discounted 30.4% 37.6% 45.5% 64.9% 100.0%
153.2% 141.1% 132.2% 112.3% 100.0%
Fixed assets including premises, furniture and fixtures 172.2% 165.1% 102.4% 95.3% 100.0%
Other assets 89.2% 92.1% 105.0% 93.8% 100.0%
Non-banking assets 113.1% 120.4% 108.0% 92.1% 100.0%
Total assets 150.3% 139.2% 127.5% 108.1% 100.0%

LIABILITIES AND CAPITAL

Liabilities
Bond 386.7% 306.7% 293.3% 241.7% 100.0%
Borrowings from other banks, financial institutions and agents 185.4% 139.4% 190.7% 119.6% 100.0%
Deposits and other accounts
Current deposits and other accounts 183.7% 166.4% 112.6% 104.1% 100.0%
Bills payable 144.2% 118.7% 95.9% 85.4% 100.0%
Savings bank deposits 170.1% 132.5% 126.5% 111.7% 100.0%
Fixed deposits 130.2% 138.8% 116.0% 103.5% 100.0%
Bearer certificate of deposit 0.0% 0.0% 0.0% 0.0% 0.0%
145.8% 141.2% 117.4% 105.0% 100.0%
Other liabilities 117.1% 118.1% 104.8% 89.0% 100.0%
Total liabilities 151.2% 140.6% 128.3% 107.1% 100.0%
Capital/shareholders' equity
Paid up capital 116.1% 116.1% 110.5% 105.3% 100.0%
Statutory reserve 142.0% 142.0% 131.2% 116.9% 100.0%
Share premium 227.6% 227.6% 227.6% 227.6% 100.0%
Dividend equalization reserve 300.0% 300.0% 300.0% 300.0% 100.0%
Other reserve 167.2% 83.6% 164.5% 226.4% 100.0%
Surplus in profit and loss account 158.7% 94.3% 75.0% 103.1% 100.0%
Total shareholders’ equity 139.5% 123.1% 118.3% 120.4% 100.0%
Total liabilities and shareholders' equity 150.3% 139.2% 127.5% 108.1% 100.0%

Horizontal analysis of Balance Sheet refers to the analysis of growth of each component of Balance Sheet items from the
previous period.

90 Annual Report 2020

Horizontal analysis
Profit and Loss Account (For last five years)

2020 2019 2018 2017 2016

Interest income/profit on investments 144.2% 167.2% 142.9% 104.6% 100.0%

Interest paid/profit shared on deposits and borrowings etc. 154.4% 167.1% 143.4% 97.1% 100.0%
Net interest income/profit on investments 129.1% 167.2% 142.1% 115.7% 100.0%
Investment income 72.4% 44.0% 38.8% 58.8% 100.0%
Commission, exchange and brokerage 157.9% 159.1% 153.1% 134.2% 100.0%
Other operating income 150.9% 189.5% 158.1% 169.7% 100.0%
105.7% 94.1% 85.3% 93.7% 100.0%
Total operating income (A) 116.3% 127.0% 110.8% 103.6% 100.0%

Salaries and allowances 144.3% 144.3% 133.0% 115.7% 100.0%

Rent, taxes, insurance, electricity, etc. 68.0% 71.0% 136.5% 125.0% 100.0%
Legal expenses 88.1% 126.6% 163.9% 139.2% 100.0%
Postage, stamp, telecommunication, etc. 106.4% 98.1% 119.0% 88.9% 100.0%
Stationery, printing, advertisements, etc. 123.8% 146.6% 152.2% 131.1% 100.0%
Chief Executive's salary and fees 110.8% 111.9% 109.9% 103.9% 100.0%
Directors' fees 62.5% 74.4% 79.3% 79.8% 100.0%
Auditors' fees 98.0% 83.2% 83.2% 109.5% 100.0%
Depreciation and repair of Bank's assets 189.4% 166.1% 115.6% 105.8% 100.0%
Other expenses 145.9% 183.3% 155.3% 126.3% 100.0%
Total operating expenses (B) 141.4% 145.8% 135.2% 117.3% 100.0%
Profit before provision (C = A-B) 93.4% 110.0% 88.6% 91.1% 100.0%
Provision for loans and advances/investments 19.8% 133.4% 95.0% 64.9% 100.0%
Provision for off-balance sheet exposures 128.2% 31.1% 124.8% 135.3% 100.0%
Provision for diminution in value of investments 0.0% 0.0% 100.0% 0.0% 0.0%
Other provision 31.9% (25.2%) 112.2% 100.0% 0.0%
Total provision (D) 31.1% 123.4% 112.2% 82.9% 100.0%
Total profit before taxes (E = C-D) 117.0% 104.9% 79.7% 94.3% 100.0%
Provision for taxation (F)
Current tax expense 115.1% 183.9% 137.2% 106.6% 100.0%
Deferred tax income/(expense) (326.8%) (146.2%) (44.8%) 165.3% 100.0%
Total provision for tax 157.8% 215.9% 154.8% 100.9% 100.0%
Net profit after tax (G = E-F) 101.4% 62.5% 51.0% 91.7% 100.0%

Horizontal analysis of Profit & Loss Account refers to the analysis of growth of each component of Profit & Loss Account from the
previous period.

91
 Vertical analysis
Balance Sheet as on December 31 (For last five years)

PROPERTY AND ASSETS 2020 2019 2018 2017 2016

Cash
In hand (including foreign currencies) 1.5% 1.7% 1.7% 1.6% 1.5%
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) 4.4% 5.6% 4.3% 7.0% 8.1%
5.9% 7.3% 6.0% 8.6% 9.6%
Balance with other banks and financial institutions
In Bangladesh 5.9% 5.3% 8.4% 4.4% 4.8%
Outside Bangladesh 1.1% 1.2% 0.0% 0.2% 0.3%
7.1% 6.5% 8.4% 4.6% 5.0%
Money at call and short notice 0.0% 0.0% 0.0% 0.0% 0.0%
Investments
Government 11.0% 10.2% 7.3% 8.0% 8.7%
Others 1.1% 0.9% 1.3% 1.2% 0.9%
12.1% 11.1% 8.6% 9.3% 9.6%
Loans and advances/investments
Loans, cash credits, overdrafts, etc./investments 69.5% 68.9% 70.2% 69.6% 65.8%
Bills purchased and discounted 0.6% 0.8% 1.0% 1.7% 2.9%
70.0% 69.6% 71.2% 71.4% 68.7%
Fixed assets including premises, furniture and fixtures 1.5% 1.6% 1.1% 1.2% 1.3%
Other assets 3.1% 3.5% 4.4% 4.6% 5.3%
Non-banking assets 0.3% 0.3% 0.3% 0.3% 0.4%
Total assets 100.0% 100.0% 100.0% 100.0% 100.0%

LIABILITIES AND CAPITAL

Liabilities
Bond 3.0% 2.6% 2.7% 2.6% 1.2%
Borrowings from other banks, financial institutions and agents 15.3% 12.5% 18.6% 13.8% 12.4%
Deposits and other accounts
Current deposits and other accounts 11.8% 11.5% 8.5% 9.3% 9.6%
Bills payable 0.6% 0.5% 0.5% 0.5% 0.6%
Savings bank deposits 15.5% 13.1% 13.6% 14.2% 13.7%
Fixed deposits 38.6% 44.5% 40.6% 42.7% 44.6%
Bearer certificate of deposit 0.0% 0.0% 0.0% 0.0% 0.0%
66.5% 69.6% 63.2% 66.6% 68.6%
Other liabilities 7.6% 8.2% 8.0% 8.0% 9.7%
Total liabilities 92.5% 92.8% 92.5% 91.0% 91.9%
Capital/shareholders' equity
Paid up capital 2.7% 2.9% 3.0% 3.3% 3.4%
Statutory reserve 2.3% 2.4% 2.5% 2.6% 2.4%
Share premium 0.4% 0.4% 0.5% 0.5% 0.3%
Dividend equalization reserve 0.1% 0.1% 0.2% 0.2% 0.1%
Other reserve 0.5% 0.3% 0.6% 0.9% 0.4%
Surplus in profit and loss account 1.6% 1.0% 0.9% 1.4% 1.5%
Total shareholders' equity 7.5% 7.2% 7.5% 9.0% 8.1%
Total liabilities and shareholders' equity 100.0% 100.0% 100.0% 100.0% 100.0%

Vertical analysis of Balance Sheet refers to the components of Balance Sheet items as a % of total assets over the periods which
would be termed as common sizing of Balance Sheet.

92 Annual Report 2020

Vertical analysis
Profit and Loss Account (For last five years)

2020 2019 2018 2017 2016

Interest income/profit on investments 73.4% 78.3% 77.2% 69.3% 67.0%

Interest paid/profit shared on deposits and borrowings etc. 46.9% 46.6% 46.2% 38.4% 39.9%
Net interest income/profit on investments 26.5% 31.6% 31.0% 31.0% 27.0%
Investment income 10.9% 6.1% 6.2% 11.5% 19.8%
Commission, exchange and brokerage 10.6% 9.9% 11.0% 11.8% 8.9%
Other operating income 5.0% 5.8% 5.6% 7.3% 4.4%
26.6% 21.7% 22.8% 30.7% 33.0%
Total operating income (A) 53.1% 53.4% 53.8% 61.6% 60.1%

Salaries and allowances 16.7% 15.3% 16.3% 17.4% 15.2%

Rent, taxes, insurance, electricity, etc. 1.6% 1.5% 3.4% 3.8% 3.0%
Legal expenses 0.1% 0.1% 0.2% 0.2% 0.2%
Postage, stamp, telecommunication, etc. 0.3% 0.2% 0.3% 0.3% 0.4%
Stationery, printing, advertisements, etc. 0.6% 0.7% 0.8% 0.9% 0.7%
Chief Executive's salary and fees 0.1% 0.1% 0.1% 0.1% 0.1%
Directors' fees 0.0% 0.0% 0.0% 0.0% 0.0%
Auditors' fees 0.0% 0.0% 0.0% 0.0% 0.0%
Depreciation and repair of Bank's assets 5.8% 4.7% 3.8% 4.2% 4.0%
Other expenses 5.7% 6.5% 6.4% 6.4% 5.1%
Total operating expenses (B) 30.8% 29.2% 31.3% 33.2% 28.6%
Profit before provision (C = A-B) 22.3% 24.2% 22.5% 28.4% 31.5%
Provision for loans and advances/investments 1.2% 7.5% 6.2% 5.2% 8.1%
Provision for off-balance sheet exposures 0.5% 0.1% 0.6% 0.7% 0.6%
Provision for diminution in value of investments 0.0% 0.0% 0.0% 0.0% 0.0%
Other provision 0.3% (0.2%) 1.1% 1.2% 0.0%
Total provision (D) 2.0% 7.5% 7.8% 7.1% 8.6%
Total profit before taxes (E = C-D) 20.3% 16.7% 14.7% 21.3% 22.8%
Provision for taxation (F)
Current tax expense 6.0% 8.9% 7.7% 7.3% 6.9%
Deferred tax income/(expense) 1.5% 0.6% 0.2% (1.0%) (0.6%)
Total provision for tax 7.6% 9.5% 7.9% 6.3% 6.3%
Net profit after tax (G = E-F) 12.7% 7.2% 6.8% 15.0% 16.5%

Vertical analysis of Profit & Loss Account refers to the components of Profit & Loss Account as a % of total income (Interest Income + Investment
Income + Commission, Exchange, Brokerage and others) over the periods which would be termed as common sizing of Profit & Loss Account.

93
 Performance at a glance, 2020
During the year 2020, in what was a highly challenging period,
City Bank reported a commendable and highly resilient performance,
a manifestation of its robust business model, diversified book,
strong credit underwriting practice and specialist talent pool.

268,202
254,781
246,704

246,944
205,170
183,493

231,391
196,596
174,695

175,025
2020

2020
2016

2019
2018
2017

2016

2019
2018
2017
Deposits Loans & Advances
BDT in million BDT in million
382,926

325,011
354,689

290,209
324,780

273,006

28,818
275,531

220,875

24,869

25,416
254,776

24,430
199,508

20,653

2020
2020

2020
2016

2019

2016

2019
2018

2018
2016

2019
2018

2017

2017
2017

Total Asset Earnings Assets Shareholders’ Fund

BDT in million BDT in million BDT in million
14,244
12,326

10,850
28.4

10,678
27.0

10,582
25.2

25.0

6.0%
23.6

5.8%
5.4%

5.3%

2020 4.0%
2020

2020

2016

2019
2016

2018
2019
2018

2016

2019

2017
2018
2017

2017

Net Asset Value per Share NPL volume NPL

in BDT BDT in million (%)

94 Annual Report 2020

 19.0%

15.9%
1.7%

14.8%
1.4%

1.1%

9.9%
0.7%

0.7%

8.2%
2020

2020
2016

2019
2018

2016

2019
2018
2017

2017

Return on Average Assets Return on Shareholders’ Fund

(%) (%)

53.2
4.5

4.1

3.9

30.2
2.4

27.2

24.8
2.1

24% 24%

21.1
22.5%
15%
11%
2020

2020
2016

2019
2018

2016

2019
2018
2017

2017

2016 2017 2018 2019 2020

Earnings per Share Dividend Stock Performance

in BDT (%) in BDT
14.5
13.0

14.3%
15.5% 13.9%
13.2% 14.7% 13.4% 15.2%
12.5% 12.7% 12.2%
8.7

6.3
6.0

10.8% 10.1%
10.5% 9.1% 8.2%
10.1% 9.7% 8.5%
8.3% 7.2%
2020
2016

2019
2018
2017

2016 2017 2018 2019 2019 2016 2017 2018 2019 2020

Price Earnings Ratio CRAR [Solo] CRAR [Conso]

times (%) (%)

95
 Segmental performance
Wholesale Banking
We are a leading Wholesale Banking franchise in Bangladesh catering to the banking needs of both corporate and
institutional clients. Our banking solutions comprise (i) Corporate Banking Division (CBD); (ii) Cash Management and
Custodial Cluster (CMCC); (iii) Structured Finance Unit (SFU); (iv) Financial Institutions (FI) and (v) Corporate
Strategic Business Management (CSBM) Department. Beyond generic products, we provide a whole host of tailored
and sophisticated solutions to our clients and, aligned with the bank’s footprint, our key value proposition
comprises our deep local presence, strong reputation in innovative financing and a wide range of platforms and
solutions. Further, the division played a frontline role in channelling government relief against COVID-19 to
vulnerable populations, thus fulfilling a key nationalistic responsibility.
Performance highlights
Metric 2020 2019 2018
Total asset book (BDT mn) 145,180 137,634 137,207
Total liabilities (BDT mn) 53,531 62,403 34,731
Total financing extended to the power sector (BDT mn) 32,090 22,536 20,000
Team size 92 96 94

318,618 Largest
Govt. stimulus reached to workers in the Mobilisation from central bank’s Green
worst-affected EOUs Transformation Fund for a spinning mill by SFU
531 mw 510 mn
Contributed to the financing of power Dollars arranged for refinancing and tenor
generation capacity over the last 2 years extension by FI Division

Key macroeconomic trends during the year: Why we are best placed for recovery:

Slowing down of trade, business and investment activity Ensured operational activities during the lockdown to
meet specific customer requirements, while also keeping
Large quantum of COVID-19 relief and stimulus passing
the wheels of the economy rolling
through the banking channel
Enabled low-cost liquidity to the maximum extent
possible
Remained responsive to changing market regulations
and policies, while playing an active role in Govt. stimulus
programs

Segment update
Focused on providing continuous and seamless experience to our customers
As a deeply customer-facing entity, the division ensured complete and continuous support to customers, even during the
pandemic triggered lockdown months. While our team members across our various departments and wings were in
constant communication with our customers as we fully activated the work from home (WFH) model, we also provided
all necessary logistical and health and safety support to employees who needed to visit office to perform complex
transactions. With the situation gradually improving towards the later part of the year, the division commenced
roster-based rotations for employees.
Growing significance to the Group Corporate Banking Division
32% Power sector engagement:
City Bank’s Corporate Banking Division enjoys a robust
of operating income
position of strength by virtue of its longstanding
54% presence and experience in power sector financing,
of total assets thereby facilitating energy-led economic development
and also contributing to the growth of a core sector of
21% the economy. The division has arranged various
of total liabilities

96 Annual Report 2020

innovative refinancing facilities to support this priority l On-boarded the Transactional Account of a
sector, including ECA (Export Credit Agency) facility, prominent GSA of the prestigious Emirates
refinancing from other banks and LCs from OBU. It also Airlines
enjoys credit lines from development financiers like IFC, l Provided the first-of-its-kind cash management
ADB, FMO, Norfund, OeEB and GCPF. solution, including FX, to Shohoz, one of the
During the year 2020, the division was able to engage in fastest growing e-commerce start-ups in
trade facilitation of BDT 275,932 mn, while achieving net Bangladesh
asset and liability growth of 8.4% and 19.4%, respectively l Provided seamless cash collection and fund
during the year. management services during the lockdown to
Bangladesh’s first and largest MFS, bKash, while
maintaining a BDT 7,000 mn average portfolio
Government stimulus: throughout the year
The Government declared various stimulus packages l Established several new locations to facilitate cash
through Bangladesh Bank to support COVID-19 collection of Square Pharma, the country’s largest
impacted industries. Among the stimulus packages, pharmaceutical company, while maintaining BDT
salary loan for workers of export-oriented industries was 2,700 mn average balance throughout the
declared first, considering that it was amongst the worst challenging times
hit sectors the economy. The division was among the l Launched several new branches for insurance
first to respond even at the time of peak lockdown, and premium collection of Metlife, one of the largest
was soon granted government authorisation. Thus, in global insurance companies
close coordination with Bangladesh Bank and different l Enhanced the functionality of CityLive (City
MFS (mobile financial services) entities, the division Bank’s online banking platform) through the
smoothly disbursed salary amounting to over BDT introduction of a direct debit collection facility
3,600 mn to 41 clients. This amount was disbursed to l Engaged in cross-selling of a FX forward contract
over 3 lakh direct workers (both females and males) of of USD 130 mn, with major contribution from
export-oriented industries from April-July 2020 as salary, Syngenta and Biman
disbursed directly in their online wallets.
The division also championed disbursal of the Govt.’s Structured Finance Unit
Working Capital Stimulus loan during the COVID-19 Primer and achievements
period. The bank disbursed around BDT 8,000 mn in City Bank’s Structured Finance Unit (SFU) provides
76 companies till December 2020, starting from June innovative and high-impact financial solutions to
2020. This comprised another large operational clients in the power, manufacturing, microfinance,
challenge because the entire country was under RMG and textiles, financial services and consumer
lockdown; yet, the bank ensured disbursements, sectors. As a testament of its high-quality and
keeping all credit criterion under check to assist the consistent achievements, SFU was awarded the
impacted industries. prestigious “Syndicated Loan of the Year Bangladesh”
award by Asian Banking & Finance. Moreover, SFU
Cash Management and Custodial Services successfully closed the mobilisation of the
largest-ever refinancing of Bangladesh Bank’s Green
Deposit mobilisation:
Transformation Fund (GTF) for a large spinning mill
City Bank strives to strengthen its deposit base by with capacity of 49,152 spindles.
catering to various corporate and institutional clients
Over the last 2 years, SFU has played an instrumental
through its CMCC team with the ultimate objective of
role in power sector financing, arranging USD 120 mn
maximising liquidity and minimising cost of funds.
and BDT 9,300 mn funds for power projects of 531
MW capacity through diverse and innovative
Key progress achieved, 2020 financing options, which showcases City Bank’s ability
With the coronavirus spreading rapidly especially to arrange complex financing solutions for large
during the second quarter of 2020, cash flow infrastructure projects of the country.
forecasting and management became vital for Furthermore, as coronavirus eroded confidence,
companies. Towards this extent, the Govt. declared corporations and businesses remained reluctant to
banking as an essential service, thus ensuring venture into new projects. As a result, the market had
sustained flow of money in the economy. The CMCC too few deals for too many contenders. During these
team quickly adapted to operational changes and challenging times, SFU remained highly opportunistic,
continued to work toward achieving its goals. Some of arranging funds for the bank’s OBU and negotiating
the noteworthy accomplishments of 2020 are USD 50 mn fund mobilisation from CDC and
mentioned hereunder: ResponsAbility. In addition, it also arranged USD 5.6
l Digitised document collection of Bangladesh’s mn refinancing facilities for energy-efficient and
sole company registration authority (RJSC) that environment-friendly RMG projects. Since these
facilitates the formation of companies and keeps long-term credit facilities were in on-lending structure
track of all ownership-related information

97
 refinancing of existing facilities, SFU was able to transaction financed under the Shariah-based
support clients by reducing their cost of funds, thus financing arrangement. The transaction was
driving a competitive benefit during the pandemic. conducted on Contour’s network, built using R3’s
SFU also continued to provide agency and other Corda blockchain technology. City Bank partnered with
ancillary services to clients involving multiple types of ITFC, the advising-cum-financing bank. Blockchain
products and structures with a portfolio under technology enables time and cost efficiency as well as
administration of more than USD 500 mn during 2020. minimises scope of fraud or forgery. This landmark
transaction demonstrates City Bank’s commitment to
modern technology for providing efficient and
Financial Institutions satisfying experiences to customers.
Primer Prestigious accolade: The bank avails trade
Through the Financial Institutions (FI) Department, facilitation lines from International Finance
City Bank maintains a strong global network Corporation (IFC) a World Bank Group, and Asian
comprising 30 global transaction accounts and 471 Development Bank (ADB). Through its transactions
SWIFT relationships (end 2020). Moreover, FI with ADB, the bank has won ADB’s ‘Leading Partner
possesses trade finance lines with 60+ global and Bank in Bangladesh in 2020’ award.
regional banks. Through this global network, the bank
has been able to utilise trade finance lines of total USD
1.3 bn of LCs during the year. Non Resident Business (NRB)
Primer and the year 2020
Key achievements, 2020 For Non-Resident Remittance business, the year 2020
was yet another remarkable one with significant
Pandemic-related support: In 2020, City Bank contributions made to the bank. Due to
assisted the pandemic-affected local businesses by pandemic-driven lockdown in different countries
allowing extension of LC tenors and arranging across the globe, City Non Resident Business (NRB)
refinancing, where required. FI arranged over USD Department focused on establishing drawing
430 mn in refinancing and around USD 80 mn in arrangement with fintech-based transactions and
tenor extension from correspondent banks coordinated with traditional MSBs to adopt fintech in
comprising a total of over USD 510 mn extended as their remittance operations. These facilitated remitters
support to various businesses hit hard by the to use MSB’s mobile apps/weblinks through which
pandemic. they could remit money from home. This adoption
Deepening engagement with Islamic finance: City helped NRB to cross the landmark of USD 400 mn
Bank also entered into Murabaha Financing remittance volumes in 2020.
Agreement with International Islamic Trade Finance NRB is also coordinating with CBL-Cards team to
Corporation (ITFC), a wing of Islamic Development introduce VISA direct remittance services for VISA
Bank, for a USD 15 mn trade finance facility. Further, cardholders of City Bank, while also coordinating with
the bank emerged as the first to avail ITFC’s CBL-SME team to promote loan products for
newly-developed LC confirmation facility. It also remittance beneficiaries in Bangladesh. It is worth
received extensive support for trade finance under mentioning that City Bank is the only bank in
the COVID-19 support program of Islamic Corporation Bangladesh to currently have this product approval
for the Insurance of Investment and Export Credit from Bangladesh Bank. NRB is also coordinating with
(ICIEC), another wing of Islamic Development Bank. City Brokerage to attract Non Resident Bangladeshis
Partnership with PrimaDollar: City Bank signed a to invest in the security markets directly from abroad
Memorandum of Understanding (MoU) with Prima through City Brokerage.
Dollar, a UK-based global trade finance provider, for
exporter-customers of the bank to avail deferred sales
contract terms. The bank, in collaboration with Leadership message
Primadollar, will be able to offer fintech-based Q. How would you sum up the year 2020?
factoring solutions to exporters, through which they We achieved a tenacious performance in tough times.
can receive deferred exports payments on-sight basis Despite the external distractions, we remained
in a secure, faster and cost-effective manner. Under focused on meeting our customers’ requirements
the agreement, the bank will be able to provide a within the ambit of the evolving regulations. Thus, we
comprehensive solution to exporters in real-time defended our business well in an unprecedented
communication, global underwriting standards and a operating environment, even demonstrating our
leading edge on online platform through the leadership in responsible and innovative finance. It is
partnership. also good to know that we played a stellar role in
Venture into blockchain: On the digital trade frontier, transmitting the government’s subsidy/relief finance
City Bank emerged as the first bank in Bangladesh to safely and securely through our channels, hence
issue a cross-border LC transaction via Blockchain directly contributing to the welfare of thousands of
technology. It was also the first Blockchain LC beneficiaries. We are a public-facing bank and our

98 Annual Report 2020

duty to the masses is a key objective that we were During the year 2020, the underlying focus of City Bank’s
able to fulfill during the year. Treasury was premised on two factors to counter
The year threw a whole lot of unique socio-economic challenging market conditions:
challenges across the world. Multiple policy rate cuts l Operational excellence: Ongoing focus on
by central banks across the globe, including in strengthening the Treasury’s operational
Bangladesh, coupled with regulatory and client framework, including back and front offices
requests on loan moratoriums have had a substantive
impact on financial institutions. Despite strong l Mapping market trends: Treasury prudently
external headwinds, we protected our income well, anticipated movements in interest rates in 2020 and
demonstrating our ability to remain resilient and agile positioned the bank’s balance sheet accordingly.
in delivering sustainable business outcomes. With a Treasury overbought Government securities,
strong focus on improving client experiences, we anticipating a decline in the yield curve, and
reinforced our digital capabilities to initiate several oversold USD, forecasting a boom in foreign
projects, most notably under Blockchain. currency inflows. This strategy paid off and resulted
in better-than-expected profit for Treasury during
Q. What is the forward outlook and prospects? the year.
Treasury remained amongst the largest contributors to
In 2021 and beyond, as we enter the post-COVID-19
the bank’s performance during the year under report.
era and the ‘new normal’, we will continue to face
operational and growth challenges. However, we’ll
keep our efforts focused on disciplined execution with Treasury’s responsibilities
a client-centric approach, cross-selling to increase our City Bank’s Treasury is focused on managing balance
share from the client and ensuring more robust sheet liquidity as well as optimising market and liquidity
planning and budgeting. risks for the bank. The various divisions that help fulfill this
Further, in a bid to accelerate digitalisation, we will objective include the following:
continue to drive adoption of core technologies to
improve our end-to-end deliveries and efficiencies, Treasury Front O�ice:
while also minimising scope of any defalcation.
The broad mandate of the front office is to manage the
bank’s balance sheet and ensure regulatory compliance,
manage the ALM processes, ensure income from FX,
Treasury money market and fixed income securities trading, while
also engaging in strategy-setting through projecting
Ensuring operational excellence liquidity scenario, interest rate and exchange rate. Some
and optimal returns of its key responsibilities include:
The COVID-19 landscape had an adverse impact on l Foreign exchange management
economic conditions in 2020. This was exacerbated by l Money market
the US-China trade tensions and Brexit, though both l Asset-liability management
these major events were sufficiently resolved for the l Fixed income trading
uncertainty to lift. For the later, the presidential elections l Nostro funds management
in the US in November 2020 saw a historic change, while
the UK also successfully segregated from the EU ALM and Money Market Desk
grouping during the year. The desk is one of the most active players in the market,
From a country perspective, the decision by the central ensuring optimal returns
bank of Bangladesh to cap both deposit and industrial The primary responsibility of ALM is to ensure the
lending rates enforced a major rate recalibration, as implementation of the bank’s balance sheet
banks scrambled to align with the “new normal”. Yet, the management strategy on a daily basis, ensuring liquidity
pandemic witnessed record liquidity levels in the banking requirements of the bank through money market
channel, aided by stimulus funds, as bank witnessed products, including call money, term money, notice
tepid credit growth amidst weak demand and uncertain money, repo/reverse repo and FX swaps, etc. This desk
outlook. General business sentiment, which remained also ensures full regulatory compliance. ALCO is
low at the start of the year, took a nosedive following the responsible for running the ALM processes, thus
onset of the pandemic and ensuing lockdowns and enabling the bank to adopt compliant policies and
movement control restrictions announced in March relevant and pragmatic strategies, as well as competitive
2020. Yet, the resilience of the country’s economy is pricing of deposit and lending products for the bank. The
evident in the fact that GDP growth was in positive bank’s Fixed Income Desk focuses on investment in
territory during the year, among the few nations to Government securities and opportunistic trading in
demonstrate this amazing feat after the ravages of a secondary market, while also managing the SLR
once-in-a-century pandemic. portfolio.

99
 the agricultural sector propped up growth even amidst
BDT 1,476 mn the pandemic on the back of healthy production of most
Interest income from money market placement, LCY cereal and non-cereal crops, aided by timely inputs
availability and favourable weather conditions at the time
BDT 429 mn of cultivation and harvest.
Interest income from money market placement, FCY Further, the Government and Bangladesh Bank adopted
a series of timely and appropriate initiatives, such as
BDT 3,246 mn stimulus packages of more than BDT 1.21 trillion, low-cost
Interest income from investments refinance schemes, etc., to especially extend support to
sectors weakened by the pandemic. Besides, Bangladesh
USD 132 mn Bank initiated several policy relaxations to ensure
Funding management of OBU book sufficient liquidity in the banking system. Inflation also
remained largely stable throughout the year, despite
65 mn significant supply-side disruptions.
Daily operation of USD/BDT swap book (avge.) On the foreign exchange front, nominal exchange rate of
BDT/USD remained mostly stable. The depreciation rate,
FX and Sales Desk which demonstrated a declining trend since October
The desk is one of the most active players in the 2017, decreased gradually to 0.06% at the end of October
interbank FX and corporate FX market 2020, but then experienced marginal appreciation of
0.12%, both in November and December 2020.
Treasury’s FX Desk focuses on foreign exchange (FX) The central bank continuously intervened in the foreign
business as well as management of FX risk. The desk is exchange market by purchasing and selling USD to
also responsible for maintaining net open positions of the stabilise and ensure exchange rate competitiveness. In
bank in line with regulatory limits and forecasting calendar year 2020, the central bank intervened in the
exchange rates. It also provides the most favourable market by buying net of USD 5,739 mn. Strong growth in
solutions for hedging FX exposures of interbank and remittance inflows and positive export growth, along with
corporate customers in the realm of spot and forward large financial assistance from multinational institutions
transactions. It also offers derivative solutions to FX and development partners, helped the country create a
customers, in line with central bank guidelines. new record in foreign exchange reserves.

Treasury outlook for 2021 and beyond

BDT 876 mn Looking forward, central bank’s policy relaxations and
FX gains achieved low-cost refinancing credit lines, along with the
Government's stimulus package, injected huge liquidity
USD 5 bn in the economy, which might stoke inflationary risks over
Total quantum of FX transactions recorded the near-term. Deterioration of quality of asset can create
serious cash flow mismatch in coming days if central
USD 404 mn bank withdraws its policy relaxation which will eventually
Assisted NRB to achieve remittance volumes create banking sector. But as the remittance growth
despite COVID-19 is still handsome which was a major
USD 829 mn source of liquidity in 2020, we believe liquidity will not be
Quantum of forward deals engaged in great concern at least in the first half of 2021. Treasury is
not assuming any risk of crowding out effect from public
sector borrowing as Government ADP implementation
Macro-economic was very low till February 2021. In summary, Treasury will
outlook for 2021 and beyond keep a close eye on cash flow of the banking book and
Bangladesh Economy in 2020 will play safe.
The COVID-19 pandemic unleashed challenges that
impacted almost all sectors of the economy. Forced by Initiatives for 2021
the adverse effects of the pandemic, the Government l Introduce new hedging products, such as IRS and
revised the growth target and eventually achieved 5.24% commodity hedging
GDP growth in FY20, vs. 8.15% in the previous year. l Develop alternatives for deposit products for
The pandemic unleashed severe disruptions on the customers
supply side across the industrial sector. Thus, shutdowns l Enhance customer knowledge of foreign currency
and substantial production losses across both large and markets and facilitate them to make timely
medium scale manufacturing caused GDP contraction. decisions to hedge exposures
While manufacturing and service, major constituents of l Ensure the highest levels of compliance
the country’s economy, witnessed decline in growth rate, l Foster a culture that seeks to proactively mitigate risk

100 Annual Report 2020

Commercial Banking
Established in 2013, City Bank’s Commercial Banking Division today is amongst the market leaders in the space, a
position secured as a result of the coming together of a number of deep strengths, including excellence in
relationship management and specialist knowledge and advisory services that help customers benefit in myriad
ways. The division was conceived to fill an essential gap in the market comprising the large and upcoming group of
“missing-middle” companies. Thus, carving out a unique niche and earning the trust of our customers has been
foundational for our business growth over the last few years.

Performance highlights
Metric 2020 2019
Total assets (BDT mn) 21,026 19,403
Total liabilities (BDT mn) 5,310 3,743
NPL (BDT mn) 966 1,423
Total customers 93 81
Team size 14 16

Operational performance review Segment update

Dedicated �inance solutions for the missing-middle
8% At the Commercial Banking division, renewed
emphasis was placed on deepening penetration into
YoY growth in loans and advances high-growth sectors, while also channeling stimulus
fund to our customers, thus closely supporting them
42% in overcoming the adverse effects of the pandemic on
YoY growth in deposit portfolio their business. Leveraging on our sector specialisation
model, we continued to offer robust financial advisory

2% to corporate businesses who continue to

demonstrate sheer resilience in the face of economic
YoY growth in trade volumes to uncertainty. Subdued economic and credit growth
USD 387.93 mn and policy uncertainty was mitigated to a large extent
by stronger relationships and strengthened credit
processes.

Key macroeconomic trends during the year Value to our customers

Disruptive threat of COVID-19 l Routing government stimulus/financial relief, thus

enabling business survival and job loss protection

Low surplus funds among businesses, thus making l Specialist banking knowledge that enable us to offer
their survival more challenging the best solutions to our customers
l Strong relationship management approach that
enable our customers to access best-fit products and
services

Growing significance to the Group

l Disbursement of stimulus fund of BDT 1,703.30 mn
2% to COVID-19 impacted borrowers, comprising about
8% of our asset portfolio
of operating income
l Achieved respectable growth in loans and
advances portfolio (up 8% YoY) and deposit
8% portfolio (up 43% YoY)
of total assets l Attained highest-ever trade volume of USD 388 mn

2%
of total liabilities

101
 Key strengths and opportunities helps fulfill those needs. Thus, operating in a relatively
As amongst the largest Commercial Banking portfolio in niche market with sound potential, we have been able to
the country, the bank has developed significant achieve consistent growth with our total assets growing
knowledge and capabilities which is a considerable by 184.55% over the last five years. We provide a wide
competitive edge. Consequently, our service offering is range of trade and working capital finance solutions that
unparalleled as a comprehensive portfolio of products are key to this customer set as most of them have to face
and services are supported by a young and dynamic deficit finance. Yet, these companies are essential
team comprising knowledgeable relationship managers components of Bangladesh’s economy and we are
and product specialists. Significant focus on processes proud to serve them as they provide jobs, contribute to
and turnaround times during the year enhanced the the exchequer and grow in scale and size. I believe their
offering as we launched several initiatives to embed full potential is yet unrecognised, evident in the fact that
customer-centricity and service excellence as our key banks and other FIs are not very active in this space.
customer value pillars. Through our time-tested relationship management
On top of our strong and diversified offering, we approach, we have been able to forge strong bonds with
supplement client relationships through our specialist our customers and have become a key part of their
financial advisory services, for instance guiding our journey.
customers on availing OBU loans, various refinancing
schemes from Bangladesh Bank, and structuring their Q. How was this evident in our own performance?
loan limits, etc. Further, thanks to our strong network, we We achieved a respectable 8% growth in assets and 42%
also facilitate clients to identify the most competitive growth in deposits YoY, while maintaining fee-based
resource suppliers. Thus, due to these factors we have income at 21%. These metrics, accomplished in
been able to ensure customer delight and virtually nil challenging conditions, reflect the positive impact of our
attrition. timely strategies, proactive communication with our
customers, and introduction of new products and
Specialist leadership team with robust sectoral
knowledge and knowhow services. Further, we also extensively collaborated with
different divisions of the bank to ensure seamless
Timely financial support, including government availability of the best solutions for our customers, thus
stimulus leading to smooth and strong relationships.
Relationship management approach to business
that enables robust client retention Moreover, during the year, we also strived to cater to the
Capability in enhanced scrutiny and early needs of our clients by giving them access to every
identification of warning signs possible opportunity extended by the government in
terms of relief, which helped them prevent deterioration
Strong focus on fee-based income, thus ensuring
revenue diversification in their financial profile. We also extended benefits in
terms of repayment holiday for term-loans and working
capital loans, as per the directives of Bangladesh Bank
Focus areas for 2021 from time to time. Thus, while we ensured compliance
with all regulations, we have also heightened scrutiny
Ensure early booking of good clients and vigilance to ensure timely repayment with the
with a pristine credit record withdrawal of moratorium. Towards this extent, every
account is being separately monitored from different
levels in order to ensure timely repayment.

Maintain a healthy loan portfolio with Q. Any closing thoughts?

industry-leading NPL standards We have carved a clear path for our division that prefers
to leverage modern advancements in banking over
traditional banking models. Our customers are unique;
Provide extensive training for capacity their needs, requirements and expectations are unique
development in both relationship and hence our path reflects our customers. Going
management and financial advisory forward, we will continue to provide them with the latest
solutions to enable them to rapidly recover from the
pandemic and emerge as models in corporate
Leadership message transformation.
Q. How did our division overcome the di�icult
conditions induced by COVID-19?
Quite well I would say. This is because we have mapped
the needs of commercial businesses meticulously and
have created a product and services architecture that

102 Annual Report 2020

Supply chain finance
Established in the year 2018, City Bank’s Supply Chain Further, the demonstrated utility of the product as being
Finance Division has been achieving rapid progress more cost-effective vs. direct working capital finance
over the years. A thrust by the bank on this sector, and more convenient as it ensures minimal
paired with supply chain finance gaining increasing documentation have made it more acceptable in the
acceptance, especially amongst SMEs as it directly links target markets.
small vendors with large corporates, the division’s asset
book has increased by 23% over the past two years.

Performance highlights
Metric 2020 2019
Total assets (BDT mn) 441 358
Total customers 41 49
Team size 8 7

BDT 441 mn
Supply Chain Finance asset book

Overview
With the launch of City Supply Chain Finance, City Bank Key growth drivers
has emerged as a market leader in the sector amongst l Large and dynamic supply chains primarily
banks within a short period since establishment. Today, comprising of SMEs, with outsourcing emerging as
the bank’s Supply Chain Finance Division has earned a well-established/well-accepted model
trust and forged relationships with companies in almost l Focus by large companies to diversify their supply
all the sectors of the economy that are chains to prevent any untoward disruptions
consumer-facing and have larger tier-I, II and III
ecosystems by virtue of offering a wide spectrum of l Projected forward capacity investment plans by
products, including online supplier financing, factoring, larger corporates that will drive demand for supply
reverse factoring and purchase order financing chain finance solutions
through the online SCF platform. Some of the major
sectors include: Forward outlook, 2020
l Fast-moving consumer goods (FMCG) City Supply Chain Finance intends to further accelerate
l Readymade garments (RMG) business momentum by offering bundled products
l Telecommunications from its product mix, including purchase order finance,
factoring finance, reverse factoring, etc., offering
l Leather tailormade solutions, exploring untapped business
l Pharmaceuticals segments, optimising resource utilisation and
emerging as the best working capital financier for SMEs
Some of our large customers include the suppliers of in Bangladesh.
such large and diversified organisations as PRAN RFL Considering the current business trends coupled with
Group, ACI, Apex Footwear, Paragon Group, Banglalink our specialist capabilities in the sector, the division
Digital Communications, edotco Bangladesh, IOM, expects to achieve asset book growth in excess of 100
UNHCR, among others. per cent during the year.

103
 Retail Banking As a local banking group with aspirations in embracing
international best practices, our transformation
Despite the external adversities, the year 2020 was one
continued as we incorporated a ‘glocal’ culture into our
of the best for City Bank’s Retail Banking Division
business, making the best use of both first-hand
across its various sub-wings, including women banking
grassroots customer knowledge, and serving their
under City Alo, Employee Banking, Branch Banking and
needs and expectations via a wide range of
Islamic Banking that especially received an impetus
personalised products and solutions. This positioning
with the opening up of more favourable regulations.
has enabled us to emerge as a semi-centralised
The division, energised by new leadership, made rapid
banking group, ensuring comprehensive customer
progress on all fronts, including push towards new and
facilitation.
more advanced IT/technology infrastructure, cost
optimisation programs through branch profiling and Notably, our practices in financial inclusion,
transitioning to a more focused branch operating intermediation and facilitation have been endorsed by
model, impetus towards higher deposit mobilisation global developmental organisations. We count
through customer-centric campaigns, and increased International Finance Corporation (IFC), a member of
emphasis on staff training. Thus, today, the division’s the World Bank group, as an investor. Such affiliations
customer value proposition has become more vibrant also reflect our prioritised focus on governance, ethics
than ever before with technology at the core, thus and transparency.
empowering customers to manage their financial lives
better and meet their life goals and aspirations.

Performance highlights
Metric 2020 2019
Total assets (BDT mn) 36,518 35,038
Total liabilities (BDT mn) 179,500 164,010
Retail loans disbursed (BDT mn) 10,753 13,715.5
NPL 1.74% 2.3%
Total customers 20,084 24,600
Team size 2,022 2,253

4% 211 bps
Growth in total assets Reduction achieved in cost of deposits

9% 3x
Growth in total liabilities New women account-holders in last 2 years

28% 4x
Growth in low-cost deposit base Growth in Employee Banking accounts in last 2 years

Segment update effected several structural changes with a view to

Firing on all fronts evolve with the times, changing amidst constant
City Bank’s Retail Banking Division is focused on change, while remaining steady and focused on what
achieving its objective of being the most vibrant and matters the most: sustainable value creation for all
profitable business line with an integrated, stakeholders.
platform-based and customer-centric approach,
enabling the bank to tap into a variety of retail financial
service opportunities to fulfill the macro themes of
financial inclusion and organised banking facilitation
and intermediation. With a view to counter the adverse
effects of the coronavirus pandemic, the division

104 Annual Report 2020

 Key macroeconomic trends during the year: Value to our customers:

Increasing trends in banking making the shift to online Launch of several new facilities and features that
enhanced customer convenience, for e.g., real-time cash
High levels of banking saturation in metro areas, thus
deposit machine, smart IVR, etc.
compelling banks to innovate for differentiation
Focused attention to each vertical, which has not only
Pressure on bank deposit rates driving liquidity to other
enabled the creation of best-fit products and solutions
asset classes
thus matching customer expectations, but has also
fuelled growth of the vertical as well

Growing significance to the Group

29% Islamic Banking

of operating income

14% City Alo

of total assets

71% Bl and Retail Marketing

of total liabilities

City Bank’s Retail Banking universe

Process Reengineering

Branch Banking
Key progress achieved
Division-wide in 2020
l Ensured consistency in YoY revenues, despite
Citygem pandemic-induced pressures
l Introduced “Ekhoni” app, providing a secure
platform for instant account opening through
mobile app/website with anytime-anywhere
Employee Banking convenience
l Launched real-time cash deposit machine to create
customer delight by providing instant 24x7 money
deposit service
Direct Acquistion
l Launched smart integrated voice response service
to automate call center services and provide
immediate resolution to queries/requests and
utmost customer satisfaction
Products and segment

Key strengths and opportunities

At the Retail Banking Division, the relationships we have
ADC built over the last several years are complemented by
our robust infrastructure, which gives us high levels of
visibility throughout the country. These are strongly
supported by electronic platforms, a comprehensive
Customer experience product portfolio and an ethos of dedicatedly serving
the customer by our relationship managers.

105
 This strong physical-digital complement is supported Streamline customer acquisition through
by a number of external factors that reinforce our case low-cost channels and reduce service
as a bank well-positioned for growth. These include costs through Alternate Delivery Channels
under-consumption across most categories, strong (ADCs)
opportunity in niche spaces (particularly Women
Banking, Islamic Banking and Employee Banking), and Exponentially scale-up Islamic Banking as
robust economic bounce-back with consistent fully Shariah-compliant, yet integrated with
remittance inflows that will provide a boost to mainstream banking
consumerism, going forward. Further, certain
pandemic-driven trends, including the need for own
house, own mobility, etc., will represent an impetus as
customers turn to organised banking channels for Citygem- Priotity Banking
accessing finance. Overview
At the division, what also represents a major scope for Citygem is a boutique priority banking proposition for
growth is our comprehensive focus on platform-based City Bank’s high-net-worth (HNW) customers.
banking approach, which opens up cross-sale
exploration and sound income generation potential.
Yet however, the pandemic has caused major Progress achieved, 2020
economic upheaval that may drive defaults, especially l Achieved substantial 176% CASA growth, despite
after suspension of moratorium benefit by the declining cost of deposits
Government. Towards this extent, we will continue to l Launched new and relevant customer
heighten our vigilance over our portfolio and adopt propositions, including complete medical check-up
proactive action in perceived stress-prone areas. (for Sapphire customers), etc.
Employee retention will also be a challenge, going l Heightened engagement with all clients through
forward, especially those who enable revenue phone calls or visits (when permitted)
acquisition. For countering this challenge, we will
structure the right incentive packages for performers, l Successfully implemented Citygem proposition in
while ensuring that we sustain a focused, highly Branch Banking where metro branch teams could
productive and right-sized team. source Citygem customers and upgrade existing
branch HNIs

Retail Banking: Core competence drivers Underlying growth drivers

Strong, centralised and highly visible market presence l Rising economic affluence
and network
l Scope for onboarding HNI customers via Branch
Well-segmented services with targeted propositions Banking
Large sales force deeply connected to the ground and l Unique and differentiated customer propositions,
the grassroots thus enhancing customer acquisition and retention
Extensive and expansive product offering l Emergence of digital channels for expanding
Strong brand equity enabling sustainable customer customer engagement
deposit mobilisation
Structural cost advantages, including CASA rate, people Forward outlook, 2021
cost, etc.
l Enhance personalisation of services towards
Focus areas for 2021 recovery of customer accounts
l Expand the Family account base
Leverage centralised network for l Enhance cross-selling and cross-referencing for
enhancing customer outreach and impact expanding the customer’s overall engagement
with the bank
l Reorient the Citygem proposition aligned with
evolving customer requirements
Expand our low-cost deposit base

Citygem and Islamic Banking

Initiate comprehensive digital branch for

acquisition and service automation
5%
Growth in total assets

106 Annual Report 2020

Islamic Banking is a major area of thrust at Citygem and manifest in the fact that we have established a whole
City Bank Manarah (comprising City Bank’s Islamic wing just for meeting this purpose with a full-fledged
Banking platform) is well-recognised and well-accepted service monitoring system.
in the market on account of greater public disposition
towards the authentic principles of Shariah-based
banking on the one hand, and our sound propositions
2,500
Employees in customer-facing roles
in this space on the other.
Progress achieved, 2020
Employee Banking l SLA (Service Level Agreement) monitoring on a
monthly basis has helped improve the service
Overview quality. Around 13 different kinds of SLAs are
The Employee Banking wing offers a wide range of monitored throughout the bank
products and services to suit the large salaried-class of l Feedback and surveys are generated through the
the country, thus looking to enhance their engagement Net Promoter Score (NPS), which has increased
with the bank, especially through retail financial over the years
services. This wing opens up a more secured form of
l Prompt complaint resolution is ensured through
lending since the customer’s salary account is with the
upholding service standards at all times
bank, along with availability of information that can help
provide targetted solutions. l Loyalty call surveys are regularly conducted to
ensure customer satisfaction

45,500 l Follow-up online exams were conducted among

our employees on product knowledge, process,
No. of accounts opened in 2020 regulations, etiquette, etc., to improve our service
standards
BDT 759 mn l Best service providers were identified and
Deposit growth achieved in 2020 recognised on a departmental platform to
encourage others and raise overall productivity
Progress achieved, 2020 levels
l On-boarded 59 new companies
l Enabled salary disbursement of BDT 17,500 mn Forward outlook, 2021
through the channel
l Continue to refine our service standards with
international benchmarking
Underlying growth drivers l Provide ongoing training to our staff on customer
l Large market in terms of number of companies service and experience
demanding better employee banking facilities
l Wider and larger product offering and propositions
that help meet varied needs and expectations
l Core emphasis on lifestyle and benefits and Islamic Banking
product choice
Overview
City Bank’s Islamic Banking segment has been
Forward outlook, 2021 identified as a major thrust area by the bank, and this
l Expand acquisition of large corporate salary segment witnessed significant growth in 2020. An
accounts through our demonstrated service authentic and fully Shariah-compliant banking platform,
standards coupled with easing regulations, catalysed growth of
l Engage in specific customer profiling for targeted this segment.
marketing As Bangladesh forges ahead with its bold plans for
socio-economic development and diversification, City
Bank’s Islamic Banking division has aligned its strategy
with the needs and aspirations of the country. By
Customer Experience targeting both the public and private sectors, we seek
Overview to contribute to the revitalisation and growth of the
Islamic financial sector and assist the nation in its
One of the key pillars of our customer-facing strategy is
transition to a middle-income country on the global
to ensure customer delight and retention through
economic ladder.
superlative customer experience. This emphasis is

107
 Throughout 2020, we continued to achieve robust
progress across all the strategic pillars of our business: 2x
accelerate growth, attract quality talent, ensure Growth in no. of accounts achieved in 2020
customer focus, achieve growing digital footprint and
focus on leadership and excellence in execution. BDT 5,000 mn
Further, in a major boost to Islamic finance, the Total asset book, 2020
Government announced plans to issue Sukuk from
December 2020 onwards as part of efforts to smoothly
BDT 16,000 mn
implement infrastructure projects in the country. The Total deposit book, 2020
Ministry of Finance issued guidelines under
‘Bangladesh Government Investment Sukuk Guidelines Progress achieved, 2020
2020’ in October 2020, with Bangladesh Bank l Launched “Bai Salam Finance” product for
informing banks and non-bank financial institutions of Commercial and Corporate clients
the development in a circular released during the same
month. Further, the central bank has also constituted a l Introduced asset-backed finance product for the
Shariah advisory committee to select the projects. SME-Small customer segment, which is the
Notably, Sukuk is a Shariah-compliant certificate. first-of-its-kind in providing such facilities in
Bangladesh, thus enhancing our credibility in
As an Islamic Banking business proposition, City Islamic finance
Manarah has always lived up to the strong brand
credibility and preference due to both stringent and l Launched a Shariah-based women banking
pure adherence to the core Shariah values. product with attractive health insurance facility
As a bank of longstanding repute, we understand and l Executed a cross-border letter of credit (LC)
care for our customers’ values and integrity. To uphold transaction for the first time in Bangladesh under a
Shariah values, we constituted a group of renowned Shariah-based financing arrangement using
experts in the field of Shariah and Banking to steward blockchain technology
our Islamic Banking operations, while also certifying
compliance with Shariah principles on a regular basis. Underlying growth drivers
Further, practicing Shariah Audit reflects our deep l Increasing acceptance of Islamic banking, as per
commitment to our customers. Shariah principles, in a significant way in
In a major initiative, the whole Islamic Banking structure Bangladesh
is being revamped, which will give customers a much l Strong scope for designing innovative and fully
better experience in conducting Shariah-based compliant products to expand Shariah-based
banking. The division has already established a robust banking, thus winning customer trust
online network of City Manarah accounts across
Bangladesh, and is now working towards the online
transaction platform for Islamic Banking. Further, the Forward outlook, 2021
division is also promoting Islamic Banking for women l Launch an upgraded existing core banking system
with products that suit a wide range of their needs, (CBS) of Islamic Banking, with the new system
expectations and requirements. Such products include: offering advanced digital banking platforms to
l City Alo Manarah General Savings Account customers and ensuring smooth transactional
l City Alo Manarah High Value Savings Account service experiences at branches
l City Alo Manarah Savings Delight Account l Invest in HR and develop specialist skills in Islamic
finance as a whole, as well as this facet of banking
Further, new products have also been launched to in the various fields of SME-S, Retail, etc.
cater to larger groups/institutions, including SME-S and
Corporate. Besides, with a view to enable a complete l Focus on garnering deposits through
shift in terms of developing exclusive products fully Shariah-compliant profit-sharing mechanism
compliant with Shariah principles to suit and cater to l Take Islamic Banking to all the branches of City
sensitive customer groups, we engaged in a thorough Bank, especially with approval granted by
review of products with the understanding that it is not Bangladesh Bank
possible to attract customers with existing
conventional products. Additionally, the division also
reviewed Manarah Personal Finance, Manarah Auto
Finance and Manarah Home Finance products, aligning
with conventional product features.

108 Annual Report 2020

City Alo - Women Banking l Collaborated jointly with women e-commerce
forums, like Ujjwala Foundation, Amal Foundation,
Overview WE, etc.
City Alo from City Bank has been designed as an l Actively participated in the Financial Alliance for
exclusive women banking platform, conceived Women forum, with City Alo being featured in their
especially to meet the needs, requirements and monthly newsletter
expectations of women from all walks of life. Thus, the
wing strives to ensure that modern banking is l Successfully launched rural training module of
customised to the latent as well as emerging financial financial management services to hatcheries/fish
or financing needs of women in the country, be they farms/agro and small businesses in association
professionals or entrepreneurs running large with the bank’s SME Division
businesses or small enterprises. Thus, we ensure that l Hosted 8 webinars and 6 workshops to create an
City Alo has a product for everyone. The overall idea of interactive and engaging learning environment
City Alo is to make banking fun, welcoming and even
joyous for women customers. Underlying growth drivers
As a major step in this direction, City Alo’s first-of-its-kind l Large number of women entrepreneurs/
coffee-shop banking branch in Gulshan, Dhaka, created professionals yet to be served via a customised
a tremendous positive impact by providing an ambient banking platform
location where our customers can enjoy a cup of
coffee, catch-up or network with their friends and peers, l Government facilitation through supportive
or even drop-off their children to the crèche that is policies for women to enter into business
attached to the branch. Moreover, the City Alo’s l Government relief/stimulus, especially designed for
website, which is the platform’s embedded presence in pandemic-related support
virtual world, represents a unique hub, fostering l Growing presence of women in the workforce, as
networking and engagement opportunities among corporates strive to enhance the diversity of their
women, facilitating awareness creation as well as teams
business opportunity exploration. l Establishment of successful businesses by women
Further, with a view to offer holistic benefits to all City emerging as a source of inspiration for other
Alo customers at a privileged rate, business tie-ups women entrepreneurs/businesswomen
have been created with 50+ merchants from l Major resident scope of growth of City Alo in
categories ranging from beauty and healthcare to Islamic finance
dining, etc.
Such a differentiated initiative has enabled us to earn
industry acknowledgement and applaud, and has Forward outlook, 2021
rapidly grown the status of City Alo as a benchmark in l Focus on expanding the City Alo service to more
women banking in the industry. parts of the country, thus reaching out to women in
need of financial/financing services
BDT 7,060 mn l Create tie-ups with a larger bouquet of relevant
business to expand the City Alo proposition
City Alo deposits growth, 2020
l Focus on deepening engagement with our
BDT 43,630 mn customers, while exposing them to greater
Total deposits portfolio, 2020 learning and capacity-building opportunities

340,302 Alternate Delivery Channel (ADC)

Total customer base, 2020
Atm/cdm network
Overview
Progress achieved, 2020 City Bank’s ATM/CDM network is amongst
l Organised business and finance management Bangladesh’s largest such last-mile coverage networks,
courses, comprising certification programs, enabling doorstep-like customer convenience in
partnering with North South University (NSU) and banking, while also providing customers access to the
shifted learning to the online platform during the bank’s varied products and services.
pandemic
l Organised a well-participated Boshonto Fair with 392
40 women entrepreneurs, organised during the Total ATM, CDM and RCDM network, 2020
beginning of the year
BDT 23 mn
Income, 2020

109
 Progress achieved, 2020 plays a substantive role in advancing financial inclusion
l Pioneered real-time cash deposit service with and intermediation in Bangladesh. Further, as
card-less deposit option time-pressured customers desire greater convenience,
reaching banking products and services at their
l Enabled card activation and PIN generation
doorstep has emerged as the core premise of our
through ATM
banking operations. Moreover, providing enjoyable
l Ensured uninterrupted ATM services with more experiences to our customers through the dispensation
than 98.5% uptime, even during the peak of world-class service represents our commitment at all
pandemic period our branches.
l Restructured ATM service centers and a total of 8 City Bank’s Branch Banking division has emerged as a
sub-centers launched to ensure prompt customer ‘super store’ for customers, where they can experience
service fast-tracked services, while also enabling access to all
l Enabled China Union Pay ATM acquiring products and solutions to meet their varying needs and
l Enabled NPSB fund transfer through City Bank’s requirements. We are also focusing on further enriching
ATM network customer experience at our branches through digital
channels as well. Further, with 132 branches under a
l Furthered green banking adoption by
unified network, we assure uninterrupted ‘anywhere
discontinuing ATM paper receipts
banking’ services throughout the country to our
customers. Additionally, Branch Banking has been
Call Centre equipped with customer segmentation strategy which
Overview helps teams to identify potential customers within the
branches. Through this initiative, branches can now
City Bank’s state-of-the-art call centre service, operating
segment customers into different categories where
from a single large location, is ahead of competition in
they can identify the target segment for upselling.
the banking industry in terms of services and features
offered. Further, our call centre facilitates shifting traffic
away from our branches, thus helping us in almost
instantaneous customer fulfillment and service at
comparatively low costs.
132
Total branch network, 2020

3 mn 1,300+
Customers served, 2020 Branch professionals

157 23
Call centre seats, one of the largest in the banking sector AD branches, 2020

Services offered
l Relaunched the largest banking Interacted Voice Progress achieved, 2020
Response (IVR) platform with 56+ services l Offered the full suite of SME and Retail banking
products to all branches to cater to a bigger
l Introduced the first Smart IVR service that will
spectrum of customer segments
enable customers to use our call center service
without staying in queue and yet enable us to field l Achieved substantive growth in affluent customer
customer queries in a cost-effective way segment
l Enabled credit card PIN re-generation through IVR l Achieved steady balance sheet growth across both
and call center funded and non-funded businesses
l Enabled new debit card placement request l Optimised cost of deposits by 112 bps through
through call center better management of deposit mix
l Achieved integration of Islamic Banking service
with call center Leadership message
l Introduced Net Promoter Score (NPS) to measure
customer satisfaction Q. How did we focus on driving transformation at the
bank?
CASA portfolio of the bank experienced an exponential
Branches 28% growth in 2020, rising substantively against the
Overview average 10% growth recorded in the prior 3 years. This
City Bank’s Branch Banking ops not only caters to a accomplishment was made possible by strengthening
wide range of customer needs and requests, but also relationships with our customers and also through a

110 Annual Report 2020

paradigm shift achieved in our standards of service, One of the major factors that assisted us in reporting
which helped enhance customer share of business. improved performance was our customer
Much of our recent progress in this regard is the result segmentation drive that helped us to identify needs,
of our ongoing digital transformation, which continued requirements and aspirations and cater to these in a
to deliver significant mobile and internet banking structured and best-fit way. Similarly, such an initiative
enhancements during the year, further expanding our also facilitated the ‘relationship banking’ concept to
digital footprint. Over 75 per cent of transactions are serve and even anticipate their needs. Though it might
carried out using our digital platforms. The launch of appear paradoxical, relationship management will play
the Ekhoni app was a sure step in the digital banking a front and central role in the digital banking arena. At
direction and the convenience this platform offers to City Bank, we have a large pool of relationship
customers to open an account with City Bank is managers who are an extension of our customers and
unparalleled, which gives us the confidence that it will their primary interface with the bank.
play a central role in the digital customer onboarding
process at the bank. Q. What does the future hold for us?
It is quite heartening to note that almost all of our major
Q. What were some of the major challenges faced by segments under Retail Banking achieved positive
the division during the year? growth during a highly challenging period. The year
The year 2020 brought a global-scale pandemic, was actually a period where we harvested a number of
halting the economic wheels for the whole world. foundational initiatives taken in the past. I've always
Bangladesh had to endure its own share of challenges, believed that retail is something that you do everyday;
with the result that a full quarter stood in a indeed, it is the daily tracking of the business with
time-suspended mode. Along with this, the year also relentless commitment. Thus, we will continue to align
introduced the 9% interest rate lending cap for all performance expectations with achievements and
banks. Hence, the year was challenging from both a outcomes on a daily basis, hence ensuring that our
macro and regulatory perspective. teams remain highly productive and focused. In a
dynamic industry environment my vision is to ensure
Yet, despite these extraneous adversities, our Retail
that we remain at the top of our game and sustainably
Banking group rose to the challenge and delivered a
well-positioned for the future, leveraging enhanced
commendable performance in 2020 by keeping its
customer delight.
revenues stable vs. last year. This is a highly
commendable achievement in challenging times.

SME-S basic financial services through simple payment

platforms, offering these even in remote hinterland
Rooted in financial inclusion and empowerment, City
communities.
Bank’s SME-S (Small) business plays an essential
catalytical role in the grassroots mass economy of the Small finance : We provide customised finance
country. It enables small businesses and individuals to solutions to individuals and SME-S with difficulties
get access to the formal financial system, set up and obtaining credit or those in financial distress, a reality
grow, or expand their business, and even receive especially post the COVID-19 pandemic.
knowhow to manage their finances as they scale up Resilience : We help people and small business
their enterprise. Our enduring purpose to help small improve their financial knowhow, helping them
and promising enterprises to expand their growth arch connect to networks and opportunities, thus ensuring
is premised on three pillars: resilience and sustainability.
Access : We help small businesses to access and use

Performance highlights
Metric 2020 2019
Total assets (BDT mn) 14,360 6,840
Total liabilities (BDT mn) 1,390 360
NPL 0.07% 0.14%
Total customers 15,117 7,829
Team size 470 458

111
 Segment update
110% Spirited performance in testing times
Growth in total assets City Bank’s SME-S business is committed to creating
opportunities for small and micro-entrepreneurs and
253% has put in place an ecosystem to support their
Growth in total liabilities aspirations. We are amongst the fastest-growing
players in this large and vibrant segment of the
93% economy with a portfolio of BDT 14,360 mn at the close
of the year 2020, registering a triple-digit growth during
Growth in customers
the year. Though the business witnessed its second full
22% year of operations in 2020, the year was a litmus test
for us as the coronavirus upended the economy and
Contribution of distributor finance business to
divisional non-funded income had a specially ravaging effect on the country’s small
business space. Yet, years of experience in
167% microfinance, leveraging insights gained by listening to
customers and engaging with peers from all across the
Growth in 2-wheeler finance business
world, we were able to register our best performance.

Key macroeconomic trends during the year: Value to our customers:

l Issues around business survival l Loan moratorium/deferment support extended to
majority of customers
l Major reduction/ suspension of consumer demand l Focused on right-fit products to enable customers to
transition out of COVID-19 related challenges
l Ensured quality and uncompromising customer
l Pressure on large institutional supply chain partners
service, with clear focus on relationship management
to cut costs

Growing significance to the Group l Rated customers to appraise portfolio health

and prevent slippages
3% l Annexed two-wheeler finance to the unit with
of operating income portfolio of BDT 320 mn at year-end

5% Secured grant (phase-wise) from major

developmental institutions, including WorldFish,
of total assets
Swisscontact, USAID, thus strongly establishing our
1% identity as a significant grassroots developmental
partner of Bangladesh.
of total liabilities
Key strengths and opportunities
City Bank has a multi-faceted and influential
presence in microfinance and small loans, engaging
Key progress achieved in 2020 directly with customers to provide access to finance,
l Onboarded as many as 750 new customers while also facilitating capacity-building and even
engaged in various small businesses access to markets.
l Achieved rapid progress in distributor finance
business on the back of digitalising loan A field-force of 470 staff located delta-wide
requisition through mobile app proactively manage customer relationships and are
l Adapted to the external environment through supported by specialised back-office teams located
processes and tech-centric changes to ensure in regional offices and Head Office. This network is a
sustained business relevance and growth key strength as it enables us to have a much more
holistic view of the issues relating to this particular
l Extended footprint to cover a massive 100,000
customer segment and support their journey in
sq. km of the delta, making presence visible in 50
graduating to SME-S. Moreover, focus on
of the 64 districts of the country
micro-entrepreneurship by the Government and

112 Annual Report 2020

multilateral funding agencies and developmental the sector. Yet, transforming these challenges into
institutions provide opportunities for collaboration credible opportunities is where we come in and,
on channelling concessionary funding. going forward, we believe only the serious players
with deeply specialised skills and customer
relationships will be able to survive in this complex
SME-S: Core competence drivers and highly competitive market. City Bank has been
l Highly experienced leadership team with sensitive to the challenges of the SME sector and
multi-decade experience in microfinance continues to support it across customer journeys.
l Well-penetrated network covering almost 80%
Q. What are your thoughts on the
of the country’s districts
external environment?
l Personalised product offering, tailored to suit The policy environment is expected to remain
specific requirements favourable, as microfinance is a key link in
l Sensitive and timely support extended to a minimising inequalities and inequities, which are
vulnerable business community now gaining prominence in local and global
l Robust focus on collaboration to escalate agendas, including the Sustainability Development
impact Goals (SDGs). Further, global developmental
l Growing contribution from distributor finance institutions are also coming forward as we join hands
and 2-wheeler financing businesses to transfer concessionary funds to intended
recipients. Further, leveraging City Bank’s identity,
corporate relationships are also providing
Focus areas for 2021 opportunities for supply chain reinforcements via
value chain/distributor financing solutions.
Leverage network for enhancing customer
Notably, we offered working capital finance solutions
outreach and impact
to distributors of local and multinational
conglomerates, which created a buzz in the market
Pursue further opportunities for due to the novelty of the concept. More than 750
collaboration with major developmental distributors were funded against 15,000 invoices
agencies worth BDT 4,500 mn, representing a striking YoY
growth of 314%. The distributorship of 224 with a
portfolio of BDT 140 mn in 2019 surged to 786
Strategically expand the distributor finance
comprising a portfolio value of BDT 580 mn. We
and 2-wheeler book
foresee huge latent growth in this sector and will go
all-out in 2021 to explore opportunities here.

Q. What is our priority, moving forward?

Leadership message Developing our team remains key to our growth
agenda and activities. In this regard training on value
Q. How is SME-S focusing on serving clients chain financing was conducted in addition to our
in its segment? regular training. As a division, going forward, we
As amongst the fastest-growing player in microfinance believe we can help more people prosper and enjoy
and small loans in the country, I believe we are the benefits of growth by empowering them
well-positioned for accelerated growth, leveraging our financially, giving them access to tailored financial
wide network of field agents and credit ops specialists products and services, and improving their financial
who are committed to uplifting this customer segment resilience through insights and knowhow.
and keep plugging an intrinsic need gap: that of timely,
reliable and sensitive access to finance. We believe we are just getting started and the best is
yet to come.
Rising together as a team with a unified commitment to
serve our customers in the best possible way, our drive
is reflected in our performance: total outstanding assets
of BDT 14,360 mn and NPL of only 0.07%.

Lack of financial safety nets, deficient management skills

and difficulty in accessing the country’s hinterlands and
borrower history in the absence of formal credit records
or data are some of the persistent challenges faced by

113
 SME-M
City Bank’s SME-M (Medium) business is at the forefront of ensuring financial credit-led transformation of the large
number of medium-sized firms operating across the country. Through credit disbursement to creditworthy
companies, the division is not only able to provide a strong impetus to entrepreneurship, but also ensure higher levels
of economic activity, more employment creation, stronger contribution to the national gross value-add and more
sustainable local area development.

Performance highlights
Metric 2020 2019
Total assets (BDT mn) 36,070 33,837
Total liabilities (BDT mn) 5,572 3,621
Total non-funded business (BDT mn) 158 199
Total customers 2,104 2,533
Team size 127 130

Segment update
7% Focused on our purpose of serving customers in the
Growth in total assets best possible way
City Bank’s SME-M operations has spanned several
54% economic cycles and this expertise supports
Growth in total liabilities customers throughout their lifecycle with many
progressing to become corporates. In a year when
19% COVID-19 brought exceptional challenges across the
business landscape of the country, our key activities
Growth in loan ticket size (avge.)
comprised extending customer support and
relationship management.

Key macroeconomic trends during the year Value to our customers

Major supply chain disruptions Deeply engaged with customers through multi-year
Weak consumer demand relationships
Persistent cash flow challenges among most Solutions-oriented approach fortified by our robust
companies across sizes industry experience
High responsiveness and quick customer support
capabilities that is deeply valued by customers

Growing significance to the Group Key progress achieved in 2020

l Farmer-hunter’ decentralised business model to
5% ensure smooth services
of operating income l Centralised team formation for portfolio
monitoring with relentless emphasis on
13% recovery
of total assets l Launch of new niche products to serve evolving
customer demand
2% l Rating of customers to appraise portfolio health
and prevent slippages
of total liabilities

114 Annual Report 2020

 Focus areas for 2021
After business restructuring in 2018, SME-M booked
a total of BDT 8,200 mn business without any Business-wide emphasis on
NPL/stress accounts! cost containment

Key strengths, opportunities and

challenges Expanded focus on non-funded income
As the leading SME bank in Bangladesh, City Bank’s to offset revenue pressures imposed by
SME-M offers a unique value proposition for interest rate restrictions
emerging corporates with a customer-centric
approach, supported by a comprehensive portfolio
of relevant products delivered through 114 branches
and digital platforms. Selective enhancement of customer base

During the year, SME-S were impacted by the

standstill in the economy due to the virus-related
industrial shutdowns and the aftermath of the Intensification of efforts on recoveries to
effects when the economy was unlocked phase-wise further lower NPLs
amidst weak consumer demand and sentiment. The
pandemic crippled the tourism and related
industries and sectors that require high-contact. Yet, Leadership message
resilience and survival strategies helped companies Q. How is SME-M evolving to serve clients?
to tide over the difficult time and we extended full
support in our customer journeys. City Bank has been sensitive to the challenges of the
SME sector and continues to support SME businesses
The full impact of COVID-19 is yet unknown and through high levels of engagement to find innovative
unquantified and this may have an adverse impact solutions. It is paradoxical that though companies and
on credit recovery. Further, relaxation of Government businesses in this space are the employment and
policy for extending pandemic-related support to revenue creators, yet they do not receive the kind of
customers may turn counterproductive and change focus that is required to enable them to enhance their
customer repayment behaviour. On the other end, contribution to economic growth. We believe that SME
enforcement of a flat industrial lending rate of 9% will companies, especially those serving the middle
impede our ability to make sustained investments market, would be key to economic revival and central
on account of the fact that we operate a specialised to the Government’s target of achieving 8%+ GDP
wing that entails a relatively high cost structure. On growth in the current fiscal year.
top of this, managerial capabilities within the sector At City Bank, our deep confidence in the potential of
remain a concern and thus we have to continue to this sector and perceived gaps provided the impetus
invest in building financial management capabilities, for transforming our branch operating model to
while also ensuring transition to a digital era. service the needs of our clients better with improved
turnaround times and deeper insights into issues in
SME-M: Core competence drivers this vital sector. Further, the fact that we have as a bank
l Large and vibrant operating landscape with invested in a dedicated SME-M division speaks about
growing scope for formal credit penetration our inherent focus to serve this sector and create
value transformation opportunities.
l Strong policy support from the Government,
especially in exports
l Personalised product offering, meeting specific Q. What was the division’s performance like
customer requirements during the year?
l Pan-Bangladesh network ensuring prompt Encouragingly, despite a highly challenging year
services wreaked by the pandemic, profitability of the bank’s
l Systematic and efficient customer evaluation SME-M operations improved as impairment charges
process declined due to proactive management of the
portfolio, scrutiny to identify early warning signs and a
l Strong focus on digitalisation
structured approach to managing recoveries. Further,
our need to diversify our revenues and mitigate
pressures of a controlled interest rate environment led
to a substantial 101% growth in our non-funded
business. We perceive further opportunities to grow
this revenue channel in 2021 and beyond.

115
 The new operating model that we focused on enables
strategic scale-up of our SME-M operations with higher Non-funded business (NFB):
service standards and increased safeguards to
l Introduce new products focusing on NFB revenue
manage asset quality. Our aim is to have happier
growth
customers and employees who are empowered to
pursue their aspirations. l Launch new trade hubs in high-potential areas to
boost NFB business
Q. What are the key initiatives you expect to look
into in 2021? New customer booking strategy:
It is evident that the SME-M sector will pick-up in 2021 l Remain highly selective in customer booking to
in response to several initiatives launched by the protect asset quality
Government. The initiative to grant credit support to
l Train focus on trade-based business to ensure
SME-S in manufacturing, agriculture, services and
portfolio diversity as well as ensure NFB income
construction sectors by way of a moratorium on
capital repayments will go a long way in helping the
sector circumvent the challenges unleashed by the Portfolio monitoring
coronavirus pandemic. Yet, we have to be highly
l Implement digital early identification system (EIS)
watchful and vigilant to ensure timely collections in the
to monitor portfolio quality more efficiently
aftermath of COVID-19 and at a time when
Government policy incentives will end. Our growing l Segregate portfolio into “good book” and “bad
focus on NPL control is evidenced by the fact that book” and adopt necessary strategies accordingly
disbursement of BDT 2,210 mn in 2020 had nil l Widen and enhance footprint to ensure closer
classification. portfolio monitoring, while also scouting for new
business opportunities
Our roadmap to 2021 and beyond:
Cost-saving initiatives: Recovery
l No additional recruitments in 2021 l Deputation of a dedicated recovery team
l Enhance digital interactions, engagements and l Constitution of different committees to ensure
trainings to reduce cost special efforts in recovery and regularisation of
major stress accounts
l Increase digital interface with clients as much as
possible to optimise travel-related costs l Reallocation of small ticket NPLs to specialised
unit as part of strategy to speed-up recovery

Cards
A leading credit and debit card provider offering flexible borrowing and payments solutions, while delivering
rewarding customer experiences. The business is the largest issuer of credit cards and the largest acquirer of cards
in Bangladesh.

Performance highlights
Metric 2020 2019
Total card billing (BDT mn) 98,500 101,760
Credit card outstanding (BDT mn) 11,111 10,127
Credit cards issued 491,937 448,071

26% 29,000+
Country-wide cards market share POS machines

5% 71%
Credit card outstanding growth E-commerce business growth

116 Annual Report 2020

Segment update
Performing against unfavourable market conditions

Key macroeconomic trends during the year Why we are best placed for recovery

l Deceleration in consumer spend because of l Highest cards market share in Bangladesh

the pandemic l The only bank to have the top-4 card network
l Uncertainty forcing withholding or deferral of partners: Amex, VISA, Mastercard and UnionPay
non-discretionary spends International
l Negative impact on employment and wages l Sole issuer and acquirer of American Express
l Early signs of recovery seen post lockdown cards in Bangladesh
release l Wide POS and QR presence in urban and
l Accelerated shift towards online spending, semi-urban areas
driven by the pandemic l Diversified card products and merchant
relationships driving customer convenience
l Personalised consumer offerings, benefits and
incentives
l Strong digital customer acquisition strategy
with budget to support various acquisition
campaigns

Positioned as a modern lifestyle choice, cards have New partnerships

enabled added consumer convenience of making l Commenced issue of Union Pay cards, with plans of
payments. This aspect came to the fore during the expanding our debit card network to unbanked
COVID-19 crisis, with digital financing helping generate customers in semi-urban/rural areas, especially via
substantial business volumes. This trend is expected to our Branch and Agent Banking networks that will
sustain as consumers build trust in e-commerce ensure lower acquisition costs
services and online payments, fuelled by smartphone
penetration and a rising number of internet-enabled
users. This shift was reflected in a 71% growth in our Customer benefit initiatives
e-commerce business. Yet, with the understanding that
digital and physical retail will co-exist, we continued to l Facilitation of financial assistance via payments
main 29,000+ POS machines, thus ensuring consumer deferment during the pandemic to alleviate
choice and convenience. financial stress amongst customers with a genuine
need
Some of the key developments of 2020 are illustrated
below. l Initiation of a facility via which cardmembers could
pay credit card outstanding and even transfer funds
New card unveilings to bKash, which helped maintain social distancing
l Launch of Citypay, the country’s first interoperable protocols during the pandemic
QR payment solution (a game-changer for digital l Enablement of foreign currency transaction
payments aligned with the “Digital Bangladesh” provisions for Citymaxx Debit Card
vision) on all four network partners. Customers of
other banks with QR facility will be able to scan l Launch of digital banking services through
issued QR codes to ensure greater convenience in WhatsApp, offering facilities such as account
making payments balance information, monthly billing details, etc.

l Launch of two new card products for meeting l Launch of revamped Amex International Gold
specific customer requirements: Lounge with upgraded amenities and luxuries

- UnionPay Debit Card, the first card product

issued under the UPI network
- American Express Prepaid Card for both
Consumer and Corporate customers

117
 Focus areas for 2021 moratorium support to those in genuine need; greater
incentivisation to reward employees who demonstrated
Engaging in mass acquisition of
non-banked customer segments for exemplary courage during the pandemic, in association
UnionPay debit cards, which will help with American Express; and activation of features that
secure our presence in rural areas enabled seamless transactions under the purview of
health and safety guidelines. One of the key initiatives as
Scaling up the UnionPay acquiring part of the latter comprised CityMaxx “Global Usage”,
business, thus opening a new billing with any CityMaxx cardmember able to conduct foreign
stream and diversifying the business transactions.
Today, we remain focused on building rewarding
Onboarding a larger number of merchants relationships. The more clients do with us, the more their
on our platform by leveraging new digital benefits grow. Notably, our approach to deepening the
payments and onboarding platform, like relationships we have with our clients rewards them by
interoperable QR, online lead generation,
digital Flexibuy, etc. recognising the value of their entire relationship. This
sets us apart from our competitors. The year 2021 ushers
in our 12th year of partnership with American Express
Leverage interoperable QR to onboard
micro-merchants for expanding presence and this longstanding relationship is strong validity of
among large public communities our responsible business practices and faith in the
outlook of the business in Bangladesh by the American
cards giant.
Leadership message
Q. Why do you think the business will remain resilient Q. What are the key initiatives you expect to
against continued pandemic-induced headwinds? look into in 2021?

Because of our approach to business. We are the largest In 2021, some of the key things we are looking into
cards issuer in the country with an irrefutable market include:
share of about 26% and yet we have a highly dynamic, l Expanding our POS/billing presence by about 35%
responsive and agile approach to not only protect our
l Marketing our revolving credit offering more
share but also advance it. Further, exclusive tie-up with
strongly for enabling greater customer convenience
American Express, our deep partnerships with all the
and added business profitability
four major global card networks, our extensive and
intensive POS presence, and our ability to quickly build l Launching new and unique products, including
our digital business is reflective of our focus on the cards with QR codes and Wi-Fi and also contactless
business. Notably, business has achieved substantial cards (especially applicable to the post-COVID-19
recovery after the lifting of the lockdown and continued scenario)
momentum is expected into 2021 as the country l Exploring possibilities in merchant financing and
embarks upon vaccination that will ensure pick up in mobile financial services (MFS)
normalcy.
l Placing stronger emphasis on semi-urban and rural
customer segments, leveraging the penetration and
Q. How are you driving responsible growth in the diversity of our bank’s connected networks
business?
We embraced a number of initiatives to extend
assistance during the pandemic. These include

118 Annual Report 2020

Digital Financial Services
At City Bank, we are focused on redefining customer experience and engagement through digital, which transcends
beyond just becoming a digital bank, or merely introducing digital banking. Hence, our digital strategy is an integral
part of our overall strategic corporate framework, helmed by our Digital Financial Services wing. This division has
been entrusted with the responsibility of keeping the customer experience, engagement and journey at the heart of
its digital framework.

67%
Growth in digital banking customers, retail
BDT 2,874 mn
77,000 Total deposits in City Agent Banking platform
New customer accounts opened via
Agent Banking outlets

Key macroeconomic trends during the year How we capitalised on the emerging scenario

l Accelerated digital banking adoption in the wake l Developed an extensive roadmap in collaboration
of the pandemic with a foreign FinTech with a view to capitalise on
l Growing user confidence and trust in conducting the shifting trends
digital financial transactions l Launched an exciting new digital loan product
l Rising presence of FinTech companies with a l Introduced an app by which customers could
“digital-first” focus instantly open an account

Our digital banking framework

Anytime, anywhere access

Delivering greater customer Intuitive and user-friendly interface

value through digital banking

Focus on and beyond banking products

Segment update
Capitalising on shifting trends
At City Bank, our consistent and deep engagement with better customer service, anchored by steady
our customers over the past many years, coupled with investments in technology and the development of
the growing scope of our digital capabilities, have led to future-ready digital talent.
a respectable rise in digitally-engaged active customers
In hindsight, the timing of establishing our Digital
and the rapid growth of financial transactions conducted
Financial Services (DFS) wing in 2019 seems perfect, as
digitally. In 2020, we enhanced the customer experience
the coronavirus pandemic brought forth a step-change
with the launch of many innovative digital products and
in banking and positioned the division well for the future.
expanded digital services. Further, we have also
Thus, the division had a busy 2020, a foundational year
achieved progress in building a digitally-capable
in which considerable progress was achieved.
organisation that embraces digital enablers to ensure

119
 Developing a pathway to our future Leadership message
l Formulated our 3-year blueprint in association with Q. How does digital banking fit the bank’s financial
Fidor, an award winning company that engages in inclusion vision of the future?
the conceptualisation and implementation of a To us, digital financial inclusion is a key enabler of
digital bank. sustainable development and is a priority of
policymakers, development agencies and regulators
globally. It has been established that initiatives in
New launches
financial inclusion don’t just alleviate individual poverty;
l Launched a collateral-free digital loan, under which
they have a much broader and truly essential impact,
users could apply for and receive loans of up to BDT creating more sustainable and inclusive markets. For
10,000 instantly through bKash. Conceived as a pilot, individuals, access to a bank account has often proven to
the initiative targetted a select group of bKash users be the first step in bringing life transformation
who could place a loan request from City Bank via opportunities within the formal economy.
the bKash app, receive the fund directly into their
For us, our focus is to ensure that we help customers
bKash account and eventually repay the loan via the
open an account as easily and effortlessly as possible.
bKash account. Receiving a good response, we aim
Aligned with this endeavour, City Bank emerged as the
to use this model to ensure accelerated financial
first bank in Bangladesh to launch a self-onboarding app,
inclusion through a full-fledged commercial launch in
City Ekhoni, which digitalised the end-to-end account
the future.
opening journey of our customers. While this is a
l Introduced a mobile app, ‘City Ekhoni’, for customers
manifestation of our goals in financial inclusion, our
to instantly open an account with City Bank, thus Agent Banking network is yet another demonstration of
opening up a completely new branch visit-free how we are going to the grassroots to enable formal
channel for account opening. Available on both iOS banking amongst underprivileged and backward
and Android platforms, customers with NID cards communities.
can open their own bank account with
anytime-anywhere convenience.
Q. The bank’s Agent Banking network achieved significant
progress during the year.
Success of City Agent Banking Yes, but more than a network, City Agent Banking has
l The idea underlying agent banking of taking banking emerged as a seamless platform that enables our
to the doorstep of our customers found deep customers to deepen their engagement with formal
resonance amongst the public during the pandemic. banking. Today, enthused by the response, we hope to
l To ensure seamless transaction volumes, we transform agent outlets into a single-stop payment
introduced a new simplified Agent Banking system solutions hub within hinterland localities/catchment
via which our agents could offer services through areas and offers services, including utility bill collection,
our dedicated software using both tablets and web, health package sales, e-commerce and top-up sales, etc.
layered by a two-factor authentication and biometric We have integrated the whole platform through a unified
security. software that enables agents to become a financial hub
l Thus, Agent Banking achieved pathbreaking in their localities. This has the potential to significantly
performance during the year, evidenced in the expand money flow and exchange, thus contributing to
following: overall growth and prosperity. Today, we aspire to
provide best-in-class customer onboarding process with
l Onboarded 1,400+ agent outlets pan-Bangladesh,
an omnichannel experience.
reflecting a 328% YoY growth, which is the highest
growth rate in the industry as well
Q. What do you envisage as the future of the Digital
l Extended City Agent Banking footprint in every
Financial Services division?
district of Bangladesh, with coverage in over 88%
upazillas Interestingly, the ‘Ekhoni’ account is just the beginning of
our customer journey aspirations. The next step will
l Opened 77,000+ new customer accounts, the
comprise digital onboarding of customers from all
highest-ever in a single year physical touch-points, including branch and agent
l Attained deposits in Agent Banking to the tune of outlets.
BDT 2,874 mn Further, we are also in the process of upgrading our
l Ensured women financial empowerment, indicated digital app, Citytouch, which will eventually enable our
in the fact that 31% customers comprised females customers to avail majority of the banking services from
the app itself. We are also bringing in new use cases onto
the app; particularly, we are working with data-driven

120 Annual Report 2020

 Upholding our responsibility, some of the key l Extend support to expand trade business from the
dimensions of our business are articulated below: Islamic Banking wing, City Hong-Kong (subsidiary)
l Prevention of trade-based money laundering and EPZ (new branch)
We have established a dedicated Trade Compliance l Create income-accretive opportunity from
team, complying with all TBML guidelines of the central supply-chain financing, factoring and buying
bank by implementing: houses
l Price verification mechanisms l Introduce digital trade with corporate internet
banking platform
l Sanction screening technology
At TSD, we intend to enhance customer
l Software to trace suspicious transactions
relationships through evolving as a trade partner
l Vessel tracking upgradation to them. Our goal is to be a ‘partner of choice’ for all
l Various training programs to raise awareness so our internal and external customers, transcending
that trade-based money laundering, a serious beyond just trade business to encompassing trade
hazard in our business, could be sufficiently solutions as well.
addressed and eschewed
l Fostering intellectual capital rejuvenation
Knowledge and skill are key to efficiency in the Operations
international trade business. At TSD, our knowledge Demonstrating a commitment to continuous
pool comprises: improvement
l 24 Certified Documentary Credit Specialists At City Bank’s Operations division, our primary
(CDCS) objective is to ensure superior customer experience
l 5 Certified Trade Finance Professional (CTFP) every time they engage with the bank. For achieving
this we:
l 1 Finance of International Trade (FIT)
l 1 Certified Expert in Trade Services (CETS) l Engage in re-engineering core and corresponding
processes
l 1 Certificate for Specialists in Demand Guarantees
(CSDG) l Incorporate new technology for efficiency
enhancement and cost containment, the benefits
l 2 Certified Anti-Money Laundering Specialist
of which could be passed on to our customers
(CAMS)
Such a specialist team has empowered TSD with a
robust competitive edge. In addition, we continuously For Operations, certified by the prestigious ISO 9001:
rejuvenated our intellectual capital by providing our 2015, the foundation of our success has always been
people exposure to local and international workshops, our commitment to continuous operational excellence.
seminars and training programs, etc. This commitment is more important in today’s day and
age of heightened competition, real-time change and
deep pockets of uncertainty. Further, in a
Values-driven culture
regulatory-intense environment, alignment to rules
As part of our values-based culture, we focus on and guidelines is crucial for circumventing censure and
fostering engaged and inspired teams to ensure preserving the integrity of our license to operate.
customer delight with appropriate, timely and
Moreover, today, the market is saturated with
cost-effective trade solutions. Such a focus was one of
commoditised banking products and services. Thus,
the major contributors to our performance in 2020.
what sets an organisation apart is its speed, accuracy
and quality of delivery within a regulatory-compliant
Forward outlook, 2021 way. Meeting the expectations of our customers,
The New Year 2021 has ushered in new business internal teams and regulators, while ensuring
opportunities, despite many challenges on the road cost-efficiency is a balancing act that requires us to
ahead. Thus, with a view to capitalise on the favourable continuously assess, streamline and invest in our
aspects of our operating context, TSD has come up operational processes, while ensuring that we make
with several effective strategies with the aim of the most efficient use of our resources. Besides, focus
becoming a partner to our customers in the trade on continuous automation and upgradation of
business. Some of the ley initiatives planned for 2021 enterprise-wide processes facilitates operational
comprise the following: activities to become far more efficient and effective,
which ultimately distinguishes the bank’s value
l Enhance trade under the SME-M segment through
propositions in a competitive marketplace.
collaboration with the SME-M division for potential
trade business opportunities

122 Annual Report 2020

City Bank’s Operations department comprises a movement of hard copy files, which was risk-prone,
number of divisions working in synchronisation as well time-consuming and added to costs. Additionally, LWF
as with the other business divisions of the bank. Such supports reduced printing, paper and courier costs too.
an operational methodology ensures seamless
process implementation, necessary to attain our
Statements via SMS
objectives.
Our efforts at continuous improvement and resource
optimisation, along with initiatives to promote digital
Operational excellence and green banking, intrinsically have a positive effect
The general trend of our efforts during the year under on the natural environment by reducing our carbon
report was responding to an uncertainty due to the footprint. In addition, we place a strong emphasis on
pandemic and adapt to central bank directions from managing the direct environmental risks and impacts
time to time to minimise disruption. We had to of our internal operations. Thus, in a major move
manage operations for all the centralised processing during the year, we introduced half-yearly statement
centres and branches by placing an emphasis on despatch process for customers via SMS, which
activating our Business Continuity plan and thus substantially reduced paper consumption and also
activating working from home (WFH) to ensure the statement printing costs to the tune of about BDT 6.5
service and control measures are not compromised. mn a year.
The bank conducted a range of internal process
improvements, which focused on centralisation and Branch Operations
automation, resulting in increased efficiency and
Managers (BOM) are entrusted with the responsibility
productivity in our back office operations.
of ensuring compliance at the branch-level, with
authorisation to:
Service Delivery l Sanction/prohibit non-cash transactions, both
City Bank’s Service Delivery team has a major role to financial and non-financial
play in customer service. In centralised operational
l Ensure timely regulatory and internal reporting,
processes of the bank, Service Delivery operates as a
audit handling and anti-money laundering (AML)
major unit to facilitate account opening, remittance
activity monitoring
services, Government bonds management and
support extended to bank’s branches, Agent banking, The BOM unit acts as a branch’s anti-money
Employee banking, Corporate wings and other laundering compliance officer and hence, a shadow
business/support units. risk manager. BOM’s stringent screening process has
enabled them to significantly contribute to
augmenting operational efficiencies, optimising costs
Launch of Liability Work Flow and bringing forth greater control over credit risks.
In September 2020, a new software, Liability Work Flow
(LWF), was launched for modernising the liability
service flow as a single integrated platform unifying all
service outlets and central processing centers. LWF is a 100%
smart API (application programming interface)-based Satisfactory audit rating achieved in 2020
solution that integrates core banking and all
liability-based operational software onto a single
platform. All our branches are live on this software, and YoY audit rating journey
is used for:
l Account opening and related account
maintenance 100%
94%
74% 87%
l Fund transfers (local and foreign)
l Cheque book and debit card processing
l Locker opening, maintenance and closing
2017 2018 2019 2020
l Government bond processing, etc.
LWF has reduced TAT and improved efficiency, In the year 2020, audit rating was published for only 44 branches
ensuring better customer experience and retention. and all received “satisfactory” audit rating.
Moreover, the software has also eliminated the

123
 Card Operations Treasury Operations
The COVID-19 pandemic accelerated digital adoption, City Bank’s Treasury Ops team provides back-office
and City Bank’s cards have emerged as platforms of support to the Treasury wing to facilitate it in meeting
choice for enabling payments in a safe, secure and its business objectives. The team comprises an
convenient way. Further, the Government’s thrust on experienced group of 7 members. Some of its key
digital payments and of a less-cash economy will augur hygiene measures include automation of data source
well for digital payments in the country. to generate reports and performance of continuous
City Bank is a pioneer in the cards business through its self-risk assessments with a risk minimisation plan to
long-standing association with American Express. In mitigate any operational risks, in compliance with ISO
fact, American Express cards in Bangladesh have 9001: 2015 standards.
become synonymous with City Bank, as the bank is the
sole designated acquirer and issuer of AMEX cards in
the country. Further, the bank is amongst the few
financial institutions in Bangladesh to issue cards via its
6,495
Money market transactions facilitated in 2020
captive card management system, and processes card
transactions through a wide range of terminals, in
collaboration with AMEX, VISA, CUP and Mastercard.
13,152
Foreign exchange transactions facilitated in 2020
Card Operations work as a back-office of the Cards
business to ensure process and service excellence. The
key contribution of Card Ops to the business is
9,254
Other transactions facilitated in 2020
indicated below.

China UnionPay issuing Focused on ensuring Treasury’s sustainable revenue

contribution to the bank, the Ops team will focus on
Ensured successful issuance of China UnionPay debit cards,
facilitating increase in trading of Government
thus creating new business opportunities for the division.
securities to corporates, extend support in reaching
out to more customers, implement an electronic
Interoperable QR dealing system (EDS) comprising a completely new
Facilitated the launch of interoperable quick response money market platform launched by Bangladesh
(QR) code-based payment acceptance solutions, Bank, etc.
enabling cardholders using Amex / Visa / Mastercard -
branded credit, debit and prepaid cards issued by City Central Clearing Operations
Bank to carry out payments effortlessly via a QR code.
City Bank’s Ops team has been performing BACH
(Bangladesh Automated Clearing House) operations
IVR and SIVR since 2010 to enable clearing and settlement of
City Bank has introduced Smart IVR banking service, paper-based payment instruments among all
the first such in Bangladesh, through which customers schedule banks country-wide to reduce our
can complete their banking activities on the mobile customers’ time and operational risks.
screen easily without assistance from a customer Currently, the division performs all of the bank’s BACH
service representative, which helps save both time and outward (other banks’ instruments) operations directly
mobile airtime charges. from 100 branches and in 31 branches through our 6
different hubs. Further, we perform all inward (City
Bank’s instruments) transactions centrally to meet
CitymaxX global use card
Bangladesh Bank’s timelines and to ensure accurate
Via this facility, our existing debit cardholders were able and efficient funds transfer.
to make purchases from all over the world. The card
During the year, Central Clearing Ops introduced a
was specifically designed to cater to those conducting
full-scale digital platform (SMS and IVR) to ensure
frequent international transactions but were hesitant to
‘Positive Pay’ confirmation from our retail customers.
use credit cards.
Further, the unit also conducted BACH operations
during the COVID-19 lockdown period by extending
Reloadable prepaid card hub facilities to an additional 14 branches, while also
Using reloadable prepaid cards, customers could conducting inward operations through home-office
refill/top-up money using the card. This card could be without a single dispute.
used for international transactions as well, subject to
regulations.

124 Annual Report 2020

 technology reliance on automation for transference of
USD 1 mn manual tasks that could be easily automated. Further,
we will continue to identify key shifts and trends and
Executed both inward and outward instruments
update our operational processes and resources
accordingly to ensure superior customer service that
Operations Project & Support will go a long way in ensuring customer delight and
City Bank’s Operations Project & Support Division eventual retention.
works as a centralised processing center for various
transactions of the different wings of the bank. The
team deals in bulk transactions through automated
and digitalised systems and also coordinates different
process re-engineering projects of the main Credit Risk Management
Operations team. Overview
Credit risk refers to a potential financial loss from the
The major achievements and highlights of the unit default or credit quality deterioration of a customer or
comprises the following: other third-party with whom City Bank has a
l Implemented BPR (business process contractual obligation. It is our most important risk in
re-engineering) projects terms of exposure and capital consumption. It also
includes counterparty risk, country risk and sovereign
l Effected cost savings by economising the
risk.
permanent Business Continuity Plan (BCP) drill
center, with the drill conducted via At the bank, we identify, analyse, control and decide on
working-from-home (WFH) credit risk based on a holistic view of the credit risk
l Executed bulk bKash wallet account payments cycle, which includes the transaction, the customer and
the portfolio. Business and risk areas and top managers
are part of this process. Credit risk identification is key
to managing and controlling our portfolios effectively.
100+ We classify/categorise external and internal risks in
Companies on boarded on the Corporate internet each business and adopt corrective and mitigating
banking platform, Citylive, in 2020 measures, when needed, through the broad processes
of planning; risk assessment and credit rating; credit
150 risk mitigation techniques; limits
pre-classifications and pre-approvals covenants;
setting,
Companies conduct transactions on Citylive
scenario analysis; monitoring and collections recovery
ensuring repayment.
In 2021, the division expects to advance its focus on
digital banking and cost savings programs through As part of our COVID-19 risk management policy, to
such initiatives as URL statement download option for help our customers and foster their economic
City Manarah customers, full implementation of BPR resilience, the credit-related actions we adopted
projects, systems-generated remittance advisory to include:
customers who receive foreign remittance from other l Providing liquidity and credit facilities to customer
banks through BEFTN, and implementation of bulk facing hardship. City Bank increased continued
bKash wallet account payment through Citylive, etc. lending to customers through usual loan approval
procedures and based on internal ratings, while
also facilitating government aid/relief
Concluding note programmes.
A major part of our focus in 2020 was in fostering the l Granting payment deferrals on outstanding loans
culture of “live” within the bank. This was important, under the moratorium guidelines on loan
specially for service industries, given their need to repayments the central bank had issued in light of
provide a superior experience to customers by keeping the COVID-19 crisis, along with other regulations.
attuned to their dynamic lifestyle.
Further, with a view to tighten financial standards after
Over the medium term, we expect to meticulously track the global 2008 economic meltdown, it is expected
the usage of high-usage items across our branch that the new Basel-III regulations will create an even
network. This will provide a holistic picture of resource bigger regulatory responsibility for banks. With a view
usage of the bank, and will lead to efforts to reduce to ensuring compliance with more stringent regulatory
consumption. Further, we will look to identify all requirements and absorb higher capital costs for credit
initiatives and projects that will help advance our focus risk, many banks are revisiting their approach to credit
on green and digital banking, while increasing risk.

125
 Risk appetite
At City Bank, our well-defined risk appetite managed by
Given that our lending portfolio accounts for 70.0% of efficient risk frameworks has paved the way for
total assets and credit risk accounts for over 86.6% of sustainable growth, enabling us to create sustainable
our risk-weighted assets, management of credit risk is stakeholder value via our calculative risk-taking and a
critical to City Bank. We endeavour to manage credit risk-aware culture. As credit risk influences our interest
risk going beyond mere regulatory compliance in order income along with loss forced by provisioning against
to enhance value. NPLs, ensuring more robust alignment with the
It is managed through the credit risk management enterprise risk framework ensures protected
framework approved by the Board, which comprises a profitability growth.
robust risk governance structure and a comprehensive
suite of risk management processes, which include
policies and procedures, risk ratings, collateral Credit risk management framework
management and valuation, segregation of credit risk City Bank’s credit risk management (CRM) framework
management functions, environmental and social risk consists of three major pillars:
management, independent verification of risk l People
assessments, credit risk monitoring, post disbursement l Policy
review, providing direction to business line managers
and sharing information with internal audit, etc. l Governance

People Policy

CBL has a dynamic team of well-trained credit CBL has accumulated years of credit risk management
practitioners led by professionally qualified leaders who experience, expressed in its dynamic credit practice
have been continuously thriving to uphold the standard guidelines under "Credit Policy Manual (CPM)". It
of the organisation's credit quality. We are vigilant for contains the principles for identifying, measuring,
implementation of the robust guidelines for credit approving, managing and controlling credit risk in the
management-Credit Policy Manual, which ensures that bank, including:
the bank's lending practices are prudent and adaptive to l Role of stakeholders
the changing scenarios of the economy and in line with
subsequent changes in regulatory guidelines. For the l Delegation of credit authority
effective management of credit risk, CBL segregated l Credit appraisal and management process
credit risk management (CRM) team into several
segments, e.g. Corporate, Commercial, SME and Retail to l Credit risk monitoring approach
cater to each group of customers with their special l Credit loss recognition policy
requirements.
l Environmental and social risk management (ESRM)
policy

Governance

People and policy within the bank’s credit risk framework empowers risk governance. Notably, the bank’s credit risk
governance practices comprises a cross-team endeavour, which ensures checks and balance at every step of the
credit underwriting process. The credit risk governance framework incorporates:
l Credit Risk Management Committee: Reviews the bank's strategy, portfolio and vulnerability, especially for large
exposures. It is a committee comprising of various heads from business, risk and finance divisions.
l Credit Risk Management Division: Responsible for underwriting, assessment of credit and portfolio risk. It ensures
implementation of credit policies and covenants.
l Deteriorating Credit Management Team (DCMT): DCMT Review Committee and Early Identification (EI) Monitoring
Committee: It is responsible for early identification of probable deterioration in repayment. It also rigorously
adheres to a resolution from past experience.
l Credit Administration Division: It is responsible for managing compliance in documentation for credit, reduction of
credit operational risk and covenant management.
l Risk Management Division: It manages the overall enterprise risk.
l Internal Control and Compliance (ICC) Division: It is responsible for the internal audit to ensure compliance.

126 Annual Report 2020

Values we embrace to create organisational value macro-level analysis of targetted industries, along with
Independence client-specific assessments was given due importance.
City Bank’s Credit Risk Management team is The division wrote 16 industry papers, representing a
empowered with independence for any credit decision, summation of the latest industry insights regarding
which ensures consistency and transparency in market trends, government policies, historical
application of credit principles and standards. performance, risk factors and growth potential. The
initiative was well-received by various stakeholders
Delegation of authority from across different divisions.
Lending authority up to a certain level has been
delegated to our experienced management team. The Focusing on service excellence
management team recommends credit to the Board, Updated credit policy manual: City Bank created a
where applicable, for new credit approvals after Credit Policy Manual (CPM), which defines the
engaging in rigorous assessment from the credit risk organisational structure, roles and responsibilities and
management team. Importantly, the practice of processes, whereby credit risks of the bank can be
delegated lending authority engages the management identified, quantified and managed within the
towards accountability, while fostering responsible framework that the bank considers consistent with its
credit practices. mandate and risk tolerance levels. To recalibrate with
the changed credit scenario, CRM orchestrated a
Collaboration year-long project to realign core credit policy with
At City Bank, balance between risk and reward is industry and market standards, which will deliver value
achieved through collaboration among the business in terms of ensuring healthy credit growth. Although
and risk divisions. These two frontier departments the reviewing process is a continuous approach, the
co-opt for due diligence right from client selection to 2020 CPM review was substantive compared to
credit monitoring. Moreover, the credit risk previous years on account of the COVID-19 pandemic.
management team also continuously coordinates with
Resource quality: To adapt to the latest policies and
credit administration, legal and trade service divisions
practices in a dynamic financial services sector, CRM
for ensuring compliance.
invested in its human resources. Every year, several risk
managers undergo professional certification from various
Compliance
renowned institutions, including BIBM, Moody’s, etc.
City Bank has zero tolerance for compromise in its
compliance standards, which helps expand its value
creation potential. Focused on controlling NPLs
Continuous effort invested in effective credit risk
2020 – A year of uncertainty management is manifest in the bank’s asset quality
City Bank’s CRM team strives for achieving the best maintained over time. Since 2016, City Bank has managed
outcomes and, accordingly, remains dynamic to to keep its NPLs way below industry-level NPLs or even
respond to the external environment. those of foreign commercial banks. Since June 2018, City
Bank has been ahead of its peer group comprising private
The year 2020 threw new challenges at the financial
commercial banks too in terms of NPL management, as
sector, with the spread of the coronavirus and thereafter
reflected in published data by Bangladesh Bank. Even in
prolonged shutdown. Yet, resilience and our ability to
times of NPL crisis in the country, City Bank achieved NPL
adapt to the ‘new-normal’ has allowed the bank to
of 4.0% in 2020, while the country’s NPL reportedly
achieve consistent growth despite major disruption.
soared to 7.7% during the year.
This was achieved due to many reasons. For instance,
we were at the forefront in delivering government NPL chart diagram (City Bank vs PCBs vs FCBs vs
stimulus funds (subsidised) to our clients. Maintaining Country Average)
strong liaison with all stakeholders, including the central
bank, made this initiative possible. Despite our whole NPL Ratio: Industry vs. CBL
CRM team working from home during peak pandemic,
12.0%
10.3%

usual approval processes, credit monitoring and even

9.3%

Board-level approvals were executed on time, thanks to 10.0%

7.7%

our adaptive team and robust systems backbone

6.5%

8.0%
5.8%

5.8%

5.7%
5.5%

supported by our IT infrastructure. Further, virtual

5.3%

4.7%

6.0%
4.0%

meetings to follow-up and monitoring helped us to

3.5%

4.0%
achieve our ultimate objective of reducing our NPLs
and allowing no new NPLs in our books. 2.0%

0.0%
Journey towards continuous transformation Dec'18 Dec'19 Dec'20
To be able to generate informed credit decisions, CBL PCB FCB Country

127
 Risk Management Division
 Resolutions  Suggestions  Queries
Risk Management Division (RMD) is the anchoring
platform of all of City Bank’s risk management functions. RMD
Board’s Executive
In the latest risk management guidelines for banks, the Risk Mgt.
Risk Mgt. Ensuring smooth information flow
central bank has reiterated the role of RMD as an integral Committee Committee
part of the optimal risk management organogram. RMD
Building on the central bank’s concept, City Bank has Feedbacks Follow ups Execution status
been meticulous in developing its risk management 4
Meetings coordinated & presented at 12
infrastructure. Consequently, RMD has undergone
pertinent modernisation and enhancement. 37 Resolutions communicated & followed up 30
The modifications include detailed introduction of risk
areas and re-specification of desk-wise responsibilities
to match business complexity. Advancing the
desk-wise responsibility concept in line with
Bangladesh Bank’s risk management guidelines for l In collaboration with business team, RMD saved
banks, City Bank’s RMD desk has been further significant capital through External Credit Rating.
categorised into two subsections: l Based on RMD analysis, the deduction from Tier-1
l Enterprise risk management capital was reduced and Tier-1 capital ratio has been
l Operational risk management improved (sep 2020 basis)
l Set Risk Appetite for 43 risk areas of the bank
Enterprise risk management l 12 monitoring and escalation reports generated
l Credit risk l Monitoring Loan Equivalent Risk of treasury, trade
l Market and liquidity and other indirect business
l Risk projects and systems l Basel-III supervisory review: 6 SRP meetings, 1
l Capital risk management dialogue with BB
l Risk policy and subsidiary risk l Risk Control Self-Assessment covering 29 areas
l Support and MIS, enterprise risk 1 from 4 divisions, and 8 departments
l Support and MIS, enterprise risk 2 l Regulatory reporting: 1 Risk Appetite Statement, 2
CRMR reports, 10 RMR reports, 4 Capital Adequacy
Operational risk management reports, 4 Stress Testing reports, 1 ICAAP report, 1
l Operational risk support (Retail, Cards and Small Market Disclosure, 1 Effectiveness Report
Business)
l Introduced 2 broad-based frameworks on
l Operational risk support (other business and support Operational risk, and Market & Liquidity risk
functions)
l Operational control and monitoring
l Introduced Comprehensive Risk Management
Guidelines of CBL
l Operational policy and processes

In addition to the highlighted policies, RMD has

Competitive edge of RMD reviewed other risk management policies, guidelines,
Years of Experience, CBL RMD was delegation of credit and treasury authorities, and
established proactively even before any
provided support to review the bank’s core risk
10+ regulatory mandates reflecting the bank’s
prioritised focus on sound risk
Management.
management guidelines in 2020.
While we have achieved commendable milestones in
Active rapport with BoD adopting an enterprise-wide risk recognition attitude
(21 Risk Mgt. Board Memo) from the leadership, RMD continues multiple endeavors
Independent reporting to improve risk understanding and awareness at the
line, through CRO, to BRMC frontlines. We have further plans to modernise our
analytical models, to enable more coherent reporting
Specialised Capability: Resourceful team by collaborating with departments, while also ensuring
& dedicated desks for each risk area up-gradation of our models and methodologies to cope
with the changing macro-environment of the bank.
Internal Knowledge Management:
consistent work across time & flexible
management of contingencies

128 Annual Report 2020

Special Asset Management SAMD focuses on bringing delinquent accounts to the
negotiation table, thus brightening prospects for
Division eventual settlement. Yet another dimension of NPL
recovery is the vesting of mortgaged collateral by the
Ensuring proactive delinquency monitoring bank through court sanctions. This allows the value of
At City Bank, having made a conscious decision to the mortgaged property to be adjusted against the
scale-back on aggressive lending activities over the liability of the borrower classified as delinquent. This is
past few years in light of protecting the integrity of our done in close collaboration with the bank’s Legal and
loan book from bad assets, we thereafter turned our Finance divisions.
attention towards managing credit quality. Taking a Thus, considering its close engagement in NPL
holistic approach, we looked at strengthening credit management, SAMD plays a pivotal role in contributing
quality management from both the pre-credit and to the bank’s profitability through release of
post-credit perspectives. While securing the important classified/written-off funds, while also releasing interest
creditworthiness appraisal facet of our business, we suspense and unapplied interest and taking these
placed emphasis on credit recovery, thus ensuring a earnings into the income account.
much more holistic focus on the typical loan cycle. Reporting is a key responsibility of SAMD, and the line of
Thus, we enhanced delinquency monitoring across the reporting comprises:
bank through our recoveries department, or the Special l Head of SAMD reports directly to the bank’s Chief
Asset Management Division (SAMD), to ensure Risk Officer
proactive follow up – right from the initial stages of l Under the Head of SAMD, there are functional
default/non-payment. Over the years, through heads who supervise the Unit Heads
consistent and relentless efforts of the SAMD, the bank
has been able to achieve a marked improvement in its l All Unit Heads look after the day-to-day activities of
NPL ratio, while also ensuring that any recoveries from relationship managers
classified/written-off accounts adds handsomely to the At present, SAMD has 16 RMs with Unit Heads. The MIS
bank’s profitability. SAMD contributes to the bank’s team comprises of 2 members, including Unit Head
income via the following: also reporting to the Head of SAMD.
l Interest revenue from rescheduled accounts
l Revenue from interest suspense on realisation Divisional update
basis Intensifying focus on delinquency post-COVID-19
l Revenue from reduction in provision requirements Despite the year 2020 being marred by the COVID-19
through recovery/rescheduling pandemic, SAMD focused on performance through
l Revenue from any recovery from written-off resolute efforts in delinquency management, which
accounts yielded robust results, including the following:
l Revenue from unapplied interest
l Revenue from recovery of legal expenses l Contributed BDT 352 mn, vs. revised target of BDT
220 mn, comprising a near 60% jump over targets
City Bank’s SAMD works in close collaboration and l Engaged in rescheduling loans worth a combined
coordination with the all the divisions, especially BDT 534 mn and written-off loans comprising BDT
Corporate, Retail and SME (non-PPG), with a view to 1,452 mn
achieve the best outputs and outcomes. l Recovered funds from as many as 156 accounts
transferred from the businesses to SAMD

412 mn l

l
Adjusted 24 accounts in full during the year
Arranged auctions for 10 properties, partially
Recoveries by SAMD over the past 5 years
adjusted with the outstanding amount
l Recruited skilled manpower to ensure smooth
SAMD’s responsibilities functioning and attainment of targets
There are two primary reasons attributed to financial l Introduced a seamless file transfer process in
loans turning sour: One, willful default and two, genuine collaboration with the CRM (credit risk
reasons at the customers’ end, including business management) and business team to ensure
failure, etc. While City Bank’s SAMD is aggressive and smooth and quick file transfers after an account
relentless in pursuing willful default and deliberate turns into a classified loan
malfeasance, it is sensitive and responsive to the needs
of those facing legitimate challenges. In both the cases,

129
 Forward outlook, 2021 l Ensuring proactive protection against adverse
With a view to intensify efforts in the aftermath of the credit risk formations
COVID-19 pandemic, our singular focus will be to l Assuring protected asset quality
enhance recoveries despite the adversities. Some of our
l Securing sustainable profitability
key initiatives include the following:
Notably, the division played a hugely positive role
during the pandemic in not only ensuring compliance
l Engaging external (third-party) debt collection
with government guidelines, but also in taking
agencies for expediting the recovery process
premeditated initiatives in a deteriorating credit
l Enabling stronger account monitoring to ensure environment. Further, it also enhanced vigilance on
recovery customers/accounts under closer observation or
l Ensuring continuous follow-up of regularised showing preset warnings in the bank’s risk
accounts to prevent their collapse back into the management systems.
NPL category
l Ensuring accurate and timely MIS to facilitate
management decisions and compliances CAD’s broader responsibilities
l Adding selective manpower for meeting specific Our scenario analyses determine the potential risks in
requirements, while de-focusing on smaller and our credit portfolio and provides a better understanding
time-consuming accounts of our portfolio’s performance under various
l Working closely with all the concerned divisions of macroeconomic conditions. Besides, our extended
the bank to hasten the recovery process team facilitates all business requirements for the bank’s
Chattogram hub. Some of CAD’s key pillars include:
l Issuance of sanction advice
Credit Administration Division l Ensuring proper documentation
Ensuring transactional integrity related to all loan
Ringfencing assets, protecting profitability l
facilities
As a response to reinforce City Bank’s credit risk
l Stock inspection and validation
supervision, the bank’s Credit Administration Division
(CAD) was established in March 2008, owning the l MIS and monitoring of loans and advances
mandate of achieving all post-approval activities of l CL reporting along with provision calculations
Corporate, Commercial, SME and OBU credit facilities,
including documentation, transactions, monitoring and l CIB and Bangladesh Bank reporting
reporting. l Audit and compliance
At City Bank, we believe credit risk identification is key to
effectively managing and controlling our portfolio. We
identify, analyse, control and determine credit risk Divisional update
based on a holistic view of the credit risk cycle, which
Remaining vigilant against future risks
includes the transaction, the customer and the portfolio.
Business and risk areas and top managers are part of The CAD assists the leadership and senior
this process. management team in fulfilling responsibilities for
overseeing the bank’s risk management framework
Today, CAD aims to foster a risk-aware culture that is
and activities, including the review of major risk
rooted in risk selection know-how, alertness, vigilance
exposures and the steps taken to monitor and control
and ownership. Towards this extent, we regularly
those exposures. With economic standstill enforced by
monitor and evaluate credit risk models, the bank’s
the Government for over 3 months starting from March
predictive capacity, risk granularity, compliance with
2020 to counter the spread of the coronavirus, the
policies and guidelines and other related factors. We
main focus area for the year was on the deterioration of
also review ratings with the latest available financial and
credit quality levels of the industry amidst deteriorating
other relevant information, while also classifying
socio-economic factors. Thus, deliberations on facets
external and internal risks in each business to adopt
that were within the control of the bank were given due
corrective and mitigating measures, whenever needed.
cognisance with a view to improve credit quality of the
portfolio through stringent measures and guidelines.
Over the years, CAD has played a seminal role in:
l Creating the risk “perimeter” in terms of helping
outline the bank’s risk appetite

130 Annual Report 2020

Some of the key initiatives of the year comprised the Responsible contribution
following:
l CAD meaningfully contributed to City Bank’s
Ensuring work continuity despite the pandemic deposit portfolio by organising a fixed deposit
l CAD embraced challenges of the new reality and campaign, raising customer awareness about City
adapted to the new work models – Bank’s fixed deposit products. The division was able
work-from-home or attending office as per roster – to mobilise BDT 76.1 mn through the campaign.
as critical measures to continue to remain
observant of key credit risk formations and take
commensurate initiatives. Further, the division also Human resource development
ensured that all pandemic-related Government l In order to ensure high levels of preparedness of
policies and guidelines were followed, including the team to face the challenges of a dynamic
block interest, relief (stimulus) fund distribution and business environment, the division organised
MI, changes in ROI in bulk, etc. several learning and knowledge-building sessions,
while also ensuring that the team was in alignment
with the expectations of the business.
Embracing digitalisation
l With a view of ensure holistic staff development, a
l CAD participated in a major project related to re-allocation exercise was initiated, under which a
Islamic banking core system upgradation few members were shifted to other functional
comprising Ababil NG, a comprehensive Islamic areas. This will ensure wider learning opportunities
Shariah-compliant solution, transcending much through exposure to the overall CAD operations,
beyond a traditional banking application. Today, thus also helping us prepare critical subject matter
Ababil is used by some of the leading Islamic banks experts who could contribute far more to CAD and
and Islamic financial institutions of the world. hence the bank.
l CAD also participated in various IT-related systems
upgradation/overhaul projects, which helped the
division to cope with the changes better and to Forward outlook, 2021
deliver precisely as per the requirements of the
Perceiving a challenging business environment in 2021,
business.
especially with regards to the aftershocks of the
COVID-19 pandemic and central bank’s evolving
CL automation guidelines on stimulus, CAD is fully geared to face an
adversarial environment and protect the interests of the
l To ensure error-free reporting and reduce manual bank. Importantly, CAD also considers this to be an
interventions for assuring information integrity as opportune time for reinforcing credit risk awareness
well as initiating more rapid and better and culture at the bank, raising awareness across the
decision-making, CAD took the initiative to organisation, while also further driving the concepts of
automate the whole CL process, which was risk ownership, accountability, identification and control.
successfully tested in December 2020 for onward
full-scale implementation. CAD perceives regulatory reporting to be a challenge
for 2021, especially in the wake of various circulations
related to loan classification, block interest rates and
Enhancing inter-departmental collaboration stimulus packages. The division will remain highly
watchful on the evolving regulations and ensure proper
l To ensure higher operational efficiencies and open
interpretation and full compliance with regulatory
lines of communication, CAD enhanced
guidelines. Further, the division is also planning to
collaboration with the bank’s various other
reinitiate all the activities and initiatives that were put on
divisions via convening a quarterly meeting where
hold in 2020, thus reinforcing its capacities and
various issues confronting the bank and possible
capabilities in the post-pandemic environment.
resolutions were discussed in detail. These
exchange sessions are a testament of our focus on
aligning with the bank’s broader operations and as
per the needs and priorities of the bank.

131
 Internal control and compliance effectiveness of our internal controls and policies on an
ongoing basis to ensure relentless alignment, and
ensuring adequate reporting to assure holistic
City Bank’s Board of Directors is responsible for the
compliance with regulatory laws and guidelines.
implementation of an effective internal control
mechanism at the bank. Such a system is designed to The three chief objectives of internal control include the
manage the bank’s key areas of risk within an following:
acceptable risk profile, rather than eliminating the risk of l Operational objectives: Achieve performance as per
failure to achieve the business objectives and policies of the bank’s vision and mission statements and
the bank. aligned with the bank’s values and code of conduct
l Reporting objectives: Ensuring timely, accurate and
Overview comprehensive reporting, comprising both financial
and non-financial reporting, as per both internal and
The bank’s Board has established an ongoing process
external stakeholder requirements
for identifying, evaluating and managing the significant
risks faced by the bank, and this process includes the l Compliance objectives: Conduct activities within the
system of enhancing internal controls and compliance realm of stipulated regulations and also initiating
initiatives as and when there occur changes to the specific compliance-related actions in accordance
business environment or regulatory guidelines. The with applicable laws and regulations
process is regularly reviewed by the Board and the Our internal control mechanisms also help meet the
Board is of the view that the systems governing internal bank’s operational performance objectives and, towards
control and compliance in place is sound and adequate this extent, the bank’s ICCD plays a crucial role in helping
to provide reasonable reassurance regarding the achieve this goal. Further, an appropriate and effective
reliability of risk management and control, financial internal control environment is maintained to ensure
reporting and the process of preparation of financial that the institution is managed and controlled in a sound
statements, which is in line with relevant accounting and prudent manner by way of the implementation of
principles and regulatory requirements. the highest standards of operational procedures and
During the year under report, 2020, the Board enhanced controls and also to assure operational stability and
vigilance, especially considering the events unfolding at performance reliability, which is a key expectation of our
the onset of the coronavirus pandemic in early 2020, shareholders.
full-scale lockdowns announced starting March 2020, City Bank’s ICCD has been structured as per the
and eventual unlocking of the economy phase-wise post stipulated organisational framework of Bangladesh
lockdown release in May-June 2020. The Board, along Bank’s Core Risk Management Guidelines. The bank’s
with the management team, remained specifically ICCD operates independently as a division of the audit
vigilant in ensuring that Government and all regulatory function and is responsible to the Audit Committee, a
guidelines regarding moratorium, loan deferment, etc., sub-committee of the Board of Directors, while also
were sufficiently followed by the bank, while also keeping maintaining a direct line of reporting to the same body.
an eye on key risk formations, especially NPLs. This framework is a crucial component of the bank’s 3
lines of defence risk model. Thus, ICCD fulfils the role of a
bridge between the Board and the bank’s management.
Our internal control mechanisms
The following comprise the 4 key functions of ICCD.
At City Bank, risk identification and sufficient mitigation
constitutes an integral activity and represents the bank’s
ongoing focus on fostering a risk aware environment
where everyone ensures that risk is controlled to the Audit and Inspection Unit
extent that it becomes a benefit for the bank rather than
a threat. Towards this extent, our internal risk
assessment standards are deeply embedded in the
day-to-day affairs and management processes of our Information Systems
business and its output/outcomes constitute an integral Audit Unit
part of the framework of monitoring and controlling risk ICCD
formations, thus enabling us to secure and perpetuate a
favourable risk profile. Shah'ria Audit Unit
City Bank’s Internal Control & Compliance Division
(ICCD) provides assurance on the effectiveness of our
risk management processes, and the strategic Compliance and
objectives of internal control systems at the bank is to Monitoring Unit
enable us to achieve sustainable performance through
intake of acceptable risk, testing the efficiency and

132 Annual Report 2020

Audit & Inspection Unit through regular audit processes conducted by the
City Bank ensures an effective and efficient audit of Information Systems Audit Unit under the approved
internal control systems, which is conducted by its annual audit plan. With a view to ensure
Audit & Inspection Unit. This unit is constituted by an comprehensive regulatory compliance across all levels
operationally-independent and professional team of the bank, it’s Information Systems Audit Unit
assigned the responsibility directly by the ensures an acceptable standard of security across all
management, thus reflecting the importance of the technological installations, like servers, workstations,
unit within the overall structure of the bank. routers, switches, applications and other ICT systems.
Moreover, special information systems investigations
The Audit & Inspection Unit comprises three audit are also undertaken as per the bank’s requirements
wings: from time to time. With expansion of digital banking
l Branch Audit Wing services offered by the bank, this audit unit also
focuses on the same to ensure related risks, including
l Head Office Audit Wing
privacy, etc., are properly identified and mitigated.
l Foreign Exchange Audit Wing
Such a structure not only ensures comprehensive
audit across the bank, but also independently focuses Shari’ah Audit Unit
on the identification and assessment of key The Shari’ah Audit Unit evaluates whether City Bank’s
operational risk formations across the bank’s major Islamic banking business is operating in line with the
business divisions, including Corporate, Commercial, prescribed Shari’ah guidelines and principles, as
SME, Supply Chain Finance, Retail, Priority Banking, articulated by the supreme authority, the Shari’ah
Islamic Banking, Digital Financial Services, Cards, Agent Supervisory Committee or SSC, in addition to ensuring
Banking and Treasury, along with other support that general banking guidelines and principles are
segments of the organisation, including operations, adhered to.
finance, risk, etc., through conducting regular audits
under the approved annual audit plan.
With a view to ensure the structural integrity of
Compliance & Monitoring Unit
responsibility entrusted to it, the Audit & Inspection The Compliance Unit identifies and traces compliance
Unit applies risk-based internal audit methodology to activities of different divisions and/or branches of the
its audit functions. Under risk-based internal audit, the bank, while also engaging in follow-ups to ensure that
focus shifts from full-scale transaction testing to risk all regulatory requirements as well as audit issues are
identification, prioritisation of audit areas and allocation rectified and complied with within specific timelines. It
of audit resources, in accordance with the evaluation of also engages with regulators and policy-makers and
risk. Essentially, the primary focus of risk-based internal also notifies departments and units of any regulatory
audit helps provide a reasonable assurance to the updates or procedural changes or regulatory
bank’s Board and the senior leadership about the amendments.
adequacy and effectiveness of the risk management The Monitoring Unit monitors the effectiveness of City
and control framework. In addition, special Bank’s internal controls systems on an ongoing basis
investigations and surprise inspections are also by identifying key/high risk incidences or build-ups, as
undertaken as per the bank’s focus on internal audit part of its daily activities. Although monitoring controls
and compliance. Risk-based internal audit includes: are a fundamental part of the overall compliance and
l Selective transaction testing monitoring function, it is independent in fulfilling its
roles and responsibilities. Some of the key activities
l Evaluation of risk management systems and under monitoring procedures include:
control procedures embedded in various areas
and functions of the bank’s operations l Periodic evaluation of business lines, including
departmental control function checklist (DCFCL)
While focusing on ensuring effective risk control, and quarterly operations report (QOR)
risk-based internal audit not only offers relevant
advisories for mitigating risk, but also anticipates l Loan documentation checklist (LDC)
potential areas of risk formations, while fulfilling a vital l Self-assessment of anti-fraud internal controls
role in protecting the bank’s operations and reputation,
as well as providing support in achieving business l Self-assessment of anti-money laundering
goals and objectives. Further, as part of its day-to-day responsibilities, the
Monitoring Unit also tracks the operational
performance of various branches and divisions and
Information Systems Audit Unit raises a red flag in case of any perceived or actual
Risks within the bank’s information, communication deviations. It also aggregates relevant information for
and reporting functions are identified and assessed thorough analyses to assess the quantum of risk on
individual units.

133
 City Bank has also formulated internal control policies Impact analysis of new central bank regulations: The
and manuals that are updated from time-to-time, central bank issues various regulations from
aligned with the dynamics of the operating and time-to-time, which may impact scheduled banks in
regulatory environment. Further, as an added layer of Bangladesh, including City Bank. Further, the bank’s
protection, robust risk-based internal audit (RBIA) management obtains approvals from Bangladesh
methodology has also been implemented. Notably, risk Bank on various issues, among which few approvals
assessment by internal control focuses on ensuring contain different conditions to be fulfilled by the bank.
compliance with the bank’s policies, together with For the purpose of strengthening risk and control
assuring that all regulatory requirements (including all environment of the bank, ICC independently assesses
core risk management guidelines issued by and also assures compliance with new regulations and
Bangladesh Bank) are met, while also taking approval conditions and, on identification of any gap, it
cognisance of social, ethical and environmental risks, escalates the same with a recommended action plan
and also recommending appropriate measures to to the senior management for effective
further augment the internal control framework. Thus, implementation.
through such a comprehensive approach, ICCD plays Maker-checker guidelines: Guidelines for City Bank
an essential role, both as a command centre as well as and its subsidiaries has already been approved by the
a facilitator, for ensuring sustainable business growth. Board. This guideline is applicable for customer
Our status in establishing strong internal controls, in transactions, financial transactions and regulatory
line with regulatory requirements, has been expressed reporting.
in the Corporate Governance Report on page 188 of Social media policy: With the rapid increase in social
this Annual Report. media usage in Bangladesh, a Social Media Policy has
become necessity as well as an indispensable tool for
the bank. Thus, a policy has been developed and
Outlook of Internal Control & approved by the Board, which articulates clear
Compliance (ICC) guidelines on what is and is not appropriate to use on
With a forward-looking stance premised on proactive social networks. The policy has been circulated to all
risk identification and control, updating audit employees by the bank’s HR. ICC will also share the
processes across functions and divisions comprises a policy with all subsidiaries. Sign-off of both existing and
key part of the future plans of ICCD, expected to be new employees will be ensured by the HR. Moreover,
implemented over the medium-term. awareness sessions will also be arranged on a regular
Branch: A standardised approach has been formulated basis. Further, clear guidelines will also be displayed on
for all branches, including development of branch risk the desktop background of user PCs/laptops for a
& control matrix, on which feedback and inputs were week for awareness-building.
drawn from all stakeholders, including the Audit Whistle-blower policy: This policy is intended to make
Committee. A pilot project on a branch on off-site basis it easier and worry-free for the bank’s employees to be
was completed and results were shared with the Audit able to report irregularities in good faith, without
Committee of the Board in March 2020. The process having to fear retribution or adverse consequences. It
has been stabilised and is currently being conducted is a key element for safeguarding the bank’s integrity
across all branches. and transparency and is one of the major tools for
Head Office divisions: Risk and control matrix for combating practices that might impair the bank’s
different Head Office divisions have been developed. reputation. ICCD is currently working to update the
Customer exposures, risk management plans and bank’s Whistle-blower Policy, which was implemented
finance-related inputs have been finalised in the first in 2013, to ensure alignment with the current times.
phase after obtaining comprehensive feedback from
stakeholders. Risk and control matrix for other Head
Office divisions will be developed at the time of audit of
the respective divisions.
Central Bank inspection coordination: Compliance
has established and is effectively running a point of
contact with DBI of Bangladesh Bank in relation to all
regulatory examinations on behalf of the bank. A
regulatory governance charter has also been
developed, which stewards the management of
regulatory guidelines, etc.

134 Annual Report 2020

Procurement lockdowns imposed during the middle of the year.
l A total of 230 RFQ/RFP/RFT (vs. 317 in 2019) were
A crucial wing that contributes to the enablement of issued, with 38 tender notices published in leading
smooth and sustainable operations of the bank. The newspapers.
department owns the responsibility of balancing the l Signed 20 service level agreements (SLAs)/
procurement of best-quality products and services at agreements for warranty and post-warranty periods,
the most reasonable rates, operating within the thus ensuring smooth services.
framework of ethics, values and principles at all times. l As a part of our digitalisation journey, we implemented
the Supply Chain & Financial Management System
1,701 (SCFMS), which helped in:
Total POs issued - Generation of procurement reports and issuing of
POs
654 mn - Execution of vendor payment requests in a
Total PO value seamless way
- Monitoring of real-time budget information vis
423 mn SCFMS’s integration with budget module
Savings achieved against PO value - Fixed yearly rate for frequently purchased goods
and services to bring forth greater efficiency and
ensure faster support.
Functional update
Focused on achieving cost savings and best value for
purchased products and services Major projects of the Procurement
With an annual procurement budget that is amongst division, 2020:
the largest in private sector banking in Bangladesh, City
l Call center IVR upgradation
Bank’s Procurement division helps in the smooth
day-to-day functioning of the bank through assuring l New storage system
timely availability of products and services acquired at l New servers
the best value and most favourable terms. The
l End point security
department embraces ethical and transparent
standards in all its dealings and while it seeks value for l Agent banking solution
the bank, it also ensures that third-parties are not l Core Islamic banking solution
disadvantaged and that their rights are protected. The
l Digital onboarding solution
department operates within a set framework of
processes and guidelines, while also meeting all l Internet banking solution
statutory rules and regulations. l Managed print solution (at the Head Office)
Over a period of 10 years, City Bank’s procurement l Document storage outsourcing
volumes have jumped from BDT 180 mn in 2010 to BDT
654 mn in 2020, representing a growth of over 263%,
catering to increased growth of business of the bank. Focus areas for 2021
Moreover, an equivalent of BDT 400 mn procured
under frame contracts in 2020 helped ensure quality In line of the bank’s overall digital
support services dispensed from the division to the strategy, we will implement mobile apps
bank. for SCFMS, which will streamline the
approval process time.
Few of the major developments at the department
Develop a comprehensive annual
comprise the following. procurement plan to provide proactive
l Achieved BDT 423 mn savings against purchase order services to internal stakeholders to ensure
(PO) of BDT 654 mn, comprising 65% (19% in 2019) of eventual end-customer satisfaction.
PO value. This was accomplished through intensive
vendor negotiations. Notably, savings were achieved Update our procurement policy to reflect
on the basis of: the needs of a dynamic business
environment, while ensuring alignment to
- New price vs. initial price quoted transparency and governance norms.
- Previous year’s purchase price
- The total number of POs issued stood at 1,701 vs. Enhance operational efficiency via
2,332 in 2019, with total purchase volumes re-engineering processes as part of our
declining on account of COVID-19 and subsequent continuous improvement journey.

135
 Brand & Communications on social media platforms increased by 25%.
and Corporate Affairs
City Bank Brand & Communications and Corporate
25%
Affairs team is responsible for building, protecting and Increase in social media followers
enhancing the Bank’s reputation as a trusted provider of
world-class financial services. The team closely works In 2020, a brand campaign with the theme 'Bhoroshar
with other departments to identify business Bank’ was developed, where 3 different TVCs were aired
opportunities and priorities and drives organisational across local TV channels over a period of 1 month. In the
strategy in a holistic and concerted way. same year the bank developed the 1st corporate AV. All
2020 marked the 100th year of Bangabandhu Sheikh the 3 TVCs and the Corporate AV was promoted across
Mujibur Rahman and numerous initiatives were the bank's social media platforms. Apart from these, a
organised by City Bank for this commemoration. A Facebook live talk show, Shohoj Banking 101 was
social media campaign was launched where 12 created and broadcast in City Bank Facebook page to
renowned artists recited different letters written by answer the common and important questions the
Bangabandhu Sheikh Mujibur Rahman over a period of people may have regarding the services and product
his life. The audio-visual of this initiative was broadcasted aspects of banking. The show had 8 episodes, each
in City Bank social media platform and total viewership focusing on different topics relating to predominantly
of 3.4 million was reached during the campaign period. the youthful audience who are getting into the world of
City Bank had also established 3 Mujib corner at Head banking. The show was a massive success with regular
office, Chittagong and Khulna, where arts works and viewership in the thousands. There was active
books are kept in display. Also in connection to the engagement from the consumers as well.
celebration the 2020 calendar for City Bank also To uphold the brand image and reputation of American
promoted the 100th year of Bangabandhu Sheikh Express Cards in Bangladesh, various promotions and
Mujibur Rahman. The theme of the calendar was offers were promoted throughout the year. Some of the
“Bangabandhur Chithi” (Letters from Bangabandhu). major campaigns were, Valentine's Day Campaign and
Each month featured a different letter written to AMEX Eid Campaign, with exclusive savings offer on
different historically significant individuals on different clothes, jewellery, dining, cattle purchase, super savings
occasions. The letters were accompanied by unique QR at few online Shops; AMEX Pohela Boishakh Campaign,
codes which were hyperlinked to corresponding to keep in line with one of the biggest and most widely
recitation videos of those letters. In addition, the letters participated festivities in the country; 25% Book Fair
were recited by renowned figures. The combination of Cashback Campaign. Other regular promotions and
this creative idea along with the use of emerging digital offers across various merchants were also promoted
media made this year’s calendar quite unique. throughout the year.
With the onset of COVID-19 pandemic, there was a
City Bank’s Corporate Affairs wing is responsible for
tremendous drop in the use of print media. The Brand
planning, strategising, executing and managing relevant
Division had focused its shift towards social media
stakeholder relationships on behalf of the bank. The
platforms, as majority of the Bank‘s communications team is also engaged with stakeholders for maintaining
were conveyed through this platform. The Banks’ social government, business, media and societal relations. The
media channels were used as an active medium to team has also been involved in strengthening the
promote awareness regarding the pandemic and also corporate brand of City Bank, both locally and
for the launch of product, services and the Bhoroshar internationally.
Bank brand campaign.
The team deepened interactions with international
The Brand Division played a robust role in the launch of partners known for their prestigious awards worldwide
five revolutionary digital banking services. These to inform them about City Bank and how it is making a
services were Ekhoni Account App, an online based difference in peoples’ lives. As a result, in 2020, the bank
account opening platform; WhatsApp banking and has received few prestigious awards as listed below:
Smart IVR services where customer can easily avail
various banking services on their smartphone with a n Best CSR Bank in Bangladesh
few clicks from the comfort of their home; and Secured by Asiamoney Best Bank Awards
Loan application using the Citytouch mobile banking n Leading Partner Bank in Bangladesh
channel. Another digital innovation that was launched by Asian Development Bank (ADB) under Trade
by the Bank was country’s first interoperable QR based and Supply Chain Finance Program (TSCFP)
payment system with four payment networks:
American Express, UnionPay, MasterCard and Visa. The Globally acknowledged weekly magazine “TIME” has
launch of these products and services were promoted published an article on City Bank in their April 2020
across all platforms which had created a tremendous edition highlighting the financial and economic
vibe in the market. The number of City Bank’s followers scenarios of Bangladesh.

136 Annual Report 2020

Being a socially-responsible bank, City Bank has always
extended a helping hand to diverse areas of social
PR and Media
development, ranging from cultural activities to disaster The PR and Media Division of the City Bank is
management, sports, education and supporting responsible for planning and buying media placements
on various platforms. Besides, the department also
underprivileged women and children. The year 2020
engaged in crisis management, media communication
was no exception, City Bank sponsored 25 events under
and monitoring.
City Bank sponsorship like; DUCSU Book Fair-2020,
Bengal Tiger Cricket Club, Prothom Alo Bondhushava From public relations to media buying, the Division has
2020, TV show ‘AlokitoNari’ in channel-I, Hult Prize 2021 kept its excellence in the last calendar year though the
of North South University. world entered into a new normal by corona pandemic.
The Division plays role as single point of contact (SPOC)
The bank also focused on various social developments during any crisis situations and the team update
including education, health, disaster management, and management about the media projection on real time
support for underprivileged women and children. To basis.
reduce climate change affects City Bank supported the As the pandemic has changed the landscape of media,
green plantation initiative with 200,000 sapling the department focused on digital news outlets for
covering 4 kilometer in Mirasarai and Feni Economic generating instant coverage for City Bank as it
Zone through BEZA. In 2020, City Bank donated BDT happened. As a result, the bank keeps the brand ahead
249 mn as CSR, including 75,000 pieces of blankets for comparing other market players.
winter affected people worth BDT 20 mn, BDT 100 mn Despite challenges of pandemic, the PR and Media
for relief distribution among flood affected people division have continued relations with journalist’s
through Prime Minister Relief Fund. community though sending 40 press releases to news
organisations to remind everyone, including customers,
City Bank was the Platinum Sponsor of “Economic about the bank's new offerings and accomplishments.
Conference on the eve of MUJIB 100”, organised to It helps the bank to create brand value among mass
discuss the present economic and financial condition of through going top of mind on product selection from
the country. There were two sessions in the daylong competitive financial market.
event, the first session covered ‘Investment, Savings and Apart from projecting innovative services amid
Fiscal Policy’ and the second session covered‘ Interest pandemic, City Bank got good media response for
Rate, Inflation and Exchange Rate’. Mr. Abu Hena setting up ‘Mujib Corner’ marking the birth centenary of
Mohammed Mustafa Kamal, Hon'ble Finance Minister of Father of the Nation Bangabandhu Sheikh Mujibur
Peoples’ Republic of Bangladesh and Mr. Fazle Kabir, Rahman.
Governor of Bangladesh Bank were present as Chief Of these, the news on Mujib Corner at City Bank also
Guest and Special Guest. Former Finance Ministers, received good response from media as these stories
former Governors of Bangladesh Bank, Secretary of reached millions of people.
Finance, Secretary of Commerce, Secretary of planning, The initiatives of hygiene measures at workspace,
Chairman of NBR, Chairman of BSEC, top government remote working and social responsibilities attracted the
officials and many leading economists of the country media in parallel.
were also present at the event. Introduction of Ekhoni Account, QR Code-based
service, international collaboration with Islamic Trade
Division is responsible for sourcing, procuring and Finance Corporation (ITFC) and International Finance
distributing relevant gifts for clients and stakeholders. In Corporation (IFC) also got highlighted through wide
2020 division procured and distribute gift for Pohela angle activities of the Division.
Boishakh, Durga Puja, corporate gift and New Year
With the aim of strengthening relationships with the
celebration as per banks requirements and also during media and also ensuring the highest recall of the City
special days of the year such as Pohela Boishakh, Bank brand, interviews of the bank’s MD & CEO were
Ramadan, Eid, New Year etc. covered in such newspapers as The Daily Star, Prothom
Alo and Business Standard.
Outlook 2021
The division has been given the responsibility of
City Bank will continue to uphold and foster a strong
managing requests for various advertisements in
brand presence in the industry, developing distinct souvenirs. As one of the top banks of the country, the
communications that help in showcasing the bank’s bank receives requests from numerous publishers for
differentiation. The bank is keen to capitalise on the souvenir adverts or sponsorships.
growing digital landscape in the country, and will
The bank continued to engage selectively, for instance
extensively continue with its digital marketing and
in sponsoring the country’s only science magazine,
branding momentum in its upcoming campaigns. In
‘Bigganchinta’ and placed hundreds of advertisements
parallel to this, the team also expects to continue to in various platforms.
promote the country’s potential globally through
various platforms and initiatives. The media reported on our expansion in various
quarters of the previous year. In this situation, the PR
and Media Division's active contact with journalists has
yielded results in 2020.

137
 Finance Legal
City Bank’s Finance Division engages in analysis,
reporting, financial control as well as administration with 439
a view to streamline the financial data flow and enhance Suits decreed, settled and disposed-off
the Bank’s financial decision-making capabilities.
Keeping in mind the requirements of internal, external
and regulatory stakeholders, the division strives to BDT 206 mn
continuously develop and innovate models and Corresponding value released
practices that best serve the purpose of the bank’s
sustainable growth strategy.
With the backdrop of the unprecedented year of 2020 Primer
ravaged by the COVID-19 pandemic, Finance Division of City Bank’s Legal Division protects the bank from legal
the bank continued to show resilience and delivered risks and builds the bank’s case and representation in
unhindered performance. City Bank’s Finance division the courts of law. The division, helmed by specialists,
works relentlessly to develop a strategic framework for ensures that it operates within the purview of all
achieving desired financial outcomes, led by its focus on regulatory rules and guidelines to not only protect the
exploring innovative ideas and processes, emphasis on bank’s interests, but also to safeguard its reputation as a
prudence and conservatism and fostering a culture of bank that upholds as sacrosanct legitimate and
ethics, risk control and compliance. legally-established decisions.
Engaging with the investment community through
Newsletters and virtual Earnings Disclosure events Progress of 2020
continued without disruption. The division also ensured The Legal Division achieved solid progress during the
continuous support to retain the bank’s international year despite operating in a relatively curtailed
rating of ‘B1’ by Moody’s in 2020, following multiple environment induced by the COVID-19 pandemic. The
surveillances conducted throughout the year. division could achieve successful settlement and
Capital planning and allocation continued to constitute disposal of as many as 439 suits during the year,
important facets, with the Finance division entrusted corresponding to release of a sum in excess of BDT 206
with the responsibility of assuring proper linkage of mn. The division filed an approx. suit value of BDT 259
business growth, as growth outlook is being mn and expects significant value release during the
increasingly linked to an adequate and robust capital current year.
base. In this regard, the first ever Basel-III compliant, Some of the other developments across the Legal
Contingent-convertible Perpetual Bond of the country Division’s various wings comprised the following:
worth BDT 4,000 mn was issued by the bank, opening l The Estate Management Unit extended support in
a new doorway for banks in Bangladesh with regards to the successful execution of 538 files, which included
efficient re-capitalisation. Finance Division played a home loans, employee house-building loans and
critical role in managing the entire process, which SME-S loans
involved months of preparation and coordination. l The Legal Documentation Unit prepared 1,125 files
Further, several automations like payments module and charge documents, scrutinised agreements and
up-gradation and real-time integration with budget offered advice from a legal standpoint on a variety of
monitoring and segmentation were led by the Finance issues
division to enhance efficiency and monitoring across l Properties of 14 accounts were consigned in favour
different functions of the bank, thus tightening reporting of the bank, comprising a consolidated market value
and internal controls. of BDT 634 mn
The division facilitated the bank in making contributions l Mutation was completed across 8 accounts,
of BDT 6,720 million to the national exchequer in 2020 equivalent to 2.49 mn sft of land, with ownership
through taxes and VAT on income and expenses. The certificates obtained under 33(7)
contribution for 2019 was BDT 7,007 million. In a significant initiative of the year, a technology-driven
unified legal information system (ULIS) was launched,
In 2020, significant regulatory changes occurred in the
through which all data related to all files and cases can
industry driven by the pandemic. Finance Division
now be uploaded, viewed and tracked on a real-time
provided crucial support in analysing & communicating
basis, thus speeding up decision-making and ensuring
issues around these to all relevant stakeholders.
process simplification and even cost efficiency.

138 Annual Report 2020

 l Facilitated rapid installation of PCs/workstations,
Forward outlook, 2021
while ensuring secured environment readiness at
Some of the key initiatives expected in the current year
different locations, including those at staff
include the following:
residence
l Target disposal of around 525 cases, against a total
of 5,276 pending cases, representing about 10% of Attending additional queries with speed and
the pending files sensitivity
l Properties of about 11 accounts are expected to be l Handled an exponential increase in the number of
vested during the year, with 33(5)/33(7) possession support requests arising out of the
certificates, excluding mutation, expected for all the pandemic-related disruptions and WFH
accounts
Empowered users
l Harness the benefits offered by ULIS, including a
comprehensive and easily navigable e-database, l We went the extra mile to support client-facing
while also updating its features and functionalities channels by facilitating split-office and cross-user
access management

Information Technology
IT’s contribution to business
Overview of our operating context
Despite catering to the pandemic-related challenges
The year 2020 was the most challenging one for City
that required timely and secure responses, we also
Bank’s Information Technology Division, exacerbated by
strived to maintain a business-as-usual approach and
the coronavirus pandemic that enforced a change in the
contributed to the bank by enabling deliveries across
rules of the game. Besides, there existed several other
the following:
headwinds too, including achievement of business
imperatives and targets despite a constant stream of l Ekhoni account: Self-onboarding solution for
regulatory directives, unusual and uncertain economic deposit customers
conditions and business revenue pressures vs. cost l CityPay: Interoperable QR-based payments
control. Yet, the bank’s Information Technology Division solution at merchant points
moved forward undaunted towards overcoming
obstacles via new technology implementation, l Instant debit card: One-stop service through
innovative solutions and bright thinking. immediate issue of debit cards for customers
opening an account with the bank

Making progress in 2020 despite major hurdles l Real-time CDM: Cash deposit machine with
real-time effect
The pandemic-induced lockdown was the
unprecedented highlight of the year, resulting in the l China UnionPay: Large card business platform
biggest contingency drill in the bank’s history ever. comprising issuing and acquiring China UnionPay
Failure was simply not an option because the bank’s along with NFC-enablement for VISA and
operations were dependent on it and operational Mastercard cards
stability was most crucial as the bank is a public-facing l Smart IVR: Visual/interactive smart IVR launched
deposit-taking financial institution. Some of the key as an advanced model of phone banking
ways in which we re-pivoted initiatives to be able to
face the new normal comprised the following: l Business intelligence: Platform to translate our
data into meaningful and insightful information for
Ensuring overnight WFH (work-from-home) more effective strategic and operational
preparedness decision-making
l Arranged for VPN and VC facilities to provide l Customer 360 Degree: Visibility of full customer
employees access to the bank’s secured network portfolio from three core platforms across Core
environment from their homes Banking, Islamic Banking and Cards Management
Supporting VC calls Systems
l Seamlessly enabled the bank to transition into l Liability Work Flow: Scalability of deposit account
virtual meetings in a secure and reliable opening, other than the core
environment l WhatsApp banking: Extension of a new channel for
Adopting central bank directives enabling a convenient mode of banking
l Implemented complex directives and guidelines l Sales CRM: Measurability of performance and
from the regulator mobility of sales force
Enabling hardware installation l Supply chain finance: Integration of distributor
finance with the banking ecosystem through
supply chain finance

139
 l Nano lending: Enablement of micro-lending facility l Corporate internet banking: Develop an integrated
through bKash digital platform catering to corporate and
institutional customers that would collectively
l Funds transfer through ATMs: Real-time funds
include modules for transactional banking, cash
transfer facility through NPSB channel from ATMs
management and trade solutions

40+ l Digital branch: Develop an advanced, smart and

self-service banking concept that enables banking
In-house business development and cost-saving
operations by customers on a 24/7 basis
initiatives delivered to business and support
functions in 2020 l Digital on-boarding: Create a self-service banking
model (both assisted and non-assisted)
Impact on technology: l Internet, mobile banking and wallet: Develop a
single-stop next-gen digital banking platform
A number of major changes on the tech side of the
enabling customers to access the bank from their
bank – from operating model and applications to
smartphone, anytime and anywhere
infrastructure were delivered during the year. These
include the following: l Agent Banking solution: Implement a modern
platform to help propel the bank’s Agent Banking
l New storage system with infrastructure
business, enabling footprint expansion and thus
standardisation
enhancing financial inclusion
l Applications architecture blueprint and
l Loan origination system: Develop a
rationalisation
comprehensive lead management solution for
l Stronger IT governance practices across the bank loan accounts – from origination right through to
and its subsidiaries disbursement
l Awareness, training and monitoring for ensuring l IDTP: Develop an Interoperable Digital Transaction
enhanced information security Platform (IDTP), comprising a processing and
l Remediation of all audit findings (both external settlement system for electronic payments, where
and internal) to improve the bank’s risk grading on the main participants are banks, MFS (mobile
Bangladesh Bank’s ICT Core Risk Scoring financial services) and PSPs (payment service
framework providers), in compliance with a regulatory directive
l Initiation of transition to a cloud-friendly Some of the other major projects include anti-money
environment through hosting of non-sensitive laundering and sanction screening, mobile remittance,
applications merchant financing, micro-ATM, custodial services
l Pilot run of a fully-centralised IT Service Desk solutions, missed call alert services, HRMS, etc.
l Implementation of load balancer and multiple Major technology initiatives planned for 2021 include
security appliances the following:

Strategy and roadmap, 2021 Operating model:

We expect the current year to continue to throw l Enable reform and necessary role changes in the
unexpected challenges on account of the uncertainty IT structure and support model to be aligned with
around the pandemic and its persistent threats and strategic business intentions for 2021
impact that still remains uncertain and ambiguous. Yet, l Implementation of a project management solution
we remain energised and confident to face the for effecting better control over the numerous
challenges ahead with positivity and optimism, initiatives continuously under process across the
especially on the back of successfully developing the bank
foundations of a high-impact tech transformation l Full implementation and bank-wide adoption of a
journey. From our vantage point and experience, we centralised IT Service Desk with a ticketing system
remain optimistic that there would be clearer visibility and hotline to act as a central point for multiple
in the coming months. parties to come together for IT issue resolution,
Some of the major business imperatives for 2021 information and support with SLA
include the following: l ISO-27001 for better control and governance of the
l Islamic Banking solution: Modernise and refresh rapidly-evolving information security standards
Islamic Banking solution by ensuring high
availability and scalability, thus making Islamic
Banking products as the first line of dedicated
offering

140 Annual Report 2020

Applications: To accomplish our main objective, we already have
l Launch of an Enterprise Middleware with an open obtained the ISO-27001 (Information Security
API to better facilitate integration capabilities to Management System) standards. We believe employee
support businesses and achieve digital and customer awareness play a complementary role in
transformation our information security management plan. Thus, we
l Enable RPA (robotics process automation) will continue with our awareness campaigns on our
technology into various processes to significantly websites and social media channels to educate our
reduce time and cost and achieve higher accuracy customers about cybercrime and advise them on the
through automation of manually repetitive measures that they can take to protect themselves.
processes Meanwhile to enhance employee capacity we will also
introduce awareness and insight sessions on
information security.
Infrastructure:
l Implementation of database consolidation as
service General Administration Division
l Infrastructure evergreening to ensure high uptime
Primer
and scalability
City Bank’s General Administration Division (GAD) is
l Implementation of real-time backup solution entrusted with the responsibility of ensuring
l Enhance information security across bank-wide uninterrupted banking operations by providing
applications continuous support in the form of:
l Infrastructure
Leadership message l Security
Q. What role does technology play at the bank? l Logistics
Technology is an integral part of our mission to l Maintenance of assets and premises
become a peoples’ bank and achieve our vision of One of the fundamental strengths of GAD is that it
being the best choice as employer. As groundbreaking ensures effective collaboration amongst various teams,
digital technologies continue to reshape the banking bringing them onto a common platform and ensuring
landscape across the globe, technology remains at the that the task at hand is completed in the most efficient
front and centre when it comes to preparing for the and cost-compliant way. Through harmonising the
future and, with the right tools and support, overall solution, CAD is thus able to create a sustainable
revolutionise all aspects of operations. competitive advantage for the bank.
In 2021, our strategic intent is to enable the following: Amidst constant change, GAD has rapidly transformed
its operations for continued focus on meeting the
l Ensure smooth and flawless IT services with
business support needs of the bank in a dynamic,
minimal downtime
complex and highly competitive environment.
l Enable rational investment and reduce cost over
the long-term Key progress achieved, 2020
l Ensure set priorities for projects/initiatives and While City Bank’s GAD has worked in highly challenging
ensure on-time deliveries conditions, the year 2020 was altogether different on
l Embed functional processes while adopting robust account of COVID-19, which no one had foreseen or
governance standards could prepare for. Thus, with the onset of the
l Foster collaborative partnerships for creating coronavirus pandemic, while we had to ensure forward
high-win solutions preparedness, we also needed to tackle the day-to-day
challenges as they unfolded in the best possible way.
We also had to strike the right balance between
Q. What is your view on the role of digital ensuring uncompromised staff safety and business
technologies in banking? continuity, with banking declared as an essential service.
Digital technologies are fast evolving and it is likely that
the core functional areas of our business will soon We embraced a number of pre-emptive measures since
depend solely on digital technologies. However, it is the pandemic took root in Bangladesh, including the
noteworthy that along with their numerous benefits, following:
digital technologies also bring in high risk due to cyber l Disinfection of all premises of the bank on a daily
threats, which is an important consideration for banks. basis
To mitigate these threats, we at City Bank have l Installation of hand sanitiser jars at all premises and
embraced a holistic approach to ensure the highest ensuring its availability at all times
order information security at the bank.

141
 l Coordination for supply of hand gloves, face shields, l Mobilised FDR amounting to BDT 48.2 mn and
PPEs, etc., to employees helped in the opening of 26 CASA accounts as part
l Enforcement of face masks and physical distancing of our efforts in contributing to the bank’s growth
at all premises l Completed proper preservation of documents in
l Temperature checks of all visitors and employees our Dhaka and Chattogram storerooms through
by thermal scanners at all entry points across all outsourcing
premises l Continuous endeavour to ensure holistic
compliance with the guidelines of the regulatory
Notably, despite COVID-related disruptions and body and the bank itself
shutdowns, GAD achieved a number of milestones
during the year. Forward outlook, 2020
l Saved BDT 17.5 mn from existing rental costs GAD has planned a number of initiatives in 2021, subject
through lease renegotiations to approval from the bank’s management and our
l Conducted auction of old vehicles and other assets regulator. Some of these comprise:
and earned BDT 15 mn from the sale
l Establishment of a new branch at Mirsarai EPZ,
l Renovated AMEX Gold Lounge at Hazrat Shahjalal Chattogram, and a cash collection booth at
International Airport, Dhaka, thus providing a new Naogaon
and more vibrant experience to our customers
l Setting up of 10 sub-branchesin strategic parts of
l Completed relocation of 9 branches and renovation the country
of 7 branches, which is the highest since the past
two years l Installation of 20 new ATMs
l Renovated 12 back offices with an aggregate space l Relocation/renovation of 14 existing branches
of over 42,000 sft, which also includes the l Accommodation of City Alo service desk at 20
executive floor of our Head Office in Dhaka branches
l Established 2 new SME-S unit offices and 19 new l Renovation of 6 back offices
ATMs in strategic locations of the country l Relocation of sales offices in Tejgaon, Dhaka, with a
l In order to strengthen security of premises and also space of 15,000 sft
ensure compliance with Bangladesh Bank’s l Continued exploration and implementation of cost
guidelines, we achieved the following: minimisation initiatives
- Preservation of CCTV footage for one year at 30 l Re-assessment, evaluation and enlistment of a new
branches vendor and consultant for infrastructure
- Installation of intruder alarm system in all development projects
branches l Automation of Transport Management System and
- Fitment of a fully functional and automated Rental Module System
Central Monitoring Station with intruder alarm l Implementation of comprehensive safety and
integration security-related directives of Bangladesh Bank
l Recruited and deployed an additional 14 gunmen l Review and development of processes, policies and
across different branches for enhancing security SOPs for bringing forth greater efficiency across
l Reviewed, resurveyed and fortified the fire safety operations
and disaster management system for adding extra
capability in addressing any unforeseen safety risks
l Disposed old records in our Dhaka and Chattogram
storerooms in order to free-up usable space
l Developed standard operating procedures (SOPs)
for Corporate SIM Management & CCTV
Operations, as part of our continuous process
development journey

142 Annual Report 2020

Subsidiaries

City Bank Capital Resources Limited

Primer l Incisive focus on balancing risk-return for clients via
City Bank Capital Resources Limited (CBCRL), a products such as hybrid/balanced growth products
subsidiary of City Bank and a public company limited by and systematic investment solutions
shares, was incorporated on 17 August 2009, vide l Focus on large institutional investment/HNI
registration no. C 79186/09, under the Companies Act, portfolio, thus ensuring further business stability
1994. Subsequently, the company obtained Merchant
Banking License (Registration Certificate No: MB
Experienced leadership and team
54/2010) from Bangladesh Securities and Exchange
Commission on 6 December, 2010. The company was l Experienced Board providing strategic counsel and
established to offer a highly complementary service to advisory
City Bank’s overall offering, providing specialist and l Strong investment banking team with experience
diversified merchant banking solutions for customer across both primary and secondary markets
looking to mobilise funds. Today, CBCRL offers a wide
range of investment banking services, including issue
Diversi�ied o�ering
management, underwriting, portfolio management and
corporate advisory. l Wide services bouquet that meet diverse customer
requirements:
42% v Perpetual bond for Tier-I capital (for scheduled
banks)
Net profit growth to BDT 235 mn
v Tier-II subordinated bonds (for scheduled banks)

392 mn v Zero-coupon bonds

Net expansion in margin loans to BDT 1,012 mn v Commercial paper (CP)

v Preference shares

47% v Debt restructuring

Growth in our share of DSE trading volumes v Term loans / working capital mobilisation

v Issue management services, including

All figures pertain to those of the year 2020. underwriting, agency and trusteeship
v Corporate advisory services

A few of our key strengths include

the following: The year 2020
Performance stability l Registered substantial 63% growth in margin loans
l Strong profitability growth achieved over the past from BDT 620 mn in 2019 to BDT 1,012 mn, despite
five years, despite volatile capital markets dull capital markets
l Zero negative equity of clients’ assets in portfolio l Our Investment Banking Division signed a number
management services of marquee deals, which helped contribute to
turnover growth

143
 Forward outlook, 2021 GDP growth expectations
City Bank Capital is the pioneer in many innovative Bangladesh’s economic growth slowed down due to the
transactions in Bangladesh. Despite the pandemic, the COVID-19 pandemic. Initially, the government targeted
company has been able to close the first ever perpetual 8.2% GDP growth for FY2019-20, which was likely
bond of BDT 4,000 mn in the country for The City Bank achievable, but has been revised downwards to 5.2%
Limited. Seven other perpetual bonds are ongoing, due to the outbreak. In FY2020-21, the government has
which total up to BDT 33,000 mn. set a highly ambitious GDP growth target of 8.2%, in
The company is also working on various types of Sukuk expectation of rapid economic recovery. However, other
bond. The first ever corporate Sukuk with a size of BDT estimates anticipate GDP growth to be at least in the
30,000 mn by BEXIMCO Limited is being structured by positive territory, which is a considerable achievement
CBC. We are also structuring another Sukuk of BDT 1,140 considering the state of the rest of the world.
mn for a local corporate. There is another
dollar-denominated Sukuk of around USD 250 mn
Credit growth and in�lation
(equivalent to approximately BDT 21,250 mn) in the
pipeline. Private sector credit growth dipped further in 2020 and
stood at 8.4% in December 2020. Enforcement of a
CBC is also working on sourcing of foreign funds, dual
single-digit lending rate failed to buoy private sector
listing (in the local and foreign capital markets),
credit growth, as investors crafted survival strategies,
identification & arrangement of strategic investors,
instead of opting for any capacity expansions. Moreover,
merger & acquisition advisory, corporate restructuring,
the COVID-19 pandemic is still creating uncertainty,
syndication financing arrangement for project finance,
which is expected to keep private sector credit growth
and acquisition financing structure.
subdued in the current fiscal year.
Even if a few existing deals are closed, among the many,
CBC will continue to contribute significantly to the group
profitability in the coming years. In FY2020, the government was able to maintain
inflation rate of 5.65%, against the target of 5.50%. One of
the major reasons attributed to this is reduction in oil and
Outlook of the capital markets other commodity prices in the international markets.
Expansion in oil prices stokes inflation. The inflation rate
Overview
is projected in the range of 5.0-5.9% in FY2020-21.
It is expected that the capital markets will continue with Possible crop losses due to seasonal floods and rising oil
its bullish momentum in 2021, as witnessed in the prices might pose challenges to inflation management,
tail-end of 2020, and generate double-digit returns, going forward.
especially riding on excess liquidity in the financial
markets, lack of alternative investment opportunities
and expectations of higher earnings growth of listed Import-exports and forex
companies. In 2020, exports and imports fell sharply due to the
The DSEX, the benchmark index of Dhaka Stock lockdown enforced in almost all parts of the world. In
Exchange, made a strong comeback in 2020 and FY2020, total imports moderated by about 8.6% to USD
registered a handsome 21% return after plummeting for 54.8 bn, with imports declining by 7% in the first six
two consecutive years. The implementation of the months of the current fiscal year. The import regression
single-digit interest rate for all banks in the country was primarily driven by supply chain disruptions,
pushed down the deposit rate dramatically to 4.7% in economic uncertainty that withheld major capacity
October 2020, which made the real return (adjusted for expansions and decline in the import of capital
inflation) from bank deposits unattractive to investors. machinery. However, cancellation of around USD 3.18 bn
Moreover, sluggish private sector credit growth and lack worth of orders of RMG products forced export earnings
of credible investment opportunities for the financial to reduce by 16% in FY2020. Though vaccinations have
sector thrusted excess liquidity to all-time highs. As an started the world over, European countries are suffering
outcome, excess liquidity in the banking sector stood at from a second wave of the coronavirus. It is expected
a whopping BDT 1.70 trillion in August 2020, with that subsequent lockdowns and declining demand will
estimates suggesting that this pool has swelled to BDT 2 continue to adversely affect exports.
trillion as of December 2020. Additionally, each bank has Forex reserves hit an all-time high to USD 43 bn in
been granted the permission to form a special corpus of December 2020, on the back of lower import payments
BDT 2 billion to invest in the capital markets, introduced and higher remittance inflows. Although the current
by Bangladesh Bank, at a 5% interest rate. With excess foreign exchange reserve is sufficient to meet import
fund flow and liquidity, the market is expected to demand for about 7 months, reserves may decline in the
generate a sound return during the current year. future due to the higher import payment obligations.

144 Annual Report 2020

Remittances End supposition
In the ongoing economic crisis, a silver lining has been It is highly unlikely that COVID-19 will weaken within one
increasing remittance inflows, which have expanded by year of its outbreak and hence the ultimate impact on
around 11% during the last fiscal year. Though the country’s economy remains unknown. Yet, cautious
collapse in global petroleum prices and subsequent optimism prevails that the economy will recover soon
fallout in the Middle Eastern countries, home to a large considering headline macroeconomic indicators,
expatriate population, caused a 16-month decline in including positive trade gap, record high forex reserves,
remittances in April 2020, the inflow bounced back in robust growth in inward remittances and surplus in the
May 2020 and stood at USD 13 bn in first half of FY2021. current account balance after a deficit of four years.
Growth in inward remittances is expected to continue in Moreover, well-structured stimulus packages declared
the forthcoming years as a 2% incentive and seamless by the government and sensible policy support from
availability of the agent banking network will encourage Bangladesh Bank has fostered hope that the impairment
migrant workers to dispatch money through this formal to the economy, inflicted by the coronavirus, will fully
channel. reverse and Bangladesh will remain as a top contender
With growth in remittances and lower import demand, to lead growth in the post-pandemic world.
current account balance turned positive to USD 4.3 bn in
December 2020. Current account balance is expected
to remain positive in the current year too, unless there is
any significant jump in import payments.

Core financial information BDT mn

Particulars 2020 2019 Change in %

Revenue 339 317 7%
Operational income 239 232 3%
Net profit 235 166 42%
Total assets 4,823 3,838 26%
Proprietary investments in the capital markets - at cost 202 110 84%
Margin loan 1,012 620 63%
AUM – at market value 8,132 5,691 43%
Turnover PMD 24,035 16,331 47%

City Brokerage Limited Human resources

Primer l Robust senior management team comprising of
professionals with proven management skills,
City Brokerage Limited (CBL), a subsidiary of City Bank,
specialist domain knowledge and considerable
was conceived for ensuring the financial empowerment
capital markets experience
of customers. The broad rationale was to provide a
dependable, reliable and cost-competitive channel for l Dedicated team of skilled professionals who ensure
customers to access the capital markets of the country. the highest quality of brokerage services provided
Today, building customer trust through its robust to clients
customer-centric operating model, CBL has emerged as l High-quality research team with 18+ years of
one of the leading brokerages in the country, offering a cumulative experience. The team possesses
wide suite of international-standard brokerage services specialist analytical skills and serves major global
to both domestic and foreign clients. The award-winning frontier and emerging market portfolio managers,
company is a ‘TREC Holder’ of both Dhaka Stock as well as brokerages in North America and Europe,
Exchange Limited (DSE) and Chittagong Stock supporting them with macro, sectoral and
Exchange Limited (CSE) and assists clients to attain their company-specific research reports
investment objectives through superior trade execution
capabilities and continuous research support.
Some of the key competitive advantages offered
include:

145
 Diversified product suite Other initiatives
l Strong portfolio management services helmed by a With a view to ensuring continuous engagement with
specialist team, thus providing clients the platform the wider global investor community throughout the
to invest professionally in the capital markets year, CBL arranged virtual investment conferences and
l CBL’s high-quality analysis-driven research reports roadshows, highlighting the resilience and long-term
are published regularly on Bloomberg, Reuters, potential of Bangladesh as an investment destination of
FactSet and S&P Global Market Intelligence Inc. In a the future.
major recognition, the company was awarded the
‘Best Sell Side Research Company of the Year 2019’ Further, in a bid to position itself for the future as a
by International Finance, a premium business and leading digital brokerage house of the country offering
finance magazine based in the UK, in 2020 one-stop digitised investment management solutions to
all clients, CBL entered into an application programming
interface (API) sharing agreement with the DSE and CSE,
Extensive market presence
paving the way for offering full-fledged digital brokerage
l Extensive network presence comprising three services across the country.
branches (Motijheel, Dhanmondi and Nikunja) and
three extension offices (Bangla Motor, Motijheel and
Gulshan) located in Dhaka, and one branch located Forward outlook, 2021
each in Chattogram and Sylhet l Introduce online Beneficiary Owner (BO) account
l Robust tech-enabled platform that ensures reliable opening process through e-KYC, in collaboration
customer access with Central Depository Bangladesh Limited
(CDBL)
l Launch Order Management System (OMS)
The year 2020
software for facilitating efficient and real-time
The COVID-19 pandemic upended the capital markets of trading through mobile, laptop, desktop PC, etc., to
the country, similar to the situation the world over, and enhance the appeal and convenience of our retail
hence we were confronted with unprecedented market offering, leveraging 132 branches and Agent
challenges that required resilient, agile and bold Banking network of our parent, City Bank
responses.
l Focus on large block trades for both foreign and
local clients, especially after capabilities
CBL’s engagement in the largest-ever single demonstrated via successful closure of the GSK
transaction on the DSE! Bangladesh-Unilever transaction
As per Government guidelines enforced to curb the l Establish a “Digital Booth” abroad in a bid to attract
spread of the coronavirus, the stock exchanges of the and facilitate Non-Resident Bangladeshi (NRB)
country remained shut for 66 days, a situation investors’ access to Bangladesh’s capital markets
unparalleled in the history of Bangladesh. Yet, even l Enhance discretionary portfolio management
amidst the highly challenging situation, CBL executed services to enable a wider number of retail
the largest-ever single transaction in the history of customers to access the capital markets and hence
Dhaka Stock Exchange worth BDT 4,042 crore, enhance the overall portfolio value
facilitating the acquisition of GSK Bangladesh by
Unilever. This historic transaction executed at a time
when the country was under lockdown is testament of CBL Money Transfer Sdn. Bhd.
the expertise, dedication and rigour that CBL brings to Primer
its clients.
City Bank established its presence in Malaysia through
CBL Money Transfer (CBLMT), a wholly-owned
Riding on this mammoth transaction, CBL became the subsidiary company, in 2013. This presence was
no. 1 broker on Dhaka Stock Exchange (DSE) and established on account of strategic reasons comprising
Chittagong Stock Exchange (CSE) in June 2020. the fact that Malaysia has a large Bangladeshi migrant
Moreover, the transaction injected new confidence and population, with some accounts putting it as the third
energy into a lackluster market at a time when the second largest such community in the country. With
country was reeling from the fatal effects of the Malaysia offering a favourable work environment and
pandemic. With turnaround witnessed in the capital also considering its proximity to Bangladesh, the migrant
markets, especially in the second half of 2020, reflected traffic to Malaysia is bound to increase over the future.
in the benchmark index of DSE (DSEX) posting an Malaysia also has a large non-Bangladeshi expatriate
impressive 21.3% gain during 2020, CBL secured a population.
dominant market share in foreign trade, institutional
trade and block sourcing.

146 Annual Report 2020

CBLMT provides money remittance services via its City Hong Kong Limited
network of 12 branches, including the Head Office
Primer
Branch, located strategically in the country.
As a strategic geographic expansion initiative, City Bank
CBLMT, a private company limited by shares
ventured into Hong Kong through its first overseas
incorporated under the laws of Malaysia and registered
financial subsidiary, “City Hong Kong Limited”, in August
with the Companies Commission of Malaysia with
2019. Hong Kong is one of the world’s major financial
Registration No. 769212-M, provides money remittance
and commercial hubs, and a direct presence in the city
services under the Money Service Business Act, 2011,
reflects the globalising footprint of the bank. Hong Kong
through a Class-B License Serial No. 00081 issued by
has a considerable economic imprint on Bangladesh's
Bank Negara, Malaysia.
economy, as it is a major trade partner of Bangladesh.
This is reflected in the fact that in June 2020, China
The year 2020 announced tariff exemption for as much as 97% of
exports from Bangladesh, representing a significant
The year 2020 was a significant one for CBLMT. Today, show of economic diplomacy.
CBLMT contributes 8.74% to total inward remittance
volumes into Bangladesh from Malaysia, achieved within Further, many international retail chains located in the
a relatively short period of time. island-state are major supply chain partners of
Bangladesh-based RMG manufacturers. Also, China has
Some of the major �inancial achievements of 2020 the ambition to emerge as a major economic
comprised: superpower in the post-pandemic world, and trade and
l Expansion in net profit by a substantial ~433% vs. business relations between China and Bangladesh are
last year, increasing from MYR 0.55 mn in 2019 to already on an upswing, which will only help brighten the
MYR 2.94 mn forward outlook.
l Total balance sheet size stood at MYR 19.71 mn Thus, the long-term future is anchored on optimism and
this makes Hong Kong an ideal region for City Bank to
choose as its base to explore and capitalise on the
Forward outlook imminent financial opportunities.
CBLMT plans to launch mobile remittance services for
customers in Malaysia. This service will facilitate The year 2020
customers to remit money to their home countries from City Hong Kong achieved progress despite a highly
their dwelling places, instead of having to visit the challenging external context, represented by
company’s branches, except for the time of disruptions on account of rare political unrest and the
registration/the first transaction. onset of the coronavirus pandemic in 2020.
CBLMT is also getting ready to become an International During the year, the subsidiary focused on enhancing
Money Transfer Operator (IMTO), thus enabling other its positioning as a trusted financial and commercial link
remittance across the world to use CBLMT’s channel to between Hong Kong-Mainland China and Bangladesh.
remit money to Bangladesh, Indonesia, Philippines, A strategic area where City HK continued to explore
Nepal, India, Pakistan and Vietnam corridors where they opportunities in was the niche Letter of Credit (LC)
offer remittance services. business to facilitate the global trade aspirations of the
local business community.
The company also plans to enhance its share of inward City HK is also working towards participating in bill
remittances from Malaysia to Bangladesh to double financing (discounting) business against LC issued by
digits (10%+) in the year 2021. not only City Bank but also other commercial banks of
Bangladesh, along with providing all documentary
support. It is optimistic to sustainably expand the
business and has a detailed road map for achieving
revenue targets and profitability aspirations, while also
ensuring that regulatory compliance is adhered to on a
non-negotiable basis.

Forward outlook
In 2021, with socio-economic normalisation bound to
accelerate, City HK will continue to increase its
customer base and work on providing new financial
solutions, thus extending the international network of
City Bank in a multi-ethnic geography with substantial
economic and trade prospects.

147
 Risk management report
At City Bank, risk management is a fundamental component
of our corporate lines of defence model, which aims to create a
robust governance structure backed by clear demarcation of roles and
responsibilities. Thus, the management of risk is a critical underpinning
to the execution of our strategy. The material risks and uncertainties
the Group faces across its business and portfolios continued to remain
the key areas of the management’s focus, especially in an environment
exacerbated by the COVID-19 pandemic.

Supporting a robust risk-aware culture Thus, at the heart of our approach to strong
City Bank is of the opinion that all employees should not governance is a robust culture underpinned by our
be risk averse but be willing to consciously take corporate values of prudent risk-taking, integrity and fair
acceptable risks in order to achieve targets and ensure dealing with all our stakeholders to ensure our
sustainable growth of the business. Premised on this, long-term success. The Board has established a
the bank strives to foster a sound risk culture where all committee (Board’s Risk Management Committee)
employees remain committed to maintain a high level focused on ethics and conduct and ensuring that the
of awareness regarding risk, to help them make proper bank’s risk management practice gets a direct line of
judgements and decisions and secure appropriate sight from the apex of the bank. Further, our principles
actions based on good sense and ethical standards. on ethics and conduct has oversight of policies,
programmes and guidelines that inculcate and sustain a
To achieve this, the Board of Directors and the senior
strong culture of responsible banking and fair dealing
management take proactive measures to cultivate and
with all.
instill the principles of responsible risk undertaking
among employees at all levels of the bank. Employees
are encouraged to develop appropriate values and
ethics that guide them when addressing risks in their
daily work.

Risk Governance and Management Framework

Board’s
Risk Management
Committee (BRMC)
Chief Executive Officer (CEO)
Chief Risk Officer (CRO)

Credit & Money

Risk Credit Risk Credit Collection, Fraud Risk Laundering &
Management Management Administration Retail & Small Management Terrorist Financing
Division Division Division Business Division Prevention

Special Asset Information

Enterprise Operational Legal Mgt. Dept. Technology
Risk MGT Risk MGT (SAMD) Security

148 Annual Report 2020

At the bank, we embrace a holistic and forward-looking functions ensures that we achieve the necessary
view of the risks we face, continually assessing both balance between risk-taking and return considerations.
current and emerging threats in our operating Our senior management actively manages risks
environment. Our top risks and emerging threats are through various risk management committees, such as
monitored, managed and mitigated through the three the Credit Risk Management Committee, Executive Risk
lines of defence model. The business units and Management Committee and the Asset and Liability
corporate functions identify and manage risks within Committee (ALCO). Thus, our RMD facilitates a regular
their domain while the group risk function provides and structured emerging risk platform to identify and
necessary oversight and support as well as monitor and deliberate on potential risks and opportunities.
control risk. Internal audit, as the third line of defence, Identified emerging risks are actively monitored and
provide independent assurance on the effectiveness of updated to reflect changes in the operating
the first and second lines of defence. environment, and serve as inputs into other risk
At City Bank, we continue to develop and advance our management fields, such as stress-testing and portfolio
portfolio risk management and stress-testing limit-setting. Both risk-taking and risk-control units are
capabilities to determine the impact of current or represented in the risk management committees,
emerging stress scenarios and our ability to withstand emphasising shared responsibilities over risk
these risks, and to inform decision-making throughout management.
the bank and the extended Group. The results of our
tests indicate that the bank is well-capitalised and is able
Segregation of duties – the ‘three lines of defence’ model
to handle current and emerging stress scenarios,
should they materialise, which is likely considering the l First line comprises all employees engaged in the
continued threat of the coronavirus pandemic. revenue-generating and client-facing areas of the
bank and all associated support functions, including
Finance, Treasury, and Human Resources. The first
Risk governance and management line is responsible for identifying and managing the
The Board establishes the bank’s risk appetite and risk risks they generate, establishing a control
management principles. The Board-appointed Risk framework and also being responsible for
Management Committee is the principal Board escalating risk events to the Risk Management
committee that oversees the bank’s risk management, division (RMD).
entrusted with the following key responsibilities: l Second line is comprised of the risk and
l Sets the bank’s overall risk management compliance functions. The role of the second line is
philosophy, ensuring it is in line with the corporate to establish the limits, rules and parameters under
strategy and within the risk appetite, as approved which first line activities shall be performed,
by the Board. consistent with the risk appetite of the bank, and to
l Reviews risk disclosure policy and risk management monitor the performance of the first line against
principles for the approval of the Board. these limits and constraints. Limits for a number of
first line activities, related to operational risk, are set
l Oversees the bank’s risk management systems for
by the first line and overseen by the Chief Risk
identifying, measuring, monitoring and controlling,
Officer. These remain subject to supervision by the
and reporting of risk exposures, while ensuring the
second line.
adequacy of risk management practices.
l Third line of defence is internal audit, which is
l Approves risk management frameworks, major risk
responsible for providing independent assurance
policies and material risk models.
over the effectiveness of governance, risk
The Board’s Risk Management Committee (BRMC) is management and control over current, systemic
supported by Risk Management Division (RMD), which and evolving risks.
is headed by the Chief Risk Officer (CRO). RMD is an
l City Bank’s Legal division provides support to all
independent risk and control oversight function of City
areas of the bank and primarily assists in the
Bank that supports the bank’s business development
recovery efforts
initiatives within a prudent, consistent and effective risk
management framework and governance structure.
RMD establishes relevant risk management Top risks and emerging threats
frameworks, policies and procedures, risk At City Bank, our process for identifying top risks and
measurements and methodologies. Further, it also emerging threats reflects the continuous assessment of
reviews and monitors the bank’s risk profiles and emerging threats and opportunities based on global
portfolio concentrations, a responsibility that has been trends that may have a bearing on the bank’s operating
heightened by the pandemic. Notably, the environment. Early identification of these risks positions
independence of risk management from business us to leverage related opportunities, while proactively
mitigating threats.

149
 Our top risks are identified through our ERM (Enterprise top risks, between first line business operations, second
Risk Management) framework and operational risk line risk functions and third line internal audit. Our risk,
processes using specialist expertise within the bank and compliance and internal audit functions deliver
across the three lines of defence, and is complemented integrated Bangladesh-wide services to ensure a
by external insights. This collaborative approach consistent approach to managing challenging
provides a combined risk assurance view, reinforces the operating environments and the associated threats and
effectiveness of our control environment and aligns our opportunities, and that a risk-aware culture is embedded
responses to support longer-term strategic at all levels of the business. Further, our ongoing and
decision-making to mitigate the impact on our increasingly mature engagement has contributed to an
expected outcomes and reputation. improvement in the bank’s risk and control culture.
We ensured that the top risks in 2020 received the Key focus areas identified in 2020 and expected to be
attention and resources needed to be adequately intensified in 2021 as having the potential to impact the
mitigated. This scope was broadened in early 2021 to effectiveness of the control environment include:
focus on emerging threats unleashed by the l The new normal environment and our adaptability
coronavirus pandemic within our operating context within it
that could materially impact our business either as a risk
l Digital enablement as a means to strengthen
or as an opportunity.
customer service
The year 2020 was mostly about one word: COVID-19.
l Cost optimisation and risks associated with it
The world grappled with a deadly pandemic that
wreaked havoc on companies, business sectors and l Compliance with regulatory requirements, such as
whole economies. While enforcement of COVID-19 anti-money laundering, anti-terrorist funding and
appropriate behaviour in some countries enabled them know your customer
to come out of the woods much faster, hesitance and
reluctance on the part of others led to both severe Managing material risks
Credit risk management
economic weakening and tragedy on account of loss of
lives and livelihoods. Credit risk is the most critical risk facing our bank and is
defined as the potential loss to the bank caused by the
Our top risks for 2020 were identified as
mentioned hereunder failure of borrower(s) to meet their payment obligations
in accordance with agreed terms and conditions. The
bank’s credit risk arises mainly as a result of the core
Pandemic risk business activities involving corporate and retail loans
and advances.
City Bank’s Board is the key governing body in charge of
Health and safety risk providing oversight for the implementation of a suitable
Credit Risk Management strategy. The Board’s Risk
Management Committee provides the overall direction
Business disruption risk to the bank and makes recommendations to the Board
on all aspects of risk management. While the business
lines serve as the first line of defence, this, along with
credit policy, risk and portfolio review teams are
Credit risk primarily responsible for the management of credit risk
to comply with the bank's credit policy and ensure
adherence to all relevant credit and lending strategies
Fraud risk and objectives in order to maintain adequate control
over credit risk.
Our approach to credit risk management is premised
on the following principles:
Technology risk
l Maintaining a strong culture of responsible lending,
as expressed in the credit risk policies and the
appetite limit framework
Cybersecurity risk l Well-defined policies and procedures that ensure
proactive credit risk management practiced within
the bank
Assuring a robust, stable and integrated control
environment l Segregation of duties and delegated authority
levels between loan origination, administration and
City Bank continues to make progress in a combined risk
assurance model, including a shared view of the bank’s

150 Annual Report 2020

l Identification, assessment and measurement of Key risks and their mitigation measures
credit risk clearly and accurately from the level of At City Bank, we have identified the following significant
individual facility up to the total portfolio, supported risks that have or may have a key impact on our
by a robust reporting and portfolio management operations and their material mitigation measures.
process
For more information on our credit risk management in
the Directors’ Report, please go to page 164.

Risk Type Definition Key Actions

Credit risk Credit risk is the potential loss of l Ensured effective credit risk
revenue as a result of defaults by management to attain
borrowers/customers or positive customer experience,
counterparties on account of good quality credit, diversified
their failure to meet contractual and resilient credit portfolio,
obligations in accordance with targetted risk returns and
agreed terms. capital optimisation.
l Adopted a more cautious
stance on certain
sectors/industries most
impacted by COVID-19,
regularly reviewing our
portfolio to identify potential
hotspots or concentrations
l Strong credit controls and
close monitoring are in place
to identify potential distress
for early intervention and/or
to take prompt recovery
actions

Market risk Loss arising from adverse l Undertook regular reviews of

movements in market the market and economic
rates/prices such as interest rates, conditions to identify areas
foreign exchange rates, which may give rise to market
commodities and equity prices. risk
l Market risk policies,
procedures and internal
control measures periodically
reviewed to ensure relevance
in managing market risk
l Hedging interest rate/rate of
return risk and foreign
exchange risk in the event
exposures exceed the risk
appetite
l Adopted enterprise risk
management framework
more closely for optimisation
of risk returns, consistent
management of market and
liquidity risk, and governance
and risk oversight

151
 Risk Type Definition Key Actions

Liquidity/funding risk Adverse impact to the bank’s l Pursuing growth in stable and
financial condition or overall low-cost customer
soundness from the inability (or deposits/refinancing windows
perceived inability) to meet our is core to managing this risk
obligations. Funding risk is the risk l Further maintaining a
that the bank does not have diversified and balanced
sufficiently stable and diverse funding portfolio comprising
sources of funding or the funding of customer deposits,
structure is inefficient. shareholders’ funds, debt and
capital funds
l Holding sufficient liquidity
cushion factoring liquidity
needs under normal and
especially stress conditions,
as well as to meet the
regulatory capital norms
l Enabling liquidity stress test
to anticipate potential impact
from severe liquidity stress
event

Operational risk Operational events or external l Initiated disaster recovery

factors that could result from and business continuity
inadequate or failed internal planning (BCP) covering all
processes, people and systems or critical business operations
from external events. and updated it to ensure
continuity of key business
services during unforeseen
events like the COVID-19
pandemic
l Ensured day - to - day
management of operational
risk through a well-structured
and resilient system of
internal controls and risk
management processes
l Use of operational risk
management tools, such as
Risk Control Self-Assessment,
for monitoring of operational
risk exposures and
effectiveness of controls
l New products and services
introduced subjected to
rigorous product evaluation
standards (also for
product/service variations),
while also ensuring increased
speed-to-market

152 Annual Report 2020

 Risk Type Definition Key Actions

Capital risk Capital risk is the risk of l Close monitoring of capital

insufficient capital to meet the positions to ensure
capital required to support the compliance with current
Group’s business growth regulatory requirements and
strategies and to satisfy ensuring strong position to
regulatory capital adequacy meet future requirements
norms. l Ability to raise additional
capital as and when required
and at favourable terms
l Capital contingency planning
to chalk out governance,
escalation process and
monitoring of capital position
as well as actions to be taken
in the event of any capital
deficiencies

Reputation risk Reputation risk is the risk arising l Periodic identification,

from negative perception on the assessment and monitoring
part of customers, counterparties, of key risk/ performance
shareholders, debt-holders, staff, factors associated with
or regulators that can adversely reputation risk
affect the bank’s ability to l Ongoing enhancement of the
maintain existing or establish new control measures
business relationships and implemented to manage
continued access to sources of reputation risk
funding.
l Procedures on escalation and
management of
potential/current reputation
events to ensure such events
are managed timely and
sufficiently
l Conduct comprehensive risk
assessment on emerging risk
events to identify areas
vulnerable to reputation risk

IT risk Risks related to the confidentiality, l During peak pandemic and

availability and integrity of shutdowns imposed due to
information technology and the coronavirus pandemic,
services. our resilient IT systems were
capable of managing
increased volume of digital
transactions
l We continuously monitored
our cyber defence capabilities
to protect customers’ data
and payments security
l We continually refine our
cyber and technology risk
assessment to strengthen our
resilience against potential
cyber threats

153
 Risk Type Definition Key Actions

l Continuously alerting
employee, customers and
other relevant stakeholders
about the latest cyber
security threat and its
remedies.
l To ensure system availability,
IT infrastructure was
upgraded and modernised to
minimise risk of any
operational disruptions

Shariah non-compliance risk Risk of legal/regulatory sanctions, l On-going identification,

financial loss or non-financial assessment, monitoring and
implications. including controlling of Shariah
reputational damage, arising from non-compliance risk to
failure to comply with the ensure our Islamic Banking
principles of Shariah. division’s operations and
business activities are in
compliance with Shariah
norms and requirements
l Shariah-based audit, along
with governance stewarded
by a supreme Shariah council
led by a specialist in Islamic
Finance
l New Islamic products /
services introduced and
variations subject to thorough
product evaluation which
assesses potential Shariah
non-compliance risk
l Sponsoring staff to acquire
Shariah certification to
enhance knowledge and
upgrade skills on all Shariah
matters
l Among the only in
Bangladesh to have affiliation
with the Bahrain-based
Council for Islamic Banks and
Financial Institutions

154 Annual Report 2020

 Risk Type Definition Key Actions

ESG risk Failure to address ESG concerns l Aligning with bank-wide

could impact the bank’s principles and key building
financial/corporate performance, blocks for the management
as well as reputation. of ESG risk
l Focused and prioritised
approach on green banking
and ESG-related financing
l Proactive engagement with
customers and regulators to
encourage adoption of better
ESG practices and promote
transition to a low-carbon
economy

De-risking as a means to promoting responsible and and establishments that seek to rejuvenate or
sustainable finance modernise technology, enhance job creation and
At City Bank, we recognise that we fulfil an important themselves focus on the power of the institution in
role as a financial institution of longstanding repute in contributing to the SDGs. In July 2020, we worked with
Bangladesh, helping combat climate change, the International Financial Corporation (IFC), which
promoting long-term sustainable development and extended USD 30 mn loan to channel financing to small
ensuring that our impact and influence is aligned with and medium enterprise (SME) businesses affected by
the Sustainable Development Goals of the United the COVID-19 pandemic. This investment is a part of the
Nations to which Bangladesh is a signatory. Further, we Working Capital Solutions (WCS) program of the
continue to enhance the integration of Environmental, COVID-19 response fund, which provides USD 2 bn
Social and Governance (ESG) considerations into our globally to emerging-market banks. City Bank was one
lending and capital market and investment activities of the banks to receive this fund.
(conducted by our subsidiaries) through our Going forward, especially with the pandemic bringing to
responsible financing practice. the fore environmental- and climate change-related
Notably, adopting a risk-based approach towards risks, we will ensure that the bank does everything
managing risk, transactions that carry high ESG / possible to further intensify its efforts in responsible and
climate-related risks are subject to enhanced evaluation sustainable finance.
and approval requirements. As part of our focus on
promoting responsible finance, we work with major Stress-testing for effective risk mitigation
global developmental institutions, including the likes of
At City Bank, as part of our focus on fostering a
the IFC, to help shift the region’s financial flows towards
risk-aware culture and promoting responsible finance,
sustainable socio-economic and environmental
we consider stress-testing as a critical tool of our risk
outcomes. Besides, as part of our commitment to
management programme. It includes both sensitivity
climate change, we prohibit new corporate or project
analysis and scenario analysis as well as the Internal
financing for conventional energy-based power plants
Capital Adequacy Assessment Process (ICAAP, which
that use subcritical efficiency technology and/or coal as
comprises a group-wide exercise spanning different risk
the main fuel source. This is at the heart of our
types) that is conducted annually to determine the level
sustainability and Green Banking practices.
of capital to be maintained against all risks and ensure
Moreover, in line with supporting the goals of that the bank has adequate capital to support all risks.
transitioning the country to a low-carbon economy, yet
ensuring accelerated finance-related economic
expansion, we channelise formal finance into projects

155
 City Bank: Risk Impact vs. Probability Framework

High impact
High probability, high impact Low probability, high impact

Attrition risk
Market risk
Reputation risk
Credit risk

Funding risk Business failure

Regulatory risk
Succession risk

High Probability Low Probability

High probability, low impact Low probability, low impact

Small/non-strategic Major liquidity

customer attrition risk

Lower-level staff
Low impact

Non-performance of
attrition
small support functions

Importantly, stress tests are done for credit, market, outcomes of stress tests, especially heightened by the
liquidity and operational risk categories and cover peak period of COVID-19 when largescale shutdowns
integrated scenarios and macroeconomic factors as had enforced deep economic compression, alert the
well, which are discussed under each section and Board and the senior management regarding adverse
results of the stress tests, along with the findings of unexpected outcomes related to a broad variety of risks.
sensitivity analyses, are submitted to the Board’s Risk
Management Committee for review. Importantly, the

156 Annual Report 2020

Chief Risk Officer’s
Review on risk management
This statement provides an overview of City Bank's strategic
risk governance and management endeavours throughout the year.
The discussion recounts our perceived challenges from the macro
environment, and illustrates our strategic and tactical initiatives
to strive towards sustainable growth.

“Despite a challenging macroeconomic environment,

City Bank has been able to maintain strong performance
and solid risk fundamentals, a reflection of the work
done over the previous few years to bolster the
foundations of our risk management approach.”

Zabid Iqbal,
Chief Risk Officer

Fostering risk resilience

in a pandemic
Overview businesses, and individuals unaware, governments all
Despite the year 2020 being one of unprecedented over the world pumped in billions of dollars as relief and
challenges on account of the dramatic paradigm shift rescue funds to somewhat mitigate the devastating
created by the COVID-19 pandemic, at City Bank we impact of the pandemic on lives and livelihoods. Today,
strived to continue to fortify our risk management standing at the cusp of a second wave, the pandemic
practices to impart both operational flexibility as well as has revealed financial vulnerabilities, and will most
organisational consistency. certainly test the post-financial crisis economic system.

At our bank, we first needed to ensure heightened Notably, though the effects of the crisis has had an
operational and financial resilience in the face of a uneven impact across sectors, those relying on
deteriorating macro environment, and also not least high-contact and high-touch have been most
because banks would be called upon to play a key detrimentally hit, including hospitality, aviation, etc. It
nationalistic role in mitigating some of the adverse has been forecast that the output of such and other
financial and economic consequences of the crisis. As it customer service industries could remain well below
has been widely known and acknowledged, the novel their pre-COVID-19 trends for some time. COVID-19 has
coronavirus pandemic has been a major disruptive indeed created a unique challenge where there is no
force for the global economy, both in terms of its sheer standard playbook to fall back upon, and businesses will
scale and impact. Though it caught governments, need to respond proactively and rapidly on a near ‘live’

157
 basis amidst constant change. At City Bank, we focused Risk management strategies during 2020
on doing exactly this, harnessing our longstanding
While it was feared during the early pandemic phase
experience and insights in forecasting, modelling and
that banks would face an immense crisis of confidence,
developing responses to either protect the bank against
rapid and timely responses by the Government and
adversity or enabling it to capitalise upon opportunity.
Bangladesh Bank helped correct this distorted
perception and greatly contributed to economic
resilience.
Our initiatives against pandemic-driven challenges
The effect of regulatory pause on sub-par classification
Formulating proactive strategies and ensuring timely
of default accounts, and that too for a significant period
implementation represented the major achievements
of time, represents a substantive tail risk of the
at our bank. Thus, though the pandemic hit the bank’s
pandemic-induced risk spectrum, and can have a major
loan portfolio leading to unforeseeable chain-reactions,
impact on the long-term NPLs of the banking sector of
especially during the peak period (March-June 2020)
Bangladesh, which already remain at exacerbated
where lockdowns and movement control restrictions
levels. As it is, understanding the true health of the
were put in place to control the transmission of the
country’s banking industry’s credit portfolio was already
virus, we were able to soften the blow through our
difficult due to abundant rescheduling and restructuring
adaptive, agile, and amenable risk mitigation strategies.
of default assets. The repayment holiday makes it
Monitoring asset quality: During the pandemic, we further challenging for risk analysts to differentiate
heightened vigilance on our non-performing loan (NPL) between willful and unwilling defaulters, and makes the
management strategy with granular assessment of system more subjective-judgment dependent over
major business segments. objective-model reliant. Moreover, loan moratoriums are
also expected to further degenerate the credit culture in
Factoring probable risks emanating from customers’
the country.
business viability: We maintained close and careful
monitoring of customers’ business performance and It is to be noted that excessive restructurings also
overall economic health throughout the year. disrupts the bank’s maturity timelines by stretching
Specifically, we also meticulously watched customers’ maturity schedules and making the mid-term and
responses to current and imminent threats to evolve long-term liquidity gaps exposed to stress. The next
our own strategic decision-making. sections discuss City Bank’s response to overall risk
exposure across different dimensions.
Facilitating careful scrutiny of loan past due status:
Although there were regulatory bindings that offered
deferral for late repayment cases, the bank strictly
Overview of the bank’s credit portfolio and its
maintained loan past due status follow-ups. Further,
sub-segments
frequent analysis of 90+ days past due (DPD) and 180+
DPD loan outstanding was also done to understand the Maintaining the health of our credit portfolio is our most
real impact of delays underlying the deferral status. crucial risk management endeavour. For our existing
exposures, we have focused on keeping ‘performing’
Ensuring sturdy supervision of loan repayment
accounts which were highly prone to default under
situation: In the face of the crisis, the bank’s loan
regular status. Relationship management and risk
recovery schemes were cautiously and vigilantly
management have worked hand-in-hand to
realigned with the lockdown conditions. Repayment
continuously monitor clients’ business status and
challenges were constantly monitored with timely
communicating with them to help them strategise in
adjustments.
keeping their repayments stable, and thus, protecting
Scrutinising stressed accounts: Stressed accounts their credit profile. In high-impact cases, senior
were taken under in-depth scrutiny round-the-year for management stepped in to advice account
ensuring intense monitoring. They were thoroughly management strategies, which helped limit the impact
reviewed to open up any scope for strategic action, of the damage.
parallel to the COVID-19 induced conditions.
Account managers were specially advised to make
Optimising our approach to capital management client-wise investigations to understand the impact of
approaches: We rigorously focused on the bank’s the pandemic on each client’s business in the present
capital management strategies to achieve the desired and also in the future. Extensive due diligence was also
return on capital, navigating through the COVID-19 conducted to understand the need of each client
challenges. Capital strengthening and optimisation qualifying for different stimulus packages declared by
measures intended to support business growth the Government, and these findings were reflected in
remained in acute focus in our capital planning and the bank’s credit sanction decisions. Importantly, City
allocation initiatives. Bank was amongst the banks at the forefront of
channeling government incentives/relief, especially on

158 Annual Report 2020

the vulnerable segments of the population to help portfolio has significantly improved during the year, as
mitigate the impact of the pandemic. The bank compared to 2019.
disbursed a significant amount of funds from different
stimulus packages, and hence fulfilled a nationalistic
role as a public-facing institution of the country. Risk weighted assets and capital adequacy
Considering the volume impact of Corporate and At the heart of global risk management conventions for
Commercial segments of the bank of the credit book, banks is sustenance of capital adequacy against risk
special directives were taken for relatively stressful weighted assets (RWA). City Bank witnessed an increase
accounts. Delinquency status of both segments was of 10% in its total risk weighted assets on solo basis,
within the acceptable range throughout the year, and which was BDT 26,932 crore in December 2020 and
has even improved compared to the previous year. BDT 24,492 crore in December 2019. On the contrary,
Most accounts were stringently monitored to prevent Tier-1 capital increased by 22.6%, which was BDT 2,902
them from slipping into stressful and non-performing crore in December 2020 and BDT 2,366 crore in
status, whereas the bank executed timely exit plans for December 2019. This has been mostly the outcome of
some accounts before they turned non-performing. issuance of perpetual bond as Additional Tier-1 capital.
The total eligible capital stood at BDT 4,182 crore on solo
SME-Medium businesses in the country’s economy
basis in December 2020, which is 12.6% higher than BDT
often struggle to stay afloat against major economic
3,714 crore in December 2019. As a result, the bank’s
and market shocks, which make the bank’s medium
capital-to-risk weighted asset ratio has improved to
business portfolio relatively volatile. Thus, accounts
15.53% in December 2020, comprising a 37 basis-point
under recovery attempts were extensively analysed
increase from 15.16% in December 2019.
and were categorised under certain characteristics.
Thereafter, these categories were assigned to different To improve capital adequacy, the bank continued its
teams, each specialised in recovery of a certain pursuit of astutely managing its risk weighted assets
category of account. The bank also placed emphasis on along with improving quality of capital and external
getting its unrated business clients evaluated by credit ratings of its client. By the end of 2020, the bank
external credit rating agencies, which has given us a had succeeded in covering around 86% of its total
more clear picture of their credit-worthiness, thereby eligible loans under valid external credit ratings,
supporting our credit sanction decisions in being comprising a significant achievement.
evidence-based. As a result, contribution to RWA from
this segment has improved.
Operational risk management
The bank, along with the industry, faces geographical
concentration risks of loans and advances. Thus, as a Our operational risk management team was
counter, pertinent resources have been engaged to established in 2019 and began enthusiastically by
maintain coherent rigorousness in risk control across focusing on improving risk infrastructure and risk
the country. exposure administration of the bank. Besides periodic
reviews of internal policies, it has coordinated, reviewed
and developed critical policies and guidelines for
Market and liquidity risk status strengthening the risk culture of the bank. Further, the
team’s execution of risk control self-assessment (RCSA)
The capital and money markets had not been exposed
covering 29 areas of the bank highlighted category -
to any extreme shocks post-lockdown release due to
wise risks and created the scope for escalating the
rapid and time-bound responses by regulators. The
highly prone and probable risks to the top management
bank steadily maintained its cash reserve ratio for both
for pragmatic steps. We have also constituted risk
onshore banking as well as offshore banking operations,
champions from cross-functional departments
structural liquidity ratio above regulatory limits and
consisting Operational Risk Management Committee
advance deposit ratio under regulatory levels.
for creating common platforms for enabling critical
City Bank’s liquidity coverage ratio (LCR) has always analysis of risk aspects and implications of outcomes.
been healthy. We were able to improve LCR even Further, we have continued to streamline our risk
further, as it stood at 173% in December 2020, as against management tools and processes to drive internal
143% in December 2019, against regulatory requirement efficiencies, while also enhancing our surveillance
of 100%. capabilities.
Further, the maximum loss limit due interest rate
sensitivity risk has not breached or reached the limit set
in our Risk Appetite Statement. Similarly, values at risk
within foreign exchange exposures and equity portfolio
always stayed under risk limits. Value at risk for equity

159
 IT risk management released and all of these branches were reviewed as
‘Satisfactory’. Further, no branches were reviewed as
In 2020, the pandemic created new challenges for the
‘Weak’. Their functional level inspections revealed
business, especially in the realm of cyber security. In this
several potential and existing risk areas with different
context, the bank emphasised on the highest levels of
intensity of impact. All these findings have been
security in the work from home (WFH) environment,
communicated to the Audit Committee of the Board,
privilege access management, and data security.
and high risk areas have been duly deliberated and
Employee awareness regarding cyber security
required action plans were approved or advised by the
transformed into a key priority, and various channels
Board of Directors in time.
like emails, wallpapers, screen-savers, webinars,
roundtable discussions, videos and messages were
used to raise awareness on the same. We also
Risk management in 2021 and forward outlook
onboarded Web Application Firewall, Anti DDoS
Protection and SSL Orchestrator in the organisation’s Since the pandemic has surged in a second wave
security umbrella. Thus, five robust layers of defense across the country, maintaining regularity of the existing
have been implemented to protect the bank from any portfolio will be our foremost priority. Equal emphasis
cyber threats with a continuous focus on surveillance, will be placed on recovery efforts from non-performing
upgradation, and modernisation. and written-off loans.
The bank’s vision is to explore business in
non-traditional avenues in both local and global
Money laundering and terrorist financing risk
markets. To that end, risk management is being further
management
fortified with more rigorous monitoring and control
The pandemic has led to unprecedented global activities, and by introducing new analyses techniques.
challenges, human suffering and economic disruptions. Such initiatives will increase our international visibility
Criminals have been quick to seek ways to exploit this and also moderate probability of uncertain shocks on
crisis. Since digitalisation enables easy access to capital. The bank has emphasised upon upgrading its
customer data, even from remote locations, this may operational risk infrastructure towards global standards
pose as an underlying risk for money laundering, and local regulations for the last few years and this
terrorism financing and related criminal activities by foundational work will support the bank’s future
abusing financial institution and its services. Thus, to endeavours.
combat the money laundering and terrorist financing
The bank will continue to modify its policies and
risk, the bank introduced new guidelines on
processes to minimise risk originating out of untoward
Trade-Based Money Laundering, arranged awareness
elements in the organisation. An area of concern for
programs for as many as 1,608 employees, submitted
Bangladesh’s banking industry is cyber security, as the
249 STR/SAR, forwarded 62,865 CTRs (Cash
country has recently been the target of multiple
Transaction Reports) to BFIU, reviewed almost 2,024
hacking attacks. While City Bank has not been exposed
adverse media news so that criminals are not able to
to any major threat till now, our IT infrastructure remains
breach our systems to launder illicit proceeds through
highly vigilant to prevent vulnerability of our systems.
our banking channels and monitored 54 branches, both
online and off-line on AML/CFT issues. Furthermore, City Bank envisions increasing
organisation - wide risk awareness, empowering
employees with understanding of risk involved with
Internal control and compliance their specific tasks, and how they can be responsible in
managing risk exposures concerning their functions.
Internal control and compliance (ICC) acts as the third
line of defense in the risk management system. One of Our overall focus is to foster a ‘risk-aware’ culture and
its major contributions is conducting internal core risk though we have achieved much progress in this
audits on credit, ALM, FX, ICT and AML risk endeavour, we have always placed and will continue to
management policies of the bank. They also report any place emphasis on the journey and not the destination.
relevant compliance breach that affect the bank’s risk
Sincerely,
profile, and ensures follow-up with the concerned
department for corrective action.
The audit plan of 2020 has been revised and the
schedule for completion of all audit tasks was extended
up to February 2021 due to the pandemic situation.
Accordingly, the ICC division is in the process of
Zabid Iqbal
completion of a comprehensive audit on 100% of
branches. However, so far, 44 branches’ report has been Chief Risk Officer

160 Annual Report 2020

Social Responsibility Report

Creating a lasting impact

At City Bank, as part of our socially-aware corporate
responsibility model, we continue to review and ensure 691 mn
its relevance in the current socio-economic context of City Bank’s social investments during the six-year
our country. period ending 2020, comprising a 73% growth
We are committed to being an active and supportive
member of the community and, in doing so, we strive 12
to ensure that our investments generate sustainable City Bank impacts 12 of the 17 UN SDGs
benefits for the community at large. Aiming to make a
meaningful and measurable impact in the lives of
economically and socially challenged societies across
Bangladesh, the bank has declared community Extending support to disaster management
empowerment and sustainable investment as key #2 Zero Hunger
strategic priorities. #3 Good Health and Wellbeing
To catalyse our commitment and channel our #13 Climate Action
resources effectively and efficiently in order to achieve
our community-focused goals, we have adopted a 2 ZERO
HUNGER 3 GOOD HEALTH
AND WELL-BEING 13 CLIMATE
ACTION
socially-responsible model anchored on 6 key pillars
comprising:
l Learning and education
l Healthcare
l Providing the basics, including access to water and
sanitation COVID-19 relief
l Disaster relief In 2020, the bank focused on mitigating the impact of
l Socio-economic development (infrastructure the COVID-19 crisis, under which we extended support
development, urban rejuvenation, etc.) and benefits to 2 million citizens by providing them
l Cultivating interest in the arts and outdoors, etc. with a month’s worth of consumables supply. Every
employee also donated two days’ worth of salary to
Notably, these pillars are designed to tackle support the COVID-19 affected people. Our branches
grassroots-level issues that have persisted through were converted into makeshift relief centers in each
time. To enable impact measurement, our key district of the country. We also raised awareness on the
interventional focus areas comprises: importance of COVID-19 appropriate behaviour, which
contributed to mitigating transmission of the virus.
l Transformation – Beneficiaries experiencing a
change in their lives, livelihoods and lifestyles Other interventions
l Improvement – Beneficiaries experiencing an During the cold harsh winters of the country, the
improvement in their socio-economic status misery of the underprivileged gets amplified due to
l Access – Beneficiaries able to access lack of warm clothes. City Bank, through the Prime
facilities/resources that were previously unavailable Minister’s Relief Fund, distributed 75,000 blankets
or they were unaware of those before. worth BDT 2 cr. among the people in 2020. Further, the
A dedicated approach to these three factors enable us bank also distributed BDT 10 cr. as relief distribution
to align our impact with those expressed in the UN among flood-affected people through Prime Minister
Sustainable Development Goals (SDGs) framed under Relief Fund. City Bank also expanded relief support
the United Nations 2030 Agenda for Sustainable through the Fareea Lara Foundation during COVID-19
Development. and floods during the year.

161
 Extending educational support to Fostering women empowerment
underprivileged students City Bank partnered with the prestigious North South
#4 Quality Education University (NSU) to promote women entrepreneurship
and empowerment through the City Alo Certification
#10 Reduced Inequalities
Program, a platform that aims to offer both technical
#17 Partnerships for the Goals knowhow as well as relevant soft skills for launching,
4 QUALITY 10 REDUCED 17 PARTNERSHIPS managing and promoting their business. Bangladesh
EDUCATION INEQUALITIES FOR THE GOALS
is a country where women comprise almost half of the
labour force and hence, in order to stimulate female
entrepreneurship and create more mainstream
employment opportunities, we found it imperative to
hone entrepreneurship skills among women and give
Support to development partners them access to basic financial schemes, thereby also
City Bank has constantly supported Shishuder Jonno bringing them into the folds of organised banking.
Foundation for its education support program for the
poor, orphaned and disabled students of Chudanga. Continued involvement with Baridhara
Under the program, the bank provides educational
Society
resources for the foundation’s school.
#3 Good Health and Wellbeing
#11 Sustainable Cities and Communities
Extending support towards health care
#15 Life on Land
and medical infrastructure
#3 Good Health and Wellbeing #17 Partnerships for the Goals

3 GOOD HEALTH
AND WELL-BEING
3 GOOD HEALTH
11 SUSTAINABLE CITIES
15 LIFE 17 PARTNERSHIPS
AND WELL-BEING AND COMMUNITIES ON LAND FOR THE GOALS

Mitigating COVID-19 impact Engaging in urban rejuvenation

During the year, the bank focused on the COVID-19 City Bank continues with its involvement with the
crisis, extending support to affected people. Realising Baridhara Society for the beautification of Baridhara
the necessity of medicines and medical equipment Lakeside Rajuk Park Zone-1. Baridhara Lakeside Park is
during the pandemic, the bank donated high flow a prime and scenic park in Dhaka. Our contribution will
nasal cannulas equipment to Chattogram General facilitate the park’s proper maintenance, while
Hospital and Noakhali Sadar Hospital. Further, a ensuring sustenance of an expansive green and
well-equipped ambulance was also donated to welcoming cover for the city and its residents.
Chattogram Metropolitan Police to support safe and
secure patient movement. The bank also extended
financial support to 3 medical patients. Partnership with BEZA
#3 Good Health and Wellbeing
Contributing to women empowerment #11 Sustainable Cities and Communities
through City Alo #15 Life on Land
#5 Gender Equality #17 Partnerships for the Goals
#10 Reduced Inequalities
#17 Partnerships for the Goals
3 GOOD HEALTH
AND WELL-BEING 11 SUSTAINABLE CITIES
AND COMMUNITIES 15 LIFE
ON LAND 17 PARTNERSHIPS
FOR THE GOALS

5 GENDER
EQUALITY 10 REDUCED
INEQUALITIES 17 PARTNERSHIPS
FOR THE GOALS

162 Annual Report 2020

 Expand the green cover Donations to the national fund
City Bank and BEZA (Bangladesh Economic Zones In 2020, City Bank donated to the Prime Minister’s
Authority) signed a MoU, under which the bank will Relief and Welfare Fund to contribute to
provide sponsorship for green plantation in house-building activities for the poor and
Bangabandhu Sheikh Mujib Shilpa Nagar at Mirsarai underprivileged of the country under the “Mujib
and Feni Economic Zones and Sonadia Eco-Tourism Shoto-Borsho” celebrations, comprising the birth
Park. The bank supported the green plantation centenary of the father of the nation, Bangabandhu
initiative by distributing 200,000 saplings covering 4 Sheikh Mujibur Rahman.
sq.km in these economic zones, which has facilitated
the expansion of green cover in the area.
Collaboration with Footsteps Foundation
#6 Clean Water and Sanitation
Supporting arts, sports and cultural #11 Sustainable Cities and Communities
heritage
#3 Good Health and Wellbeing
#10 Reduced Inequalities
6 CLEAN WATER
AND SANITATION 11 SUSTAINABLE CITIES
AND COMMUNITIES

#11 Sustainable Cities and Communities

#17 Partnerships for the Goals

3 GOOD HEALTH
AND WELL-BEING 10 REDUCED
INEQUALITIES 11 SUSTAINABLE CITIES
AND COMMUNITIES 17 PARTNERSHIPS
FOR THE GOALS

During the year, City Bank continued collaborating

with Footsteps Foundation, a social enterprise, for
Project Trishna, which aims to provide local
city-dwellers with access of safe drinking water.
Providing a potable source of free drinking water can
Supporting diverse interests
go a long way in preventing several water-borne
In 2020, City Bank contributed to Bistaar for Children diseases, such as cholera, typhoid and dysentery. A
and Teens through cine clubs film screening events. journey that started in 2015, there are 18 active Project
The bank also provided support to Bangladesh Trishna water purification systems supported by City
Disabled Development Trust in its efforts in publishing Bank.
a monthly Braille magazine 'Dristi Bijoye'. City Bank
also donated to establish a large mural of
Bangabandhu Sheikh Mujibur Rahman, under the City Bank’s social investments over the years
celebratory campaign of Mujib Borsho in 2020.
BDT in Millions

Infrastructure improvement in 250

249

remote/underprivileged areas 200

#9 Industry, Innovation and Infrastructure 146 144
150
#11 Sustainable Cities and Communities 100 43 75
#17 Partnerships for the Goals 50
0
2016 2017 2018 2019 2020

9 INDUSTRY, INNOVATION
AND INFRASTRUCTURE 11 SUSTAINABLE CITIES
AND COMMUNITIES 17 PARTNERSHIPS
FOR THE GOALS

163
 Directors’ report
Dear shareholders and stakeholders,
It is a pleasure and a privilege on behalf of City Bank’s Board of Directors to
present the Directors’ Report and Auditor’s Report, along with the audited
financial statements of The City Bank Limited, for the year ended
31 December, 2020.
Despite the adverse macroeconomic conditions unleashed by the
COVID-19 pandemic, we continued to responsibly steward the business
towards enhanced sustainability by striving to minimise risk and maximise
structural opportunities as manifested by the coronavirus. We also continued
to protect the health and safety of our employees and customers, while also
engaging with our other stakeholders in a meaningful way. We believe that
this focus, together with the bank’s robust foundations and longstanding
legacy, will enable us to remain on the path of sustainable value creation
for all our stakeholders today and well into the future.

Global economic review Global overview

The year 2020 was characterised by an extraordinarily After an estimated 3.5 percent contraction in 2020, the
complex environment exemplified by the pandemic global economy is projected to grow 5.5 percent in 2021
and the measures to alleviate its economic impact in and 4.2 percent in 2022, as per IMF’s World Economic
terms of government stimulus and relief policies that Outlook (WEO) Update for January 2021. The estimate
were announced all over the world, with notable for 2020 is 0.9 percentage points higher than projected
coordination between their fiscal, financial and in the October 2020 WEO forecast. This indicates, on
monetary counterparts to limit damage from lockdown average, stronger-than-expected recovery across
measures. The crisis has been universal in nature and regions in the second half of the year. The 2021 growth
highly severe, and has generated enormous forecast is revised up 0.3 percentage points, reflecting
uncertainty given the impossibility of predicting its additional policy support in a few large economies and
scope and duration, especially with new mutations expectations of a vaccine-induced strengthening of
enforcing targetted lockdowns in some parts of the activity later in the year, which offset the struggle on
world. near-term momentum due to rising infections. Notably,
the upgrade is particularly large for the advanced
economy grouping, reflecting additional fiscal support
Year 2020 in a nutshell mostly in the United States and Japan together with
Deep impact of the coronavirus pandemic expectations of earlier widespread vaccine availability
compared to the emerging market and developing
Major economic shock with recessionary trends economy group.
Substantial loss of lives and livelihoods
Substantial /policy relief

164 Annual Report 2020

 Year over Year
Difference from
October 2020 Q4 over Q4 2
Actual Projections WE0 Projections 1/ Actual Projections
2019 2020 2021 2022 2021 2019 2020 2021 2022
World Output 2.8 -3.5 5.5 4.2 0.3 0.0 -1.4 4.2 3.7
Advanced Economies 1.6 -4.9 4.3 3.1 0.4 0.2 -3.9 4.6 1.9
United States 2.2 -3.4 5.1 2.5 2.0 -0.4 -2.1 4.0 2.0
Euro Area 1.3 -7.2 4.2 3.6 -1.0 0.5 -6.8 5.8 2.0
Germany 0.6 -5.4 3.5 3.1 -0.7 0.0 -5.3 5.2 1.7
France 1.5 -9.0 5.5 4.1 -0.5 1.2 -8.2 7.4 2.0
Italy 0.3 -9.2 3.0 3.6 -2.2 1.0 -8.3 4.2 2.3
Spain 2.0 -11.1 5.9 4.7 -1.3 0.2 -9.8 7.1 2.0
Japan 0.3 -5.1 3.1 2.4 0.8 0.7 -2.3 2.7 1.6
United Kingdom 1.4 -10.0 4.5 5.0 -1.4 1.8 -8.3 6.0 1.9
Canada 1.9 -5.5 3.6 4.1 -1.6 0.7 -4.0 3.7 2.7
Other Advanced Economies 3/ 1.8 -2.5 3.6 3.1 0.0 0.0 -2.2 4.5 1.9
Emerging Market and Developing Economies 3.6 -2.4 6.3 5.0 0.3 -0.1 0.9 3.7 5.4
Emerging and Developing Asia 5.4 -1.1 8.3 5.9 0.3 -0.4 3.2 3.8 6.4
China 6.0 2.3 8.1 5.6 -0.1 -0.2 6.2 4.2 6.0
India 4/ 4.2 -8.0 11.5 6.8 2.7 -1.2 0.6 1.7 7.8
ASEAN-5 5/ 4.9 -3.7 5.2 6.0 -1.0 0.3 -3.2 5.2 6.1
Emerging and Developing Europe 2.2 -2.8 4.0 3.9 0.1 0.5 -2.7 4.8 3.0
Russia 1.3 -3.6 3.0 3.9 0.2 1.6 -4.6 5.3 2.6
Latin America and the Caribbean 0.2 -7.4 4.1 2.9 0.5 0.2 -4.8 2.3 2.8
Brazil 1.4 -4.5 3.6 2.6 0.8 0.3 -1.9 1.6 2.6
Mexico -0.1 -8.5 4.3 2.5 0.8 0.2 -5.4 2.2 2.4
Middle East and Central Asia 1.4 -3.2 3.0 4.2 0.0 0.2 - - -
Saudi Arabia 0.3 -3.9 2.6 4.0 -0.5 0.6 - 3.5 4.0
Sub-Saharan Africa 3.2 -2.6 3.2 3.9 0.1 -0.1 - - -
Nigeria 2.2 -3.2 1.5 2.5 -0.2 0.0 -3.1 - -
South Africa 0.2 -7.5 2.8 1.4 -0.2 -0.1 -6.2 2.8 0.6
Memorandum
Low-Income Developing Countries 5.3 -0.8 5.1 5.5 0.2 0.0 - - -
World Growth Based on Market Exchange Rates 2.4 -3.8 5.1 3.8 0.3 0.0 -2.0 4.3 3.1
World Trade Volume (goods and services) 6/ 1.0 -9.6 8.1 6.3 -0.2 0.9 - - -
Advanced Economies 1.4 -10.1 7.5 6.1 0.4 1.0 - - -
Emerging Market and Developing Economies 0.3 -8.9 9.2 6.7 -1.0 0.8 - - -
Commodity Prices (US dollars)
Oil 7/ -10.2 -32.7 21.2 -2.4 9.2 -5.4 -27.6 13.5 -2.2
Nonfuel (average based on world commodity import 0.8 6.7 12.8 -1.5 7.7 -2.0 15.4 2.0 -0.1
weights)
Consumer Prices 1.4 0.7 1.3 1.5 -0.3 -0.1 0.5 1.5 1.6
Advanced Economies 8/ 5.1 5.0 4.2 4.2 -0.5 -0.1 3.2 3.8 3.7
Emerging Market and Developing Economies 9/
London Interbank Offered Rate (percent) 2.3 0.7 0.3 0.4 -0.1 -0.1 - -
On US Dollar Deposits (six month) -0.4 -0.4 -0.5 -0.6 0.0 -0.1 - -
On Euro Deposits (three month) 0.0 0.0 -0.1 -0.1 -0.1 -0.1 - -
On Japanese Yen Deposits (six month)

Source: IMF WEO January 2021 update; real effective exchange rates are assumed to remain constant at the levels
prevailing during the October 23–November 20, 2020 period. economies are listed on the basis of economic size.
The aggregated quarterly data are seasonally adjusted.

165
 As COVID-19 spread globally, governments began Global activity indicators
closing their borders and economies to promote social (Three-month moving average; annualised percent
distancing and restrict mobility and in-person settings change)
to combat the pandemic. This spurred a worldwide 10 110
recession, which initially caused volatility to skyrocket
across all asset classes. Central banks reacted swiftly. 5 105

The US Fed stepped in to support capital markets with 0 100

interest rate cuts and balance-sheet expansion

-5 95
programmes, providing the much-needed liquidity to Industrial production
Monthly world trade volumes
support the system, while bringing long-term -10 (seasonally adjusted, 2018=100,
right scale)
90

government bond yields to historic lows. In Europe, the -15

Manufacturing PMI: New orders
85
central bank (ECB) also adopted monetary stimulus
-20 80
measures and eased its collateral policy, reducing Jan.
2019
Jul.
19
Jan.
20
Jul.
20
Dec.
20
peripheral sovereign risk. Besides, a number of
governments used fiscal policy to simultaneously Source: CPB Netherlands Bureau for Economic Policy Analysis;
Haver Analytics; Markit Economics; IMF Staff calculations
inject unprecedented amounts of liquidity to prop-up PMI=Purchasing Managers’ Index
their economies. Thus, the combination and scale of
those measures laid the foundation for a gradual Regulatory response to the impacts of the
return of risk appetite, while the resolution of the US coronavirus pandemic
presidential election and news about effective The severe economic disruption and contraction
COVID-19 vaccines helped invigorate and energise induced by the COVID-19 pandemic in 2020 revealed
financial markets. the importance of institutions' funding functions in
The international banking environment was also contributing to economic recovery. Competent
affected by the pandemic. The banking sector has authorities, including national and international banks,
been part of the solution, as banks have been acted promptly by reducing liquidity, capital and
channelling significant amounts of support from operational requirements for financial institutions to
government policies to the public/beneficiaries, while continue to provide financing to the economy, while
adopting measures to help households and ensuring that such institutions also continue to act
businesses cope with the impact to their income. It is to prudently as they can also be negatively affected by
be noted that several stress exercises conducted by the deterioration of the economic situation.
international organisations indicate that international Several national governments took measures to
banks' strong solvency and liquidity should prevent a address the economic and social impact of COVID-19,
banking crisis, even if economic conditions worsen. specifically in the form of legislative moratorium that
Yet, banks will have to own the added challenge of a were aimed at containing non-performing loans (NPLs)
potential increase in NPLs/defaults. and helping the public to meet liquidity needs.
Notably, though financial markets witnessed several Throughout 2020, the European Banking Authority
risk-averse episodes that coincided with periods of (EBA) adopted a series of guidelines, including
greater uncertainty, they ended 2020 on a more guidelines on legislative and non-legislative
positive note. moratorium applied in the context of the COVID-19
crisis. These guidelines clarify the requirements for
public and private moratorium to avoid classification of
GDP losses relative to pre-COVID-19 by region
exposures affected by moratorium as withheld
(Current projected 2022 level relative to pre-COVID-19 exposures. Further, as part of containment measures,
(January 2020 WEO) forecast, percent difference) the ECB (European Central Bank) issued a
recommendation in March 2020 urging European
0 banks to exercise extreme prudence on dividends and
-1
share buy-backs.
-2
-3
-4 Broad economic performance geography-wise
-5
l United States (GDP: -3.5 percent in 2020). Overall
-6
-7
financial stimulus packages and softer restrictions
-8
caused the US economy to shrink less than in other
-9 regions. As a result, after peaking at 14.7 percent,
Ern LAC SSC MECA EMDE World EM AE China United
Asia
ex
EUR. States recovery-enabled unemployment to fall to 6.7
CHN
percent in December 2020. The shock exerted
downward pressure on inflation. After cutting
Source: IMF staff calculations; AE=Advanced Economies
interest rates to 0-0.25 percent, the Federal Reserve

166 Annual Report 2020

 percent in 2022, as per IMF’s WEO Update in January WEO forecast for advanced economies and
2021. However, services trade is expected to recover emerging market and developing economies
more slowly than merchandise volumes, which is (Index, 2019:Q4 = 100)
consistent with subdued cross-border tourism and
business travel until transmission declines everywhere China (Jan. 2021 WEO Update) China (Jan. 2021 WEO Update)
AEs (Jan. 2021 WEO Update) AEs (Jan. 2021 WEO Update)
and international aviation is opened up more fully. EMDEs excluding China (Jan. 2021
WEO Update)
EMDEs excluding China (Jan. 2020
WEO Update)

120

Inflation 115

Even with the anticipated recovery in 2021-22, output 110

105
gaps are not expected to close until after 2022.
100
Consistent with persistent negative output gaps,
95
inflation is expected to remain subdued during
90
2021-22. In advanced economies (AEs) it is projected to
85
remain generally below central bank targets at 1.5
80
percent. Among emerging market and developing 2019:
Q4
20:
Q2
20:
Q4
21 :
Q2
21 :
Q4
22 :
Q2
22 :
Q4

economies (AMDEs) inflation is projected at just over 4

Source: IMF Staff estimates; AEs= Advanced Economies;
percent, which is lower than the historical average of
EMDEs=Emerging Market and Developing Economies
the group.
With growing vaccine availability, improved therapies
Global outlook: Vaccination and policy support and more intensive testing and tracing, local
brighten optimism transmission of the virus is expected to be brought to
Multiple vaccine approvals and the launch of the early low levels everywhere by the end of 2022. Moreover,
vaccination drive that most countries have additional fiscal policy support is set to boost activity in
commenced since December 2020 at least for some countries, but most are expected to experience
frontline responders and others in vulnerable age lower deficits in 2021. The sizable fiscal support
groups/conditions have raised initial hopes of an announced for 2021 in some countries, including most
eventual end to the pandemic. recently in the United States and Japan, together with
the unlocking of next-gen EU funds, will help lift
Further, this optimism is reinforced by economic data economic activity among advanced economies with
released after the October 2020 WEO forecast that favourable spill-overs to trading partners. Major central
suggest stronger-than-projected momentum on banks are also assumed to maintain their current
average across regions in the second half of 2020. policy rate settings throughout the forecast horizon to
Despite the high human toll of the pandemic with the end of 2022. As a result, financial conditions are
untold tragedy, economic activity appears to be expected to remain mostly at current levels for
adapting to subdued contact-intensive activity with the advanced economies, while gradually improving for
passage of time. emerging market and developing economies.
Finally, additional policy measures announced at the Thus, it is hoped that addressing crises legacies, global
end of 2020 notably in the United States and Japan are synchronised and harmonised responses to amplify
expected to provide further support in 2021–22 to the policy effectiveness and alleviate the adverse impact of
global economy. These developments indicate a much the pandemic, and closer multilateral cooperation will
stronger starting point for the 2021-22 global outlook help achieve a resilient, equitable and sustainable
than expected in the previous forecast. post-pandemic recovery.
However, surging infections in late 2020 (including
from new variants of the virus), renewed lockdowns
implemented in Europe as well as in emerging Bangladesh economic review
countries like India that is witnessing a recent spike in Macro view
its caseload, logistical challenges confronting vaccine
distribution, vaccine politics and diplomacy, and Favourable transformation of the macros
uncertainty about take-up are important counter Over the past decade, Bangladesh’s economic growth
points to the favourable news. It is expected that has steadily increased from 6 percent to 8 percent, a
government push for vaccination will help accelerate considerable achievement during a period of a
the drive, going forward. Much remains to be done on sluggish global macroeconomic environment.
the health and economic policy fronts to limit The global novel coronavirus pandemic adversely
persistent damage from the severe contraction of affected the economy of Bangladesh. The COVID-19
2020 and ensure a sustained recovery. pandemic has severely impacted the major source of
external financing: ready-made garments (RMG).
According to the provisional estimates of the

168 Annual Report 2020

Bangladesh Bureau of Statistics (BBS), GDP growth in COVID-19 response and outcomes
FY2019-20 stood at 5.24 percent, compared to 8.15 Swift and empathetic
percent in the previous fiscal year (FY2018-19).
To keep the country's economy afloat in the face of the
GDP compression in FY2019-20 originated mostly ongoing coronavirus pandemic, extra spending on
from supply-side shocks, suffered mainly by healthcare and emergency humanitarian assistance
pandemic-induced disturbances in the industry sector, was ensured, with the government already
particularly by substantial production loss in large- and announcing a financial package of about BDT 1.2 lakh
medium-scale manufacturing output. While the crore for economic recovery. Some of the notable
industry sector had been contributing to GDP via activities of this package include the following:
double-digit growth rates since FY2015-16, the growth
l Creation of a special fund for export-oriented
rate in this sector sharply decelerated to 6.48 percent
industries
in FY2019-20. The industry sector fell to multi-year lows
but achieved growth rate in the positive territory l Provision for working capital facilities to the
during the first three quarters of FY2019-20. Growth of affected industry and service sector organisations
the industry sector collapsed into negative territory, l Provision for working capital facilities to small
reflected in the Quantum Index of Industrial (including cottage industries) and medium
Production (-14.98 percent) during Q4FY2019-20. industrial enterprises
Growth in export and import was in the negative l Increase in benefits of the Export Development
territory in FY2019-20, enforced by global disruptions Fund
in the supply chain. However, remittance inflows grew l Increase in coverage of social security
by 10.87 percent, which contributed to reduction in the l Direct cash transfers to targetted people
current account deficit, compared to the previous fiscal l Creation of various funds for the agricultural sector
year. Simultaneously, the increase in capital and
l Reduction in import duty on COVID-19 related
financial account inflows led to a surplus in the overall
products
balance of payments. As a result, foreign exchange
reserves increased significantly. As of June 30, 2020 l Policy support to enhance liquidity in the banking
foreign exchange reserves stood at USD 36.04 billion, sector
the highest ever. During this period, a marginal Overall, the Bangladesh government announced
depreciation in exchange rate of BDT vs. the US Dollar stimulus packages worth BDT 1.03 trillion/USD 12.2
was observed. billion, or 3.7% of the GDP, which is among the largest in
Industry and services sector activities are witnessing the world in comparison to GDP size. This facet
rapid recovery, aided by government and Bangladesh enhances optimism that the country’s economy will
Bank’s continued supportive policy measures to boost bounce-back rapidly from the adverse impact of the
sectoral performance. The industry sector has staged coronavirus and achieve economic normalisation
a robust turnaround from the pandemic dread with faster than anticipated. The ADB has pegged growth in
faster-than-expected growth of QII Pat 7.94 percent in the current fiscal year (FY2020-21) at 6.8% on the back
Q1FY21, contributed by recovery in the apparel, textiles, of strong, rapid and sustained recovery.
pharmaceuticals, non-metallic mineral products Notably, during the pandemic, digital transformation
sectors, among others. Besides, service sector-related that the country envisaged through the “Digital
activities also climbed out from their pandemic lows. Bangladesh” vision accelerated with a sharp increase
Notably, private sector credit growth in trade and in customer interactions through digital channels,
commerce and consumer finance increased especially during the lockdown period. This structural
significantly during the first quarter of FY2020-21. long-term trend bodes well for digital banking in the
country.
Bangladesh GDP growth estimates by the
government and other developmental institutions Services sector
(percent) Major stat:

5.3%
9%
7.9%
8.2%
Growth achieved by the services sector in
8% 7.3%
7%
7.4% FY2019-20
6.8%
6% The service sector, which was also impacted by the
5% 5.2%
pandemic albeit less severely than the industry sector,
4.4%
4% 3.8% grew by 5.32 percent in FY2019-20, against 6.78
3%
FY17 FY18 FY19 FY20 FY21
percent growth achieved in FY2019-20, as most of the
ADB IMF Government leading sub-sector activities, including wholesale and

169
 retail trade activities, transportation, storage and Current account deficit
communication, financial services, education, real Major stat:
estate, renting and lease and all other business
activities subsided due to the lockdown measures. 20.0%
Agricultural sector Growth in CAD in July-Feb FY’ 21
Major stat:

13.4% Bangladesh’s current account deficit, or CAD, is

projected to widen in FY2020-21 and FY2021-22 owing
Contribution of agri sector to GDP, FY2019-20 to the negative impact from COVID-19, as per the IMF in
its June 2020 report. Though remittances grew by 20
Agriculture accounted for over 13% of Bangladesh’s percent in the first eight months of FY2019-20, these
GDP in FY2019-20, while its contribution to labour started to decline in March and April by 11 percent and
comprised over 40%. With a view to ensure the 25 percent YoY, respectively. Continued remittance
sustainable development of the agriculture sector in weakness in the coming months will slow FY2019-20
the country, policy measures and other support will be growth to 1.4 percent and lead to a 7 percent decline in
needed for accelerated reform that will not only help FY2020-21. It has been estimated that Bangladeshi
enhance crop yield, but also put more income in the diaspora workers have chosen to return, while those
hands of farmers. Agriculture received a total of BDT that remain are likely to experience job losses amidst a
21,484 crore in the FY2019-20 budget, which is 4.11% of stall in economic activity. Further, wage pressures
the total allocation. BDT 9,000 crore was allocated as abroad will also put pressure on remittance inflows into
subsidy for fertiliser, etc. the country. Further, some countries have also asked
Bangladesh to repatriate its undocumented workers.
In FY2019-20, agri sector growth declined marginally to
3.1% due to pandemic-driven labour shortages and After a modest decline in the first three quarters of
export restrictions on poultry and marine products. As FY2019-20, exports in April contracted by 83 percent
such, credit disbursement to the sector also declined YoY. As indicated earlier, COVID-19 has substantively
by 3.7% in FY2019-20, achieving 94.3% of the priority impacted the RMG sector, with reports of more than
sector lending disbursement target of BDT 24,124 crore. USD 3 billion in garment orders already standing
cancelled and shutdowns reported in many factories
with consequent layoffs. An estimated 3.5 million
Monetary policy stance Bangladeshis work in the country’s garments sector,
and around one million workers have been reportedly
Stable and supportive
laid-off. Exports are projected to contract by around 18
Bangladesh Bank, the country’s central bank, percent in FY2019-20 and further decline by 1 percent
announced an expansionary monetary policy stance in FY2020-21, as demand from major trade partners
for FY2020-21, accommodating growth-compatible remains weak amidst subdued global consumption
needs of the country, while attaining the targeted trends. The impact on the current account deficit in
inflation. The monetary policy stance is aligned with FY2019-20 is partially expected to be offset by the
the growth journey of Bangladesh’s economy, decline in energy prices and the slowdown in imports
considering the effects of the ongoing pandemic with the deficit projected at 2.2 percent of GDP. As the
challenges. Though facing several pandemic-induced domestic economy begins to recover, the current
challenges, Bangladesh will recover its economic account deficit is expected to significantly widen as a
growth path in FY2020-21, expecting continued percentage of GDP in FY2020-21.
remittance inflows and recovery in private sector credit
growth.
Trends in inflation
To achieve the targeted growth path, Bangladesh Bank
is expected to continue with its policy support, while Major stat:
the government has been providing the necessary
impetus through stimulus packages for pandemic-hit 5.3%
economic sectors like tourism and hospitality. Through Inflation in December 2020
policy relaxations, along with the low-cost refinance
schemes, Bangladesh Bank is expected to reach the
annual target of broad money (M2) growth by end of Headline CPI inflation (point-to-point) remained
June 2021, maintaining consistency with the recovery broadly stable over the last three years at around 5.60
of economic growth and containment of inflation in percent (average) till March 2020, while it crossed the
the coming months of FY2020-21. 6 percent level in November 2019 when the outbreak
of coronavirus came to light. Going forward, CPI
inflation became unstable after the detection of the

170 Annual Report 2020

first COVID-19 patient in Bangladesh in March 2020 BDT/USD exchange rate trend (%)
and gradually increased to 6.44 percent in October 6
2020, primarily on account of food inflation. Thereafter,
inflation started to demonstrate a declining trend: 5.52 5
percent in November 2020 and 5.29 percent in 4
December 2020.
3
Despite the bumper crop production in the last two
quarters of FY2019-20, both cereal and non-cereal food 2
product (especially rice and pulses) prices remained
1
elevated in recent months because of crop losses and
supply chain-related disruptions due to monsoonal 0

Aug-17

Dec-17

Apr-18

Aug-18

Dec-18

Apr-19

Aug-19

Dec-19

Apr-20

Aug-20

Dec-20
floods and COVID-19 related lockdowns. On the other
-1
hand, non-food inflation remained low during the
coronavirus pandemic primarily alluded to subdued
domestic demand.
Source: Bangladesh Bank
According to the MPS for FY21, a moderate and
tolerable single-digit average CPI inflation has been
projected. The central bank’s policy relaxations and
low-cost refinancing credit, along with the Select cross-country nominal exchange rate statistics
government's stimulus packages that injected huge (Base: January 2017=100)
liquidity in the economy may add to inflationary risks,
165
going forward.
150

135

120
Inflationary trends: Headline CPI inflation 105
(12-month average) and projections
90
Jul-18

Sep-18

Nov-18

Jan-19

Mar-19

May-19

Jul-20

Sep-20

Nov-20

Jan-20

Mar-20

May-20

Jul-20

Sep-20

Nov-20
10
9 Targets
8 (FY21-FY25) Bangladesh Pakistan (RHS)
7 India Sri Lanka
5.4 5.3 5.12 4.94
6 4.76 Indonesia Philippines
5
4
3 Source: International Financial Statistics, IMF
2
1
0
Balance of payments
FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

Major stat:
Source: Bangladesh Bureau of Statistics, Bangladesh Planning
Commission 4 USD bn
Current account balance, July-Nov 2020
Exchange rates
Deficit of the current account balance that persisted
Major stat: for the last 4 years witnessed a reversal with significant

0.5% surplus of USD 4.1 billion during July - November 2020.

Positive export growth along with negative import
BDT/USD exchange rate moderation in June 2020 growth contributed mostly to the surplus in the current
vs. 0.92% in June 2019 account balance. During the first five months of
FY2020-21 (July-November), total export earnings of
The nominal exchange rate of BDT/USD remained Bangladesh (USD 15.5 billion) posted a positive YoY
mostly stable with a moderate depreciating trend. YoY, growth of around 0.86 percent, compared to a
the exchange rate depreciated moderately from 0.47 negative 8.84 percent growth in the same period of
percent in June 2020 compared to 0.92 percent in June FY2019-20. During this period however, Bangladesh’s
2019. The depreciation rate, which exhibited a declining leading export product, readymade garments (RMG),
trend since October 2017, decreased gradually to 0.06 registered a 1.5 percent decline on account of slow
percent at the end of October 2020, but then export demand due to the global second wave of the
experienced marginal appreciation of 0.12 percent both pandemic.
in November and December 2020.

171
 Remittance While sufficient liquidity in the banking system to be
Major stat: aligned with the government's effort of implementing
stimulus packages to revive the economy from the
11% COVID-19 impact is critical, Bangladesh Bank slashed its
cash reserve ratio (CRR) by 150 basis points to 4 percent
Remittance inflow YoY growth in FY2019-20
in two steps during March-April 2020.
Moreover, the central bank also reduced bank rate from
During the first half of FY2020-21, inward remittances 5 percent to 4 percent in July 2020, which had been
witnessed a sharp growth of 37.6 percent, as compared remained untouched at 5 percent since 2003, bringing
to the same period of FY2019-20, mainly driven by it in line with the current interest rate regime in the
recent policy initiatives of 2 percent cash incentives on country. Further, the central bank also the lowered repo
inward remittance and relaxation of conditions for rate from 6 percent to 4.75 percent in three steps during
incentives, including an extension of document the March-July 2020 period, aiming at fostering easy
submission time to 2 months instead of 15 days. access for banks to lend more credit to priority sectors
during the pandemic period. Consequently, interest rate
Broad money (M2) developments in the call money market and interbank repo rate
continued to decline from 5.14 percent and 5.96 percent
Major stat:
in March 2020 to 2 percent and 0.70 percent in
14% November 2020, respectively.
Notably, weighted average retail interest rates also
YoY growth in M2 in November 2020
witnessed a significant decline both in lending and
deposits, following the ceiling of 9 percent lending rate
Growth of broad money (M2) was in line with the cap effective from 1 April 2020. Weighted average
December 2020 projections. M2 grew YoY by 13.99 lending and deposit rates declined from 5.51 percent
percent at the end of November 2020, against the and 9.58 percent in March 2020 to 4.64 percent and
target of 14 percent till December 2020, mainly 7.62 percent in November 2020, respectively.
impacted by net foreign assets growth, reflected in a
strong surge of inflows in remittances and foreign Policy and money market rate movements (%)
loans during the first five months of FY2020-21. Overall,
the growth rate of M2 is still below the annual target of
15.60 percent, yet is expected to reach this target by
end June 2021. 8

Private sector credit growth trend

(%; program vs. actual) 4

Repo
20 Reverse Repo
2
Call Money
18 Nov-2020 Inter-bank Repo

16 (8.21%)
0
Aug-16
Nov-16
Feb-17
May-17
Aug-17
Nov-17
Feb-18
May-18
Aug-18
Nov-18
Feb-19
May-19
Aug-19
Nov-19
Feb-20
May-20
Aug-20
Nov-20

14
12 Program
Program fro FY21
10
Actual
8
Source: Bangladesh Bank
Dec-14

Jun-15

Dec-15

Jun-16

Dec-16

Jun-17

Dec-17

Jun-18

Dec-18

Jun-19

Dec-19

Jun-20

Dec-20

Jun-21

Weighted average lending and deposit real interest rates

(%)
Source: Bangladesh Bank 5
4
3
2
Policy and interest rates 1
0
Major stat: -1
-2

150 bps
Apr-16

Sep-16

Feb-17

Jul-17

Dec-17

May-18

Oct-18

Mar-19

Aug-19

Jan-20

Jun-20

Nov-20

Cut in CRR to 4% Real deposit rate Real lending rate

Source: Bangladesh Bank

172 Annual Report 2020

Liquidity resources, stimulating equitable and balanced regional
Major stat: growth. In Bangladesh, financial inclusion has gained
rapid precedence over the last few years on account
1,952 USD bn of a large population on the one hand and
non-homogenous banking growth on the other. Today,
Total excess liquid assets at end November 2020 substantial hinterlands of the country are still out of
the reach of the formal financial system, with them
Liquidity in the banking system is broadly stable and having to depend on the usurious local moneylending
sufficiently adequate. The total excess liquid assets, system.
which was BDT 1,157 billion at the end of Q1FY16 had It should be noted that financial inclusion is a
been plummeting gradually and dropped to BDT 639 fundamental enabler of sustainable development and
billion at the end of Q3FY19. Excess liquidity started to economic growth. Access to financial services can
pick up since Q4FY19 and continued until Q2FY20, help eradicate poverty, improve individual well-being
attributed to the rising growth rate of bank deposits. and household welfare and spur entrepreneurship and
On account of the COVID-19 pandemic since March small enterprise activity. At the same time, economies
2020, the central bank has been easing monetary with increased financial access and intermediation to
policy stance and enhancing refinance schemes all tend to grow faster and have less income inequality.
against the government's stimulus packages that has As such, it sits at the heart of SDG#8 in promoting
helped further improve excess liquidity in the banking “Decent work and economic growth.”
system in Q4FY20. In recent years, Bangladesh has made significant
advances in economic and social development.
Forward outlook However, ensuring continued inclusive economic
growth remains a significant challenge. This is further
Poised for rapid recovery
compounded by the fact that close to 70 percent of
Looking forward, the government has set a 7.4 percent the country’s population still live in rural areas. Despite
real GDP growth target for FY2020-21, weighing on the success of NGO-led poverty alleviation and
rebound in the economic situation aided by continued microfinance programs, Bangladesh continues to lag
policy initiatives, such as stimulus packages, low-cost behind in global financial inclusion indicators. Further,
refinance schemes and policy relaxations, among formal financial institutions continue to be
others. Bangladesh economy has recovered faster, concentrated in urban areas and available financial
reflected in the sector-wise performance, for the first services are disproportionately skewed towards the
quarter of FY2020-21 amidst an adverse situation as middle and upper-middle class urban population.
the pandemic continues. Targets indicate that growth
However, the solution to this challenge has been the
will recover at a faster pace in FY2020-21 and will rise
growing development and acceptance of “Agent
gradually thereafter. The economy is likely to maintain
banking” as a quasi-bank model, which has been able
the targeted growth path with an expectation that a
to penetrate the countryside of Bangladesh, operating
second wave of the pandemic would not harm the
in conformance with regulatory rules and guidelines,
economy seriously, a view which yet remains
while also enabling banks whose agents are their
uncertain. Yet, advanced vaccination would have a
‘franchise partners’ to rapidly scale up in a
hugely positive impact on the domestic economy,
cost-efficient way. Further, harnessing ICTs and other
moving the needle on economic growth back to
digitally-enabled tools to deliver financial services also
pre-COVID-19 levels and even higher.
represents the platform needed to ensure holistic and
sustainable financial inclusion in the country and this is
Financial inclusion: Banking enablement best manifest in mobile financial services or MFS. It is
at the grassroots also to be noted that in Bangladesh, MFIs are the
Following the global financial crisis of 2008, dominant players in rural financial markets. The joint
policymakers have focused their attention on reducing liability-based targetted programs for poor households
financial risk and stabilising the financial system. have expedited resource mobilisation amongst
Among the various strategies, emphasis has been borrowers, enabling them to secure better lives and
placed on inclusive finance or financial inclusion. livelihoods.
Inclusive finance enables inclusive growth, enabling As per Bangladesh Bank’s statistics department, total
portfolio diversification and minimising risks for deposit balance under Agent banking stood at BDT
lenders on the one hand, while fostering economic 156,870 mn in December 2020, vs. BDT 75,430 mn in
opportunities for deprived/low-income households December 2019, constituting a growth of 108 percent
and micro and small enterprises on the other. during the period. Further, total inward remittance
Therefore, inclusive finance promotes growth through received via Agent banking stood at BDT 16,340 mn in
more investment and redistribution of financial December 2020 vs. BDT 9,230 mn in December 2019,

173
 showing a jump of 78 percent during the period. As DSEX (Dhaka Stock Exchange) and turnover trends
per the same source, all transactions conducted via
6500 30
mobile financial services (MFS) stood at over BDT
6000
2,995 lakh cr in December 2020 vs. 2,274 lakh crore in 5500
24

Bill on BDT
the corresponding month of the previous year, 18

Index
5000
representing a growth of about 32 percent over the 4500
12

period. The sharp growth in all metrics can be 4000

6

especially alluded to the increasing acceptance and 3500 6

Jul-19

Sep-19

Nov-19

Jan-20

Jun-20

Aug-20

Oct-20

Dec-20
public trust being built into these platforms, also on the
back of strong regulatory governance and oversight. Turnover (RHS) DSEX index (RHS)

Source: Dhaka Stock Exchange

The bellwether indicator of the capital market, the

Growth of Agent banking in Bangladesh
DSEX, declined by 26.9 percent YoY in June 2020, as
investor fear heightened during the last quarter of
Use of agent banking growing FY2019-20 that economy may run aground and
In crore BDT; source: BB
worsen further by the COVID-19 pandemic. Yet, with
July 2019-20 July 2020-21
easing of fears and concerns and resilient
7,661,508
4,027,689

macroeconomic bounce-back evidenced in recovery

10,788.2

11,305,9
28,415.3
5,251.3

3,327.9
of most headline indicators post lockdown release
637.1
94.9
29.7

75.9
93.7

caused the DSEX to grow by 21.31 percent YoY in

December 2020. Consequently, the daily average
Deposit
balance

Number of
transactions

Volume of
transactions

Loan
disbursement

Utility bill
payments

Remittance

turnover picked up significantly to BDT 8.2 bn at the

end of December 2020, from BDT 3.8 bn at the end of
June 2020.
The DSE market capitalisation steadily galloped to 14.1
AGENTS, OUTLETS percent of GDP in December 2020, vs. 11.2 percent in
AND ACCOUNTS June 2020. Yet, it is low as compared to peer countries
SOURCE: BB
such as India, the Philippines and Sri Lanka, thus
2,273,396

July 2019-20
1,257,930

reflecting scope for growth.

July 2020-21
7,685,990
3,575,659
3,369,654
4,162,122

It is anticipated that the Bangladesh Securities

154,214
44,333
12,861
8,875

Exchange Commission (BSEC), merchant banks and

9,180
6,213

stock exchanges may consider appropriate measures

Male accounts
Agents

Other accounts
Outlets

Female accounts

Total accounts

to enhance the number of companies with strong

fundamentals, especially profitable state-owned and
multinational companies, to enhance the depth of the
market capitalisation. The new commission of BSEC
has already taken special attention for faster approval
Source: Bangladesh Bank of the initial public offerings (IPO) process in the capital
market.
Capital markets performance
The downward movement of share prices and trade Synchronisation of DSEX with global markets
volumes with some degrees of volatility continued in (base: January 2015=100)
the capital markets during FY2019-20, compared to 140
FY2018-19 due to investors' disquiet stemming
130
primarily from the COVID-19 pandemic. However, the
country’s capital market experienced some 120

improvements during the first half of FY2020-21, led by 110

the favourable and well-timed policy support of 100
Bangladesh Bank and other regulatory bodies, as
90
reflected in increased price indices, turnover and
market capitalisation. 80

70
Nov-19

Dec-19

Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

MSCI Emerging Markets index DSEX

Source: Dhaka Stock Exchange, www.msci.com

174 Annual Report 2020

The synchronised movements between the global public expenditure and social safety net coverage. To
equity market and DSE were observed for the last further supplement this, the Government also
several years due to increase in trade and financial announced a new stimulus package especially for
integration and global portfolio participation on the small businesses and low-income communities in
DSE. In response to the COVID-19 outbreak, many January 2021 to the extent of around BDT 27 bn. Most
central banks adopted unprecedented easy monetary of this stimulus fund will be channelled via the
and prudent financial policies, and the global capital country’s banking system.
market started to recover. Likewise, the Bangladesh
Thus, considering the crisis and the need to transition
capital market started to recover since June 2020 too,
to the interest rate target-based policy framework,
especially with government largesse to mitigate and
Bangladesh Bank proposed that its bank rate be
moderate the severe impact of the coronavirus crises
lowered for the first time in 17 years to 4 percent from
on various segments of the economy.
5 percent, as part of its expansionary policy stance,
Thus, to improve the liquidity condition in the capital according to its monetary policy statement for fiscal
market, Bangladesh Bank and other regulatory bodies year 2020-21. The central bank also proposed to cut its
adopted several initiatives, including: overnight repo rate by 50 basis points to 4.75 percent
l Guiding all scheduled banks to create a special and its reverse repo rate by 75 basis points to 4
investment fund of BDT 2 bn for investment in the percent, in a bid to ensure sufficient less-costly funds
stock market, in addition to banks’ stock market for banks and rationalise the policy rates' corridor.
exposure limits Thus, a benign interest rate environment is anticipated,
even as inflationary pressures are expected to remain
l Allowing banks to avail financial support from the under control for now.
central bank through long-term repo
The central bank had also introduced a loan
l Approving BSEC’s Investment Corporation of moratorium facility in March 2020 in response to the
Bangladesh’s (ICB) BDT 20 bn fund for capital COVID-19 outbreak. The facility was initially up until
market investment June 30, 2020, but was extended to the end of
l Announced (via Budget FY2020-21) that the December 2020. It has since been lifted by
Government allowed the investment of Bangladesh Bank, and this will help restore
undisclosed money in the capital market without transparency and credit discipline in the banking
any question from any agencies after paying 10 system, while also reducing any sudden surge in NPLs.
percent tax Hence, with lifting of moratorium guidelines, in
Going forward, in response to the COVID-19 crisis, December 2020, the central bank imposed an
Bangladesh Bank took an unprecedented easy additional 1 percent general provision against all
monetary and prudent financial policy, which will help unclassified loans, targetting to improve the financial
to increase liquidity and depth in the capital market health of banks and financial institutions, along with
and impact the market positively over the long-term. their shock-absorbing capacity. Under the new policy
regulations, all scheduled banks will need to keep the
Financial review additional provision against unclassified loans,
including special mention account loans, under
The financial year 2020 was perhaps one of the 'Special General Provision-COVID-19' that will not be
toughest periods for Bangladesh’s economy. The transferable until directed otherwise by the central
onset of the coronavirus pandemic, which had a bank. Besides, banks also have to comply with existing
confounding impact on several key sectors such as regulations on provisioning against all types of loans,
trade and commerce, manufacturing and industry, including 0.25-2 percent provisions against loans
services, tourism and travel, also had a cascading under the general category, 20 percent against
negative impact on employment, income and substandard category, 50 percent against doubtful
consumerism, weakening the economy considerably loans and 100 percent against bad or loss category.
in the first and second quarters of 2020 when the
lockdowns were first announced in the country to The banking industry, a key source of funding for
counter peak pandemic. many businesses in Bangladesh, too was affected due
to this downward spiral. The sector remained under
With a view to counter the major threats of the stress due to poor credit demand and higher
coronavirus, the Government focused on softening non-performing loans (NPLs). Yet, even amidst this
the blow through unveiling a massive stimulus chaos, City Bank mobilised all its experience, wisdom
package. The total amount of financial assistance and good judgement to build the necessary resilience
would stand at BDT 727,500 mn, representing nearly to turn in an admirable performance in 2020, given the
2.52 percent of the country’s GDP and comprising adverse conditions that prevailed. We navigated the
several packages targetted at emergency assistance, year in a manner that the outcome reaffirms the

175
 robust and enduring foundations that we have reduction in credit demand experienced in the market
nurtured over the years. right throughout the pandemic period. It also reflected
the bank's conscious decision to maintain a cautious
A description of the major financial metrics is provided
lending approach in the interest of safeguarding credit
below.
quality.
Gross income: The gross income (interest
Deposits: City Bank’s total deposits stood at BDT 254.8
income/profit on investments) of the bank declined to
bn as on 31st December 2020, as compared with BDT
BDT 23,134 mn in 2020 from BDT 26,819 mn in 2019, a
246.7 bn as on 31st December 2019. This restrained
deceleration of 13.7 percent, with loss of YoY revenue
growth was on account of the fact that systemic
largely attributed to the regulatory changes of interest
liquidity remained relatively high at the bank.
rate on loans and pandemic-related disruptions.
Advance-to-deposit (ADR) ratio stood at 74.5% percent
Net interest income (NII): NII declined to BDT 8,363 in 2020, vs. 79.1% percent in 2019.
mn in 2020 from BDT 10,832 mn in 2019, a fall of 29.5
Cost-to-income: City Bank’s cost-to-income ratio
percent. This deceleration was account of sharper
stood at 57.9% in 2020, as compared with 54.7% in
slowdown in gross income vs. a slower decline in
2019 (58.0% in 2018), reflecting restriction of total
interest paid/profit shared on deposits and borrowings
operating expenses. Going forward, the bank will
of 7.6 percent for the year.
continue to identify opportunities for cost moderation,
Other income sources: Investment income; attuned to the realities of the current environment.
commission, exchange and brokerage; and other
ROE and ROA: Sharper growth in profitability during
operating income constitute the rest of the income
the year under review was one of the primary reasons
pool. Together, these stood at BDT 8,373 mn in 2020,
contributing to a respectable ROE and ROA, which
as compared to BDT 7,453 mn in 2020, attributed to
stood at 14.8 percent and 1.1 percent, respectively for
increase in investment income.
the year.
Overall income: Total operating income stood at BDT
Dividend: One of the key objectives of the bank is to
16,737 mn in 2020, vs. BDT 18,285 mn in 2019,
continue to position the business to the external
constituting a YoY decline of 8.5 percent.
operating context and remain on the path of
Operating expenses: The bank did well to control its sustainable value creation for shareholders. Despite
operating expenses, which declined to BDT 9,697 mn the year 2020 being one of the most challenging
in 2020 from BDT 9,998 mn in 2019, constituting a periods in the bank’s history on account of the
moderation of 3 percent YoY. The operating expenses coronavirus pandemic, we rapidly re-pivoted the
decline was primarily triggered by lower rent, business and remained committed to our dividend
insurance and electricity charges as well as other philosophy, manifest in the bank declaring a cash
expenses, reflecting lower variable costs as well as dividend of 17.5 percent and stock dividend of 5.0%
successful rental renegotiations, etc. percent for the year 2020, vs. 15 percent cash dividend
in 2019. Notably, City Bank’s dividend declaration for
Taxation: City Bank’s total tax provisions declined to
the year is at the highest band as per Bangladesh
BDT 2,383 mn in 2020 from BDT 3,260 mn in 2019,
Bank’s regulations. This not only reflects the bank’s
reflecting lower provisions for both current tax and
robust capital levels (CRAR of 15.5% on standalone
deferred tax expenses.
basis), but also testifies the management’s robust
Profitability: The bank’s net profit increased to BDT forward outlook.
4,012 mn in 2020, against BDT 2,472 mn in 2019,
Overall, City Bank achieved respectable operational
representing a YoY growth of 62.3 percent. This was
and financial performance and strategic progress
primarily on account of release of provisions (BDT
during 2020 in a very difficult macroeconomic
644.3 mn in 2020 vs. BDT 2,555.8 mn in 2019) as per
environment. Looking forward, though the
regulatory guidelines.
environment remains uncertain as the financial
Earnings per share (EPS): EPS increased to BDT 3.9 in implications of the COVID-19 pandemic are still to
2020, as compared to BDT 2.4 in 2019, attributed to evolve, we believe that our strong foundations,
expansion in profitability. growing emphasis on digital banking, robust balance
sheet and cautious approach to lending will enable us
Total assets: The total assets rose to BDT 3.8 bn in
to ride over the crises and emerge stronger on the
2020, against 3.6 bn in 2019. The growth of 6 percent
other side of the pandemic.
can be mainly attributed to growth in net loans and
advances. Financial reporting
Loan and advances: Loans and advances stood at The Directors of the bank confirm compliance with the
BDT 268.2 bn as on 31st December 2020, vs. BDT 246.9 financial reporting framework for the following:
bn as on 31st December 2019, on account of a drastic

176 Annual Report 2020

l The financial statements, prepared by the Honorarium paid to Directors including
management of City Bank make a fair presentation Independent Directors
of its activities, operational details and results, cash
flow information and changes in equity structure. Honorarium paid to directors including independent
directors for attending meeting according to
l Proper books of account as required by law have Bangladesh Bank's BRPD Circular No 11/2015 is shown
been maintained by City Bank. in note no. 37 of the financial statements
l Appropriate accounting policies, including Segment-wise or Product-wise
International Accounting Standards (IAS). performance
Bangladesh Accounting Standards (BAS)/
International Financial Reporting Standards (IFRS)/ Our business segments and their performances
Bangladesh Financial Reporting Standards (BFRS), during 2020 has been thoroughly discussed in the
as applicable in Bangladesh, have been ‘Segmental Performance’ section of the report.
consistently applied in preparation of the financial
statements. Any change or deviation has been Shareholding pattern of the bank
adequately disclosed.
Shares held by directors and ownership composition
l Accounting estimates and underlying
assumptions are made on reasonable ground and Information is provided in Corporate Governance
prudent judgment and are reviewed on an section
ongoing basis. Shares held by CEO, CFO, Company Secretary and
l Being responsible for preparation and fair Head of Internal control & compliance and their
presentation of the financial statements, the spouses
management of the bank asserts that the financial Information is provided in Corporate Governance
statements prepared by the management as at section
and for the year ended 31 December, 2020 present
fairly, in all material respects, its state of affairs, the Shares held by top-5 salaried executives of the bank
results of its operations, cash flows and changes in Information is provided in Corporate Governance
equity. section
l No significant doubt exists upon the Company’s There is no shareholder in the bank who is holding
liability to continue as a going concern. City Bank 10% or more voting interest in City Bank. Hence, the
has neither intention nor the need to liquidate or corresponding BSEC rule does not apply.
curtail materially the scale of its operations. Hence,
the financial statements of the bank have been
Declaration and Distribution of Dividend
prepared on the assumption that the bank is a
going concern and will continue in operation for Dividend declaration and distribution are made
the foreseeable future. according to board approved bank’s dividend policy,
which is aligned with prevailing rules and regulation.
Attendance in the Board Meeting in 2020 Bank’s dividend policy is disclosed in its website and it
can be visited through clicking the link
During the year 2020, a total of 15 Board Meetings https://www.thecitybank.com/investor-relation
were held and detailed information of that is provided
in Corporate Governance section.
Related party transactions
The bank in its ordinary course of business undertook
Attendance in the Board’s Audit Committee Meeting
financial transactions with some entities or persons
in 2020
that fall within the definition of ‘Related Party’ as
During the year 2020, 7 Audit Committee Meetings contained in IAS 24 (Related Party Disclosures) and
were held and detailed information of that is provided relevant provisions of Bank Company Act, 1991 and
in Corporate Governance section. Bangladesh Bank BRPD Circular No. 14 dated 25 June,
2003. As on the reporting date, the bank had funded
and non-funded exposures with its subsidiaries,
Attendance in the Board’s Risk Management non-funded exposures to some current and
Committee Meeting in 2020 ex-directors and credit card limit to some of its
During the year 2020, 4 BRMC Meetings were held Directors. Besides, the bank had procured some goods
and detailed information of that is provided in and services from the entities of related party (ies)
Corporate Governance section. during 2020. Please refer to note 50% Related Party
Disclosures of financial statements for details of the
transactions.

177
 Protection of interest of minority The Board has the overall responsibility for the
shareholders and effective means of establishment and oversight of the bank’s risk
management framework.
redress
The bank is operated in accordance with the Articles
of Association and all applicable laws and regulations Contributions to national growth and
of the land to ensure the greater interest of all development
shareholders of the bank. The bank is committed to
sound governance practices based on integrity, As a bank that is closely integrated with the
openness, fairness, professionalism and accountability developmental journey of Bangladesh, City Bank has
in building confidence among stakeholders. placed honest focus on making sustainable
contributions to the country’s growth and
However, any complaint received at AGM or development. The bank recognises its public
throughout the year, from any shareholders, is responsibility of fulfilling its obligations to assist the
resolved lawfully in time. Government in meeting certain key objectives,
including those centered on reducing social inequality,
infrastructure development, etc.
Risk management Going forward, City Bank will uphold its responsibility
City Bank’s Board recognises the importance of and reputation as a key partner of the Government in
ongoing identification and management of risk in achieving public welfare objectives.
order to build and maintain the bank’s sound financial
and reputational condition.
Acknowledgements
Risk is an inherent component of City Bank’s activities.
The ability to effectively identify, assess, measure, After a few challenging years for City Bank, the Board
respond, monitor and report on risk in activities is was most encouraged by the turnaround in
critical to the achievement of the bank’s mission and performance in 2020, and I express my heartfelt
strategic objectives and is a core part of the bank’s risk appreciation and compliments to our MD & CEO, CFO,
governance framework. and the other members of the executive team for their
outstanding performance, fortitude and leadership.
Such a holistic risk management approach reflects the
Our Non-Executive Directors provide invaluable
bank’s values, influences organisational culture and
independent insight and guidance across strategic,
guides day-to-day as well as strategic operations. It is
governance and commercial issues and I thank each
captured in policy statements, Board and
of them for their strategic contributions.
management directives, operating procedures and
training programmes, while also being demonstrated Thank you to our shareholders for your conviction in
in daily activities by the management and employees. our investment case, and we warmly welcome those
who invested for the first time during the year.
At City Bank, enterprise risk management is a set of
structured and consistent risk management processes To our broader stakeholders, including our staff,
that are applied across the bank. This programme customers, suppliers, industry regulators and
helps identify, assess and prioritise and provides a communities, thank you for your support, interest and
formal structure for ensuring that internal and external engagement with City Bank.
risks that impact the organisation are adequately I seek your continued support in 2021, in what will be a
identified, controlled and documented for future challenging year.
reference.
Kind regards,
Further, as part of our risk governance framework, the
enterprise risk management program is structured
around a formal approach that is aligned with the
bank’s profile and strategic objectives. Moreover, it also
produces various risk mitigation activities within the Aziz Al Kaiser
business units. The resulting strategic, financial and Chairman
operational risk mitigation activities that have been
implemented reinforce the bank’s operations and
sustainability, thus reducing the potential for
unexpected losses and assisting in managing volatility
better.

178 Annual Report 2020

Economic impact report

This section refers to the value creation processes that Maintaining capital adequacy
the bank has incorporated within to ensure balance in Capital to Risk Weighted Assets Ratio (CRAR) is the
meeting stakeholder’s expectations. City Bank creates measure of the financial strength and sustainability of a
value through provision of financial services in line with bank. It limits the extent up to which banks can expand
its vision, ‘The Financial Supermarket with a Winning their business in terms of risk weighted assets. Bank's
Culture Offering Enjoyable Experiences.’ Considering capital is the ‘cushion’ for potential losses, which
the keen sense of changing market dynamics, the bank protects the bank's depositors or other borrowers. Thus,
aligns its own systems, processes and procedures to capital management is considered as an integral part of
check, verify and validate the value creation process. risk management of the bank. In this regard,
The bank conducts its business in a transparent and Bangladesh Bank uses CRAR as a mechanism to protect
ethical manner in line with the best industry practices, depositors and enhance confidence in the banking
while being fair to every stakeholder. The bank is system. Regulatory capital requirements are therefore
mindful of the need to add value on a sustainable basis necessary to limit operations of banks to prevent
to all stakeholders in its value creation process. It has not overtrading. At the same time, banks can leverage their
been a case of building financial value and enhancing growth to improve the return on assets. Therefore,
the bottom line at any cost for the bank, but maintaining a healthy CRAR would ensure a stable and
participating in a process of creating sustainable value sound banking industry, which undoubtedly
through fair and ethical means. contributes to the growth of the economy.

Some of the measures taken to create, sustain and Please refer to Notes to the Accounts Point 17.5.a on
deliver value are as follows: page 293 (Capital Adequacy Ratio-The City Bank
Limited) for the capital adequacy computation of The
City Bank Limited as at 31 December, 2020.

Value Added Statement

Value Added is the wealth accretion made by City Bank. through providing banking and other financial services in
2020 for its employees, government and shareholders in the form of salaries & allowances, duties & taxes and net
profit after tax respectively and also indicates value of use of fixed assets through depreciation.
BDT mn
Particulars 2020 % 2019 %

Income from Banking Services 31,506 34,272

Less: Cost of Services and Supplies (18,076) (19,662)
Value Added by the Banking Services 13,430 14,610
Non-Banking Income 2 -
Loan Written off and Provision (644) (2,556)
Total operating income 12,788 12,054
Distribution of Value Addition
To Employees as Salaries & Allowances 5,265 41.2% 5,266 43.7%
To Shareholders 4,012 31.4% 2,472 20.5%
To Govt. as Income Tax 2,383 18.6% 3,260 27.0%
Depreciation 1,127 8.8% 1,057 8.8%
12,788 100.0% 12,054 100.0%

179
 Value distribution - %

8.8% 8.8%

18.6% 27.0%
43.7%
41.2%
2020 2019

31.4% 20.5%

To Employees as Salaries & Allowances

To Shareholders
To Govt. as Income Tax
Depreciation

Economic Value Added Statement

Economic Value Added (EVA) is the measure of financial performance of an organisation. It is based on the principle
that since a company's management employs equity capital to earn a profit, it must pay for the use of this equity
capital. This management tool is useful to shareholders in particular and other stakeholders in general to take
decision for increasing value.
EVA is equal to profit after tax plus the provision for loans and other assets less written off during the year minus cost
of equity where cost of equity is the opportunity cost that the shareholders forego. This cost of equity is calculated
considering risk-free rate based on weighted average rate of 20 Years Treasury Bills/bonds issued by Bangladesh
Government plus 2% risk premium. City Bank’s management is focused on maximising value creation for
shareholders and other equity providers.
BDT mn

Particulars 2020 2019

Shareholders' Equity 28,818 25,416

Add: Provision for Loans and Advances 10,295 11,101
39,113 36,517
Average Shareholders' Equity 37,815 34,956

Earnings
Profit after Tax 4,012 2,472
Add: Provision for Loans and Others 644 2,556
4,656 5,027

Average cost of equity (based on weighted average

rate of 20 Years Treasury Bills/bonds issued by the 10.13% 11.14%
Bangladesh Government plus 2% risk premium) 3,831 3,894

Economic Value Added 826 1,133

180 Annual Report 2020

Remunerative dividend policy Our policy is to carry a positive mismatch primarily in
The bank continued to pay a substantial dividend to its 1-30 days’ category in interest earning assets and
shareholders while ploughing back sufficient profits to interest bearing liabilities. Our liquidity remained at
augment the funding needs and capital adequacy optimum levels during the year. The statutory liquidity
requirements. The bank is careful of the need to strike ratio stood at 14.59% (required 13.0% of total demand &
a reasonable balance between these aspects in time deposits) in December 2020.
maintaining sustainable growth, commensurate with
the risks undertaken by its investors. This prudent
dividend policy has contributed in building the bank's Optimum utilisation of resources
shareholders' funds to the present level and it is The bank is mindful of mobilising the scarce resources
considered as one of the major funding sources of the such as capital, deposits and borrowings at attractive
Bank's expansion. terms. The bank is vigilant in mobilising the resources
in the most cost efficient manner and is cognisant of
Considering the performance of the bank over the
the need for prudent investment of funds for the
past year, the Board of Directors has recommended
improvement of profitability. Hence, it carefully
17.5% cash dividend and 5.0% stock dividend for the
analyses the lending propositions and makes sure
year 2020.
follow up action is in place before disbursement of
funds.

Maintaining satisfactory liquidity Cost/income ratio reported by the bank, which is one
The bank maintains liquid assets to carry out the of the lowest among any local commercial bank,
day-to-day operations and fulfil the statutory testifies the optimum utilisation of resources. The
requirements imposed by the regulator. The Asset and Bank's shareholders' equity stood at BDT 28,818 mn as
Liabilities Committee of the bank (ALCO) monitors the at 31 December, 2020, mainly due to the initiatives
situation carefully and provides direction to maintain taken, such as prudent dividend policy, tax planning
an optimum trade-off between liquidity and and controlled capital and revenue expenditure over
profitability. the years.

Market Value Added Statement

Market Value Added Statement reflects a company's performance evaluated by the market through the share price.
This amount is derived from the difference between market capitalisation and book value of shares outstanding. It
signifies the enhancement of financial solvency as perceived by the market.
BDT mn
Particulars 2020 2019

No. of Shares Outstanding 1,016,386,661 1,016,386,661

Market Value Per Share (BDT) 24.80 21.10
Face Value Per Share (BDT) 10.00 10.00
Total Market Capitalisation 25,206 21,446
Book Value of Paid Up Capital 10,164 10,164
Market Value Added 15,043 11,282

Financial goals and performance BDT mn

2020 2019
Particulars
Goals Achievement Goals Achievement

Loans and advances 292,394 268,202 289,612 246,944

Deposits 292,154 254,781 252,859 246,704
Capital Adequacy Ratio 13.5% 15.5% 12.5% 15.2%
% of NPL 4.8% 4.0% 5.1% 5.8%
Profit after tax 4,000 4,012 3,902 2,472
Cost to income ratio 55.1% 57.9% 52.7% 54.7%
Return on Assets (ROA) 1.1% 1.1% 1.1% 0.7%
Return on Equity (ROE) 14.7% 14.8% 15.1% 9.9%

181
 Shareholders’ information

Stock details

Particulars Dhaka Stock Exchange (DSE) Chittagong Stock Exchange (CSE)

Stock Symbol CITYBANK CTBNK
Company Code 11102 22006
Listing Year 1986 1995
Market Lot 1 1
Market Category A A
Electronic Share Yes Yes

Distribution of shareholders

Status
Composition
No. of shares % of total shares

Directors/Sponsors 3,373,587,370 33.19%

Institutions 2,367,005,690 23.29%
Foreign Shareholders 434,550,900 4.28%
General Public 3,988,722,650 39.24%
Total 1,016,386,661 100.00%
As of 31 December, 2020

Classification of shareholders by holding

2020 2019
Particulars No. of No. of % of No. of % of
shareholders shares total holding shareholders total holding

01 - 500 shares 16,379 2,314,080 0.23% 17,740 0.25%

501 - 5,000 shares 10,878 20,219,751 1.99% 11,683 2.10%
5,001 - 10,000 shares 1,959 14,275,521 1.40% 2,109 1.47%
10,001 - 20,000 shares 1,177 16,898,403 1.66% 1,340 1.84%
20,001 - 30,000 shares 443 10,974,793 1.08% 470 1.13%
30,001 - 40,000 shares 202 7,117,326 0.70% 224 0.77%
40,001 - 50,000 shares 160 7,423,832 0.73% 153 0.69%
50,001 - 100,000 shares 280 20,414,973 2.01% 292 2.04%
100,001 - 1,000,000 shares 349 106,668,927 10.49% 395 11.46%
Over 1,000,000 shares 128 810,079,055 79.70% 134 78.26%
Total 31,955 1,016,386,661 100.00% 34,540 100.00%

182 Annual Report 2020

Exchange listing/Share trading The Bank’s market capitalisation at 31 December, 2020
The issued ordinary shares of The City bank Limited are was BDT 25,206 m which is 4.4% of total Banking sector’s
listed with Dhaka Stock Exchange Limited and Market Capitalisation of DSE.
Chittagong Stock Exchange Limited as a publicly traded (Banking Industry holds 14.5% of the total market
company. The audited Income Statement for the year capitalisation).
ended 31 December, 2020 and the audited Balance (Source of information: Monthly Review of December,
Sheet of the Bank as at 31 December, 2020 have been 2020).
submitted to the Dhaka Stock Exchange & Chittagong
Stock Exchange with in the permitted time frame. Stock
exchange code for The City Bank Limited shares is
“CITYBANK” Market price of shares of The City Bank
Limited in Dhaka Stock Exchange was BDT 24.8 on close
of the business of the 31 December, 2020.

Market price information of The City Bank share BDT

DSE CSE Total Volume
Month on DSE & CSE
Total Volume Total Volume
Month High Month Low Month High Month Low
(Number) (Number)
Jan-20 20.60 16.70 48,860,134 20.00 16.70 1,075,042 49,935,176
Feb-20 20.90 17.30 35,917,782 20.90 17.30 817,497 36,735,279
Mar-20 19.40 15.00 20,835,429 18.70 15.00 525,282 21,360,711
Apr-20 Market closed due to general holiday
May-20 18.70 15.00 329,077 17.90 15.00 4,755 333,832
Jun-20 16.70 16.20 5,324,393 16.70 16.20 361,312 5,685,705
Jul-20 17.40 16.20 10,611,383 17.30 16.20 521,407 11,132,790
Aug-20 22.90 16.20 64,815,866 22.90 16.20 1,825,474 66,641,340
Sep-20 26.00 21.40 92,115,261 25.80 21.10 2,265,157 94,380,418
Oct-20 26.00 23.70 35,784,052 25.90 23.70 1,864,016 37,648,068
Nov-20 25.40 24.00 39,884,171 25.40 24.20 667,242 40,551,413
Dec-20 26.40 24.00 71,131,702 26.20 24.10 2,248,496 73,380,198
Source: DSE Monthly Review & CSE Bazaar Porikrama

DSE Price Volume Chart for The City Bank Ltd., 2020

Volume ('000) Close Price

30 14,000

25 12,000

10,000
20
Price (BDT)

Volume

8,000
15
6,000
10
4,000

5 2,000

0 0

Source : DSE & CBL Research

Dividend declaration & distribution

38th Annual General Meeting Notice date 22 Mar 21
Proposed 17.50% Cash and 5.00% stock dividends in respect of FY 2020 Record date 13 Apr 21
38th Annual General Meeting To be held on 19 May 21

183
 Taxation on dividend income Since stock dividend is out of the loop of withholding tax
Stock dividend is tax exempted. In case of cash dividend, deduction, its effective rate of return is much higher than
following is the current deduction of tax at source on cash dividend.
dividend income as per current fiscal act:
l If the shareholder is a company, either resident or Taxation arising from capital gain
non-resident, at the rate applicable to the company Capital gain arising from transfer or sale of Government
i.e. 20% securities is tax exempted. Capital gain arising from
l If the shareholder is a resident or non-resident transfer or sale of stocks and shares of public companies
Bangladeshi person, other than company, at the rate listed with stock exchanges is taxable at the rate of 10%.
of 10% (ten percent) if the recipient furnishes his
12-digit TIN Certificate, if not 15% is applicable
l If the shareholder is a non-resident (other than
Bangladeshi) person, other than company, at the rate
of 30%

Financial calendar for quarterly results

Particulars Submission Date to BSEC

Audited Consolidated Results for the 4th quarter ended 31 December, 2020 31 Mar 21
Unaudited Consolidated financials for the 1st quarter ended 31 March, 2020 8 Jul 20
Unaudited Consolidated financials for the 2nd quarter and half year ended 30 June, 2020 30 Jul 20
Unaudited Consolidated financials for the 3rd quarter ended 30 September, 2020 30 Oct 20

184 Annual Report 2020

Segment analysis

BDT mn
2020 2019
Consumer & Consumer &
Particulars Commercial Banking Offshore Total Commercial Banking Offshore Total
Conventional Islamic Conventional Islamic

Total operating profit (profit before

unallocated expenses and tax) 16,127 297 314 16,737 17,791 240 253 18,285
Allocated expenses (9,614) (58) (26) (9,697) (9,924) (62) (12) (9,998)
Provision against loans and advances (257) (41) (87) (384) (2,658) (33) 106 (2,585)
Provision against off-balance sheet exposures (149) (22) - (170) 3 - (45) (41)
Other provision (89) - - (89) 71 - - 71
Profit before tax 6,019 175 201 6,395 5,283 145 304 5,731
Provision for taxation (2,383) (3,260)
Net profit 4,012 2,472
Segment assets 328,413 17,293 37,220 382,926 317,732 8,377 28,580 354,689
Segment liabilities 328,413 17,293 37,220 382,926 317,732 8,377 28,580 354,689

2020 2019
Particulars
Conventional Islamic Offshore Conventional Islamic Offshore
Segment analysis of Revenue 2020 96.3% 1.8% 1.9% 97.3% 1.3% 1.4%

Segment analysis of Revenue

1.8% 1.9% 1.3% 1.4%

Offshore Offshore
2020 Conventional 2019 Conventional
Islamic Islamic

96.3% 97.3%

2020 2019
Particulars
Conventional Islamic Offshore Conventional Islamic Offshore
Segment analysis of Asset 2020 85.8% 4.5% 9.7% 89.6% 2.4% 8.1%

Segment analysis of Asset

9.7% 8.1%
4.5% 2.4%

2020 Offshore 2019 Offshore

Conventional Conventional
Islamic Islamic
85.8% 89.6%

185
 Directors’ responsibility statement

The Board of Directors is appointed to act for and on behalf of the shareholders to oversee the day to day affairs of
the business. The Board is directly accountable to the shareholders and each year the company will hold an Annual
General Meeting (AGM), at which the directors must provide a report to the shareholders on the performance of the
company, what its future plans and strategies are and also submit themselves for re-election to the board.
The report of the Company’s affairs and the Audited Financial Statements duly certified by is generally to be laid
down before the Annual General Meeting for discussion. In preparing the Annual Report, the Board of Directors is
required to ensure that:
l Financial statements of the Bank present a true and fair view of the state of affairs, the result of its operation,
cashflows and changes in equity
l Proper books of accounts have been maintained as required by relevant laws
l Appropriate accounting policies have been consistently applied in preparation of the financial statements
and that the accounting estimates are based on reasonable and prudent judgments
l International accounting standards, as applicable in Bangladesh, have been followed in preparation of the
financial statements
l The internal control system is sound in design and effectively implemented and monitored
l There are no significant doubts upon the bank’s ability to continue as a going concern
l Key operating and financial data of the preceding 5 years- please refer to ‘Historical Performance’ on page
88
l Proposed 17.5% cash and 5.0% stock dividend for the year 2020
l Number of Board meetings held during the year and attendance by each director please refer to ‘Corporate
Governance’ section on page 188
l Shareholding patterns of the Bank:
- Parent/subsidiary/ associated companies and other related parties – not applicable
- Shares held by directors, CEO, CFO, Company Secretary, Head of ICC and their spouses and minor
children
l Please refer to ‘Corporate Governance’ section on page 188
The Directors to the best of their knowledge and belief are satisfied to perform the related responsibilities of the
Board of Directors guided by the Companies Act, 1994, The Bank Company Act, 1991, Guidelines issued by the
Bangladesh Bank and Bangladesh Securities and Exchange Commission.

Aziz Al Kaiser
Chairman
On behalf of Board of Directors

186 Annual Report 2020

Report of the
Managing Director & CEO
and the Chief Financial Officer
Date : March 24, 2021

The Board of Directors

The City Bank Limited
City Bank Centre
136, Gulshan Avenue, Gulshan-2
Dhaka - 1212, Bangladesh
Subject: Declaration by CEO & CFO on Financial Statements for the year ended on 31 December, 2020
Dear Sir(s),
Pursuant to the condition No. 1(5) (xxvi) imposed vide the Commission’s Notification No: BSEC / CMRRCD / 2006-158
/ 207 / Admin / 80, Dated 10 June, 2018 under section 2CC of the Securities and Exchange Ordinance, 1969, we do
hereby declare that:
(1) The Financial Statements of The City Bank Limited for the year ended on 31 December, 2020 have been
prepared in compliance with International Accounting Standards (IAS) or International Financial Reporting
Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately
disclosed;
(2) The estimates and judgments related to the financial statements were made on a prudent and reasonable
basis, in order for the financial statements to reveal a true and fair view;
(3) The form and substance of transactions and the Company’s state of affairs have been reasonably and fairly
presented in its financial statements;
(4) To ensure above, the Company has taken proper and adequate care in installing a system of internal control
and maintenance of accounting records;
(5) Our internal auditors have conducted periodic audits to provide reasonable assurance that the established
policies and procedures of the Company were consistently followed;
(6) The management’s use of the going concern basis of accounting in preparing the financial statements is
appropriate and there exists no material uncertainty related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern.

In this regard, we also certify that:

(i) We have reviewed the financial statements for the year ended on 31 December, 2020 and that to the best of
our knowledge and belief:
(a) These statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;
(b) These statements collectively present true and fair view of the Company’s affairs and are in compliance
with existing accounting standards and applicable laws.
(ii) There are, to the best of knowledge and belief, no transactions entered into by the Company during the year
which are fraudulent, illegal or in violation of the code of conduct for the company’s Board of Directors or its
members.
Sincerely yours,

Mashrur Arefin Md. Mahbubur Rahman

Managing Director & Deputy Managing Director &
Chief Executive Officer Chief Financial Officer

187
 Corporate Governance Report

At City Bank, corporate governance is the system of However, the Bank’s corporate governance philosophy
principles, policies, procedures and clearly stated encompasses not only regulatory and legal
responsibilities and accountability developed by key requirements, but also various internal rules, policies,
stakeholders to circumvent inherent conflicts of procedures and practices anchored on the best
interest in the corporate form. The purpose of practices of local and global banks. City Bank attaches
corporate governance is to facilitate effective and a simple meaning to corporate governance, which is
prudent management of the business so as to enable due diligence in observing responsibilities by the Board
long-term value creation for all stakeholder groups. as well as the management to safeguard interests of
Hence, the role of corporate governance is key stakeholders, i.e. depositors, shareholders,
characterised by: employees and the society as a whole.
Two essential pillars of good corporate governance
l Elimination or mitigation of conflicts of interest,
structures comprise:
particularly those between the management and
shareholders l Transparency
l Assurance that the company’s assets are used l Accountability
efficiently and effectively and in the best interests of These pillars are backed by strong internal controls,
shareholders and stakeholders compliance structures and MIS capabilities at the bank.
From the view point of conflicts of interest, two
relationships are the primary focus of most systems of Board of Directors
corporate governance: City Bank’s Board of Directors currently constitutes 12
l Between the management and shareholders (Twelve) directors, among whom 11 (Eleven) are
l Between the directors and shareholders non-executives/directors, including the Chairman, and
the other director is the Managing Director (Ex-Officio).
The Board of Directors represent a critical component Board members include individuals of high calibre with
of the systemic checks and balances that underpin the academic and professional quali ications in the field of
core of corporate governance. Board members have a business, and other professionals with long-standing
shared responsibility to make decisions that are in the experience. This strengthens the effective discharge of
best long-term interests of shareholders. In order to do duties and responsibilities by the Board. The Board
so effectively, Board members require a combination of approves the bank’s budget and business plans and
the following: also reviews those on a monthly basis so that directions
l Independence can be given as per changing economic and market
environments. The Board also reviews the policies and
l Experience manuals of the various segments of business in order
l Resources to establish stronger operational capabilities. The Board
and the Executive Committee reviews the policies and
Corporate governance practice at City Bank guidelines issued by the Bangladesh Bank regarding
City Bank is guided in its corporate governance credit and other operations of the banking industry.
practices mainly by two regulatory bodies: The management operates within the policies, manuals
and limits, as approved by the Board. Regular meetings
l Bangladesh Bank (Central Bank of Bangladesh) of the Board are held, with a frequency of at least once
l Bangladesh Securities and Exchange Commission a month.
(BSEC)

188 Annual Report 2020

Appointment of directors Meeting of the Board of Directors
The members of the Board of City Bank are appointed The Board of Directors holds meetings on a regular
according to the provisions of the Companies Act, 1994, basis. At each meeting, the management provides
the Bank Company Act, 1991 (amended up to 2013), information, references and detailed working papers for
Corporate Governance Guidelines of BSEC, and each agenda to all the Directors for review, at least
Guidelines of Bangladesh Bank and Articles of three days prior to the meeting. The Chairman of the
Association of the bank. Board of Directors allocates sufficient time for the
The Board comprises experienced members with directors to consider each agenda in a prudent way,
diverse professional expertise and knowledge in the and allows them to freely discuss, inquire and express
realms of business, banking and finance, IT, accounting, opinions on the topics of interest at the meeting in
marketing, administration and engineering, which order to fulfil their duties and uphold their
makes the Board diverse, proficient and balanced in responsibilities to the best of their capabilities.
guiding the bank to achieve its desired objectives.

During the year 2020, 15 Board meetings were held and attendance record are as follows:

Name Position within No. of No. of

the bank meetings held meetings attended

Mr. Aziz Al Kaiser Chairman 15 15

Mr. Hossain Khaled Vice-Chairman 15 12
Mr. Hossain Mehmood Nominated Director 15 14
Mrs. Tabassum Kaiser Director 15 12
Mr. Rajibul Huq Chowdhury Director 15 13
Mrs. Syeda Shaireen Aziz Director 15 14
Mr. Rafiqul Islam Khan Director 15 11
Mrs. Savera H. Mahmood Nominated Director 15 14
Ms. Rebecca Brosnan Nominated Director 15 3
Mr. Farooq Sobhan Independent Director 15 15
Dr. Salim Mahmud Independent Director 15 10
The Directors who could not attend the meeting were granted leave of absence by the Board.

Ownership Composition
As on 31 December, 2020, Directors of City Bank held 33.19% of the total shares, as compared to 28.19% at year-end
2018.

Percentage of Shareholdings as on 31 December, 2020

2020 2019
Composition No. of % of No. of % of
shares held total shares shares held total shares
Directors & Sponsors 337,358,737 33.19% 286,539,405 28.19%
Institutions 236,700,569 23.29% 223,295,121 21.97%
Foreign Shareholders 43,455,090 4.28% 99,252,501 9.77%
General Public 398,872,265 39.24% 407,299,634 40.07%
Total 1,016,386,661 100.00% 1,016,386,661 100.00%

189
 Directors’ shareholding status
As per BSEC Notification dated 22 November, 2011 and All the Directors of a company, listed with any stock
7 December, 2011 each Director other than exchange shall jointly hold minimum 30% (thirty
independent and depositor’s director(s) of any listed percent) shares of the paid up capital of the company.
company shall hold minimum 2% (Two percent) shares All the eligible Directors of the bank have taken required
of the paid up capital by 21 May, 2012. Otherwise there number of shares to comply with the above notification.
shall be a casual vacancy of director(s).

Shareholding structures of the Directors of City Bank are as follows as of 31 December, 2020:

Name Position No. of Percentage of

within the bank shares held holdings
Mr. Aziz Al Kaiser Chairman 28,402,848 2.77%
Mr. Hossain Khaled Vice-Chairperson 22,597,253 2.20%
Mr. Hossain Mehmood Nominated Director 20,554,154 2.00%
Mrs. Tabassum Kaiser Director 21,593,659 2.10%
Mr. Rajibul Huq Chowdhury Director 21,622,441 2.11%
Mrs. Syeda Shaireen Aziz Director 20,528,305 2.00%
Mr. Rafiqul Islam Khan Director 20,988,144 2.05%
Mrs. Savera H. Mahmood Nominated Director 20,528,307 2.00%
Ms. Rebecca Brosnan Nominated Director 50,819,332 4.95%
Mr. Farooq Sobhan Independent Director - -
Dr. Salim Mahmud Independent Director - -
Mr. Mashrur Arefin Managing Director & CEO - -

Shareholdings by CEO, CFO, Company Secretary, Head of ICC and their Spouses

Name Designation No. of Name of No. of

shares spouse shares

Mr. Mashrur Arefin Managing Director & CEO Nil Mrs. Farhana Mashrur Nil
Mr. Md. Mahbubur Rahman DMD & Chief Financial Officer Nil Mrs. Sanjeda Afrin Ashraf Nil
Mr. Md. Kafi Khan Company Secretary Nil Mrs. Nargis Sultana Nil
Mr. A.K.M Saif Ullah Kowchar Head of ICC Nil Mrs. Farzana Mannan Nil

Shareholdings by Top-5 Salaried Executives

Name Designation No. of

Shares

Mr. Sheikh Mohammad Maroof Additional Managing Director, Head of Wholesale Banking, Trade Services, Nil
SME- Small & Micro Finance
Mr. Mohammad Mahbubur Rahman Deputy Managing Director & Chief Financial Officer Nil
Mr. Md. Zafrul Hasan SEVP, Head of Digital Financial Services Nil
Mrs. Mahia Juned Deputy Managing Director & Chief Operating Officer NIl
Mr. A.K.M. Saif Ullah Kowchar Head of Internal Control & Compliance Nil

There is no shareholder holding 10% or more voting interest in City Bank. Hence, the corresponding BSEC rule
does not apply.

190 Annual Report 2020

Non-executive Directors l Manage the operation of the bank safeguarding
The Managing Director is the only Executive Director interests of customers and other stakeholders in
on the Board of Directors of the bank. All other Compliance with the highest standards of ethics
Directors including the Chairman are the and integrity
Non-Executive Directors. l Implement the policies and strategic direction,
established by the Board
Independent Directors l Establish and maintain a strong system of internal
In compliance with the Corporate Governance control
Guidelines of Bangladesh Securities and Exchange
l Ensure the Bank’s compliance with applicable legal
Commission (BSEC) and as per Section-15 of Bank
and regulatory requirements
company (Amendment) Act-2018 regarding
appointment of new directors and the guidelines given
by Bangladesh Bank in BRPD Circular No. 11 dated 27 Responsibilities of the Chairman of the
October, 2013, the Bank appointed 2 Independent Board
Directors observing all required formalities.
The overall responsibilities of the Chairman are to:
l Act as the Bank’s led representative, explaining aims
Independent Directors’ independence
and policies to the shareholders
As per existing rules and regulations, Independent
Directors are required not to have any significant l Ensure no participation in or interfere in the

relationship, whether pecuniary or otherwise, with the administrative or operational and routine affairs of
Bank, its top management and the Board. The Bank the Bank
complies with the requirement and appoints l Ensure that the Board sets and implement the
Independent Directors who do not hold any shares in Bank’s direction and strategy effectively
the Bank and do not hold any shares in the Bank and
do not have any family or other relationship and its The specific responsibilities of the Chairman, among
Board of Directors and its executive management. others, are to:
l Provide all over leadership to the Board, supplying
Separation of Chairman and Chief Executive vision, mission and imagination, working closely
Officer roles with the CEO
In compliance with Bangladesh Bank BRPD Circular l Take leading role in determination of composition
No. 06, 04 February, 2010 and Clause 1.4 of BSEC and structure of the Board, which will involve in
Corporate Governance Guidelines dated 7 August, regular assessment of the
2012, it has been reported that the Chairman of the
- Size of the Board
Board, Mr. Aziz Al Kaiser had been elected from among
the directors. There are clear and defined roles and - Interaction, harmony and involvement of the
responsibilities of the Chairman and the Chief Directors
Executive Officer. l Set the Board’s agenda and plan Board Meeting

l Chair all Board Meetings, directing debate towards

The Chairman of the Board approves the agenda for consensus
the Board Meetings, assisted by the Managing Director
l Ensure that the Board receives appropriate,
and the Company Secretary. Regular agenda items
accurate, timely and clear information
include approving credit beyond CEO’s authority and
l Chair the AGM and other shareholders’ meetings to
aspects of the bank’s corporate strategy, financial
performance, core risks and credit policies, corporate foster effective dialogue with shareholders
governance, CSR and organisational structure, human l Ensure that the views of the shareholders are
resources policy, customer and service strategies and communicated to the Board as a whole
procurement policies, etc. l Work with Chairman of Board Committees

l Conduct on-site inspection of any bank-branch or

On the other hand, CEO, being the head of
financing activities under the purview of the
management team, is accountable to the Board and its
oversight responsibilities of the Board
committee to run and manage the bank in accordance
with the prescribed policies, principles and strategies,
established by the Board as well as rules, regulations Annual appraisal of Board’s performance
and guidelines from Central Bank, BSEC and other The shareholders elect Directors in the Annual General
regulatory authorities. The management’s primary Meeting (AGM). Directors are accountable to the
responsibilities are as follows: shareholders. At the AGM, the shareholders freely
speak about the performance of the bank and make a

191
 critical analysis of the Board of Directors. The Chairman Annual evaluation of the Managing Director
replies to their queries made during meeting. Their & CEO by the Board
constructive suggestions are noted down and In line with Bank’s mission and vision, Board of
implemented for qualitative improvement of the bank. Directors define the roles and responsibilities of the
As per our existing policy, it is disclosed that no formal Managing Director & CEO. Managing Director & CEO is
annual appraisal of the Board takes place in the Bank. evaluated by the Board on the basis of goals set for
him at the beginning of each year. The annual financial
Roles and responsibilities of the Managing budget and other job objectives are discussed,
Director & CEO reviewed and finalised by the Board at the start of the
The main responsibilities and authorities financial year. The Board considers both financial and
of the Managing Director are enumerated below: non-financial goals during the appraisal.

l In terms of the financial, business and Evaluation based on financial performance

administrative authorities vested upon him by the Evaluation based on financial performance emphasis
Board, the CEO shall discharge his own on annual budget, i.e. revenue earning for the Bank,
responsibilities. He shall remain accountable for gradual reduction the NPL ratio, etc. At the end of each
achievement of financial and other business targets quarter, the Managing Director & CEO is evaluated
by means of business plans, efficient based on the financial targets. The evaluation is done
l implementation thereof and prudent based on both:
administrative as well as financial management l Achievement of targets against budget

l The CEO shall ensure compliance of the Bank l Achievement of targets against the achievement of
Companies (Revised) Act, 2018 and/or other those targets in the previous year
relevant laws and regulations in the discharge of his
functions in the bank Evaluation based on non- financial goals
l The CEO shall include information on violation of The Managing Director & CEO is also evaluated based
any law, rules, regulation including Bank Company on non-financial goals in an ongoing basis. The
(Revised) Act, 2018 while presenting non-financial criteria include, but are not confined to
memorandums before the Board or the things such as:
Committees formed by the Board l The confidence of the shareholders in the CEO, as

l The CEO will provide all sorts of information to reflected in the stock price of the company
Bangladesh Bank about the violation of Bank l The relationship of the company with the
Company (Revised) Act, 2018 and/ or any violation regulators
of Laws, Rules and Regulations l The confidence of customers in CEO, as reflected
l The recruitment and promotion of all staff of the through continuous development of value
Bank except those in the two tiers below him shall proposition
rest on the CEO. He shall act in such cases in In addition, at the end of each year, an annual
accordance with the approved service rules on the assessment and evaluation of the achievements of
basis of the human resources policy and pre-agreed targets is done. Board considers the
sanctioned strength of employees as approved by improvement in the scores for CAMELS rating at the
the Board. The Board or the Chairman of any time of evaluation. During this evaluation, the
Committee of the Board or any Director does not deviations from target, and the reasons for the
get involved or intervene in such affairs deviations are discussed and assessed. Moreover,
l The authority relating to transfer of and disciplinary Managing Director’s quality leadership to post better
measures against the staff, except those at two tiers performance is always expected.
below the CEO, shall rest on him, which he shall
apply in accordance with the approved service Policy training of Directors
rules. Besides, under the purview of the human Most of the Directors of the Bank are on the Board for
resources policy as approved by the Board, he shall many years. They have acquired enough knowledge
nominate officers for training. Besides, the CEO and acumen to lead the bank well to the path of
shall assume any other responsibility if the Board progress. The latest legislations on the financial sector
assigns within the purview of the Rules, and directives of the regulatory bodies are made
Regulations, Acts and Articles of the Bank available to them for their instant information in order
that they can discharge their responsibilities effectively.
They also attend various seminars and symposiums
mainly on corporate governance organised by
different professional bodies.

192 Annual Report 2020

Corporate Governance training and its No partner or employee of Rahman Rahman Huq,
objectives Chartered Accountants possess any share of the bank
during the tenure of their audit assignment at City
Corporate Governance has at its backbone a set of bank.
transparent relationships among the institution’s
Management, Board, Shareholders and other Central bank inspections
stakeholders. With this in view, City Bank continuously During the year 2020, Bangladesh Bank carried out
organises training on “Orientation on Banking Business comprehensive and special inspections on the Bank’s
under Good Governance" where all employees have to Head Office and 22 branches (among 132 branches)
participate. and followed-up on their comprehensive and special
inspections on the Bank’s Head Office and different
The main topics of the training are: branches as of 31-03-2017, 30-06-2017, 30-09-2017,
l Overall banking business in line with good
31-03-2018, 30-06-2018, 30-09-2018, 31-12-2018,
governance 31-03-2019, 30-06-2019, 31-12-2019, 31-03-2020,
30-06-2020 and 30-09-2020. They also conducted
l Corporate Governance in Banks-international best
special inspection on five core risk areas based on
practices 30-06-2020 and 30-06-2020 financials on Head Office,
l Banking Companies Act and stipulations on along with Gulshan Branch and Gulshan Avenue
corporate governance Branch. They submitted their detailed inspection
l Corporate governance regulations for banks in report as of 30-06-2020 on the Bank’s Head Office,
Bangladesh which will be placed to the Board of Directors soon.
Major findings of the inspection will be discussed in
Benefits provided to Directors and the meeting of the Board of Directors in presence of
Bangladesh Bank representatives and related
Managing Director management personnel of the Bank.
l Directors are entitled to fees for attending the
Board / Executive Committee meetings (Notes to
Board’s committees and their
the Financial Statement No. 36.a)
responsibilities
l Managing Director is paid salaries and allowances
The Board has following 3 (three) committees:
as per approval of the Board and Bangladesh Bank
l Board Risk Management Committee
(Notes to the Financial Statement No. 35)
City Bank has fully complied with Bangladesh Bank l Audit Committee
Circular and Guidelines. l Executive Committee

Appointment of external auditors Board’s Risk Management Committee

The Board of Directors of the bank in its 37th Annual (BRMC)
General Meeting held on 26 June, 2020 appointed Board’s Risk Management Committee (BRMC) at City
Rahman Rahman Huq, Chartered Accountants as the Bank was established by the Board of Directors in its
statutory auditor for the year 2020. 452nd meeting held on 25 January, 2014 for
governance of risk-overseeing, directing, and setting
Services not provided by external auditors policies and monitoring risk management
As per BSEC guidelines, City bank had declared performance. Bangladesh Bank vide their BRPD
Rahman Rahman Huq, Chartered Accountants, Circular No 11, dated 27 October, 2013 had also advised
(involved in statutory audit) was not included in any of banks to form the Committee of the Board named
the followings during the year 2020: “Risk Management Committee” in addition to existing
l Appraisal or valuation services or fairness opinions “Audit Committee” and “Executive Committee” of the
l Designing and implementing financial information
Board.
system
l Book-keeping or other related services

l Broker-Dealer services

l Actuarial services

l Internal Audit services

l Any other services that the Audit committee

determines

193
 Committee composition and meetings
The BRMC consisted following members of the Board:

Name Status with Status in the No. of No. of meetings

the bank Committee meetings held attended
Mr. Hossain Khaled Vice-Chairman Convener 4 4
Mr. Hossain Mehmood Nominated Director Member 4 4
Mr. Rajibul Huq Chowdhury Director Member 4 4
Secretary: Mr. Md. Kafi Khan
* The Board’s Risk Management Committee has been reconstituted on 22 February, 2021 and included
Mrs. Tabassum Kaiser & Ms. Rebecca Brosnan as member of the committee.

Roles and responsibilities of the committee

Committee was entrusted to supervise and review risk management processes covering the following:
l Risk identification and development of control strategy

l Adoption of organisational structure embedding risk across the organisation

l Review and adoption of Risk Management Policy

l Preservation and maintenance of information and reporting

l Supervision of execution of overall risk management policy

l Miscellaneous (Quarterly reporting of decision & recommendation to board, ensuring compliance of regulatory
instructions, considering evaluation report by internal/external auditors)
l Any other task as assigned by the Board of Directors and Central Bank

Audit Committee
As per BRPD circular # 12 (23 December, 2002), all banks are advised to constitute an audit committee comprising
members of the Board. The audit committee will assist the Board in fulfilling its oversight responsibilities including
implementation of the objectives, strategies and overall business plans set by the Board for effective functioning of
the bank.

Committee composition and meetings

Pursuant to the specified BRPD Circular No. 12, the Audit Committee of the Board of Directors consisted of the
following members from the Board:

Name Status with Status in the No. of No. of meetings

the bank Committee meetings held attended
Mr. Farooq Sobhan Independent Director Convener 7 07/07
Mrs. Syeda Shaireen Aziz Director Member 7 07/07
Mr. Rafiqul Islam Khan Director Member 7 06/07
Mrs. Savera H. Mahmood Nominated Director Member 6 06/06
Mrs. Tabassum Kaiser Director Member 7 01/07
Dr. Salim Mahmud Independent Director Member 7 01/07

Secretary: Mr. Md. Kafi Khan

Note: Mrs. Tabassum Kaiser, Director, was replaced in place of Mrs. Savera H. Mahmood, Director, and Dr. Salim Mahmud was included in the
Board’s Audit Committee by the Board at its 574 th meeting held on 27 October, 2020.

Roles and responsibilities of the committee

l Guide implementation of Corporate Governance in the organisation

l Recommend to the Board, the appointment and removal of the Head of Internal Control and Compliance

l To review whether internal control strategies, processes recommended by internal and external auditors have
been implemented by the management
l To establish regulatory guidelines and instructions within the organisation

l To ensure adherence to legal and regulatory requirements

194 Annual Report 2020

Executive Committee (EC) l Monthly business and financial performance
The Board of Directors in its 325th meeting held on analysis
January 21, 2007, reconstituted Executive Committee l Monthly business review and analysis of each
(EC) in City Bank with 6 (six) members from the Board business units’ performance
of Directors in compliance with Bangladesh Bank
guidelines. The responsibility of EC is to review and
Extended management committee (EMC)
provide final approvals on the credit proposals those
Extended Management Committee is a prime decision
are beyond the delegated authority of the Managing
making body of the bank for day to day operations and
Director.
for seamless execution of strategic decisions with
leaders of different divisions/departments. EMC is key
Committee composition and meetings
to drive and uphold the key values across the
The Executive Committee of the Board of Directors
organisation and is also responsible jointly for
consisted of the following members from the Board:
delivering business results. Headed by a Mancom
member, EMC regularly conducts to ensure all internal
Particulars Directorship status Status in the
with the bank Committee and external challenges within the organisation are
dealt with proactively.
Mr. Aziz Al Kaiser Chairman Convener*
Mr. Hossain Khaled Vice-Chairman Member Assets liability committee (ALCO)
Mr. Hossain Mehmood Nominated Director Member The duties of managing the market risk including
Mr. Rajibul Huq Chowdhury Director Member liquidity, interest rate and foreign exchange risk lies
Secretary: Mr. Md. Kafi Khan
with the Treasury Division under the supervision of
* The Board’s Executive Committee has been reconstituted on 22 ALCO committee. The ALCO committee is comprised
February, 2021 and Board of Directors has selected Mr. Aziz Al Kaiser, of senior executives of the Bank, who meets at least
Chairman as Convener of the Board’s Executive Committee. once in a month. The committee evaluates the current
position of the Bank and gives directions to mitigate
Roles and responsibilities of the committee the market risk exposure to a minimum level. ALCO
Executive Committee is entrusted the following was fully engaged with activities in setting strategies
broader responsibilities and functions: and re-vamping previous strategies to cope with the
l Establish and periodically review the bank’s overall current market scenario.
credit and lending policies and procedures
l Develop and implement uniform and minimum
Basel Unit
acceptable credit standards for the bank In order to incorporate the changing global concepts
in risk management and to adopt the Basel III
l Approve all revision, restructure and amendments
standards, City Bank formed a management level
made to the credit proposals (initially approved by
committee named ‘Basel Unit’, chaired by MD & CEO.
the committee)
The committee is vested with supervisory
responsibilities to implement Basel III across the bank.
Management committees and their responsibilities
Therefore, Committee is assigned to adopt a
In an effective corporate governance structure, the
comprehensive approach to devise the plan and craft
bank management has a collective mandate under the
the strategies for implementation of Basel III in the
leadership of MD & CEO to carry out daily operations
banking business of City Bank in accordance the road
to the best interest of the stakeholders. The
map provided by Bangladesh Bank.
management team is headed by the Managing
Director, Mr. Mashrur Arefin. Several Management
Supervisory review process (SRP) team
Committees have been formed to handle the banking
As per “Revised Process Document for SRP SREP
operations and identify and manage risks of the bank.
Dialogue on ICAAP (Implementation of 2nd Pillar of
The committees are MANCOM, Extended MANCOM,
Basel Accord)” issued by Bangladesh Bank in May
ALCO, RMU, Investment Committee and Purchase
2014, Bank must have an exclusive body naming SRP
Committee. Managing Director leads the three most
team which shall act as the Managerial Layer of
important committees, which are MANCOM, ALCO and
Supervisory Review Process. SRP Team of City Bank is
Investment Committee
headed by MD & CEO. The team is empowered to
validate the ICAAP report of the bank and to represent
Management committee (MANCOM) the bank in the process of dialogue with SREP Team of
MANCOM is considered the highest decision and BB and to determine adequate capital requirement of
policy making authority of the bank which consists of the bank.
the CEO and the heads of various large divisions.
Regular tasks of the committee include:

195
 Executive Risk Management Committee (ERMC) decision-making. ICCD also ensures compliance with
Executive Management Risk Committee of the bank laws, regulations, guidelines, policies and procedures
comprises of senior management with Chief Risk issued by both the bank’s management as well as
Officer & Chief Anti Money Laundering Compliance regulators. Stronger internal controls enable the bank
Officer in the chair to ensure proper and timely to engage safely in more profitable activities that would
identification, management and mitigation of risks otherwise be considered risk-prone for an organisation
exposed by the bank in a comprehensive way. without these controls. Thus, ICCD enhances public
confidence in the bank, assuring operational integrity
Committee for moral, ethics and integrity and reputation, while also facilitating risk-based
In line with the implementation of National Integrity examination.
Strategy (NIS) of Bangladesh, the Bank operates City Bank’s ICCD operates independently as a division
“Committee on Morale, Ethics and Integrity” where and consists of four units (Audit & Inspection,
Head of Internal Control & Compliance acts as the Information Systems Audit, Shari’ah Audit and
Focal Point to implement National Integrity Strategy Compliance & Monitoring), with responsibility to
within the bank. The Committee identifies ways to determine risks and evaluate the overall business,
uphold the culture of ethics and integrity and establish operations and credit portfolio of the bank on an
good governance and promote consciousness with a ongoing basis. The key objective of ICCD is to assist
view to reduce frauds, forgeries, irregularities and other and provide guidance across all aspects of the bank
sources of corruption across the bank. using adequate resources for identification of
weaknesses and embracing appropriate measures to
Investment committee (IC) overcome these to ensure high levels of compliance.
The five members’ Investment Committee looks after ICCD operates independently as a division. City Bank’s
investment in the capital market and meets whenever audit function reports directly to the Audit Committee
required. They oversee and monitor to ensure that the of the Board, while it is also responsible to the same
investment decisions are carried out as per approved authority. The Shari’ah Audit function reports directly
strategies and investment policies. This committee to the bank’s Shari’ah Supervisory Committee (SSC).
regularly monitors the bank’s holdings of shares and Thus, ICCD acts as a crucial bridge between the Board,
capital market exposures and ensures keeping SSC and the bank’s management. An effective
investment within prescribed limits (currently 25% of organisational structure has also been established by
prescribed Capital) as set by the Central Bank. fostering a reliable internal control culture within the
bank. Our status on establishing strong internal
Purchase committee controls across the organisation, aligned with
The five members’ Purchase Committee plays an regulatory requirements, is articulated below:
instrumental role in the procurement procedure of the l The Board of Directors is actively engaged in
bank. implementing a modern, scientific and acceptable
internal control and compliance process within the
Internal control: The command centre of bank.
transparency and accountability
l The Audit Committee of the Board evolves an
An effective internal control system continually
recognises and assesses all material risks that could effective procedure for financial reporting
adversely affect the attainment of the bank’s goals and disclosures, developing a suitable internal control
objectives. Risk assessment identifies and considers system and ensuring liaison with both internal and
both internal and external factors. While internal factors external auditors to minimise the occurrence of
include complexity of the organisational structure, business risks.
nature of the bank’s activities, quality of personnel, l The Shari’ah Supervisory Committee ensures that
organisational changes and also employee attrition, the bank’s Islamic Banking business operates in line
external factors include fluctuating economic with Shari’ah guidelines/principles, in addition to
conditions, changes in the industry, socio-political general banking guidelines/principles.
developments and technological advancements. l The Management Committee (Mancom)/senior
City Bank’s Internal Control and Compliance Division management team, with support from the
(ICCD) recognises and assesses all material risks that Extended Management Committee (EMC), actively
could impede the attainment of the bank’s goals. Risk controls the overall management of the bank and
assessment by internal control emphasises on decides the extent of internal control system that is
compliance with regulatory requirements and social, deemed appropriate for the bank.
ethical and environmental risks that affect the banking l Organisational and procedural controls, supported
industry. It ensures reliable financial and managerial by an effective management information system,
information that promotes improved strategic assist in the prudent management of the bank's
exposure to risk.

196 Annual Report 2020

l External auditors evaluate the internal control finance has been finalised in the first phase and other
system while conducting their statutory audit. Head Office divisions will be progressively developed.
l ICCD has been structured as per the prescribed Key operational risk areas of the core business lines
organisational structure of Bangladesh Bank’s core (Corporate Banking, Commercial Business, SME
risk management guidelines. Medium Business, Small Business, Supply Chain
Finance, Retail Banking, Priority Banking, Islamic
l Control policies and procedures have been
Banking, Digital Financial Services, Cards, Agent
established, which are verified by ICCD to ensure
Banking and Treasury), along with other segments of
that control policies and procedures are being
the bank, i.e., operations, finance, risk and support
complied with.
functions, as well as IT security and Shari’ah
l Updated internal control policies and manuals are compliance are identified and assessed through
issued on an ongoing basis. regular audit processes conducted by ICCD under an
l An independent audit mechanism monitors the approved annual audit plan.
effectiveness of organisational and procedural Importantly, all core risk management guidelines
controls. issued by Bangladesh Bank have been duly
Further, a robust risk-based internal audit (RBIA) has implemented and compliance is routinely monitored
been implemented. Risk assessment by the internal by ICCD and RMD to test and determine effectiveness.
control function focuses on compliance with the bank’s This apart, every year, ICCD prepares a detailed annual
policies, together with regulatory requirements and integrated report on the health of the bank and
social, ethical and environmental risks, so as to ensure submits it to the Board to assess the
maximisation of opportunity through minimisation of strengths/weaknesses of the bank on the basis of
risk and to sustain the forward growth outlook of the certain core fundamental metrics. This helps foster a
bank. culture of governance and compliance across the
At the branch-level Risk & Control Matrix has been bank.
implemented since 2009 and is updated from
time-to-time. The entire process was revamped in 2019
and fully implemented in all branches in 2020 with a
view to ensure relevance with the current operating
environment. Risk & Control Matrix for customer
exposure on the bank, risk management division and

197
 Report on Executive Committee

“Good conduct is fundamental to the sustainability of City Bank and its

ability to create value. The Board’s Executive Committee delivers the
responsibility of ensuring that good conduct is reflected in the
organisation’s daily behaviour and is manifested in our individual and
collective actions and decisions. Some of the key ways by which we
advance these objectives are by ensuring that the bank is in full compliance
with Bangladesh Bank’s credit management regulations and in maintaining
a robust credit culture and discipline with rigorous adherence to policies.”

Aziz Al Kaiser
Convener
Executive Committee

Primer
City Bank’s Board of Directors, at its 325 th meeting held on February 22, 2021, reconstituted the Executive Committee
(EC) with 4 (four) members from the Board of Directors, in compliance with Bangladesh Bank guidelines. The
responsibility handed to the EC is to review and provide final approvals on credit proposals, which are beyond the
delegated authority of the Managing Director. Further, EC decisions, described through the full meeting minutes, are
referred to in the subsequent meeting of the Board for ratification.

Committee structure
The Executive Committee consisted of the following members of the Board:

Name Status with the bank Status in the committee

Mr. Aziz Al Kaiser Chairman Convener*

Mr. Hossain Khaled Vice-Chairman Member
Mr. Hossain Mehmood Nominated Director Member
Mr. Rajibul Huq Chowdhury Director Member

Secretary: Mr. Md. Kafi Khan

* The Board’s Executive Committee has been reconstituted on 22 February 2021 and Board of Directors has selected
Mr. Aziz Al Kaiser, Chairman as Convener of the Board’s Executive Committee.

198 Annual Report 2020

Roles and responsibilities of the committee Acknowledgements
l Establish and periodically review the bank's overall The Executive Committee expresses its sincere
credit culture and practices, including lending gratitude to the members of the Board and the
policies and procedures management team for the support extended to the
l Develop and implement uniform and minimum committee, enabling it to dutifully conduct its tasks and
acceptable credit standards responsibilities.
l Approve all revisions, restructuring and On behalf of the Executive Committee,
amendments made to credit proposals initially
approved by this committee

Major areas focused in 2021

l The committee reviewed and approved different
credit proposal Aziz Al Kaiser
l Ratified different management approval on Convener,
reduction of interest rate, change in collateral Executive Committee
security and document deferral
l The committee reviewed and approved different
credit proposal for renewal and enhancement of
existing credit limit

199
 Report on Audit Committee
“City Bank plays an important role in society as a bank for many households
and businesses, and thus espouses sound and sustainable financial
conditions for the economy as a whole. This requires a governance model
with a clear delegation of responsibilities, and at the bank’s Board Audit
Committee, our purpose is to uphold this governance model and ensure
that the bank’s executive management establishes and maintains effective
routines for internal governance, risk management and control.”

Farooq Sobhan
Convener
Audit Committee

Primer
At City Bank, sustainability is one of the key focus areas, The Audit Committee of the Board (ACB) of City Bank
especially in the context of a country that is was established by the Board of Directors to provide
transforming fast after the major economic independent oversight of the bank’s financial reporting,
deceleration induced by the COVID-19 pandemic. In non-financial corporate disclosures, internal control
implementation of our sustainability agenda, sound systems, and compliance with governing rules and
financial control, alongside economic, environmental regulations, in accordance with Bangladesh Bank’s
and social (ESG) aspects of our business, is pivotal to guidelines and Bangladesh Securities and Exchange
meet our long-term objectives and targets. In other Commission’s (BSEC’s) notifications on Corporate
words, we believe that robust financial control can yield Governance.
the highest impact on the efficiency, effectiveness and
value creation ability of our deployed strategies and The Committee is also entrusted with the responsibility
approaches. Therefore, we go beyond management to review the following:
structures, policies and processes to make audits and
assessments an integral part of our organisational l Financial reporting processes
culture to ensure that our bank continues to create l System of internal control and management of
sustainable value and remains as a dependable partner financial risks
for all our stakeholders. l Audit processes
l Processes for monitoring observance of laws,
Driving positive outcomes by being rooted in ethical guidelines and regulations
conduct and principled oversight l Affiliation with its own code of business conduct
As per BRPD Circular No. 11 dated 27 October 2013, the
Board approves the objectives, strategies and overall
business plans of the bank, and the Audit Committee
assists the Board in fulfilling its oversight responsibilities.

200 Annual Report 2020

Committee structure
The Audit Committee consisted of the following members from the Board of Directors:
Status with Status in Educational Meeting
Name the bank the committee qualifications attendance

Mr. Farooq Sobhan Independent Director Convener B.A. (Hons), M.A. 07/07
Mrs. Syeda Shaireen Aziz Director Member BBA 07/07
Mr. Rafiqul Islam Khan Director Member HSC 06/07
Mrs. Savera H. Mahmood Nominated Director Member MSS 06/06
Mrs. Tabassum Kaiser Director Member MBA 01/07
Dr. Salim Mahmud Independent Director Member PhD 01/07
Secretary: Mr. Md. Kafi Khan
*Mrs. Tabassum Kaiser, Director, was replaced in place of Mrs. Savera H. Mahmood, Director, and Dr. Salim Mahmud was included
in the Board’s Audit Committee by the Board at its 574th meeting held on 27 October 2020.

Roles and responsibilities of the committee l To review the financial statements with the
The Audit Committee is principally responsible for the management and external auditors before its
following: finalisation
l To review the statement of all related party
transactions submitted by the management
Internal control
l To evaluate whether the management sets the
appropriate compliance culture by Internal audit
communicating the importance of internal control l To monitor whether the internal audit works
and the administration of risk, while also ensuring independently from the management
that all employees have clear understanding of
l To review the activities of the internal audit and the
their roles and responsibilities
organisational structure, and ensure that no
l To review the management’s actions in tech unjustified restriction or limitation hinders the
advancement, especially in the realm of digital internal audit process
banking, and the bank's Management Information
l To examine the efficiency and effectiveness of the
System (MIS)
internal audit function
l To consider whether internal control strategies,
l To examine whether the findings and
recommended by internal and external auditors,
recommendations made by the internal auditors
have been implemented by the management
are duly considered by the management
l To consider reports relating to fraud, forgery and
deficiencies in internal control, or other similar
issues detected by internal and external auditors External audit
and inspectors of the regulatory authority, and l To review the performance of the external auditors
place it before the Board after reviewing whether and their audit reports
necessary corrective action has been taken by the
l To examine whether the findings and
management
recommendations made by the external auditors
are duly considered by the management
Financial reporting l To make recommendations to the Board
l To review, along with the management, whether regarding the appointment of external auditors
the interim and annual financial statements reflect
complete and true information, as well as to
Compliance with existing laws and regulations
determine whether the statements are prepared in
accordance with the existing rules, regulations and l To review whether laws and regulations framed by
standards enforced in the country, and as per the the regulatory authorities (central bank and other
relevant accounting standards prescribed by bodies) and internal regulations approved by the
Bangladesh Bank Board are being complied with
l To review the Management’s discussion and
analysis report before disclosing it in the Annual
Report

201
 Other responsibilities l Reviewed the interim unaudited quarterly financial
statements of the bank and its subsidiaries for the
l To submit a compliance report to the Board on a
first and second quarters of 2020
quarterly basis on corrective action taken on
omission, fraud and forgery cases and other l Reviewed the interim audited quarterly financial
irregularities detected by internal and external statements of the bank and its subsidiaries for the
auditors and inspectors of regulatory authorities third quarter of 2020
l To solicit assessment reports from external and l Recommended the re-appointment of auditors for
internal auditors the year 2021 and fix their remuneration
l To perform other oversight functions as desired by l Recommended the appointment of auditors for
the Board and evaluate the committee's own certification on compliance with the corporate
performance on a regular basis governance code and fix their remuneration
l Reviewed and approved the process for offline
Meetings of the committee audit of branches
The Audit Committee of the Board held 07 (seven) l Reviewed the observations and advice of
meetings during the year 2020 and engaged in Bangladesh Bank in their inspection reports on the
detailed discussions and reviews with the Head of bank, along with their compliance status
Internal Control & Compliance, internal auditors, l Reviewed the internal audit reports conducted by
external auditors, etc., regarding their findings, ICCD and their findings, along with their
observations and remedial suggestions on issues of compliance status
the bank’s affairs that needed improvement. The Audit
Committee instructed the management to follow the l Reviewed the summary report on audit findings,
remedial suggestions and monitored them with corrective actions taken accordingly
accordingly. l Reviewed and approved the Revised Internal Audit
Plan for the year 2021
Audit Committee meetings Date of meetings held
Acknowledgements
81st Audit Committee Meeting on 11 March, 2020
The Audit Committee expresses its earnest
82nd Audit Committee Meeting on 22 June, 2020
appreciation to the members of the Board, the
83rd Audit Committee Meeting on 26 July, 2020 management and internal and external auditors for
84th Audit Committee Meeting on 14 September, 2020 their admirable support extended to the Committee,
85th Audit Committee Meeting on 19 October, 2020 which enabled it in upholding its responsibilities and
on 25 October, 2020 discharging its duties.
86th Audit Committee Meeting
87th Audit Committee Meeting on 22 November, 2020
On behalf of the Audit Committee,

During the year under report, the Committee also

conducted the following activities:
l Reviewed the draft Auditor’s Report and audited
financial statements for 2020 and after discussing Farooq Sobhan
with external auditors, recommended it to the Convener
Board for their consideration Audit Committee

202 Annual Report 2020

Report on Board’s Risk
Management Committee
“The COVID-19 pandemic has made the underlying structure and
resilience of Bangladesh’s financial markets a critical matter for the public
as well as domestic and international investors, as the country copes
with the challenges of returning to sustainable growth.
City Bank, as one of the country’s premier financial institutions,
will play a substantive role in the economic normalisation journey.
At the bank’s Board’s Risk Management Committee, it is our
responsibility to continue to strengthen the organisation’s
risk management and control framework so that the bank can play a
purposeful role in societal restoration.”
Hossain Khaled
Convener
Board’s Risk Management Committee

Primer Committee structure

The COVID-19 outbreak has posed significant To pursue a meticulous functional risk governance
challenges for the economic environment and forward process, the Board of Directors at City Bank
outlook. The Bank responded to this unprecedented constituted the Board’s Risk Management Committee
situation by fulfilling its responsibilities as a (BRMC), in its 452nd meeting held on 25 January, 2014,
socio-commercial link between the Government and which was reconstituted in 2018 and later in 2021.
the public, thus helping the country’s economy to The committee was assigned the responsibility of
move forward even amidst the extraordinary ensuring the proper functioning of the bank’s risk
challenges. management processes and systems through
The Board’s Risk Management Committee maintained surveillance and continuous monitoring, while also
rigorous vigil over key risk areas and engaged in providing necessary guidance with suitable
comprehensive assessment of the impact of the resolutions. The committee provided critical
pandemic on potential credit losses, government recommendations, as deemed necessary, a duty that
support/relief measures and significant central bank came to the fore during the coronavirus pandemic.
policy updates to cushion the bank against the The other rationale for the establishment of the BRMC
negative impacts, while also strengthening the was to comply with Bangladesh Bank’s regulatory
foundations for the future. requirements, with reference to BRPD Circular No 11,
Further, the committee continued to strengthen its dated 27 October, 2013, to form “A Committee of the
proactive risk governance stance, reflected in the key Board” in addition to existing “Executive Committee” of
committee agendas pivoted to address the priorities. the Board and “Audit Committee” of the Board.
The committee also sought to ensure fluidity in
communication and collaboration despite meetings
not being held in in-person settings but via video
conference. The committee convened four formal
meetings during the year to ensure that the bank
remained risk-aware, with clear line of sight on key risk
formations and mitigation plans.

203
 The BRMC consisted of the following members of the Board:

Name Status with Status with the No. of No. of meetings

the Bank Committee meetings held attended
Mr. Hossain Khaled Vice-Chairman Convener 4 4
Mr. Hossain Mehmood Nominated Director Member 4 4
Mr. Rajibul Huq Chowdhury Director Member 4 4
Secretary: Mr. Md. Kafi Khan
* The Board’s Risk Management Committee has been reconstituted on 22 February 2021 and included
Mrs. Tabassum Kaiser & Ms. Rebecca Brosnan as member of the Committee.

Other attendees at committee meetings in 2020: l Any other responsibility as assigned by the Board
The Board Secretary attended the meetings as of Directors and the central bank
Member Secretary. Chief Risk Officer, Chief Financial
Officer, AMD & Head of Wholesale Banking, heads of Activities of the committee in 2020
major business segments and risk heads and
representatives from the Risk Management Division In pursuit of upholding its key responsibilities, the
also attended the meetings by invitation. committee activated the following initiatives during the
year 2020:
l Scrutinising the impact of COVID-19: The
Meetings of the committee committee suggested exploration of the
In 2020, BRMC held four meetings, in which the bank’s pandemic’s impact on the bank’s sector-wise
risk exposures, risk supervision and control systems portfolio, along with other inherent risk factors. The
and restorative actions were discussed in detail. Dates RMG/textiles industry, one of the most
of BRMC meetings held during the year are as follows: pandemic-induced stressed sector, was in focus for
evaluation, entailing the bank’s loan exposure to
the industry, liability breakdown outcomes and
BRMC meetings Date of meetings held outcome of financial stimulus. In addition, the
24th Meeting of BRMC June 24, 2020 committee also reviewed the pandemic’s effect on
25th Meeting of BRMC September 01, 2020 exports. Further, it recommended monitoring
repayment terms of financing under the stimulus
26th Meeting of BRMC October 28, 2020
package.
27th Meeting of BRMC November 18, 2020 l Strategic resolution of stressed loans: The
committee reviewed the monitoring status of the
Roles and responsibilities of the committee major stress accounts of the bank. The committee
The committee is entrusted with the mandate of recommended meticulous monitoring of
supervising and reviewing risk management processes repayment behaviour and other important
covering the following: qualitative aspects. For some risk-prone accounts, it
advised development of an exit plan for asset
l Risk identification and development of control
reconstruction.
strategy
l Reviewing risk-adjusted return on capital: The
l Adoption of organisational structure embedding
committee reviewed the bank’s risk-adjusted return
risk across the organisation
on its various business segments. To maximise
l Review and adoption of the Risk Management return on capital, the committee advised evaluation
Policy of the scope of enhancing the bank’s market share
l Preservation and maintenance of information and in profitable business segments. Further, for some
reporting of the other business segments, it advised re
l Supervision of execution of the overall risk evaluation of key performance indicators for
management policy ensuring the potential for higher risk-adjusted
l Miscellaneous activities, including quarterly returns. It also called for the development of
reporting of resolutions and recommendations to targetted sector-wise growth strategies.
the Board, ensuring compliance with all regulatory l Monitoring of asset quality: The committee
guidelines and considering the evaluation report evaluated the NPL (non-performing loans)
by internal/external auditors management strategy in detail across all the major
business segments. Root-cause analysis was also
conducted on all major delinquent accounts, which

204 Annual Report 2020

were classified as per the pre-moratorium guidelines of l Reviewing activities of the Executive Risk
the regulator, but were yet to be classified as bad Management Committee and Credit Risk
loans. Management Committee: The committee evaluated
l Recommending the risk appetite: The committee the activities of the Executive Risk Management
reviewed the actual exposure relative to the risk Committee and the Credit Risk Management
appetite limits through regular risk information Committee throughout the year 2020.
reports presented in the meetings.
l Administering legal risk: The committee advised Acknowledgements
to develop a summary of the bank’s cases under
The Board’s Risk Management Committee expresses
litigation with an ageing analysis to assess the
its sincere gratitude to the members of the Board, the
underlying causes of the cases and to reinforce
management team and the Executive Risk
recovery from written-off loans. The committee
Management Committee for their unstinted support
also took note of the challenges of long-pending
throughout 2020. The minutes of BRMC meetings
litigation procedures and quality of the mortgaged
containing various suggestions and recommendations
property.
to the management were placed to the Board on a
l Stringent monitoring of recovery from quarterly basis.
written-off and classified loans: The committee
placed heightened emphasis on recovery efforts
from classified and written-off loans. It also advised At the beginning of each year, the Committee discusses
to present quarterly updates on achievements its key priorities for the year ahead. In 2021, the
against the targetted recovery plans from committee will continue to monitor execution of the
written-off loans. transformation initiatives and their impact on the risk
and control environment. The committee will enhance
l Recommendation on capital management: The
vigilance towards ensuring operational resilience, while
committee advised managing critical challenges of
ensuring a risk-aware environment, which it believes will
capital adequacy and directed the implementation
usher a step-change in the bank’s performance over
of a balance-sheet restructuring exercise for
the course of 2021.
reducing risk-weighted assets. Moreover, the
committee recommended to develop a long-term
business plan, synched with the bank’s capital plan. On behalf of the Board’s Risk Management Committee,
l Recommendation on opportunistic portfolio
diversification: The committee advised on a
sector-wise analysis of key thrust sectors and to
explore business opportunities in these sectors.
l Evaluating risk ratings: The committee noted the Hossain Khaled
bank’s outlook as detailed by external rating
Convener
agencies. The committee advised the
management to pursue strategic approaches, and Board’s Risk Management Committee
to update the committee on key financial
determinants for rating and the action plans to
improve the bank’s overall ratings.
l Reviewing the activities of the Sustainable
Finance Unit: The committee reviewed the
activities of the bank’s Sustainable Finance Unit
throughout the year 2020.
l Reviewing risk management reports and
outcomes: The committee scrutinised the major
risk management reports of the bank, including
monthly risk management reports, comprehensive
risk management reports and also the activities of
the bank’s Management Risk Committee.
l Observing regulatory changes: The Committee
commented on the major regulatory changes
effected during the pandemic, while placing
emphasis on equivalent strategies and
adjustments.

205
 Our Corporate
Governance structure

Brand &
Digital Financial Communications
Services and
Corporate Affairs

206 Annual Report 2020

Bangladesh Bank’s guidelines for
corporate governance and our
compliance status
Status of Compliance of Bangladesh Bank’s Guidelines for Corporate Governance
(BRPD circular No. 6 dated 04.02.2010)

SL Compliance
No. Particulars Status

1. Responsibilities and authorities of the Board of Directors:

(a) Work-planning and strategic management

(i) The Board shall determine the objectives and goals and to this end shall chalk out
strategies and work-plans on annual basis. It shall specially engage itself in the affairs
of making strategies consistent with the determined objectives and goals and in the
issues relating to structural change and reorganization for enhancement of
institutional efficiency and other relevant policy matters. It shall analyze/monitor at
quarterly rests the development of implementation of the work-plans.
Complied
(ii) The Board shall have its analytical review incorporated in the Annual Report as
regard the success/failure in achieving the business and other targets as set out in its
annual work-plan and shall appraise the shareholders of its
opinions/recommendations on future plans and strategies. It shall set the Key
Performance Indicators (KPIs) for the CEO and other senior executives and have it
evaluated at times.

(b) Lending and risk management

(i) The policies, strategies, procedures etc. in respect of appraisal of loan/investment
proposal, sanction, disbursement, recovery, reschedulement and write-off thereof
shall be made with the board’s approval under the purview of the existing laws, rules
and regulations. The Board shall specifically distribute the power of sanction of
loan/investment and such distribution should desirably be made among the CEO Complied
and his subordinate executives as much as possible. No director, however, shall
interfere, directly or indirectly, into the process of loan approval.
(ii) The Board shall frame policies for risk management and get them complied with
and shall monitor at quarterly rests the compliance thereof.

(c) Internal control management

The Board shall be vigilant on the internal control system of the bank in order to
attain and maintain satisfactory qualitative standard of its loan/investment portfolio. Complied
It shall review at quarterly rests the reports submitted by its audit committee
regarding compliance of recommendations made in internal and external audit
reports and the Bangladesh Bank inspection reports.

(d) Human resources management and development

(i) Policies relating to recruitment, promotion, transfer, disciplinary and punitive
measures, human resources development etc. and service rules shall be framed
and approved by the board. The Chairman or the Directors shall in no way Complied
involve themselves or interfere into or influence over any administrative affairs
including recruitment, promotion, transfer and disciplinary measures as executed
under the set service rules. No member of the Board of Directors shall be
included in the selection committees for recruitment and promotion to different

207
 SL Particulars Compliance
No. Status

levels. Recruitment and promotion to the immediate two tiers below the CEO shall,
however, rest upon the board. Such recruitment and promotion shall have to be
carried out complying with the service rules i.e. policies for recruitment and
promotion.
(ii) The Board shall focus its special attention to the development of skills of bank’s Complied
staff in different fields of its business activities including prudent appraisal of
loan/investment proposals, and to the adoption of modern electronic and
information technologies and the introduction of effective Management
Information System (MIS). The Board shall get these programs incorporated in its
annual work plan.
(e) Financial management
(i) The annual budget and the statutory financial statements shall finally be prepared
with the approval of the Board. It shall at quarterly rests review/ monitor the positions
in respect of bank’s income, expenditure, liquidity, non-performing asset, capital base
and adequacy, and maintenance of loans. Loss provision and steps taken for
recovery of defaulted loans including legal measures.
(ii) The Board shall frame the policies and procedures for Bank’s purchase and Complied
procurement activities and shall accordingly approve the distribution of power
for making such expenditures. The maximum possible delegation of such
power shall rest on the CEO and his subordinates. The decision on matters
relating to infrastructure development and purchase of land, building, vehicles
etc. for the purpose of Bank’s business shall, however, be adopted with the
approval of the board.

(f) Formation of supporting committee

For decision on urgent matters an executive committee, whatever name called, may
be formed with the directors. There shall be no committee or sub-committee of the Complied
Board other than the Executive Committee and the Audit Committee. No alternate
director shall be included in these committee.

(g) Appointment of CEO

(i) The Board shall appoint a competent CEO for the bank with the approval of the
Bangladesh Bank. Complied
(ii) The Board shall ensure fulfilling any other responsibility(ies) appropriately
assigned by the Central Bank.

2. Responsibilities of the Chairman and Board of Director

(a) Chairman of the Board of Directors (or Chairman of any committee formed by the Complied
Board or any Director) does not personally possess the jurisdiction to apply policy
making or executive authority, he shall not participate in or interfere into the
administrative or operational and routine affairs of the bank.
(b) The Chairman may conduct on-site inspection of any bank-branch or financing
activities under the purview of the oversight responsibilities of the board. He may call
for any information relating to bank’s operation or ask for investigation into any such Complied
affairs; he may submit such information or investigation report to the meeting of the
Board or the Executive Committee and if deemed necessary, with the approval of the
board, he shall effect necessary action thereon in accordance with the set rules
through the CEO. However, any complaint against the CEO shall have to be appraised
to Bangladesh Bank through the Board along with the statement of the CEO.

208 annual report 2020

SL Particulars Compliance
No. Status

(c) The Chairman may be offered an office-room, a personal secretary/assistant, a

telephone at the office and a vehicle in the business-interest of the bank subject to Complied
the approval of the board.
3. Responsibilities of Advisor
The Advisor, whatever name called, shall advise the board of directors or the CEO on
such issues only for which he is engaged in terms of the conditions of his No such
appointment. He shall neither have access to the process of decision-making nor Advisor at
shall have the scope of effecting executive authority in any matters of the bank the Bank.
including financial, administrative or operational affairs.
4. Responsibilities and authorities of CEO
The CEO of the bank, whatever name called, shall discharge the responsibilities and Complied
effect the authorities as follows:
(a) In terms of the financial, business and administrative authorities vested upon him by
the Board, the CEO shall discharge his own responsibilities. He shall remain
accountable for achievement of financial and other business targets by means of Complied
business plan, efficient implementation thereof and prudent administration and
financial management.
(b) The CEO shall ensure compliance of the Bank Companies Act. 1991 and/or other Complied
relevant laws and regulations in discharge of routine functions of the bank.
(c) The CEO shall clearly include any violation from Bank Companies Act, 1991 and/or
any other related laws/regulations in the Memo presented to the meeting of the Complied
Board or any other Committee(s) engaged by the Board.
(d) The CEO shall report to Bangladesh Bank of issues in violation of the Bank
Companies Act. 1991 or of other laws/regulations and, if required, may apprise the Complied
Board post facto.
(e) The recruitment and promotion of all staff of the bank except those in the two tiers
below him shall rest on the CEO. He shall act in such cases in accordance with the
approved service rules on the basis of the human resources policies and sanction
strength of employees as approved by the board. The Board or the Chairman of
any committee of the Board or any director shall not get involved or interfere into Complied
such affairs. The authority relating to transfer of and disciplinary measures against
the staff, except those at one tier below the CEO, shall rest on him, which he shall
apply in accordance with the approved service rules. Besides, under the purview of
the human resources policy as approved by the Board, he shall nominate officers
for training etc.

5. Meetings of the Board of Directors

One meeting of the Board of Directors per month can be held usually but it can be
more than one upon necessity. No less than one meeting of the Board in three Complied
months to be held.

6. Number of members of Executive Committee (EC) of the Board

Number of members of EC cannot exceed 7 members as per BRPD Circular. Letter
No. 2 dated February 15, 2010 and more than one member from one family shall not Complied
be included in the EC as per BRPD Circular Letter No. 4 dated March 14, 2010

7. Training of the Directors

The Directors of the Board will acquire appropriate knowledge of the Banking Laws
and other relevant laws, rules and regulations to effectively discharge the
responsibilities as a director of the Bank. Complied

209
 Howladar Yunus & Co.
House 14 (Level 4-5)
Road 16A, Gulshan 1
Dhaka 1212
Bangladesh
T +880 2 588 15247

Report to the Shareholders of

The City Bank Limited on compliance on the Corporate Governance Code
We have examined the compliance status to the Corporate Governance Code by The City Bank Limited for the year
ended December 31, 2020. This code relates to the Notification No. BSEC/CMRRCD/2006-158/207/Admin/80 dated 03
June 2018 of the Bangladesh Securities and Exchange Commission.
Such compliance with the Corporate Governance Code is the responsibility of the Company. Our examination was limited
to the procedures and implementation thereof as adopted by the Management in insuring compliance of the Corporate
Governance Code.
This is a scrutiny and verification and an independent audit on compliance of the conditions of the Corporate Governance
Code as well as the provisions of relevant Bangladesh Secretarial Standards (BSS) as adopted by Institute of Chartered
Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Corporate
Governance Code.
We state that we have obtained all the information and explanations, which we have required, and after due scrutiny and
verification thereof, we report that , in our opinion:
(a) The Company has complied with the conditions of the Corporate Governance Code as stipulated in the
above-mentioned Corporate Governance Code issued by the Commission except as reported on the attached
status of compliance statement.
(b) The company has complied with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted
by the Institute of Chartered Secretaries of Bangladesh (ICSB) as required by this Code.
(c) Proper books and records have been kept by the company as required under the Companies Act, 1994, the
securities laws and other relevant laws; and
(d) The Governance of the company is satisfactory.

Place: Dhaka
Date: April 13, 2021

210 annual report 2020

The City Bank Limited Corporate
Governance Compliance Report
Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Commission’s
(BSEC’s) through Notification No. BSEC/CMRRCD/2006-158/207/Admin/80, dated 03 June 2018, issued under
section 2CC of the Securities and Exchange Ordinance, 1969 is presented below:

Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied
1 BOARD OF DIRECTORS
1.1 Board's Size:
The number of Board Directors should not be less
than 5 (five) and more than 20 (twenty)
1.2 Independent Directors
1.2(a) At least one fifth (1/5) of the total number of Directors As per said BSEC
in the Company’s board shall be independent notification, 03 (three)
directors. independent directors
required. CBL has
appointed only 02
(two) Independent
Directors out of 11
Directors.
However in
compliance with Bank
Company Act -1991
(amended 22nd July
2013), Sec: 15(9), if the
number of Directors is
less than 20 (twenty)
then no. of
independent
director(s) shall be 2
(two).
(b)(i) Who either does not hold any share or holds less than
1% shares to the total paid-up shares of the Company;
(b)(ii) Who is not a sponsor of the Company and is not
connected with the companies any sponsor or director
or shareholder who holds one percent (1%) or more
share of the total paid-up shares of the company on the
basis of family relationship.
Provided that spouse, son, daughter, father, mother,
brother, sister son-in-law and daughter-in-law shall be
considered as family members;
(b)(iii) who has not been an executive of the Company in
immediately preceding 2 (two) financial years;
(b)(iv) Who does not have any other relationship whether
pecuniary or otherwise, with the Company or its
subsidiary/ associated companies or its subsidiary
/associated companies;

211
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(b)(v) who is not a member or TREC (Trading Right

Entitlement Certificate) holder, director or officer of any
stock exchange;
(b)(vi) who is not a shareholder, director excepting
independent director or officer of any member or
TREC holder of stock exchange or an intermediary of
the capital market;
(b)(vii) who is not a partner or an executive or was not a
partner or an executive during the preceding 3 (three)
years of the concerned Company’s statutory audit firm
or audit firm engaged in internal audit services or audit
firm conducting special audit or professional certifying
compliance of this Code;
(b) (viii) Who is not independent director in more than 5 (five)
listed companies;
(b) (ix) Who has not been convicted by a court of competent
jurisdiction as a defaulter in payment of any loan to a
bank or a Non-Bank Financial Institution (NBFI);
(b) (x) Who has not been convicted for a criminal offence
involving moral turpitude;
(c) The independent director(s) shall be appointed by the
board of directors and approved by the shareholders
in the Annual General Meeting (AGM).
(d) The post of independent director(s) cannot remain 03 (Three) Indepen-
vacant for more than 90 (ninety) days. dent Directors are
required as CBL
Board is comprised
of 11 (eleven)
Directors.
However, in
compliance with
Bank Company Act
-1991 (amended
22nd July, 2013),
Sec: 15(9), CBL has
02 (Two) Indepen-
dent Directors as
the number of
Directors is less
than 20 (Twenty).

(e) The tenure of office of an independent director shall be

for a period of 03 (three) years, which may be extended
for 1 (one) tenure only:
Provided that a former independent director may be
considered for reappointment for another tenure after
a time gap of one tenure, i.e., three years from his or her
completion of consecutive two tenures

212 annual report 2020

 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

1.3 Qualification of Independent Director (ID)

(a) Independent Director shall be a knowledgeable

individual with integrity who is able to ensure
compliance with financial, regulatory and corporate
laws and can make meaningful contribution to
business.

(b) Independent Director shall have following qualifications:

(b)(i) Business Leader who is or was a promoter or director

of an unlisted company having minimum paid-up
capital of Tk. 100.00 million or any listed company or a Not applicable.
member of any national or international chamber of
commerce or business association;
(b)(ii) Corporate Leader who is or was a top level executive
not lower than Chief Executive Officer or Managing
Director or Deputy Managing Director or Chief
Financial Officer or Head of Finance or Accounts or
Company Secretary or Head of Internal Audit and Not applicable.
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;
(b)(iii) Former official of government or statutory or
autonomous or regulatory body in the position not
below 5th Grade of the national pay scale, who has at
least educational background of bachelor’s degree in
economics or commerce or business or Law;
(b)(iv) University Teacher who has educational background
in Economics or Commerce or Business Studies or Not applicable.
Law; or

(b) (v) Professional who is or was an advocate practicing at

least in the High Court Division of Bangladesh Supreme
Court or a Chartered Accountant or Cost and
Management Accountant or Chartered Financial
Analyst or Chartered Certified Accountant or Certified
Public Accountant or Chartered Management
Accountant or Chartered Secretary or equivalent
qualification.
(c) The independent director shall have at least 10 (ten)
years of experiences in any field Mentioned in clause (b).
(d) In special cases, the above qualifications or experiences
may be relaxed subject to prior approval of the Not applicable.
Commission.

213
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

1.4 Duality of Chairperson of the Board of Directors and Managing Director or Chief Executive Officer

(a) The positions of the Chairperson of the Board and the

Managing Director (MD) and/or Chief Executive Officer
(CEO) of the company shall be filled by different
individuals
(b) The Managing Director (MD) and/or Chief Executive
Officer (CEO) of a listed company shall not hold the
same position in another listed company.
(c) The Chairperson of the Board shall be elected from
among the non-executive directors of the company.
(d) The Board shall clearly define respective roles and
responsibilities of the Chairperson and the Managing
Director and/or Chief Executive Officer.
(e) In the absence of the Chairperson of the Board, the
remaining members may elect one of themselves from
non executive directors as Chairperson for that
particular Board’s meeting; the reason of absence of the
regular Chairperson shall be duly recorded in the
minutes.
1.5 The Directors’ Report to Shareholders
(i) Industry outlook and possible future development in
the industry.
(ii) Segment-wise or product-wise performance.

(iii) Risks and concerns.

(iv) A discussion on Cost of Goods sold, Gross Profit Margin
and Net Profit Margin.
(v) Discussion on continuity of any Extra-Ordinary gain or Not applicable
loss.
(vi) A detailed discussion on related party transactions
along with a statement showing amount, nature of
related party, nature of transactions and basis of
transactions of all related party transactions.
(vii) A statement of utilisation of proceeds raised through Not applicable as no
public issues, rights issues and/or any other instruments such events has
occurred during 2020.
(viii) An explanation if the financial results deteriorate after
the company goes for Initial Public Offering (IPO), Not applicable as no
such events has
Repeat Public Offering (RPO), Rights Share Offer, Direct
occurred during 2020.
Listing, etc.
(ix) An explanation on any significant variance that occurs Not applicable as no
between Quarterly Financial performances and Annual significant variance
Financial Statements exists between quarterly
financial performance
and annual financial
statements.

214 annual report 2020

 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(x) A statement of remuneration paid to the directors

including independent directors
(xi) A statement that the financial statements prepared by
the management of the issuer company present fairly
its state of affairs, the result of its operations, cash flows
and changes in equity
(xii) A statement that proper books of account of the issuer
company have been maintained
(xiii) A statement that appropriate accounting policies have
been consistently applied in preparation of the financial
statements and that the accounting estimates are
based on reasonable and prudent judgment
(xiv) A statement that International Accounting Standards
(IAS) or International Financial Reporting Standards
(IFRS), as applicable in Bangladesh, have been followed
in preparation of the financial statements and any
departure there from has been adequately disclosed
(xv) A statement that the system of internal control is sound
in design and has been effectively implemented and
monitored.
(xvi) A statement that minority shareholders have been
protected from abusive actions by, or in the interest of,
controlling shareholders acting either directly or
indirectly and have effective means of redress.
(xvii) A statement that there is no significant doubt upon the
issuer company’s ability to continue as a going concern,
if the issuer company is not considered to be a going
concern, the fact along with reasons there of shall be
disclosed
(xviii) An explanation that significant deviations from the last
year’s operating results of the issuer company shall be
highlighted and the reasons thereof shall be explained
(xix) A statement where key operating and financial data of
at least preceding 05 (five) years shall be summarized.
(xx) An explanation on the reasons if the issuer company Not applicable
has not declared dividend (cash or stock) for the year
(xxi) Board’s statement to the effect that no bonus share or
stock dividend has been or shall be declared as interim Not applicable
dividend.
(xxii) The total number of Board meetings held during the
year and attendance by each director
(xxiii) Pattern of shareholding and name wise details (disclosing aggregate
number of shares):
Parent or Subsidiary or Associated Companies and
(xxiii)(a)
other related parties (name-wise details)

215
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied
(xxiii)(b) Directors, Chief Executive Officer, Company Secretary,
Chief Financial Officer, Head of Internal Audit and
Compliance and their spouses and minor children
(name-wise details)
(xxiii)(c) Executives (top five salaried employees of the
company, other than the Directors, Chief Executive
Officer, Company Secretary, Chief Financial Officer and
Head of Internal Audit).
(xxiii)(d) Shareholders holding ten percent (10%) or more voting
interest in the company (name-wise details)
In case of the appointment or re-appointment of a director, a disclosure on the following
(xxiv)
information to the shareholders
(xxiv)(a) a brief resume of the director
(xxiv)(b) nature of his or her expertise in specific functional areas
(xxiv)(c) names of companies in which the person also holds
the directorship and the membership of committees of
the Board

Management’s Discussion and Analysis signed by CEO or MD presenting detailed analysis of the
(xxv) company’s position and operations along with a brief discussion of changes in the financial
statements, among others, focusing on

(xxv)(a) accounting policies and estimation for preparation of

financial statements.
(xxv) (b) changes in accounting policies and estimation, if any,
clearly describing the effect on financial performance
or results and financial position as well as cash flows in
absolute figure for such changes.
(xxv) (c) comparative analysis (including effects of inflation) of
financial performance or results and financial position
as well as cash flows for current financial year with
immediately preceding five years explaining reasons
thereof.
(xxv) (d) compare such financial performance or results and
financial position as well as cash flows with the peer
industry scenario.
(xxv) (e) briefly explain the financial and economic scenario of
the country and the globe.
(xxv) (f) risks and concerns issues related to the financial
statements, explaining such risk and concerns
mitigation plan of the company
(xxv) (g) future plan or projection or forecast for company’s
operation, performance and financial position, with
justification thereof, i.e., actual position shall be
explained to the shareholders in the next AGM.

216 annual report 2020

 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(xxvi) Declaration or certification by the CEO and the CFO to

the Board as required under condition No. 3(3) shall be
disclosed as per Annexure-A
(xxvii) The report as well as certificate regarding compliance
of conditions of this Code as required under condition
No. 9 shall be disclosed as per Annexure-B and
Annexure-C.
1.6 Meetings of the Board of Directors

The company shall conduct its Board meetings and

record the minutes of the meetings as well as keep
required books and records in line with the provisions
of the relevant Bangladesh Secretarial Standards (BSS)
as adopted by the Institute of Chartered Secretaries of
Bangladesh (ICSB) in so far as those standards are not
inconsistent with any condition of this Code
1.7 Code of Conduct for the Chairperson, other Board members and Chief Executive Officer

(a) The Board shall lay down a code of conduct, based on NRC not formed.
the recommendation of the Nomination and
Remuneration Committee (NRC) at condition No. 6, for As per BRPD Circular
the Chairperson of the Board, other board members Letter No.11, dated 27
and Chief Executive Officer of the company. October 2013 of
Bangladesh Bank,
(b) The code of conduct as determined by the NRC shall be “Formation of
posted on the website of the company including, committees from the
among others, prudent conduct and behavior; Board of Directors:
confidentiality; conflict of interest; compliance with laws, Each bank company
rules and regulations; prohibition of insider trading; can form 1 (one)
relationship with environment, employees, customers executive committee,
and suppliers; and independency. 1 (one) audit commit-
tee and 1 (one) risk
management
committee with the
directors. Board can’t
form any other
permanent, tempo-
rary or sub-commit-
tee except the above
mentioned three
committees.
2 Governance of Board of Directors of Subsidiary Company
(a) Provisions relating to the composition of the Board of
the holding company shall be made applicable to the
composition of the Board of the subsidiary company.
(b) At least 1 (one) independent director on the Board of the Appointed in the
Board meeting,
holding company shall be a director on the Board of the
however Form XII of
subsidiary company the subsidiaries are
not updated yet.

217
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(c) The minutes of the Board meeting of the subsidiary

company shall be placed for review at the following
Board meeting of the holding company.
(d) The minutes of the respective Board meeting of the
holding company shall state that they have reviewed
the affairs of the subsidiary company also.
(e) The Audit Committee of the holding company shall
also review the financial statements, in particular the
investments made by the subsidiary company.

3 Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO),
Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS)

3.1 Appointment
(a) The Board shall appoint a Managing Director (MD) or
Chief Executive Officer (CEO), a Company Secretary
(CS), a Chief Financial Officer (CFO) and a Head of
Internal Audit and Compliance (HIAC).
(b) The positions of the Managing Director (MD) or Chief
Executive Officer (CEO), Company Secretary (CS), Chief
Financial Officer (CFO) and Head of Internal Audit and
Compliance (HIAC) shall be filled by different
individuals.
(c) The MD or CEO, CS, CFO and HIAC of a listed company
shall not hold any executive position in any other
company at the same time.
(d) The Board shall clearly define respective roles,
responsibilities and duties of the CFO, the HIAC and the
CS.
(e) The MD or CEO, CS, CFO and HIAC shall not be
removed from their position without approval of the
Board as well as immediate dissemination to the
Commission and stock exchange(s).
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)

(a) The MD or CEO and CFO shall certify to the Board that they have reviewed financial statements for
the year and that to the best of their knowledge and belief:

218 annual report 2020

 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(a)(i) these statements do not contain any materially untrue

statement or omit any material fact or contain
statements that might be misleading.
(a)(ii) these statements together present a true and fair view
of the company’s affairs and are in compliance with
existing accounting standards and applicable laws.
(b) The MD or CEO and CFO shall also certify that there are,
to the best of knowledge and belief, no transactions
entered into by the company during the year which are
fraudulent, illegal or in violation of the code of conduct
for the company’s Board or its members.
(c) The certification of the MD or CEO and CFO shall be
disclosed in the Annual Report.
4 Board of Directors’ Committee

(i) Audit Committee

(ii) Nomination and Remuneration Committee NRC not formed.
Explanation
Mentioned in 1.7.
5 Audit Committee
5.1 Responsibility to the Board of Directors
(a) The company shall have an Audit Committee as a
subcommittee of the Board.
(b) The Audit Committee shall assist the Board in ensuring
that the financial statements reflect true and fair view of
the state of affairs of the company and in ensuring a
good monitoring system within the business.
(c) The Audit Committee shall be responsible to the Board;
the duties of the Audit Committee shall be clearly set
forth in writing.
5.2 Constitution of the Audit Committee
(a) The Audit Committee shall be composed of at least 3
(three) members
(b) The Board shall appoint members of the Audit
Committee who shall be non-executive directors of the
company excepting Chairperson of the Board and shall
include at least 1 (one) independent director.
(c) All members of the audit committee should be
“financially literate” and at least 1 (one) member shall
have accounting or related financial management
background and 10 (ten) years of such experience.

219
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied
(d) When the term of service of any Committee member
expires or there is any circumstance causing any
Committee member to be unable to hold office before Not Applicable
expiration of the term of service, thus making the
number of the Committee members to be lower than
the prescribed number of 3 (three) persons, the Board
shall appoint the new Committee member to fill up the
vacancy immediately or not later than 1 (one) month
from the date of vacancy in the Committee to ensure
continuity of the performance of work of the Audit
Committee.
(e) The company secretary shall act as the secretary of the
Committee.
(f) The quorum of the Audit Committee meeting shall not
constitute without at least 1 (one) independent director.
5.3 Chairperson of the Audit Committee
(a) The Board shall select 1 (one) member of the Audit
Committee to be Chairperson of the Audit Committee,
who shall be an independent director
(b) In the absence of the Chairperson of the Audit
Committee, the remaining members may elect one of
themselves as Chairperson for that particular meeting,
in that case there shall be no problem of constituting a
quorum as required under condition No. 5(4)(b) and the
reason of absence of the regular Chairperson shall be
duly recorded in the minutes
(c) Chairperson of the Audit Committee shall remain
present in the Annual General Meeting (AGM).
5.4 Meeting of the Audit Committee
(a) The Audit Committee shall conduct at least its four
meetings in a financial year.
(b) The quorum of the meeting of the Audit Committee
shall be constituted in presence of either two members
or two-third of the members of the Audit Committee,
whichever is higher, where presence of an independent
director is a must
5.5 Role of Audit Committee
(a) Oversee the financial reporting process
(b) monitor choice of accounting policies and principles
(c) monitor Internal Audit and Compliance process to
ensure that it is adequately resourced, including
approval of the Internal Audit and Compliance Plan and
review of the Internal Audit and Compliance Report

220 annual report 2020

 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(d) oversee hiring and performance of external auditors

(e) hold meeting with the external or statutory auditors for
review of the annual financial statements before
submission to the Board for approval or adoption
(f) review along with the management, the annual financial
statements before submission to the Board for approval
(g) review along with the management, the quarterly and
half yearly financial statements before submission to the
Board for approval
(h) review the adequacy of internal audit function
(i) review the Management’s Discussion and Analysis
before disclosing in the Annual Report

(j) review statement of all related party transactions

submitted by the management
(k) review Management Letters or Letter of Internal Control
weakness issued by statutory auditors
(l) oversee the determination of audit fees based on scope
and magnitude, level of expertise deployed and time
required for effective audit and evaluate the
performance of external auditors; and
(m) oversee whether the proceeds raised through Initial
Public Offering (IPO) or Repeat Public Offering (RPO) or Not applicable as no
such events
Rights Share Offer have been utilized as per the
occurred.
purposes stated in relevant offer document or
prospectus approved by the Commission.
5.6 Reporting of the Audit Committee
(a) Reporting to the Board of Directors
(a)(i) The Audit Committee shall report on its activities to the
Board
(a)(ii) The Audit Committee shall immediately report to the
Board on the following findings, if any:
(a)(ii)(a) report on conflicts of interests Not applicable as no
such events occurred
yet.
(a)(ii)(b) suspected or presumed fraud or irregularity or material Not applicable as no
defect identified in the internal audit and compliance such events occurred
process or in the financial statements yet.
(a)(ii)(c) suspected infringement of laws, regulatory compliances Not applicable as no
including securities related laws, rules and regulations such events occurred
yet.

(a)(ii)(d) any other matter which the Audit Committee deems Not applicable as no
necessary shall be disclosed to the Board immediately such events occurred
yet.

221
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied
(b) Reporting to the Authorities
If the Audit Committee has reported to the Board about
anything which has material impact on the financial
condition and results of operation and has discussed
with the Board and the management that any
rectification is necessary and if the Audit Committee
Not applicable as
finds that such rectification has been unreasonably
no such events
ignored, the Audit Committee shall report such finding occurred yet.
to the Commission, upon reporting of such matters to
the Board for three times or completion of a period of 6
(six) months from the date of first reporting to the Board,
whichever is earlier
5.7 Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee,
including any report made to the Board under condition Not applicable as
No. 5(6)(a)(ii) above during the year, shall be signed by no such events
the Chairperson of the Audit Committee and disclosed occurred yet.
in the annual report of the issuer company.

NRC not formed as

6 Nomination and Remuneration Committee (NRC)
Mentioned in 1.7.

6.1 Responsibility to the Board of Directors

(a) The company shall have a Nomination and
Remuneration Committee (NRC) as a sub-committee of
the Board
(b) The NRC shall assist the Board in formulation of the
nomination criteria or policy for determining
qualifications, positive attributes, experiences and
independence of directors and top level executive as
well as a policy for formal process of considering
remuneration of directors, top level executive
(c) The Terms of Reference (ToR) of the NRC shall be
clearly set forth in writing covering the areas stated at
the condition No. 6(5)(b).
6.2 Constitution of the NRC
(a) The Committee shall comprise of at least three
members including an independent director
(b) All members of the Committee shall be non-executive
directors
(c) Members of the Committee shall be nominated and
appointed by the Board
(d) The Board shall have authority to remove and appoint
any member of the Committee

222 annual report 2020

 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(e) In case of death, resignation, disqualification, or removal

of any member of the Committee or in any other cases
of vacancies, the board shall fill the vacancy within 180
(one hundred eighty) days of occurring such vacancy in
the Committee.
(f) The Chairperson of the Committee may appoint or
co-opt any external expert and/or member(s) of staff to
the Committee as advisor who shall be non-voting
member, if the Chairperson feels that advice or
suggestion from such external expert and/or
member(s) of staff shall be required or valuable for the
Committee
(g) The company secretary shall act as the secretary of the
Committee
(h) The quorum of the NRC meeting shall not constitute
without attendance of at least an independent director
(i) No member of the NRC shall receive, either directly or
indirectly, any remuneration for any advisory or
consultancy role or otherwise, other than Director’s fees
or honorarium from the company
6.3 Chairperson of the NRC
(a) The Board shall select 1 (one) member of the NRC to be
Chairperson of the Committee, who shall be an
independent director
(b) In the absence of the Chairperson of the NRC, the
remaining members may elect one of themselves as
Chairperson for that particular meeting, the reason of
absence of the regular Chairperson shall be duly
recorded in the minutes
(c) The Chairperson of the NRC shall attend the annual
general meeting (AGM) to answer the queries of the
shareholders
Provided that in absence of Chairperson of the NRC, any
other member from the NRC shall be selected to be
present in the annual general meeting (AGM) for
answering the shareholder’s queries and reason for
absence of the Chairperson of the NRC shall be
recorded in the minutes of the AGM
6.4 Meeting of the NRC
(a) The NRC shall conduct at least one meeting in a financial
year
(b) The Chairperson of the NRC may convene any
emergency meeting upon request by any member of
the NRC

223
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied

(c) The quorum of the meeting of the NRC shall be

constituted in presence of either two members or two
third of the members of the Committee, whichever is
higher, where presence of an independent director is
must as required under condition No. 6(2)(h)
(d) The proceedings of each meeting of the NRC shall duly
be recorded in the minutes and such minutes shall be
confirmed in the next meeting of the NRC
6.5 Role of the NRC
(a) NRC shall be independent and responsible or
accountable to the Board and to the shareholders
(b) NRC shall oversee, among others, the following matters
and make report with recommendation to the Board
(b)(i) formulating the criteria for determining qualifications,
positive attributes and independence of a director and
recommend a policy to the Board, relating to the
remuneration of the directors, top level executive,
considering the following
(b)(i)(a) the level and composition of remuneration is
reasonable and sufficient to attract, retain and motivate
suitable directors to run the company successfully
(b)(i)(b) the relationship of remuneration to performance is clear
and meets appropriate performance benchmarks
(b)(i)(c) remuneration to directors, top level executive involves a
balance between fixed and incentive pay reflecting
short and long-term performance objectives
appropriate to the working of the company and its goals
(b)(ii) devising a policy on Board’s diversity taking into
consideration age, gender, experience, ethnicity,
educational background and nationality
(b)(iii) identifying persons who are qualified to become
directors and who may be appointed in top level
executive position in accordance with the criteria laid
down, and recommend their appointment and removal
to the Board
(b)(iv) formulating the criteria for evaluation of performance of
independent directors and the Board
(b)(v) identifying the company’s needs for employees at
different levels and determine their selection, transfer or
replacement and promotion criteria
(b)(vi) developing, recommending and reviewing annually the
company’s human resources and training policies

224 annual report 2020

 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied
7 External or Statutory Auditors
7.1 The issuer company shall not engage its external or statutory auditors to perform the following
services of the company

(i) appraisal or valuation services or fairness opinions

(ii) financial information systems design and
implementation
(iii) book-keeping or other services related to the
accounting records or financial statements
(iv) broker-dealer services
(v) actuarial services
(vi) internal audit services or special audit services
(vii) any service that the Audit Committee determines
(viii) audit or certification services on compliance of
corporate governance as required under condition No.
9(1)
(ix) any other service that creates conflict of interest
7.2 No partner or employees of the external audit firms shall
possess any share of the company they audit at least
during the tenure of their audit assignment of that
company; his or her family members also shall not hold
any shares in the said company
Provided that spouse, son, daughter, father, mother,
brother, sister, son-in-law and daughter-in-law shall be
considered as family members
7.3 Representative of external or statutory auditors shall
remain present in the Shareholders’ Meeting (Annual
General Meeting or Extraordinary General Meeting) to
answer the queries of the shareholders
8 Maintaining a website by the Company
8.1 The company shall have an official website linked with
the website of the stock exchange.
8.2 The company shall keep the website functional from the
date of listing.
8.3 The company shall make available the detailed
disclosures on its website as required under the listing
regulations of the concerned stock exchange(s).

225
 Compliance Status
Condition (Put √ in the
Title appropriate column) Remarks
No.
Not
Complied Complied
9 Reporting and Compliance of Corporate Governance

9.1 The company shall obtain a certificate from a practicing

Professional Accountant or Secretary (Chartered
Accountant or Cost and Management Accountant or
Chartered Secretary) other than its statutory auditors or
audit firm on yearly basis regarding compliance of
conditions of Corporate Governance Code of the
Commission and shall such certificate shall be disclosed
in the Annual Report
9.2 The professional who will provide the certificate on
compliance of this Corporate Governance Code shall be
appointed by the shareholders in the annual general
meeting
9.3 The directors of the company shall state, in accordance
with the Annexure-C attached, in the directors’ report
whether the company has complied with these
conditions or not

226 annual report 2020

 FINANCIAL
STATEMENTS
2020

227
 INDEPENDENT AUDITOR’S REPORT
To the Shareholders of The City Bank Limited

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

OPINION
We have audited the consolidated financial statements of The City Bank Limited and its subsidiaries (the “Group”) as well as the
separate financial statements of The City Bank Limited (the “Bank”), which comprise the consolidated and separate balance sheets as
at 31 December 2020 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.

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 balance sheet of the Group and the separate balance sheet of the Bank as at 31 December
2020 and of its consolidated and separate profit and loss accounts and its consolidated and separate cash flows for the year then
ended in accordance with International Financial Reporting Standards (IFRSs) as explained in note 2.1.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our
report. We are independent of the Group and the Bank in accordance with the International Ethics Standards Board for Accountants’
Code of Ethics for Professional Accountants (IESBA Code), Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh
Bank, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Institute of Chartered
Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and
separate financial statements of the current year. 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.

1. Measurement of provision for loans and advances

See notes no. 3.3.3, 8.a.16, 8.a.17, 16.a.1 and 16.b to the financial statements.
The key audit matter How the matter was addressed in our audit
The process of estimating provision for loans and advances We tested the design and operating effectiveness of key
associated with credit risk is judgmental and complex. While controls focusing on the following:
estimating such provision certain judgmental factors need to l Credit monitoring and provisioning process;
be considered including:
l Identification of loss events, including early warning and
l Future business performance of the borrower; default warning indicators; and
l Key assumptions relating to further business l Review of quarterly Classification of Loans (CL).
performance of the borrower;
l Market value of the collateral; and
Our substantive procedures in relation to the provision for loans
l Ability to repossess collateral; and and advances portfolio comprised the following:
l Recovery rates. l Reviewed the adequacy of the Bank's general and
specific provisions;
Furthermore, these provisions are processed manually using l Assessed the methodologies on which the provision
the voluminous data extracted from the IT system of the Bank amounts based, recalculated the provisions and tested
and following the instructions of Bangladesh Bank (the central the completeness and accuracy of the underlying
bank of Bangladesh) issued time to time. information; and

228 Annual Report 2020

 The key audit matter How the matter was addressed in our audit
Due to high level of judgement involved and using some l Finally assessed the appropriateness and presentation of
manual process in estimating the provision for loans and disclosures against relevant accounting standards and
advance, we considered this to be a key audit matter. Bangladesh Bank guidelines.
At year end the Group and Bank reported total gross loans and
advances of BDT 269,268 million (2019: BDT 247,778 million)
and BDT 268,202 million (2019: BDT 246,944 million)
respectively and provision for loans and advances of BDT 9,152
million (2019: BDT 10,117 million) and BDT 9,093 million (2019:
BDT 10,069 million) respectively.

2. Loans and advances

See note no 2.1 and 8 to the financial statements.

The key audit matter How the matter was addressed in our audit
Loans and advances are the main element of financial We tested the design and operating effectiveness of key
statements of the Bank. Income of the Bank is mainly controls focusing on credit appraisal, loan disbursement
dependent on the portfolio of loans and advances. procedures and monitoring process of loans and advances.
Management performance is highly dependent on the target We have performed procedure to check whether the Bank has
achievement of loans and advances. Loan disbursement ensured appropriate documentation as per Bangladesh Bank
requires robust documentation followed by approval from regulations and the Bank's policy before disbursement of loans
appropriate level of authority. and advances. In addition, we have performed procedure to
We have identified loans and advances as key audit matter check whether the loans and advances is recorded completely
because there is an inherent risk of fraud in disbursement of and accurately and that are existed at the reporting date.
loans and advances by management to meet specific targets or Furthermore, we have assessed the appropriateness of
expectations. disclosure against Bangladesh Bank guidelines.

3. Recognition of interest income from loans and advances

See note no. 3.6.1 and 26 to the financial statements
The key audit matter How the matter was addressed in our audit
Recognition of interest income has significant and wide We tested the design and operating effectiveness of key
influence on financial statements. controls over recognition and measurement of interest on
Recognition and measurement of interest income has loans and advances.
involvement of complex IT environment. We performed test of operating effectiveness on automated
We identify recognition of interest income from loans and control in place to measure and recognise interest income.
advances as a key audit matter because this is one of the key We have also performed substantive procedure to check
performance indicators of the Bank and therefore there is an whether interest income is recognised completely and
inherent risk of fraud and error in recognition of interest by accurately.
management to meet specific targets or expectations. We assessed the appropriateness and presentation of
disclosure against relevant accounting standards and
Bangladesh Bank guidelines.

4. IT systems and controls

The key audit matter How the matter was addressed in our audit
Our audit procedures have a focus on IT systems and controls We tested the design and operating effectiveness of the Bank’s
due to the pervasive nature and complexity of the IT IT access controls over the information systems that are critical
environment, the large volume of transactions processed in to financial reporting. We tested IT general controls (logical
numerous locations daily and the reliance on automated and access, changes management and aspects of IT operational
manual with automated (IT dependent) controls. controls). We have performed audit procedures to ensure that

229
 The key audit matter How the matter was addressed in our audit
We have focused on user access management, developer requests for access to systems were appropriately reviewed
access to the production environment and changes to the IT and authorised. We tested the Bank’s periodic review of access
environment. These are key to ensure that manual with rights. We also inspected requests of changes to systems for
automated control and automated controls are operating appropriate approval and authorisation. We considered the
effectively. control environment relating to various interfaces,
configuration and other application layer controls identified as
key to our audit.
In addition, we understood where relevant, changes were made
to the IT landscape during the audit period and tested those
changes that had a significant impact on financial reporting.

Other Information
Management is responsible for the other information. The other information comprises the information included in the Annual Report
but does not include the consolidated and separate financial statements and our auditor's report thereon. The Annual Report is
expected to be made available to us after the date of this auditor’s report.
Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the
consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the
matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Consolidated and Separate Financial Statements
and Internal Controls
Management is responsible for the preparation of the consolidated financial statements of the Group and also separate financial
statements of the Bank that give a true and fair view in accordance with IFRSs as explained in note 2.1, 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 Group and 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. 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 scepticism throughout the
audit. We also:
l 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.

230 Annual Report 2020

l 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 Group's internal control.
l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
l 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.
l 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.
l 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 consolidated and separate 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

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 Responsibilities for
the Audit of the Consolidated and Separate Financial Statements section in forming the above opinion on the consolidated
financial statements of the Group and the separate financial statements of the Bank 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
Responsibilities of Management and Those Charged with Governance for the Consolidated and Separate Financial Statements
and Internal Controls for the financial statements and internal control:
(a) internal audit, internal control and risk management arrangements of the Group and the Bank 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 Bank and its related entities.
(iii) financial statements for the year ended 31 December 2020 of two subsidiaries namely City Brokerage Limited and City Bank
Capital Resources Limited have been audited by S.F. Ahmed & Co, Chartered Accountants and other two subsidiaries namely
CBL Money Transfer Sdn. Bhd. and City Hong Kong Limited have been audited by Nasharuddin Wong & Co, Chartered
Accountants and Akin CPA Limited, Certified Public Accountants respectively and have been properly reflected in the
consolidated financial statements;
(iv) in our opinion, proper books of accounts 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 by the bank were for the purpose of the Bank's business for the year;

231
 (viii) the consolidated financial statements of the Group and the separate financial statements of the Bank have been drawn up in
conformity with prevailing rules, regulations and accounting standards as well as related guidance issued by Bangladesh Bank;
(ix) adequate provisions have been made for advance and other assets which are in our opinion, doubtful of recovery;
(x) the information and explanations required by us have been received and found satisfactory;
(xi) we have reviewed over 80% of the risk weighted assets of the Bank and spent over 3,565 person hours; and
(xii) Capital to Risk-weighted Asset Ratio (CRAR) as required by Bangladesh Bank has been maintained adequately during the year
The engagement partner on the audit resulting in this independent auditor's report is Ali Ashfaq.

Ali Ashfaq, Partner, Enrolment no: 509

Rahman Rahman Huq, Chartered Accountants
KPMG in Bangladesh
Firm Registration Number: [N/A]

Dhaka, 22 March 2021

DVC: 2103220509AS524431

232 Annual Report 2020

CONSOLIDATED BALANCE SHEET
As at 31 December 2020
Figures in Taka

PROPERTY AND ASSETS Notes 2020 2019

Cash
In hand (including foreign currencies) 4 5,643,796,101 6,136,396,417
Balance with Bangladesh Bank and its agent bank(s)
(including foreign currencies) 4.a.2 16,761,650,690 19,776,258,104
22,405,446,791 25,912,654,521
Balance with other banks and financial institutions 5
In Bangladesh 22,811,053,203 19,174,226,133
Outside Bangladesh 4,385,591,848 4,360,632,299
27,196,645,051 23,534,858,432
Money at call and short notice 6 - -
Investments 7
Government 42,061,653,285 36,085,210,195
Others 9,799,542,962 7,563,438,277
51,861,196,247 43,648,648,472
Loans and advances/investments 8
Loans, cash credits, overdrafts, etc./investments 266,897,404,404 245,024,807,640
Bills purchased and discounted 2,370,175,652 2,752,926,612
269,267,580,056 247,777,734,252
Fixed assets including premises, furniture and fixtures 10 6,611,300,802 6,299,251,389
Other assets 11 10,169,257,067 8,627,907,980
Non-banking assets 12 1,082,478,752 1,152,338,991
Total assets 388,593,904,766 356,953,394,037

LIABILITIES AND CAPITAL

Liabilities
Bond 13 11,600,000,000 9,200,000,000
Borrowings from other banks, financial institutions and agents 14 59,729,114,844 45,147,496,824
Deposits and other accounts 15
Current deposits and other accounts 45,764,342,149 40,869,697,059
Bills payable 2,289,242,204 1,884,096,479
Savings bank deposits 59,520,636,745 46,367,253,617
Fixed deposits 146,922,088,579 157,319,657,916
Bearer certificate of deposit - -
254,496,309,677 246,440,705,071
Other liabilities 16 33,265,393,958 31,625,852,069
Total liabilities 359,090,818,479 332,414,053,964
Capital/shareholders' equity
Paid up capital 17.2 10,163,866,610 10,163,866,610
Statutory reserve 18 8,659,477,813 8,659,477,813
Share premium 19 1,504,388,797 1,504,388,797
Dividend equalisation reserve 20 530,786,630 530,786,630
Other reserve 21 2,835,213,292 701,793,786
Surplus in profit and loss account 22 5,809,239,365 2,978,918,631
Total shareholders' equity 29,502,972,507 24,539,232,267
Non controlling interest 23 113,780 107,806
Total equity 29,503,086,287 24,539,340,073
Total liabilities and shareholders' equity 388,593,904,766 356,953,394,037

233
 Figures in Taka
OFF-BALANCE SHEET ITEMS Notes 2020 2019
Contingent liabilities
Acceptances and endorsements 55,577,706,368 51,796,238,358
Letters of guarantee 24.1 19,162,505,772 11,763,748,842
Irrevocable letters of credit 24.2 31,349,804,747 29,545,447,726
Bills for collection 24.3 9,615,832,715 7,915,163,524
Other contingent liabilities for ECA financing 11,195,747,927 12,152,921,351
Total 126,901,597,529 113,173,519,801

Other commitments
Documentary credits and short term trade-related transactions - -
Forward assets purchased and forward deposits placed 24.4 9,507,895,143 5,224,685,808
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Other commitments - -
Total 9,507,895,143 5,224,685,808
Total Off-Balance Sheet items including contingent liabilities 136,409,492,672 118,398,205,609

Net Assets Value (NAV) per share 49 29.03 24.14

The annexed notes 1 to 53 form an integral part of these financial statements.

Managing Director & CEO Director Director Chairman

As per our report of same date.

Dhaka, 22 March 2021 Ali Ashfaq, Partner, Enrolment no: 509

Rahman Rahman Huq, Chartered Accountants
KPMG in Bangladesh
Firm Registration Number: [N/A]

DVC: 2103220509AS524431

234 Annual Report 2020

CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2020 Figures in Taka
Notes 2020 2019
Interest income/profit on investments 26 23,264,862,526 26,924,949,586
Interest paid/profit shared on deposits and borrowings etc. 27 (14,807,916,208) (16,013,724,643)
Net interest income/profit on investments 8,456,946,318 10,911,224,943

Investment income 28 3,747,853,965 2,361,557,548

Commission, exchange and brokerage 29 3,935,830,730 3,722,530,724
Other operating income 30 1,580,928,599 1,987,642,988
9,264,613,294 8,071,731,260
Total operating income (A) 17,721,559,612 18,982,956,203
Operating expenses
Salaries and allowances 31 5,473,853,873 5,447,575,845
Rent, taxes, insurance, electricity, etc. 32 554,177,359 569,270,621
Legal expenses 33 35,675,911 48,751,265
Postage, stamp, telecommunication, etc. 34 100,119,256 91,976,013
Stationery, printing, advertisements, etc. 35 221,889,579 258,473,602
Chief executive's salary and fees 36 18,764,419 18,960,006
Directors' fees 37 4,688,093 4,833,773
Auditors' fees 2,983,145 2,581,060
Depreciation and repair 38 1,897,929,716 1,671,060,493
Other expenses 39 1,814,557,792 2,261,306,283
Total operating expenses (B) 10,124,639,143 10,374,788,961
Profit before provision (C = A-B) 7,596,920,469 8,608,167,242

Provision for loans and advances/investments 40 (376,436,866) (2,599,940,627)

Provision for off-balance sheet exposures (170,448,318) (41,344,313)
Provision for diminution in value of investments 25,630,424 (31,120,749)
Other provision (89,379,167) 70,632,584
Total provision (D) (610,633,927) (2,601,773,105)
Total profit before tax (E = C+D) 6,986,286,542 6,006,394,137
Provision for taxation (F) 41
Current tax expense (2,114,350,395) (3,161,628,378)
Deferred tax income/(expense) (507,754,594) (209,603,620)
Total provision for tax (2,622,104,989) (3,371,231,998)
Net profit after tax (G = E+F) 4,364,181,553 2,635,162,139

Net profit after tax attributable to:

Equity holders of the bank 4,364,175,579 2,635,158,749
Non-controlling interest 5,974 3,390
4,364,181,553 2,635,162,139
Appropriations
Statutory reserve - 657,918,701
General reserve - -
- 657,918,701
Retained surplus for the year 4,364,175,579 1,977,240,048

Earnings per share (EPS) 47 4.29 2.59

The annexed notes 1 to 53 form an integral part of these financial statements

Managing Director & CEO Director Director Chairman

As per our report of same date.

Ali Ashfaq, Partner, Enrolment no: 509

Rahman Rahman Huq, Chartered Accountants
Dhaka, 22 March 2021 KPMG in Bangladesh
Firm Registration Number: [N/A]
DVC: 2103220509AS524431

235
236
CONSOLIDATED STATEMENT OF CHANGES IN EQUIT
For the year ended 31 December 2020
Attributable to the equity holders of the Bank
Dividend Non controlling

Annual Report 2020

Statutory Share Surplus in profit Total equity
Particulars Paid up capital General reserve Revaluation equalisation Total interest
reserve premium reserve and loss account
reserve
Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Balance as at 1 January 2020 10,163,866,610 8,659,477,813 1,504,388,797 11,394,928 690,398,858 530,786,630 2,978,918,631 24,539,232,267 107,806 24,539,340,073
Surplus/(deficit) on account of revaluation of investments - - - - 2,133,419,506 - - 2,133,419,506 - 2,133,419,506
Currency translation differences - - - - - - 5,354,803 5,354,803 - 5,354,803
Net profit/(loss) for the year - - - - - - 4,364,175,579 4,364,175,579 5,974 4,364,181,553
Dividend (Cash) - - - - - - (1,539,209,648) (1,539,209,648) - (1,539,209,648)
Balance as at 31 December 2020 10,163,866,610 8,659,477,813 1,504,388,797 11,394,928 2,823,818,364 530,786,630 5,809,239,365 29,502,972,507 113,780 29,503,086,287

For the year ended 31 December 2019

Attributable to the equity holders of the Bank
Statutory Share Dividend Surplus in profit Non controlling
Particulars Paid up capital General reserve Revaluation equalisation Total interest Total equity
reserve premium reserve reserve and loss account
Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Balance as at 1 January 2019 9,679,872,970 8,001,559,112 1,504,388,797 11,394,928 3,120,268,821 530,786,630 2,068,909,234 24,917,180,492 104,416 24,917,284,908
Surplus/(deficit) on account of revaluation of investments - - - - (2,429,869,963) - - (2,429,869,963) - (2,429,869,963)
Currency translation differences - - - - - - 3,128,569 3,128,569 - 3,128,569
Net profit/(loss) for the year - - - - - - 2,635,158,749 2,635,158,749 3,390 2,635,162,139
Dividend (Cash) - - - - - - (586,365,580) (586,365,580) - (586,365,580)
Dividend (Bonus Share) 483,993,640 - - - - - (483,993,640) - - -
Appropriation made during year - 657,918,701 - - - - (657,918,701) - - -
Balance as at 31 December 2019 10,163,866,610 8,659,477,813 1,504,388,797 11,394,928 690,398,858 530,786,630 2,978,918,631 24,539,232,267 107,806 24,539,340,073

The annexed notes 1 to 53 form an integral part of these financial statements.

CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2020
Figures in Taka
Notes 2020 2019
A) Cash flows from operating activities
Interest receipts/investment income receipts in cash 23,258,506,853 27,072,335,941
Interest payments/profit paid on deposits (15,089,946,205) (16,918,247,379)
Dividend receipts 387,639,445 384,496,515
Fees and commission receipts in cash 2,951,494,870 2,382,319,861
Recoveries of loans previously written-off 16.a.1 135,393,727 228,668,430
Cash payments to employees (5,616,106,990) (5,381,629,988)
Cash payments to suppliers (131,709,550) (172,559,506)
Income taxes paid (2,953,300,286) (2,800,969,746)
Receipts from other operating activities 43 4,707,604,336 3,976,975,042
Payments for other operating activities 44 (4,347,542,602) (4,027,729,653)
Cash generated from operating activities before changes in
operating assets and liabilities (i) 3,302,033,598 4,743,659,517

Increase/decrease in operating assets and liabilities

Loans and advances to customers (21,489,845,804) (15,902,779,730)
Other assets 45 (1,962,235,255) (2,229,942,006)
Deposits from other banks/borrowings 10,410,838,977 (21,134,614,497)
Deposits from customers 12,226,383,649 46,612,617,580
Other liabilities 46 2,496,772,104 1,598,437,653
Cash generated from operating assets and liabilities (ii) 1,681,913,671 8,943,719,000
Net cash flow from operating activities (i+ii) 4,983,947,269 13,687,378,517

B) Cash flows from investing activities

Net payment for sale/(purcahse) of shares (363,535,699) (127,809,642)
Net payment for sale / (purchase) of securities (8,924,696,395) (5,457,509,960)
Net payment for (purchase)/sale of property, plant and equipment (637,384,202) (832,873,646)
Net cash used in investing activities (9,925,616,296) (6,418,193,248)

C) Cash flows from financing activities

Issuance of perpetual bond 2,400,000,000 -
Issuance of subordinated bond - 400,000,000
Dividend paid (1,539,209,648) (586,365,580)
Net cash from financing activities 860,790,352 (186,365,580)
D) Net increase in cash and cash equivalents (A+B+C) (4,080,878,675) 7,082,819,689
E) Effects of exchange rate changes on cash and cash equivalents 1,019,698,739 1,342,089,070
F) Cash and cash equivalents at beginning of the year 65,784,885,715 57,359,976,956
G) Cash and cash equivalents at end of the year (D+E+F) 62,723,705,779 65,784,885,715

Cash and cash equivalents at end of the year consists of: 42

Cash in hand (including foreign currencies) 5,643,796,101 6,136,396,417
Balance with Bangladesh Bank and its agent bank(s) (including foreign currencies) 16,761,650,690 19,776,258,104
Balance with other banks and financial institutions 27,196,645,051 23,534,858,432
Money at call and short notice - -
Government securities 13,121,613,937 16,337,372,762
62,723,705,779 65,784,885,715

Net operating cash flow per share (NOCFPS) 48 4.90 13.47

The annexed notes 1 to 53 form an integral part of these financial statements.

237
 BALANCE SHEET
As at 31 December 2020

Figures in Taka
Notes 2020 2019
PROPERTY AND ASSETS
Cash
In hand (including foreign currencies) 4.a.1 5,641,907,242 6,130,572,909
Balance with Bangladesh Bank and its agent bank (s)
(including foreign currencies) 4.a.2 16,761,650,690 19,776,258,104
22,403,557,932 25,906,831,013
Balance with other banks and financial institutions 5.a
In Bangladesh 22,681,361,342 18,820,461,869
Outside Bangladesh 4,341,742,395 4,305,212,819
27,023,103,737 23,125,674,688
Money at call and short notice 6 - -
Investments 7.a
Government 42,061,653,285 36,085,210,195
Others 4,189,792,330 3,366,294,433
46,251,445,615 39,451,504,628
Loans and advances/investments 8.a
Loans, cash credits, overdrafts, etc./investments 265,988,727,812 244,204,761,679
Bills purchased and discounted 9 2,212,792,749 2,738,889,044
268,201,520,561 246,943,650,723

Fixed assets including premises, furniture and fixtures 10.a 5,920,244,649 5,675,246,085
Other assets 11.a 12,043,415,414 12,433,741,210
Non-banking assets 12 1,082,478,752 1,152,338,991
Total assets 382,925,766,660 354,688,987,338

LIABILITIES AND CAPITAL

Liabilities
Bond 13 11,600,000,000 9,200,000,000
Borrowings from other banks, financial institutions and agents 14.a 58,768,967,963 44,168,290,655
Deposits and other accounts 15.a
Current deposits and other accounts 45,024,641,744 40,790,426,287
Bills payable 2,289,242,204 1,884,096,479
Savings bank deposits 59,520,636,745 46,367,253,617
Fixed deposits 147,946,628,940 157,661,889,059
Bearer certificate of deposit - -
254,781,149,633 246,703,665,442
Other liabilities 16.a 28,957,319,436 29,201,394,866
Total liabilities 354,107,437,032 329,273,350,963
Capital/shareholders' equity
Paid up capital 17.2 10,163,866,610 10,163,866,610
Statutory reserve 18 8,659,477,813 8,659,477,813
Share premium 19 1,504,388,797 1,504,388,797
Dividend equalisation reserve 20 530,786,630 530,786,630
Other reserve 21.a 1,860,629,399 930,897,744
Surplus in profit and loss account 22.a 6,099,180,379 3,626,218,781
Total shareholders' equity 28,818,329,628 25,415,636,375
Total liabilities and shareholders' equity 382,925,766,660 354,688,987,338

238 Annual Report 2020

 Figures in Taka
Notes 2020 2019
OFF-BALANCE SHEET ITEMS
Contingent liabilities
Acceptances and endorsements 55,577,706,368 51,796,238,358
Letters of guarantee 24.1 19,162,505,772 11,763,748,842
Irrevocable letters of credit 24.2 31,349,804,747 29,545,447,726
Bills for collection 24.3 a 9,543,880,438 7,846,319,339
Other contingent liabilities for ECA Financing 11,195,747,927 12,152,921,351
Total 126,829,645,252 113,104,675,616

Other commitments
Documentary credits and short term trade-related transactions - -
Forward assets purchased and forward deposits placed 24.4 9,507,895,143 5,224,685,808
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Other commitments - -
Total 9,507,895,143 5,224,685,808
Total Off-Balance Sheet items including contingent liabilities 136,337,540,395 118,329,361,424

Net Assets Value (NAV) per share 49 a 28.35 25.01

The annexed notes 1 to 53 form an integral part of these financial statements.

Managing Director & CEO Director Director Chairman

As per our report of same date.

Ali Ashfaq, Partner, Enrolment no: 509

Dhaka, 22 March 2021 Rahman Rahman Huq, Chartered Accountants
KPMG in Bangladesh
Firm Registration Number: [N/A]

DVC: 2103220509AS524431

239
 PROFIT AND LOSS ACCOUNT Figures in Taka
For the year ended 31 December 2020 Notes 2020 2019

Interest income/profit on investments 26.a 23,134,359,843 26,819,239,518

Interest paid/profit shared on deposits and borrowings etc. 27.a (14,771,171,752) (15,987,236,351)
Net interest income/profit on investments 8,363,188,091 10,832,003,167
Investment income 28.a 3,437,926,143 2,086,159,974
Commission, exchange and brokerage 29.a 3,355,184,560 3,380,963,967
Other operating income 30.a 1,580,928,599 1,985,585,042
8,374,039,302 7,452,708,983
Total operating income (A) 16,737,227,393 18,284,712,150

Salaries and allowances 31 5,246,612,242 5,247,455,559

Rent, taxes, insurance, electricity, etc. 32.a 495,874,933 517,834,384
Legal expenses 33.a 32,007,120 46,008,027
Postage, stamp, telecommunication, etc. 34.a 92,523,050 85,291,432
Stationery, printing, advertisements, etc. 35.a 199,165,131 235,989,626
Chief executive's salary and fees 36 18,764,419 18,960,006
Directors' fees 37.a 1,376,000 1,640,000
Auditors' fees 2,085,000 1,770,000
Depreciation and repair of Bank's assets 38.a 1,823,384,218 1,599,749,332
Other expenses 39.a 1,785,674,474 2,242,861,796
Total operating expenses (B) 9,697,466,587 9,997,560,162
Profit before provision (C = A-B) 7,039,760,806 8,287,151,988

Provision for loans and advances/investments 40.a (384,437,154) (2,585,079,302)

Provision for off-balance sheet exposures (170,448,318) (41,344,313)
Provision for diminution in value of investments - -
Other provision 40.c (89,379,167) 70,632,584
Total provision (D) (644,264,639) (2,555,791,031)
Total profit before taxes (E = C+D) 6,395,496,167 5,731,360,957
Provision for taxation (F) 41.a
Current tax expense (1,905,494,664) (3,045,860,580)
Deferred tax income/(expense) (477,830,257) (213,860,419)
Total provision for tax (2,383,324,921) (3,259,720,999)
Net profit after tax (G = E+F) 4,012,171,246 2,471,639,958
Appropriations
Statutory reserve - 657,918,701
General reserve - -
- 657,918,701
Retained surplus for the year 4,012,171,246 1,813,721,257
Earnings per share (EPS) 47.a 3.95 2.43

The annexed notes 1 to 53 form an integral part of these financial statements.

Managing Director & CEO Director Director Chairman

As per our report of same date.

Ali Ashfaq, Partner, Enrolment no: 509

Dhaka, 22 March 2021 Rahman Rahman Huq, Chartered Accountants
KPMG in Bangladesh
Firm Registration Number: [N/A]
DVC: 2103220509AS524431
240 Annual Report 2020
 STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
Revaluation Dividend Surplus in profit and
Paid-up capital Statutory reserve Share premium General reserve reserve equalisation Total equity
Particulars reserve loss account
Taka Taka Taka Taka Taka Taka Taka Taka

Balance as at 1 January 2020 10,163,866,610 8,659,477,813 1,504,388,797 11,394,928 919,502,816 530,786,630 3,626,218,781 25,415,636,375
Surplus/(deficit) on account of revaluation of investments - - - - 929,731,655 - - 929,731,655
Net profit for the year - - - - - - 4,012,171,246 4,012,171,246
Dividend (Cash) - - - - - - (1,539,209,648) (1,539,209,648)
Balance as at 31 December 2020 10,163,866,610 8,659,477,813 1,504,388,797 11,394,928 1,849,234,471 530,786,630 6,099,180,379 28,818,329,628

For the year ended 31 December 2019

Dividend Surplus in profit and
Paid-up capital Statutory reserve Share premium Revaluation equalization Total equity
General reserve reserve
Particulars reserve loss account
Taka Taka Taka Taka Taka Taka Taka Taka

Balance as at 1 January 2019 9,679,872,970 8,001,559,112 1,504,388,797 11,394,928 1,819,067,648 530,786,630 2,882,856,744 24,429,926,829
Surplus/(deficit) on account of revaluation of investments - - - - (899,564,832) - - (899,564,832)
Net profit for the year - - - - - - 2,471,639,958 2,471,639,958
Dividend (Cash) - - - - - - (586,365,580) (586,365,580)
Dividend (Bonus Share) 483,993,640 - - - - - (483,993,640) -
Appropriation made during year - 657,918,701 - - - - (657,918,701) -
Balance as at 31 December 2019 10,163,866,610 8,659,477,813 1,504,388,797 11,394,928 919,502,816 530,786,630 3,626,218,781 25,415,636,375

The annexed notes 1 to 53 form an integral part of these financial statements.

241
 CASH FLOW STATEMENT
For the year ended 31 December 2020 Figures in Taka
Notes 2020 2019
A) Cash flows from operating activities
Interest receipts/investment income receipts in cash 23,128,006,369 26,966,625,873
Interest payments/profit paid on deposits (15,059,319,529) (16,898,589,867)
Dividend receipts 151,492,874 158,414,665
Fees and commission receipts in cash 2,465,756,544 2,109,789,225
Recoveries of loans previously written off 16.a.1 135,393,727 228,668,430
Cash payments to employees (5,387,369,984) (5,180,893,353)
Cash payments to suppliers (121,058,500) (148,661,781)
Income taxes paid 11.a.3 (2,793,350,480) (2,684,010,570)
Receipts from other operating activities 43.a 4,661,491,979 3,925,581,963
Payments for other operating activities 44.a (4,191,499,232) (3,897,769,299)
Cash generated from operating activities before changes in
operating assets and liabilities (i) 2,989,543,768 4,579,155,286

Increase/decrease in operating assets and liabilities

Loans and advances to customers (21,257,869,838) (15,552,181,272)
Other assets 45.a (82,916,167) (417,401,938)
Deposits from other banks/borrowings 10,429,898,265 (21,317,136,606)
Deposits from customers 12,248,263,234 46,565,840,903
Other liabilities 46.a 769,390,791 541,781,907
Cash generated from operating assets and liabilities (ii) 2,106,766,285 9,820,902,994
Net cash from operating activities (i+ii) 5,096,310,053 14,400,058,280

B) Cash flows from investing activities

Net payment for sale/(purcahse) of shares (154,616,761) (6,546,602)
Net payment for sale / (purchase) of securities (8,924,696,395) (5,457,509,960)
Net payment for (purchase)/sale of property, plant and equipment (557,715,221) (724,216,352)
Investment in subsidiaries (31,102,901) (35,879,708)
Net cash (used in)/generated from investing activities (9,668,131,278) (6,224,152,622)

C) Cash flows from financing activities

Issuance of perpetual bond 2,400,000,000 -
Issuance of subordinated bond - 400,000,000
Dividend paid (1,539,209,648) (586,365,580)
Net cash used in financing activities 860,790,352 (186,365,580)

D) Net increase in cash and cash equivalents (A+B+C) (3,711,030,873) 7,989,540,078

E) Effects of exchange rate changes on cash and cash equivalents 889,428,016 1,271,174,742
F) Cash and cash equivalents at beginning of the year 65,369,878,463 56,109,163,643
G) Cash and cash equivalents at end of the year (D+E+F) 62,548,275,606 65,369,878,463

Cash and cash equivalents at end of the year consists of:

Cash in hand (including foreign currencies) 5,641,907,242 6,130,572,909
Balance with Bangladesh Bank and its agent bank(s) (including foreign currencies) 16,761,650,690 19,776,258,104
Balance with other banks and financial institutions 27,023,103,737 23,125,674,688
Money at call and short notice - -
Government securities 13,121,613,937 16,337,372,762
62,548,275,606 65,369,878,463
Net operating cash flow per share (NOCFPS) 5.01 14.17

242 Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS
As at and for the year ended 31 December 2020

1. REPORTING ENTITY - THE BANK AND ITS ACTIVITIES

1.1 Legal Status and nature of the entity

The City Bank Limited ("the Bank") was incorporated as a public limited company in Bangladesh under The Companies Act,
1913. It commenced its banking business from 14 March 1983 under the license issued by Bangladesh Bank. The Bank has 121
(2019:121) branches and 11 (2019: 11) SME/Agri branches in Bangladesh as at 31 December 2020. The Bank had no overseas
branches as at 31 December 2020. Out of the above 132 branches, 1 branch is designated as Islamic Banking Branch
complying with the rules of Islamic Shariah, the modus operandi of which is substantially different from other branches run
on conventional basis. It has 311 (2019: 343) ATMs as at 31 December 2020. The Bank was listed with Dhaka Stock Exchange
Limited and Chittagong Stock Exchange Limited as a publicly traded company on 03 February 1987 and 27 December 1995.
It is operating as City Group with it's four subsidiaries.
The registered office of the Bank is located at 136, Bir Uttam Mir Shawkat Sarak (Gulshan Avenue), Gulshan-2, Dhaka-1212.
The consolidated financial statements of the Bank as at and for the year ended 31 December 2020 comprise the Bank and
its subsidiaries (collectively the 'Group' and individually 'Group entities').

1.2 Principal activities of the bank

The principal activities of the Bank are to provide wide array of financial products (loans and deposits) and services that
includes all kinds of conventional and Islamic banking services to its customers. It offers commercial banking, consumer
banking, trade services, cash management, treasury, SME, retail, custodial and clearing services to its customers. These
activities are conducted through its branches, SME/Agri branches, islamic windows and vibrant alternative delivery channels
(ATM booths, internet banking) in Bangladesh. City Touch Digital Banking Service is the bank’s flagship product to provide
internet based banking solutions. City Touch offers online banking facilities like - fund transfer to utility bills payment, buying
air tickets, paying bills of mobile phones, credit cards, and insurance premiums and then tracking of accounts and even
shopping from over 100 retailers. City Touch is integrated with bKash payment system as well.The Bank also provides
off-shore banking services through its Off-Shore Banking Units (OBU) and islami banking services through its Islamic Bank
branch.

1.3 Offshore Banking

Offshore Banking Unit (OBU) is a separate business unit of the Bank, operates its business through a separate counter as
governed under the rules and guidelines vide Bangladesh Bank's letter reference no. BRPD(P-3)744(101)/2010-4129 dated 10
November 2009 and a Policy for Offshore Banking Operation issued by Bangladesh Bank through BRPD circular no. 02,
dated 25 February 2019 and BRPD circular letter no. 09, dated 27 May 2019. It gives loans (on and off-balance sheet
exposures) and takes deposits in freely convertible foreign currencies to and from person/institution not resident in
Bangladesh and Type-A (wholly foreign owned) units in EPZs in Bangladesh. It also gives long term loans to industrial units
outside EPZs and Type-B and Type-C industrial units within the EPZs subject to compliance by the industrial units with the
guidelines of Bangladesh Investment Development Authority (BIDA) and Bangladesh Bank. Besides, this unit provides bill
discounting/financing facilities accepted by Authorised Dealer (AD) in Bangladesh against usance LCs in accordance with
Bangladesh Bank (BB) guidelines. Separate financial statements of Off-Shore Banking Units are shown in Annexures J(1) and
J(2).

1.4 Islamic Banking

The Bank obtained permission for Islamic Banking Branch from Bangladesh Bank vide letter no. BL/DA/6852/2003 dated 16
July 2003. Through the Islamic Banking Branch the Bank extends all types of Islamic Shariah compliant finance like lease, hire
purchase shirkatul melk (HPSM), bai muazzal, household scheme etc. and different types of deposits like
mudaraba/manarah savings deposits, mudaraba/manarah term deposits, al-wadeeah current deposits, monthly/quarterly
profit paying scheme etc. Separate financial statements of Islamic Banking Branch are shown in Annexures I(1) and I(2).

243
 1.5 Agent Banking
The bank has started agent banking operation in 2017 with a view to reach unbanked population particularly in the
geographically dispersed area and offer banking services to potential customers who are currently out of traditional banking
periphery. City Bank has launched this banking service with 20 outlets in 2017, which is now 1,411 across the country with
thousands of new customers. This service includes offering all types of deposit accounts and other banking transactions
including bill payments, inward foreign remittance payment, fund transfer etc.

1.6 Custodian Service

The Bank obtained permission to work as a security custodian from Bangladesh Securities and Exchange Commission vide
its certificate no. SC-09/2009, dated 17 June 2009 under the Securities and Exchange Commission (Securities Custodian
Service) Rules 2003. Financial performance of Security Custodial Services have been separately reported in Annexure K
along with Bank’s audited financial statements in compliance with the requirement u/s 10(2) of Security Custodial Services
Rules 2003. The due certificate from external auditors has been obtained on internal control and financial statements of
security custodial operations of the Bank.

1.7 Subsidiaries of the Bank

The Bank has four subsidiaries. All of them have been in operations on the reporting date. These are City Brokerage Limited,
City Bank Capital Resources Limited , CBL Money Transfer Sdn. Bhd. and City Hong Kong Limited. Details of the subsidiaries
have been presented in note no. 1.7.1 to 1.7.4.

1.7.1 City Brokerage Limited

City Brokerage Limited ('the company') was incorporated in Bangladesh as a private limited company on 31 March 2010 vide
registration no. C-83616/10 under the Companies Act 1994. The legal status of the Company has been converted into public
limited company from private limited company in June 2012 in compliance with Bangladesh Securities and Exchange
Commission Rules 2000. Previously the Bank launched its brokerage division on 4 August 2009 which was subsequently
separated from the Bank on 15 November 2010. On 31 December 2020 the Bank held 99.9963% shares of the company.
The financial statements, audited by S.F. Ahmed & Co, Chartered Accountants, have been enclosed in Appendix A.

1.7.2 City Bank Capital Resources Limited

City Bank Capital Resources Limited (CBCRL) was incorporated in Bangladesh as a private limited company on 17 August
2009 vide registration no. C-79186/09 under the Companies Act, 1994. The registered office of CBCRL is at 90/1, City Center
(13th Floor), Motijheel Commercial Area, Dhaka-1000. CBCRL delivers a whole range of investment banking services
including merchant banking activities such as issue management, underwriting, portfolio management and corporate
advisory. On 31 December 2020 the Bank held 99.9933% shares of CBCRL.
The financial statements, audited by S.F. Ahmed & Co, Chartered Accountants, have been enclosed in Appendix B.

1.7.3 CBL Money Transfer Sdn. Bhd. (CMTS)

CBL Money Transfer Sdn. Bhd. (CMTS) is a private limited company by shares incorporated under the laws of Malaysia and
registered with the Companies Commission of Malaysia with Registration No. 769212M carrying on money services business
under the Money Services Business Act 2011 under a Class B License No. 00127 from the Bank Negara Malaysia. CMTS is
principally engaged as inbound and outbound remittance service provider.
The Bank entered into an agreement on 4 April 2013 to purchase 75% of ordinary shares of CMTS with an agreement to
acquire 100% shares of CMTS ultimately and the company became and started as subsidiary of the Bank since 5 August
2013. On 31 December 2020 the Bank held 100% shares of CMTS.
The financial statements of CMTS, audited by Nasharuddin Wong & Co, Chartered Accountants, have been enclosed in Appendix C.

1.7.4 City Hong Kong Ltd.

City Hong Kong Limited ("the Company") is incorporated and domiciled in Hong Kong and has its registered office and
principal place of business at Units 904 & 906, 9th Floor, Austin Tower, Nos. 22-26 Austin Avenue, Tsimshatsui, Kowloon,
Hong Kong. City Hong Kong Limited is a fully owned (100% shares) subsidiary of The City Bank Limited established at the
end of 2019 to facilitate international trade business through advising letter of credits, handling documentary collections and
bill financing (discounting) against letters of credit.
The financial statements of City Hong Kong Ltd, audited by Akin CPA Limited, Certified Public Accountants, have been
enclosed in Appendix D.

244 Annual Report 2020

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The separate financial statements of the Bank as at and for the year ended 31 December 2020 comprise those of Domestic
Banking Unit (Main operations) and Offshore Banking Unit (OBU), and the consolidated financial statements of the group
comprise those of 'the Bank' (parent company) and its subsidiaries. There were no significant changes in the nature of
principal business activities of the Bank and the subsidiaries during the financial year.

2.1 Statement of compliance

The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC) was
formed in 2017 and has since then adopted International Accounting Standards (IASs) and International Financial Reporting
Standards (IFRSs) as the applicable Financial Reporting Standards for public interest entities such as banks with effect from
2 November 2020.
Accordingly, the financial statements of the Bank are prepared in accordance with IFRSs (including IASs) and the
requirements of the Bank Company (amendment) Act, 2013, the rules and regulations issued by Bangladesh Bank, the
Companies Act 1994, The Securities and Exchange Ordinance 1969, Bangladesh Securities and Exchange Commission Act
1993, Bangladesh Securities and Exchange Commission (Public Issues) Rules 2015, Income Tax Ordinance and Rules 1984,
Value Added Tax and Supplementary Duty Act 2012, The Value Added Tax and Supplementary Duty Rules 2016, Dhaka
Stock Exchange Ltd. (DSE), Chittagong Stock Exchange Ltd. (CSE) and Central Depository Bangladesh Ltd. (CDBL) and
Financial Reporting Act 2015. In case any requirement of the Bank Company (amendment) Act, 2013, and provisions and
circulars issued by Bangladesh Bank differ with those of IFRSs (including IASs), the requirements of the Bank Company
(amendment) Act, 2013, and provisions and circulars issued by Bangladesh Bank shall prevail. Material departures from the
requirements of IFRS are mentioned in i to xvii:
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 Organization 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-I(1) and I(2) and the figures appearing in the annexure have been
incorporated in the related heads of these financial statements as recommended by the Central Shariah Board for Islamic
Banks in Bangladesh.

i) Presentation of financial statements

IFRS: As per IAS 1, a complete set of financial statements comprises a statement of financial position, a statement of profit and
loss and other comprehensive income, a statement of changes in equity, a statement of cash flows, notes comprising a
summary of significant accounting policies and other explanatory information and comparative information. IAS 1 has also
stated the entity to disclose assets and liabilities under current and non-current classification separately in its statement of
financial position.
Bangladesh Bank: The presentation of these financial statements in prescribed format (i.e. balance sheet, profit and loss
account, cash flow statement, statement of changes in equity, liquidity statement) and certain disclosures therein are guided
by the First Schedule (section-38) of the Bank Companies Act, 1991 (Amended Upto 2018) and BRPD circular no. 14 dated 25
June 2003 and subsequent guidelines of Bangladesh Bank. In the prescribed format there is no option to present assets and
liabilities under current and non-current classification.

ii) Investment in shares, mutual fund and other securities

IFRS: As per requirements of IFRS 9, classification and measurement of investment in shares and securities will depend on
how these are managed (the entity’s business model) and their contractual cash flow characteristics. Based on these factors
it would generally fall either under “at fair value through profit or loss account” or under “at fair value through other
comprehensive income” where any change in the fair value (as measured in accordance with IFRS 13) at the year-end is
taken to profit and loss account or other comprehensive income respectively.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted and unquoted shares are revalued
on the basis of year-end market price and Net Assets Value (NAV) of last audited balance sheet respectively. As per
instruction of DOS circular letter no. 3 dated 12 March 2015, investment in mutual fund (close-end) is revalued at lower of cost
and higher of market value and 85% of NAV and another DOS circular letter no. 10 dated 28 June 2015, investment in mutual
fund (open-end) is revalued at lower of cost and higher of market value and 95% of NAV. As such, provision is made for any
loss arising from diminution in value of investments (portfolio basis); otherwise investments are recognised at costs.

245
 iii) Revaluation gain/loss on government securities
IFRS: Government securities refer primarily various debt instruments which include both bonds and bills. As per
requirements of IFRS 9 Financial Instruments, bonds can be categorised as “Amortised Cost (AC)” or “Fair Value Through
Profit or Loss (FVTPL)” or “Fair Value through Other Comprehensive Income (FVOCI)”. Bonds designated as Amortised Cost
are measured at amortised cost method and interest income is recognised through profit and loss account. Any changes in
fair value of bonds designated as FVTPL is recognised in profit and loss account. Any changes in fair value of bonds
designated as FVOCI is recognised in other reserve as a part of equity.
As per requirements of IFRS 9, bills can be categorised either as “Fair Value Through Profit or Loss (FVTPL)” or “Fair Value
through Other Comprehensive Income (FVOCI)”. Any change in fair value of bills is recognised in profit and loss or other
reserve as a part of equity respectively.
Bangladesh Bank: According to DOS circular no. 5 dated 26 May 2008 and subsequent clarification in DOS circular no. 5
dated 28 January 2008, Government securities/bills are classified into Held for Trading (HFT) and Held to Maturity (HTM),
HFT securities are revalued on the basis of mark to market and any gains on revaluation of securities which have not
matured as at the balance sheet date are recognised in other reserves as a part of equity and any losses on revaluation of
securities which have not matured as at the balance sheet date are charged in the profit and loss account. Interest on HFT
securities including amortisation of discount is recognised in the profit and loss account. HTM securities which have not
matured as at the balance sheet date are amortised and gains or losses on amortisation are recognised in other reserve as
a part of equity.

iv) Repo and reverse repo transactions

IFRS: As per IFRS 9 when an entity sells a financial asset and simultaneously enters into an agreement to repurchase the
asset (or a similar asset) at a fixed price on a future date (repo), the arrangement is treated as a loan and the underlying asset
continues to be recognised at amortised cost in the entity’s financial statements. The difference between selling price and
repurchase price will be treated as interest expense. The same rule applies to the opposite side of the transaction (reverse
repo).
Bangladesh Bank: As per Department of Off-Site Supervision (DOS) Circular letter no. 06 dated 15 July 2010 and subsequent
clarification in DOS circular no. 02 dated 23 January 2013, when a bank sells a financial asset and simultaneously enters into
an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the
arrangement is accounted for as a normal sales transaction and the financial asset is derecognised in the seller’s book and
recognised in the buyer’s book.
However, as per DMD circular letter no. 7 dated 29 July 2012, non primary dealer banks are eligible to participate in the
Assured Liquidity Support (ALS) programme, whereby such banks may enter collateralised repo arrangements with
Bangladesh Bank. Here the selling bank accounts for the arrangement as a loan, thereby continuing to recognize the asset.

v) Provision on loans and advances

IFRS: As per IFRS 9 an entity shall recognise an impairment allowance on loans and advances based on expected credit
losses. At each reporting date, an entity shall measure the impairment allowance for loans and advances at an amount equal
to the lifetime expected credit losses if the credit risk on these loans and advances has increased significantly since initial
recognition whether assessed on an individual or collective basis considering all reasonable information, including that
which is forward-looking. For those loans and advances for which the credit risk has not increased significantly since initial
recognition, at each reporting date, an entity shall measure the impairment allowance at an amount equal to 12 month
expected credit losses that may result from default events on such loans and advances that are possible within 12 months
after reporting date.
Bangladesh Bank: As per BRPD circular no.14 (23 September 2012), BRPD circular no. 19 (27 December 2012), BRPD circular
no. 05 (29 May 2013), BRPD circular no. 16 (18 November 2014) , BRPD circular no.15 (27 September 2017), BRPD circular no. 1
(20 February 2018), BRPD circular no. 3 (23 April 2019), BRPD circular no.16 (21 July 2020), BRPD circular no. 52 (20 October
2020) and BRPD circular no. 56 (10 December 2020) a general provision at 0.25% to 2% under different categories of
unclassified loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. And specific
provision (other than short-term agricultural and micro-credits) for sub-standard loans, doubtful loans and bad losses has to
be provided at 20%, 50% and 100% respectively for loans and advances depending on the duration of overdue. Moreover,
a provision for Short-Term Agricultural and Micro-Credits has to be provided for 'sub-standard' and 'doubtful' loans at the rate
of 5% and a 100% provision for the 'bad/Loss' loans. Such provision policies are not specifically in line with those prescribed
by IFRS 9.

vi) Recognition of interest in suspense

IFRS: Loans and advances to customers are generally classified at amortised cost as per IFRS 9 and interest income is

246 Annual Report 2020

 recognised by using the effective interest rate method to the gross carrying amount over the term of the loan. Once a loan
subsequently becomes credit-impaired, the entity shall apply the effective interest rate to the amortised cost of these loans
and advances.
Bangladesh Bank: As per BRPD circular no.14 dated 23 September 2012, once a loan is classified as impaired, interest on
such loans are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an interest
in suspense account, which is presented as a liability in the balance sheet.

vii) Other comprehensive income

IFRS: As per IAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of Other
Comprehensive Income are to be included in a Single Comprehensive Income (SCI) Statement.
Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which are required to be followed by all
banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor
are the elements of Other Comprehensive Income allowed to be included in a Single Comprehensive Income (SCI)
Statement. As such the bank does not prepare the other comprehensive income statement. However, elements of OCI, if any,
are shown in the statements of changes in equity.

viii) Financial instruments – presentation and disclosure

In several cases Bangladesh Bank guidelines categorize, recognize, measure and present financial instruments differently
from those prescribed in IFRS 9. As such full disclosure and presentation requirements of IFRS 7 and IAS 32 cannot be made
in the financial statements.

ix) Financial guarantees

IFRS: As per IFRS 9, financial guarantees are contracts that require the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtors fails to make payment when due in accordance with the original or
modified terms of a debt instrument. Financial guarantee liabilities are recognised initially at their fair value plus transaction
costs that are directly attributable to the issue of the financial liabilities. The financial guarantee liability is subsequently
measured at the higher of the amount of loss allowance for expected credit losses as per impairment requirement and the
amount initially recognised less, income recognised in accordance with the principles of IFRS 15. Financial guarantees are
included within other liabilities.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, financial guarantees such as letter of credit and letter of
guarantee will be treated as off-balance sheet items. No liability is recognised for the guarantee except the cash margin. As
per BRPD Circular no.01 dated 03 January 2018 and BRPD Circular no.14 dated 23 September 2012, the Bank is required to
maintain provision at 1% against gross off-balance sheet exposures.

x) Cash and cash equivalents

IFRS: Cash and cash equivalent items should be reported as cash item as per IAS 7.
Bangladesh Bank: Some highly liquid assets such as money at call and short notice, T-bills/T-bonds, prize bonds are not
prescribed to be shown as cash and cash equivalents rather shown as face item in the balance sheet. However, in the cash
flow statement, money at call and short notice and prize bonds are shown as cash and cash equivalents beside cash in hand,
balance with BB and other banks.

xi) Non-banking asset

IFRS: No indication of Non-banking asset is found in any IFRS.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, there is a separate balance sheet item named
non-banking assets existed in the standard format.

xii) Cash flow statement

IFRS: Cash flow statement can be prepared either direct method or indirect method as per IAS 7. The presentation is selected
to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied
consistently.
Bangladesh Bank: As per BRPD circular no 14, dated 25 June 2003, cash flows statement has been prepared following a
mixture of direct and indirect methods.

247
 xiii) Balance with Bangladesh Bank: (Cash Reserve Ratio - CRR)
IFRS: CRR maintained with Bangladesh Bank should be treated as other asset as it is not available for use in day to day
operations as per IAS 7.
Bangladesh Bank: Balance with Bangladesh Bank including CRR is treated as cash and cash equivalents.

xiv) Presentation of intangible asset

IFRS: Intangible asset must be identified and recognised, and the disclosure must be given as per IAS 38.
Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD circular no. 14 dated 23 September
2012.

xv) Off-balance sheet items

IFRS: As per IFRS, there is no requirement for disclosure of off-balance sheet items on the face of the balance sheet.
Bangladesh Bank: As per BRPD circular no.14 dated 25 June 2003, off balance sheet items (e.g. letter of credit, letter of
guarantee etc.) must be disclosed separately on the face of the balance sheet.

xvi) Disclosure of appropriation of profit

IFRS: There is no requirement to show appropriation of profit in the face of statement of comprehensive income.
Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, an appropriation of profit should be disclosed in the face
of profit and loss account.

xvii) Loans and advances/investments net of provision

IFRS: Loans and advances/investments should be presented net of provisions.
Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, provision on loans and advances are presented
separately as liability and cannot be netted off against loans and advances.

2.2 Basis of measurement

The financial statements of the Group have been prepared on historical cost basis except for the following:
l Government Treasury Bills and Bonds designated as 'Held for Trading (HFT)' are present at value using marking to market
concept with gain crediting to revaluation reserve;
l Government Treasury Bills and Bonds designated as 'Held to Maturity (HTM)' are carried at amortised cost;
l Investment in shares of listed companies are prepared at market value with gain credited to revaluation reserve.

2.3 Going concern

The accompanying financial statements have been prepared on a going concern assumption that the Bank will continue in
operation over the foreseeable future. The Bank has neither any intention nor any legal or regulatory compulsion to liquidate
or curtail materially the scale of any of its operations. Key financial parameters (including liquidity, profitability, asset quality,
provision sufficiency and capital adequacy) of the bank continued to demonstrate a healthy trend for a couple of years. The
Bank have been awarded AA2 in long term and ST-2 in short term by Credit Rating Agency of Bangladesh (CRAB). Rating
details are shown in note 3.20. The management does not see any issue with respect to going concern due to recent
pandemic COVID-19. Besides, the management is not aware of any other material uncertainties that may cast significant
doubt upon the bank's ability to continue as a going concern.

2.4 Functional and presentation currency

These financial statements are presented in Bangladesh Taka (Taka/Tk) which is the Bank's functional currency. Except as
otherwise indicated, financial information presented in Taka has been rounded to the nearest integer.

2.5 Use of judgments and estimates

In preparing these consolidated financial statements in conformity with International Accounting Standards (IAS) and
International Financial Reporting Standards (IFRS) management has required to make judgments, estimates and
assumptions that affect the application of bank’s accounting policies and the reported amounts of assets liabilities, income

248 Annual Report 2020

 and expenses. Actual results may differ from these estimates.
The most critical estimates and judgments are applied to the following:
l Provision for loan and advances/investments- as explained in note 3.3.3
l Employee benefit -as explained in note 3.11
l Income tax - as explained in note 3.12
l Deferred tax assets/liabilities - as explained in note 11.a.5
l Useful lives of depreciable assets regard to noncurrent assets - as stated in Annexure-D
However, underlying assumptions on estimates are reviewed on a going concern basis and revisions thereon are recognised
in the period in which the estimates are revised. It is also required to disclose the contingent assets and liabilities at the date
of the financial statements in accordance with the guidelines as prescribed by IAS 37: “Provisions, Contingent Liabilities and
Contingent Assets”.

Provision
Provisions are liabilities that are uncertain in timing or amount. Provisions are recognised in the following situations:
l the entity has a present (legal or constructive) obligation as a result of past events;
l probable out flow of resources to settle the obligation and the obligation can be measured reliably;
l it is more likely than not that outflow of resources will be required to settle the present obligation exists at the end of
reporting period.

Contingent liability
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events. A contingent liability arises when some, but not all, of
the criteria for recognizing a provision are met.
IAS 37 applies prudence by deeming a past event to give rise to a present obligation and an entity shall not recognize a
contingent liability. However, if it is possible rather than probable that an obligation exists, a contingent liability will exist, not
a provision in the financial statements. An entity shall disclose for each class of transaction of contingent liability at the end
of the reporting period if the contingent liability is not remote.

Contingent assets
A contingent asset is possible asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Entity. Contingent
assets are never recognised; rather they are disclosed in the financial statements when they arise.

2.6 Reporting period

These financial statements cover one calendar year from 1 January 2020 to 31 December 2020.

2.7 Dividend
Dividend on ordinary shares is recognised as a liability and deducted from retained earnings when they are approved by
shareholders at the Annual General Meeting (AGM) of the Bank.
Dividend on ordinary shares for the year that is recommended by the Directors after the balance sheet date for approval of
shareholders at the Annual General Meeting are disclosed in note - 52 to the financial statements.

2.8 Date of authorization

The Board of Directors has authorised this financial statements for public issue on 22 March 2021.

2.9 Cash flow statement

The cash flow statement has been prepared in accordance with IAS 7. Cash Flow Statements considering the requirements
specified in BRPD circular no.14 dated 25 June 2003 issued by the Banking Regulation and Policy Department of Bangladesh
Bank.

249
 2.10 Statement of changes in equity
The Statement of changes in equity reflects information about the increase or decrease in net assets or wealth. Statement of
changes in equity is prepared principally in accordance with IAS-1 "Presentation of Financial Statements" and under the
guidelines of Bangladesh Bank's BRPD Circular no.14 dated 25 June 2003.

2.11 Liquidity statement

The liquidity statement of assets and liabilities as on the reporting date has been prepared on the following basis:

Particulars Basis
Cash, balance with other banks and financial institutions, Stated maturity/observed behavioral trend.
money at call and short notice, etc.
Investments Residual maturity term.
Loan and advance/investment Repayment/maturity schedule and behavioral trend
(non-maturity products)
Fixed assets Useful life
Other assets Realisation/amortisation basis
Borrowing from other banks and financial institutions Maturity/repayment term
Deposits and other accounts Maturity/behavioral trend (non-maturity products)
Other long term liabilities Maturity term
Provisions and other liabilities Settlement/adjustment schedule basis

2.12 Financial statements for Offshore Banking Unit (OBU)

Reporting currency of Offshore Banking Unit is US Dollar. However, foreign currency transactions are converted into
equivalent Taka using the ruling exchange rates on the dates of respective transactions as per IAS 21 'The Effects of changes
in Foreign Exchange Rates'. Foreign currency balances held in US Dollar are converted into Taka at weighted average rate of
Inter Bank market as determined by Bangladesh Bank on the closing date of the reporting period.

2.13 Non-recognition of investment in IDLC Finance Limited as associate in City Group

The bank and its two subsidiaries are holding IDLC Finance Limited's shares in the following manner:

Particulars No. of Shares Held Shareholdings Percentage

The City Bank Limited 33,934,822 9.00%

City Bank Capital Resources Ltd. 37,328,028 9.90%
City Brokerage Ltd. 16,247,218 4.31%
Total 87,510,068 23.21%

250 Annual Report 2020

 The group is holding 23.21% shares of IDLC Finance Limited and also representing four seats in IDLC's board. In line with
International Accounting Standard 28 "Investments in Associates and Joint Ventures", the group is required to recognise
these investments as associate as reflections of the followings are there:
a. The group has more than 20.0% voting rights
b. Four persons are representing in IDLC Finance Limited's board.
IDLC Finance Limited, being an organization regulated by Bangladesh Bank, Bangladesh Securities and Exchange
Commission, Financial Reporting Council, Stock Exchanges, etc., formulates its operational processes and policies
independently and The City Bank Ltd. does not have significant influence over the operation and policy making of IDLC
Finance Limited. Thus the bank does not recognise its investment in said company as investment in associate in accordance
with IAS-28.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements of the group and those of the bank have been applied consistently except otherwise instructed by Bangladesh
Bank as the prime regulator. Certain comparative amounts in the financial statements have been reclassified and rearranged
to conform to the current year’s presentation.

Accounting policies of subsidiaries

The financial statements of subsidiaries (City Brokerage Limited, City Bank capital Resources Limited, CBL Money Transfer
Sdn. Bhd. and City Hong Kong Limited) which are included in the Consolidated Financial Statements of the Group have been
prepared using uniform accounting policies of the Bank (Parent) for transactions and other events in similar nature. There is
no significant restriction on the ability of subsidiaries to transfer funds to the parent in the form of cash dividends or to repay
loans and advances. All subsidiaries of the Bank have been incorporated in Bangladesh except for CBL Money Transfer Sdn.
Bhd. and City Hong Kong Limited which are incorporated in Malaysia and Hong Kong respectively.

3.1.1 Accounting policy for IFRS 16: Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration
in the contract to each lease component on the basis of its relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or
the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will
be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and
equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and
makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a
lease unless the Group is reasonably certain not to terminate early.

251
 The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount
expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of short-term leases.
However, Bank has applied "COVID 19 related rent concession (amendment to IFRS 16) " during this year 2020.

3.1.2 Basis of consolidation

The consolidated financial statements include the financial statements of The City Bank Limited and those of its four
subsidiaries (City Brokerage Limited, City Bank Capital Resources Limited, CBL Money Transfer Sdn. Bhd. and City Hong
Kong Limited) prepared as at and for the year ended 31 December 2020. The consolidated financial statements have been
prepared in accordance with IFRS 10 'Consolidated Financial Statements'.

Name of subsidiary Ownership Date of Country of Status Regulator Year/period

incorporation operation closing
City Brokerage Limited 99.996% 31-Mar-10 Bangladesh Majority Owned BSEC, DSE,CSE 31 December
City Bank Capital Resources Limited 99.993% 17-Aug-09 Bangladesh Majority Owned BSEC, DSE,CSE 31 December
Bank Negara, 31 December
CBL Money Transfer Sdn. Bhd 100.000% 4-Apr-13 Malaysia Wholly Owned Malaysia
City Hong Kong Limited* 100.000% 11-Jan-19 Hong Kong Wholly Owned Bangladesh Bank 31 December
IRD, CR & MLU

*Primary regulators of City Hong Kong Limited in Bangladesh is Bangladesh Bank and in Hong Kong regulators are Inland
Revenue Department (IRD), Companies Registry (CR) & Money Lenders Unit (MLU).

3.1.3 Non-controlling interest

The Group elects to measure any non-controlling interests in the subsidiaries either:
l at fair value; or
l at their proportionate share of the acquires identifiable net assets, which are generally at fair value.

3.1.4 Transactions eliminated on consolidation

Intra-group balances and income and expenses arising from intra-group transactions are eliminated in preparing these
consolidated financial statements.

3.2 Foreign currency transactions

According to IAS 21 "The Effects of Changes in Foreign Exchange Rates" transactions in foreign currencies are recorded in
the functional currency at the rate of exchange prevailing on the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are translated into the functional currency at the spot exchange rate
at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
retranslated into the functional currency at the spot exchange rate at the date that the fair value was determined.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction.
Foreign currency differences arising on translation are recognised in the profit and loss statement.

3.3.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, ATM, unrestricted balances held with Bangladesh Bank and its
agent bank, balance with other banks and financial institutions, money at call and short notice, investments in treasury bills,
Bangladesh Bank bill and prize bonds.

252 Annual Report 2020

3.3.2 Investments
All investments (other than government treasury securities) are initially recognised at cost including acquisition charges
associated with the investment. Premiums are amortised and discount accredited using the effective or historical yield
method. Accounting treatment of government treasury bills and bonds (categorised as HFT and HTM) are made in
accordance with Bangladesh Bank DOS Circular letter no. 05, dated 26 May 2008 and subsequent clarifications DOS Circular
letter no. 05 dated 28 January 2009.

Held to Maturity
Investments which have 'fixed or determinable payments' and are intended to be held to maturity are classified as 'Held to
Maturity'. These are measured at amortised cost at each year end by taking into account any discount or premium in
acquisition. Any increase or decrease in value of such investments are booked under equity and in the profit and loss
statement respectively.

Held for Trading

Investments classified in this category are acquired principally for the purpose of selling or repurchasing in short trading or
if designated as such by the management. After initial recognition, investments are marked to market weekly and any
decrease in the present value is recognised in the Profit and Loss Account and any increase is booked to Revaluation Reserve
Account through Profit and Loss Account as per DOS Circular no. 05 dated 28 January 2009.

Investment in quoted shares

These securities are bought and held primarily for the purpose of selling them in future or held for dividend income. These
are valued and reported at market price as per Bangladesh Bank's guidelines. Booking of provision for investment in
securities (gain/loss net off basis) are made as per DOS Circular no.4 dated 14 November 2011.

Investment in quoted shares (Under special fund and investment policy)

Investment in quoted shares under special fund and investment policy are recognised at cost as per DOS Circular no. 01
dated 10 February 2020.

Investment in unquoted shares

Investment in unquoted shares are recognised at cost under cost method. Adjustment is given for any shortage of book
value over cost for determining the carrying amount of investment in unquoted shares.

Value of investments has been shown as under:

Investment class Measurement after initial Recording of changes

Initial recognition recognition
Govt. treasury securities - Held Cost Amortised cost Increase in value of such
to Maturity (HTM) investments is booked to equity,
decrease to profit and loss account.
Govt. treasury securities - Held Cost Fair value Loss to Profit and Loss Account,
for Trading (HFT) gain to Revaluation Reserve through
Profit and Loss Account.
Debenture/Bond Face value Face value None
Shares (Quoted)* Cost Lower of cost or market value Loss (net off gain) to profit and loss
(overall portfolio) account but no unrealised gain
booking.
Shares (Unquoted)* Cost Lower of cost or Loss to profit and loss account but
Net Asset Value (NAV) no unrealised gain booking.
Prize bond Cost Cost None

* Provision for shares against unrealised loss (gain net off) has been taken into account according to DOS circular no. 4 dated
24 November 2011 and for mutual funds (closed-end) as per DOS circular letter no. 3 dated 12 March 2015 and for mutual
funds (open-end) as per DOS circular letter no.10 dated 28 June 2015 of Bangladesh Bank.

253
 Investment in Subsidiaries
Investments in subsidiaries are accounted for under the cost method of accounting in the Bank’s financial statements in
accordance with IAS 27 ‘Consolidated and Separate Financial Statements’ and IFRS 10 “Consolidated Financial Statements”.
Impairment of investment in subsidiaries (if any) the bank takes it into account made as per the provision of IAS 36
‘Impairment of Assets’.

3.3.3 Loans and advances/investments and provisions for loans and advances/investments
a) Loans and advances of conventional banking/investments of Islamic Banking branches are non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market and that the Bank does not sell in the normal
course of business.
b) At each balance sheet date and periodically throughout the year, the Bank reviews loans and advances to assess whether
objective evidence that impairment of a loan or portfolio of loans has arisen supporting a change in the classification of
loans and advances, which may result in a change in the provision required in accordance with BRPD circular no. 56 (10
December 2020), BRPD circular no. 52 (20 October 2020), BRPD circular no. 16 (21 July 2020), BRPD circular no. 03 (21
April 2019), BRPD circular no.1 (20 February 2018), BRPD circular no.15 (27 September 2017), BRPD circular no.16 (18
November 2014), BRPD circular no. 05 (29 May 2013), BRPD circular no.14 (23 September 2012) and BRPD circular no. 19
(27 December 2012) . The guidance in the circular follows a formulaic approach whereby specified rates are applied to the
various categories of loans as defined in the circular. The provisioning rates are as follows:

Provision
Types of loans and advances
STD SM A SS DF BL

Consumer:
House building and professional 1.00% - 2.00% 1.00% - 2.00% 20.00% 50.00% 100.00%
Other than housing finance & professionals to setup business 2.00% 2.00% 20.00% 50.00% 100.00%
Provision for loan to broker house, merchant banks, stock dealers, etc 2.00% 2.00% 20.00% 50.00% 100.00%
Short-term agri-credit and micro credit 1.00% 1.00% 5.00% 5.00% 100.00%
Small and medium enterprise finance 0.25% 0.25% 20.00% 50.00% 100.00%
Cottage, micro and small credit (CMSME) 0.25% 0.25% 5.00% 20.00% 100.00%
Others 1.00% 1.00% 20.00% 50.00% 100.00%

BRPD Circular no.14 (23 September 2012) as amended by BRPD Circular no. 19 (27 December 2012) also provides scope for
further provisioning based on qualitative judgments. In these circumstances impairment losses are calculated on individual
loans considered individually significant based on which specific provisions are raised. If the specific provisions assessed
under the qualitative methodology are higher than the specific provisions assessed under the formulaic approach above, the
higher of the two is recognised in liabilities under “Provision for loans and advances” with any movement in the provision
charged/released in the profit and loss account. Classified loans are categorised into sub-standard, doubtful and bad/loss
based on the criteria stipulated by Bangladesh Bank guideline.
c) Loans and advances are written off to the extent that i) there is no realistic prospect of recovery, and ii) against which legal
cases are filed, where required and classified as bad/loss as per as per BRPD circular no. 02 dated 13 January 2003,
BRPD circular no. 13 dated 07 November 2013 and BRPD circular no. 01 dated 06 February 2019 of Bangladesh Bank.
These write off however will not undermine/affect the claim amount against the borrower. Detailed memorandum
records for all such written off accounts are maintained and followed up.
d) Amounts receivable on credit cards are included in advances to customers at the amounts expected to be recovered.

3.3.4 Staff loan

House building and car loan are provided to the permanent staff at a subsidised rate. Criteria and detail of type wise staff loan
are given below:
House building loan: A permanent staff completing 5 years of service can avail house building loan subject to getting
approval from Managing Director, CEO and recommended by the concerned divisional head.
Car loan: All permanent staff from AVP can avail car loan subject to getting approval from Managing Director, CEO and
recommended by the concerned divisional head.

254 Annual Report 2020

3.3.5 Fixed assets (property, plant and equipment)
Recognition and measurement
As per IAS 16 “Property, Plant and Equipment" Items of fixed assets excluding land are measured at cost less accumulated
depreciation and accumulated impairment losses, if any. Land is carried at cost.
Purchase of software that is integral to the related equipment is capitalised as part of that equipment.
Cost includes expenditure that are directly attributable to the acquisition of asset and bringing to the location and condition
necessary for it to be capable of operating in the intended manner.
When significant parts of an item of fixed asset have different useful lives, they are accounted for as separate items (major
components) of fixed assets.
The gain or loss on disposal of an item of fixed asset is determined by comparing the proceeds from disposal with the
carrying amount of the item of fixed asset, and is recognised in other income/other expenses in profit or loss.

Subsequent costs
The cost of replacing a component of an item of fixed asset is recognised in the carrying amount of the item if it is probable
that the future economic benefits embodied within the part will flow to the group and its cost can be measured reliably. The
carrying amount of the replaced parts is derecognised. The costs of the day to day servicing of fixed assets are recognised
in the profit and loss statement as incurred.

Depreciation
Depreciation on fixed assets are recognised in the profit and loss statement on straight line method over its estimated useful
lives. In case of acquisition of fixed assets, depreciation is charged from the month of acquisition, whereas depreciation on
disposed off fixed assets are charged up to the month prior to the disposal. Asset category wise depreciation rates for the
current and comparative periods are as follows:

Category of assets Rate of depreciation

Land Nil
Building 2.5%
Furniture and fixtures 10%
Office equipment and machinery 20%
Software 10%
Vehicles 20%

3.3.6 Non- banking assets

Non-banking assets were acquired by the entity due to failure of borrowers to repay the loan in time taken against
mortgaged property. The Bank was awarded absolute ownership on few mortgaged properties (mostly land) through the
verdict of honourable court under section 33 (7) of the Artharin Adalat Act 2003. The value of the properties has been
recognised in the financial statements as non-earning assets on the basis of third party valuation report. Party wise details
(including possession date) of the properties are separately presented in note 12.

3.3.7 Provisions for other assets

BRPD Circular no.14 (25 June 2001) requires a provision of 100% on other assets which are outstanding for one year and
above. The Bank maintains provisions in line with this circular unless it assesses there is no doubt of recovery on items of
other assets in which case no provision is kept.

3.3.8 Intangible assets and its amortisation

Intangible assets comprise separately identifiable intangible items arising from use of franchise of AMEX and the use of
Finacle from Infosys. Intangible assets are recognised at cost. Intangible assets with a definite useful life are amortised using
the straight line method over its estimated useful economic life.

3.3.9 Reconciliation of inter-bank and inter-branch account

Account with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no material
differences which may affect the financial statements significantly. Un-reconciled entries/balances in the case of inter-branch
transactions on the reporting date are not material.

255
 3.4 Liabilities and basis of their valuation

3.4.1 Tier-II subordinated bond

Tier-II Subordinated bond includes fund raised from several banks, financial institutions and other organization through
issuance of 7 (seven) years Bonds for Taka 5,000 million during 2017 and 7 (Seven) years Bonds for Taka 4,200 during 2018
to January 2019. Details are shown in note 13.01.

3.4.2 Perpetual bond

City Bank, as the pioneer has successfully launched subscription of the first ever Perpetual Bond in the industry as well as the
country. The issuance process of “City Bank Perpetual Bond” was initiated back in 2019 and with subsequent approvals from
the regulators, the bank already completed subscription of Taka 2,400 million out the total issue size of Taka 4,000 million
within 31 December 2020. Details are shown in note 13.02.

3.4.3 Borrowings from other banks, financial institutions and agents

Borrowings from other banks, financial institutions and agents includes refinance from Bangladesh Bank against agro-based
credit, SME and EDF Loan etc., interest-bearing borrowings against securities from Bangladesh Bank, call borrowing from
other banks and borrowing from other multilateral organisations. These items are brought to financial statements at the
gross value of the outstanding balance. Details are shown in note 14.

3.4.4 Deposits and other accounts

Deposits and other accounts include non interest-bearing current deposit redeemable at call, interest bearing on demand
and short-term deposits, savings deposit and fixed deposit. These items are brought into financial statements at the gross
value of outstanding balance. Details are shown in note 15.

3.4.5 Provision for liabilities

As per IAS 37, provisions are recognised when it is probable that an outflow of economic benefits will be required to settle a
current legal or constructive obligation as a result of past events, and a reliable estimate can be made of the amount of the
obligation.

3.4.6 Provision for Off-balance sheet exposure

As per BRPD circular no.14 (23 September 2012) the Bank has recognised 1% General Provision on the following off balance
sheet exposures as defined in BRPD circular no.10 (24 November 2002) considering the exemption as provided through
BRPD circular no.01 (03 January 2018), BRPD circular no.7 (21 June 2018) ,BRPD circular no.13 (18 October 2018), BRPD circular
no.02 (25 February 2019), BRPD circular no.09 (27 May 2019) and BRPD circular letter no.BPRD(P-1)/661/13/2019-354 (13
January 2020) .
- Acceptance and endorsements
- Letters of guarantee
- Irrevocable letters of credit
- Foreign exchange contracts

3.4.7 Provisions on balances with other banks and financial institutions (Nostro accounts)
Provision for unsettled transactions on nostro accounts is made as per Foreign Exchange Policy Department (FEPD) circular
no. FEPD (FEMO) / 01/2005-677 dated 13 September 2005 of Foreign Exchange Policy Department (FEPD) of Bangladesh
Bank and reviewed semi-annually by our management along with duly certified by the external auditor. On the reporting
date, the Bank has no unsettled transactions outstanding for more than 3 months and no provision has been made in this
regard.

3.4.8 Provision for rebate to good borrower

Previously commercial banks were required to maintain provision @10.0% of interest charged against loans to good
borrowers, identified on the basis of prescribed guidelines stated in BRPD Circular no. 06 (19 March 2015) and BRPD Circular
Letter no 03 (16 February 2016) for onward rebate to the recognized good borrowers. However, Bangladesh Bank during
2020 issued another circular (BRPD Circar No. 14 dated 18 June 2020), wherein it is mentioned that from 2020 banks need
not to provide any rebate to good borrowers. Hence, during 2020, no further good borrowers’ provision was accounted for
in the financials.

256 Annual Report 2020

3.4.9 Other liabilities
Other liabilities comprise items such as provision for loans and advances/investments, provision for taxation, interest
payable, interest suspense, accrued expenses,lease obligation etc. Other liabilities are recognised in the balance sheet
according to the guidelines of Bangladesh Bank, Income Tax Ordinance, 1984 and internal policy of the Bank.

3.5 Capital/Shareholders' equity

3.5.1 Authorised capital

Authorised capital is the maximum amount of share capital that the Bank is authorised by its Memorandum and Articles of
Association to issue (allocate) among shareholders. This amount can be changed by shareholders' approval upon fulfilment
of relevant provisions of the Companies Act, 1994. Part of the authorised capital usually remains unissued. The part of the
authorised capital already issued to shareholders is referred to as the issued share capital of the Bank.

3.5.2 Paid up capital

Paid up capital represents total amount of shareholders' capital that has been paid in full by the ordinary shareholders.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at
shareholders’ meetings. In the event of a winding-up of the Bank, ordinary shareholders rank after all other shareholders and
creditors and are fully entitled to any residual proceeds of liquidation.

3.5.3 Share premium

Share premium is the capital that the Bank raises upon issuing shares for a price in excess of the nominal value of shares. The
share premium shall be utilised in accordance with provision of section 57 of the Companies Act,1994 and as directed by
Securities and Exchange Commission in this respect.

3.5.4 Statutory reserve

Statutory reserve has been maintained at the rate of 20% of profit before tax in accordance with provisions of section 24 of
the Bank Companies Act, 1991 (Amended Up to 2018). Such transfer shall continue until the reserve balance equals its paid
up capital together with the share premium.

3.5.5 Revaluation reserve for government securities

Revaluation reserve for government securities arises from the revaluation of treasury bills, Bangladesh Bank bills and
treasury bonds (HFT and HTM) in accordance with the DOS Circular no. 5 dated 26 May 2008 and DOS(SR) 1153/120/2010
dated 8 December 2010.

3.5.6 Capital management

The Bank has a capital management process in place to measure, deploy and monitor its available capital and assess its
adequacy. This capital management process aims to achieve the following objectives:
l To comply with the capital requirements set by the regulators;
l To safeguard the Bank's ability to continue as a going concern so that it can continue to provide returns for shareholders
and benefits for other stakeholders;
l To maintain a strong capital base to support the development of its business.
Capital is managed in accordance with the Board approved Capital Management Planning. Senior management develops
the capital strategy and oversee the capital management planning of the Bank. The Bank's finance, treasury and risk
management departments are key participators in implementing the Bank's capital strategy and managing capital. Capital is
managed using both regulatory capital measures and internal matrix.

3.6 Revenue recognition

3.6.1 Interest income

Interest on loans and advances is calculated on daily product basis. Based on product features, interest is accrued or charged
to customers' accounts on monthly/quarterly basis.
In accordance with BRPD Circular no.14 (23 September 2012) as amended by BRPD Circular No. 19 (27 December 2012) and
BRPD Circular no. 56 (10 December 2020) interest accrued on sub-standard loans and doubtful loans are credited to an
“Interest Suspense Account” which is included within “Other liabilities”. Interest from loans and advances ceases to be
accrued when they are classified as bad/loss. It is then kept in interest suspense in a memorandum account.

257
 3.6.2 Profit on investment (Islamic Banking)
Mark-up on investment is taken into income account proportionately from profit receivable account. Overdue charge /
compensation on classified investments are transferred to profit suspense account instead of income account.

3.6.3 Investment income

Income on investments are recognised on accrual basis. Investment income includes discount on treasury bills and
Bangladesh Bank bills, interest on treasury bonds and fixed deposit with other banks. Capital gain on investments in shares
are also included in investment income. Capital gain is recognised when it is realised.

3.6.4 Fees and commission income

The Bank earns commission and fee income from a diverse range of service provided to its customers. Commission and fee
income is accounted for as follows:
- income earned on the execution of a significant act is recognised as revenue when the act is completed;
- income earned from services provided is recognised as revenue as the services are provided;
- Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of
effecting the transactions.

3.7 Interest paid on subordinated bond, borrowing and other deposits (Conventional banking)
Interest paid and other expenses are recognised on accrual basis.

3.8 Profit shared on deposits (Islamic banking)

Profit shared to mudaraba deposits are recognised on accrual basis.

3.9 Dividend income

Dividend income is recognised when the right to receive income is established. Dividends are presented under investment
income.

3.10 Others
Foreign exchange gain/ loss
Exchange income includes all gain and losses from foreign currency day to day transactions, conversions and revaluation of
non monetary items.

3.11 Employee benefits

3.11.1 Provident fund

Provident Fund benefits are given to the permanent staff of the Bank in accordance with the registered Provident Fund Rules.
The Commissioner of Income Tax, Taxes Zone - 4, Dhaka, has approved the Provident Fund as a recognized fund within the
meaning of section 2(52) read with the provisions of part - B of the First Schedule of Income Tax Ordinance 1984. The
reorganization took effect on 31 October 1987. The Provident Fund is operated by a Board of Trustees consisting of 5
members of the Bank. All confirmed employees of the Bank are contributing 10% of their basic salary as subscription to the
Provident Fund. The Bank also contributes equal amount to the Provident Fund. Contributions made by the Bank are
charged as expense and the Bank bears no further liability. Interest earned from the investments is credited to the members'
account on yearly basis. By Law the Provident fund is duly audited by M/S Snehashish Mahmud & Co.

3.11.2 Gratuity fund

Gratuity Fund benefits are given to the staff of the Bank in accordance with the approved Gratuity Fund Rules. National Board
of Revenue has approved the Gratuity Fund as a recognized gratuity fund with effect from 3 June 2012. The Gratuity Fund is
operated by a Board of Trustee consists of 5 members of the Bank. Provision for gratuity is made annually covering all its
permanent eligible employees. A valuation of gratuity scheme is regularly carried out by a professional Actuarial & Pension
Consultants, M/S Z. Halim & Associates to assess the adequacy of the liabilities provided for the scheme as per IAS 19
'Employee Benefits'. On continuing fund basis valuation, the Bank has been maintaining adequate provision against gratuity
scheme. By Law the Gratuity fund is duly audited by M/S Snehashish Mahmud & Co.

3.11.3 Other employee benefits

258 Annual Report 2020

 Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be paid under short term cash bonus or profit-sharing plans if
the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably. The Bank has following short term employee benefit schemes:

Hospitalisation insurance
The Bank has a health insurance scheme to its confirmed employees and their respective dependents at rates provided in
health insurance coverage policy.

Life insurance
The Bank has a group life insurance scheme to its confirmed employees and the benefit of the scheme is available to the
family of the employee on the occurrence of natural death of the employee during the tenure of his/her service.

Performance bonus
Provision of Workers' Profit Participation Fund and Welfare Fund mentioned in Bangladesh Labour (Amendments) Act, 2013
contradicts Bank Company Act, 1991 through which Bank Companies are regulated. Section-11 of Bank Company Act, 1991
restricts to employ anyone who receives remuneration or part of remuneration as share of profit of the company and
remuneration includes salary and other benefit. Accordingly, we obtained a legal opinion from Nurul Alam & Associates,
Advocates and Consultants, wherein it is opined that Worker’s Profit Participation and Welfare Fund shall not be applicable
for Bank Companies, as there is no non-obstante clause. Unless Government of Peoples Republic of Bangladesh amends
section 11 of Bank Company Act or frames rules, giving overriding effect to Bank Company Act, 1991, section 232 of
Bangladesh Labour (Amendments) Act, 2013 will not be applicable for banks.
Moreover, in the Bank, performance bonus provision is there, which is distributed among the employees on the basis of
individual employee’s yearly performance with a view to recognize welfare of the employees and reward their participation
and contribution to the company.

3.12 Tax expense

Tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in the profit and loss statement
except to the extent that it relates to items recognised directly in equity.

3.12.1 Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Details are
shown in note 16.a.6.

3.12.2 Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following
temporary differences:
l temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss;
l temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in
the foreseeable future; and
l temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current
tax assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax
entities but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that

259
 it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

3.12.3 Tax exposures

In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may
involve a series of judgments about future events. New information may become available that causes the Bank to change
its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the
period that such a determination is made.

3.13 Impairment of non-financial assets

The carrying amounts of the Group’s and the Bank's non-financial assets, other than deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its Cash Generating
Unit (CGU) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or CGU.
For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group
of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or
CGU.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to
reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs) and then to reduce the carrying amount
of the other assets in the CGU (group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.

3.14 Earnings per share

The Group and the Bank present basic and diluted Earnings Per Share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number
of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to the
ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares, which comprise share options granted to employees.
No diluted earnings per share is required to be calculated for the period.

260 Annual Report 2020

3.15 Compliance with International Financial Reporting Standards (IFRS)
Name of the standards IFRS Ref. Implementation status by the Bank
First-time Adoption of Bangladesh Financial Reporting Standards IFRS-1 Not applicable
Share-based Payment IFRS-2 Not applicable
Business Combinations IFRS-3 Not applicable
Insurance Contracts IFRS-4 Not applicable
Non-current Assets Held for Sale and Discontinued Operations IFRS-5 Not applicable
Exploration for and Evaluation of Mineral Resources IFRS-6 Not applicable
Financial Instruments: Disclosures IFRS-7 Applied with some departure (note 2.1)
Operating Segments IFRS-8 Applied with some departure (note 3.19)
Financial Instruments IFRS-9 Applied with some departure (note 2.1)
Consolidated Financial Statements IFRS-10 Applied
Joint Arrangements IFRS-11 Not applicable
Disclosure of Interest in Other Entities IFRS-12 Applied
Fair Value Measurement IFRS-13 Applied with some departure (note 2.1)
Regulatory Deferral Accounts IFRS-14 Not applicable
Revenue from contractors with customers IFRS-15 Applied
Leases IFRS-16 Applied
Presentation of Financial Statements IAS-1 Applied with some departure (note 2.1)
Inventories IAS-2 Not Applicable
Statement of Cash Flows IAS-7 Applied with some departure (note 2.1)
Accounting Policies, Changes in Accounting Estimates and Errors IAS-8 Applied
Events after the Reporting Period IAS-10 Applied
Construction Contracts IAS-11 Not Applicable
Income Taxes IAS-12 Applied
Property, Plant and Equipment IAS-16 Applied
Employee Benefits IAS-19 Applied
Accounting for Government Grants and Disclosure of Govt Assistance IAS-20 Not Applicable
The Effects of Changes in Foreign Exchange Rates IAS-21 Applied
Borrowing Costs IAS-23 Not Applicable
Related Party Disclosures IAS-24 Applied
Accounting and Reporting by Retirement Benefit Plans IAS-26 Not Applicable
Separate Financial Statements IAS-27 Applied
Investments in Associates and Joint Venture IAS-28 Not Applicable
Interests in Joint Ventures IAS-31 Not Applicable
Financial Instruments: Presentation IAS-32 Applied with some departure (note 2.1)
Earnings per Share IAS-33 Applied
Interim Financial Reporting IAS-34 Applied
Impairment of Assets IAS-36 Applied
Provisions, Contingent Liabilities and Contingent Assets IAS-37 Applied
Intangible Assets IAS-38 Applied
Investment property IAS-40 Not Applicable
Agriculture IAS-41 Not Applicable

In order to comply with certain specific rules and regulations of Bangladesh Bank which are different to IAS/IFRS, some of
the requirements specified in these IAS/IFRSs are not applied. Refer to note-2.1 for such recognition and measurement
differences that are most relevant and material to the Bank and the Group.
The Standard regards a retirement benefit plan as a reporting entity separate from the employers of the participants in the
plan. Therefore, it is not applicable for the Bank’s annual report as it is the employer and not the retirement benefit plan itself.
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.

3.16 Standards issued but not yet effective

A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2020
and earlier application is permitted; however, the Bank has adopted "COVID-19 - Related Rent Concessions (Amendment to
IFRS 16)" and has not early adopted the other new or amended standards in preparing these financial statements.

261
 The following amended standards and interpretations are not expected to have a significant impact on the Bank’s financial
statements:
– Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
– Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
– Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
– Reference to Conceptual Framework (Amendments to IFRS 3)
– Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
– IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts.

3.17 Offsetting
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when, and only when, the
group has a legal right to set off the recognised amounts and it intends either to settle on a net basis or to realize the asset
and settle the liability simultaneously.
Income and expenses are presented on a net basis only when permitted under IFRSs, or for gains and losses arising from a
group of similar transactions such as in the group’s trading activity.

3.18 Segment reporting

The group and the Bank have no identified operating segment and as such presentation of segmental reporting is not made
in the financial statements as per IFRS 8. However, geographical and business segments wise limited disclosures are
furnished in note 50 and Annexure-H.
Inter-segment transactions are generally based on inter-branch fund transfer measures as determined by the management.
Income, expenses, assets and liabilities are specifically identified with individual segments. Based on such allocation,
segmental balance sheet as on 31 December 2020 and segmental profit and loss account for the year ended 31 December
2020 have been prepared.

3.19 Materiality and aggregation

Each material class of similar items has been presented separately in the financial statements. Items of dissimilar nature also
have been presented separately unless they are immaterial in accordance with IAS 1 'Presentation of Financial Statements'.

3.20 Credit rating of the Bank

As per BRPD Circular no. 6 dated 5 July 2006, the Bank has done its credit rating by Credit Rating Agency of Bangladesh
(CRAB) based on the financial statements as at and for the year ended 31 December 2019. The following ratings have been
awarded:

Particulars Periods Date of Rating Long term Short term Rating Valid
Entity Rating January to December 2019 30-Jun-20 AA2 ST-2 30-Jun-21
Entity Rating January to December 2018 29-May-19 AA2 ST-2 30-Jun-20
Entity Rating January to December 2017 11-Jun-18 AA2 ST-2 30-Jun-19

Bank also has been assessed by renowned intenational rating agency Moody’s Investors Service and awarded B1 based on
the financial statements 2019.
Based on financial statements, as well as other quantitative and qualitative information, City Bank’s ratings are as follows:

Rating type Date of Rating Long term Short term Outlook

Surveillance 17-Dec-20 B1 NP Negative
Surveillance 28-Nov-19 B1 NP Negative
Surveillance 16-Jul-18 Ba3 NP Stable

262 Annual Report 2020

3.21 Related party disclosures
A party is related to the company if:
(i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control
with, the company; has an interest in the company that gives it significant influence over the company; or has joint
control over the company;
(ii) the party is an associate;
(iii) the party is a joint venture;
(iv) the party is a member of the key management personnel of the Company or its parent;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting
power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or
(vii) the party is a post-employment benefit plan for the benefit of employees of the company, or of any entity that is a related
party of the company.
Details of the related party disclosures presented in note # 51 and Annexure- F

3.22 Events after reporting period

As per IAS -10 “Events after Reporting Period” events after the reporting period are those events, favourable and
unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised
for issue. Two types of events can be identified:
(a) adjusting events after the reporting period (those that provide evidence of conditions that existed at the end of the
reporting period); and
(b) non adjusting events after the reporting period (those that are indicative of conditions that arose after the reporting
period).
Details of the Events after reporting period presented in note # 52.

Figures in Taka
2020 2019
4 CONSOLIDATED CASH IN HAND
The City Bank Limited (note 4.a) 5,641,907,242 6,130,572,909
City Brokerage Limited 77,500 77,500
City Bank Capital Resources Limited 40,401 51,781
CBL Money Transfer Sdn. Bhd. 1,770,958 5,694,227
5,643,796,101 6,136,396,417
Adjustments for Consolidation - The City Bank Limited - -
5,643,796,101 6,136,396,417

4.a Cash - The City Bank Limited

In hand - including foreign currencies (note 4.a.1) 5,641,907,242 6,130,572,909
Balance with Bangladesh Bank and its agent bank(s) - including foreign currencies (note 4.a.2) 16,761,650,690 19,776,258,104
22,403,557,932 25,906,831,013
4.a.1 Cash in hand
Local currency 5,265,967,849 5,971,965,140
Foreign currency 375,939,393 158,607,769
5,641,907,242 6,130,572,909

4.a.2 Balance with Bangladesh Bank and its agent bank(s)

Local currency 14,692,808,055 17,923,225,521
Foreign currency 1,187,622,188 1,301,391,858
15,880,430,243 19,224,617,379
Sonali Bank Limited as agent of Bangladesh Bank (local currency) 881,220,447 551,640,725
16,761,650,690 19,776,258,104

263
 Figures in Taka
2020 2019
The above balance represents amount as per Bank book. The difference due to reconciling items with Bangladesh Bank are
subsequently adjusted.
Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with section 33 of
Banking Companies Act, 1991 (Amended upto 2018), BRPD circular no.11 and 12, dated 25 August 2005, MPD circular no.116/2013-757
dated 10 December 2013, MPD Circular no. 1 dated 23 June 2014, MPD circular No. 01 dated 03 April 2018 and MPD circular No. 03
dated 09 April 2020.
The minimum Cash Reserve Ratio on the Bank's time and demand liabilities at the rate of 4% on bi-weekly basis has been
calculated and maintained with Bangladesh Bank in current account and 13% Statutory Liquidity Ratio, excluding CRR, on the same
liabilities has also been maintained in the form of treasury bills, bonds and debentures including foreign currency balances with
Bangladesh Bank (CRR and SLR of December 2020 is based on weekly average time and demand liabilities balance of October
2020). Both reserves maintained by the Bank are in excess of the statutory requirements, as shown below:
a) Cash Reserve Ratio (CRR)
Required reserve 11,790,346,740 14,517,286,080
Actual reserve maintained 14,558,764,448 17,749,947,187
Surplus 2,768,417,708 3,232,661,107

b) Statutory Liquidity Ratio (SLR)

Required reserve 38,741,445,175 33,741,277,080
Actual reserve maintained (note 4.a.3) 51,333,386,186 45,463,557,136
Surplus 12,591,941,011 11,722,280,056

4.a.3 Held for Statutory Liquidity Ratio (SLR)

Cash in hand 5,641,907,242 6,130,572,909
Sonali Bank Limited as agent of Bangladesh Bank as per statement balance 861,407,951 550,513,355
Surplus of CRR - balance with Bangladesh Bank 2,768,417,708 3,232,661,107
Government securities and bonds 42,061,653,285 35,549,809,765
51,333,386,186 45,463,557,136

5 CONSOLIDATED BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS

In Bangladesh
The City Bank Limited (note 5.a) 22,681,361,342 18,820,461,869
City Brokerage Limited 967,722,120 372,036,096
City Bank Capital Resources Limited 206,083,220 464,331,140
23,855,166,682 19,656,829,105
Mutual indebtedness:
Deposit with The City Bank Limited - City Brokerage Limited (842,638,760) (140,464,390)
Deposit with The City Bank Limited - City Bank Capital Resources Limited (201,474,719) (342,138,582)
Deposit with The City Bank Limited - CBL Money Transfer Sdn. Bhd. - -
(1,044,113,479) (482,602,972)
Adjustments for Consolidation - City Brokerage Limited - -
Total in Bangladesh 22,811,053,203 19,174,226,133

Outside Bangladesh
The City Bank Limited (note 5.a) 4,341,742,395 4,305,212,819
CBL Money Transfer Sdn. Bhd. 42,133,271 44,917,960
City Hong Kong Limited 1,716,182 10,501,520
Total outside Bangladesh 4,385,591,848 4,360,632,299
Grand total 27,196,645,051 23,534,858,432

264 Annual Report 2020

 Figures in Taka
2020 2019
5.a Balance with other banks and financial institutions - The City Bank Limited
In Bangladesh (note 5.a.1) 22,681,361,342 18,820,461,869
Outside Bangladesh (note 5.a.2) 4,341,742,395 4,305,212,819
27,023,103,737 23,125,674,688
5.a.1 In Bangladesh
Current accounts
Agrani Bank Limited 65,907,589 86,287,419
Sonali Bank Limited 25,589,860 108,525,306
Janata Bank Limited 894,305 897,490
Sub total 92,391,754 195,710,215

Short notice deposit accounts

Bank Al-Falah Limited 302,082,246 2,078,746
Rupali Bank Limited 84,419,940 55,444,163
Standard Chartered Bank 58,959,394 269,693,615
AB Bank Limited 15,746,288 14,937,378
Southeast Bank Limited 10,579,780 10,135,610
Exim Bank Limited 6,293,372 2,671,830
Prime Bank Limited 2,332,340 826,650
Social Islami Bank Limited 1,624,753 1,545,849
Trust Bank Limited 1,276,485 9,209,187
Mutual Trust Bank Limited 683,017 132,975
Sonali Bank Limited 507,169 -
Dutch-Bangla Bank Limited 8,763 10,088
Sub total 484,513,547 366,686,091

Fixed deposit receipts

Investment Corporation of Bangladesh 7,250,000,000 7,250,000,000
IDLC Finance Limited 5,250,000,000 450,000,000
National Credit & Commerce Bank Limited 1,889,558,113 1,214,167,635
Export Import Bank of Bangladesh Limited 1,240,000,000 -
Uttara Finance and Investment Limited 1,000,000,000 2,000,000,000
Industrial and Infrastructure Development Finance Company Limited 850,000,000 850,000,000
Jamuna Bank Limited 800,000,000 800,000,000
One Bank Limited 800,000,000 -
Lankabangla Finance Limited 760,000,000 1,830,000,000
Industrial Promotion and Development Company of Bangladesh Limited 675,518,761 1,625,518,761
Delta Brac Housing Finance Corporation Limited 500,000,000 -
Bangladesh Finance and Investment Company Limited 500,000,000 600,000,000
Phoenix Finance & Investments Limited 350,000,000 350,000,000
GSP Finance Company (BD) Limited 150,000,000 150,000,000
ICB Islamic Bank Limited 89,379,167 89,379,167
Agrani Bank Limited - 849,000,000
National Housing Finance and Investment Limited - 200,000,000
Sub total 22,104,456,041 18,258,065,563
Total 22,681,361,342 18,820,461,869

265
 Figures in Taka
5.a.2 Outside Bangladesh (Nostro accounts) Currency 2020 2019
Current accounts
Standard Chartered Bank, New York, USA USD 1,809,298,844 1,073,668,815
Citibank N.A. New York, USA USD 352,016,751 721,079,813
Mashreq Bank, New York, USA USD 239,560,290 516,551,889
Habib American Bank, New York, USA USD 222,475,344 122,565,620
HDFC Bank Ltd, Mumbai, India ACUD 135,033,328 170,439,592
Standard Chartered Bank,Mumbai, India ACUD 81,404,840 56,121,773
Mashreq Bank, Mumbai, India ACUD 57,752,554 (60,707,245)
Commerz Bank AG. Frankfurt, Germany USD 42,603,873 16,937,103
Bank of Tokyo Mitsubishi Ltd., Japan JPY 32,986,479 301,064
AB Bank Ltd., Mumbai, India ACUD 32,172,454 45,809,719
Commerz Bank AG. Frankfurt, Germany EURO 25,951,640 38,134,450
NIB Bank Limited, Karachi, Pakistan ACUD 25,135,542 11,827,394
Standard Chartered Bank, Frunkfurt, Germany EURO 15,142,093 45,474,214
Commercial Bank of Ceylon, Colombo, Sri Lanka ACUD 13,558,055 2,178,817
Sonali Bank Ltd., Kolkata, India ACUD 8,865,756 2,203,431
Mashreq Bank, Dubai AED 5,742,482 971,571
Standard Chartered Bank, London GBP 4,672,963 15,681,742
Commerz Bank AG. Frankfurt AUD 3,831,118 845,566
Kookmin Bank, Korea USD 3,649,750 7,731,716
Commerz Bank AG. Frankfurt, Germany CHF 2,897,807 2,554,790
Standard Chartered Bank, Nepal ACUD 1,176,161 1,177,532
Bank of Tokyo Mitsubishi Ltd., New Delhi, India ACUD 736,056 733,046
Bank of Bhutan, Bhutan ACUD 430,366 1,685,265
Mashreq Bank, Mumbai, India EURO 187,421 188,424
Mashreq Bank, London GBP - 509,394
Mashreq Bank, New York, USA (For OBU Operation) USD 967,735,089 1,351,885,987
ICICI Bank Limited, India (For OBU Operation) USD 179,642,476 -
Commerz Bank AG. Frankfurt, Germany (For OBU Operation) USD 72,760,065 40,840,765
Commerz Bank AG. Frankfurt, Germany (For OBU Operation) EURO 3,589,575 117,130,094
Sub total 4,341,009,172 4,304,522,341

Term deposits
Sonali Bank, Kolkata, India ACUD 733,223 690,478
Sub total 733,223 690,478
Total 4,341,742,395 4,305,212,819

Details are shown in Annexure-B.

5.a.3 Maturity grouping of balance with other banks and financial institutions
Payable on demand - -
Up to 1 month 17,698,205,809 8,738,330,685
Over 1 month but not more than 3 months 7,150,000,000 9,142,446,075
Over 3 months but not more than 1 year 2,085,518,761 5,155,518,761
Over 1 year but not more than 5 years 89,379,167 89,379,167
Over 5 years - -
27,023,103,737 23,125,674,688

266 Annual Report 2020

 Figures in Taka
2020 2019
6 MONEY AT CALL AND SHORT NOTICE - -

7 CONSOLIDATED INVESTMENTS
Government securities
The City Bank Limited (note 7.a.1.i) 42,061,653,285 36,085,210,195
42,061,653,285 36,085,210,195
Others
The City Bank Limited (note 7.a.1.ii) 4,189,792,330 3,366,294,433
City Brokerage Limited (note 7.b) 2,940,492,048 2,303,997,855
City Bank Capital Resources Limited (note 7.c) 2,669,258,584 1,893,145,989
9,799,542,962 7,563,438,277
51,861,196,247 43,648,648,472
7.a Investments - The City Bank Limited
Government (note 7.a.1.i) 42,061,653,285 36,085,210,195
Others (note 7.a.1.ii) 4,189,792,330 3,366,294,433
46,251,445,615 39,451,504,628
7.a.1 Investment securities are classified as follows
i) Government bonds
Government bonds (note 7.a.4) 42,055,501,985 36,081,759,195
Prize bonds 6,151,300 3,451,000
42,061,653,285 36,085,210,195
ii) Other investments
Shares (note 7.a.5) 2,828,847,552 2,014,440,314
Investment in Subordinated Bond 1,300,000,000 1,300,000,000
Mutual fund 60,822,505 51,731,846
Debenture of Bangladesh Welding Electrodes Limited 122,273 122,273
4,189,792,330 3,366,294,433
46,251,445,615 39,451,504,628
7.a.2 Investment classified as per Bangladesh Bank Circular
Held to Maturity (HTM) 28,657,741,320 19,704,778,112
Held for Trading (HFT) 13,403,911,965 16,380,432,083
Reverse Repo - -
Other Securities 4,189,792,330 3,366,294,433
46,251,445,615 39,451,504,628
Disclosure relating to REPO Reverse REPO is presented in Annexure - G

7.a.3 Maturity grouping of investments

On demand 6,151,299 3,451,000
Over 1 month but not more than 3 months 16,875,082,691 4,569,925,181
Over 3 months but not more than 1 year 4,820,323,970 13,092,019,409
Over 1 year but not more than 5 years 21,866,641,844 19,465,047,343
Over 5 years 2,683,245,811 2,321,061,695
46,251,445,615 39,451,504,628

267
 Figures in Taka
7.a.4 Government bills/bonds 2020 2019
Name of the bills/bonds
30 days Bangladesh Bank bills - -
91 days Treasury bills - -
182 days Treasury bills - 6,952,852,680
364 days Treasury bills 6,498,852,750 9,516,022,036
3 months Islamic bonds 5,000,000,000 -
6 months Islamic bonds 750,000,000 500,000,000
5 years Sukuk Islamic bonds 527,940,000 -
2 years Treasury bonds 13,476,463,251 5,459,669,147
5 years Treasury bonds 5,936,485,851 3,015,800,639
10 years Treasury bonds 7,718,274,166 8,345,449,270
15 years Treasury bonds 1,987,267,428 2,127,334,346
20 years Treasury bonds 160,218,539 164,631,077
42,055,501,985 36,081,759,195
7.a.5 Investment in shares
Quoted
IDLC Finance Limited 2,151,467,715 1,540,640,919
Trust Bank Limited 61,168,059 47,790,285
Grameenphone Limited 40,923,090 33,695,820
Matin Spinning Mills Ltd 31,359,364 28,602,497
Dhaka Bank Limited 27,621,602 26,527,356
Walton Hi-Tech Industries Ltd. 22,568,929 -
Square Pharmaceuticals Limited 21,950,000 14,231,000
Mercantile Bank Limited 21,052,244 20,839,130
Confidence Cement Limited 18,195,000 -
British American Tobacco Bangladesh Co. Ltd. 15,350,400 -
Ifad Autors Limited 14,160,000 4,620,000
Standard Bank Limited 13,670,922 13,961,127
Pubali Bank Limited 10,995,288 10,949,664
AB Bank Limited 8,697,783 5,408,308
Doreen Power Generations and Systems Limited 8,182,784 -
Robi Axiata Limited 3,909,432 -
Mobil Jamuna Lubricants Bangladesh Limited 3,845,000 1,329,300
Mutual Trust Bank Limited 3,777,844 3,956,265
The ACME Laboratories Limited 3,735,000 1,522,500
Bata Shoe Company (Bangladesh) Limited 3,583,770 3,550,110
Shahjibazar Power Co. Ltd. 1,755,755 1,643,880
Investment Corporation of Bangladesh 1,346,150 906,086
Saif Powertec Limited 1,318,806 926,208
Prime Bank Limited 1,306,440 1,390,480
BBS Cables Ltd. 1,205,600 1,176,000
Rangamati Food Products Limited 767,550 767,550
Raspit Inc. (BD) Limited 695,400 695,400
Shahjalal Islami Bank Limited 641,727 624,523
Paramount Textile Limited 381,070 -
SILCO Pharmaceuticals Limited 192,528 220,978
German Bangla Joint Venture Foods Limited 75,600 75,600
Somorita Hospital Limited 10,302 10,368
Perfume Chemical Ind. Limited 1,652 1,652
Summit Power Limited - 87,392,250
Brac Bank Limited - 51,390,000
Singer Bangladesh Limited - 32,863,468
Sub-total 2,495,912,806 1,937,708,724

268 Annual Report 2020

 Figures in Taka
2020 2019
Quoted (Under special fund and investment policy as per DOS Circular no.01/2020)
Summit Power Limited 57,067,190 -
Walton Hi-Tech Industries Ltd. 30,795,873 -
British American Tobacco Bangladesh Co. Ltd. 27,693,552 -
Berger Paints Bangladesh Ltd. 23,568,285 -
Square Pharmaceuticals Limited 18,335,558 -
Singer Bangladesh Limited 17,539,982 -
Grameenphone Limited 16,075,136 -
United Power Generation & Distribution Company Limited 11,033,077 -
Paramount Textile Limited 9,573,768 -
Aamra Networks Limited 9,103,111 -
Doreen Power Generations and Systems Limited 6,101,184 -
Sub-total 226,886,716 -

Unquoted ordinary shares

Industrial & Infrastructural Development Finance Company Limited 71,770,260 42,453,820
Venture Investment Partners Bangladesh Limited 18,000,000 18,000,000
KARMA Sangsthan Bank Limited 10,000,000 10,000,000
Central Depository Bangladesh Limited 6,277,770 6,277,770
Sub-total 106,048,030 76,731,590
Total 2,828,847,552 2,014,440,314

7.b Investments - City Brokerage Limited

Membership (note 7.b.1)
Dhaka Stock Exchange Limited (DSE) 543,119,683 543,119,683
Chittagong Stock Exchange Limited (CSE) 19,001,000 19,001,000
562,120,683 562,120,683
Investments in shares (note 7.b.2) 2,378,371,365 1,741,877,172
2,940,492,048 2,303,997,855
7.b.1 Membership fees is the amount paid by the company to obtain membership of DSE and CSE.

7.b.2 This represents investment made by the City Brokerage Limited in purchase of shares of various companies listed in Dhaka Stock
Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) through its dealer account. Cost price of the investment is
Taka 2,248,997,266 (2019: 2,075,072,670) as on 31 December 2020.

7.c Investments - City Bank Capital Resources Limited

Others
Investments in quoted shares (note 7.c.1) 2,606,070,909 1,804,448,314
Investments in unlisted securities (note 7.c.2) 63,187,675 88,697,675
2,669,258,584 1,893,145,989

7.c.1 This represents investment made by the City Bank Capital Resources Limited in purchase of shares of various companies listed in
Dhaka Stock Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) through its dealer account. Cost price of the
investment is Taka 1,853,048,763 (2019: 1,818,054,440) as on 31 December 2020.

7.c.2 This represent investment made by CBCRL in purchase of equity shares of Mir Akhter Hossain, Lub-rref (Bangladesh) Ltd., Index
Agro Industries Ltd. and preference shares of Regent Energy and Power Co. Limited.

269
 8 CONSOLIDATED LOANS AND ADVANCES/INVESTMENTS Figures in Taka
2020 2019
Loans/investments, cash credits, overdrafts, etc.
The City Bank Limited (note 8.a) 265,988,727,812 244,204,761,679
City Brokerage Limited (note 8.b) 1,295,081,082 949,616,669
City Bank Capital Resources Limited (note 8.c) 1,027,915,888 682,657,886
City Hong Kong Limited 22,837,269 -
268,334,562,051 245,837,036,234
Mutual indebtedness:
Loan from The City Bank Limited - City Brokerage Limited* (993,700,934) (577,231,515)
Loan from The City Bank Limited - CBL Money Transfer Sdn. Bhd. (281,465,403) (234,997,079)
Loan from The City Bank Limited - City Hong Kong Limited (161,991,310) -
(1,437,157,647) (812,228,594)
266,897,404,404 245,024,807,640
Bills purchased and discounted
The City Bank Limited (note 8.a.2) 2,212,792,749 2,738,889,044
City Hong Kong Limited 157,382,903 14,037,568
2,370,175,652 2,752,926,612
269,267,580,056 247,777,734,252

*City Brokerage Limited availed overdraft facilities @ 9.00% p.a. for extending margin financing to its customers and availed two term
loan facilities @ 7.00% p.a. for investment in secondary market.

8.a Loans and advances/investments - The City Bank Limited

Loans/investments, cash credits, overdrafts, etc. (note 8.a.1) 265,988,727,812 244,204,761,679
Bills purchased and discounted (note 8.a.2) 2,212,792,749 2,738,889,044
268,201,520,561 246,943,650,723

8.a.1 Loans/investments, cash credits, overdrafts, etc.

Inside Bangladesh
Industrial credits 127,636,345,314 128,103,017,095
Export development fund 22,147,584,527 16,244,581,753
Cash credits 20,334,812,142 21,322,572,326
City solution 17,329,535,564 19,127,352,609
Other loans and advances 13,955,828,737 7,476,194,114
Small and medium enterprise loans 13,296,321,584 10,870,398,508
Secured overdrafts 13,061,410,308 6,199,778,292
City card loans 11,110,764,835 10,127,402,971
House building loans 7,321,102,710 7,125,170,243
Loan against payroll 4,884,689,589 1,876,466,693
Staff loans (note 8.a.15) 3,660,589,249 3,786,630,389
City express 3,364,225,684 3,992,335,747
Bai-muajjal, bi salam, murabah 3,310,408,244 4,304,131,468
City drive 2,090,664,555 1,648,334,199
Hire purchase shirkatul melk 1,430,913,847 891,747,543
Transportation loans 410,081,752 549,560,649
Loans against trust receipt 173,717,021 280,215,337
Payment against document 17,681,861 17,282,847
Lease finance/Izara (note 8.a.5) 6,521,808 11,589,863
City gems 2,071,769 2,330,768
Loans against imported merchandise - 12,671,186
265,545,271,100 243,969,764,600
Outside Bangladesh 443,456,712 234,997,079
265,988,727,812 244,204,761,679

270 Annual Report 2020

8.a.2 Bills purchased and discounted Figures in Taka
Payable Inside Bangladesh 2020 2019
Inland bills purchased 1,845,616,311 2,108,238,549
Payable Outside Bangladesh
Foreign bills purchased and discounted 367,176,438 630,650,495
2,212,792,749 2,738,889,044
8.a.3 Performing loans and advances/investments
Gross loans and advances/investments 268,201,520,561 246,943,650,723
Non-performing loans and advances/investments (note 8.a.3.1) (10,850,128,128) (14,244,174,334)
257,351,392,433 232,699,476,389
8.a.3.1 Non-performing loans and advances/investments
Opening balance 14,244,174,334 12,325,502,447
Addition during the year 397,015,686 9,195,507,995
Reduction during the year (3,791,061,892) (7,276,836,108)
Closing balance 10,850,128,128 14,244,174,334

In the year 2020, no loans and advances/investments were downgraded in compliance with BPRD circular no. 04 (19 March 2020),
BRPD circular no. 13 (15 June 2020) and BRPD circular no. 17 (28 September 2020). Interest charged during the year on
non-performing loans and advances/Investment has added with non-performing loans and advances/investment.
8.a.4 Residual maturity grouping of loans and advances/investments including bills purchased and discounted
Repayable on demand 26,613,822,054 13,928,818,840
Not more than 3 months 56,172,982,374 65,139,752,627
More than 3 months but not more than 1 year 65,592,417,600 57,793,955,719
More than 1 year but not more than 5 years 87,854,274,602 83,886,014,673
More than 5 years 31,968,023,931 26,195,108,864
268,201,520,561 246,943,650,723
8.a.5 Lease finance/Izara
Lease rental receivable within 1 year 5,771,509 8,115,478
Lease rental receivable within 5 years 1,044,978 8,266,359
Lease rental receivable after 5 years - -
Total lease/Izara rental receivable 6,816,487 16,381,837
Unearned interest receivable (294,679) (4,791,974)
Net lease/Izara finance 6,521,808 11,589,863

8.a.6 Loans and advances/investments

Loans 232,592,505,362 216,682,411,061
Cash credits 20,334,812,142 21,322,572,326
Overdrafts 13,061,410,308 6,199,778,292
265,988,727,812 244,204,761,679
Bills purchased and discounted (note 8.a.2) 2,212,792,749 2,738,889,044
268,201,520,561 246,943,650,723
8.a.7 Concentration of loans and advances/investments including bills purchased and discounted
Industrial loans and advances/investments 209,483,130,549 181,939,428,248
Advances to customer groups 37,301,413,976 38,531,915,149
Others loans and advances/investments 21,160,164,959 26,318,768,964
Advances chief executive and other senior executives 256,437,680 152,471,534
Advances to allied concerns of directors 373,397 1,066,828
268,201,520,561 246,943,650,723
8.a.8 Business segment wise concentration of loans and advances/investments including bills purchased and discounted
Corporate 138,821,355,853 131,460,021,529
Retail 47,765,682,055 51,566,695,330
SME (including agriculture loan and microcredit) 44,560,258,924 33,994,560,807
Off-shore Banking Unit (OBU) 33,393,634,480 26,135,742,668
Staff loan (note 8.a.15) 3,660,589,249 3,786,630,389
268,201,520,561 246,943,650,723

271
 Figures in Taka
2020 2019
8.a.9 Sector wise concentration of loans and advances/investments including bills purchased and discounted
% of total loan Taka % of total loan Taka
Readymade garments industry 17.61% 47,234,565,191 17.06% 42,122,669,055
Consumer credit 15.09% 40,471,886,865 15.57% 38,438,333,306
Energy and power industry 12.12% 32,500,250,508 9.15% 22,592,149,131
Trade service 11.42% 30,633,402,946 10.83% 26,755,777,500
Other manufacturing industry 10.77% 28,891,191,233 10.02% 24,751,384,745
Textile & spinning mills 5.43% 14,556,815,769 3.93% 9,710,065,741
Real estate financing 4.70% 12,606,353,466 4.93% 12,165,485,382
Steel industry 4.39% 11,783,745,960 6.98% 17,237,615,040
Agri & micro-credit through NGO 4.22% 11,330,966,627 4.40% 10,870,132,479
Service industry 2.34% 6,278,766,406 2.16% 5,344,292,450
Others 2.28% 6,111,967,899 1.93% 4,760,482,186
Assembling industry 2.21% 5,924,871,985 3.66% 9,032,716,268
Pharmaceuticals industry 2.17% 5,812,010,707 3.03% 7,473,690,422
Edible oil and food processing 1.69% 4,535,545,508 2.79% 6,893,975,142
Construction 1.47% 3,953,552,329 0.83% 2,052,875,336
Transport, storage & communication 1.15% 3,071,861,140 1.39% 3,425,669,940
Ship breaking & building 0.49% 1,317,351,185 0.53% 1,316,197,807
Chemical industry 0.27% 720,528,338 0.67% 1,648,106,386
Hospitals 0.17% 465,886,499 0.14% 352,032,407
100.00% 268,201,520,561 100.00% 246,943,650,723

8.a.10 Geographical location-wise loans and advances/investments

Inside Bangladesh 2020 2019

Urban: % of total loan Taka % of total loan Taka
Dhaka 79.44% 213,071,889,896 80.08% 197,760,376,126
Chattogram 10.96% 29,394,913,649 11.29% 27,870,653,446
Rajshahi 2.63% 7,057,558,508 2.46% 6,084,131,555
Khulna 1.79% 4,800,295,104 1.42% 3,499,777,635
Rangpur 1.10% 2,962,520,333 1.02% 2,518,261,500
Sylhet 0.40% 1,080,042,105 0.46% 1,125,223,530
Barishal 0.34% 923,295,002 0.25% 610,666,616
Mymensingh 0.11% 306,507,734 0.12% 285,281,457
96.79% 259,597,022,331 97.09% 239,754,371,865
Rural:
Dhaka 2.35% 6,297,628,417 2.11% 5,214,446,485
Chattogram 0.42% 1,126,958,912 0.42% 1,035,404,667
Rajshahi 0.17% 462,236,037 0.19% 469,143,504
Sylhet 0.08% 205,404,902 0.08% 190,167,857
Khulna 0.03% 68,813,250 0.02% 45,119,266
3.04% 8,161,041,518 2.82% 6,954,281,779
Total inside Bangladesh 99.83% 267,758,063,849 99.90% 246,708,653,644
Outside Bangladesh 0.17% 443,456,712 0.10% 234,997,079
Grand total 100.00% 268,201,520,561 100.00% 246,943,650,723

8.a.11 Sector-wise loans and advances

Public sector - - - -
Private sector 100.00% 268,201,520,561 100.00% 246,943,650,723
100.00% 268,201,520,561 100.00% 246,943,650,723

272 Annual Report 2020

 Figures in Taka
2020 2019
8.a.12 Securities against loans/investments including bills purchased and discounted
Collateral of movable/immovable assets 178,730,494,388 178,055,477,296
Local banks and financial institutions guarantee 2,212,792,749 2,738,889,044
Foreign banks guarantee - -
Export documents 22,165,266,388 16,261,864,600
Fixed deposit receipts (FDR) 4,246,431,943 4,156,124,877
FDR of other banks - -
Government guarantee - -
Personal guarantee 17,503,252,585 19,407,567,946
Other securities 43,343,282,508 26,323,726,960
268,201,520,561 246,943,650,723

8.a.13 Detail of large loan/investments

As at 31 December 2020 there were 36 (31 December 2019: 42) borrowers or group with whom amount of outstanding loans and
advances/investments exceeded 10% of the total capital of the Bank. Total capital of the Bank was Taka 41,816.93 million as at 31
December 2020 (Taka 37,135.80 million as at 31 December 2019).
Number of borrowers or groups 36 42
Amount of outstanding advances/investments (Taka) 73,345,914,982 81,985,256,187
Amount of classified advances/investments therein (Taka) - -

8.a.14 Particulars of loans and advances/investments

i) Loans/investments considered good in respect of which the Bank is fully
secured 207,354,985,468 201,212,355,817
ii) Loans/investments considered good against which the Bank holds no security
other than the debtors' personal guarantee 17,503,252,585 19,407,567,946
iii) Loans/investments considered good secured by the personal undertaking of
one or more parties in addition to the personal guarantee of the debtors 43,343,282,508 26,323,726,960
iv) Loans/investments adversely classified; provision not maintained there against - -
268,201,520,561 246,943,650,723
v) Loans/investments due by directors or officers of the banking company or any
of them either separately or jointly with any other persons 3,660,962,646 3,787,697,217
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. 3,660,962,646 3,787,697,217
viii) Maximum total amount of advances/investments, including temporary
advances/investments granted during the year to the companies or firms in
which the directors of the banking company have interest as directors, partners
or managing agents or in the case of private companies, as members - -
ix) Due from other banking companies - -
x) Classified loans and advances/investments
(a) Classified loans and advances/investments on which interest has
not been charged 8,372,840,365 11,078,952,070
Increase of specific provision (1,896,558,628) 1,341,744,885
Amount of loans written off 1,583,366,108 789,648,317
Amount realised against loans previously written off 165,919,387 247,554,548
(b) Provision on classified loans and advances/investments 3,933,125,996 5,829,684,624
(c) Provision kept against loans/investments classified as bad debts 3,490,569,104 5,358,792,915
(d) Interest credited to Interest Suspense Account 4,075,007,387 2,034,100,642

273
 Figures in Taka
2020 2019
xi) Cumulative amount of written off loans/investments
Opening balance 16,962,006,166 16,419,912,397
Amount written off during the year 1,583,366,108 789,648,317
Amount realised against loans/investments previously written off (165,919,387) (247,554,548)
Closing balance 18,379,452,887 16,962,006,166
The amount of written off/classified loans/investments for which law suits have been filed 33,027,900,000 32,683,000,000

8.a.15 Staff loan

House building scheme 2,428,127,925 2,508,651,492
Provident fund 687,400,943 736,443,828
Vehicle scheme 465,194,507 472,635,645
Consumer credit and other scheme 79,865,874 68,899,424
3,660,589,249 3,786,630,389

8.a.16 Classification of loans and advances/investments 2020 2019

% of total loan Taka % of total loan Taka
Unclassified
Standard including staff loan 95.71% 256,697,308,286 93.36% 230,553,669,352
Special mention account (SMA) 0.24% 654,084,147 0.87% 2,145,807,037
95.95% 257,351,392,433 94.23% 232,699,476,389
Classified
Sub-standard 0.56% 1,509,553,130 1.02% 2,513,074,041
Doubtful 0.36% 967,734,633 0.26% 652,148,223
Bad/Loss 3.12% 8,372,840,365 4.49% 11,078,952,070
4.05% 10,850,128,128 5.77% 14,244,174,334
100.00% 268,201,520,561 100.00% 246,943,650,723

8.a.17 Particulars of required provision for loans and advances/investments

General provision on unclassified loans
Loans/investments (excluding SMA) 4,006,849,690 4,127,113,693
Special General Provision-COVID-19 720,073,153 -
Special mention account (SMA) 10,473,660 23,982,196
Required provision for unclassified loans and advances/investments 4,737,396,503 4,151,095,889
A. Total provision maintained for unclassified loans and advances/investments 5,159,470,078 4,239,579,345
B. Excess provision 422,073,575 88,483,456

2020 2019
Base for % of required Required Required
provision provision provision provision
Taka Taka Taka
Specific provision on classified loans
Sub-standard 812,474,713 5% - 20% 333,076,204 295,522,912
Doubtful 320,417,635 5% - 50% 109,480,688 175,368,797
Bad/Loss 3,428,424,789 100% 3,490,569,104 5,358,792,915
Required provision for classified loans and advances/investments 3,933,125,996 5,829,684,624
C. Total provision maintained for classified loans and advances/investments 3,933,125,996 5,829,684,624
D. Excess provision - -

Total required provision for loans and advances/investments 8,670,522,499 9,980,780,513

Total provision maintained for loans and advances/investments (A+C) 9,092,596,074 10,069,263,969
Total excess provision (B+D) 422,073,575 88,483,456

274 Annual Report 2020

 Figures in Taka
2020 2019

8.a.18 During the year 2020, no loan having outstanding Taka 500 crore or more was restructured.

8.b Loans and advances/investments - City Brokerage Limited

Margin loan was given to several individuals and institutions for doing share trading business through City Brokerage
Limited.

8.c Loans and advances/investments - City Bank Capital Resources Limited

Margin loan was given to several individuals and institutions for doing share trading business through City Bank Capital
Resources Limited.

9 Bills purchased and discounted (note 8.a.2)

Payable in Bangladesh 1,845,616,311 2,108,238,549
Payable outside Bangladesh 367,176,438 630,650,495
2,212,792,749 2,738,889,044
9.1 Maturity grouping of bills purchased and discounted
Payable within one month 794,306,002 985,171,793
Over one month but less than three months 1,170,149,928 430,155,263
Over three months but less than six months 156,564,648 1,316,814,937
Six months or more 91,772,171 6,747,051
2,212,792,749 2,738,889,044
10 Consolidated fixed assets including premises, furniture and fixtures
The City Bank Limited (note 10.a) 5,920,244,649 5,675,246,085
City Brokerage Limited (note 10.b) 331,316,057 357,970,809
City Bank Capital Resources Limited (note 10.c) 754,384,844 690,923,540
CBL Money Transfer Sdn. Bhd. (note 10.d) 73,378,512 38,278,835
City Hong Kong Limited (note 10.e) 1,928,700 6,784,080
7,081,252,762 6,769,203,349
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited (276,812,532) (276,812,532)
City Brokerage Limited with The City Bank Limited (193,139,428) (193,139,428)
6,611,300,802 6,299,251,389
10.a Fixed assets including premises, furniture and fixtures - The City Bank Limited
Cost
Office equipment and machinery 3,701,710,362 3,346,400,131
Building 1,789,452,122 1,789,452,122
Work-in progress - building 82,285,716 82,285,716
Furniture and fixtures 1,555,212,473 1,429,367,802
Software 626,336,945 514,272,601
Work-in progress - software 112,929,441 92,104,758
Bank's vehicles 394,168,628 388,194,209
Land 168,630,265 168,630,265
Right of use assets 3,353,715,406 2,606,368,257
11,784,441,358 10,417,075,861
Accumulated depreciation and amortisation (5,864,196,709) (4,741,829,776)
Written down value 5,920,244,649 5,675,246,085

See Annexure - D for details.

275
 Figures in Taka
10.b Fixed assets including premises, furniture and fixtures - City Brokerage Limited 2020 2019
Cost
Land and Building 292,849,538 292,849,538
Office equipment and machinery 56,219,682 55,800,462
Furniture and fixtures 32,539,305 31,311,255
Software 7,102,028 8,757,936
Vehicles 6,220,770 6,220,770
Lease hold property 850,000 850,000
Right of use assets 50,772,104 49,881,498
446,553,427 445,671,459
Accumulated depreciation and amortisation (115,237,370) (87,700,650)
Written down value 331,316,057 357,970,809

10.c Fixed assets including premises, furniture and fixtures - City Bank Capital Resources Limited

Cost
Land and building (capital work in progress) 740,540,291 668,895,984
Vehicle 11,201,065 11,201,065
Furniture and fixtures 7,594,669 7,584,994
Office equipment and machinery 8,557,555 7,766,995
Software 2,200,000 2,200,000
Right of use assets 14,409,238 14,915,584
784,502,818 712,564,622
Accumulated depreciation and amortisation (30,117,974) (21,641,082)
Written down value 754,384,844 690,923,540

10.d Fixed assets including premises, furniture and fixtures - CBL Money Transfer Sdn. Bhd.
Cost
Furniture and fixtures 23,683,332 21,395,692
Office equipment and machinery 19,907,642 16,622,669
Vehicle 2,363,025 2,133,632
Right of use assets 70,120,564 34,069,800
116,074,563 74,221,793
Accumulated depreciation (42,696,051) (35,942,958)
Written down value 73,378,512 38,278,835

10.e Fixed assets including premises, furniture and fixtures - CBL Hong Kong Limited
Cost
Office equipment and machinery 1,899,447 1,434,975
Furniture and fixtures 682,911 672,873
Right of use assets - 9,637,353
2,582,358 11,745,201
Accumulated depreciation (653,658) (4,961,121)
Written down value 1,928,700 6,784,080

276 Annual Report 2020

 Figures in Taka
2020 2019
11 CONSOLIDATED OTHER ASSETS
The City Bank Limited (note 11.a) 12,043,415,414 12,433,741,210
City Brokerage Limited (note 11.b) 343,602,028 241,529,983
City Bank Capital Resources Limited (note 11.c) 165,851,865 106,920,305
CBL Money Transfer Sdn. Bhd. (note 11.d) 3,791,692,791 2,079,713,480
City Hong Kong Limited (note 11.e) 3,050,068 1,594,306
16,347,612,166 14,863,499,284
Goodwill arising on investment in subsidiaries 35,997,760 35,397,698
Mutual indebtedness:
Payable to City Bank Limited - City Brokerage Limited (546,291) (167,409,618)
Payable to City Bank Limited - City Bank Capital Resources Limited (97,068,213) (663,124)
Payable to City Bank Limited - CBL Money Transfer Sdn. Bhd. - (882,145)
Payable to City Bank Capital Resources Limited - City Bank Limited - (2,642,188)
Payable to City Bank Capital Resources Limited - City Brokerage Limited - (13,809,887)
Payable to CBL Money Transfer Sdn. Bhd. - City Bank Limited (53,414) -
Investment in subsidiaries (6,116,684,941) (6,085,582,040)
(6,214,352,859) (6,270,989,002)
Adjustments for consolidation - City Brokerage Limited - -
10,169,257,067 8,627,907,980
11.a Other assets- The City Bank Limited
Income generating other assets
Investment in subsidiaries (note 11.a.1) 6,116,684,941 6,085,582,040
Interest income receivable (note 11.a.2) 1,803,932,474 1,591,709,111

Non income generating other assets

Accounts receivables (note 11.a.3) 1,950,645,101 1,898,626,651
Advance payment of tax (note 11.a.4) 1,473,884,970 1,676,259,455
Deferred tax assets (note 11.a.5) 350,972,882 828,803,139
Intangible assets (note 11.a.6) 186,242,966 219,250,895
Prepaid expenses 59,460,728 51,513,950
Security deposits 43,114,553 45,597,814
Advance against rent and advertisement 30,981,431 7,648,618
Stationery and stamps 17,389,022 15,960,334
Protested bill 5,842,887 5,842,887
Branch adjustment account 4,263,459 6,064,171
Receivable from CBL Money Transfer - 882,145
12,043,415,414 12,433,741,210
11.a.1 Investment in subsidiary
In Bangladesh
City Brokerage Limited 3,400,000,000 3,400,000,000
City Bank Capital Resources Limited 2,550,000,000 2,550,000,000
5,950,000,000 5,950,000,000
Outside Bangladesh
CBL Money Transfer Sdn. Bhd. 99,702,332 99,702,332
City Hong Kong Limited 66,982,609 35,879,708
166,684,941 135,582,040
6,116,684,941 6,085,582,040
11.a.2 Interest income receivable
Interest receivable from placement 263,815,681 543,233,594
Interest receivable from government security 741,458,794 535,588,904
Interest receivable from loans & advances 709,125,972 512,886,613
Interest receivable from Bangladesh Bank for Stimulus Package 89,532,027 -
1,803,932,474 1,591,709,111

277
 Figures in Taka
2020 2019
11.a.3 Accounts receivables
Receivable against encashment -SP/BSP/PSC 818,140,835 299,506,877
Receivable against card operation 459,123,929 630,965,633
Advance against remittance 239,542,827 590,178,834
Sundry debtors 176,185,230 82,796,114
Receivable against sales proceeds of shares 94,314,993 167,416,457
Advance to vendor for expense 93,553,163 60,194,256
Interest receivable against block interest 30,756,537 -
Receivable against fraud forgeries 26,491,503 26,491,503
Unreconciled nostro entry 8,691,904 8,691,904
Advance to staff for expense 3,844,180 3,068,633
Advance for right share - 29,316,440
1,950,645,101 1,898,626,651
11.a.4 Advance payment of tax
Opening balance 1,676,259,455 3,067,137,569
Paid during the year 2,793,350,480 2,684,010,570
Adjustment for previous years tax liability (2,995,724,965) (4,074,888,684)
Closing balance 1,473,884,970 1,676,259,455

11.a.5 Deferred tax assets

Deferred tax asset 350,972,882 828,803,139

Detail calculation on deferred tax assets:

Taxable
(deductible) Deferred tax
Book value Tax base temporary (assets)/liability
Taka Taka difference Taka
Taka

Fixed assets 2,840,984,500 3,735,676,665 (894,692,165) (335,509,562)

Unrealised gain on share 32,233,636 - 32,233,636 3,223,364
Receivable on Interest income - T bond 741,458,794 - 741,458,794 278,047,048
Provision against classified loan (999,883,845) - (999,883,845) (374,956,442)
Right of use of assets 2,111,674,620 - 2,111,674,620 791,877,983
Lease obligation (1,903,080,727) - (1,903,080,727) (713,655,273)
Deferred tax liability/(asset) (350,972,882)
Deferred tax asset up to last year (828,803,139)
Deferred tax (income)/expense 477,830,257

11.a.6 Intangible assets

Royalty 167,375,315 199,486,504
Users license 18,867,651 19,764,391
186,242,966 219,250,895
11.a.6.1 Movement of intangible assets
Opening balance 219,250,895 248,949,440
Addition during the year 52,987,101 50,571,842
Amortisation during the year (85,995,030) (80,270,387)
Closing balance 186,242,966 219,250,895

278 Annual Report 2020

 Figures in Taka
2020 2019
11.b Other assets - City Brokerage Limited
Advance payment of tax 294,115,124 220,158,834
Advances, deposits and prepayments 19,819,835 6,343,169
Dividend receivable 15,983,125 12,747,729
Receivable from CSE 7,914,173 -
Receivable from DSE 5,769,771 2,280,251
343,602,028 241,529,983

11.c Other assets - City Bank Capital Resources Limited

Account receivable 79,513,925 4,791,351
Advances, deposits and prepayments 49,910,890 12,788,559
Advance income tax 36,423,270 84,758,025
Stamps in hand 3,780 3,780
Deferred tax assets - 4,578,590
165,851,865 106,920,305

11.d Other assets - CBL Money Transfer Sdn. Bhd.

Advances, deposits and prepayments 3,791,692,791 2,079,713,480
3,791,692,791 2,079,713,480
11.e Other assets - City Hong Kong Limited
Security deposits 3,050,068 1,594,306
3,050,068 1,594,306

12 NON - BANKING ASSETS

Income generating:
Share (note 12.a) 103,455,000 110,110,000
Non-income generating:
Land (note 12.b) 979,023,752 1,042,228,991
1,082,478,752 1,152,338,991

The City Bank Limited has been awarded absolute ownership on 44 mortgage properties through verdict of honourable Court under
section 33 (7) of Artha Rin Adalat Ain, 2003. The Bank also acquired some lien shares as settlement of loan. Theses have been recorded
at Taka 1,082,478,752 as non-banking assets.

279
 Figures in Taka
Name of Parties Type of assets Booking Date 2020 2019
12.a Income generating:
Abrar Steel Mills Ltd. Prime Bank Ltd.'s share 15/Nov/12 103,455,000 110,110,000
103,455,000 110,110,000
12.b Non-income generating:
M/S Overseas Liner Agency 953 decimal land 29/Dec/11 11,436,000 11,436,000
M/S Habib Bastra Bitan 16.50 decimal land 29/Dec/11 1,485,000 1,485,000
M/S Misti Enterprise 16.50 decimal land 29/Dec/11 819,523 819,523
M/S Silva Synthetic Fabrics 67.5 decimal land in Narayangonj 29/Dec/11 &
29/Dec/15 27,000,000 27,000,000
L.J.S Enterprise 181.96 decimal land 29/Dec/11 3,677,959 3,677,959
M/S Sikder Construction 14 decimal land 29/Dec/11 12,131,206 12,131,206
M/s. Nan Business Associates 5 decimal land & 1,518 sft floor 27/Dec/12 8,340,000 8,340,000
Shibpur Rice Mill 150.75 decimal land 27/Dec/12 2,563,633 2,358,633
M/s. Chand & Sons 6.60 decimal land 10/Oct/13 1,850,139 1,850,139
M/s. Ashraf Traders 12 decimal land 20/Oct/13 3,352,735 3,352,735
M/s. Rafique Repairing & Motor 8 decimal land along with two storied
Machinery Parts building 20/Oct/13 1,371,088 1,371,088
Friends International 225.35 decimal land 3/Mar/14 14,888,087 14,888,087
Lucky Trade Concern 7.89 decimal land 29/Jun/15 130,326,220 130,326,220
M/s General Services 375.5 decimal land 20/Dec/15 2,074,764 2,074,764
M/s Galeeb International 8.25 decimal land 22/Dec/15 3,507,045 3,507,045
M/s Balaka Industries 7 katha land 22/Dec/15 6,390,367 6,390,367
Alif Builders & Co. 4.51 decimal land 22/Dec/15 13,647,649 13,647,649
M/s Dhaka Eylet & Bartack Center 34 decimal land 23/Dec/15 - 4,855,476
M/s Alamin Engineering 2.50 katha and 8.25 decimal land 23/Dec/15 2,340,929 2,340,929
M/s S S Poultry Feed 12.32 decimal land 23/Dec/15 4,292,867 4,152,867
M/s Sathi Foods & Oil Industries 15 decimal land 23/Dec/15 10,683,879 10,683,879
M/s MIM Pictures International 51.5 decimal land 24/Dec/15 1,763,421 1,763,421
M/s Shaans Denim 1670 sft flat 24/Dec/15 34,880,000 34,880,000
M/s Apparel King Limited 16.34 decimal land 24/Dec/15 7,189,924 7,189,924
M/s Suchi Enterprise 50.24 decimal land 24/Dec/15 3,602,354 3,602,354
M/s A B Traders 3.63 acre land 24/Dec/15 899,503 899,503
M/s The Media Advertising 17.50 decimal and 5 katha land 24/Dec/15 1,627,948 1,627,948
M/s Mondira Medico 12.20 decimal and 3 acre land 24/Dec/15 4,496,291 4,496,291
M/s. Nan Business Associates 256 decimal land 28/Dec/15 55,181,250 55,181,250
M/s Tajco Ltd 1.60 acre land 30/Dec/15 15,049,194 15,049,194
Atlas Food and Beverage Limited 233.68 decimal land 29/Jun/16 65,366,934 65,366,934
Sristy Traders 21.50 decimal land 29/Jun/16 26,322,125 26,322,125
Rafty Sweaters Limited 100 decimal land and 02 storied building
measuring -+42,000 sft 29/Dec/16 71,140,000 71,140,000
Saleh Fashion Ltd. 14.56 decimal and 30 decimal land 21/Jun/17 17,592,323 17,592,323
M/S Hasnat Enterprise 4.587 decimal land with building and 4.125
decimal land 30/Dec/17 21,055,559 21,055,559
M/s. Noor Enterprise 84.87 decimal land 30/Dec/17 80,034,010 79,984,010
M/s. McCoy Knitwear 22.50 decimal land and 5.00 decimal land.
Total 27.5 decimal land 30/Dec/17 2,625,000 2,625,000
M/s. Rupchanda Food Products 21 decimal vacant land 30/Dec/17 1,680,000 1,680,000
M/s. Unique Steel 75.5 decimal land 30/Dec/17 36,476,810 36,476,810
Mohd. Elias Bros (Pvt.) Ltd 18.92 decimal land 28/Jun/18 69,300,000 69,300,000
M/s Momin Monu Auto Rice Mill 117.50 decimal land at Jamalpur 28/Jun/18 9,400,000 9,400,000
S. M Enterprise 94.32 decimal land with 3 storied
commercial building 26/Dec/18 98,642,429 98,033,679
S. K. Motors 29.30 decimal and 27.69 decimal land 27/Dec/18 23,238,000 23,238,000
M/s Rabeya Bastraly 7.0 decimal and 5.5 decimal land 27/Dec/18 2,853,626 2,757,626
Emdadul Haque Bhuiyan 578.63 decimal land 30/Jun/19 &
29/Dec/19 66,427,961 125,877,474
979,023,752 1,042,228,991

280 Annual Report 2020

 Figures in Taka
2020 2019

13 Bond
Tier-II subordinated bond (note-13.01) 9,200,000,000 9,200,000,000
Perpetual bond - additional Tier-I capital (note-13.02) 2,400,000,000 -
11,600,000,000 9,200,000,000

13.01 Tier-ii Subordinated Bond

Tier-II Subordinated bond includes fund raised from several banks, financial institutions and other organisation through
issuance of 7 (Seven) years Bond during 2017 and 2018, worth Taka 5,000 million and Taka 7,000 million respectively. Out
of this Taka 7,000 million, Taka 3,800 million and Taka 400 million has been subscribed within 31 December 2018 and 31
December 2019 respectively.
The bank holds two Subordinated Bonds with outstanding amounts of Taka 5,000 million and Taka 4,200 million
respectively as on 31 December 2020. Institution wise subscription towards the bonds are:

City Bank 2nd subordinated bond

ONE Bank Limited 1,000,000,000 1,000,000,000
Rupali Bank Limited 800,000,000 800,000,000
Janata Bank Limited 750,000,000 750,000,000
Sonali Bank Limited 500,000,000 500,000,000
Pubali Bank Limited 500,000,000 500,000,000
Mercantile Bank Limited 400,000,000 400,000,000
Uttara Bank Limited 350,000,000 350,000,000
Dhaka Stock Exchange Limited 300,000,000 300,000,000
Agrani Bank Limited 200,000,000 200,000,000
Dhaka Bank Limited 100,000,000 100,000,000
Standard Bank Limited 100,000,000 100,000,000
5,000,000,000 5,000,000,000
City Bank 3rd subordinated bond
ONE Bank Limited 1,300,000,000 1,300,000,000
Sonali Bank Limited 1,000,000,000 1,000,000,000
Agrani Bank Limited 1,000,000,000 1,000,000,000
Pubali Bank Limited 500,000,000 500,000,000
Dhaka Bank Limited 400,000,000 400,000,000
4,200,000,000 4,200,000,000
9,200,000,000 9,200,000,000
13.02 Perpetual bond (Additional tier-I capital)
City Bank, as the pioneer has successfully launched subscription of the first ever Perpetual Bond in the industry as well as the
country. The issuance process of “City Bank Perpetual Bond” was initiated back in 2019 and with subsequent approvals from
the regulators, the bank has already completed subscription of Taka 2,400.00 million out of the total issue size of Taka
4,000.00 million within 31 December 2020. Basic features of the bonds are;
Coupon rate: Reference rate Plus Coupon margin
Here, reference rate is the latest available 20 years treasury bond rate as published by Debt Management Department of
Bangladesh Bank on the quotation day and coupon margin is 2%.
Coupon range: 6.0% to 10.0%
Contingent Convertible feature: This bonds are contingent convertible and this conversion will only be executed if banks's
consolidated common equity Tier-I (CET-I) falls below 4.5% and the conversion amount will be to the extent of shortfall
amount for reaching CET-I @ 4.5%.
Subscriber wise perpetual bond are:

Individual subscribers 1,400,000,000 -

Institutional subscriber:
Pubali Bank Limited 1,000,000,000 -
2,400,000,000 -

281
 Figures in Taka
2020 2019

14 CONSOLIDATED BORROWINGS FROM OTHER BANKS, FINANCIAL INSTITUTIONS AND AGENTS

The City Bank Limited (note 14.a) 58,768,967,963 44,168,290,655
City Brokerage Limited (note 14.b) 1,342,968,567 974,452,019
City Bank Capital Resources Limited (note 14.c) 643,816,599 579,372,565
CBL Money Transfer Sdn. Bhd. (note 14.d) 248,529,140 237,610,179
City Hong Kong Limited (note 14.e) 161,990,222 -
61,166,272,491 45,959,725,418
Mutual indebtedness:
Loan from The City Bank Limited-City Brokerage Limited (993,700,934) (577,231,515)
Loan from The City Bank Limited- CBL Money Transfer Sdn. Bhd. (281,465,403) (234,997,079)
Loan from The City Bank Limited - City Hong Kong Limited (161,991,310) -
(1,437,157,647) (812,228,594)
59,729,114,844 45,147,496,824

14.a Borrowings from other banks, financial institutions and agents

In Bangladesh (note 14.a.1) 39,637,851,111 27,588,833,977
Outside Bangladesh (note 14.a.2) 19,131,116,852 16,579,456,678
58,768,967,963 44,168,290,655

14.a.1 In Bangladesh
Trust Bank Limited 1,950,425,300 -
Agrani Bank Limited 1,696,022,000 -
Bank Al-Falah Limited 678,408,800 250,000,000
Jamuna Bank Limited 508,806,600 280,170,000
Rupali Bank Limited 500,000,000 -
National Credit and Commerce Bank Limited 424,005,500 -
Pubali Bank Limited 254,403,300 849,000,000
Sonali Bank Limited 200,000,000 1,010,000,000
Dhaka Bank Limited - 3,396,000,000
Uttara Bank Limited - 1,100,000,000
IFIC Bank Limited - 500,000,000
Prime Bank Limited - 500,000,000
Meghna Bank Limited - 500,000,000
AB Bank Limited - 500,000,000
Southeast Bank Limited - 400,000,000
State Bank of India - 200,000,000
Janata Bank Limited - 200,000,000
Habib Bank Limited - 100,000,000
Refinance against EDF loan from Bangladesh Bank 21,095,710,535 14,563,519,993
Refinance against Stimulus package from Bangladesh Bank 8,712,972,124 -
Refinance against SME & Corporate loan from Bangladesh Bank 3,059,803,457 2,271,495,984
Borrowings from Bangladesh Bank 557,293,495 468,648,000
Bangladesh Bank against Assured Liquidity Support - 500,000,000
39,637,851,111 27,588,833,977

282 Annual Report 2020

 Figures in Taka
2020 2019
14.a.2 Outside Bangladesh
Standard Chartered Bank, Thailand 5,278,452,488 -
Global Climate Partnership Fund S.A.Sicav-Sif (GCPF) 2,544,033,000 2,546,999,999
International Finance Corporation 2,544,033,000 70,750,142
CaixaBank, S.A 2,257,604,564 600,574,140
Abu Dhabi Commercial Bank 1,381,915,851 2,299,785,596
Norwegian The Investment Fund For Developing Countries (NORFUND) 848,011,000 849,000,000
HDFC Bank Limited 848,011,000 781,080,000
Emirates NBD Bank PJSC, Dubai 772,321,778 -
Oesterreichische Entwicklungsbank AG (OeEB) 763,209,900 1,018,800,000
Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V (FMO) 636,008,250 1,273,500,000
Habib Bank, Dubai 572,909,865 -
Asian Development Bank 262,454,479 -
Emirates Islamic Bank 225,905,890 -
Habib Bank Limited, Belgium 196,245,787 -
Standard Chartered Bank, Singapore - 3,722,566,338
Bank Muscat S.A.O.G - 2,920,560,000
DBS Bank - 495,840,463
19,131,116,852 16,579,456,678

14.a.3 Borrowings secured/unsecured from other banks, financial institutions and agents
Secured - 500,000,000
Unsecured 58,768,967,963 43,668,290,655
58,768,967,963 44,168,290,655

14.a.4 Maturity grouping of borrowings from other banks, financial institutions and agents
Payable on demand 1,002,802,084 5,260,000,000
Up to 1 month 8,920,486,648 8,599,101,042
Over 1 month but within 3 months 15,238,855,072 11,206,679,445
Over 3 months but within 1 year 26,571,340,032 12,114,723,243
Over 1 year but within 5 years 5,669,377,395 6,987,786,925
Over 5 years 1,366,106,732 -
58,768,967,963 44,168,290,655

14.b City Brokerage Limited is enjoying two overdraft facilities from The City Bank Limited for extending margin financing to its customers,
supporting prefunding facilities to its foreign clients and investment in secondary market. Rate of interest of the availed facilities are
currently 9.00% p.a. and 7.00% p.a. respectively which is subject to revisions by the banks' management from time to time. Brokerage
is also enjoying two term loan facilities of Tk. 30.00 crore for ten years from Lanka Bangla Finance Ltd. @10.00% interest p.a., Tk. 12.96
crore from Investment Corporation of Bangladesh (ICB) @ 4.00% interest p.a..

14.c City Bank Capital Resource Ltd. has availed a term loan facility for ten years to acquire and develop own asset from IPDC Finance Ltd.
at the rate of 9.00%.

14.d CBL Money Transfer Sdn Bhd. has taken overdraft facility from The City Bank Ltd. For prefunding support for remitting foreign currency
from Malaysia @ 5.25%.

14.e City Hong Kong Limited is availing overdraft facilities from its parent @ 5.25% for extending bills discounting facilities to its customers.

283
 Figures in Taka
2020 2019
15 CONSOLIDATED DEPOSITS AND OTHER ACCOUNTS
The City Bank Limited (note 15.a) 254,781,149,633 246,703,665,442
City Brokerage Limited 606,935,637 174,799,386
City Bank Capital Resources Limited 245,730,650 210,377,141
CBL Money Transfer Sdn. Bhd. 104,952 132,092
City Hong Kong Limited 325,880 1,743,600
Inter-company indebtedness (note 15.b) (1,137,937,075) (650,012,590)
254,496,309,677 246,440,705,071

15.a Deposits and other accounts - The City Bank Limited

Local bank deposits (note 15.a.1) 460,688,930 4,631,467,973
Customer and other deposits 254,320,460,703 242,072,197,469
254,781,149,633 246,703,665,442
15.a.1 Local bank deposits
2020
Manarah
CD SND FDR SND Total
Name of Bank
Taka Taka Taka Taka Taka

Habib Bank Limited - - 400,000,000 - 400,000,000

Islami Bank Bangladesh Limited - - - 23,425,261 23,425,261
Al Arafah Islami Bank Limited - - - 12,263,137 12,263,137
Trust Bank Limited - - - 7,059,920 7,059,920
Southeast Bank Limited 4,261,085 1,425,136 - - 5,686,221
First Security Islami Limited 3,860,117 - - - 3,860,117
Export Import Bank of Bangladesh Limited - - - 3,318,005 3,318,005
Modhumoti Bank Limited - 1,239,131 - - 1,239,131
Shahjalal Islami Bank Limited - - - 1,217,495 1,217,495
Pubali Bank Limited - 896,449 - - 896,449
Padma Bank Limited 10,883 459,575 - - 470,458
AB Bank Limited - - - 353,148 353,148
Prime Bank Limited 266,894 - - - 266,894
BRAC Bank Limited - 215,198 - - 215,198
Jamuna Bank Limited - - - 211,143 211,143
Dutch-Bangla Bank Limited - 111,699 - - 111,699
Standard Bank Limited - 82,833 - - 82,833
Social Islami Bank Limited - - - 11,821 11,821
8,398,979 4,430,021 400,000,000 47,859,930 460,688,930

15.a.2 Deposits and other accounts Figures in Taka

2020 2019
Current deposits and other accounts
Current, al-wadeeah and manarah current deposits* 28,001,767,163 25,785,610,838
Sundry deposits (note 15.a.3) 14,288,114,557 11,982,917,434
Foreign currency deposits 2,731,152,393 3,018,277,134
Security deposits receipts 3,607,631 3,620,881
45,024,641,744 40,790,426,287
Bills payable
Pay orders issued 2,282,003,215 1,876,599,354
Demand draft 4,085,182 4,154,822
Pay slips issued 3,153,807 3,342,303
2,289,242,204 1,884,096,479

284 Annual Report 2020

 Figures in Taka
2020 2019
Savings bank deposits (note 15.a.4) 59,520,636,745 46,367,253,617

Fixed deposits
Fixed deposits, mudaraba and manarah fixed deposits 113,933,026,681 124,853,784,836
Short notice deposits, mudaraba and manarah short notice deposits 23,716,209,656 23,929,658,311
Scheme deposits (note 15.a.5) 9,941,260,702 8,385,239,952
Non resident deposits 356,131,901 493,205,960
147,946,628,940 157,661,889,059
Total deposits and other accounts 254,781,149,633 246,703,665,442

* Year wise current accounts were opened for distribution of cash dividend and accordingly dividend amount was duly transferred to
the relevant current accounts. As on December 31, 2020, an amount of Tk. 111,804,306 (2019: Tk.87,450,529) remained unclaimed with
several current accounts.

15.a.3 Sundry deposits

Foreign bills purchased awaiting remittance 7,128,394,455 4,697,332,510
Sundry creditors 3,375,656,384 4,306,263,386
Margin on letters of credit 1,681,338,787 1,386,983,035
Margin on letters of guarantee 522,352,546 408,859,913
Sundry deposits - Amex Card- local 347,356,562 244,449,880
Sundry deposits - City Card - local 322,808,000 31,932,219
Imprest fund - cash incentive 238,905,217 172,317
Sundry deposit - ATM 168,636,984 508,302,326
Others 154,731,780 22,656,674
Payable against RTGS & EFT 114,700,215 96,709,171
Sundry deposits - Master Cards 75,417,216 48,011,123
Unclaimed foreign DD 57,735,639 58,475,118
Security money- suppliers 46,766,874 45,484,068
Security deposits NRB 25,016,325 24,196,500
CIB service charges 8,493,422 6,549,308
Payable against legal expenses 4,346,797 453,688
Charge back - Amex Card - international 3,072,763 3,354,543
Interest payable on three stage deposits 2,731,458 2,731,458
Charges against credit rating 2,085,782 1,880,865
Sanchaypatra 1,300,000 1,300,000
Security money- staff 1,013,810 1,013,810
Key deposits 963,750 966,750
Payable against cash advance 814,693 808,838
Foreign currency 799,525 799,525
Charge back - Master Cards 617,335 484,143
Payable against SP and others 500,000 24,068,700
Unclaimed balances 390,588 393,652
Lease deposits 346,592 346,592
Agent commission on consumer credit schemes 232,757 232,757
Hajj deposits 194,597 194,597
Margin on inland bills purchased 185,000 185,000
Auto debit receipt/payment (Credit Card) 113,872 32,669,028
Risk fund (Consumer Credit Schemes and lease finance) 80,428 80,428
Sundry deposits - foreign settlement 14,404 21,731,400
Sundry deposits - City Card - international - 2,844,112
14,288,114,557 11,982,917,434

285
 Figures in Taka
2020 2019
15.a.4 Savings bank deposits
Savings bank deposits 57,034,390,234 45,284,993,538
Mudaraba/manarah savings deposits 2,486,246,511 1,082,260,079
59,520,636,745 46,367,253,617
15.a.5 Scheme deposits
City shomriddhi 9,279,178,418 7,998,292,273
Deposit pension scheme 352,301,323 102,701,675
City projonmo 197,447,030 205,040,864
Mudaraba monthly deposit scheme 97,945,829 63,644,540
Three stage scheme deposit 5,222,361 4,876,853
Manarah hajj deposit scheme 4,261,376 3,089,012
Junior savers scheme 1,812,301 2,368,908
Monthly benefit scheme 950,000 2,650,000
Marriage savings scheme 785,184 785,184
City bank sanchaya scheme 746,951 989,311
Lakpati savings scheme 366,252 557,655
Education savings scheme 243,677 243,677
9,941,260,702 8,385,239,952
15.a.6 Sector-wise deposits
Private 243,386,300,045 227,888,347,866
Other public 3,598,377,204 7,510,136,249
Deposit money banks 460,688,930 4,631,467,973
Government 4,604,631,061 3,655,436,220
Foreign currency 2,731,152,393 3,018,277,134
254,781,149,633 246,703,665,442

15.a.7 Maturity analysis of inter-bank deposits

Payable on demand 303,151 285,208
Up to 1 month 408,856,175 3,272,422,144
Over 1 month but within 3 months 18,321,334 1,326,618,227
Over 3 months but within 1 year 33,208,270 32,142,394
460,688,930 4,631,467,973
15.a.8 Maturity analysis of deposits
Bills payable:
Payable on demand 18,619,170 15,323,985
Up to 1 month 539,955,928 444,395,556
Over 1 month but within 6 months 1,730,667,106 1,424,376,938
Over 6 months but within 1 year - -
Over 1 year but within 5 years - -
Over 5 years but within 10 years - -
Over 10 years - -
2,289,242,204 1,884,096,479
Other deposits:
Payable on demand 9,504,283,629 7,256,633,700
Up to 1 month 23,278,530,966 26,266,989,673
Over 1 month but within 6 months 77,014,712,743 95,927,045,834
Over 6 months but within 1 year 69,943,932,455 52,262,570,173
Over 1 year but within 5 years 69,548,838,622 47,524,108,618
Over 5 years but within 10 years 3,167,692,578 13,712,173,802
Over 10 years 33,916,436 1,870,047,163
252,491,907,429 244,819,568,963
254,781,149,633 246,703,665,442

286 Annual Report 2020

15.b City Brokerage Limited and City Bank Capital Resource Limited maintained current deposit and fixed deposit receipt
accounts with its parent company, The City Bank Limited. Account wise outstanding balances are as follows:

Figures in Taka
2020 2019
Inter-company indebtedness among Holding company & Subsidiaries:
City Brokerage Limited - current accounts - 137,466,855
City Brokerage Limited - fixed deposits receipt accounts 842,638,760 2,997,535
842,638,760 140,464,390

City Bank Capital Resources Limited - current accounts 578,998 2,853,235

City Bank Capital Resources Limited -fixed deposits receipt accounts 181,901,601 339,233,608
182,480,599 342,086,843
Inter-company indebtedness among Subsidiaries:
Payable to City Bank - City Bank Capital Resources Limited 93,823,596 167,409,618
Payable to City Bank Capital Resources Limited - City Brokerage Limited 18,994,120 51,739
112,817,716 167,461,357
Total inter-company indebtedness 1,137,937,075 650,012,590

16 CONSOLIDATED OTHER LIABILITIES

The City Bank Limited (note 16.a) 28,957,319,436 29,201,394,866
City Brokerage Limited (note 16.b) 664,037,503 427,990,339
City Bank Capital Resources Limited (note 16.c) 136,479,633 158,150,781
CBL Money Transfer Sdn. Bhd. (note 16.d) 3,509,511,041 1,840,393,418
City Hong Kong Limited (note 16.e) 1,890,667 15,920,009
33,269,238,280 31,643,849,413
Mutual indebtedness:
Payable to City Bank Limited - City Brokerage Limited (490,574) (6,017)
Payable to City Bank Limited - City Bank Capital Resources Limited (3,244,617) (3,299,295)
Payable to City Bank Limited - CBL Money Transfer SDN BHD (53,414) (882,145)
Payable to City Bank Capital Resources Limited - City Bank Limited - -
Payable to City Brokerage Limited - City Bank Capital Resources Limited (55,717) (13,809,887)
(3,844,322) (17,997,344)
Adjustments for consolidation - City Bank Capital Resources Limited - -
Adjustments for consolidation - CBL Money Transfer Sdn. Bhd. - -
- -
33,265,393,958 31,625,852,069

16.a Other liabilities - The City Bank Limited

Provision for loans and advances/investments (note 16.a.1) 9,092,596,074 10,069,263,969
Interest and other expenses payable 7,319,641,234 8,212,549,355
Interest suspense account (note 16.a.3) 4,075,007,387 2,034,100,642
Provision for income tax (note 16.a.6) 2,852,148,135 3,942,378,436
Lease liabilities 1,903,080,727 1,713,066,892
Others 1,412,097,004 995,447,093
Provision for outstanding off-balance sheet exposures (note 16.a.2) 1,202,334,089 1,031,885,771
Provision for non banking assets 523,083,602 523,083,602
Other provision (note 16.a.5) 479,205,968 670,926,471
Provision for money at call and short notice 89,379,167 -
Provision for nostro account 8,692,635 8,692,635
Payable to CBL Money Transfer Sdn. Bhd. 53,414 -
28,957,319,436 29,201,394,866

287
 Figures in Taka

16.a.1 Provision for loans and advances/investments 2020 2019

Movement in specific provision on classified loans/investments:
Provision held at the beginning of the year 5,829,684,624 4,487,939,739
Fully provided debts written off during the year (1,489,857,481) (710,829,678)
Fully waived during the year (6,641,295) (7,465,775)
Recoveries of amounts previously written off 135,393,727 228,668,430
Specific provision made during the year (485,588,804) 401,644,128
Provision made for partially write off - 1,429,727,780
Transfer to general provision (49,864,775) -
Provision held at the end of the year 3,933,125,996 5,829,684,624

Movement in general provision on unclassified loans/investments:

Provision held at the beginning of the year 4,239,579,345 3,485,871,951
Transfer from provision for classified accounts 49,864,775 -
General provision made during the year 870,025,958 753,707,394
Provision held at the end of the year 5,159,470,078 4,239,579,345
9,092,596,074 10,069,263,969

The Bank maintained provision against loans/investments accounts under writ petition of Taka 313.76 million (2019: Taka 93.37
million) against requirement of Taka 313.76 million (2019: Taka 93.37 million) as at 31 December 2020. These required and
maintained provisions included in total required and maintained provisions of loans / investments, disclosed above.

16.a.2 Provision on off-balances sheet exposures

As per BRPD circular no. 14 dated 23 September 2012 banks are advised to maintain 1% general provision against outstanding
off balance sheet exposures. Bangladesh Bank through BRPD circular letter no.1 dated 3 January 2018 and BRPD letter
reference non BRPD|(P-1)/661/13/2019-354 dated 13 January 2019 allows waiver of maintaining 1% general provision against off
balance sheet exposures to fast track power plant project and exposures to all power plant projects for import of fuel with effect
from 31 December 2017. Waiver for fast track power plant project is applicable for the exposures to be taken till 30 September
2018. In year 2018, Bangladesh Bank also issued a circular through BRPD letter no.7 dated 21 June 2018 allows waiver of
maintaining 1% general provision against Bills for Collection. In addition to the all said circular, Bangladesh Bank issued a letter
reference no. BRPD(P-1)/661/13/2020/1403 dated 05 February 2020 based on our prayer to allows waiver of maintaining 1%
general provision against Export Credit Agency (ECA) guarantee back long term credit facility by allowing 0.5% general
provision waver. As on 31 December 2020 bank’s outstanding off balance sheet exposures against fast track power projects, for
import of fuel for power plant project, Bills for Collection and Export Credit Agency (ECA) guarantee back long term credit facility
were Taka 5,546,321,547, Taka 10,327,036,546, Taka 9,544,065,438 and Taka. 11,195,747,927 respectively. With compliance of the
mentioned circular and circular letter reference, the Bank maintained provision of Taka 1,202,334,089 (31 December 2019: Taka
1,031,885,771) against requirement of Taka 1,137,562,564 ( 31 December 2019: Taka 977,850,968 ) as at 31 December 2020.

Opening balance 1,031,885,771 990,541,458

Addition during the year 170,448,318 41,344,313
Closing balance 1,202,334,089 1,031,885,771

16.a.3 Interest suspense account

Interest suspense account on classified loans and advances 1,377,162,961 1,240,859,927
Interest suspense on standard loans 2,605,400,438 731,422,098
Interest suspense on special mention account 92,443,988 61,818,617
4,075,007,387 2,034,100,64

288 Annual Report 2020

 Figures in Taka
2020 2019
16.a.4 Movement of interest suspense account
Opening balance 2,034,100,642 1,391,564,567
Amount transferred to "interest suspense" account during the year 2,584,002,631 1,558,634,487
Amount recovered from "interest suspense" account during the year (400,844,319) (789,015,879)
Amount waived during the year (49,501,899) (52,095,805)
Amount written off during the year (92,749,668) (74,986,728)
Closing balance 4,075,007,387 2,034,100,642

16.a.5 Other provision

Provision against employee bonus 231,158,925 346,879,428
Provision against good borrower (note 16.a.5.2) 55,469,389 155,469,389
Provision against other assets 154,490,507 132,452,901
Provision against investment 24,150,000 24,150,000
Provision against interest receivable 8,094,260 6,131,866
Provision against protested bills 5,842,887 5,842,887
479,205,968 670,926,471

16.a.5.1 Movement of other provision

Opening balance 670,926,471 512,170,507
Addition during the year 93,223,478 328,811,426
Adjustment during the year (284,943,981) (170,055,462)
Closing balance 479,205,968 670,926,471

16.a.5.2 Movement of Provision against good borrower

Opening balance 155,469,389 95,469,389
Addition during the year - 60,000,000
Release duting the year (100,000,000) -
Closing balance 55,469,389 155,469,389

16.a.6 Provision for income tax

Opening balance 3,942,378,436 4,971,406,540
Adjustment for settlement of tax (2,995,724,965) (4,074,888,684)
Provision during the year (note 16.a.6.1) 1,905,494,664 3,045,860,580
Closing balance 2,852,148,135 3,942,378,436

16.a.6.1 Provision for current tax of Taka 1,905,494,664 @ 37.5% and provision for prior year Taka 3,045,860,580 have been made, as
prescribed by Finance Act, of the accounting profit of the bank after considering some of the add backs to income and
disallowances of expenditure as per Income Tax Ordinance, 1984.

Corporate tax position of the bank has been shown in Annexure-E

289
 Figures in Taka
2020 2019
16.b Other liabilities - City Brokerage Limited
Provision for taxation and VAT 339,843,985 230,014,460
Accounts payable 127,290,359 2,413,022
Interest suspense 92,222,991 92,222,991
Provision for loans and advances 59,792,739 48,047,979
Lease obligation 23,377,832 29,569,463
Deferred tax liabilities 21,417,597 -
Accrued expenses 92,000 92,000
Provision for diminution in value of investments - 25,630,424
664,037,503 427,990,339

16.c Other liabilities - City Bank Capital Resources Limited

Provision for taxation 76,353,198 119,562,662
Other payables 33,938,582 2,720,444
Accrued expenses 15,304,609 1,013,585
Lease obligation 5,322,177 11,849,239
Deferred tax liabilities 3,931,827 -
VAT and TDS payable 1,629,240 3,259,803
Provision for diminution in value of investment - 19,745,048
136,479,633 158,150,781

16.d Other liabilities - CBL Money Transfer Sdn. Bhd.

Settlement obligation 3,441,777,352 1,815,041,412
Lease obligation 57,063,575 20,526,904
Provision for taxation 8,596,334 51,599
Accrued expenses 2,073,780 4,773,503
3,509,511,041 1,840,393,418

16.e Other liabilities - CBL Hong Kong Limited

Provision for office expense 1,127,844 87,294
Payable against others 309,364 10,196,940
Deferred tax liabilities 289,392 288,759
Provision for auditor fee 164,067 181,054
Lease obligation - 5,165,962
1,890,667 15,920,009

17 SHARE CAPITAL
17.1 Authorised:

1,500,000,000 ordinary shares of Taka 10.00 each 15,000,000,000 15,000,000,000

Authorised Share Capital of the Bank has been increase to Taka 15,000,000,000 from Taka 10,000,000,000 by a special
resolution dated 28 June 2015.

290 Annual Report 2020

 Figures in Taka

17.2 Issued, subscribed and fully paid up: No. of shares 2020 2019
Ordinary shares of Taka 10.00 each issued for cash up to 31
December'16 240,463,470 2,404,634,700 2,404,634,700
Ordinary shares of Taka 10.00 each issued for cash to IFC
during October'17 46,094,633 460,946,330 460,946,330
Ordinary shares of Taka 10.00 each issued as bonus shares up
to 31 December'19 729,828,558 7,298,285,580 7,298,285,580
1,016,386,661 10,163,866,610 10,163,866,610

The City Bank Ltd. issued 46,094,633 fresh ordinary shares @ Tk. 28.30 each (including a premium of Tk. 18.30 per share) to
International Finance Corporation (IFC) on 03 October 2017 after complying with all regulatory requirements.

The Bank offered 1:1 right share during the year 2010 and on the record date the outstanding number of shares was 19,639,125
as the bonus for 2009 was credited before the record date for right share. During the course of right exercise the honorable
High Court issued an injunction order against 392,778 shares. The verdict of the Court was to restrain exercise of right shares
against the said 392,778 shares and also asked to maintain provision for future dividend, which may be declared on the
aforementioned shares. Accordingly, the Bank maintained a reserve of Taka 58,253,259 till 31 December 2020 for subsequent
declared stock dividend for the prejudice shares, which is shown under surplus in profit and loss account.

17.3 History of issued, subscribed and fully paid up capital:

Accounting year Declaration No. of share Value of capital Cumulative

1983 Opening capital 3,400,000 34,000,000 34,000,000
1985 Further subscription 1,000,000 10,000,000 44,000,000
1987 Initial public offer 3,600,000 36,000,000 80,000,000
1990 1:1 Right issue 8,000,000 80,000,000 160,000,000
2002 1:2 Right issue 8,000,000 80,000,000 240,000,000
2004 1:1 Right issue 24,000,000 240,000,000 480,000,000
2005 50% stock dividend 24,000,000 240,000,000 720,000,000
2006 50% stock dividend 36,000,000 360,000,000 1,080,000,000
2007 10% stock dividend 10,800,000 108,000,000 1,188,000,000
2008 15% stock dividend 17,820,000 178,200,000 1,366,200,000
2009 15% stock dividend 20,493,000 204,930,000 1,571,130,000
2010 25% stock dividend 39,278,250 392,782,500 1,963,912,500
2010 1:1 Right issue 192,463,470 1,924,634,700 3,888,547,200
2011 30% stock dividend 116,656,410 1,166,564,100 5,055,111,300
2012 25% stock dividend 126,377,782 1,263,777,820 6,318,889,120
2013 10% stock dividend 63,188,891 631,888,910 6,950,778,030
2014 20% stock dividend 139,015,560 1,390,155,600 8,340,933,630
2015 5% stock dividend 41,704,668 417,046,680 8,757,980,310
2017 Fresh share issued to IFC 46,094,633 460,946,330 9,218,926,640
2018 5% stock dividend 46,094,633 460,946,330 9,679,872,970
2019 5% stock dividend 48,399,364 483,993,640 10,163,866,610
1,016,386,661 10,163,866,610

Although face value of paid up capital was split into Taka 10 from Taka 100 during the year 2011, we considered face value of
share @ Taka 10 from the inception of the bank for this statement.

291
 17.3.a Percentage of shareholdings at the closing date Figures in Taka
2020 2019
Particulars Taka Percentage(%) Taka Percentage(%)
General public 3,988,722,650 39.24% 4,072,996,340 40.07%
Directors and sponsors 3,373,587,370 33.19% 2,865,394,050 28.19%
Institutions 2,367,005,690 23.29% 2,232,951,210 21.97%
Foreign shareholder 434,550,900 4.28% 992,525,010 9.77%
10,163,866,610 100.00% 10,163,866,610 100.00%

17.4 Classification of shareholders by holding

2020 2019
Number of Number of % of total Number of % of total
share holders Shares holding Shares holding

01 - 500 shares 16,379 2,314,080 0.23% 17,740 0.25%

501 - 5,000 shares 10,878 20,219,751 1.99% 11,683 2.10%
5,001 - 10,000 shares 1,959 14,275,521 1.40% 2,109 1.47%
10,001 - 20,000 shares 1,177 16,898,403 1.66% 1,340 1.84%
20,001 - 30,000 shares 443 10,974,793 1.08% 470 1.13%
30,001 - 40,000 shares 202 7,117,326 0.70% 224 0.77%
40,001 - 50,000 shares 160 7,423,832 0.73% 153 0.69%
50,001 - 100,000 shares 280 20,414,973 2.01% 292 2.04%
100,001 - 1,000,000 shares 349 106,668,927 10.49% 395 11.46%
Over 1,000,000 shares 128 810,079,055 79.70% 134 78.26%
31,955 1,016,386,661 100.00% 34,540 100.00%

17.5 Consolidated Capital Adequacy Ratio

As per Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III), all
scheduled banks are required to calculate Capital Adequacy Ratio based on ‘Solo’ basis as well as on ‘Consolidated’ basis.
Capital Adequacy Ratio is calculated in accordance with the phase-in arrangements for Basel III implementation in 2015. All
amounts are stated in Taka crores except for those, if any, stated otherwise.

2020 2019
Common Equity Tier 1 Capital (CET1) Taka in crore Taka in crore
Paid up capital 1,016.39 1,016.39
Non-repayable share premium account 150.44 150.44
Statutory reserve 865.95 865.95
General reserve 1.14 1.14
Retained earnings (note 22) 580.92 297.89
Dividend equalisation reserve 53.08 53.08
Minority interest in subsidiaries 0.01 0.01
2,667.93 2,384.89
Regulatory Adjustments / Deductions from CET1
Deferred tax assets (32.53) (83.31)
100% of Excess Investment in other banks, FI and Ins. Co. (98.71) (204.94)
Book value of goodwill and value of any contingent assets which are shown as assets (3.60) (3.54)
2,533.08 2,093.11
Additional Tier 1 Capital
Perpetual bond 240.00 -
Total Tier 1 Capital 2,773.08 2,093.11

292 Annual Report 2020

 2020 2019
Taka in crore Taka in crore
Tier 2 Capital
Tier-II subordinated bond 644.00 820.00
General provision (note 17.5.2) 636.18 527.15
1,280.18 1,347.15
Regulatory Adjustments / Deductions from Tier 2 capital
100% of Excess Investment in other banks, FI and Ins. Co. (124.34) (32.95)
Total Tier 2 Capital 1,155.84 1,314.20
Total capital 3,928.92 3,407.31

Total assets 38,859.39 35,695.34

Total risk weighted assets (note 17.5.1) 27,513.82 24,508.21
Required capital with capital conservation buffer (12.50% of risk weighted assets) 3,439.23 3,063.53
Surplus 489.69 343.78
Total Capital Ratio 14.28% 13.90%
Tier 1 Capital Ratio 10.08% 8.54%
Leverage Ratio 5.74% 4.83%

17.5.1 Risk weighted assets

A. Credit Risk
On-Balance sheet 18,923.05 16,454.63
Off-Balance sheet 4,296.96 4,584.58
23,220.02 21,039.21
B. Market Risk 1,328.45 833.17
C. Operational Risk 2,965.36 2,635.84
Total Risk weighted assets (A+B+C) 27,513.82 24,508.21

17.5.2 General provision maintained against unclassified loan/investments & outstanding off-balance sheet exposures

General provision maintained against unclassified loan/investments (note 16.a.1) 515.95 423.96
General provision maintained against outstanding off balance sheet exposures (note 16.a.2) 120.23 103.19
636.18 527.15

17.5.a Capital Adequacy Ratio - The City Bank Limited

Common Equity Tier 1 Capital (CET1)
Paid up capital 1,016.39 1,016.39
Non-repayable share premium account 150.44 150.44
Statutory reserve 865.95 865.95
General reserve 1.14 1.14
Retained earnings (note 22.a) 609.92 362.62
Dividend equalisation reserve 53.08 53.08
2,696.91 2,449.61
Regulatory Adjustments / Deductions from CET1
Deferred tax assets (35.10) (82.88)
100% of Excess Investment in other banks, FI and Ins. Co. (0.15) (0.30)
2,661.66 2,366.43
Additional Tier 1 Capital
Perpetual bond 240.00 -
Total Tier 1 Capital 2,901.66 2,366.43

293
 2020 2019
Tier 2 Capital Taka in crore Taka in crore
Tier-II subordinated bond 644.00 820.00
General provision (note 17.5.a.2) 636.18 527.15
1,280.18 1,347.15
Regulatory Adjustments / Deductions from Tier 2 capital
100% of Excess Investment in other banks, FI and Ins. Co. (0.15) -
Total Tier 2 Capital 1,280.03 1,347.15
Total capital 4,181.69 3,713.58

Total assets 38,292.58 35,468.90

Total risk weighted assets (note 17.5.a.1) 26,932.20 24,492.47
Required capital with capital conservation buffer (12.50% of risk weighted assets) 3,366.52 3,061.56
Surplus 815.17 652.02
Total Capital Ratio 15.53% 15.16%
Tier 1 Capital Ratio 10.77% 9.66%
Leverage Ratio 6.06% 5.48%

17.5.a.1 Risk weighted assets

A. Credit Risk
On- Balance sheet 19,027.58 16,773.79
Off-Balance sheet 4,296.96 4,584.58
23,324.54 21,358.37
B. Market Risk 726.41 533.17
C. Operational Risk 2,881.25 2,600.93
Total risk weighted assets (A+B+C) 26,932.20 24,492.47

17.5.a.2 General provision maintained against unclassified loan/investments & outstanding off balance sheet exposures
General provision maintained against unclassified loan/investments (note 16.a.1) 515.95 423.96
General provision maintained against outstanding off balance sheet exposures (note 16.a.2) 120.23 103.19
636.18 527.15

Figures in Taka

18 STATUTORY RESERVE 2020 2019

Opening balance 8,659,477,813 8,001,559,112
Addition during the year (20%%of pre-tax profit) - 657,918,701
Closing balance 8,659,477,813 8,659,477,813

Every scheduled bank is required to build up statutory reserve and before declaring dividend, will transfer profit equivalent to
20.0% of PBT to the said reserve until the sum of the said reserve and share premium account becomes equal to the paid up
capital.
During the year 31 December 2020, there was no requirment to build statutory reserve due to summation of bank's statutory
reserve and share premium was equal to bank's paid up capital.

19 SHARE PREMIUM
Opening balance 1,504,388,797 1,504,388,797
Adjustment for issuance of stock dividend - -
Closing balance 1,504,388,797 1,504,388,797

294 Annual Report 2020

 Figures in Taka
2020 2019
20 DIVIDEND EQUALISATION RESERVE
BRPD circular letter no. 18 dated 20 October 2002, states that banks require to create Dividend Equalisation Fund if declared
cash dividend is more than 20%. As per said circular, creation of Dividend Equalisation Fund is to be equal of excess amount
of cash dividend over 20%. For the year 2015 and 2016 bank's declared cash dividend rates were 22% and 24% respectively.

Opening balance 530,786,630 530,786,630

Addition during the year - -
Closing balance 530,786,630 530,786,630

21 CONSOLIDATED OTHER RESERVE

The City Bank Limited (note 21.a) 1,860,629,399 930,897,744
City Brokerage Limited 129,374,073 (333,195,506)
City Bank Capital Resources Limited 845,209,820 104,091,548
2,835,213,292 701,793,786

21.a Other reserve - The City Bank Limited

Revaluation reserve for equity Shares (note 21.1) 1,500,667,087 838,440,953
Revaluation reserve for HFT securities 282,298,028 43,059,320
Revaluation reserve for HTM securities 66,269,356 38,002,543
General reserve 11,394,928 11,394,928
1,860,629,399 930,897,744

22 CONSOLIDATED SURPLUS IN PROFIT AND LOSS ACCOUNT

The City Bank Limited (note 22.a) 6,099,180,379 3,626,218,781
Post acquisition retained deficit from City Brokerage Limited (265,024,946) (418,817,327)
Non-controlling interest 4,677 7,391
(265,020,269) (418,809,936)
Post acquisition retained surplus from City Bank Capital Resources Limited 431,298,101 265,038,608
Non-controlling interest (8,457) (5,197)
431,289,644 265,033,411
Post acquisition retained surplus from CBL Money Transfer Sdn. Bhd. 91,780,898 32,406,651
Non-controlling interest - -
91,780,898 32,406,651
Post acquisition retained deficit from City Hong Kong Limited (44,689,504) (20,546,659)
Non-controlling interest - -
(44,689,504) (20,546,659)
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited (276,812,532) (276,812,532)
City Brokerage Limited with The City Bank Limited (193,139,428) (193,139,428)
Add: Changes in revaluation reserve for alignment with parent company's policy (29,000,000) (29,000,000)
Add: Foreign exchange revaluation effect (4,349,823) (6,431,657)
5,809,239,365 2,978,918,631

22.a Movement of surplus in profit and loss account-The City Bank Limited
Opening balance 3,626,218,781 2,882,856,744
Profit for the year 4,012,171,246 2,471,639,958
Transfer to statutory reserve - (657,918,701)
Cash dividend paid (1,539,209,648) (586,365,580)
Stock dividend paid - (483,993,640)
Closing balance 6,099,180,379 3,626,218,781

As per BRPD circular no. 11 dated 12 December 2011, Profit arise from deferred tax is not considered as distributable profit for
dividend.

295
 Figures in Taka
2020 2019
23 NON CONTROLLING INTEREST
Share capital 110,000 110,000
Surplus in profit and loss account/retained earnings 3,780 (2,194)
113,780 107,806

24 CONTINGENT LIABILITIES
24.1 Letters of guarantee

Local 14,396,344,279 10,399,883,659

Foreign 982,247,642 1,089,182,402
Shipping guarantee 4,306,266,397 683,542,694
19,684,858,318 12,172,608,755
Margin on guarantee (522,352,546) (408,859,913)
19,162,505,772 11,763,748,842

Money for which the Bank is contingently liable in respect of guarantees given favouring:

Government 9,089,156,742 7,567,948,363

Banks and other financial institutions 4,765,215,670 2,228,769,167
Others 5,830,485,906 2,375,891,225
19,684,858,318 12,172,608,755
Margin on guarantee (522,352,546) (408,859,913)
19,162,505,772 11,763,748,842
24.2 Irrevocable Letters of Credit
General 23,328,289,520 24,099,597,237
Back to Back LC 9,203,147,064 6,329,886,503
In land 499,706,950 502,947,021
33,031,143,534 30,932,430,761
Margin on LC (1,681,338,787) (1,386,983,035)
31,349,804,747 29,545,447,726
24.3 Consolidated bills for collection
The City Bank Limited (note 24.3.a) 9,543,880,438 7,846,319,339
City Hong Kong Limited 71,952,277 68,844,185
9,615,832,715 7,915,163,524
24.3.a Bills for collection -The City Bank Limited
Outward foreign bills for collection 6,315,190,754 5,126,579,499
Inward local bills for collection 2,864,463,455 2,719,924,840
Inward foreign bills for collection 364,411,229 -
9,544,065,438 7,846,504,339
Margin on bill collection (185,000) (185,000)
9,543,880,438 7,846,319,339
24.4 Forward assets purchased and forward deposits placed
Forward sales/contracts 9,507,895,143 5,224,685,808
9,507,895,143 5,224,685,808
24.5 Suit filed by the bank
No law suit has been filed by the bank against contingent liabilities.

296 Annual Report 2020

 Figures in Taka
25 INCOME STATEMENT - THE CITY BANK LIMITED 2020 2019
Income:
Interest, discount and similar income (note 25.1) 25,269,300,248 28,507,023,655
Fees, commission and brokerage (note 25.2) 2,465,756,544 2,109,789,225
Gains less losses arising from dealing in foreign currencies (note 29.a) 889,428,016 1,271,174,742
Other operating income (note 30.a) 1,580,928,599 1,985,585,042
Gains less losses arising from dealing in securities (note 28.a) 1,123,716,122 237,416,603
Dividend income 151,492,874 158,414,665
Gains less losses arising from investment securities (note 28.a) 27,776,742 2,544,569
Profit less losses on interest rate changes - -
31,508,399,145 34,271,948,501
Expenses:
Interest/profit paid on deposits, borrowings etc.
Administrative expenses (note 25.3) 14,771,171,752 15,987,236,351
Other operating expenses (note 39.a) 6,788,523,069 6,698,006,070
Depreciation on bank's assets (note 38.a) 1,785,674,474 2,242,861,796
Income over expenditure 1,123,269,044 1,056,692,296
24,468,638,339 25,984,796,513
7,039,760,806 8,287,151,988
25.1 Interest, discount and similar income
Interest income (note 26.a) 23,134,359,843 26,819,239,518
Interest income on treasury bills/reverse repo/bonds (note 28.a) 2,017,772,488 1,566,309,970
Interest income on subordinated bond 117,167,917 121,474,167
25,269,300,248 28,507,023,655
25.2 Fees, commission and brokerage
Commission (note 29.a) 2,465,756,544 2,109,789,225
Brokerage - -
2,465,756,544 2,109,789,225
25.3 Administrative expenses
Salary and allowances 5,246,612,242 5,247,455,559
Rent, taxes, insurance, electricity, etc. (note 32.a) 495,874,933 517,834,384
Legal expenses (note 33.a) 32,007,120 46,008,027
Postage, stamp, telecommunication, etc. (note 34.a) 92,523,050 85,291,432
Stationery, printing, advertisement, etc. (note 35.a) 199,165,131 235,989,626
Chief executive's salary and fees (note 36) 18,764,419 18,960,006
Directors' fees (note 37.a) 1,376,000 1,640,000
Auditors' fees 2,085,000 1,770,000
Repair of bank's assets (note 38.a) 700,115,174 543,057,036
6,788,523,069 6,698,006,070

26 CONSOLIDATED INTEREST INCOME/PROFIT ON INVESTMENT

The City Bank Limited (note 26.a) 23,134,359,843 26,819,239,518
City Brokerage Limited 96,141,704 91,249,366
City Bank Capital Resources Limited 110,937,046 106,680,561
CBL Money Transfer Sdn. Bhd. - -
City Hong Kong Limited 5,445,306 154,390
23,346,883,899 27,017,323,835
Inter-company transactions
The City Bank Limited with City Brokerage Limited (59,521,270) (75,025,395)
City Bank Capital Resources Limited (12,775,714) (8,621,244)
The City Bank Limited with CBL Money Transfer Sdn. Bhd. (6,408,530) (8,727,610)
City Hong Kong Limited (3,315,859) -
(82,021,373) (92,374,249)
23,264,862,526 26,924,949,586

297
 Figures in Taka
26.a Interest income/profit on investment - The City Bank Limited
2020 2019
Interest on industrial credits 5,447,655,360 7,266,422,330
Interest on short term loan 4,420,659,711 5,115,283,293
Interest on city solution 2,081,264,073 2,319,718,309
Interest on small and medium enterprise loans 1,859,903,345 1,745,930,714
Interest on fully and partly secured overdrafts 1,579,400,089 941,658,635
Interest on credit cards 1,544,237,319 1,642,520,637
Interest on cash credits/bai-muajjal 1,575,714,574 2,145,083,824
Interest on house building loans 802,191,407 806,069,475
Interest on documentary bills purchased 554,910,349 728,278,922
Interest on demand loans 444,876,879 738,188,639
Interest on city express 379,152,009 425,544,690
Interest on Interest on EDF 286,992,783 237,205,210
Interest on city drive 212,770,104 215,236,843
Interest on staff loans 154,274,070 159,673,531
Interest on packing credits 108,981,536 107,853,593
Interest on transport loans 39,291,909 63,928,323
Interest on hire purchase shirkatul melk 10,728,214 12,550,618
Interest on loans against trust receipts 3,714,979 105,499,837
Interest on payment against documents 2,313,179 5,538,093
Interest on lease finance/izara 880,574 1,656,600
Interest on loans against imported merchandise/Murabaha 216 -
Total interest/profit on loans and advances/investments 21,509,912,679 24,783,842,116
Less: Allowable rebate for good borrower (note 26.a.1) - 60,000,000
Total interest/profit on loans and advances/investments
after rebate for good borrower 21,509,912,679 24,723,842,116

Interest on balance with other banks and financial institutions 1,583,652,240 2,061,116,231
Interest on foreign bank accounts 38,729,091 32,488,046
Interest on call loans 2,065,833 1,793,125
Total interest/profit on placement of funds 1,624,447,164 2,095,397,402
23,134,359,843 26,819,239,518
26.a.1 Provision for rebate to good borrower
Previously commercial banks were required to maintain provision @10.0% of interest charged against loans to good borrowers, identified
on the basis of prescribed guidelines stated in BRPD Circular no. 06 (19 March 2015) and BRPD Circular Letter no 03 (16 February 2016)
for onward rebate to the recognized good borrowers. However, Bangladesh Bank during 2020 issued another circular (BRPD Circular No.
14 dated 18 June 2020), wherein it is mentioned that from 2020 banks need not to provide any rebate to good borrowers. Hence, during
2020, no further good borrowers’ provision was accounted for in the financials.

27 CONSOLIDATED INTEREST/PROFIT PAID ON DEPOSITS, BORROWINGS ETC.

The City Bank Limited (note 27.a) 14,771,171,752 15,987,236,351
City Brokerage Limited 102,380,526 105,806,624
City Bank Capital Resources Limited 1,697,485 2,995,275
CBL Money Transfer Sdn. Bhd. 11,801,847 9,641,257
City Hong Kong Limited 2,885,971 419,385
14,889,937,581 16,106,098,892
Inter-company transactions
City Brokerage Limited (59,521,270) (75,025,395)
City Bank Limited with City Bank Capital Resources Limited (12,775,714) (8,621,244)
CBL Money Transfer Sdn. Bhd. (6,408,530) (8,727,610)
City Hong Kong Limited (3,315,859) -
(82,021,373) (92,374,249)
14,807,916,208 16,013,724,643

298 Annual Report 2020

 Figures in Taka
27.a Interest/profit paid on deposits, borrowings etc. - The City Bank Limited 2020 2019
a. Interest/profit paid on deposits:
Fixed deposits 7,575,094,276 7,608,887,401
Short notice deposits 1,174,141,717 1,346,846,278
Savings bank deposits 1,025,593,470 1,419,821,259
Deposits under scheme 966,478,007 835,741,091
Current bank deposits 475,707,197 560,314,594
Mudaraba term deposits 385,614,991 468,348,132
Mudaraba/manarah savings deposits 46,388,633 17,045,098
Mudaraba monthly benefit scheme 14,182,705 10,656,164
Mudaraba short notice deposits 7,271,956 10,535,052
b. Interest paid on borrowings from outside Bangladesh for off-shore banking 831,889,934 1,532,535,571
c. Interest paid on subordinate bond 815,475,000 826,596,360
d. Interest/profit paid on local bank accounts 777,766,972 1,046,561,596
e. Interest/profit paid on repurchase agreement (REPO) 405,862,804 63,890,267
f. Interest/profit paid on borrowing from Bangladesh Bank 169,682,405 128,863,425
g. Interest paid for lease obligation 97,577,240 110,594,063
h. Interest paid on perpetual bond 2,444,445 -
14,771,171,752 15,987,236,351

28 CONSOLIDATED INVESTMENT INCOME

The City Bank Limited (note 28.a) 3,437,926,143 2,086,159,974
City Brokerage Limited 142,450,630 136,582,168
City Bank Capital Resources Limited 153,642,745 134,774,555
3,734,019,518 2,357,516,697
Inter-company transactions
City Bank Limited with City Bank Capital Resources Limited 13,834,447 4,040,851
3,747,853,965 2,361,557,548
28.a Investment income - The City Bank Limited
Interest on treasury bills/reverse repo/bonds 2,017,772,488 1,566,309,970
Gain on government securities 1,123,716,122 237,416,603
Dividend on shares 151,492,874 158,414,665
Interest income on subordinated bond 117,167,917 121,474,167
Gain on sale of shares and debentures 27,776,742 2,544,569
3,437,926,143 2,086,159,974

29 CONSOLIDATED COMMISSION, EXCHANGE AND BROKERAGE

The City Bank Limited (note 29.a) 3,355,184,560 3,380,963,967
City Brokerage Limited 310,588,545 137,273,278
City Bank Capital Resources Ltd 73,723,605 73,553,304
CBL Money Transfer Sdn. Bhd 201,379,022 153,919,958
City Hong Kong Limited. 8,789,445 661,068
3,949,665,177 3,746,371,575
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited (13,834,447) (23,840,851)
3,935,830,730 3,722,530,724

299
 Figures in Taka

2020 2019
29.a Commission, exchange and brokerage - The City Bank Limited
Other fees and charges (note 29.a.1) 1,422,763,964 1,169,034,458
Accepted bills 495,915,535 418,346,533
Letters of credit 341,970,484 365,264,941
Letters of guarantee 106,567,270 94,392,341
Other commissions 41,522,305 2,946,603
Export related services 34,223,210 38,795,462
NRB operation 18,923,977 17,450,177
PO, DD, TT, TC, etc. 3,310,089 3,268,559
OBC, IBC etc. 551,710 288,151
Bills purchased 8,000 2,000
2,465,756,544 2,109,789,225
Exchange gain including gain from foreign currency dealings (note 29.a.2) 889,428,016 1,271,174,742
3,355,184,560 3,380,963,967
29.a.1 Other fees and charges
Service and other charges 1,395,922,901 1,086,358,352
Structured finance fee 26,841,063 75,843,856
Commitment fee - 6,832,250
1,422,763,964 1,169,034,458
29.a.2 Net exchange gain
Exchange gain 900,391,659 1,294,789,130
Exchange loss (10,963,643) (23,614,388)
889,428,016 1,271,174,742

30 CONSOLIDATED OTHER OPERATING INCOME

The City Bank Limited (note 30.a) 1,580,928,599 1,985,585,042
City Brokerage Limited 6,189,600 12,910,870
City Bank Capital Resources Ltd - -
CBL Money Transfer Sdn. Bhd. - 1,526,276
City Hong Kong Limited - -
1,587,118,199 2,000,022,188
Inter-company transactions
City Brokerage Limited with The City Bank Limited (6,189,600) (12,379,200)
1,580,928,599 1,987,642,988
30.a Other operating income - The City Bank Limited
Credit card income (note 30.a.1) 1,409,986,789 1,830,347,867
Rebate received from foreign banks 71,364,401 69,910,124
Swift recoveries 57,398,174 62,371,710
Others 24,318,599 9,930,491
Rental income 15,400,944 13,024,850
Profit from sale of fixed assets 2,459,692 -
1,580,928,599 1,985,585,042
30.a.1 Credit card income
Merchant commission 889,403,123 1,019,923,053
Card issue fees 359,214,909 308,169,252
Mark-up, excess limit, cash advance fees etc. 126,514,324 118,934,364
Interchange fees 34,854,433 64,283,761
Late payment fees - 319,037,437
1,409,986,789 1,830,347,867

300 Annual Report 2020

 Figures in Taka

2020 2019
31 CONSOLIDATED SALARIES AND ALLOWANCES
The City Bank Limited 5,246,612,242 5,247,455,559
City Brokerage Limited 94,456,795 88,304,994
City Bank Capital Resources Limited 71,245,053 52,303,767
CBL Money Transfer Sdn. Bhd. 39,557,106 48,466,695
City Hong Kong Limited 21,982,677 11,044,830
5,473,853,873 5,447,575,845

32 CONSOLIDATED RENT, TAXES, INSURANCE, ELECTRICITY ETC.

The City Bank Limited (note 32.a) 495,874,933 517,834,384
City Brokerage Limited (note 32.b) 28,732,040 19,714,315
City Bank Capital Resources Limited 7,145,285 5,824,162
CBL Money Transfer Sdn. Bhd. 27,355,665 37,142,935
City Hong Kong Limited 1,259,036 1,134,025
560,366,959 581,649,821
Inter-company transactions
City Brokerage Limited with The City Bank Limited (6,189,600) (12,379,200)
554,177,359 569,270,621
32.a Rent, taxes, insurance, electricity etc. - The City Bank Limited
Insurance 253,018,328 214,370,574
Rent * 26,773,443 102,918,742
Power and electricity 138,430,233 123,437,452
Rates and taxes 77,652,929 77,107,616
495,874,933 517,834,384

*While implementing IFRS 16 (leases), the bank recorded interest expense on lease liabilities (note 27.a) and depreciation on right of use assets
(ROA) (note 38.a) instead of charging rental expense of BDT 618,547,067 (excluding VAT) (2019: Taka 572,409,788) in 2020 against those rental
premises that have been treated as lease assets (ROA) and shown in the balance sheet under IFRS 16.

32.b Rent, taxes, insurance, electricity etc. - City Brokerage Limited

Rates and taxes 24,944,501 15,680,495
Power and electricity 1,739,728 2,156,350
Insurance 2,047,811 1,877,470
Rent - -
28,732,040 19,714,315

33 CONSOLIDATED LEGAL EXPENSES

The City Bank Limited (note 33.a) 32,007,120 46,008,027
City Brokerage Limited 3,139,875 893,024
City Bank Capital Resources Limited 324,972 1,735,531
CBL Money Transfer Sdn. Bhd. 58,085 82,471
City Hong Kong Limited 145,859 32,212
35,675,911 48,751,265

33.a Legal expenses - The City Bank Limited

Legal expenses 30,993,013 45,029,887
Others 1,014,107 978,140
32,007,120 46,008,027

301
 Figures in Taka
2020 2019

34 CONSOLIDATED POSTAGE, STAMPS, TELECOMMUNICATION ETC.

The City Bank Limited (note 34.a) 92,523,050 85,291,432
City Brokerage Limited (note 34.b) 2,387,062 3,062,552
City Bank Capital Resources Limited 1,036,947 1,002,794
CBL Money Transfer Sdn. Bhd. 2,550,498 2,326,224
City Hong Kong Limited 1,621,699 293,011
100,119,256 91,976,013

34.a Postage, stamps, telecommunication etc. - The City Bank Limited

Telephone - office 54,530,916 37,214,323
Postage/courier service 23,404,852 28,400,461
Telephone - residence 13,723,209 14,904,287
Telegram, telex, fax & swift charge 864,073 4,772,361
92,523,050 85,291,432

34.b Postage, stamps, telecommunication etc. - City Brokerage Limited

Telegram, telex, fax and e-mail 1,822,279 2,369,272
Telephone bill 524,084 659,115
Postage 40,699 34,165
2,387,062 3,062,552

35 CONSOLIDATED STATIONERY, PRINTING AND ADVERTISEMENTS ETC.

The City Bank Limited (note 35.a) 199,165,131 235,989,626
City Brokerage Limited 1,329,916 1,108,283
City Bank Capital Resources Limited 2,692,911 1,461,402
CBL Money Transfer Sdn. Bhd. 18,600,588 19,773,141
City Hong Kong Limited 101,033 141,150
221,889,579 258,473,602
35.a Stationery, printing and advertisements etc. - The City Bank Limited
Office and security stationery (note 35.a.1) 118,730,835 147,210,627
Publicity and advertisement (note 35.a.2) 78,106,631 87,327,845
Computer consumable stationery 2,327,665 1,451,154
199,165,131 235,989,626
35.a.1 Office and security stationery
Office stationery 65,248,828 97,923,860
Security stationery 53,482,007 49,286,767
118,730,835 147,210,627
35.a.2 Publicity and advertisement
Advertisement sponsorship-magazine 29,108,603 42,797,988
Advertisement-television and radio 37,769,464 11,694,200
Advertisement sponsorship-others 9,650,084 32,688,856
Advertisement-miscellaneous 1,578,480 146,801
78,106,631 87,327,845

36 CHIEF EXECUTIVE'S SALARY AND FEES

Basic salary 7,930,308 7,494,553
Festival bonus and other allowances 10,834,111 11,465,453
18,764,419 18,960,006

302 Annual Report 2020

 Figures in Taka

2020 2019
37 CONSOLIDATED DIRECTORS' FEES
The City Bank Limited (note 37.a) 1,376,000 1,640,000
City Brokerage Limited 100,000 90,000
City Bank Capital Resources Limited. 102,850 87,500
CBL Money Transfer Sdn. Bhd. 3,109,243 3,016,273
4,688,093 4,833,773
37.a Directors' fees - The City Bank Limited
Meeting fees 1,376,000 1,640,000

As per Bangladesh Bank's Circular, BRPD Circular No. 11, dated 4 October 2015, each director was entitled to have Taka 8,000 as
honorarium for attending each meeting.

38 CONSOLIDATED DEPRECIATION AND REPAIR

The City Bank Limited (note 38.a) 1,823,384,218 1,599,749,332
City Brokerage Limited (note 38.b) 39,757,810 36,897,207
City Bank Capital Resources Limited (note 38.c) 9,722,513 10,176,397
CBL Money Transfer Sdn. Bhd. 20,347,999 19,276,435
City Hong Kong Limited 4,717,176 4,961,122
1,897,929,716 1,671,060,493

38.a Depreciation and repair of bank's assets - The City Bank Limited
Depreciation:
Depreciation on leased assets 581,427,731 550,509,095
Depreciation on fixed assets 541,841,313 506,183,201
1,123,269,044 1,056,692,296
Repairs and maintenance:
Fixed assets 688,952,467 535,574,541
Others 11,162,707 7,482,495
700,115,174 543,057,036
1,823,384,218 1,599,749,332

38.b Depreciation and repair - City Brokerage Limited

Depreciation:
Leased assets 13,109,168 13,233,739
Building 7,321,236 7,321,236
Office equipment 6,000,765 5,547,236
Furniture and fixtures 2,500,717 2,784,404
Vehicle 1,244,160 1,244,160
Software 1,695,792 1,655,908
31,871,838 31,786,683
Repairs and maintenance:
Fixed assets 7,885,972 5,110,524
7,885,972 5,110,524
39,757,810 36,897,207

303
 Figures in Taka

2020 2019
38.c Depreciation and repair - City Bank Capital Resources Limited
Depreciation:
Leased assets 3,931,248 4,052,773
Vehicle 2,115,822 2,240,202
Furniture and fixtures 1,193,908 1,334,216
Office equipment 1,250,790 1,127,672
Building - -
Software - 328,509
8,491,768 9,083,372
Repairs and maintenance:
Fixed assets 1,230,745 1,093,025
1,230,745 1,093,025
9,722,513 10,176,397

39 CONSOLIDATED OTHER EXPENSES

The City Bank Limited (note 39.a) 1,785,674,474 2,242,861,796
City Brokerage Limited 11,776,730 19,865,232
City Bank Capital Resources Limited 6,398,404 10,466,278
CBL Money Transfer Sdn. Bhd. 5,639,908 5,027,009
City Hong Kong Limited 5,068,276 2,885,968
1,814,557,792 2,281,106,283
Inter-company transactions
City Bank Capital Resources Limited with The City Bank Limited - (19,800,000)
1,814,557,792 2,261,306,283

39.a Other expenses - The City Bank Limited

Credit card (note 39.a.1) 536,843,093 615,251,421
Donations 272,504,518 151,936,200
Business expansion cost 243,635,078 400,921,328
Others (note 39.a.2) 168,536,420 430,482,979
Guard salary 130,822,634 125,669,926
Royalty adjustment 85,995,030 84,867,827
IT support & software maintenance 54,072,789 42,465,414
Business process outsourcing - online 53,811,898 40,940,873
Travelling expenditure and conveyance - Staff 47,281,107 72,253,241
Professional fees 44,386,751 126,643,245
Fuel 37,398,273 27,193,839
Security expenses 32,705,658 31,417,482
Washing and cleaning 23,722,355 16,161,392
Cash carrying charges 15,650,172 22,264,268
Entertainment 12,733,927 22,247,588
Subscription to institutions 11,275,057 13,854,928
Staff activities and welfare 6,958,136 9,602,317
Medical 3,203,884 325,894
Vehicle rental expenditure 1,659,170 2,259,115
CIB Charges 1,343,310 2,377,288
Books, magazines and newspapers etc. 811,563 1,525,276
Annual general meeting 251,775 2,117,776
Remittance charges 71,876 82,179
1,785,674,474 2,242,861,796

304 Annual Report 2020

 Figures in Taka
39.a.1 Credit card expenses 2020 2019
Inter charges fee 328,350,696 357,411,245
VISA international fees 82,132,076 126,335,354
ATM service charges 73,543,457 50,105,713
Processing and personalisation fees 29,542,160 49,636,617
Complementary campaign expenses 23,274,704 31,762,492
536,843,093 615,251,421
39.a.2 Others include capital raising expenses, staff recruitment expenses, NRB bank charges etc.

40 CONSOLIDATED PROVISION FOR LOANS AND ADVANCES/INVESTMENTS

The City Bank Limited (note 40.a) 384,437,154 2,585,079,302
City Brokerage Limited 11,744,760 14,861,325
City Bank Capital Resources Limited (19,745,048) -
376,436,866 2,599,940,627
40.a Provision for loans and advances/investments - The City Bank Limited
Provision for unclassified loans and advances/investments 870,025,958 753,707,394
Provision for classified loans and advances/investments (485,588,804) 401,644,128
Provision for partially written off - 1,429,727,780
384,437,154 2,585,079,302
40.b Provision for diminution in value of investments - The City Bank Limited
Provision for investment - -
- -
40.c Other provision - The City Bank Limited
Provision for non-banking assets - (70,632,584)
Provision for money at call and short notice 89,379,167 -
89,379,167 (70,632,584)

41 CONSOLIDATED PROVISION FOR TAXATION

Current tax:
The City Bank Limited (note 41.a) 1,905,494,664 3,045,860,580
City Brokerage Limited 109,829,524 53,499,787
City Bank Capital Resources Limited 82,756,227 62,199,822
CBL Money Transfer Sdn. Bhd. 16,269,980 68,189
2,114,350,395 3,161,628,378
Deferred tax:
The City Bank Limited (note 41.a) 477,830,257 213,860,419
City Brokerage Limited 21,417,597 -
City Bank Capital Resources Limited 8,510,417 (4,545,558)
City Hong Kong Limited (3,677) 288,759
507,754,594 209,603,620
Income tax on profit 2,622,104,989 3,371,231,998

41.a Provision for Taxation - The City Bank Limited

Current tax:
Provision for income tax has been made according to Income Tax Ordinance, 1984. During the year, an amount of Taka
1,905,494,664 (2019: Taka 3,045,860,580) has been kept as provision for income tax.
Though it appears from the above report that we have two tax files opened since 2003 (for assessment year 2004-2005 and
2005-2006) for various grounds mainly interpretation of laws and the treatment. The appeal filed at different level from
Commissioner of Taxes Appeal to Honorable High Court Division. Where, we did not received proper judgement through appeal
from tax department, we preferred appeal before Honorable High Court Division. Under the Appeals filed so far, we have both
refund claim from Tax office and tax claim from tax department as well. However, we are reviewing all pending tax claim every year
and made provision Taka 632,791,678 against tax office claim of Taka 580,424,010 from 2004 to 2020 and the Company believes
that its provision for tax liabilities are adequate for all open tax years based on its assessment of many factors, including
interpretations of tax law and prior experience. Please refer to Annexure - E for details.

305
 Deferred tax:
Deferred tax is provided using the Balance sheet method for timing difference arising between the tax base of assets and liabilities
and their carrying values for reporting purposes as per International Accounting Standard (IAS - 12). During the year, net amount of
Taka 477,830,257 has been recognised as deferred tax expense, which was Taka 213,860,419 as deferred tax expense in prior year.

Figures in Taka

2020 2019
The charge for taxation is based upon profit for the year comprises:
Current tax on taxable income @37.5% 1,905,494,664 3,045,860,580
Adjustment for prior year - -
1,905,494,664 3,045,860,580
Net deferred tax liability/(asset) originated for temporary differences 477,830,257 213,860,419
Income tax on profit 2,383,324,921 3,259,720,999

41.b Reconciliation of effective tax rate - The City Bank Limited

2020 2019
% Taka % Taka
Profit before income tax as per profit and loss account 6,395,496,167 5,731,360,957
Income tax as per applicable tax rate 37.50% 2,398,311,063 37.50% 2,149,260,359
Factors affecting the tax charge for current year
Non deductible expenses 4.01% 256,616,795 10.50% 601,601,942
Inadmissible expenses/provisions 3.78% 241,599,239 16.72% 958,421,636
Admissible expenses (14.95%) (956,329,145) (11.08%) (635,001,035)
Tax savings from reduced tax rates for dividend (0.41%) (26,511,253) (0.48%) (27,722,566)
Tax savings from reduced tax rates for capital gain (0.12%) (7,638,604) (0.01%) (699,756)
Income from gain on sale of fixed assets (0.01%) (553,431) 0.00% -
Total income tax expenses 29.79% 1,905,494,664 53.14% 3,045,860,580

42 CONSOLIDATED CASH AND CASH EQUIVALENTS

For the purpose of presentation in the cash flow statements, cash and cash equivalents includes cash in hand and cash at bank
(regardless of maturity), highly liquid interest bearing investment/securities.

Cash flow statement can be prepared either in direct method or in indirect method as per IAS 7. The presentation is selected to
present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied
consistently.

As per BRPD circular no 14, dated 25 June 2003, cash flows statement has been prepared following a mixture of direct and indirect
methods.

The details of cash and cash equivalents are as follows: 2020 2019
The City Bank Limited (note 42.a) 62,548,275,606 65,369,878,463
City Brokerage Limited 967,799,620 372,113,596
City Bank Capital Resources Limited 206,123,621 464,382,921
CBL Money Transfer Sdn. Bhd. 43,904,229 50,612,185
City Hong Kong Limited 1,716,182 10,501,520
63,767,819,258 66,267,488,685
Mutual indebtedness:
Balance with The City Bank Limited - City Brokerage Limited (842,638,760) (140,464,390)
Balance with The City Bank Limited - City Bank Capital Resources Limited (201,474,719) (342,138,580)
(1,044,113,479) (482,602,970)
62,723,705,779 65,784,885,715

306 Annual Report 2020

 Figures in Taka
2020 2019
42.a Cash and cash equivalents - The City Bank Limited
Cash in hand (including foreign currencies) (note 4.a.1) 5,641,907,242 6,130,572,909
Balance with Bangladesh Bank and its agent bank(s) (note 4.a.2) 16,761,650,690 19,776,258,104
Balance with other banks and financial institutions (note 5.a) 27,023,103,737 23,125,674,688
Money at call and short notice (note 6) - -
Government securities 13,121,613,937 16,337,372,762
62,548,275,606 65,369,878,463

43 CONSOLIDATED RECEIPTS FROM OTHER OPERATING ACTIVITIES

The City Bank Limited (note 43.a) 4,661,491,979 3,925,581,963
City Brokerage Limited 45,457,469 59,702,382
City Bank Capital Resources Limited 20,678,935 (1,516,640)
CBL Money Transfer Sdn. Bhd. - 1,545,686
City Hong Kong Limited - -
4,727,628,383 3,985,313,391
Adjustment for consolidation-The City Bank Ltd. (20,024,047) (8,338,349)
4,707,604,336 3,976,975,042

43.a Receipts from other operating activities - The City Bank Limited
Interest on bonds, debentures and treasury bills 3,080,563,380 1,939,996,921
Credit card income 1,409,986,789 1,830,347,867
Rebate received from foreign banks 71,364,401 69,910,124
Postage/telex/fax/swift charge recoveries 57,398,174 62,371,710
Rent recovered 15,400,944 13,024,850
Miscellaneous earnings 24,318,599 9,930,491
Income from sale of bank's property 2,459,692 -
4,661,491,979 3,925,581,963

44 CONSOLIDATED PAYMENTS FOR OTHER OPERATING ACTIVITIES

The City Bank Limited (note 44.a) 4,191,499,232 3,897,769,299
City Brokerage Limited 53,120,419 64,267,565
City Bank Capital Resources Limited 24,353,599 25,279,903
CBL Money Transfer Sdn. Bhd. 76,117,785 64,815,343
City Hong Kong Limited 8,641,167 7,776,743
4,353,732,202 4,059,908,853
Adjustment for consolidation-The City Bank Ltd. (6,189,600) (32,179,200)
4,347,542,602 4,027,729,653
44.a Payments for other operating activities - The City Bank Limited
Other expenses 2,648,582,511 2,599,208,356
Rent, taxes, insurance and electricity 594,870,915 545,552,529
Repair to bank's assets 707,242,006 540,670,924
Postage, stamp and telecommunication 96,130,262 103,450,536
Advertisement expenses 109,055,188 60,466,583
Legal expenses 32,218,120 44,539,371
Auditors' fees 2,024,230 2,185,000
Directors' fees 1,376,000 1,696,000
4,191,499,232 3,897,769,299

307
 Figures in Taka
2020 2019
45 CONSOLIDATED (INCREASE)/DECREASE OF OTHER ASSETS
The City Bank Limited (note 45.a) (82,916,167) (417,401,938)
City Brokerage Limited (31,685,571) 61,634,912
City Bank Capital Resources Limited (112,351,249) 44,717,779
CBL Money Transfer Sdn. Bhd. (1,676,614,085) (2,068,541,249)
City Hong Kong Limited (1,431,978) (1,594,306)
(1,904,999,050) (2,381,184,802)
Adjustment for consolidation-The City Bank Ltd. (57,236,205) 151,242,796
(1,962,235,255) (2,229,942,006)
45.a (Increase) / decrease of other assets - The City Bank Limited

Advance against rent and advertisement (23,332,813) 513,476,190

Prepaid expenses (7,946,778) 48,683,280
Intangible assets 33,007,929 29,698,545
Security deposits 2,483,261 19,129,655
Stationery and stamps (1,428,688) 2,227,206
Receivable from CBL Money Transfer Sdn. Bhd. 882,145 (882,145)
Branch adjustment account 1,800,712 (1,002,035)
Advance rent adjusted for right of use of assets (36,363,485) (431,485,640)
Account receivables (52,018,450) (597,246,994)
(82,916,167) (417,401,938)

46 CONSOLIDATED INCREASE/(DECREASE) OF OTHER LIABILITIES

The City Bank Limited (note 46.a) 769,390,791 541,781,907
City Brokerage Limited 118,685,709 (270,612,359)
City Bank Capital Resources Limited 43,878,600 (5,264,109)
CBL Money Transfer Sdn. Bhd. 1,593,108,284 1,303,862,116
City Hong Kong Limited (9,020,133) 10,465,288
2,516,043,251 1,580,232,843
Adjustment for consolidation-The City Bank Ltd. (19,271,147) 18,204,810
2,496,772,104 1,598,437,653
46.a Increase/ (decrease) of other liabilities - The City Bank Limited
Interest suspense account 2,040,906,745 642,536,075
Others 416,649,911 464,489,479
Other provision (191,720,503) 158,755,964
Payable to CBL Money Transfer SDN BHD 53,414 (5,704,158)
Loans written off and waived (1,496,498,776) (718,295,453)
769,390,791 541,781,907
47 CONSOLIDATED EARNINGS PER SHARE (EPS)
(i) Net profit after tax attributable to equity holders of the bank 4,364,175,579 2,635,158,749
(ii) Weighted average number of shares 1,016,386,661 1,016,386,661
Consolidated earnings per share (i/ii) 4.29 2.59

47.a Earnings per share (EPS) - The City Bank Limited

(i) Net profit after tax 4,012,171,246 2,471,639,958
(ii) Weighted average number of shares 1,016,386,661 1,016,386,661
Earnings per share (i/ii) 3.95 2.43

308 Annual Report 2020

 Figures in Taka

2020 2019

48 CONSOLIDATED NET OPERATING CASH FLOW PER SHARE (NOCFPS)

(i) Net operating cash flow 4,983,947,269 13,687,378,517
(ii) Number of shares 1,016,386,661 1,016,386,661
Net operating cash flow per share (i/ii) 4.90 13.47

48.a Net operating cash flow per share (NOCFPS) - The City Bank Limited

(i) Net operating cash flow 5,096,310,053 14,400,058,280

(ii) Number of shares 1,016,386,661 1,016,386,661
Net operating cash flow per share (i/ii) 5.01 14.17

49 CONSOLIDATED NET ASSETS VALUE (NAV) PER SHARE

(i) Shareholders' equity 29,502,972,507 24,539,232,267
(ii) Number of shares 1,016,386,661 1,016,386,661
Net Assets Value per share (i/ii) 29.03 24.14

49.a Net Assets Value (NAV) per share - The City Bank Limited
(i) Shareholders' equity
(ii) Number of shares 28,818,329,628 25,415,636,375
Net Assets Value per share(i/ii) 1,016,386,661 1,016,386,661
28.35 25.01

2020
50 SEGMENT REPORTING Conventional Islamic Offshore Total
Taka Taka Taka Taka

Total operating income (profit before

unallocated expenses and tax) 16,127,053,341 296,569,831 313,604,221 16,737,227,393
Allocated expenses (9,613,550,274) (58,355,141) (25,561,172) (9,697,466,587)
Provision against loans and advances (256,632,236) (41,242,186) (86,562,732) (384,437,154)
Provision against off-balance sheet exposures (148,689,128) (21,759,190) - (170,448,318)
Other provision (89,379,167) - - (89,379,167)
Profit before tax 6,018,802,536 175,213,314 201,480,317 6,395,496,167
Provision for taxation (2,383,324,921)
Net profit 4,012,171,246
Segment assets 328,412,904,838 17,292,598,000 37,220,263,822 382,925,766,660
Segment liabilities and shareholders' equity 328,412,904,838 17,292,598,000 37,220,263,822 382,925,766,660

309
 51 RELATED PARTY DISCLOSURES
i) Particulars of Directors of the Bank as on 31 December 2020

Sl. Percentage (%) of

No. Name of the persons Designation Present Address shares as at 31
December 2020

Mr. Aziz Al Kaiser Bloomingdale

1 Chairman 24 Dutabas Road, Baridhara, Dhaka-1212
2.77%

Mr. Hossain Khaled House No-20, Road No-6

2 Vice-Chairman 2.20%
Dhanmondi R/A, Dhaka-1205

Ms. Tabassum Kaiser Bloomingdale

3 Director 24 Dutabas Road, Baridhara, Dhaka - 1212 2.10%
Mr. Hossain Mehmood House No-20, Road No-6
4 (Representative of A-One Nominated
Dhanmondi R/A, Dhaka-1205
Polymer Limited) Director 2.00%

5 Mr. Rajibul Huq Chowdhury Director 688/3, Boro Mogbazar, Dhaka-1217 2.11%

House no.97, Road no.11/A

6 Mr. Rafiqul Islam Khan Director 2.05%
Dhanmondi, R/A Dhaka -1209

“Stone House” House no.8,

7
Mrs. Syeda Shaireen Aziz Director Road no.62, Gulshan-2, Dhaka-1212 2.00%

Mrs. Savera H. Mahmood House no.12, Road no.01,

(Representative of Partex Nominated 2.00%
8 Corporate Limited) Director Baridhara, Dhaka.
Ms. Rebecca Brosnan
9 Nominated Flat 2D, Kam Yuen Mansion,
4.95%
[Representative of Inernational 3 Old Peak Road, Mid levels, Hong Kong SAR
Finance Corporation (IFC)] Director

10 Independent Royal Concord, House # 54,

Mr. Farooq Sobhan Apt. # 402, Road # 84, Gulshan - 2, Dhaka Nil
Director
Independent Flat # A/7, House # 17, Road # 7, Block # C
11 Mr. Dr. Salim Mahmud Niketan Housing Society, Gulshan - 1, Dhaka -1212 Nil
Director
The City Bank Ltd.
12 Mr. Mashrur Arefin MD & CEO 136 Gulshan Avenue, Gulshan-2 Nil
Dhaka-1212

For directors interest in different entities refer to Annexure-F.

310 Annual Report 2020

ii) Related party transactions
During the period 1 January 2020 to 31 December 2020, the Bank concluded business deals with the following organizations in which
the directors had interest:

Transaction value for the Balance outstanding as at

Name of Nature of period ended
Relationship
organisation transactions 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019
Taka Taka Taka Taka
City Brokerage Ltd. Subsidiary company Share capital - - 3,400,000,000 3,400,000,000
City Brokerage Ltd. Subsidiary company Loan 416,469,419 710,007,950 993,700,934 577,231,515
City Brokerage Ltd. Subsidiary company Interest on loan 59,521,270 75,025,395 N/A N/A
City Brokerage Ltd. Subsidiary company Inter company expenses 4,049,329 3,180,895 - -
City Bank Capital Resources Ltd. Subsidiary company Share capital - - 2,550,000,000 2,550,000,000
City Bank Capital Resources Ltd. Subsidiary company Cash dividend - - - -
City Bank Capital Resources Ltd. Subsidiary company Interest on deposits 12,775,715 8,621,244 N/A N/A
City Bank Capital Resources Ltd. Subsidiary company Inter company 439,512 812,014 - -
CBL Money Transfer Sdn. Bhd. Subsidiary company Share capital - - 99,702,332 99,702,332
CBL Money Transfer Sdn. Bhd. Subsidiary company Loan 11,076,057,939 5,599,817,110 281,465,403 234,997,079
CBL Money Transfer Sdn. Bhd. Subsidiary company Interest on loan 6,408,530 8,727,610 N/A N/A
CBL Money Transfer Sdn. Bhd. Subsidiary company Inter company expenses 2,146,097,471 1,899,372,746 (53,414) 882,145
CBL Hong Kong Ltd. Subsidiary company Share capital 31,102,901 35,879,708 66,982,609 35,879,708
CBL Hong Kong Ltd. Subsidiary company Loan 489,819,769 - 161,991,310 -
CBL Hong Kong Ltd. Subsidiary company Interest on loan 3,315,859 - N/A N/A
International Finance Corporation (IFC) Director Equity - - 460,946,330 460,946,330
International Finance Corporation (IFC) Director Borrowings 2,544,033,000 3,075,499,942 2,544,033,000 70,750,142
International Finance Corporation (IFC) Director Interest on borrowings 959,709 80,194,847 - -
International Finance Corporation (IFC) Director Fixed assets 5,088,105 5,088,105 35,192,726 40,280,831
International Finance Corporation (IFC) Director Professional service 10,377,400 55,439,700 - -
International Finance Corporation (IFC) Director Prepaid expense for - 28,991,700 - -
International Finance Corporation (IFC) Director professional service - 26,448,000 - 72,732,333
Janata Insurance Company Ltd. Director Payable against 8,155,627 9,264,584 N/A N/A
City General Insurance Company Ltd. Director professional service 8,708,253 9,422,273 N/A N/A
Phoenix Insurance Company Ltd. Director Insurance coverage 11,502,234 14,457,430 N/A N/A
Mr. Manwar Hossain Ex-director Insurance coverage 8,481,721 8,709,130 N/A N/A
Mr. Rubel Aziz Ex-director Insurance coverage 1,242,006 1,242,006 N/A N/A
Partex Beverage Limited Director Rent expenses 227,700 227,700 N/A N/A
MS. Hossain Dyeing & Printing Mills Ltd. Director Rent expenses 351,021 372,689 N/A N/A
Mr. Azizul Haque Chowdhury Ex-director Rent expenses 9,983,464 9,437,226 N/A N/A
Munira Mozaher Hosne Aziz Foundation Director Rent expenses 3,819,357 - N/A N/A
Mr. Zoynal Abedin Chowdhury Ex-director Rent expenses 2,404,926 - N/A N/A
Mr. M A Hashem Ex-director Rent expenses 2,461,285 570,780 N/A N/A

311
312
iii) Statement of debts due by companies or firms in which the Directors (including Ex-Directors) of the Bank have interests as on 31 December 2020

A) Statement of funded debts due by the Directors of the bank company as at 31 December 2020
(Figures in Lac Taka)
Sl. No. Present status with Name of the Types of facility Outstanding as at 31 Classification
Names of Directors institution Value of eligible security
the bank December 2020 status

Annual Report 2020

1 Mr. Aziz Al Kaiser Chairman Self Credit Card 0.07 Unclassified Marked as lien of $ 0.10 lac in RFCD A/C & Tk. 3.00 lac in FDR
2 Mr. Hossain Khaled Vice Chairman Self Credit Card 2.08 -Do- Marked as lien of $ 0.05 lac in ERQ A/C
3 Mrs. Syeda Shaireen Aziz Director Self Credit Card 0.56 -Do- Marked as lien of Tk. 7.22 lac in FDR A/C
4 Mrs. Savera H. Mahmood Director Self Credit Card 0.48 -Do- Marked as lien of Tk. 8.90 lac in FDR A/C
5 Mr. Hossain Mehmood Director Self Credit Card 0.01 -Do- Marked as lien of $ 0.05 lac in ERQ A/C
6 Mr. Rajibul Huq Chowdhury Director Self Credit Card 0.00 -Do- Marked as lien of Tk. 5.00 lac in FDR
7 Mrs. Tabassum Kaiser Director Self Credit Card 0.53 -Do- Marked as lien of $ 0.05 lac in RFCD A/C & Tk. 3.00 lac in FDR

B) Statement of other funded debts due by the Directors of the bank company as at 31 December 2020 (Figures in Lac Taka)
Name of Director Present status Name of the Types of facility Outstanding as at Classification Value of eligible security
Sl. institution
with the bank 31 December 2020 status

1 N/A N/A N/A N/A N/A N/A N/A

C) Statement of non-funded debts due by the companies or firms in which the Directors of the bank company have interests as at 31 December 2020 (Figures in Lac Taka)
Present Status Name of the Outstanding as at Classification
Sl. Names of Directors Types of Facility Value of eligible security
with the Bank Institution 31 December 2020 status
Mr. Hossain Khaled & Monowar Industries
1 Director (Pvt) Ltd. BG 0.13 Unclassified 100% Margin
Mr. Hossain Mehmood
2 Mr. Hossain Khaled & Director Eulon Plastic BG 5.63 -Do- 10% Margin
Mr. Hossain Mehmood Private Ltd.
3 Mr. Rajibul Huq Chowdhury Director Shahida Trading BG 4.11 -Do- 100% Margin
Corporation
 D) Statement of funded debts due by the companies or firms in which the Ex-Director of the banking company have interests as at 31 December 2020 (Figures in Lac Taka)

Present Names
Names of status Types of Outstanding Amount of Status of Amount of
Sl. of the Nature of security
Ex-Directors with the as at 31 December provision classification share Remarks
institutions facility holding with value
bank 2020 created
Money Suit no. 60/2006. Stayed as per order of the
CC Honorable High Court in FAT no. 568/06 filed by the
A M Traders 120.28 - BLW - - Bank. Bank filed FA 95/11 (old 568/06 dated 06.09.06)
Mr. Zakaria (Pledge)
before the High Court against Judgment date 04.07.06
Hossain & decree dt 10.07.06 in AR no. 60/06. The Court released
1 Choudhury and Ex. Director the defendant no. 3 (Ex. Hon'ble Director Mr. Zakaria
Hossain Chowdhury) from Bank's liability. Written Off .
Mrs. Hosne Ara
Begum
Ahsan CC Artha Execution case no. 152/05 is continuing. Last date
35.04 - BLW - - of Artha Execution 152/2005 was fixed on 04.05.2020
Traders (Pledge) for return of warrant of arrest. Next date yet to receive.

Artha Execution case no. 372/04 & 93/05 dated: 30.11.04

M/s R.P. & 28.04.05. The Court has passed an order regarding
Term
2 Mr. A.B.M. Feroj Ex. Director Electrical detention of the convict borrower in civil jail for 6(six)
Loan 191.15 - BLW months from the date of arrest.
Industries 20 post dated cheque
-

1. Hypo. of machineries The liabilities of Saleh Fashion Ltd. was adjusted on

installed in the factory 21.06.2017 at Tk. 175.92 lac through Booking of the
worth Tk. 24.00 lac. vested properties under section 33(7) of Artha Rin Adalat
2. Mortgage of land & Ain, 2003 as Non Banking Asset of the Bank.
factory worth Tk. CR Case no. 1372/06, N.I. Act. U/S 138 dated: 14.05.06 filed
Saleh 26.80 lac. and last date was fixed for W/A. Next date yet to receive.
Mr. Saleh CC 3. Mortgage of 5 katha
Ahmed Ex. Director Fashions (Hypo) - - - land with 2(two) storied
-
Ltd. building worth Tk. 1.00
3 Chowdhury crore &
4. 1st charge created with
RJSC."

In Artha Execution case no. 196/04, the Learned Court

issued Warrant of Arrest. Proceedings of the said Artha
Execution Suit file will be stayed until execution of
M/s Hasan - BLW - warrant of arrest.
LIM 530.23
Enterprise

Mr. Azizul Haque M/s Shahida Trading CASH & FDR The BG was issued at 100% margin fvg. Customs with
4 Ex. Director Corporation BG Tk. 4.11 - UC - the validity for perpetual period.
Chowdhury
Mr. Anwar Hossain & Monowar Industries CASH & FDR The BG was issued at 100% margin fvg. Customs with
5 Ex. Director (Pvt) Ltd and BG Tk. 0.13 - UC - 100% (Cash Tk.1,250 & Tk.11,250)
Mr. Monowar Hossain related Business the validity for perpetual period.

E) Compensation of key management personnel

Refer to note: 37.a

313
 Strategic report Shareholder information Governance

52 EVENTS AFTER REPORTING PERIOD

Board of Directors in its 584th meeting held on 22 March 2021 decided to recommend 17.50% cash and 5.00% stock
dividend subject to approval of shareholders and regulatory authorities.

53 GENERAL
53.1 Core risk management
BRPD circular no. 17 (7 October 2003) and BRPD circular no. 4 (5 March 2007) require banks to put in place an effective risk
management system. Bangladesh Bank monitors the progress of implementation of these guidelines through its on-site
inspection teams through routine inspection. The risk management systems in place at the Bank are discussed below.

53.1.1 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. Separate Corporate / SME /
Retail divisions have been formed at Head Office which are entrusted with the duties of maintaining effective relationship
with 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 Risk Management (CRM) 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, sanctioning credit, formulating policy/strategy for lending operation,
etc. For retail lending, a separate Retail Finance Centre (RFC) has been formed to assess risk, approve and monitor retail loans.
A thorough risk assessment is done before sanction of any credit facility at Credit Risk Management Units. The risk
assessment includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer,
security of the credit facility etc. The assessment process starts at the relationship level 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 Board of
Directors of the Bank.
In determining Single borrower/Large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit is
conducted at regular intervals to ensure compliance of Bank’s and Regulatory polices. Loans are classified as per
Bangladesh Bank’s guidelines.

53.1.2 Asset liability management risk

For better management of asset and liability risk, the Bank has an established Assets Liability Committee (ALCO) which
meets at least once a month. The members of ALCO as at 31 December 2020 were as follows:
Mr. Mashrur Arefin Managing Director & Chief Executive Officer
Mr. Sheikh Mohammad Maroof AMD, Head of Wholesale Banking & Head of SME-Small & Micro Finance
Mr. Md. Abdul Wadud DMD, Head of Commercial, Trade and Medium Business
Ms. Mahia Juned DMD & COO
Mr. Mohammad Mahbubur Rahman DMD & CFO
Mr. Md. Zabid Iqbal Chief Risk Officer
Mr. Md Arup Haider Head of Retail Banking
Mr. Muhammed Shah Alam Head of Treasury
Mr. Md. Arif Bin Idrish Head of Islamic Banking
The ALCO's primary function is to formulate policies and guidelines for the strategic management of the bank using
pertinent information that has been provided through the ALCO process together with knowledge of the individual
businesses managed by members of the committee. ALCO regularly reviews the Bank’s overall asset and liability position,
forward looking asset and liability pipeline, overall economic position, the Banks’ liquidity position, capital adequacy, balance
sheet risk, interest risk and makes necessary changes in its mix as and when required.
The Bank maintains specified liquidity and funding ratio limits to ensure financial flexibility to cope with unexpected future
cash demands. ALCO monitors the liquidity and funding ratios on an ongoing basis and ascertains liquidity requirements
under various stress situations. In order to ensure liquidity against all commitments, the Bank reviews the behaviour patterns
of liquidity requirements. The Bank has an approved Liquidity Contingency Plan (LCP) which is reviewed and updated on an
annual basis by ALCO. All regulatory requirements including CRR, SLR and RWA are reviewed by ALCO.

314 Annual Report 2020

Risk review Financial review Financial statements

53.1.3 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.
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. The Bank maintains various nostro accounts in
order to conduct operations in different currencies including TK. The senior management of the Bank sets limits for handling
nostro account transactions. All Nostro accounts are reconciled on a monthly basis and outstanding entries beyond 30 days
are reviewed by the management for its settlement.
As at 31 December 2020, no debit entry was unreconciled for 3 months or more, therefore no provision is kept in accordance
with FEPD circular no. 677 (13 September 2005).

53.1.4 Internal control and compliance

Effective internal controls are the foundation of safe and sound banking. A properly designed and consistently enforced
system of operational and financial internal control helps a bank’s management safeguard the bank’s resources, produce
reliable financial reports and comply with laws and regulations. Effective internal control also reduces the possibility of
significant errors and irregularities and assists in their timely detection when they do occur.
Internal Control and Compliance (ICC) operates independently as a division consisting three units (Audit & Inspection,
Monitoring and Compliance) with prime responsibility to determine risks by evaluating overall Business, Operations & Credit
Portfolios of the Bank. The key objective of ICC is to assist and guide in all aspects of the bank using adequate resources for
identification of weaknesses and taking appropriate measures to overcome the same to be a compliant bank.
ICC has a unique reporting line to the Bank’s Board of Directors through the Audit Committee and to the Managing Director
& CEO. Thus it acts as a bridge between the board and the Bank’s management. An effective organizational structure has
been established by exercising durable Internal Control culture within the Bank.

53.1.5 Reputation risk arising from money laundering incidences

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 Head of Internal Control & Compliance 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 the category of Officers and Executives for developing awareness and skill
for identifying suspicious activities/transactions.

53.1.6 Information technology

The Bank's IT has gone through a gigantic transformation from where it started. After several years of continuous efforts,
standardization of both back-end as well as front-end operations of bank is complete. Now through wide array of
customizable products and services, IT can bring about equivalent contribution to profits.
Relevant hardware, software and networking equipment are in place to support operations of online branches, internet
banking, SMS service, call centre, Tele Banking, POS and ATM network. These devices are providing superior performance
resulting in better end-user satisfaction. To ensure uninterrupted and smooth customer service in all branches and SME
centres, IT division continuously work on performance tuning for database and application, networking and server hardware
on regular basis. Continuous investments are going on to do the necessary upgradation on hardware and software to
increase the Bank's centralised online banking and other peripheral service requirements.

53.2 Audit committee

According to BRPD circular no.12 (23 December 2002), all banks are advised to constitute an audit committee comprising
members of the Board. The audit committee will assist the Board in fulfilling its oversight responsibilities including
implementation of the objectives, strategies and overall business plans set by the Board for effective functioning of the bank.
The committee will review the financial reporting process, the system of internal control and management of financial risks,
the audit process, and the bank's process for monitoring compliance with laws and regulations and its own code of business
conduct.
The Bank, being a listed entity, have a board of directors from whom to select an audit committee. The Audit Committee of
the Board of Directors consist of four members of the Board, who meet on a regular basis with the senior management of

315
 Strategic report Shareholder information Governance

the Bank, and with the internal and external auditors to consider and review the nature and scope of the reviews and the
effectiveness of the systems of internal control and compliance as well as the financial statements of the Bank. All audit
reports issued by internal and external auditors and all inspection/audit reports issued by Bangladesh Bank are sent to the
Audit Committee.

53.2.1 Particulars of audit committee

Pursuant to the BRPD Circular no. 12 dated 23 December 2002, the Audit Committee of the Board of Directors as at 31 December
2020 consisted of the following 4 members of the Board:

Name Status with bank Status with committee Educational qualification

Mr. Farooq Sobhan Independent Director Convener B.A (Hon’) M.A
Mrs. Syeda Shaireen Aziz Director Member BBA
Mr. Rafiqul Islam Khan Director Member HSC
Mrs. Savera H. Mahmood Director Member MSS

53.2.2 Meetings held by the Audit Committee with senior management to consider and review the Bank's Financial
Statements:
During the period under review the Audit Committee held several meetings to oversee/review various functions including
reviewing the quarterly financial statements in compliance with the Bangladesh Bank circular.

Meetings held by the committee during the year by date:

81st Audit Committee Meeting held on 11 March 2020
82nd Audit Committee Meeting held on 22 June 2020
83rd Audit Committee Meeting held on 26 July 2020
84th Audit Committee Meeting held on 14 September 2020
85th Audit Committee Meeting held on 19 October 2020
86th Audit Committee Meeting held on 25 October 2020
87th Audit Committee Meeting held on 22 November 2020

53.2.3 Steps taken for implementation of an effective internal control procedure of the Bank:
Through circular the Audit Committee placed its report regularly to the Board of Directors of the Bank mentioning its review
results and recommendations on internal control system, compliance of rules and regulations and establishment of good
governance within stipulated time.

53.3 Interest rate risk

Interest rate risk may arise either from trading portfolio or from non-trading portfolio. The trading portfolio of the Bank consists
of Government treasury bills and bonds of different maturities. Interest rate risk arises from mismatches between the future
yield of an asset and their funding cost. Asset Liability Committee (ALCO) monitors the interest rate movement on a regular
basis and Treasury Division actively manages the Balance Sheet gap profitably on a regular basis.

53.4 Equity risk

Equity risk arises from movement in market value of equities held. The risks are monitored by Special Banking Wing under a
well designed policy framework. The total market value of equities held was higher than the total cost price at the balance
sheet date (Annexure-C).

53.5 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 periodic and special audit of the branches and departments 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.

53.6 Implementation of BASEL-III

Basel III reforms are the response of Basel Committee on Banking Supervision (BCBS) to improve the banking sector’s ability
to absorb shocks arising from financial and economic stress, whatever the source, thus reducing the risk of spill over from the
financial sector to the real economy.

316 Annual Report 2020

 The Committee introduced transitional arrangements to implement the new standards that help to ensure that the banking
sector can meet the higher capital standards through reasonable earnings retention and capital raising, while still supporting
lending to the economy. In line with the Basel framework, Bangladesh Bank issued transitional arrangements for Basel III
implementation in Bangladesh. The phase-in arrangements for Basel III implementation in Bangladesh has been effective from
1 January 2015 in accordance with BRPD Circular no- 18 dated 21 December 2014.

Internal Capital Adequacy Assessment Process (ICAAP)

Internal Capital Adequacy Assessment Process (ICAAP) represents the Bank's own assessment of its internal capital
requirements. The Bank's approach to calculating its own internal capital requirement has been to take the minimum capital
required for credit risk, market risk and operational risk under Pillar-I as the starting point, assess whether this is sufficient to
cover those risks and then identify other risks (Pillar-II) and assess prudent level of capital to meet them.

The assessment is undertaken using time series of data and Bangladesh Bank's guidelines on Risk Based Capital Adequacy to
assess the likelihood of occurrence and potential impact. Purposes of Internal Capital Adequacy Assessment Process are to:
i) inform the Board of Directors about
- assessing risks;
- initiatives to mitigate identified risks;
- capital requirement to support the operations in light of identified risks.
ii) comply with Bangladesh Bank's requirement.

53.7 Exchange rates

The assets and liabilities as at 31 December in foreign currencies have been converted to TK at the following rates:

Currency 2020 2019

Taka Taka
USD 1 = 84.8011 84.9000
ACU 1 = 84.8011 84.9000
GBP 1 = 114.8122 111.3506
AUD 1 = 64.8304 59.3791
EUR 1 = 104.1654 95.0880
CHF 1 = 96.1191 87.3053
JPY 1 = 0.8206 0.7778
SAR 1 = 22.5974 22.6231
MYR 1 = 20.9904 20.6394
KWD 1 = 277.8906 279.5752
SGD 1 = 64.0177 62.9215
AED 1 = 23.0867 23.1137

53.8 Credit rating of the Bank

As per the BRPD instruction circular no.6 dated 5 July 2006, the Bank has done its credit rating by Credit Rating Agency of Bangladesh
Limited (CRAB) based on the financial statements dated 31 December 2019.
Particulars Date of Rating Long term Short term Rating Valid
AA2 ST-2
Entity Rating 30-Jun-20 Very strong capacity & very Strong capacity for
30-Jun-21
high quality timely repayment

53.9 Fraud and administrative error

In the year 2020, total number & amount of fraud forgeries (probable) detected in the Bank were 1 no. & Taka 4,888,000 respectively.
The suspicious attempt was identified lately in December 2020 which was occurred by external customer. Bank has taken necessary
initiatives to recover the amount by communicating Bangladesh Bank for the arbitration in compliance with Bangladesh Bank PSD
Circular No. 7, dated 05 December 2019, Section 7.1 (Bangladesh Automated Cheque Processing System Operating Rules and
Procedures). Also in order to prevent fraud and administrative errors, the bank has taken appropriate corrective measures so that the
same incidences can be prevented in future.

53.10 Number of employees

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 4,356 at the end of December 2020 as against 4,493 at the end of December 2019.

317
 53.11 Impact of COVID 19:
Following the declaration of COVID 19 as a pandemic by the World Health Organization (WHO) in early March 2020, like many other
governments, the Government of Bangladesh introduced restrictive measures to contain further spread of the virus, affecting free
movement of people and goods. These measures included imposing nationwide general holidays from 26 March 2020 to 30 June
2020. It may impact overall profitability of the bank.
Considering the long term impact of COVID 19 on most sectors in economy of Bangladesh, Bangladesh Bank (BB) has issued circular
dated 28 September 2020 not to downgrade the clients’ loan classification status from 31 December 2019 even no payment is made.
Consequently, the bank is not affected which could have been affected if circular is not issued. In addition, BB has issued circulars to
provide stimulus package for some sectors through commercial bank. Both facilitate to boost the economy and banking operations
during this pandemic.
Management has also assessed the overall impact on COVID 19 and has not identified any indications that may cast doubt on going
concern of the group and the bank. Bank's primary business has not impacted expressively as it has a significant growth even the
pandemic declared by WHO except in cards and trade business. Moreover, The Management continue to monitor the spread of the
virus and its impact, it may have on the bank’s operations.

53.12 Previous year's figures have been rearranged, wherever necessary, to conform with the current year's presentation.

Managing Director & CEO Director Director Chairman

Dhaka, 22 March 2021

318 Annual Report 2020

CONSOLIDATED LIQUIDITY STATEMENT Annexure-A
(Analysis of maturity of assets and liabilities)

As at 31 December 2020
Up to 1 month 1-3 months 3-12 months 1-5 years More than 5 years Total
Particulars
Taka Taka Taka Taka Taka Taka
Assets
Cash in hand 10,615,100,051 - - - 11,790,346,740 22,405,446,791
Balance with other banks and financial institutions 17,871,747,123 7,150,000,000 2,085,518,761 89,379,167 - 27,196,645,051
Money at call and short notice - - - - - -
Investments 3,302,714,750 16,238,881,220 4,820,323,970 21,866,641,844 5,632,634,463 51,861,196,247
Loans and advances/investments 44,190,450,250 38,500,256,756 67,160,839,710 87,448,009,408 31,968,023,932 269,267,580,056
Fixed assets including premises, furniture and fixtures - - - - 6,611,300,802 6,611,300,802
Other assets 985,195,662 2,765,850,456 4,795,719,303 1,526,679,606 95,812,040 10,169,257,067
Non banking assets - - - - 1,082,478,752 1,082,478,752
Total assets (A) 76,965,207,836 64,654,988,432 78,862,401,744 110,930,710,025 57,180,596,729 388,593,904,766
Liabilities
Bond - - 1,510,000,000 7,610,000,000 2,480,000,000 11,600,000,000
Borrowings from other banks, financial institutions and agents 9,930,880,082 15,226,258,010 26,678,233,535 6,347,961,471 1,545,781,746 59,729,114,844
Deposits 29,690,986,867 37,324,235,729 99,585,820,138 69,548,838,622 3,201,609,014 239,351,490,370
Other accounts 3,691,362,431 7,390,671,822 4,062,785,054 - - 15,144,819,307
Provision and other liabilities 2,772,439,190 6,856,547,090 2,941,084,578 9,471,397,753 11,223,925,347 33,265,393,958
Total liabilities (B) 46,085,668,570 66,797,712,651 134,777,923,305 92,978,197,846 18,451,316,107 359,090,818,479
Net liquidity gap (A - B) 30,879,539,266 (2,142,724,219) (55,915,521,561) 17,952,512,179 38,729,280,622 29,503,086,287

As at 31 December 2019
Up to 1 month 1-3 months 3-12 months 1-5 years More than 5 years Total
Particulars
Taka Taka Taka Taka Taka Taka
Assets
Cash in hand 11,395,368,441 - - - 14,517,286,080 25,912,654,521
Balance with other banks and financial institutions 9,157,644,647 9,134,309,268 5,072,286,509 143,538,394 27,079,614 23,534,858,432
Money at call and short notice - - - - - -
Investments 3,390,961,454 3,102,503,666 13,151,527,772 20,100,366,467 3,903,289,113 43,648,648,472
Loans and advances/investments 14,071,055,337 64,814,938,701 58,557,097,388 84,015,530,984 26,319,111,842 247,777,734,252
Fixed assets including premises, furniture and fixtures - - - - 6,299,251,389 6,299,251,389
Other assets 3,427,435,528 1,994,805,645 2,190,400,750 1,014,866,057 400,000 8,627,907,980
Non banking assets - - 56,549,688 1,095,789,303 - 1,152,338,991
Total assets (A) 41,442,465,407 79,046,557,280 79,027,862,107 106,370,091,205 51,066,418,038 356,953,394,037

Liabilities
Bond - - - 8,280,000,000 920,000,000 9,200,000,000
Borrowings from other banks, financial institutions and agents 13,722,421,380 10,983,325,383 12,322,556,210 7,679,247,569 439,946,282 45,147,496,824
Deposits 28,937,825,743 43,377,343,460 98,952,834,670 47,564,025,268 15,622,137,615 234,454,166,756
Other accounts 3,199,937,075 6,404,533,563 2,382,067,677 - - 11,986,538,315
Provision and other liabilities 4,910,505,044 3,552,041,376 3,695,207,244 6,269,976,700 13,198,121,705 31,625,852,069
Total liabilities (B) 50,770,689,242 64,317,243,782 117,352,665,801 69,793,249,537 30,180,205,602 332,414,053,964
Net liquidity gap (A - B) (9,328,223,835) 14,729,313,498 (38,324,803,694) 36,576,841,668 20,886,212,436 24,539,340,073

319
 Annexure-A/1
LIQUIDITY STATEMENT
(Analysis of maturity of assets and liabilities)

As at 31 December 2020
Up to 1 month 1-3 months 3-12 months 1-5 years More than 5 years Total
Particulars
Taka Taka Taka Taka Taka Taka
Assets
Cash in hand 10,613,211,192 - - - 11,790,346,740 22,403,557,932
Balance with other banks and financial institutions 17,698,205,809 7,150,000,000 2,085,518,761 89,379,167 - 27,023,103,737
Money at call and short notice - - - - - -
Investments 3,302,714,750 13,578,519,240 4,820,323,970 21,866,641,844 2,683,245,811 46,251,445,615
Loans and advances/investments 44,292,602,046 38,494,202,382 65,592,417,600 87,854,274,602 31,968,023,931 268,201,520,561
Fixed assets including premises, furniture and fixtures - - - - 5,920,244,649 5,920,244,649
Other assets 737,127,260 2,037,048,958 1,899,648,831 1,196,141,212 6,173,449,153 12,043,415,414
Non banking assets - - - - 1,082,478,752 1,082,478,752
Total assets (A) 76,643,861,057 61,259,770,580 74,397,909,162 111,006,436,825 59,617,789,036 382,925,766,660

Liabilities
Bond - - 1,510,000,000 7,610,000,000 2,480,000,000 11,600,000,000
Borrowings from other banks, financial institutions and agents 9,923,288,732 15,238,855,072 26,571,340,032 5,669,377,395 1,366,106,732 58,768,967,963
Deposits 29,857,959,135 37,658,248,304 100,222,772,371 69,548,838,622 3,201,609,013 240,489,427,445
Other accounts 3,483,430,558 6,974,360,428 3,833,931,202 - - 14,291,722,188
Provision and other liabilities 2,769,459,944 3,249,488,023 2,914,271,366 8,859,967,495 11,164,132,608 28,957,319,436
Total liabilities (B) 46,034,138,369 63,120,951,827 135,052,314,971 91,688,183,512 18,211,848,353 354,107,437,032
Net liquidity gap (A - B) 30,609,722,688 (1,861,181,247) (60,654,405,809) 19,318,253,313 41,405,940,683 28,818,329,628

As at 31 December 2019
Up to 1 month 1-3 months 3-12 months 1-5 years More than 5 years Total
Particulars
Taka Taka Taka Taka Taka Taka
Assets
Cash in hand 11,389,544,933 - - - 14,517,286,080 25,906,831,013
Balance with other banks and financial institutions 8,738,330,685 9,142,446,075 5,155,518,761 89,379,167 - 23,125,674,688
Money at call and short notice - - - - - -
Investments 1,629,271,680 2,944,104,501 13,092,019,409 19,465,047,343 2,321,061,695 39,451,504,628
Loans and advances/investments 13,928,818,840 65,139,752,627 57,793,955,719 83,886,014,673 26,195,108,864 246,943,650,723
Fixed assets including premises, furniture and fixtures - - - - 5,675,246,085 5,675,246,085
Other assets 1,135,507,821 1,946,464,706 2,157,296,276 1,048,725,275 6,145,747,132 12,433,741,210
Non banking assets - - 56,549,688 1,095,789,303 - 1,152,338,991
Total assets (A) 36,821,473,959 79,172,767,909 78,255,339,853 105,584,955,761 54,854,449,856 354,688,987,338

Liabilities
Bond - - - 8,280,000,000 920,000,000 9,200,000,000
Borrowings from other banks, financial institutions and agents 13,859,101,042 11,206,679,445 12,114,723,243 6,987,786,925 - 44,168,290,655
Deposits 28,712,126,483 43,679,279,292 99,219,391,768 47,524,108,618 15,582,220,966 234,717,127,127
Other accounts 3,199,937,075 6,404,533,563 2,382,067,677 - - 11,986,538,315
Provision and other liabilities 3,074,018,108 3,489,687,577 3,696,798,524 5,743,057,712 13,197,832,945 29,201,394,866
Total liabilities (B) 48,845,182,708 64,780,179,877 117,412,981,212 68,534,953,255 29,700,053,911 329,273,350,963
Net liquidity gap (A - B) (12,023,708,749) 14,392,588,032 (39,157,641,359) 37,050,002,506 25,154,395,945 25,415,636,375

320 Annual Report 2020

 BALANCE WITH OTHER BANKS - OUTSIDE BANGLADESH
(NOSTRO ACCOUNTS)
As at 31 December 2020
Annexure-B
31 December 2020 31 December 2019
Name of the Banks Account Currency
type type FC Exchange Equivalent FC Exchange Equivalent
amount rate Taka amount rate Taka
Standard Chartered Bank, New York, USA CD USD 21,335,795 84.8011 1,809,298,844 12,646,276 84.9000 1,073,668,815
Citibank N.A. New York, USA CD USD 4,151,087 84.8011 352,016,751 8,493,284 84.9000 721,079,813
Mashreq Bank, New York, USA CD USD 2,824,967 84.8011 239,560,290 6,084,239 84.9000 516,551,889
Habib American Bank, New York, USA CD USD 2,623,496 84.8011 222,475,344 1,443,647 84.9000 122,565,620
HDFC Bank Ltd, Mumbai, India CD ACUD 1,592,353 84.8011 135,033,328 2,007,533 84.9000 170,439,592
Standard Chartered Bank,Mumbai, India CD ACUD 959,950 84.8011 81,404,840 661,034 84.9000 56,121,773
Mashreq Bank, Mumbai, India CD ACUD 681,035 84.8011 57,752,554 (715,044) 84.9000 (60,707,245)
Commerz Bank AG. Frankfurt, Germany CD USD 502,398 84.8011 42,603,873 199,495 84.9000 16,937,103
Bank of Tokyo Mitsubishi Ltd., Japan CD JPY 40,198,000 0.8206 32,986,479 387,071 0.7778 301,064
AB Bank Ltd., Mumbai, India CD ACUD 379,387 84.8011 32,172,454 539,573 84.9000 45,809,719
Commerz Bank AG. Frankfurt, Germany CD EURO 249,139 104.1654 25,951,640 401,044 95.0880 38,134,450
NIB Bank Limited, Karachi, Pakistan CD ACUD 296,406 84.8011 25,135,542 139,310 84.9000 11,827,394
Standard Chartered Bank, Frunkfurt, Germany CD EURO 145,366 104.1654 15,142,093 478,233 95.0880 45,474,214
Commercial Bank of Ceylon, Colombo, Sri Lanka CD ACUD 159,881 84.8011 13,558,055 25,663 84.9000 2,178,817
Sonali Bank Ltd., Kolkata, India CD ACUD 104,548 84.8011 8,865,756 25,953 84.9000 2,203,431
Mashreq Bank, Dubai CD AED 248,736 23.0867 5,742,482 42,034 23.1137 971,571
Standard Chartered Bank, London CD GBP 40,701 114.8122 4,672,963 140,832 111.3506 15,681,742
Commerz Bank AG. Frankfurt CD AUD 59,094 64.8304 3,831,118 14,240 59.3791 845,566
Kookmin Bank, Korea CD USD 43,039 84.8011 3,649,750 91,069 84.9000 7,731,716
Commerz Bank AG. Frankfurt, Germany CD CHF 30,148 96.1191 2,897,807 29,263 87.3053 2,554,790
Standard Chartered Bank, Nepal CD ACUD 13,870 84.8011 1,176,161 13,870 84.9000 1,177,532
Bank of Tokyo Mitsubishi Ltd., New Delhi, India CD ACUD 8,680 84.8011 736,056 8,634 84.9000 733,046
Bank of Bhutan, Bhutan CD ACUD 5,075 84.8011 430,366 19,850 84.9000 1,685,265
Mashreq Bank, Mumbai, India CD EURO 1,799 104.1654 187,421 1,982 95.0880 188,424
Mashreq Bank, London CD GBP - 114.8122 - 4,575 111.3506 509,394
Mashreq Bank, New York, USA (For OBU Operation) CD USD 11,411,822 84.8011 967,735,089 15,923,274 84.9000 1,351,885,987
ICICI Bank Limited, India (For OBU Operation) CD USD 2,118,398 84.8011 179,642,476 - 0.0000 -
Commerz Bank AG. Frankfurt, Germany (For OBU Operation) CD USD 858,008 84.8011 72,760,065 481,046 84.9000 40,840,765
Commerz Bank AG. Frankfurt, Germany (For OBU Operation) CD EURO 34,460 104.1654 3,589,575 1,231,807 95.0880 117,130,094
Sonali Bank, Kolkata, India TD ACUD 8,646 84.8011 733,223 8,133 84.9000 690,478
4,341,742,395 4,305,212,819

321
 INVESTMENT IN SHARES Annexure-C
As at 31 December 2020
Type of Face Number of Cost of Quoted rate Total market
Average per
Sl. shares value shares holding cost share as at value as at
Name of the company 31 Dec 2020 31 Dec 2020
No.
Taka Taka Taka Taka Taka
Quoted ordinary share
1 IDLC Finance Limited A 10 33,934,822 462,133,670 13.62 63.40 2,151,467,715
2 Trust Bank Limited A 10 1,831,379 49,108,342 26.81 33.40 61,168,059
3 Grameenphone Limited A 10 117,900 44,063,979 373.74 347.10 40,923,090
4 Matin Spinning Mills Ltd A 10 861,521 36,865,695 42.79 36.40 31,359,364
5 Dhaka Bank Limited A 10 2,321,143 54,456,970 23.46 11.90 27,621,602
6 Walton Hi-Tech Industries Ltd. N 10 20,263 20,676,361 1,020.40 1,113.80 22,568,929
7 Square Pharmaceuticals Limited A 10 100,000 21,724,384 217.24 219.50 21,950,000
8 Mercantile Bank Limited A 10 1,657,657 37,621,008 22.70 12.70 21,052,244
9 Confidence Cement Limited A 10 150,000 18,264,155 121.76 121.30 18,195,000
10 British American Tobacco Bangladesh Co. Ltd. A 10 13,000 14,148,150 1,088.32 1,180.80 15,350,400
11 Ifad Autors Limited A 10 300,000 14,770,930 49.24 47.20 14,160,000
12 Standard Bank Limited A 10 1,647,099 23,965,596 14.55 8.30 13,670,922
13 Pubali Bank Limited A 10 456,236 23,140,398 50.72 24.10 10,995,288
14 AB Bank Limited A 10 718,825 40,660,844 56.57 12.10 8,697,783
15 Doreen Power Generations and Systems Limited A 10 134,144 7,672,286 57.19 61.00 8,182,784
16 Robi Axiata Limited N 10 131,189 1,311,890 10.00 29.80 3,909,432
17 Mobil Jamuna Lubricants Bangladesh Limited A 10 50,000 4,521,025 90.42 76.90 3,845,000
18 Mutual Trust Bank Limited A 10 156,757 2,425,444 15.47 24.10 3,777,844
19 The ACME Laboratories Limited A 10 50,000 4,696,347 93.93 74.70 3,735,000
20 Bata Shoe Company (Bangladesh) Limited A 10 5,100 6,016,710 1,179.75 702.70 3,583,770
21 Shahjibazar Power Co. Ltd. A 10 23,953 2,892,945 120.78 73.30 1,755,755
22 Investment Corporation of Bangladesh A 100 13,625 2,785,091 204.41 98.80 1,346,150
23 Saif Powertec Limited A 10 73,267 2,330,000 31.80 18.00 1,318,806
24 Prime Bank Limited A 10 76,400 1,243,033 16.27 17.10 1,306,440
25 BBS Cables Ltd. A 10 22,000 1,948,446 88.57 54.80 1,205,600
26 Rangamati Food Products Limited Z 10 64,500 645,000 10.00 11.90 767,550
27 Raspit Inc. (BD) Limited Z 10 366,000 6,153,414 16.81 1.90 695,400
28 Shahjalal Islami Bank Limited A 10 28,023 - - 22.90 641,727
29 Paramount Textile Limited A 10 7,190 384,665 53.50 53.00 381,070
30 SILCO Pharmaceuticals Limited A 10 8,022 72,930 9.09 24.00 192,528
31 German Bangla Joint Venture Foods Limited Z 10 21,000 210,000 10.00 3.60 75,600
32 Somorita Hospital Limited A 10 170 - - 60.60 10,302
33 Perfume Chemical Ind. Limited Z 10 28 3,500 125.00 59.00 1,652
906,913,207 2,495,912,806
Total

322 Annual Report 2020

Quoted (Under special fund and investment policy as per DOS Circular no.01/2020)

Type of Face value Number Cost of Average

Sl. No. Name of the company shares of shares holding cost
Taka Taka Taka
1 Summit Power Limited A 10 1,500,000 57,067,190 38.04
2 Walton Hi-Tech Industries Ltd. A 10 30,000 30,795,873 1,026.53
3 British American Tobacco Bangladesh Co. Ltd. A 10 25,000 27,693,552 1,107.74
4 Berger Paints Bangladesh Ltd. A 10 17,000 23,568,285 1,386.37
5 Square Pharmaceuticals Limited A 10 100,000 18,335,558 183.36
6 Singer Bangladesh Limited A 10 100,000 17,539,982 175.40
7 Grameenphone Limited A 10 50,000 16,075,136 321.50
8 United Power Generation & Distribution Company Limited A 10 42,101 11,033,077 262.06
9 Paramount Textile Limited A 10 179,474 9,573,768 53.34
10 Aamra Networks Limited - 10 200,000 9,103,111 45.52
11 Doreen Power Generations and Systems Limited A 10 100,000 6,101,184 61.01
Total 226,886,716

Unquoted Ordinary Shares

Face value Number Cost of Average
Sl. No. Name of the company of shares holding cost
Taka Taka Taka

1 Industrial & Infrastructural Development Finance Company Limited 10 13,380,903 71,770,260 5.36
2 Venture Investment Partners Bangladesh Limited 100 202,176 18,000,000 89.03
3 KARMA Sangsthan Bank Limited 100 100,000 10,000,000 100.00
4 Central Depository Bangladesh Limited 10 2,284,721 6,277,770 2.75
Total 106,048,030

323
324
Annexure-D

SCHEDULE OF FIXED ASSETS INCLUDING PREMISES, FURNITURE AND FIXTURES

As at 31 December 2020

Annual Report 2020

Cost Depreciation/Amortisation
Written
Particulars Balance Additions Adjustments Disposals Balance Balance Charged Disposals/ Balance down value
as at during during the during the as at as at during adjustments as at as at
1 Jan 2020 the year year year 31 Dec 2020 1 Jan 2020 the year during the year 31 Dec 2020 31 Dec 2020
Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Own assets
Land 168,630,265 - - - 168,630,265 - - - - 168,630,265
Building 1,789,452,122 - - - 1,789,452,122 378,689,647 44,736,303 - 423,425,950 1,366,026,172
Work in progress (building) 82,285,716 - - - 82,285,716 - - - - 82,285,716
Furniture and fixtures 1,429,367,802 125,844,671 - - 1,555,212,473 844,191,300 102,446,459 - 946,637,759 608,574,714
Office equipment and machinery 3,346,400,131 355,310,231 - - 3,701,710,362 2,432,869,166 298,951,856 - 2,731,821,022 969,889,340
Software 514,272,601 16,145,378 95,918,966 - 626,336,945 272,500,613 42,312,083 - 314,812,696 311,524,249
Work in progress (software) 92,104,758 116,743,649 (95,918,966) - 112,929,441 - - - 112,929,441
Bank's vehicles 388,194,209 9,158,341 - (3,183,922) 394,168,628 263,069,955 53,394,612 (902,111) 315,562,456 78,606,172
Sub-total 7,810,707,604 623,202,270 - (3,183,922) 8,430,725,952 4,191,320,681 541,841,313 (902,111) 4,732,259,883 3,698,466,069

Leased assets

Right of use assets 2,606,368,257 838,697,875 (91,350,726) - 3,353,715,406 550,509,095 581,427,731 - 1,131,936,826 2,221,778,580
Sub-total 2,606,368,257 838,697,875 (91,350,726) - 3,353,715,406 550,509,095 581,427,731 - 1,131,936,826 2,221,778,580
Grand total 10,417,075,861 1,461,900,145 (91,350,726) (3,183,922) 11,784,441,358 4,741,829,776 1,123,269,044 (902,111) 5,864,196,709 5,920,244,649
 Annexure-D

SCHEDULE OF FIXED ASSETS INCLUDING PREMISES,FURNITURE AND FIXTURES

As at 31 December 2019

Cost Depreciation/Amortisation
Written
Particulars Balance Additions Adjustments Disposals Balance Balance Charged Disposals/ Balance down value
as at during during the during the as at as at during adjustments as at as at
1 Jan 2019 the year year year 31 Dec 2019 1 Jan 2019 the year during the year 31 Dec 2019 31 Dec 2019
Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Own assets
Land 168,630,265 - - - 168,630,265 - - - - 168,630,265
Building 1,789,452,122 - - - 1,789,452,122 333,953,344 44,736,303 - 378,689,647 1,410,762,475
Work in progress (building) 82,285,716 - - - 82,285,716 - - - - 82,285,716
Furniture and fixtures 1,299,802,351 129,680,451 (115,000) - 1,429,367,802 745,920,674 98,270,626 - 844,191,300 585,176,502
Office equipment and machinery 2,963,255,182 383,144,949 - - 3,346,400,131 2,163,466,982 269,188,285 213,899 2,432,869,166 913,530,965
Software 472,745,186 41,527,415 - - 514,272,601 234,172,705 38,541,807 (213,899) 272,500,613 241,771,988
Work in progress (software) 63,410,632 28,719,126 (25,000) - 92,104,758 - - - - 92,104,758
Bank's vehicles 364,942,497 23,251,712 - - 388,194,209 207,623,775 55,446,180 - 263,069,955 125,124,254
Sub-total 7,204,523,951 606,323,653 (140,000) - 7,810,707,604 3,685,137,480 506,183,201 - 4,191,320,681 3,619,386,923

Leased assets

Right of use assets - 2,606,368,257 - - 2,606,368,257 - 550,509,095 - 550,509,095 2,055,859,162

Sub-total - 2,606,368,257 - - 2,606,368,257 - 550,509,095 - 550,509,095 2,055,859,162
Grand total 7,204,523,951 3,212,691,910 (140,000) - 10,417,075,861 3,685,137,480 1,056,692,296 - 4,741,829,776 5,675,246,085

Annexure-E
STATEMENT OF TAX POSITION
As at 31 December 2020

Tax provision
Accounting Assessment made on the Tax as per
year basis of accounts assessment Present status
year
Taka Taka

2003 2004-2005 190,000,000 264,849,327 Reference application filed to High Court Division of the Supreme Court.
2004 2005-2006 442,791,678 315,574,683 Reference application filed to High Court Division of the Supreme Court.

325
 NAME OF DIRECTORS AND THEIR INTEREST Annexure-F

IN DIFFERENT ENTITIES
As at 31 December 2020

1 Mr. Aziz Al-Kaiser Chairman Vice-Chairman

Partex Star Group -
Director
Voice Tel Limited 25.00%
Sky Telecommunication Limited 23.00%
Partex Housing Limited 50.00%
Shuborno Bhumi Housing Limited 50.00%
Managing Director
Star Particle Board Mills Limited 90.00%
Partex PVC Industries Limited 90.00%
New Light Star Apparels Limited 90.00%
Corvee Maritime Company Limited 90.00%
Partex Furniture Industries Limited 90.00%
Partex Builders Limited 90.00%
Partex Laminates Limited 90.00%
Partex Limited 90.00%
Fairhope Housing Limited 80.00%
Partex Cables Limited 90.00%
Partex Aromarine Logistics Limited 80.00%
Star Adhesive Limited 90.00%
Star Gypsum Board Mills Limited 80.00%
Triple Apparels Limited 80.00%
Partex MDF Board Mills Limited 90.00%
Partex Power Generation Co. Limited 51.00%
Partex Strar Properties Limited 37.50%
Star Furniture Limited 83.00%

2 Mr. Hossain Khaled Vice-Chairman Director

Anwar Group of Industries -
Anwar Silk Mills Limited 19.61%
Mehmood Industries (Pvt.) Limited 9.62%
Anwar Galvanizing Limited 5.85%
Anwar Ispat Limited 16.67%
Hossain Dyeing & Printing Mills Ltd. 32.37%
Anwar Cement Limited 7.14%
Anwar Cement Sheet Limited 33.31%
A-One Polymer Limited 29.97%
Anwar Printex Limited 8.00%
Managing Director
Anwar Landmarks 20.00%
Anwar Jute Spinning Mills Limited 15.31%
AG Automobiles Limited 10.00%
Euro Cars Limited 33.26%

326 Annual Report 2020

3 Mr. Hossain Mehmood Nominated Director Chairman
(Nominated by A-One AG Automobiles Limited 33.33%
Polymer Limited) Director
Anwar Jute Spinning Mills Limited 15.31%
AG Motors Limited 25.00%
Euro Cars Limited 32.26%
Anwar Ispat Limited 16.67%
Anwar Cement Sheet Limited 33.31%
Anwar Landmarks Limited 20.00%
A-One Polymer Limited 29.97%
Managing Director
Hossain Dying and Printing Mills Limited 32.37%
Mehmood Industries (Pvt.) Limited 10.00%
Anwar Silk Mills Limited 19.61%
Anwar Printex Limited 8.00%

4 Mrs. Tabassum Kaiser Director Director

Fairhope Housing Limited 20.00%
Star Gypsum Board Mills Limited 20.00%
Star Particle Board Mills Limited 10.00%
Partex PVC Industries Limited 10.00%
New Light Star Apparels Limited 10.00%
Corvee Maritime Company Limited 10.00%
Partex Furniture Industries Limited 10.00%
Partex Builders Limited 10.00%
Partex Laminates Limited 10.00%
Partex Limited 10.00%
Partex Cables Limited 10.00%
Partex Aromarine Logistics Limited 10.00%
Star Adhesive Limited 10.00%
Partex MDF Board Mills Limited 10.00%
Managing Director
Triple Apparels Limited 20.00%
Partex Agro Limited 50.00%

5 Mr. Rajibul Huq Chowdhury Director Director

A.S.M Chemical Industries Limited 10.40%
Managing Director
Aziz Super Garments Limited -
Marina Knit Fashion Limited -
Khushi Apparels Limited -
Ratna Fashion Limited -
Proprietor
R.H. Corporation -

6 Mrs. Syeda Shaireen Aziz Director Director

Partex Corporate Limited 20.00%
Sattar Glass Factory Limited 20.00%
Sakhi Fisheries Limited 10.00%

327
 7 Mr. Md. Rafiqul Islam Khan Director Chairman
Pakiza Knit Composite Limited 25.00%
Pakiza Apparels Limited 20.00%
Pakiza Woven Fashion Limited 20.00%
Pakiza Garments Limited 20.00%
Pakiza Techno Vation Limited 20.00%
Director
Phoenix Securities Limited 8.00%
Managing Director
Pakiza Dyeing & Printing Industries (Pvt.) Ltd. 85.00%
Garden Textile Mills (Pvt.)Limited 75.00%
Pakiza Textiles Limited 50.00%
Pakiza Spinning Mills Limited 60.00%
Pakiza Cotton Spinning Mills (Pvt.)Limited 55.00%

8 Mrs. Savera H. Mahmood Nominated Director Director

(Nominated by Partex Partex Agro Limited 50.0%
Corporate Limited) Partex Tissue Limited 15.0%
Danish Multipurpose Firm Limited 15.00%
Danish Condensed Milk (BD) Limited 10.00%
Danish Foods Limited 10.00%
Rubel Steel Mills Limited 10.00%
Danish Distribution Network Limited 10.00%
Danish Milk Bangladesh Limited 10.00%
Danish Dairy Farm Limited 10.00%

9 Ms. Rebecca Brosnan Nominated Director - -

(Nominated by International
Finance Corporation)

10 Mr. Farooq Sobhan Independent Director - -

11 Mr. Dr. Salim Mahmud Independent Director - -

328 Annual Report 2020

 Annexure-G
A. DISCLOSURE REGARDING OUTSTANDING REPO
As at 31 December 2020
Figures in Taka

Sl. no. Counterparty name Agreement date Reversal date Amount (1st leg cash
consideration)

1. Nil Nil Nil Nil

B. DISCLOSURE REGARDING OUTSTANDING REVERSE REPO

As At 31 December 2020

Sl. no. Counterparty name Agreement date Reversal date Amount (1st leg cash
consideration)

1. Nil Nil Nil Nil

C. Disclosure regarding overall transactions of REPO and Reverse REPO

As at 31 December 2020

Minimum Maximum Daily average

Sl. no. Securities sold under REPO outstanding outstanding outstanding
during the year during the year during the year

1. with Bangladesh Bank 50,000,000 19,079,983,596 4,346,336,021

2. with other Banks & Financial Institutions 499,531,000 9,201,519,780 3,474,078,770

Minimum Maximum Daily average

Sl. no. Securities purchased under outstanding outstanding
Rederse REPO outstanding
during the year during the year during the year

1. with Bangladesh Bank Nil Nil Nil

2. with other Banks & Financial Institutions 301,800,929 3,687,459,607 179,814,272

329
330
Annexure-H
GEOGRAPHICAL SEGMENT REPORTING
As at 31 December 2020
Figures in Taka
Dhaka Chattogram Rajshahi Khulna Sylhet Rangpur Barishal Mymensingh
Division Division Division Division Division Division Division Division Division Total

Annual Report 2020

Interest income/profit 19,120,429,435 2,730,990,688 534,464,389 372,540,198 120,467,791 158,233,569 69,275,796 27,957,977 23,134,359,843
Interest expenses (11,603,011,794) (1,976,423,397) (252,538,888) (175,484,694) (569,518,622) (108,057,247) (35,668,948) (50,468,162) (14,771,171,752)
NII 7,517,417,641 754,567,291 281,925,501 197,055,504 (449,050,831) 50,176,322 33,606,848 (22,510,185) 8,363,188,091
Pool income 20,928,061,668 2,277,011,747 265,967,181 199,553,803 726,010,681 130,965,321 40,580,353 64,477,204 24,632,627,958
Pool expenses (22,520,699,564) (1,456,709,760) (299,298,477) (185,015,310) (16,290,980) (121,870,101) (26,726,661) (6,017,105) (24,632,627,958)
NPI (1,592,637,896) 820,301,987 (33,331,296) 14,538,493 709,719,701 9,095,220 13,853,692 58,460,099 -
Interest income on investments 3,437,926,143 - - - - - - - 3,437,926,143
Commission income 2,302,662,968 133,919,727 9,861,305 15,770,745 2,145,128 257,571 930,072 209,028 2,465,756,544
Exchange gain /loss 888,154,782 643,650 160,656 140,817 256,470 71,641 - - 889,428,016
Fees and other income 1,360,769,622 127,758,482 29,603,219 22,060,645 21,265,802 10,926,944 4,325,722 4,218,163 1,580,928,599
Total other income 7,989,513,515 262,321,859 39,625,180 37,972,207 23,667,400 11,256,156 5,255,794 4,427,191 8,374,039,302
Operating income 13,914,293,260 1,837,191,137 288,219,385 249,566,204 284,336,270 70,527,698 52,716,334 40,377,105 16,737,227,393
Staff cost 4,487,331,144 386,356,143 112,230,555 85,009,217 107,123,531 46,500,714 19,052,867 21,772,490 5,265,376,661
Other cost 4,065,613,537 215,113,052 43,311,727 27,659,264 48,070,177 16,187,658 8,083,033 8,051,478 4,432,089,926
Total operating expenses 8,552,944,681 601,469,195 155,542,282 112,668,481 155,193,708 62,688,372 27,135,900 29,823,968 9,697,466,587
Operating profit 5,361,348,579 1,235,721,942 132,677,103 136,897,723 129,142,562 7,839,326 25,580,434 10,553,137 7,039,760,806
Provision for loans & others (499,315,043) (104,009,116) (6,842,950) 9,033,641 16,965,788 (62,065,915) 340,569 1,628,387 (644,264,639)
Profit before tax (PBT) 4,862,033,536 1,131,712,826 125,834,153 145,931,364 146,108,350 (54,226,589) 25,921,003 12,181,524 6,395,496,167
Provision for taxation (2,383,324,921)
Net profit after tax (PAT) 4,012,171,246

Segment wise loans & advances/investments 219,812,975,024 30,521,872,564 7,519,794,543 4,869,108,354 1,285,447,006 2,962,520,334 923,295,002 306,507,734 268,201,520,561
Segment wise deposits 190,542,370,802 40,639,461,364 5,554,959,059 3,936,200,221 9,410,896,913 2,688,136,665 835,676,814 1,173,447,795 254,781,149,633
REPORT OF SHARIAH SUPERVISORY COMMITTEE
For the year ended 31 December 2020

All praise be to Almighty Allah, the Lord of the Universe and peace and blessings of Allah be upon the Prophet Mohammad (peace be
upon him) and his all other descendants and companions.
The duty of the Shariah Supervisory Committee is to provide independent opinions and necessary guidelines by observing and
reviewing the activities of Islamic banking operation of the Bank and to make the clients aware of Shariah compliance. On the other
hand, the responsibility of the Bank’s Management is to ensure that the Bank conducts its business under Islamic banking operations
in accordance with the rules and principles of Islamic Shariah.
During the year 2020, the Shariah Supervisory Committee of The City Bank Limited met in 3 (Three) formal meetings and reviewed
different operational issues of Islamic banking including those referred to it by the Management of the Bank and provided opinions
and decisions related to Islamic Shariah.
Besides, the Muraqibs (Shariah Auditors) of the Shariah Supervisory Committee inspected the running issues, products and processes
during the year 2020. They also conducted Shariah Audit of the Islamic Banking Branch and other business and operating units
during the year and submitted Shariah compliance status to the Committee. Moreover, training sessions on Islamic banking and
Shariah knowledge were conducted by Shariah experts during the year which were organized by Human Resources Division of the
Bank for all fresh and different groups of employees.
The Committee, after reviewing the Shariah Audit Reports, Balance Sheet and Profit & Loss Account as at the end of 31st December
2020 of Islamic Banking operations of the Bank, furnishes the following opinion:
1. The different types of fundamental financing agreements and process of transactions entered into by Islamic banking branch
during the period under report have been made in accordance with the principles of Islamic Shariah.
2. Distribution of profit to the Mudarabah depositors was made in accordance with the pre-agreed and disclosed Investment
Income Sharing Ratio (IISR).
3. The rules and processes of different modes of investment practiced by the Bank have been properly followed.
4. Compensation amount has been kept separately and has not been included in Bank’s income.
5. Bank management has been advised to increase regular trainings & arrange workshops on Islamic banking for the officials to
enrich their professional skills and to organize awareness programs for the clients regarding Islamic banking.
To the best of our knowledge, no gross violation and lapses in the Islamic banking operations of the bank has occurred during the
year under report and the bank management has been advised to keep the spirit of Shariah high in the days to come.
May Allah (SWT) give us strength to achieve His satisfaction through implementation the principles of Shariah in Islamic Banking and
all other spheres of life.

Md. Abdullah Sharif Principal Dr. Md. Anwar Hosain Molla

Member Secretary Chairman, SSC

331
 Annexure-I (1)

BALANCE SHEET OF ISLAMIC BANKING BRANCH

As at 31 December 2020

Figures in Taka
Notes 2020 2019
PROPERTY AND ASSETS
Cash
Cash in hand (including foreign currencies) 1 4,397,587 996,941
Balance with Bangladesh Bank and its agent bank(s) (Including foreign currencies) 3,120,754,274 2,625,766,099
3,125,151,861 2,626,763,040
Balance with other banks and financial institutions 2
In Bangladesh 2,728,658,779 32,196,063
Outside Bangladesh - -
2,728,658,779 32,196,063
Placement with banks & other financial institutions - -
Investments in shares & securities 3
Government 6,277,940,000 500,000,000
Others - -
6,277,940,000 500,000,000
Investments 4
General investments etc. 4,741,322,092 5,195,879,012
Bills purchased and discounted 355,484,100 2,638,800
5,096,806,192 5,198,517,812
Fixed assets including premises, furniture and fixtures 5 3,437,318 3,707,521
Other assets 6 60,603,850 15,486,290
Non-banking assets - -
Total assets 17,292,598,000 8,376,670,726

LIABILITIES AND CAPITAL

Liabilities:
Borrowings from other banks, financial institutions and agents 7 - -
Deposits and other Accounts
Mudaraba and Manarah savings deposits 2,486,246,511 1,118,185,641
Mudaraba term deposits 13,334,743,970 5,964,286,686
Al-wahdia and Manarah current deposits and other accounts 669,248,786 520,778,307
Bills payable 14,875,828 14,764,728
16,505,115,095 7,618,015,362
Other liabilities 8 787,482,905 758,655,364
Total liabilities 17,292,598,000 8,376,670,726
Capital/shareholders' equity
Paid up capital - -
Statutory reserve - -
Share premium - -
Other reserve - -
Surplus in profit and loss account/retained earnings - -
Total shareholders' equity - -
Total liabilities and shareholders' equity 17,292,598,000 8,376,670,726

OFF-BALANCE SHEET ITEMS

Contingent liabilities
Acceptances and endorsements 2,436,233,833 661,929,833
Letters of guarantee 166,720,282 159,420,282
Irrevocable letters of credit 1,796,356,783 632,569,816
Bills for collection 8,587,048 3,326,463
Other contingent liabilities - -
4,407,897,946 1,457,246,394
Other commitments - -
Total Off-Balance Sheet items including contingent liabilities 4,407,897,946 1,457,246,394

332 Annual Report 2020

 Annexure-I (2)

PROFIT AND LOSS ACCOUNT OF ISLAMIC BANKING BRANCH

For the year ended 31 December 2020

Figures in Taka
Notes 2020 2019
Profit and investment income 686,022,692 720,807,870
Profit paid on deposits and borrowings etc. (455,753,083) (506,741,070)
Net investment income 230,269,609 214,066,800

Investment income 12,998,106 4,993,115

Commission, exchange and brokerage 9 50,728,469 18,988,952
Other operating income 10 2,573,647 2,013,105
Total operating income 296,569,831 240,061,972

Salaries and allowances 26,218,964 30,876,679

Rent, taxes, insurance, electricity etc. 19,512,320 18,638,618
Legal expenses 170,353 192,700
Postage, stamp, telecommunication etc. 119,642 1,119,166
Stationery, printing, advertisement etc. 1,513,029 605,044
Depreciation and repair of bank's assets 4,601,484 3,948,193
Other expenses 11 6,219,349 6,842,932
Total operating expenses 58,355,141 62,223,332
Net operating profit 238,214,690 177,838,640
Provision for loans and advances/investments (41,242,186) (33,082,106)
Provision for off-balance sheet exposures (21,759,190) -
Total provision (63,001,376) (33,082,106)
Total profit before taxes 175,213,314 144,756,534

NOTES TO THE BALANCE SHEET AND PROFIT AND

LOSS ACCOUNT OF ISLAMIC BANKING BRANCH
As at and for the year ended 31 December 2020

Figures in Taka

1 CASH 2020 2019

1.1 Cash in hand
In local currency 4,397,587 996,941
In foreign currency - -
4,397,587 996,941
1.2 Balance with Bangladesh Bank and its agent bank(s)
In local currency 3,120,754,274 2,625,766,099
In foreign currency - -
3,120,754,27 2,625,766,099

333
 Figures in Taka
2020 2019
2 BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS
In Bangladesh (Note - 2.1) 2,728,658,779 32,196,063
Outside Bangladesh - -
2,728,658,779 32,196,063
2.1 In Bangladesh
Mudaraba Short Notice Deposits
Bank Alfalah Limted 302,082,246 2,078,746
AB Bank Limited (Islamic Banking Branch) 15,746,288 14,937,378
South East Bank Limited (Islamic Banking Branch) 10,579,780 10,135,610
Export Import Bank of Bangladesh Limited 6,293,372 2,671,830
Prime Bank Limited 2,332,340 826,650
Social Islami Bank Limited 1,624,753 1,545,849
338,658,779 32,196,063
Mudaraba term deposit accounts
Export Import Bank of Bangladesh Limited 1,240,000,000 -
Jamuna Bank Limited 800,000,000 -
IDLC Finance Limited 350,000,000 -
2,390,000,000 -
2,728,658,779 32,196,063
3 INVESTMENTS IN SHARES (SECURITIES)
Government bond
Bangladesh Government Islami Investment Bond (BGIIB) (Note-3.1) 6,277,940,000 500,000,000
6,277,940,000 500,000,000

Other investments - -
6,277,940,000 500,000,000
3.1 Bangladesh Government Islami Investment Bond (BGIIB)
3 months Islamic bonds 5,000,000,000 -
6 months Islamic bonds 750,000,000 500,000,000
5 years Islamic sukuk bond 527,940,000 -
6,277,940,000 500,000,000

4 INVESTMENTS
i) Investments
Inside Bangladesh
Murabaha 3,297,820,176 4,258,225,729
Hire purchase shirkatul melk (HPSM) 1,441,321,701 935,476,568
Bai-muazzal 2,180,215 2,176,715
Quard - -
4,741,322,092 5,195,879,012
Outside Bangladesh - -
4,741,322,092 5,195,879,012
ii) Bills purchased and discounted
Payable Inside Bangladesh
Inland bills purchased 355,484,100 2,638,800

Payable Outside Bangladesh

Foreign bills purchased and discounted - -
355,484,100 2,638,800
5,096,806,192 5,198,517,812

334 Annual Report 2020

 Figures in Taka
2020 2019

5 FIXED ASSETS INCLUDING PREMISES, FURNITURE AND FIXTURES

Cost
Furniture and fixtures 14,925,358 14,789,649
Office equipment and machinery 18,630,868 17,906,721
33,556,226 32,696,370
Accumulated depreciation (30,118,908) (28,988,849)
3,437,318 3,707,521

6 OTHER ASSETS
Profit receivable from investment 43,713,184 8,376,153
Advance deposits and advance rent 8,496,350 3,487,943
Advance tax 8,179,870 3,174,915
Stationery and stamps 148,446 267,946
Sundry debtors 66,000 179,333
60,603,850 15,486,290

7 BORROWINGS FROM OTHER BANKS, FINANCIAL INSTITUTIONS AND AGENTS

In Bangladesh (Note- 7.1) - -
Outside Bangladesh - -
- -

7.1 In Bangladesh
Bangladesh Bank for 100 days - -
Bangladesh Bank for 5 months - -
Bangladesh Bank for 6 months - -
- -

8 OTHER LIABILITIES
Profit Payable to head office 175,213,314 218,949,258
Profit mark up account 173,786,914 173,430,528
Profit payable account 162,968,681 119,567,760
Provision for investment 124,411,821 83,169,635
Others 49,717,040 38,170,588
Branch adjustment account 40,946,889 77,327,566
Provision for off-balance sheet exposures 36,166,327 14,407,137
Profit suspense account 10,571,066 3,614,840
Unrealised compensation 7,283,886 6,640,413
Expense payable 6,048,458 21,336,045
Realised compensation 368,509 2,041,594
787,482,905 758,655,364

335
 Figures in Taka
2020 2019
9 COMMISSION, EXCHANGE AND BROKERAGE
Other fees and charges (Note - 9.1) 20,292,930 6,912,212
Commission on letters of credit 16,750,057 7,381,506
Commission on accepted bills 13,289,252 4,328,372
Commission on OBC, IBC etc. 284,078 36,900
Other commission 100,652 -
Commission on bills purchased 8,000 1,500
Commission on export bills 3,500 1,000
Commission on letters of guarantee - 214,500
50,728,469 18,875,990
Exchange gain - 112,962
Brokerage - -
- 112,962
50,728,469 18,988,952

9.1 Other fees and charges

Investment processing fees 12,783,269 4,670,779
Service charges on deposits 5,760,389 1,605,897
Cheque book issue fees 1,605,300 515,435
Clearing return 109,518 103,601
Charges on account closing and transfer 34,454 16,500
20,292,930 6,912,212

10 OTHER OPERATING INCOME

Postage/telex/swift/fax recoveries 1,475,001 1,116,798
Miscellaneous earnings (Note - 10.1) 912,646 711,057
Locker rent 186,000 185,250
2,573,647 2,013,105

10.1 Miscellaneous earnings includes earning from early settlement of loan, issuing various certificate and bank statements on
demand of customers.

11 OTHER EXPENSES
Miscellaneous expenses 3,430,763 3,003,624
Online communication expenses 1,526,788 3,067,479
Subscription to institutions 491,010 -
Security expenses 490,615 257,503
Business expansion cost 148,000 -
Entertainment 64,133 56,198
Conveyance 48,760 149,701
Training, seminar and workshop 12,500 304,827
Newspapers 6,780 3,600
6,219,349 6,842,932

336 Annual Report 2020

 Annexure-J (1)

BALANCE SHEET OF OFF-SHORE BANKING UNIT

As at 31 December 2020
Notes 2020 2019
PROPERTY AND ASSETS USD Taka Taka
Cash
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 1
In Bangladesh 8,386,086 711,149,317 704,767,635
Outside Bangladesh 14,430,558 1,223,727,192 1,509,856,847
22,816,644 1,934,876,509 2,214,624,482
Money at call and short notice - - -
Investments in shares & securities
Government - - -
Others - - -
- - -
Loans and advances 2
Loans, cash credits, overdrafts, etc. 409,898,507 34,759,844,283 26,102,015,835
Bills purchased and discounted 379,377 32,171,587 33,726,833
410,277,884 34,792,015,870 26,135,742,668
Fixed assets including premises, furniture and fixtures - - -
Other assets 5,817,984 493,371,443 230,107,291
Non-banking assets - - -
Total assets 438,912,512 37,220,263,822 28,580,474,441

LIABILITIES AND CAPITAL

Liabilities:
Borrowings from other banks, financial institutions and agents 3 290,599,867 24,643,188,381 21,104,626,679
Deposits and other Accounts 6,720,007 569,863,986 174,385,475
Other liabilities 4 141,592,638 12,007,211,455 7,301,462,287
Total liabilities 438,912,512 37,220,263,822 28,580,474,441

Capital/shareholders' equity
Paid up capital - - -
Statutory reserve - - -
Share premium - - -
Other reserve - - -
Surplus in profit and loss account - - -
- - -
Total liabilities and shareholders' equity 438,912,512 37,220,263,822 28,580,474,441

OFF-BALANCE SHEET ITEMS

Contingent liabilities
Acceptances and endorsements 8,879,289 752,973,474 1,326,954,752
Letters of guarantee - - -
Irrevocable letters of credit 7,262,065 615,831,100 309,342,812
Bills for collection 19,456,317 1,649,917,084 1,251,835,817
Other contingent liabilities 132,023,617 11,195,747,948 12,152,921,351
167,621,288 14,214,469,606 15,041,054,732
Other commitments - - -
Total Off-Balance Sheet items including contingent liabilities 167,621,288 14,214,469,606 15,041,054,732

337
 Annexure-J (2)

PROFIT AND LOSS ACCOUNT OF OFF-SHORE BANKING UNIT

For the year ended 31 December 2020

Notes 2020 2019

USD Taka Taka

Interest income 5 17,067,686 1,447,358,548 2,087,546,496

Interest paid on borrowings (14,127,328) (1,198,012,954) (1,901,614,621)
Net interest income 2,940,358 249,345,594 185,931,875

Commission and exchange 6 750,297 63,626,011 67,308,362

Other operating income 7,460 632,616 187,602
Total operating income 3,698,115 313,604,221 253,427,839

Rent, taxes, insurance, electricity, etc. - - -

Legal expenses - - -
Other operating expenses 301,425 25,561,172 11,533,156
Total operating expenses 301,425 25,561,172 11,533,156
Net operating profit 3,396,690 288,043,049 241,894,683

Provision for loans and advances/investments (1,020,774) (86,562,732) 106,411,861

Provision for Off-Balance sheet exposures - - (44,794,639)
Provision for diminution in value of investments - - -
Other provision - - -
Total provision (1,020,774) (86,562,732) 61,617,222
Total profit before taxes 2,375,916 201,480,317 303,511,905

338 Annual Report 2020

NOTES TO THE BALANCE SHEET AND PROFIT AND
LOSS ACCOUNT OF OFF-SHORE BANKING UNIT
For the year ended 31 December 2020

2020 2019

USD Taka Taka

1 BALANCE WITH OTHER BANKS AND FINANCIAL INSTITUTIONS

In Bangladesh 8,386,086 711,149,317 704,767,635
Outside Bangladesh 14,430,558 1,223,727,192 1,509,856,847
22,816,644 1,934,876,509 2,214,624,482

OBU maintain its own account relating Offshore Banking business separately.

2 LOANS AND ADVANCES

Loans, cash credits, overdrafts, etc.
Short Term Loan 346,342,948 29,370,262,968 20,114,397,650
Term Loan 53,018,262 4,496,006,938 5,495,131,685
Over Draft Loan 10,537,297 893,574,377 492,486,500
409,898,507 34,759,844,283 26,102,015,835

Bills purchased and discounted 379,377 32,171,587 33,726,833

410,277,884 34,792,015,870 26,135,742,668

3 BORROWINGS FROM OTHER BANKS, FINANCIAL INSTITUTIONS AND AGENTS

In Bangladesh 65,000,000 5,512,071,500 4,525,170,000
Outside Bangladesh 225,599,867 19,131,116,881 16,579,456,679
290,599,867 24,643,188,381 21,104,626,679
4 OTHER LIABILITIES
Payable to main operation 133,882,239 11,353,361,186 6,658,690,887
Provision for loans and advances 4,102,779 347,920,159 261,357,427
Interest payable 1,263,636 107,157,723 231,088,767
Provision for off balance sheet exposure 1,060,761 89,953,665 89,953,665
Others 1,261,981 107,017,377 59,541,466
Government levy and vat payable 21,242 1,801,345 830,075
141,592,638 12,007,211,455 7,301,462,287

5 INTEREST INCOME
Loan and advances 16,614,836 1,408,956,369 1,937,375,341
Bills purchased and discounted 412,647 34,992,920 148,066,042
Interest on balance with other banks and financial institutions 40,203 3,409,259 2,105,113
17,067,686 1,447,358,548 2,087,546,496

6 COMMISSION, EXCHANGE AND BROKERAGE

Commission income 750,297 63,626,011 67,308,362
Exchange gain - - -
750,297 63,626,011 67,308,362

339
 Rahman Rahman Huq Telephone +880 (2) 9886450-2
Chartered Accountants Fax +880 (2) 988 6449
9 & 5 Mohakhali C/A Email [email protected]/bd
Dhaka 1212 Internet www.kpmg.com/bd
Bangladesh

To whom it may concern

This is to certify that as detailed in the Annexure K, The City Bank Limited made the custodian
transactions on account of custodian services provided during the year ended 31 December 2020, which
have been verified with the books of account, invoices and other related documents as produced to us
for our verification.

We also certify that management of the Bank prepared and fairly presented of the income and expenses
in accordance with the requirement of the Securities and Exchange Commission (Securities Custodian
Service) Rules 2003, and made necessary disclosures in the Bank’s audited financial statements for the
year ended 31 December 2020.

Ali Ashfaq, Partner, Enrolment no: 509

Rahman Rahman Huq, Chartered Accountants
Dhaka, 22 March 2021

Rahman Rahman Huq, a partnership firm registered in Bangladesh Tel +880 (31) 710704, 710996
and a member firm of the KPMG network of independent member Chattogram office address : Fax +880 (31) 2520795
firms affiliated with KPMG International cooperative (“KPMG 78 Agrabad C/A (13th Floor) E-mail [email protected]
International”), a Swiss entity. Chattogram, Bangladesh Internet www.kpmg.com/bd

340 Annual Report 2020

 Annexure-K

PROFIT AND LOSS ACCOUNT OF CUSTODIAN SERVICE

For the year ended 31 December 2020

Figures in Taka
2020 2019

Operating income

Commission, exchange and brokerage 263,477 1,153,828

Other operating income - -
Total operating income 263,477 1,153,828

Salaries and allowances 126,863 123,218

Rent, taxes, insurance, electricity etc. - -
Legal expenses - -
Postage, stamp, telecommunication etc. - -
Stationery, printing, advertisement etc. - -
Auditors' fees 60,000 60,000
Depreciation and repair of bank's assets - -
Other expenses 11,500 60,000
Total operating expenses 198,363 243,218
Operating profit 65,114 910,610

341
 Annexure-L
HIGHLIGHTS

Figures in million unless specified

As at 31 December As at 31 December
Sl. no. Particulars 2020 2019

1 Paid-up capital Taka 10,163.87 10,163.87

2 Total capital Taka 41,816.93 37,135.80
3 Capital surplus/(deficit) Taka 8,151.68 6,520.21
4 Total assets Taka 382,925.77 354,688.99
5 Total deposits Taka 254,781.15 246,703.67
6 Total loans and advances/investments Taka 268,201.52 246,943.65
7 Total contingent liabilities and commitments Taka 136,337.54 118,329.36
8 Credit deposit ratio* % 74.68% 79.08%
9 Percentage of classified loans/investments against
total loans and advances/investments % 4.05% 5.77%
10 Amount of classified loans/investments during the year Taka 10,850.13 14,244.17
11 Provisions kept against classified loans/investments Taka 3,933.13 5,829.68
12 Provision surplus/(deficit) against classified loans/investments Taka - -
13 Cost of fund % 4.59% 5.41%
14 Interest earning assets Taka 325,011.15 290,209.01
15 Non-interest earning assets Taka 57,914.62 64,479.98
16 Return on investment (ROI) % 8.29% 6.46%
17 Return on assets (ROA) % 1.09% 0.73%
18 Liquidity coverage ratio (LCR) % 173.50% 142.60%
19 Net stable funding ratio (NSFR) % 104.60% 107.42%
20 Net asset value per share Taka 28.35 25.01
21 Profit after tax and provision Taka 4,012.17 2,471.64
22 Income from investment Taka 3,437.93 2,086.16
23 Earnings per share Taka 3.95 2.43
24 Net income per share Taka 3.95 2.43
25 Price earning ratio Times 6.28 8.68

*As per Bangladesh Bank Reporting.

342 Annual Report 2020

 FINANCIAL
STATEMENTS OF
SUBSIDIARY COMPANIES

343
344 Annual Report 2020
 FINANCIAL
STATEMENTS OF
CITY BROKERAGE
LIMITED 2020

345
 INDEPENDENT AUDITOR’S REPORT
To the Shareholders of City Brokerage Ltd.

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION
We have audited the financial statements of City Brokerage Ltd. (the company), which comprise the statement of financial position
(balance sheet) as at 31 December 2020, and the statement of profit or loss and other comprehensive income (profit and loss
statement), statement of changes in equity 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 accompanying financial statements give a true and fair view of the financial position of the company as at 31
December 2020, and of its financial performance and its cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRSs).

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 we have fulfilled our 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.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL
STATEMENTS
Management is responsible for the preparation and fair presentation of the financial statements that give a true and fair view in
accordance with IFRSs, the Companies Act, 1994 and other applicable laws and regulations 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 these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the
audit. We also:

346 Annual Report 2020

l 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.

l 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.

l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.

l 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.

l 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 gives a true and fair view.

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 company so far as it appeared from our
examination of these books; and
c) the statement of financial position (balance sheet) and statement of profit or loss and other comprehensive income (profit and
loss statement) dealt with by the report are in agreement with the books of account.

Auditor’s Signature :
Name of Engagement Partner : Md. Moktar Hossain, FCA, Senior Partner
Enrollment No. : 728
Firm’s Name : S. F. AHMED & CO., Chartered Accountants
Firm’s Reg. No. : 10898 E.P. under Partnership Act 1932

Document Verification System Code (DVC) : 2103040728AS591147

Dated, 25 February 2021

347
 STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)
As at 31 December 2020
Figures in Taka
Notes 2020 2019
Assets
Non-current assets
Property, plant and equipment 4 298,801,415 314,221,022
Intangible assets 5 5,406,236 7,102,028
Right-of-use asset 6 27,108,407 36,647,759
Investment in Stock Exchanges 7 562,120,683 562,120,683
893,436,741 920,091,492
Current assets
Margin loan to clients 8 1,295,081,082 944,103,336
Investment in securities 9 2,248,997,293 2,075,072,678
Accounts receivable 10 42,862,801 21,928,826
Advance corporate income tax 11 294,115,124 220,158,834
Advances, deposits and prepayments 12 6,624,104 14,716,515
Cash and cash equivalents 13 967,799,619 372,113,597
4,855,480,022 3,648,093,786
Total assets 5,748,916,763 4,568,185,279

Equity and liabilities

Capital and reserves
Share capital 14 3,400,000,000 3,400,000,000
Retained earnings (265,024,946) (418,817,325)
3,134,975,054 2,981,182,675
Non current liabilities
Long term loan 15 755,532,827 600,187,177
Lease liabilities-non current portion 16 12,596,522 21,007,458
Deferred tax liabilities 17 21,417,597 -
789,546,947 621,194,635
Current liabilities
Short term loan 18 587,435,740 374,264,842
Lease liabilities- current portion 16 10,781,310 8,562,004
Payable to clients 19 606,935,637 174,799,386
Accounts payable 20 127,290,360 12,173,881
Accrued expenses 92,000 92,000
Interest suspense account 21 92,222,991 92,222,991
Provision for loans loss - margin loan 22 59,792,739 48,047,979
Provision for diminution in value of investment 23 - 25,630,424
Provision for corporate income tax 24 339,843,985 230,014,461
1,824,394,762 965,807,968
Total shareholders' equity and liabilities 5,748,916,763 4,568,185,279
These financial statements should be read in conjunction with annexed notes.
for and on behalf of the Board of Directors of City Brokerage Ltd.

Managing Director & CEO Director Chairman

See annexed report of the date

Dhaka, Bangladesh S. F. AHMED & CO

Dated, 25 February 2021 Chartered Accountants
DVC : 2103040728AS591147

348 Annual Report 2020

STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME (PROFIT AND LOSS STATEMENT)
For the year ended 31 December 2020
Figures in Taka
Notes 2020 2019
Operating income
Brokerage commission 25 343,223,327 131,268,594
Interest income 26 96,141,704 100,497,969
Capital gains/(losses) 27 39,267,869 45,505,314
Dividend income 103,182,761 91,076,854
Other operating income 28 531,270 570,550
Total operating income 582,346,931 368,919,281
Non- operating income 29 6,347,861 12,959,870
Total income 588,694,792 381,879,151
Expenses
Direct cost 30 20,130,369 14,468,645
Operating expenses 31 195,030,061 159,422,429
Interest expenses 32 102,380,526 105,806,625
Bad Debt Expenses - 2,758,913
Total expenses 317,540,955 282,456,612
Profit before provision and taxation 271,153,837 99,422,539
Provision for loan loss-margin loan 22 11,744,760 12,102,412
Provision/ (write back of provision) for diminution in value of investment 23 (25,630,424) 25,630,424
Profit before tax 285,039,501 61,689,703
Income tax expense
Current tax 24 (109,829,524) (53,499,787)
Deferred tax (expenses)/ income 17 (21,417,597) -
(131,247,122) (53,499,787)
Profit for the year 153,792,379 8,189,916
Other comprehensive income - -
Total comprehensive income for the year 153,792,379 8,189,916

These financial statements should be read in conjunction with annexed notes.

for and on behalf of the Board of Directors of City Brokerage Ltd.

Managing Director & CEO Director Chairman

See annexed report of the date

Dhaka, Bangladesh S. F. AHMED & CO

Dated, 25 February 2021 Chartered Accountants
DVC : 2103040728AS591147

349
 STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020

Figures in Taka

Retained
Particulars Share capital earnings Total

Year 2019
Balance at 01 January 2019 3,400,000,000 (427,007,241) 2,972,992,759
Share issued during the year - - -
Profit for the year - 8,189,916 8,189,916
Balance at 31 December 2019 3,400,000,000 (418,817,325) 2,981,182,675

Year 2020
Balance at 01 January 2020 3,400,000,000 (418,817,325) 2,981,182,675
Share issued during the year - - -
Profit for the year - 153,792,379 153,792,379
Balance at 31 December 2020 3,400,000,000 (265,024,946) 3,134,975,054

for and on behalf of the Board of Directors of City Brokerage Ltd.

Managing Director & CEO Director Chairman

Dhaka, Bangladesh
Dated, 25 February 2021

350 Annual Report 2020

STATEMENT OF CASH FLOWS
For the year ended 31 December 2020

Figures in Taka
2020 2019

Cash flows from operating activities

Profit before provision and taxation 271,153,837 99,422,539
Adjustment for non-cash item:
Depreciation and amortisation 31,871,838 31,786,683
Bad Debt Expenses - 2,758,913
303,025,675 133,968,135
Changes in working capital components:
(Increase)/Decrease in accounts receivable (20,933,974) 88,360,765
(Increase)/Decrease in advances, deposits and prepayments 8,092,411 7,949,390
Increase/(Decrease) in payable to clients 432,136,250 (224,932,856)
Increase/(Decrease) in account payable 115,116,479 (30,645,947)
534,411,166 (159,268,649)
Cash flows form operations 837,436,841 (25,300,514)
Income tax paid (73,956,290) (61,164,838)
Net cash used in operating activities 763,480,551 (86,465,352)

Cash flows from investing activities

Investment in securities (173,924,615) (226,721,551)
Acquisition of property, plant and equipment (1,647,270) (3,890,313)
Addition to intangible assets - (102,250)
Investment in margin loan (350,977,746) 67,187,321
Acquisition of right-of-use asset (3,569,816) (49,881,498)
Net cash from /(used in) investing activities (530,119,447) (213,408,290)

Cash flows from financing activities

Long term Loan 155,345,650 307,223,420
Short term Loan 213,170,898 (637,091,277)
Lease liability-non current portion (8,410,936) 21,007,458
Lease liability-current portion 2,219,305 8,562,004
Net cash from financing activities 362,324,917 (300,298,395)
Net changes in cash and cash equivalents 595,686,022 (600,172,037)
Opening cash and cash equivalents 372,113,597 972,285,634
Closing cash and cash equivalents 967,799,619 372,113,597

for and on behalf of the Board of Directors of City Brokerage Ltd

Managing Director & CEO Director Chairman

Dhaka, Bangladesh
Dated, 25 February 2021

351
 NOTES TO FINANCIAL STATEMENTS
As at and for the year ended 31 December 2020

1. COMPANY AND ITS ACTIVITIES

1.1 Status of the company
City Brokerage Ltd. (the company) was incorporated in Bangladesh on 31 March 2010 as a private limited company under
the Companies Act 1994 vide certificate of incorporation no. C-83616/10. Subsequently, the company obtained Broker and
Dealer licenses from Dhaka Stock Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) bearing broker
license number 3.1/DSE-145/2010/433 dated 25 October 2010 and 3.2/CSE-133/2010/250 dated 04 November 2010 and dealer
license number 3.1/DSE-145/2010/434 dated 25 October 2010 and 3.2/CSE-133/2010/251 dated 04 November 2010. It is a
subsidiary company of The City Bank Limited, a banking company incorporated in Bangladesh under the Banking
Companies Act 1991. Though the company was incorporated on 31 March 2010 but it started its operations from 15
November 2010. The registered office of the company is situated at City Centre, Unit # 12A & 12B (12th floor) Level-13, 90/1,
Motijheel Commercial Area, Dhaka 1000. The company has three branches each located at Gulshan, Dhanmondi and
Nikunja, Dhaka and two other branches at Chittagong and Sylhet. The legal status of the company has been converted into
public limited company from private limited company in June 2012 in compliance with Bangladesh Securities and Exchange
Commission (Stock Dealer, Stock Broker and Authorised Representatives) Rules 2000.

1.2 Nature of business

The principal objectives of the company are to act as a member of Dhaka Stock Exchange 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 Article of Association of the company.

2. BASIS OF ACCOUNTING
2.1 Statement of compliance
The financial statements have been prepared in compliance with the requirement of the International Financial Reporting
Standards (IFRS) which also cover International Accounting Standards (IAS), the Companies Act 1994, Bangladesh Securities
and Exchange Commission (Stock Dealer, Stock Broker and Authorised Representatives) Rules 2000. and other applicable
laws and regulations.

2.2 Basis of measurement

These financial statements have been prepared on accrual basis of accounting following going concern concept under
historical cost convention.

2.3 Functional and presentation currency

These financial statements are presented in Bangladesh Taka (BDT), which is both functional and presentation currency of
the company.

2.4 Use of estimates and judgments

The preparation of the 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 recognised
in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future
periods if the revision affects both current and future periods.

2.5 Reporting period

The financial statements cover one year from 01 January 2020 to 31 December 2020.

352 Annual Report 2020

2.6 Date of authorisation
The audited financial statements for the year ended 31 December 2020 were authorised by the Board of Directors on 25
February 2021.

2.7 Components of financial statements

a. Statement of financial position (balance sheet);
b. Statement of profit or loss and other comprehensive income (income and expenditure statement);
c. Statement of changes in equity;
d. Statement of cash flows; and
e. Summary of significant accounting policies and other explanatory information.

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently, if not stated otherwise, to all periods presented in
these financial statements.

3.1 Revenue recognition

IFRS 15 deals with revenue recognition and establishes principles for reporting useful information to users of financial
statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity´s contracts
with customers. Revenue is recognised when a entity fulfils the performance obligations regarding the contract of supplying
the goods or rendering of service. The standard replaces all existing requirements of IAS 18: Revenue and IAS 11: Construction
contracts and related interpretations. The standard is effective for annual periods beginning on or after 01 January 2019 thus
the company adopted IFRS 15 with a date of the said initial application.
It has been assessed that the implementation of IFRS 15 is not likely to have any significant impact on the financial
statements. Management has assessed impact of IFRS 15 on the different agreement types that are used in company’s
business areas, most of the components are long-term in nature. Revenue from the contracts are recognised over the time
as the service obligation satisfies over the time. No retrospective application has been made as due impact of adopting IFRS
15 does not affect the revenue recognised till date.

Brokerage commission
Brokerage commission is recognised on an actual basis. Such income is calculated based on trading of share and securities.

Interest income
Interest income comprises:
1) interest income on margin loan which is recognised on an accrual basis and calculated based on daily margin loan
balance of the respective margin loan holder's account.
2) interest income on bank deposit which is recognised as it accrues, using the effective interest method.
3) interest income on prefunding is recognised on an accrual basis which is charged on foreign investors at a specified
interest rate.

Dividend income
Dividend income is recognised when the right to receive dividend is established. Usually this is the record date for
entitlement of dividend against equity securities.

Capital gain
Capital gain arises from sale of quoted securities which is recognised on an actual basis at the time of sale.

353
 3.2 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity. Non- derivative financial instruments comprise investments in shares, margin loans, receivables,
cash and cash equivalents, term loans, trade payables, customer deposits and share capital.

Financial assets
Financial assets refer to assets that arise from contractual agreements on future cash flows or from owning equity
instruments of another entity.
The company initially recognises receivables and deposits on the date when they are originated. All other financial assets are
recognised initially on the date at which the company becomes a party to the contractual provisions of the transaction.
The company derecognises a financial asset when the contractual rights to the cash flows from the assets expire, or it
transfers the contractual rights to receive the cash flows of the financial assets in a transaction in which substantially all the
risks and rewards of ownership of the financial asset are transferred.
Financial assets as presented in these financial statements include cash and cash equivalents, accounts receivables, margin
loans and investment in quoted securities.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank deposits and other short term highly liquid investments with original
maturity of three months or less and overdrafts which were held and available for use by the company without any
restriction, and there is insignificant risk of changes in value of these current assets.

Accounts receivables
Accounts receivables are recognised at original invoiced amount. They are stated at netted off provision for bad and doubtful
debts and written-of, if any.

Margin loan
Margin loan is provided to clients to facilitate investment in equity securities. They are initially classified as financial assets at
fair value and subsequently measured at amortised cost.

Investment in securities
Investment in securities are initially measured at cost. Subsequent to initial measurement any fall in value of investments
below cost is recognised in profit or loss and a reserve for fall in value is created.

Financial liabilities
Financial liabilities refer to the contractual obligation to deliver cash or other financial assets to another entity or to exchange
financial instruments with another entity under conditions that are potentially unfavourable.
The company initially recognises financial liabilities on the transaction date at which the entity becomes a party to the
contractual provisions of the liability. The entity recognises such financial liability when its contractual obligations arising from
past events are certain and the settlement of which is expected to result in an outflow from the entity of resources
embodying benefits.
The entity derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired. Financial
liabilities as presented in these financial statements comprise loans and borrowings, accounts payables and other payables.

Loans and borrowings

Loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequently these borrowings
are stated at amortised cost using the effective interest method.

Accounts payable
Accounts payables are recognised at fair value.
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the entity has a legal right to offset the amounts and intends either to settle them on a net basis or to realise
the asset and settle the liability simultaneously.

354 Annual Report 2020

3.3 Property, plant and equipment
Recognition and measurement
Tangible fixed assets are accounted for according to IAS 16: Property, plant and equipment at historical cost or revaluation
less accumulated depreciation and the capital work-in-progress is stated at cost. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. Maintenance, renewals and betterments that enhance the economic
useful life of the property, plant and equipment or that improve the capacity, quality or reduce substantially the operating
cost or administration expenses are capitalised by adding it to the related property, plant and equipment.
Subsequent costs
Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate, 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. All other repairs and maintenance are charged to the statement of profit or loss and other
comprehensive income during the financial period in which they are incurred. In compliance with the provisions of the
Companies Act 1994, adjustment is made to the original cost of fixed assets acquired through foreign currency loan at the
end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of
exchange prevailing at the reporting date.
Depreciation
Depreciation on property, plant and equipment is charged using straight-line method. Full month's depreciation is charged
on items in the month of their acquisition and no depreciation is charged in the month of disposal. Rates of depreciation on
various classes of property, plant and equipment are as under:

Category of asset Rate (%)

Furniture and fixtures 10
Office equipment 20
Office decoration 10
Motor vehicles 20
Land and Building 2.5

3.4 Leases
The Company has adopted IFRS 16: IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee
recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to
make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting
remains similar to the current standard- i.e. lessors continue to classify leases as finance or operating leases.
IFRS 16 replaces existing leases guidance, including IAS 17: Leases, IFRIC 4: Determining whether an Arrangement contains a
Lease, SIC-15: Operating Leases - Incentives and SIC- 27: Evaluating the Substance of Transactions Involving the Legal Form
of a Lease.
The standard is effective for annual periods beginning on or after 01 January 2019.
As a lessee, the company previously classified leases as operating or finance leases based on its assessment of whether the
lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the company
Under IFRS 16, the company recognises right-of-use assets and lease liabilities for all leases.

3.5 Intangible assets

Intangible assets are accounted for according to IAS 38: Intangible assets. Intangible assets acquired separately are initially
recognised at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and
any accumulated impairment losses.

3.6 Statement of cash flows

Statement of cash flows is prepared under indirect method in accordance with IAS 7: Statement of cash flows.

3.7 Income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in the statement of profit or loss
and other comprehensive income in accordance with IAS 12: Income taxes.

3.8 Events after the reporting period

No events were occurred after the reporting date that could affect the financial position of the company or required
disclosure.

355
 3.9 Employees provident fund
Provident fund benefits are given to the permanent employees of the company in accordance with the Provident Fund Rules
which are recognised by National Board of Revenue (NBR). The fund is operated by a Board of Trustees consisting of four
members (all members are from management of the company). All confirmed employees of the company are contributing
10% of their basic salary as subscription to the Fund. The company also contributes equal amount of the employees'
contribution.

3.10 Employees gratuity fund

Gratuity fund benefits are given to the permanent employees of the company in accordance with the Gratuity Fund Rules
which are recognised by National Board of Revenue (NBR). The fund is operated by a Board of Trustees consisting of four
members (all members are from management of the company).

Figures in Taka

4 PROPERTY, PLANT AND EQUIPMENT 2020 2019

Cost
Opening balance 387,032,025 383,141,712
Add: Addition during the year 1,647,270 3,890,313
388,679,295 387,032,025
Less: Disposal during the year - -
Closing balance (a) 388,679,295 387,032,025

Accumulated depreciation
Opening balance 72,811,003 55,913,968
Add: Charged during the year 17,066,878 16,897,036
89,877,880 72,811,003
Less: Adjustment during the year - -
Closing balance (b) 89,877,880 72,811,003
Net book value (a-b) 298,801,415 314,221,022

Details are shown in Annex A.

5 INTANGIBLE ASSETS
Cost of software 7,102,028 8,655,686
Add: Addition during the year - 102,250
7,102,028 8,757,936
Less: Amortisation during the period 1,695,792 1,655,908
Net book value 5,406,236 7,102,028

6 RIGHT-OF-USE ASSETS
Cost:
Opening balance 49,881,498 -
Add: Adjustment on initial application of IFRS - 49,881,498
Add: Addition during this year 3,569,816 -
53,451,314 49,881,498
Less: Disposal during this year 2,679,210 -
Closing balance (a) 50,772,104 49,881,498

Accumulated depreciation:
Opening balance 13,233,739 -
Add: Depreciation for this year 13,109,168 13,233,739
26,342,907 13,233,739
Less: Adjustment made during this year 2,679,210 -
Closing balance (b) 23,663,698 13,233,739
Net book value (a - b) 27,108,407 36,647,759

Details are shown in Annex B.

356 Annual Report 2020

 Figures in Taka
2020 2019
7 INVESTMENT IN STOCK EXCHANGES
Dhaka Stock Exchange Limited (note 7.1) 543,119,683 543,119,683
Chittagong Stock Exchange Limited (note 7.2) 19,001,000 19,001,000
562,120,683 562,120,683
7.1 Dhaka Stock Exchange Limited
Opening Balance 543,119,683 580,999,000
Less : 25% share sale to SZSE and SSE - (37,879,317)
543,119,683 543,119,683
19,001,000 19,001,000
7.2 Chittagong Stock Exchange Limited

City Brokerage Limited has acquired the membership of Dhaka Stock Limited for BDT 580,999,000 in 2010. As per the
scheme of Demutualization of DSE, City Brokerage Limited being the initial Shareholders of DSE, is entitled to receive
7,215,106 number of shares of BDT 10 each, totalling BDT 72,151,060.
Under section 14(ka) of Demutualization Act 2013, Share Purchase Agreement (SPA) executed between Dhaka Stock
Exchange Limited and its Strategic investors namely Shenzhen Stock Exchange Limited (SZSE) and Shanghai Stock
Exchange Limited (SSE) and completed the sale of 25% (twenty five percent) of DSE Shares to SZSE and SSE. In this
connection, City Brokerage Limited sold 1,803,777 number of shares at the rate of BDT 21 per share totalling BDT 37,879,317.
Currently City Brokerage Limited is holding 5,411,329 number of shares at a cost of totalling BDT 543,119,683.
The Scheme is not yet completed and these shares are also currently not traded in stock exchanges, hence the actual value
is not readily ascertainable. However, management expect the fair value to be similar or more than the current revalued
amount. Once more clarity about the scheme and related factors are available, a determination of fair value and related
adjustments including impairment assessment, if any shall be made at that time.

8 MARGIN LOAN TO CLIENTS

Opening balance 944,103,336 1,282,985,307
Increase/(Decrease) during the year 350,977,746 (338,881,971)
Closing balance 1,295,081,082 944,103,336

The above loan was distributed to individual and institutional clients against margin loan for investing in securities.

9 INVESTMENT IN SECURITIES
Investment in dealer account 1,770,340,030 1,900,501,602
Investment of ICB fund 128,161,634 45,579,563
Investment of Bangladesh Bank fund 350,495,629 128,991,513
2,248,997,293 2,075,072,678

This represents investment made by the company in shares and mutual funds of various companies listed in DSE and CSE
through its own account. The cost price of the quoted securities is BDT 2,248,997,293 and the market value of those quoted
securities is BDT 2,424,349,315 on 31 December 2020.

357
 Figures in Taka
2020 2019

10 ACCOUNTS RECEIVABLE
Receivable from DSE (note 10.1) 5,769,771 2,280,251
Receivable from CSE (note 10.2) 7,914,173 -
Receivable from Clients 5,025,190 1,064,887
Receivable from Issuer - 3,455,000
Receivable from C168 7,980,213 5,320
Receivable from C174 190,329 115,560
Dividend receivable 15,983,125 12,747,729
Central Depository Bangladesh Ltd. - 2,260,080
42,862,801 21,928,826
10.1 Receivable from DSE
Broker 5,769,771 2,280,251
Dealer - -
5,769,771 2,280,251
10.2 Receivable from DSE
Broker 7,914,173 -
Dealer - -
7,914,173 -

11 ADVANCE CORPORATE INCOME TAX

Opening balance 220,158,834 158,993,996
Add: Paid during the year 73,956,290 61,164,838
294,115,124 220,158,834
Less: Adjustment during the year - -
Closing balance 294,115,124 220,158,834

12 ADVANCES, DEPOSITS AND PREPAYMENTS

Advance to/against:
Insurance 141,323 1,411,128
Corporate guarantee fee (*) - 5,674,963
Employee car advance 4,953,331 5,513,333
Suppliers 1,045,000 2,007,240
Advance to Consultant 75,000 -
Software implementation cost 409,450 -
- 109,851
Reimbursement fees on Professional Exam
6,624,104 14,716,515

(*) This represents amount paid to The City Bank Ltd., the parent company of City Brokerage Ltd. and NCC Bank Ltd. as
corporate guarantee fee.

358 Annual Report 2020

 Figures in Taka
Type of account 2020 2019
13 CASH AND CASH EQUIVALENTS
Bank balances with:
The City Bank Ltd. account no-
3101132314001 SND ICB fund 260,803 2,997,535
3101132314002-SND Special BB Fund 49,616,658 -
1101132314001-SND CCBA 724,221,344 103,158,292
1101132314002-SND IPO 7,120,896 3,439,879
1101132315001-CD Dealer 28,650,509 4,945,241
1101132310001-CD Corporate 32,768,550 25,923,443
Standard Chartered Bank - 01111058801 CCBA 18,635,637 213,293,274
NRB Bank-1082050030047-SND Corporate 1,156,189 1,128,689
EXIM Bank-11313100040606-SND CCBA 69,064,476 37,686
Mutual Trust Bank Ltd.-00220210005086-SND Corporate 12,855 13,545
NCC-CD (0103-0210004721) Corporate 444,984 -
931,952,901 354,937,584
Cheques awaiting for collection 35,769,217 17,098,513
Petty cash 77,500 77,500
967,799,619 372,113,597

14 SHARE CAPITAL
Authorised capital
500,000,000 shares of BDT 10 each 5,000,000,000 5,000,000,000
Issued, subscribed and paid-up capital
The City Bank Ltd.
339,994,000 shares of BDT 10 each fully paid-up 3,399,940,000 3,399,940,000
Individual
6,000 shares of BDT 10 each fully paid-up 60,000 60,000
3,400,000,000 3,400,000,000

15 LONG TERM LOAN

Loan from Langka Bangla Finance Ltd. 248,448,832 270,581,202
Loan from Investment Corporation of Bangladesh 107,083,995 129,605,975
Loan from The City Bank Limited 400,000,000 200,000,000
755,532,827 600,187,177

One loan was taken from Lanka Bangla Finance Ltd. in the form of house building commercial loan for purchasing floor
spaces at Al-Amin Centre, 25/A Dilkusha C/A, Dhaka-1000 bearing interest @ 10.00% per annum for the period of 10 years.
Others loan taken from Investment Corporation of Bangladesh (ICB) @ 4.00% and from The City Bank Limited under
Bangladesh Bank DOS circular no. 01 dated 10 February 2020 @ 7.00% for investment in secondary market.

16 LEASE LIABILITIES
Non-current portion 12,596,522 21,007,458
Current portion (payable within twelve months) 10,781,310 8,562,004
23,377,832 29,569,463

359
 Figures in Taka
2020 2019
17 DEFERRED TAX LIABIL ITIES
Carrying Amount Tax base Taxable/(deductible)
As on 31 December 2020 temporary difference
Assets:
Fixed assets net of depreciation 302,719,343 240,549,618 (62,169,725)
Right of use of assets 27,108,407 - (27,108,407)
Liabilities:
Lease liabilities 23,377,832 - 23,377,832
Total 353,205,581 240,549,618 (65,900,300)
Applicable tax rate 32.50%
Deferred tax liability as on 31 December, 2020 (21,417,597)
Deferred tax liability as on 01 January, 2020 -
Deferred tax (expenses)/ income accounted for during the year (21,417,597)

18 SHORT TERM LOAN 587,435,740 374,264,842

This loan was taken from The City Bank Ltd. in the form of overdraft. The overdraft facility limit is BDT 1,100 million for
providing margin loan facilities to the clients trading on securities in DSE and CSE. The interest rate for the loan is 9%
annually which is subject to revision by bank management from time to time.

19 PAYABLE TO CLIENTS 606,935,637 174,799,386

This represents sale proceeds of clients' securities which is being held for buying marketable securities or refund to the
clients as per their instructions.

20 ACCOUNTS PAYABLE
Payable to DSE (note 20.1) 90,228,809 7,500,779
Payable to CSE (note 20.2) 4,854 41,223
Payable to issuer 7,777,200 -
Payable to suppliers 882,272 759,467
Commission payable 5,147,411 2,254,929
Provision against interest expense 5,601,520 1,590,696
Provision for expenses 15,000,000 -
Other payable 883,562 26,787
Cash dividend payable 1,036,034 -
Central Depository Bangladesh Ltd. 728,699 -
127,290,360 12,173,881
20.1 Payable to DSE
Broker 90,228,809 7,500,779
Dealer - -
90,228,809 7,500,779
20.2 Payable to CSE
Broker 4,854 41,223
Dealer - -
4,854 41,223

360 Annual Report 2020

 Figures in Taka
2020 2019
92,222,991
21 INTEREST SUSPENSE ACCOUNT 92,222,991

Interest suspense account is interest charged to the margin loan account, but not recognised as income. The interest
amount will subsequently be recognised as income when the value of equity become positive.

22 PROVISION FOR LOAN LOSS-MARGIN LOAN

Opening balance 48,047,979 231,099,213
Add: Addition during the year 11,744,760 12,102,412
59,792,739 243,201,625
Less: Adjustment during the year - 195,153,646
Closing balance 59,792,739 48,047,979

Provision for diminution in value of margin loan has been made of negative equity of margin loans as on 31 December 2020.
As of 31 December 2020, the required provision against margin loan, where there is negative equity, is BDT 46,979,040 from
which BDT 11,744,760 provided to the accounts as per BSEC’s directive no. BSEC/Surveillance/Mukhopatro(5th
Part)/2019/196 dated 17 July 2020. However, no cash dividend can be paid during the year in terms of said directive as the
company has availed this facility.

23 PROVISION/ (WRITE BACK OF PROVISION) FOR DIMINUTION IN VALUE OF INVESTMENT

Opening balance 25,630,424 -
Provision for the year (25,630,424) 25,630,424
- 25,630,424

Provision for diminution in value of investment has been made against unrealised loss of investment as on 31 December
2020. As per BSEC’s directive no. BSEC/Surveillance/Mukhopatro(5th Part)/2019/196 dated 17 July 2020, quarter basis such
provision would be made within 31 December 2023. However, no cash dividend can be paid during the year in terms of said
directive as the company has availed this facility. There is no unrealised loss at reporting date, so no need to preserve such
provision.

24 PROVISION FOR CORPORATE INCOME TAX

Opening balance 230,014,461 176,514,674
Add: Provision made during the year 109,829,524 53,499,787
339,843,985 230,014,461
Less: Paid during the year - -
Closing balance 339,843,985 230,014,461

25 BROKERAGE COMMISSION
Dhaka Stock Exchange Ltd.
Broker 326,542,122 126,688,887
Dealer 137,121 -
326,679,243 126,688,887
Chittagong Stock Exchange Ltd
Broker 16,528,030 4,579,707
Dealer 16,054 -
16,544,084 4,579,707
343,223,327 131,268,594

361
 Figures in Taka
2020 2019

26 INTEREST INCOME
Interest on margin loan 73,925,168 68,349,410
Bank interest income 11,160,947 22,899,957
Interest on pre-funding 11,055,589 9,248,602
96,141,704 100,497,969

27 CAPITAL GAINS/(LOSSES)
Gain/(Loss) on investment (BB Fund) 16,717,337 -
Gain/(Loss) on investment (ICB Fund) 14,169,437 -
Realized gain/loss on investment 8,381,095 45,505,314
39,267,869 45,505,314

28 OTHER OPERATING INCOME

Account opening fee 17,850 27,450
BO account maintenance fee 483,900 513,400
IPO commission 29,520 29,700
531,270 570,550

29 NON OPERATING INCOME

Pledge & unpledged charge 100,511 61,170
Cheque dishonour charge 57,750 49,000
Rental income 6,189,600 12,379,200
Other income - 470,500
6,347,861 12,959,870

30 DIRECT COST
Hawla charges
Dhaka Stock Exchange Ltd.
Broker 1,900 150
Dealer - -
1,900 150
Laga charges
Dhaka Stock Exchange Ltd.
Broker 19,604,840 14,194,402
Dealer 42,067 -
19,646,907 14,194,402
Chittagong Stock Exchange Ltd.
Broker 479,330 274,093
Dealer 2,232 -
481,562 274,093
20,130,369 14,468,645

362 Annual Report 2020

 Figures in Taka
2020 2019
31 OPERATING EXPENSES
Salary and allowances 94,456,795 88,304,994
Corporate guarantee fee 6,433,305 5,573,564
Utilities 1,739,728 2,156,350
Subscription and fee 4,393,043 3,914,743
License and renewal fee 970,172 235,916
Third party service fee 4,664,854 3,814,469
Depreciation 17,066,878 16,897,036
Depreciation - lease assets 13,109,168 13,233,739
Traveling and conveyance 4,973,937 4,380,176
CDBL charges 3,193,698 773,746
Fees and charges 22,226,154 -
Office maintenance 7,172,138 4,885,369
Repair 203,174 55,000
Internet expenses 1,822,279 2,369,272
Branding and marketing expense - 530,491
Business development 588,185 2,769,599
Printing and stationery 644,396 881,503
Entertainment 1,049,344 2,072,766
Telephone and mobile 524,084 659,115
Legal and professional fees 3,139,875 893,024
Amortisation of software 1,695,792 1,655,908
Insurance premium 2,047,811 1,877,470
Bank charges 605,262 202,188
Board meeting fees 100,000 90,000
Fuel 119,437 136,689
Advertisement and publicity 685,520 115,250
Newspaper and periodicals 32,982 111,530
Car maintenance 30,604 26,152
Software maintenance 480,056 144,000
Training expenses 209,598 439,662
Audit fee 155,889 92,000
Board meeting expenses 127,264 81,543
Postage and courier 40,699 34,165
Medical and employee welfare 282,940 -
Bidding Fee 45,000 15,000
195,030,061 159,422,429

32 INTEREST EXPENSES
Borrowing cost 99,593,228 102,218,404
Finance cost-lease 2,787,298 3,588,221
102,380,526 105,806,625
33 RELATED PARTIES
33.1 Parent company

The City Bank Limited has 99.9982% shareholding of the company. As a result, the controlling party of the company is The
City Bank Limited.

363
 33.2 Related party transactions
During the year, the Company carried out a number of transactions with related parties in the normal course of business.
The names of related parties and nature of these transactions have been set out in accordance with the provision of IAS 24:
Related Party Disclosures.

Name of Relationship Nature of 2020 2019

related party with the entity transactions Taka Taka
The City Bank Limited Parent company Net transaction of own investment 17,022,286 -
Brokerage commission 496,182 -
Balance of The City Bank Ltd 482,126 -

City Bank Capital Parent company Net transaction of own investment 10,720,895 102,354,070
Resource Ltd Receivable from CBCRL 134,752,315 51,739
Payable to CBCRL 134,696,599 -
Share trading settlement - 27,319,923
Brokerage commission earn 21,499,865 16,836,903

34 FINANCIAL RISK MANAGEMENT

The Company’s management has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Company’s management policies are established to identify and analyse the risks faced by
the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company’s
activities. The Company has provided in separate notes the information about the Company’s exposure to each of the
following risks, the Company’s objectives, policies and processes for measuring and managing risks and the Company’s
management of capital. The Company has exposure to the following risks from its use of financial instruments.
- Credit risk
- Liquidity risk
- Market risk

34.1 Credit risk

Credit risk is the risk of financial loss to the company if any customer or counter party to a financial instrument fails to meet
its contractual obligation. This principally arises from the company's receivables from customers.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at
the reporting date was:

Margin loan 1,295,081,082 944,103,336

Investment in securities 2,248,997,293 2,075,072,678
Accounts receivable 42,862,801 21,928,826

34.2 Liquidity risk

Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's
approach to managing liquidity (cash and cash equivalents) is to ensure, as far as possible, that it will always have sufficient
liquid assets to meets its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or taking risk of damage to the company's reputation. Typically, the company ensures that it has sufficient cash and
cash equivalents to meet expected operational expenses through preparation of the cash flow forecast, prepared based on
time line payment of the financial obligation and accordingly arrange for sufficient liquidity/fund to make the expected
payment within the due date.

Total assets excluding cash & cash equivalent 4,781,117,144 4,167,884,262

364 Annual Report 2020

34.3 Market risk
Market risk is the risk that any changes in market price, such as interest rates and capital market condition will affect the
company's income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposure within acceptable parameters.
Provision for loan loss - margin loan 59,792,739 48,047,979

35 NUMBER OF EMPLOYEES
The number of employees engaged for the whole year or part thereof who received an yearly remuneration of BDT 36,000
or above was 45.

36 OTHERS
36.1 These notes from an integral part of the annexed financial statements and accordingly are to be read in conjunction
therewith.

36.2 Figures in these notes and annexed financial statements have been rounded off to the nearest BDT.

36.3 Previous period's figures have been re-arranged, wherever, considered necessary, to conform with current period
presentation without causing any impact on the operating results for the period and value of assets and liabilities at the end
of that period as shown in the financial statements under reporting.

for and on behalf of the Board of Directors of City Brokerage Ltd.

Managing Director & CEO Director Chairman

Dhaka, Bangladesh
Dated, 25 February 2021

365
366
Annexure-A
DETAILS OF PROPERTY, PLANT AND EQUIPMENT
As at 31 December 2020

Cost DEPRECIATION

Annual Report 2020

At 01 Jan Additions Sale/ Total Up to Total at Net book value
Category of asset 2020 during disposal during at 31 Dec Rate (%) 01 Jan 2020 Charge for Adjustment 31 Dec 2020 at
the year the year 2020 the year 31 Dec 2020
Taka Taka Taka Taka Taka Taka Taka Taka Taka
Furniture and fixtures 26,010,543 - - 26,010,543 10 19,087,623 1,847,845 - 20,935,468 5,075,075
Office equipment 55,800,462 419,220 - 56,219,682 20 35,487,561 6,000,765 - 41,488,326 14,731,356
Office decoration 5,300,712 1,228,050 - 6,528,762 10 909,643 652,872 - 1,562,515 4,966,247
Motor vehicles 6,220,770 - - 6,220,770 20 2,073,600 1,244,160 - 3,317,760 2,903,010
Lease hold property 850,000 - - 850,000 - - - - - 850,000
Land and building 292,849,538 - - 292,849,538 2.5 15,252,576 7,321,236 - 22,573,812 270,275,726
Total 2020 387,032,025 1,647,270 - 388,679,295 72,811,003 17,066,878 - 89,877,880 298,801,414
Total 2019 383,141,712 3,890,313 - 387,032,025 55,913,967 16,897,036 - 72,811,002 314,221,022

Annexure-B
SCHEDULE OF RIGHT-OF-USE ASSET
As at 31 December 2020

Cost Accumulated depreciation

Adjustment
Particulars on initial Sale/ Total at As at Net book value
At 01 Jan
application Additions disposal during 31 December 01 January Total at at
of IFRS 16 as during Charge for Adjustment
31 Dec 2020 31 Dec 2020
2020 the year 2020 2020 the year
at 01 January the year
2020
Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka
Office space 49,881,498 - 3,569,816 2,679,210 50,772,104 13,233,739 13,109,168 2,679,210 23,663,698 27,108,407
Total at 31 December 2020 49,881,498 - 3,569,816 2,679,210 50,772,104 13,233,739 13,109,168 2,679,210 23,663,698 27,108,407
Total at 31 December 2019 - 49,881,498 - - 49,881,498 - 13,233,739 - 13,233,739 36,647,759
 FINANCIAL
STATEMENTS OF
CITY BANK
CAPITAL RESOURCES
LIMITED 2020

367
 INDEPENDENT AUDITOR’S REPORT
To the Shareholders of City Bank Capital Resources Limited

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION
We have audited the financial statements of City Bank Capital Resources Limited (the company), which comprise the statement of
financial position (balance sheet) as at 31 December 2020, and the statement of profit or loss and other comprehensive income (profit
and loss statement), statement of changes in equity 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 accompanying financial statements give a true and fair view of the financial position of the company as at 31
December 2020, and of its financial performance and its cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRSs).

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 we have fulfilled our 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.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL
STATEMENTS
Management is responsible for the preparation and fair presentation of the financial statements that give a true and fair view in
accordance with IFRSs, the Companies Act, 1994 and other applicable laws and regulations 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 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 these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the
audit. We also:

l 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.
l 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.

368 Annual Report 2020

l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
l 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.
l 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 gives a true and fair view.

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 company so far as it appeared from our
examination of these books; and
c) the statement of financial position (balance sheet) and statement of profit or loss and other comprehensive income (profit and
loss statement) dealt with by the report are in agreement with the books of account.

Auditor’s Signature :
Name of Engagement Partner : Md. Moktar Hossain, FCA, Senior Partner
Enrollment No. : 728
Firm’s Name : S. F. AHMED & CO., Chartered Accountants
Firm’s Reg. No. : 10898 E.P. under Partnership Act 1932
Document Verification System Code (DVC) : 2102280728AS396611
Dated, 25 February 2021

369
 STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)
As at 31 December 2020 Figures in Taka
Assets Notes 2020 2019
Non-current assets
Property, plant and equipment 4 7,419,336 11,164,745
Right-of- use assets 5 6,425,217 10,862,811
Capital works-in-progress 6 740,540,291 668,895,984
Intangible assets 7 - -
Financial asset at fair value through profit or loss 8 30,697,675 88,697,675
Financial asset at fair value through other comprehensive income 9 2,366,596,975 1,694,692,471
Deferred tax assets 10 - 4,578,590
Total non-current assets 3,151,679,494 2,478,892,276

Current assets
Margin loan 11 1,011,872,894 620,014,892
Trading investment in quoted shares 12 288,006,928 275,933,838
Accounts receivable 13 79,513,925 4,791,352
Advances, deposits and prepayments 14 86,334,160 97,546,583
Cash and cash equivalents 15 206,127,401 360,851,701
Total current assets 1,671,855,308 1,359,138,366
Total assets 4,823,534,802 3,838,030,642

Equity and liabilities

Share capital 16 2,550,000,000 2,550,000,000

Retained earnings 500,511,869 265,038,608
Fair value reserve 746,996,052 75,091,548
Total equity 3,797,507,921 2,890,130,156

Liabilities
Non-current liabilities
Term loan 17 575,617,456 531,065,260
Deferred tax liability 10 3,931,827 -
Lease liabilities - ROU assets 18 2,466,904 6,267,273
Total non-current liabilities 582,016,187 537,332,533

Current liabilities and provisions

Term loan 17 33,413,507 48,307,305
Lease liabilities - ROU assets 18 2,855,273 5,581,966
Accounts payable 19 261,035,259 211,390,726
Other liabilities 20 35,567,823 5,980,247
Provision for diminution in value of investment in mutual funds 21 - 19,745,048
Overdraft loan 34,785,636 -
Provision for taxation 22 76,353,198 119,562,662
Total current liabilities 444,010,695 410,567,953
Total equity and liabilities 4,823,534,802 3,838,030,642
These financial statements should be read in conjunction with the annexed notes.
For and on behalf of the Board of Directors of City Bank Capital Resources Limited.

Chairman Director Managing Director & CEO Company secretary

See annexed report of the date
Dhaka, Bangladesh
Dated, 25 February 2021
S. F. AHMED & CO
Chartered Accountants
DVC : 2102280728AS396611
370 Annual Report 2020
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME (PROFIT AND LOSS STATEMENT)
For the year ended 31 December 2020
Figures in Taka
Notes 2020 2019
Operating income
Interest income 23 93,554,573 73,969,293
Income from investment 24 161,281,664 163,347,039
Service income 25 74,403,338 74,030,684
Total operating income 329,239,575 311,347,016
Other income 26 9,743,554 5,655,425
Total income 338,983,129 317,002,441
Operating expenses
Salaries and allowances 27 69,871,717 51,131,964
Rent, taxes, insurance, utilities, etc 28 2,872,969 2,533,375
Repairs, maintenance and depreciation 29 9,722,512 10,176,397
Stationery, printing and advertising 30 2,692,911 1,461,402
Postage, stamp and telecommunication 31 1,036,947 1,002,794
Brokerage commission 679,733 477,381
CDBL charges 3,497,024 2,483,083
Audit fee 155,889 293,889
Training and development expenses 85,278 1,477,641
Directors' remuneration 102,850 87,500
Legal and professional fees 324,972 1,735,531
Other expenses 32 8,461,754 12,484,783
Total operating expenses 99,504,556 85,345,741
Operating profit 239,478,573 231,656,699
Finance expense 33 (1,697,485) (2,995,275)
Profit before provision 237,781,088 228,661,424
(Provision)/ provision back for diminution in value of investment 21.1 19,745,048 (5,490,325)
Unrealised gains on quoted shares 12.1 69,213,768 -
Profit before tax 326,739,904 223,171,099

Income tax expense

Current tax 22 82,756,227 62,199,822
Deferred tax (income)/expenses 10 8,510,417 (4,545,558)
Profit for the year 91,266,643 57,654,264
Other comprehensive income 235,473,261 165,516,835

Fair value reserve 9 671,904,504 (907,071,081)

Total comprehensive income 907,377,765 (741,554,246)

These financial statements should be read in conjunction with the annexed notes
For and on behalf of the Board of Directors of City Bank Capital Resources Limited

Chairman Director Managing Director & CEO Company secretary

See annexed report of the date

Dhaka, Bangladesh
Dated, 25 February, 2021 S. F. AHMED & CO
Chartered Accountants
DVC : 2102280728AS396611

371
 STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020

Share capital Retained earnings Fair value reserve Total

Particulars Taka Taka Taka Taka

Year 2019
Balance at 01 January 2019 2,550,000,000 99,521,773 982,162,629 3,631,684,402
Profit for the year - 165,516,835 - 165,516,835
Other comprehensive income - - (907,071,081) (907,071,081)
Balance at 31 December 2019 2,550,000,000 265,038,608 75,091,548 2,890,130,156

Year 2020
Balance at 01 January 2020 2,550,000,000 265,038,608 75,091,548 2,890,130,156
Profit for the year - 235,473,261 - 235,473,261
Other comprehensive income - - 671,904,504 671,904,504
Balance at 31 December 2020 2,550,000,000 500,511,869 746,996,052 3,797,507,921

For and on behalf of the Board of Directors of City Bank Capital Resources Limited

Chairman Director Managing Director & CEO Company secretary

Dhaka, Bangladesh
Dated, 25 February, 2021

372 Annual Report 2020

STATEMENT OF CASH FLOWS Figures in Taka
For the year ended 31 December 2020 2020 2019

A. Cash flows from operating activities

Fees and commission from portfolio management service 147,375,401 112,819,287

Fees from corporate advisory service 19,553,750 53,711,635
Dividend income 132,250,088 139,631,626
Operating expenses (74,688,292) (81,733,710)
Bank charges (463,790) (450,586)
Cash generated from operating activities before changes in operating assets and liabilities 224,027,157 223,978,251

Increase/decrease in operating assets and liabilities

Margin loan (391,858,002) (197,717,556)
Customers'deposits (10,616,942) 133,778,288
Client deposit 35,353,509 110,311,295
Receivable from broker (139,029,347) (28,124,677)
Payable to broker 93,058,896 51,591,670
(402,474,944) (63,939,268)
Cash generated from operating activities (178,447,787) 160,038,983
Interest paid (58,453,929) (58,949,025)
Income tax paid (77,630,936) (55,794,338)
Net cash from/ (used in) operating activities (314,532,652) 45,295,620

B. Cash flows from investing activities

Fixed deposit receipt encashment/ (investment) 103,535,000 (60,951,759)

Interest income from FDR 21,288,459 31,750,643
Income from Govt. treasury shares 16,294,295 -
Divestment of commercial paper 46,600,000 20,000,000
Proceeds from redeemable preference shares - 9,302,325
Divestment / (Investment) in quoted shares (30,609,682) 94,639,546
Capital works-in-progress (53,904,859) (33,856,845)
Payment for acquisition of right-of-use assets 506,345 (13,570,083)
Proceeds from sale of property plant and equipment 24,561 -
Acquisition of property plant and equipment (859,735) (841,183)
Net cash from investing activities 102,874,384 46,472,645

C. Cash flows from financing activities

Lease liability - ROU Asset (6,527,062) 11,849,239
Overdraft loan 34,785,636 -
Long term loan 28,675,394 26,016,398
Net cash from/(used in) financing activities 56,933,968 37,865,637
D. Net changes in cash and cash equivalents (A+B+C) (154,724,299) 129,633,902
E. Opening cash and cash equivalents 360,851,701 231,217,798
F. Closing cash and cash equivalents 206,127,401 360,851,700

For and on behalf of the Board of Directors of City Bank Capital Resources Limited

Chairman Director Managing Director & CEO Company secretary

Dhaka, Bangladesh
Dated, 25 February, 2021

373
 NOTES TO FINANCIAL STATEMENTS
As at and for the year ended 31 December 2020

1 REPORTING ENTITY
1.1 Company profile
City Bank Capital Resources Limited (the Company), a fully owned subsidiary of The City Bank Limited, is a public company limited
by shares. The Company was incorporated in Bangladesh on 17 August 2009 vide registration no. C-79186/09 under the
Companies Act 1994. Subsequently the Company obtained Merchant Banking License (Registration Certificate No: MB-54/2010)
from Bangladesh Securities & Exchange Commission on 06 December 2010. The registered office of the Company is situated at
90/1, City Center (13th Floor), Motijheel Commercial Area, Dhaka -1000.
1.2 Nature of business
City Bank Capital Resources Limited delivers a wide range of investment banking services such as issue management,
underwriting, portfolio management and corporate advisory and other services as mentioned in the Memorandum and Articles
of Association of the company.

2 BASIS OF ACCOUNTING
2.1 Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), which also
cover International Accounting Standards (IAS), the Companies Act 1994, Bangladesh Securities and Exchange Commission
(Merchant Banker and Portfolio Manager) Rules 1996 and other applicable laws and regulations. In case any rules and regulations
issued by Bangladesh Securities and Exchange Commission differs from those of other regulatory authorities, the rules and
regulations issued by Bangladesh Securities and Exchange Commission shall prevail.
2.2 Basis of measurement
The financial statements have been prepared on accrual basis of accounting following going concern concept under historical
cost convention except for financial instruments which are measured at fair value.
2.3 Functional and presentation currency
The financial statements are presented in Bangladeshi Taka (BDT), which is both functional and presentation currency of the
Company.
2.4 Use of estimates and judgment
The preparation of the financial statements in conformity with IFRSs 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 recognised in the period in which the estimate is revised if the revision affects only that period of
revision and future periods if the revision affects both current and future periods.
2.5 Reporting period
The financial year of the Company has been determined to be from 1 January to 31 December each year. These financial
statements cover the period from 1 January 2020 to 31 December 2020.
2.6 Date of authorisation
The audited financial statements for the year ended 31 December 2020 were authorised by the Board of Directors on 25 February,
2021.
2.7 Components of financial statements
a. Statement of financial position (balance sheet);
b. Statement of profit or loss and other comprehensive income (income and expenditure statement);
c. Statement of changes in equity;
d. Statement of cash flows; and
e. Summary of significant accounting policies and other explanatory information.

374 Annual Report 2020

3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently (otherwise as stated) to all periods presented in these
financial statements.

3.1 Property, plant and equipment

Recognition and measurement
Items of property, plant and equipment are measured initially at cost and subsequently at cost less accumulated depreciation in
compliance with International Accounting Standard (IAS) 16 "Property, Plant and Equipment". The cost of acquisition of an asset
comprises its purchase price and any direct cost for bringing the asset to its working condition for its intended use. Expenditures
incurred after the assets have been put into use, such as repairs and maintenance is normally charged off as revenue expenditure
in the period in which it is incurred. When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Subsequent cost
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured
reliably. The costs of the day-to- day servicing of property, plant and equipment are recognised in the profit and loss account as
incurred.
Depreciation
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the company and its cost can be measured
reliably. The costs of the day-to- day servicing of property, plant and equipment are recognised in the profit and loss account as
incurred.
The rates at which property, plant and equipment are depreciated for current and comparative years are as follows:
Category of assets Rate of depreciatio
Office equipment 10% - 50%
Furnitures and fittings 10% - 20%
Motor vehicles 20%

Disposal
Gains and losses on disposal of an item of property, plant and equipment are to be determined by comparing the proceeds from
disposal with the carrying amount of the property, plant and equipment disposed off and are recognised net with “other
operational income” in profit or loss statement.

3.2 Leases
The Company has adopted IFRS 16: IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee
recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to
make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting
remains similar to the current standard- i.e. lessors continue to classify leases as finance or operating leases. IFRS 16 replaces
existing leases guidance, including IAS 17: Leases, IFRIC 4: Determining whether an Arrangement contains a Lease, SIC-15:
Operating Leases - Incentives and SIC- 27: Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
The standard is effective for annual periods beginning on or after 1 January 2019.
As a lessee, City Bank Capital Resources Limited previously classified leases as operating or finance leases based on its assessment
of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to City
Bank Capital Resources Limited. Under IFRS 16, City Bank Capital Resources Limited recognizes right-of-use assets and lease
liabilities for all leases.

3.3 Intangible assets and amortisation

Intangible assets are to be initially recognised at cost including any directly attributable cost. Intangible assets that have finite
useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure is
capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. Intangible assets
include software, integrated systems along with related hardware. Currently, the company has a software "Mbank" which is
considered as an intangible asset and is therefore amortised at a rate of 14.93% per annum.

375
 3.4 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity. Non- derivative financial instruments comprise investments in trading securities, margin loans, receivables, cash
and cash equivalents, term loans, trade payables, customer deposits and share capital.
3.4.1 Financial assets
Financial assets refer to assets that arise from contractual agreements on future cash flows or from owning equity instruments of
another entity.
The company initially recognises receivables and deposits on the date when they are originated. All other financial assets are
recognised initially on the date at which the company becomes a party to the contractual provisions of the transaction.
The company derecognises a financial asset when the contractual rights or probabilities of receiving the cash from the assets
expires, or it transfers the rights to receive the contractual cash flows from the financial assets in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred.
Financial assets include financial assets at fair value through profit or loss (FVTPL), financial assets at fair value through other
comprehensive income (FVTOCI), financial assets at amortised cost, margin loans, cash and cash equivalents, accounts receivable.
IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell
non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 contains three
principal classification categories for financial assets: measured at amortised cost, fair value through other comprehensive income
(FVOCI) and fair value through profit and loss (FVTPL). The classification of financial assets under IFRS 9 is generally based on the
business model in which a financial asset is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous
IAS 39 categories of held to maturity, loans and receivables and available for sale. The Company holds investment securities which
are strategically held and actively traded in a quoted market and those which are unquoted. The adoption of IFRS 9 has not had a
significant effect on the Company’s accounting policies related to financial assets and liabilities except where noted.
Financial assets at fair value through profit or loss (FVTPL)
Investment in quoted securities (such as stock/ shares, bonds) are securities those are officially listed (quoted) on a stock exchange
for public trading. They are measured at fair value and subsequent to initial measurement any fall in value of investment below
cost is recognised at profit or loss and a reserve for the fall in value is created.
Investment in shares which are not actively traded in a quoted market are measured at fair value unless the fair value can not be
measured reliably, in which case they are measured at cost.
Financial assets at fair value through other comprehensive income (FVTOCI)
These equity securities represent investments that the Company intends to hold for the long term for strategic purposes. As
permitted by IFRS 9, the Company has designated these investments at the date of initial application as measured at FVOCI. Unlike
IAS 39, the accumulated fair value reserve related to these investments will never be reclassified to profit or loss. Before the
changes to IFRS 9: Financial Instruments, the Company was presenting these investment in available for sale category. The
gain/loss arising from the changes in fair value have been put in other comprehensive income.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank deposits and other short term highly liquid investments with original
maturities of three months or less, and there was insignificant risk of changes in value of these current assets.
Accounts receivables
Accounts receivables are recognised at original invoiced amount.
Margin loan
Margin loan is provided to clients to facilitate investment in equity securities. They are initially classified as financial assets at fair
value and subsequently measured at amortised cost.

3.4.2 Financial liabilities

A contractual obligation to deliver cash or another financial assets to another entity or to exchange financial instruments with
another entity under conditions that are potentially unfavourable.
The company initially recognises financial liabilities on the transaction date at which the Entity becomes a party to the contractual
provisions of the liability. The Entity recognises such financial liability when its contractual obligations arising from past events are
certain and the settlement of which is expected to result in an outflow from the entity of resources embodying benefits.

376 Annual Report 2020

 The Entity derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.
Financial liabilities as presented in these financial statements comprise loans and borrowings, accounts payable and other
payables.
Loans and borrowings
Loans and borrowings are recognised initially at fair value less attributable transaction costs. Subsequently, the borrowings are
stated at amortised cost using effective interest method.
Accounts payable
Accounts payables are recognised at fair value.
Offsetting financial assets and a financial liabilities
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and
only when, the entity has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset
and settle the liability simultaneously.

3.5 Revenue recognition

The Company has adopted IFRS 15: Revenue from Contracts with Customers from 1st January 2018. IFRS 15 deals with revenue
recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount,
timing and uncertainty of revenue and cash flows arising from an entity´s contracts with customers. Revenue is recognised when
an entity fulfills the performance obligations regarding the contract of supplying the goods or rendering of service. The standard
replaces all existing requirements of IAS 18: Revenue and IAS 11: Construction contracts and related interpretations. The standard is
effective for annual periods beginning on or after 1 January 2018 thus the company adopted IFRS 15 with a date of the said initial
application.
It has been assessed that the implementation of IFRS 15 is not likely to have any significant impact on the financial statements.
Management has assessed impact of IFRS 15 on the different agreement types that are used in company’s business areas, most
of the components are long-term in nature. Revenue from the contracts are recognised over the time if the service obligation
satisfies over the time. No retrospective application has been made as due impact of adopting IFRS 15 does not affect the revenue
recognised till date.
Interest income on margin loan
Income from interest on margin loan is recognised on an accrual basis. Such income is calculated based on daily margin loan
balance of the respective margin loan holder's account.
Fees and commission income
Fees and commission income are recognised when the corresponding services are provided. Fees and commission income
presented in the financial statements include the following:
i) Management fee is charged on client's portfolio value (at market price) on daily basis at the applicable rate
ii) Settlement fee charged to customers' trading in the secondary capital market;
iii) Documentation fees charged to clients for opening accounts with the company; and
iv) Income from advisory is recognised when a service is rendered in line with the related agreement.

Dividend income
Dividend income is recognised when the right to receive dividend is established. Usually this is the dividend declaration date for
equity securities.
Investment income
Income on investments is recognised on accrual basis. Investment income includes interest on treasury bonds and fixed deposit
with other banks. Capital gains on investments in shares and treasury bills are also included in investment income. Capital gains
are recognised when these are realised.

377
 3.6 Taxation
Income tax expense is recognised in the statement of profit or loss and other comprehensive income. Current tax is the expected
tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years. Current tax has been calculated on the basis of Finance Act, 2019.

3.7 Deferred Tax

Deferred tax has been calculated based on the difference between the carrying amount of an asset or liability in the statement of
financial position and its carrying amount by the tax authority; tax bases, that will be reversed in future, and where the change in
the value of asset or liability has a tax consequence. This may result in either deferred tax assets or deferred tax liabilities in the
financial statement of the company.

3.8 Provisions
A provision is recognized when the Company has a legal or constructive obligation as a result of a past event, it is probable that an
outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.

3.9 Contingencies
Contingencies arising from claims, litigations, assessments, fines, penalties, etc are recorded when it is probable that a liability
would be created and the amount can be reasonably estimated.

3.10 Borrowing costs

Borrowings are classified into both current and non-current liabilities. In compliance with the requirements of IAS 23 “Borrowing
Cost,” borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All
other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.

3.11 Events after reporting period

Events after the reporting period that provide additional information about the company's position at the reporting period are
reflected in the financial statements. Events after the reporting period that are not adjusting event are disclosed in the note when
material.
No material event had occurred after the reporting period, which could substantially effect the values reported in these financial
statements.

3.12 Defined contribution plan- provident fund

Provident fund benefits are given to the permanent employees of the company in accordance with Provident Fund Rules which
are recognized by National Board of Revenue (NBR). The fund is operated by a Board of Trustees consisting of seven members. All
confirmed employees of the company are contributing 10% of their basic salary as subscription to the fund. The company also
contributes equal amount of the employees' contribution.
3.13 Defined benefit plan-gratuity
Gratuity fund benefits are given to the permanent employees of the company in accordance with the Gratuity Fund Rules which
are recognized by NBR. The fund is operated by a Board of Trustees consisting of seven members.

378 Annual Report 2020

 Figures in Taka
2020 2019
4 PROPERTY, PLANT AND EQUIPMENT
Cost:
Opening balance 26,553,054 25,711,871
Add: Addition during the year 859,735 841,183
27,412,789 26,553,054
Less: Disposal during the year 59,500 -
Closing balance (a) 27,353,289 26,553,054

Accumulated depreciation:
Opening balance 15,388,309 10,686,219
Add: Charge for the year 4,560,519 4,702,090
19,948,828 15,388,309
Less: Adjustment made during this year 14,875 -
Closing balance (b) 19,933,953 15,388,309
Net book value (a - b) 7,419,336 11,164,745

Details are shown in Annex A.

5 RIGHT-OF- USE ASSETS

Cost:
Opening balance 14,915,583 -
Add: Adjustment on initial application of IFRS 16 as at 01 Jan 19 - 14,915,583
Add: Addition during this year - -
14,915,583 14,915,583
Less: Reduce lease liability during the year for change in rent rate 506,345 -
Closing balance (a) 14,409,238 14,915,583

Accumulated depreciation:
Opening balance 4,052,773 -
Add: Depreciation for this year 3,931,248 4,052,773
7,984,021 4,052,773
Less : Adjustment made during this year - -
Closing balance (b) 7,984,021 4,052,773
Net book value (a - b) 6,425,217 10,862,811

Details are shown in Annex B.

6 CAPITAL WORKS-IN-PROGRESS Land Buildings Total

At 01 January 2020 300,000,000 368,895,984 668,895,984
Add: Addition during the year (note 6.1) - 71,644,307 71,644,307
At 31 December 2020 300,000,000 440,540,291 740,540,291

6.1 This represents cost of construction of BDT 13,904,859 and borrowing cost of BDT 57,739,448. As the works is still under construction, this
borrowing cost has been capitalised as per IAS 23: Borrowing Costs.

379
 Figures in Taka
2020 2019
7 INTANGIBLE ASSETS
Cost:
Opening balance 2,200,000 2,200,000
Add: Addition during the year - -
2,200,000 2,200,000
Less: Disposal during the year - -
Closing balance (a) 2,200,000 2,200,000

Accumulated Amortisation:
Opening balance 2,200,000 1,871,491
Add: Amortisation for the year - 328,509
2,200,000 2,200,000
Less: Adjustment made during the year - -
Closing balance (b) 2,200,000 2,200,000
Net book value (a - b) - -

8 FINANCIAL ASSET AT FAIR VALUE THROUGH PROFIT OR LOSS

Opening balance 88,697,675 40,000,000
Less: Redemption during the year - (9,302,325)
Transfer to listed securities - ADNTEL (note 12.1) (58,000,000) 58,000,000
Closing Balance 30,697,675 88,697,675

On 11 June 2014, the company had invested BDT 100,000,000 in redeemable preference share of Regent Energy and Power
Limited (REPL). Subsequently, REPL had paid BDT 69,302,325 and outstanding balance as on 31 December 2020 is BDT
30,697,675.

9 FINANCIAL ASSET AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Fair value at 01 January 2020 (37,328,028@ BDT 45.4) 1,694,692,471 2,601,763,552
Add/(Less): Change in fair value during the year 671,904,504 (907,071,081)
Fair value at 31 December 2020 (37,328,028@ BDT 63.4) 2,366,596,975 1,694,692,471

On 29 June 2016, the company had acquired 24,885,352 shares of IDLC Finance Limited for BDT 55.08 each. Subsequently, it further
acquired 12,442,676 shares under right issue resulting the holding of 37,328,028 shares with an average cost of BDT 43.39 each. Presently,
the company intends to hold the investment for long-term thus classified as financial asset at fair value through other comprehensive
income.

Taxable/(ded-uctible)
10 DEFERRED TAX ASSETS/(LIABILTY) Carrying Amount Tax base
temporary
difference
As on 31 December 2020
Property, plant and equipment 5,439,197 13,775,446 (8,336,249)
Right-of- use assets 6,425,217 - 6,425,217
Lease liabilities (5,322,177) - (5,322,177)
Unrealised (loss) /gain on investment 69,213,768 - 69,213,768
Carry forward of loss on sale of shares - 2,770,968 (2,770,968)

Applicable tax rate on property, plant and equipment, right-of-use assets and lease liabilities 37.50%
Applicable tax rate other than property, plant and equipment, right-of-use assets and lease liabilities 10.00%
Deferred tax-Asset/ (liability) (3,931,827)

380 Annual Report 2020

 Figures in Taka
2020 2019
As on 31 December 2019
Property, plant and equipment 9,001,576 13,049,880 (4,048,304)
Right-of- use assets 10,862,811 - 10,862,811
Lease liabilities (11,849,239) - (11,849,239)
Unrealised (loss) /gain on investment (19,745,048) - (19,745,048)
Carry forward of loss on sale of shares - 7,160,608 (7,160,608)

Applicable tax rate on property, plant and equipment, right-of-use assets and lease liabilities 37.50%
Applicable tax rate other than property, plant and equipment, right-of-use assets and lease liabilities 10.00%
Deferred tax-Asset/ (liability) 4,578,590

11 MARGIN LOANS
Opening balance 620,014,892 422,297,336
Add/(less): Increase/(decrease) during the year 391,858,002 197,717,556
Closing balance 1,011,872,894 620,014,892

Portfolio management department extends margin loan facilities to its customers trading on the secondary capital market in Bangladesh.
Bangladesh Securities and Exchange Commission issues various guidelines/ orders/ notifications for the Merchant Banks pertaining to
these margin loan facilities.

12 TRADING INVESTMENT IN QUOTED SHARES

Listed securities (note 12.1) 271,963,934 109,755,844
Financial asset at amortised cost (note 12.2) 16,042,994 166,177,994
288,006,928 275,933,838

12.1 Listed securities

Business segment Cost price Fair market value Unrealised gain / (loss)

Cement 2,282,283 2,390,000 107,717

Engineering 16,202,028 24,083,149 7,881,122
Financial Institutions 6,903,291 7,143,000 239,709
Food & Allied 19,001,098 21,085,400 2,084,302
Fuel & Power 17,624,000 17,570,000 (54,000)
Insurance 3,911,780 4,193,593 281,813
IT Sector 60,573,954 124,313,376 63,739,422
Miscellaneous 11,926,869 12,143,700 216,831
Mutual Funds 36,842,255 29,055,635 (7,786,620)
Pharmaceuticals & Chemicals 14,276,296 13,771,650 (504,647)
Telecommunication 4,543,938 7,792,000 3,248,062
Textile 8,644,610 8,274,909 (369,701)
Travel & Leisure 17,764 147,522 129,757
Total 202,750,166 271,963,934 69,213,768

12.2 Financial asset at amortised cost

Investment in fixed deposit receipt (FDR) - 103,535,000
Investment in commercial paper 16,042,994 62,642,994
16,042,994 166,177,994

Investment in fixed deposit receipt (FDR) represents a fixed term deposit of six (6) months. Investment in commercial paper represents
purchase of commercial paper of InGen Technology Limited.

381
 Figures in Taka
2020 2019
13 ACCOUNTS RECEIVABLE
Advisory fees receivable 4,368,750 5,927,500
Interest receivable from fixed deposits - 3,905,986
Dividend receivable from trending investments 3,135,192 2,421,470
Receivable from Prime Bank Securities Limited 289,979 -
Receivable from Remons Investment & Securities Ltd. 30,777,791 -
Receivable from Vertex Stock & Securities Limited 18,947,693 -
Receivable from UCB Capital Management Ltd 18,567,044 5,828,723
Receivable from IIDFC Securities Limited 680,636 -
Inter-company transaction:
Inter-company receivables :
City Brokerage Ltd-client sales 134,696,599 59,101,672
The City Bank Ltd-portfolio management fees 3,244,617 657,107
Inter-company payables:
City Brokerage Ltd-Clients purchase of listed securities (134,752,316) (72,911,559)
The City Bank Limited-operating expenses (442,060) (139,547)
79,513,925 4,791,352

14 ADVANCES, DEPOSITS AND PREPAYMENTS

Advance income tax 36,423,270 84,758,025
Advance to employee 2,295,783 5,496,519
Security deposit with Central Depository Bangladesh Ltd. 200,000 200,000
Security deposit for membership fee 200,000 200,000
Advance against expenses 226,500 52,542
Advance to SBS International Business Ltd. 46,526,059 6,526,059
Prepaid insurance 89,855 107,244
Security deposit-Banglalink ICON 11,000 11,000
Other assets 361,693 195,194
86,334,160 97,546,583

15 CASH AND CASH EQUIVALENTS

Cash in hand 40,401 51,781
Stamp in hand 3,780 3,780
Bank balance with The City Bank Ltd:
In current accounts:
1101363680001 6,648 2,778,966
1101363680002 571,475 72,705
1101363680003 875 1,565
Special notice deposit account:
3101363680001 1,640,576 18,990,619
1101340451001 69,133,422 66,596,571
1101340450001 111,127,603 171,146,418
Bank balance with Social Islami Bank Ltd:
Mudaraba notice deposit account:
1271360000293 4,396,064 11,139,784
Bank balance with Community Bank Bangladesh Limited:
0070306177101 276 -
Investment in fixed deposit receipt (FDR) - 90,000,000
Balance with City Brokerage Ltd. 18,994,120 51,739
Balance with Sheltech Brokerage Ltd. 212,161 17,773
206,127,401 360,851,701

382 Annual Report 2020

 Figures in Taka
2020 2019
16 SHARE CAPITAL
Authorised
300,000,000 shares of BDT 10 each 3,000,000,000 3,000,000,000
Issued, subscribed and paid up
255,000,000 ordinary shares of BDT 10 each 2,550,000,000 2,550,000,000

% of
Name of shareholder No. of shares Value of shares share holding

The City Bank Ltd 254,995,000 2,549,950,000 99.9980%

Mr. Mashrur Arefin 1,000 10,000 0.0004%
Mr. Sheikh Mohammad Maroof 1,000 10,000 0.0004%
Mr. Md. Mahbubur Rahman 1,000 10,000 0.0004%
Ms. Mahia Juned 1,000 10,000 0.0004%
Mr. Md. Abdul Wadud 500 5,000 0.0002%
Ms. Parul Das 500 5,000 0.0002%
255,000,000 2,550,000,000 100%

17 TERM LOAN
Principal outstanding 605,766,471 577,091,077
Interest payable 3,264,493 2,281,489
609,030,964 579,372,566
Current and non current classification

Non-current portion 575,617,456 531,065,260

Current portion (payable within twelve months) 33,413,507 48,307,305
609,030,964 579,372,565
Name of lender : IPDC Finance Limited
Name of facility : Term loan facility
Facility limit : BDT 830,000,000/-
Rate of interest : 9% per annum
Purpose of loan : For the purpose of acquisition of land and construction of building.

Repayment terms : 10 years including 24 months grace period for principal amount and 12 months grace period
for interest that will be paid through 32 equal installments after the grace period.

Security : i) Registered mortgage of 12 katha land with existing structure located at Uttara, Abdullahpur;
ii) Letter of comfort from The City Bank Ltd;
iii) First charge on fixed & floating assets of CBCRL.

18 LEASE LIABILITIES - ROU ASSETS

Non-current portion 2,466,904 6,267,273
Current portion (payable within twelve months) 2,855,273 5,581,966
5,322,177 11,849,239

19 ACCOUNTS PAYABLE
Payable to clients (note 19.1) 245,730,650 210,377,141
Accrued expenses (note 19.2) 15,304,609 1,013,585
261,035,259 211,390,726
19.1. Payable to clients
Client sales 86,595,998 10,793,893
Client deposit 159,134,652 199,583,248
245,730,650 210,377,141

383
 Figures in Taka
2020 2019
19.2 Accrued expenses
Audit fee 92,000 161,000
Rent expense - 263,906
CDS fee 676,331 -
Salaries and allowances - performance bonus 5,000,000 -
Advertisement expenses - 143,520
Legal expenses - 57,500
Security Service 91,278 22,680
Electricity expenses - 19,979
Gratuity payable (note 27) 9,100,000 -
Software maintenance fee 345,000 345,000
15,304,609 1,013,585

20 OTHER LIABILITIES
Payable to UCB Capital Management Ltd 8,102,569 2,720,444
Payable to Prime Bank Securities Limited
103,827 -
25,285,787 -
Payable to Remons Investment & Securities Ltd.
446,400 -
Payable for IPO application
1,629,240 3,259,803
Withholding tax payable (Note 20.1)
35,567,823 5,980,247

20.1 Withholding tax payable 364,290 419,281

Withholding tax on salary 342,852 192,570
Withholding tax on supplier and other payment 12,251 8,180
Withholding tax on professional fees 676,250 2,435,000
Withholding VAT on payable 232,058 204,771
Withholding VAT on supplier and other payment 1,539 -
Withholding VAT payable on professional fees 1,629,240 3,259,802

21 PROVISION FOR DIMINUTION IN VALUE OF INVESTMENT IN MUTUAL FUNDS

Provision for diminution in value of quoted shares (note 21.1) - 19,745,048

21.1 Provision for diminution in value of quoted shares of mutual fund

Opening balance 19,745,048 14,254,723
Add: Provision made during the year - 5,490,325
19,745,048 19,745,048
Less: Write back of provision made during the year 19,745,048 -
Closing balance - 19,745,048

As per Bangladesh Securities and Exchange Commission (BSEC) directive no BSEC/CMRRCD/2009-193/212 dated: 10 December 2018 and
BSEC’s directive no. BSEC/Servilance/Mukhopatro (5th Part)/2019/159 dated: 07 January 2020, no provision is required for diminution in
value of quoted securities. As on 31st December 2020, unrealized gain from listed securities is BDT 69,213,768 (note- 12.1).

22 PROVISION FOR TAXATION

Opening balance 119,562,662 118,327,122
Add: Provision made during the year 82,756,227 65,589,476
Less: Adjustment for over provision in prior years - (3,389,654)
202,318,889 180,526,944
Less: Paid/Adjustment during the year 125,965,691 60,964,282
Closing balance 76,353,198 119,562,662

384 Annual Report 2020

 Figures in Taka
2020 2019

23 INTEREST INCOME
Interest on margin loan 93,554,573 73,969,293
93,554,573 73,969,293

24 INCOME FROM INVESTMENT

Interest on fixed deposit 7,638,919 27,055,844
Capital gain from Govt. treasury bonds 16,294,295 -
Realised gains on sale of listed securities 4,384,640 -
Dividend from preference shares 1,515,744 2,068,863
Dividend from ordinary shares 131,448,066 134,222,332
161,281,664 163,347,039

25 SERVICE INCOME
Corporate advisory fees 17,995,000 38,468,510
Settlement fees 40,753,937 28,461,216
Portfolio management fees 15,556,401 7,060,459
Documentation charge 98,000 40,500
74,403,338 74,030,684

26 OTHER INCOME
SND interest Income 9,743,554 5,655,425
9,743,554 5,655,425

27 SALARIES AND ALLOWANCES

Salaries and allowances 69,861,717 51,066,964
Intern allowances 10,000 65,000
69,871,717 51,131,964

28 RENT, TAXES, INSURANCE, UTILITIES, ETC

Service charge 509,419 436,430
Insurance premium 688,506 230,662
Utilities expenses 1,675,044 1,866,284
2,872,969 2,533,375

29 REPAIRS, MAINTENANCE AND DEPRECIATION

Repair and maintenance 1,230,745 1,093,025
Depreciation-PPE 4,560,519 4,702,090
Depreciation-Lease asset 3,931,248 4,052,773
Amortisation of intangible assets - 328,509
9,722,512 10,176,397

30 STATIONERY, PRINTING AND ADVERTISING

Printing charge 187,924 109,725
Stationery 1,836,100 1,096,657
Advertisement 668,887 255,020
2,692,911 1,461,402

31 POSTAGE, STAMP AND TELECOMMUNICATION

Postage and courier charge 12,192 3,832
Online charges 568,042 564,763
Telephone charges 456,713 434,199
1,036,947 1,002,794

385
 Figures in Taka
2020 2019
32 OTHER EXPENSES
Business development expenses 3,618,538 5,328,434
Realised loss on listed securities - 1,516,640
Travelling and conveyance 1,029,057 1,562,182
Outsourcing expenses 1,373,336 1,171,803
Security expenses 1,086,078 1,121,309
Entertainment expenses 145,528 248,257
Excise duty 424,000 401,265
License and renewal fee 113,052 84,303
Cleaning expenses 198,450 272,814
Bank charges 39,790 49,321
Website maintenance expenses 28,254 14,505
Credit rating fee 80,625 214,000
Membership fee 111,111 293,000
Loss on PPE write-off 20,064 -
Miscellaneous expenses 193,871 206,950
8,461,754 12,484,783

33 FINANCE EXPENSE
Lease liability - IFRS 16 788,170 1,355,272
Short term loan 163,679 1,640,004
Overdraft loan 745,636 -
1,697,485 2,995,275

34 RELATED PARTIES
34.1 Parent company
The City Bank Limited has 99.9980% shareholding of the Company. As a result, the controlling party of the Company is The
City Bank Limited.

34.2 Related party transactions

During the year, the Company carried out a number of transactions with related parties in the normal course of business.
The names of related parties and nature of these transactions have been set out in accordance with the provision of IAS 24:
Related Party Disclosures.
Name of Relationship Nature of
related party with the entity transactions 2020 2019

Transaction during the period

Expense re-imbursement (302,513) (2,134,104)
Interest income from SND and FDR 12,775,715 8,621,244
Portfolio management fees - income 13,834,447 4,040,851
The City Bank Parent Corporate advisory fee - income - 19,800,000
Closing balance
Limited company
Inter company payable 442,060 139,547
FDR interest receivable - 2,642,188
Portfolio management fees - receivables 3,244,617 657,107
FDRs Investment - 82,500,000
SND and current account 182,480,599 259,586,843
Deposit for investment in listed securities 75,545,771 167,409,618
Transaction during the year
Net transaction of own investment (10,720,895) (102,354,070)
Share trading settlement 41,186,818 27,319,923
Brokerage commission 21,499,865 16,836,903
City Brokerage Ltd. Closing balance
Balance with City Brokerage Limited 18,994,120 51,739
Receivable for client share sell 134,696,599 59,101,672
Payable for client share purchase (134,752,316) (72,911,559)

386 Annual Report 2020

 Figures in Taka
35 FINANCIAL RISK MANAGEMENT 2020 2019
The Company’s management has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Company’s management policies are established to identify and analyse the risks faced by
the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management
policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company’s
activities. The Company has provided in separate notes the information about the Company’s exposure to each of the
following risks, the Company’s objectives, policies and processes for measuring and managing risks and the Company’s
management of capital. The Company has exposure to the following risks from its use of financial instruments.
- Credit risk
- Liquidity risk
- Market risk
35.1 Credit risk
Credit risk is the risk of financial loss to the company if any customer or counter party to a financial instrument fails to
meet its contractual obligation. This principally arises from the company's receivables from customers.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was:
Margin loan 1,011,872,894 620,014,892
Cash and cash equivalents 206,083,220 360,796,140
Trading Investments 288,006,928 275,933,838
Accounts receivables 79,513,925 4,791,352
Inter-company receivable 137,941,216 59,758,779
1,723,418,183 1,321,295,001
35.2 Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's approach
to managing liquidity (cash and cash equivalents) is to ensure, as far as possible, that it will always have sufficient liquid assets to
meets its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or taking risk of
damage to the company's reputation. Typically, the company ensures that it has sufficient cash and cash equivalents to meet
expected operational expenses through preparation of the cash flow forecast, prepared based on time line payment of the financial
obligation and accordingly arrange for sufficient liquidity/fund to make the expected payment within the due date.

35.3 Market risk

Market risk is the risk that any changes in market price, such as interest rates and capital market condition will affect
the company's income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposure within acceptable parameters.

36 CONTINGENT LIABILITIES AND COMMITMENTS

Underwriting commitments outstanding - 103,500,000

37 NUMBER OF EMPLOYEES
The number of employees engaged for the whole year or part thereof who received an yearly remuneration of BDT 36,000 or
above was 39 (2020:39).

38 OTHERS
38.1 Figures have been rounded off to the nearest BDT.

38.2 Prior year's figures shown for comparison purpose, have been rearranged whenever necessary to confirm with current year's
presentation.
For and on behalf of the Board of Directors of City Bank Capital Resources Limited

Chairman Director Managing Director & CEO Company secretary

Dhaka, Bangladesh
Dated, 25 February,2021

387
388
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Annex A
As at 31 December 2020

Cost Accumulated depreciation

Annual Report 2020

Balance at Total at Upto Charge for Total to
Particulars Addition Sale/ disposal Rate Adjustment Net book value
1 Jan 2020 31 Dec 2020 1 Jan 2020 the year 31 Dec 2020 at 31 Dec 2020

Taka Taka Taka Taka Taka Taka Taka Taka Taka

Office equipment 7,766,995 850,060 59,500 8,557,555 10%-50% 5,226,822 1,250,790 14,875 6,462,737 2,094,818
Furniture and fittings 7,584,994 9,675 - 7,594,669 10%-20% 3,806,383 1,193,908 - 5,000,290 2,594,379
20%
Motor vehicle 11,201,065 - - 11,201,065 6,355,104 2,115,822 - 8,470,926 2,730,139
Total at 31 December 2020 26,553,054 859,735 59,500 27,353,289 15,388,309 4,560,519 14,875 19,933,953 7,419,336

Total at 31 December 2019 25,711,871 841,183 - 26,553,054 10,686,219 4,702,090 - 15,388,309 11,164,745

SCHEDULE OF RIGHT-OF- USE ASSETS

As at 31 December 2020

Annex B

Cost Accumulated depreciation

Particulars Balance at Adjustment Addition Lease modification Total at As at Charge for Adjustment Total to Net book value
on initial
1 Jan 2020 application of during for rate change 31 Dec 2020 01 Jan 2020 the period 31 Dec 2020 at 31 Dec 2020
IFRS 16 as at during the year
01 Jan 2019 the year
Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Office space 14,915,583 - - 506,345 14,409,238 4,052,773 3,931,248 - 7,984,021 6,425,217

Total at 31 Dec 2020 14,915,583 - - 506,345 14,409,238 4,052,773 3,931,248 - 7,984,021 6,425,217
Total at 31 Dec 2019 -
- 14,915,583 - 14,915,583 - 4,052,773 - 4,052,773 10,862,811
 FINANCIAL
STATEMENTS OF
CBL MONEY TRANSTER
SDN. BHD. 2020
(Incorporated in Malaysia)

389
 INDEPENDENT AUDITORS' REPORT
To the Members of CBL Money Transfer Sdn. Bhd.
(Incorporated in malaysia)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION
We have audited the financial statements of CBL MONEY TRANSFER SDN. BHD., which comprise the statement of financial position as
at 31 December 2020, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on the
accompanying pages.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31
December 2020, and of its financial performance and its cash flows for the year then ended in accordance with Financial Reporting
Standards and the requirements of the Companies Act, 2016 in Malaysia.

BASIS FOR OPINION

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our
responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

INDEPENDENCE AND OTHER ETHICAL RESPONSIBILITIES

We are independent of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian
Institute of Accountants ("By-Laws") and the International Ethics Standards Board for Accountants' Code of Ethics for Professional
Accountants ("IESBA Code") and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS'' REPORT THEREON
The Directors of the Company are responsible for the other information. The other information comprises the Directors' Report but
does not include the financial statements of the Company and our auditors' report thereon.
Our opinion on the financial statements of the Company does not cover the Directors' Report and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements of the Company, our responsibility is to read the Directors' Report and, in doing
so, consider whether the Directors' Report is materially inconsistent with the financial statements of the Company or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
Based on the work we have performed, we conclude that there is no material misstatement of the Directors' Report.

RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL STATEMENTS

The Directors of the Company are responsible for the preparation of financial statements of the Company that give a true and fair view
in accordance with Financial Reporting Standards and the requirements of the Companies Act, 2016 in Malaysia. The Directors are also
responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements of the
Company that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements of the Company, 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.

390 Annual Report 2020

AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements of the Company as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors' 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 approved standards on auditing in
Malaysia and International Standards on Auditing 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 approved standards on auditing in Malaysia and International Standards on Auditing, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
i) Identify and assess the risks of material misstatement of the financial statements of the Company, 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.
ii) 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.
iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by the Directors.
iv) 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
auditors' report to the related disclosures in the financial statements of the Company 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 auditors' report. However,
Future events or conditions may cause the Company to cease to continue as a going concern.
v) Evaluate the overall presentation, structure and content of the financial statements of the Company, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In accordance with the requirements of the Companies Act 2016 in Malaysia, we also report that in our opinion the accounting and
other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the
provisions of the Act.

OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in
Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

NASHARUDDIN WONG & CO NASHARUDDIN BIN ABD. AZIZ

(NO: AF 0981) (NO: 1675/05/2021(J)
Chartered Accountants Partner of the firm
Chartered Accountants (M)
Petaling Jaya
Dated: 09 February 2021

391
 STATEMENT OF FINANCIAL POSITION
As at 31 December 2020 2020 2019
Notes RM RM
Non current assets
Property, plant and equipment 5 952,8960 902,819
952,960 902,819
Current assets
Security deposits, advances and other assets 332,738 350,681
Settlement obligations 6 16,337,547 12,472,951
Cash and cash equivalents 7 2,091,637 2,452,212
18,761,922 15,275,844
Total assets 19,714,882 16,178,663

Equity attributable to equity Holders of the company

Share capital 8 5,822,896 5,822,896
Retained earnings/(accumulated loss) 1,538,501 1,396,870
Total equity 7,361,397 4,426,026

Non current liabilities

Lease liabilities 9 - 2,095
- 2,095
Current liabilities
City bank borrowing 10 11,838,044 11,497,270
Other payables and accruals 103,809 238,078
Lease liabilities 9 2,,095 12,694
Provision for taxation 409,537 2,500
12,353,485 11,750,543
Total liabilities 12,353,485 11,752,638
Total equity and liabilities 19,714,882 16,178,663
The accompanying notes form an integral part of these financial statements.

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the financial year ended 31 December 2020
2020 2019
Notes RM RM
Revenue 3 (e) 10,654,815 7,526,068
Cost of services 3 (f) (938,463) (1,061,154)
Gross profit 9,716,352 6,464,914

Other income (696,109) 101,239

Staff costs (2,643,735) (3,172,277)

Depreciation expenses (193,744) (188,090)
Other operating expenses (2,126,449) (2,255,275)
Finance charges (316,352) (396,008)
Profit before taxation 11 3,739,963 554,503
Income tax expense 12 (804,592) (3,345)
Profit for the year 2,935,371 551,158
Other comprehensive Income, net of tax - -
Total comprehensive income for the year 2,935,371 551,158

The accompanying notes form an integral part of these financial statements.

392 Annual Report 2020

STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 December 2020
(Accumulated loss)/
Share Capital Retained earnings Total
RM RM RM

As at 1 January 2019 5,822,896 (1,948,028) 3,874868

Total comprehensive income for the year - 551,158 551,158
As at 31 December 2019 5,822,896 (1,396,870) 4,426,026

As at 1 January 2020 5,822,896 (1,396,870) 4,426,026

Total comprehensive income for the year - 2,935,371 2,935,371
As at 31 December 2020 5,822,896 1,538,501 7,361,397

The accompanying notes form an integral part of these financial statements.

STATEMENT OF CASH FLOW

For the financial year ended 31 December 2020 2020 2019
Notes RM RM
Cash flows from operating activities:-
Profit before taxation 3,739,963 554,503
Adjustment for:-
Depreciation of property, plant and equipment 193,744 188,090
Interest expenses 316,352 396,008
Operating profit before working capital changes 4,250,059 1,138,601
Working capital changes:
Receivables (3,846,653) (5,111)
Payables (134,269) (1,139,339)
Cash generated from/(used by) operating activities 269,137 (5,849)
Interest paid (316,352) (396,008)
Tax paid (397,555) (2,655)
Net cash used by operating activities (444,770) (404,512)

Cash flows from investing activities:-

Purchase of property, plant and equipment (243,885) (183,735)
Net cash used by investing activity (243,885) (183,735)

Cash flows from financing activities :

Repayment of lease liability (12,694) (12,151)
Borrowing from holding company 340,774 -
Repayment to holding company - (934,602)
Net cash generated from/(used by) financing activities 328,080 (946,753)
Net changes in cash and cash equivalents (360,575) (1,535,000)
Cash and cash equivalents brought forward 2,452,212 3,987,212
Cash and cash equivalents carried forward 7 2,091,637 2,452,212

The accompanying notes form an integral part of these financial statements.

393
 NOTES TO FINANCIAL STATEMENTS
As at and for the year ended 31 December 2020

1 GENERAL INFORMATION
The Company is a private limited company incorporated and domiciled in Malaysia with its principal place of business at
Ground Floor, Loke Yew Building, No. 2, Leboh Pasar Besar, 50050 Kuala Lumpur, The registered office is located at A-6-1/1,
Block A, Megan Avenue, 189 Jalan Tun Razak, 50400 Kuala Lumpur.
The Company is principally engaged as outbound remittance service provider.
The holding company is The City Bank Limited, a company incorporated in Bangladesh.
The financial statements of the Company are presented in Ringgit Malaysia (RM)

2 BASIS OF PREPARATION
The financial statements have been prepared in accordance with Malaysia Financial Reporting Standards (MFRS) issued
by the malaysian Accounting Standards Board ("MASB"), International Financial Reporting Standards (IFRS) and the
Requirements of the Act, 2016, in Malaysia.

3 SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting
The Financial statements have been prepared under the historical cost convention.
As of 1 January 2020, the Company adopted the following new MFRSs and Issues Committee ("IC") Interpretation which
have been issued by the Malaysian Accounting Standards Board ("MASB"):
(i) Effective for financial periods beginning of or after 1 January 2020:
Amendments to References to the Conceptual Framework in MFRS Standards
Amendments to MFRS 2 Share-Based Payment
Amendments to MFRS 3 Business Combinations
Amendments to MFRS 6 Exploration and Evaluation of Mineral Resources
Amendments to MFRS 7 Financial Instruments: Disclosures: Interest Rate Benchmark Reform
Amendments to MFRS 9 Financial Instruments: Interest Rate Benchmark Reform
Amendments to MFRS 14 Regulatory Deferral Accounts
Amendments to MFRS 101 Presentation of Financial Statements
Amendments to MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors
Amendments to MFRS 134 Interim Financial Reporting
Amendments to MFRS 137 Provisions, Contingent Liabilities and Contingent Assets
Amendments to MFRS 138 Intangible Assets
Amendments to MFRS 139 Financial Instruments: Recognition and Measurement: Interest Rate
Benchmark Reform
Amendments to IC Interpretation 12 Service Concession Arrangements
Amendments to IC Interpretation 19 Extinguishing Financial Liabilities with Equily Instruments
Amendments to IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine
Amendments to IC Interpretation 22 Foreign Currency Transactions and Advance Consideration
Amendments to IC Interpretation 132 Intangible Assets - Web site Cost

(ii) Efective for financial periods beginning on or after 1 June 2020:

MFRS 16 Leases: Covid-19 Related Rent Concessions
The adoption of the above standards, amendments and interpretation are not expected to havesignificant impact on the
financial position and financial performance of the Company.
At the date of authorisation for issue of these financial statements, the following new MFRSs, Amendments to MFRSs and
IC Interpretations have been issued by the MASB but not yet effective and have not been applied by the company:

394 Annual Report 2020

 (iii) Efective for financial periods beginning on or after 1 January 2021:
Amendments to MFRS 4 Insurance Contracts: Interest Rate Benchmark Reform - Phase 2
Amendments to MFRS 7 Financial Instruments: Disclosures: Interest Rate Benchmark Reform - Phase 2
Amendments to MFRS 9 Financial Instruments: Disclosures: Interest Rate Benchmark Reform - Phase 2
Amendments to MFRS 16 Leases: Interest Rate Benchmark Reform - Phase 2
Amendments to MFRS 139 Financial Instruments: Recognition and Measurement: Interest Rate
Benchmark Reform-Phase 2
(iv) Efective for financial periods beginning on or after 1 January 2022:
Amendments to MFRS 3 Bssiness Combinations: Reference to the Conceptual Framework
Amendments to MFRS 101 Presentation of Financial Statements: Classification of Liabilities as Current
or Non-current
Amendments to MFRS 116 Property, Plant and Equipment: Proceeds before Intended Use
Amendments to MFRS 137 Provisions, Contingent Liabilities and Contingent Assets: Onerous
Contracts-Cost of Fulfilling a Contract

(v) Annual Improvements to MFRSs 2018 - 2020 Cycle

Amendments to MFRS 1 First - time Adoption of Malaysian Financial Reporting Standards:
Subsidiary as a First-time Adopter
Amendments to MFRS 9 Financial Instruments: Fees in the ‘10 per cent’ Test for Derecognition of
Financial Liabilities
Amendments to MFRS 141 Agriculture: Taxation in Fair Value Measurements

(vi) Efective for financial periods beginning on or after 1 January 2023:

MFRS 17 Insurance Contracts
Amendments to MFRS 101 Presentation of Financial Statements: Classification of Liabilites as Current
or Non-current

(vii) Deferred to date to be determined by the MASB:

Amendments to MFRS 10 Consolidated Financial Statements: Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture
Amendments to MFRS 128 Investment in Associates and Joint Ventures: Sale or Contribution of Assets
between and Investor and its Associate or Jonit Venture
The Company will adopt the above new MFRSs and Amendments to MFRSs when they become effective. The adoption
of the above new MFRSs and Amendments to MFRSs is not Expected to have a material impact on the financial
performance or position of the Company in the period of initial application.

(b) Property, Plant and Equipment

All items of plant and equipment are initially recorded at cost less accumulated depreciation, Subsequent costs are
included in the asset's carrying amount or recognides as a separate asset, as appropriate, only when it is probable that
future economic benefits associated wiht the item will flow to the Company and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the income statement duringg the financial year in which they
are incurred.
Plant and equipment are initially measured at cost.
Subsequent to recognition, plant and equipment are measeurd at cost less accumulated depreciation and accumulated
impairment losses.

395
 Depreciation of plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual
value over the estimated use ful life, at the fllowing annual rteds:-
Air conditioners 10%
Computer 20%
Furniture and fittings 10%
Office equipments 10%
Renovation 10%
Signage and billboard 10%

The residual values, useful life and depreciation mothod are reviewed at each financial year end to ensure the the amount,
method and period of depreciation are consistentwihth previus estimates and the expected pattern of consumption of the
future economic benefits embodied in the items of plant and equipment.
An item of plant and equipment is derecognised upon disposal or whe no future economic benefits are expected from its
use on disposal .The difference between the net disposalprocceds, if any, and the net carrying amount is recognised in the
income statement.

(C) Finacial instruments

(i) Initial recognition and measurement
A financial asset or financial liability is recognised in the financial position when, and only when, the Company becomes a
party to the contractual provisions of the instrument.
A Financial asset (unless it is a receivable without a significant financing component) or a financial liability is initially
measured at fair value plus or minus, in the case of a financial instrument not at fair value through profit or loss, any directly
attributable transaction cost incurred at the acquisition or issuance of the financial instrument. A trade receivable that does
not contain a significant financing component, is initiured at the transaction price.
No change to the accounting policy in relation to regular way purchases or sales (purchases or sales under a contract
whose terms require delivery of financial assets within a time frame established be regulation or convention in the
marketplece concerned).

(ii) Financial instrument eategories and subsequent measurement financial assets

The Company Company categorise financial instrumentsas flolows:
Categories of financial assets are determided on initial recognition and are not reclassified subsequent to their initial
recognition unless the Company changes its business model for managing financial assets in which case all affected
financial assets are reclassified on the first day of the first reporting year following the change of the business model.

a) Amortised costs
Amortised cost ("AC”)acategrory comprises financial assets that are held wihthin a business model whose objective is to
hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cashlflows that are
solely payments of principal and interest on the principal amount outstanding tThe financial assets are not designated as
fair value through profit or loss, subsequent to initial recognition, these financial assets are measured at amortised cost
using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised
in profit or loss.

b) Fair value through other comprehensive income

(i) Debt investments
Fair value through other comprehensive income category comprises debt investment where it is held within a business
model whos e oeective is achieved by both collecting contractual cash flows and selling the financial assets, and its
contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. The debt investment is not designated as at fair value through profit or loss. Interest income
calculated using the effective interest method, foreign exchange gains and losses and impirment are recognised in profit
or loss. Other net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses
accumulated in other comprehensive income are reclassified to profit or loss.

396 Annual Report 2020

ii) Equity investments
This category comprises investment in equity that is not held for trading, and the Company irrevocably elect to present
subsequent changes in the investment's fair value in other comprchensive income. This election is made on an
investment-by-investment basis. Dividends are recognised as income in profit or loss unless the dividend clearly
represents a recovery of part of the cost of investment. Other net gains and losses accumulated in other comprehensive
income are not reclassified to profit or loss.

C) Fair value through profit or loss

All financial asset not measured at amortised cost or fair value through other comprehensive income as described above
are measurd at fair value through profit or loss. This includes derivative financial assets (except for a derivative that is a
designated and effective hedging instrument). On initial recognition, the Company may irrevocaley designate a financial
asset that otherwise meets the requirenents to be measured at amortised cost or at fair value through other
comprehensive income as at fair value through profit or loss if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
Financial assets categrised as fair value through profit or loass are subsequrntly measured at theit fair value. Net gains or
losses, including any interest or dividend income, are recognised in the profit or loss,
All Financial assets, except for those measured at fair value through profit or loss and equity investments measured at fair
value through comprehensive income, are subject to impairment assessment.

Financial Liabilities
At initial recognition, all financial liabilities are subsequently measured at fair value through profit or loss or at amortised cost.

a) Fair value through profit or loss

Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a
financial guarantee contract or a designated and effective hedging instrument, contingent consideration in a business
combination and financial liabilities that are specifically designated into financial liabilities categorised as fair value through
profit or loss are subsequently measured at their fair value with gains or losses, including any interest expense are
recognised in the profit or loss.
For financial liabilities where it is designated as fair value through profit or loss upon initial recognition, the Company
recognised that amount of change in fair value of the financial liability that is attributable to change in credit risk in the
other comprehensive income, unless the treatment of the effects of changes in the liability’s credit risk would create or
enlarge an accounting mistatch, and remaining amount of thecharnge in fair value in the profit or loss.

b) Amortised cost
Other financial liabilities not categorised as fair value through profit or loss are subsequently measured at amortised cost
using the effective interest method.
Interest expense and foreign exchange gains and losses are recognised in the profit or loss. Any gains or losses are also
recognised in the profit or loss.

iii) Derecognition
A financial asset or part of it is derecognised when, and only when the contractual right to the cash flows from the financial
asset expire or control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial
asset are transferred to another party. On derecognition of a financial asset, the difference between the carrying amount
and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any
cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged,
cancelled or expired. A financial liability is also derecognised when its terms are modified and the cash flows
of the modified and the cash flows of the modified liability are substantially different, in which case, a new financial liability
based on modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the
carrying amount of the financial liabltity extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

397
 d) Dash and Cash Equivalents
Cash and cash equivalents comprise of cash in hand and at bank.

e) Revenue
The majority of the Company's revenues are comprised of consumer money transfer transaction fees that are based on
the principal amount of the money transfer and the locations from and to which funds are transferred, Consumer money
trantfer transaction fees are set by the Company and recorded as revenue at the time of sale. In certain consumer money
transfer transactions involving different send and receive currencies, the Company generates revenue based on the
difference between the exchange rate set by the Company to the consumer and the rate at which its agents are able to
acquire currency. This foreign exchange revenue is recorded at the time the related transaction fee revenue is recognised.

f) Cost of services
Cost of services consists of cost directly associated with providing services to consumers, and is primarily comprised of
bank charges, which are recognised at the time of sale.

g) Income tax
i) Current tax
Income tax on the income statement for the year comprises current and defarred tax. Current tax. Current tax is the
expected amount of incomes taxes payable in respect of the taxable profit for the year and is measured using the tax rates
that have been enacted at the balance sheet date.

ii) Deferred tax

Deferred tax is provided for, using the liability method, on temporary diferences at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are
recognised for all taxable temporary differences, unused tax credits to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized.
Deferred tax is not recognise if the temporary differences arises from goodwill or negative goodwill or from the initial
recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction,
affects neither accounting profit no taxable profit.

(h) Foreign Currencies

Transaction in foreign currencies are converted into Ringgit Malaysia at rates of exchange approximating those ruling at
the transaction dates. At each of balance sheet date, foreign currency monetary items are translated into Ringgit Malaysia
at exchange rates ruling at that date, unless hedged by forward foreign exchange contracts, in which case the rates
specified in such forward contracts are used.
Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the
historical rates as at the date of acquisition and non-monetary items which are carried at fair value are translated using the
exhchange rate that existed when the values were determined.

(i) Impairment of financial assets

All financial assets are assessed at each reporting date whether there is any objective evidence of impairment as a result
of one or more events having an impact on the estimated future cash flows of the assets. Losses expected as a result of
future events, no matter how likely, are not recognised. For an equity instrument, a significant or prolonged decline in the
fair value below its cost is an objective evidence of impairment.
All impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference
between the asset's carrying amount and the present value of estimated future cash flows discounted at the asset's
original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. When
a trade receivable becomes uncollectible it is written off against the allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in the profit or loss and is measured as the
difference between the asset's acquisition cost (net of any principal repayment and amortisation) and the asset's current
fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial
asset has been resognised in the other comprehensive income, the cumulative loss in other comprehensive income is
reclassified from equity and recognised to profit or loss.

398 Annual Report 2020

 (j) Settlement Obligations
Settlement obligations consist of money transfer and payment service payables and payables to agents. Money transfer
payables represent amounts to be paid to transferees when they request their funds. Most agents typically settle with
transferees first and then obtain reimbursement from the Company. Due to the agent funding and settlement process,
payables to agents represent amounts due to agents for money transfers that have been settled with transferees.

(k) Employees Benefits

(i) Short term employee benefits
Wages, salaries and bonuses are recognised as expenses in the year in which the associated services are rendered by
employees of the Company. Short term accumulating compensated absences such as paid annual leave ae recognised
when services are rendered by employees that increase their entitlement to future compensated absences. and short
term non-accumulating compensated absences such as sick leave are recognised when absences occur.
(ii) Defined contribution plans
Obligations for contributions to defined contribution plans are recognised as an expense in the income statements as
incurred.

4 CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

Estimates and judgements are continuosly enaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
In the process of applying of the company's accounting policies, which are described in note - 3 and the key assumptions
concerning the future, management is not aware of any judgements or estimates that have a significant effect on the
amount recognised in the financial statements.

5 PROPERTY, PLANT AND EQUIPMENT

Office equipment
computers & Furniture & Motor Signage &
air condition fittings vehicles Renovation billboard Total
RM RM RM RM RM RM
2020
Cost
As at 01.01.2020 963,358 197,318 103,377 603,778 72,574 1,945,405
Additions for the year 183,190 10,080 9,200 32,415 9,000 243,885
As at 31.12.2020 1,146,548 207,398 112,577 636,193 86,574 2,189,290

Accumulated depreciation
As at 01.01.2020 496,776 65,837 103,377 340,804 35,793 1,042,586
Charge for the year 128,426 16,113 920 40,453 7,833 193,744
As at 31.12.2020 625,201 81,950 104,297 381,257 43,626 1,236,330
Net carrying amount 521,347 125,448 8,280 254,936 42,948 952,960

2019
Cost
As at 01.01.2019 859,036 157,878 103,377 568,505 72,874 1,761,670
Additions for the year 104,322 39,440 - 35,273 4,700 183,735
As at 31.12.2019 963,358 197,318 103,377 603,778 77,574 1,945,405

Accumulated depreciation
As at 01.01.2019 372,575 50,522 101,652 301,516 28,231 854,496
Charge for the year 124,200 15,315 1,725 39,288 7,562 188,090
As at 31.12.2019 496,775 65,837 103,377 340,804 35,793 1,042,586
Net carrying amount 466,583 131,481 - 262,974 41,781 902,819

399
 6 SETTLEMENT OBLIGATIONS
2020 2019
Agents Prefunding Obligation Net Position Prefunding Obligation Net Position
RM RM RM RM RM RM
Agrani Bank Limited 364,740546 (363,182,908) 1,557,638 222,076,438 (221,309,976) 766,462
Al-Arafah Islami Bank Limited 2,798,293 (2,718,287) 80,006 541,124 (494,724) 46,399
Bangladesh Krishi Bank 30,214,764 (29,978,606) 236,158 21,632,544 (21,416,673) 215,871
Bangladesh Utara Bank - 4,291 4,291 - 4,291 4,291
Bkash Limited - (7,254,302) (7,254,302) - (3,277,276) (3,277,276)
Bank Asia Limited 6,772,729 (6,657,298) 115,431 3,114,721 (3,034,507) 80,214
BNI Indonesia 100,864,525 (100,309,598) 554,927 79,344,548 (78,492,976) 851,571
BRI Indonesia 497,857,502 (494,895,019) 2,962,483 388,507,501 (384,400,705) 4,106,796
Buro - (6,665,912) (6,665,912) - (5,746,856) (5,746,856)
City Bank Limited 365,906,761 (344,564,885) 21,341,876 281,111,396 (265,564,817) 15,546,579
Donga Money Transfer 29,735,288 (29,328,275) 407,013 26,937,737 (26,606,606) 331,131
Dutch Bangla Bank Limited 207,470 (22,357) 185,113 - - -
Himalayan Bank 76,480,665 (76,020,084) 460,581 63,200,834 (62,722,980) 477,853
Ipay 30,879,860 (30,856,665) 23,195 30,879,860 (30,856,665) 23,195
Islami Bank 547,787,448 (546,333,318) (1,454,130) 276,346,434 (275,531,546) 814,888
Jagorani Chakra Foundation - (5,188,463) 5,188,463 - (5,043,074) (5,043,074)
Janata Bank 129,410,561 (129,135,372) 275,189 112,204,934 (111,641,736) 563,198
Kotak Mahindra Bank 44,621,516 (43,668,130) (953,386) 26,445,777 (25,748,995) 696,782
Padakhep - (2,143,045) (2,143,045) - (2,042,205) (2,042,205)
Pubali Bank Limited 27,135,559 (27,012,050) 123,509 22,310,790 (21,964,869) 345,921
Reliable Finance Limited - 13,952 13,952 - 13,952 13,952
Rupali Bank Limited 15,967,515 (15,541,790) 425,725 3,696,463 (3,597,912) 98,552
Sanima Bank Limited 141,433,420 (139,042,392) 2,391,028 49,013,494 (48,398,324) 615,170
Samsara 10,095,854 (10,100,272) (4,418) 10,095,854 (10,100,272) (4,418)
Sonali Bank Limited 137,718,155 (136,566,043) 1,152,112 115,393,564 (114,394,106) 999,458
Sulav Remit Nepal 77,575,949 (77,536,154) 39,795 77,575,949 (77,536,154) 39,796
Tranglo Sdn Bhd 91,063,869 (91,055,479) 8,390 90,898,869 (90,892,296) 6,573
Trans Fast Remittance LLC 194,280,399 (49,180,775) 145,099,624 112,118,351 (38,712,555) 73,405,796
Trans Fast Pakistan - (10,092,766) (10,092,766) - (2,577,619) (2,577,619)
Trans Fast Bangladesh - (132,620,446) (132,620,446) - (69,249,162) (69,249,162)
Uttara Bank Limited 8,784,346 (8,703,424) 8,922 7,531,155 (7,499,680) 31,475
United Commercial Bank Limited 40,850 (22,984) 17,866 40,850 (11,825) 29,025
Xpress Money 45,236,322 (44,893,763) 342,559 44,002,792 (43,700,180) 302,612
2,977,610,166 (2,961,272,619) 16,337,547 2,065,021,977 (2,052,549,026) 1,2472,951

7 CASH AND CASH EQUIVALENTS

2020 2019
Cash and cash equivalents comprise of:- RM RM
Cash and bank balances 2,091,637 2,452,212
2,091,637 2,452,212

8 SHARE CAPITAL
No. of shares RM No. of shares RM

Issued and fully paid:-

Ordinary shares 5,822,896 5,822896 5,822,896 5,822896

400 Annual Report 2020

 2020 2019
9 LEASE LIABILITIES RM RM
Cash and cash equivalents comprise of:-

Total amount payable 2,106 15,186

Less: Interest in suspense (11) (397)
2,095 14,789

Payables within 12 months 2,095 12,694

Payables after 12 months - 2,095
2,095 14,789

10 CITY BANK BORROWING

This represents unsecured shareholder's loans in form of overdraft and bank guarantee strictly for the purpose of the
Company's remittance business activities.
The facilities are charged interest at 5.25% (2019: 5.25%) per annum and is repayable on demand.

11 PROFIT BEFORE TAXATION

Profit before taxation has been determinded after charging crediting) amongst other items the following :-

Auditor’s remuneration 12,000 12,000

Depreciation 193,744 188,090
Director’s remuneration 142,000 148,000
Interest expense 316,352 396,008
Offie rental 840,402 778,915
Revalution loss/(gain) from remittances 696,109 26,349
Rental income - 69,000

12 INCOME TAX EXPENSE

Current year's provision for taxation 805,537 2,500
(Over)/underprovision of taxation in prior year (945) 845
Tax expense for the year 804,592 3,345

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax
expense at the effective tax rate of the Company is as follows:-

Profit before taxation 3,739,963 554,503

Taxation at Malaysian statutory tax rate 897,591 133,081

Expenses not deductible for taxation 233,846 56,456
Deferred tax asset not recognised during the year (325,900) (187,037)
(Over)/underprovision of tazation in prior year (945) 845
Tex expense for the year 804,592 3,345

13 SIGNIFICANT RELATED PARTY TRANSACTIONS

During the financial year, the Company had, in the normal course of business transacted on normal commercial terms the
following transactions :-
Interest expense paid to holding company 315,966 395,078

401
 14 FINANCIAL STATEMENT
Categories of financial instruments
The table below provides an analysis of financial instruments categorised under MFRS 9:
(a) Financial assets and financial liabilities measured at amortised cost ("AC")

Carrying
amount AC
31.12.2020 RM RM
Financial Assets
Security deposits, advances and other assets 332,738 332,738
Settlement obligations 16,337,547 16,337,547
Cash and cash equivalents 2,091,637 2,091,637
18,761,922 18,761,922

Financial Liabilities
City Bank borrowing 11,838,044 11,838,044
Other payables and accruals 103,809 103,809
Lease liabilities 2,095 2,095
11,943,948 11,943,948
31.12.2019
Financial Assets
Security deposits, advances and other assets 350,681 350,681
Settlement obligations 12,472,951 12,472,951
Cash and cash equivalents 2,452,212 2,452,212
15,275,844 15,275,844

Financial Liabilities
City Bank borrowing 11,497,270 11,497,270
Other payables and accruals 238,078 238,078
Lease liabilities 12,694 12,694
11,748,042 11,748,042

Financial Risk Management Objectives and Policies

The Company's financial risk management policy seeks to ensure that adequate financial resources are available for the
development of the Company's businesses managing risk The Company is exposed to financial risk from operations and the
use of financial instruments. The key financial risks include foreign currency risk, interest rate risk, credit risk and liquidity risk.
The company operates within clearly defined guidelines on financial risk management and it is not the Company's policy to
engage in speculative transaction.
The folowing sections provide details regarding Company's exposure to hte above mentioned financial risk and the
objectives, policies and processes for the management of these risks:

(a) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instruments will fluctuate because of
changes in foreign currency risk. The Company is exposed to foreign currency risk on settlement obligations, cash and cash
equivalents and loan and borrowing that are denominated in currencies other than the functional currency of the Company.
Carrying amounts of the Company's exposure to foreign currency risk are as follows:

402 Annual Report 2020

 USD Totals
RM RM RM
31.12.2020
Settlement obligations 16,337,547 - 16,337,547
Cash and Bank balances 2,060,582 31,055 2,091,637
Loan and borrowing 11,838,044 - 11,838,044

31.12.2019
Settlement obligations 12,472,951 - 12,472,951
Cash and Bank balances 2,443,651 8,561 2,452,212
Loan and borrowing 11,497,270 - 11,497,270

Foreign currency sensitivity analysis

The Company's sensitivity to foreign currency is mainly attributable to the exposure of cash and bank balances which
denominated in United States Dollar at the end of the reporting period.
In management opinion, the sensitivity analysis is unpresentative of the inherent foreign exchange risk because the year
end exposure does not reflect the exposure during the financial year.

(b) Interest Rate Risk

The Company is exposed to interest rate risk through the loan and borrowing which is fixed at the incpection of the
financing arrangements, are disclosed in Note 10.
No sensitivity analysis is prepared as the Company does not expect any material effect on the Company's profit net of tax
and equity arising from the effect of reasonably possible changes to interest rates on interest bearing financial instruments
at the end of the reporting period.

(c) 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 arise primarily from mismatches of the maturities of financial assets and liabilities.
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of credit
facilities.

On demand or
2020 within 1 year 1 to 2 years Total
RM RM RM

Financial Liablities
Loan and borrowing 11,838,044 - 11,838,044
Other payables and accruals 103,809 - 103,809
Lease liabilities 2,095 - 2,095
11,943,948 - 11,943,948

2019

Financial Liablities
Loan and borrowing 11,497,270 - 11,497,270
Other payables and accruals 238,078 - 238,078
Lease liabilities 12,694 2,095 14,789
11,748,042 2,095 11,750,137

403
 15 CAPITAL MANAGEMENT
The Company's primary objectives when managing its capital is to ensure that it maintains the Company's stability and
growth 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.
The Company regularly reviews and manages its capital structure and makes adjustments to it, taking into consideration
of changes in economic conditions, future capital requirements of the Company, prevailing and projected profitibility and
operating cash flows, projected capital expenditures and projected strategic investment oppurtunities. No changes were
made in the objectives, policies or processes during the financial years ended 31 December 2020 and 2019.

2020 2019
RM RM

Share capital 5,822,896 5,822,896

Reserves 1,538,501 (1,396,870)
Total equity 7,361,397 4,426,026
Loan and borrowing 11,838,044 11,497,270
Total borowing to total equity (%) 1.61 2.60

16 IMPOSITION OF MOVEMENT CONTROL

On 16 March 2020, the Malaysian Government had announced the imposition of a Movement Control Order (MCO)
nationwide to curb the spread of COVID-19 in Malaysia, under the Prevention and Control of Infectious Diseases Act 1988
and the Police Act 1987.
Before these financial statements were made out, the Board of Directors had considered the impact of COVID-19 outbreak
in Malaysia, which would have affected the financial position, perfomance and cash flow of the Company as ended on the
reporting date thereon;
The Management concluded that the impact of non-adjusting events from this COVID-19 outbreak has not significantly
affected the fair value of the financial assets / liabilities and non-financial assets of the Company, including the classification
of current and non-current items tht were presented on the reporting date.

17 COMPARATIVE FIGURES
The Company has reclassified the presentation of financial position as at 31 December 2020. The net effects of the
Company's comparative figure as summarised below :

As previously
Statemet of Financial Position reported Reclassified Restated
RM RM RM

Current assets
Settlement obligations - 12,472,951 12,472,951

Current liability
Settlement obligations (12,472,951) 12,472,951 12,472,951

18 AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENT

The financial statement were authorised for issue by the Board of Directors in accordance with a resolution of the Directors
on the date of these financial statements.

404 Annual Report 2020

DETAILED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 31 December 2020

2020 2019
RM RM
Revenue
Transaction fees 3,797,583 4,107,482
Foreign exchage revenue 6,857,232 3,418,586
10,654,815 7,526,068
Less: Cost of services
Services charges (938,463) (1,061,154)
Gross profit 9,716,352 6,464,914

Add : Other income

Interest income - 5,890
Rental income - 69,000
Revaluation (loss) / gain from remittances (696,109) 26,349
(696,109) 101,239

Less: Administrative and operating expenses

Staff costs :
Bonus 12,830 1,200
Benefit in kind 32,458 131,712
Wages, salaries and allowances 2,417,061 2,881,597
EPF 136,994 110,616
SOCSO 27,902 21,941
Medical 16,490 25,211
2,643,35 3,172,277
Depreciation expenses 193,744 188,090

For management information only

405
 DETAILED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 31 December 2020

2020 2019
RM RM
Other operating expenses
Advertising 90 21,789
Agency fees 5,000 12,000
Auditor's remuneration - fees 12,000 12,000
Auditor's remuneration - expenses 2,030 930
Bank charges 64,356 123,965
Courier and postage 4,326 6,911
Directors' remuneration 142,000 148,000
Electricity and water 111,930 124,577
Entertainment 37,507 50,028
Educational allowances 151,623 78,082
Insurance - 2,028
Licensing fee 14,175 10,240
Repair and maintenance 23,333 36,554
Office rental 840,402 778,915
Printing and stationery 92,357 76,188
Professional fees 32,541 34,715
Rental of photostat machine 32,735 34,748
Rental of Pos machine 10,729 10,185
Secretarial and filling fees 1,412 1,972
Security charges 218,847 404,060
Service charge 1,579 5,699
Stamp duty 352 157
Staff training 110,025 20,900
Telephone and internet 121,803 107,230
Travelling and accommodation 84,524 131,094
Upkeep of motor vehicles 10,773 22,308
2,126,449 2,255,275
Financial charges:-
Loan interest 315,966 395,078
Hire purchase interest 386 930
316,352 396,008
PROFIT BEFORE TAXATION 3,739,963 554,503

For management information only

406 Annual Report 2020

 FINANCIAL
STATEMENTS OF
CITY HONG KONG
LIMITED 2020
(Incorporated in Hong Kong
with Limited Liability)
 REPORT OF THE DIRECTORS
The directors have pleasure in submitting their annual report together with the audited financial statements of City Hong Kong Limited (the
“Company”) for the year ended 31 December 2020.

PRINCIPAL ACTIVITIES
The Company was a licensed money lender registered under the Money Lenders Ordinance in Hong Kong. The Pricipal activity of the
company during the year is engaged in trade finance activities.

RESULTS AND APPROPRIATIONS

The loss of the Company for the year ended 31 December 2020 and the state of the company's affairs at that date are set out in the financial
statements on pages 6 to 24.
The directors do not recommend the payment of a diviend for the year. (2019:Nill)

PROPERTY, PLANT AND EQUIPMENT

Details of the movements during the year in the property, plant and equipment of the Company are set out in Note 9 to the fonancial
statements.

SHARE CAPITAL
Details of the Company's share capital are set out in Note 13 to the financial statements.

DIRECTORS
The directors of the Company during the year and up to the date of this report were:
Hossain Khaled
Kazi Mohammad Tanjibul Alam
Mahia Juned
In accordance with the Company’s Article of Association, all directors retire at the forthcoming annual general meeting but, being eligible,
offer themselves for re-election.

DIRECTORS’ INTERESTS IN CONTRACTS OF SIGNIFICANCE

No other contracts of significance in relation to the Company’s business to which the Company or its subsidiary was a party and in which
the directors of the Company had a material interest, whethen directly or indirectly, subsisted at the end of the period or at any time during
the peiod.

ARRANGEMENTS TO ACQUIRE SHARES OR DEBENTURES

At no time during the period was the Company or its subsidiary a party to any arrangement to enable the director of the Company to acquire
benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

MANAGEMENT CONTRACT
The Company did not enter into any contract, other than the contract of service with a director or any person engaged in the full-time
employment, whereby any individual, firm or body corporate undertakes the management and administration of the whole, or any
substantial part of any business of the Company.
BUSINESS REVIEW
The Company falls within the reporting exemption for the financial year. Accordingly, the Company is exempted from preparing a business review.

INDEMNITY OF DIRECTORS
Pursuant to Article of the Articles and subject to the provisions permitted by the Companies Ordinance, every director or other officer of the
Company shall be entitled to be indemnified out of the assets of the Company against all losses or liabilities which he may sustain or incur
in or about the execution of the duties of his office or otherwise in relation thereto.

DEBENTURES AND EQUITY-LINKED AGREEMENTS

At no time during the period and up to the date of this report, there was or is, any permitted indemnity provision being in force for the
benefits of any of the directors of the Company.
AUDITOR
Akin CPA Limited retires and, being eligible, offer themselves for re-appointment. A resolution for the re-appointment of Akin CPA Limited as
auditor of the Company is to be proposed at the forthcoming Annual General Meeting.
On behalf of the Board

15 March 2021
Hossain Khaled
Director
408 Annual Report 2020
INDEPENDENT AUDITOR’S REPORT
To the Shareholder of City Hong Kong Limited
(incorporated in hong kong with limited liability)

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

OPINION
We have audited the financial statements of City Hong Kong Limited (the "Company") set out on pages 6 to 24, which comprise the
statement of financial position as at 31 December 2020, and the statement of comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant
accounting policies and other explanatory notes.
In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2020, and
of its financial performance and its cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards
("HKFRSs") 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 report of the
directors, 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.

DIRECTORS' RESPONSIBILITY 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
issued by the HKICPA and the disclosure requirement of 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.

409
 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. We report our opinion 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 user 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:
l 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.
l 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.
l Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the director.
l 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.
l 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.
l Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Company to express an opinion on the 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.

Akin CPA Limited

Certified Public Accountants

Sharma, Manish Narain

Practicing Certificate Number: P05395
Hong Kong, 15 March 2021

410 Annual Report 2020

STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020

2020 2019
Notes HK$ HK$

Revenue 4 1,189,950 84,529

Other incomes 5 110,955 1,148
Operating income 1,300,905 85,677
Administrative expenses (3,162,187) (1,926,496)
Operating loss (1,861,282) (1,840,819)
Finance cost (318,324) (38,915)
Loss before tax 6 (2,179,606) (1,879,734)
Income tax expenses 7 336 (26,794)
Net loss for the period (2,179,270) (1,906,528)
Other comprehensive income - -
Total comprehensive loss for the period (2,179,270) (1,906,528)

The note on pages 10 to 24 form part of these financial statements.

411
 STATEMENT OF FINANCIAL POSITION
As at 31 December 2020
2020 2019
Notes HK$ HK$
Non-current assets
Right of use asset 10 - 447,126
Property, plant and equipment 9 176,333 182,371
176,333 629,497
Current assets
Discount bills receivables 16,594,566 1,302,551
Other receivable 13,220 -
Rental deposit 147,936 147,936
Cash and cash equivalents 11 156,904 974,438
16,912,626 2,424,925
Current liabilities
Discount bills payables - 946,176
Lease payable - 479,351
Other payable 98,041 158,482
Accrual and deposit received 12 78,151 28,209
Bank overdraft 14,810,169 -
14,986,361 1,612,218

Net current assets 1,926,265 812,707

Total assets less current liabilities 2,102,598 1,442,204

Non-current liabilities
Amount due to shareholder 15 161,938 3,321,937
Deferred tax liabilities 14 26,458 26,794
188,396 3,348,731

Net assets/ (liabilities) 1,914,202 (1,906,527)

Equity/ (capital deficiency)

Share capital 13 6,000,000 1
Accumulated loss (4,085,798) (1,906,528)
Total equity/ (capital deficiency) 1,914,202 (1,906,527)

Approved and authorised for issue by the Board of Directors on 1 5 MAR 2021.

Hossain Khaled Mahia Juned

Director Director

The note on pages 10 to 24 form part of these financial statements.

412 Annual Report 2020

STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
Share Accumulated
capital loss Total
HK$ HK$ HK$

As at 31 December 2019 1 (1,906,528) (1,906,527)

Issued and fully paid 5,999,999 - 5,999,999
Net loss for the year - (2,179,270) (2,179,270)
As at 31 December 2020 6,00,000 (4,085,798) 1,914,202

By an ordinary resolution passed at the extraordinary general meeting held on 27 August 2020, the Company's ordinary shares were
increased to HK$ 6,000,000 by the creation of an additional 5,999,999 ordinary shares of HK$1 each were issued at par therein,
ranking pari passu with the existing ordinary shares of the Company in all respects.

The notes on pages 10 to 24 form part of these financial statements.

STATEMENT OF CASH FLOWS

For the year ended 31 December 2020
2020 2019
Notes HK$ HK$
Operating activities
Loss before tax (2,179,606) (1,879,734)
Adjustments for:
Depreciation of property, plant and equipment 46,544 13,217
Depreciation of right of use asset 416,643 447,126
Interest on bank loan 303,061 -
Operating loss before changes in working capital (1,413,358) (1,419,391)
Increase in discount bills receivable (15,292,015) (1,302,551)
Increase in other receivable (13,220) -
Increase in rental deposit - (147,936)
(Decrease)/ increase in discount bills payable (946,176) 946,176
(Decrease)/ increase in lease payable (479,351) 479,351
(Decrease)/ increase in other payable (60,441) 158,482
Increase in accruals and deposit received 49,942 28,209
Net cash used in operating activities (18,154,619) (1,257,660)

Investing activities
Acquisition of property, plant and equipment (40,506) (195,588)
Lease modification 30,483 -
Acquisition of right of use asset - (894,252)
Net cash used in investing activities (10,023) (1,089,840)

Financing activities
Interest on bank overdraft (303,061) -
Increase in amount due to shareholder (3,159,999) 3,321,937
Issued share capital and fully paid 5,999,999 1
Net cash generated from financing activities 2,536,939 3,321,938
Net (decrease)/ increase in cash and cash equivalents (15,627,703) 974,438
Cash and cash equivalents at the beginning of the period 974,438 -
Cash and cash equivalents at the end of the year/ period 11 (14,653,265) 974,438

The note on pages 10 to 24 form part of these financial statements.

413
 NOTES TO THE FINANCIAL STATEMENTS
As at and for the year ended 31 December 2020

1 REPORTING ENTITY
City Hong Kong Limited ("the Company") is a private company incorporated in Hong Kong with limited liability. The address of
its registered office is Unit 904 & 906, Austin Tower, 22-26 Austin Avenue, Tsimshatsui, Kowloon, Hong Kong. The Company was
a licensed money lender registered under the Money Lenders Ordinance in Hong Kong. The principal activities of the
Company during the year was engaged in trade finance activities.
The financial statement are presented in Hong Kong Dollars ("HK$"), which is the same as the functional currency of the
Company.

2 APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING

STANDARDS ("HKFRSs")
New and revised standards and interpretation issued and effective for the year
The following new standards and amendments to standards issued by the Hong Kong Institute of Certified Public Accountants
("HKICPA"), which are mandatory for the first time for this financial year:

HKFRS 3 Definition of a Business (amendments)

HKAS 1 and HKAS 8 Definition of Material (amendments)
HKAS 39, HKAS 37 and HKFRS 9 Hedge accounting (amendments)
Conceptual Framework for Financial Reporting 2018 Revised Conceptual Framework for Financial Reporting

New and revised standards and interpretation in issue but not yet effective
The Company has not early applied the following new and revised HKFRSs that have been issued but are not yet effective:
Annual improvements Project Annual Improvements to HKFRSs 2018-2020 (amendments)3
HKFRS 3, HKAS 16 and HKAS 37 Narrow-scope amendments (amendments)3
HKAS 1 Classification of Liabilities as Current or Non current (amendments)4
HKFRS 16 Covid-19 Related Rent Concessions (amendments)1
HKFRS 17 Insurance contracts (new standard)2
HKFRS 10 and HKAS 28 Sale or Contribution of Assets between an investor and its Associate or Joint Venture
(amendments)5
1 Effective for accounting periods beginning on or after 1 June 2020
2 Effective for accounting periods beginning on or after 1 January 2021
3 Effective for accounting periods beginning on or after 1 January 2022
4 Effective for accounting periods beginning on or after 1 January 2023
5 Effective for accounting periods beginning on or after a date to be determined

The directors of the Company anticipate that the application of the above new and revised HKFRSs will have no material impact on the financial
performance and the financial position of the Company.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the financial statements
These financial statements of the Company have been prepared in accordance with all applicable Hong Kong Financial
Reporting Standards ("HKFRSs"), which collective term includes all applicable individual Hong Kong Financial Reporting
Standards, Hong Kong Accounting Standards ("HKASs") and Interpretations issued by the HKICPA, accounting principles
generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. They have been
prepared under the historical cost convention.

414 Annual Report 2020

The preparation of the financial statements in conformity with HKFRSs requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
A summary of the significant accounting policies adopted by the Company is set out below.

Foreign currency translation

(a) Functional and presentation currency
Items included in the financial statements of each of the Company entitles are measured using the currency of the primary
economic environment in which the entity operates the functional currency). These financial statements are presented in
Hong Kong Dollars, which is the Company's functional currency.

(b) Transactions 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 period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or
loss.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss
within "finance costs". All other foreign exchange gains and losses are presented in profit or loss within "other income" or "other
expenses".

Cash and cash equivalents

Cash and cash equivalents include 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.

Discount bills receivable

Discount bills receivable are recognized 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 bills 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.

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment
losses.
Where the Company acquire leasehold land for own use under a finance lease, the prepaid cost included in property, plant and
equipment on initial recognition represents the fair value of the leasehold land, or if lower, the present value of the minimum
lease payment, determined at the inception of the lease and any initial direct costs of the lease (incremental costs that are
directly attributable to negotiating and arranging a lease).
The other cost of such items of property, plant and equipment comprises the following:
l the purchase price, including legal and brokerage fees, import duties and non- refundable purchase taxes, after deducting
trade discounts and rebates;
l any costs directly attributable to bringing the asset to the location and condition necessary for them to be capable of
operating in the matter intended by management;
l the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the
obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during
a particular period for purposes other than to produce inventories during that period.
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. Assets held under finance leases, for which there is no reasonable certainty that the Company will obtain
ownership at the end of the lease term, are depreciated over their expected useful lives on the same basis as owner assets, or
where shorter, the terms of the relevant lease.

415
 The following annual rates are used for the depreciation of property, plant and equipment:
Computer equipment 20% p.a.
Furniture and fixtures 20% p.a.
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 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.

Impairment of assets
At the end of each reporting period, the Company reviews the carrying amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than
its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as
an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset 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 in prior period. A reversal of an impairment loss is
recognised as income immediately.

Other payables
Other payables are recognized initially at the transaction price and subsequently measured at amortised cost using the
effective interest method.

Taxation
Income tax expense represents the sum of the tax currently payable and deferred taxation.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the statement
of profit or loss and other comprehensive income because of income or expense that are taxable or deductible in other period
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 at the end of the reporting period.
Deferred taxation is recognised on temporary 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. Deferred tax liabilities are recognised
for all taxable temporary differences and deferred tax assets are generally recognized for all deductible temporary differences
to the extent that is probable that taxable profits will be available against which deductible temporary differences can be
utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in business combination) of other assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of the reporting period 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 end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities. However, the measurement of deferred tax liabilities associated with an investment property measured at fair value
does not exceed the amount of tax that would be payable on its sale to unrelated market participant at fair value at the
reporting period. Deferred tax is recognized in profit or loss, except when it relates to items that are recognized in other
comprehensive income or directly in equity, in which case the deferred tax is also recognized in other comprehensive income
or directly in equity respectively.

Leases
Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for
use by the Company.
Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract to the
lease and non-lease components based on their relative standalone prices.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:

416 Annual Report 2020

 l fixed payments (including in-substance fixed payments), less any lease incentives receivable
l variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
l amounts expected to be payable by the Company under residual value guarantees
l the exercise price of a purchase option if the Company is reasonably certain to exercise that option,and
l payments of penalties for terminating the lease, if the lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. if that rate cannot be readily determined, which
is generally the case for leases in the company, the lessee's incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.

To determine the incremental borrowing rate, the Company:

l where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received
l uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Company,
which does not have recent third party financing, and
l makes adjustments specific to the lease, e.g. term, country, currency and security.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
l the amount of the initial measurement of lease liability
l any lease payments made at or before the commencement date less any lease incentives received
l any initial direct costs, and
l restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying
asset's useful life. While the Company revalues its land and buildings that are presented within property, plant and equipment,
it has chosen not to do so for the right-of-use buildings held by the Company.
Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the
lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset
and recognised as expense over the lease term on the same basis as lease income. The respective leased assets are included
in the statement of financial position based on their nature.

Employee benefit obligations

Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of
non-monetary benefits are accrued in the period in which the associated services are rendered by employees. Where payment
or settlement is deferred and the effect would be material, these amounts are stated at their present values.

Provisions and contingent liabilities

Provisions are recognised for other liabilities of uncertain timing or amount when the Company has a present legal or
constructive obligation arising as a result of a post event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material,
provisions are stated at the present value of the expenditure expected to settle the obligation.
Where it not probable that an outflow of resources embodying economic benefits will be required or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of resources embodying
economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence
of one or more uncertain future events, are also disclosed as contingent liabilities unless the probability of outflow of resources
embodying economic benefits is remote.

417
 Related parties
For the purpose of these financial statements, related party includes a person and entity as defined below:
(a) A person or a close member of that person's family is related to the Company if that person:
(i) is a member of the key management personnel of the group and the company or of a parent of the group and the
company;
(ii) has control over the group and the company; or
(iii) has joint control or significant influence over the reporting entity or has significant voting power in it.
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) either 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 party.
(iv) either 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 reporting entity is itself such a plan, the sponsoring employers are also related to the plan.
(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)

2020 2019
4 REVENUE HK$ HK$
Interest income from discounted bills 496,597 13,178
Services income 693,353 71,351
1,189,950 84,529

5 OTHER INCOME
Bank interest income 1,046 1,148
Government grant 27,000 -
Net exchange gain 82,909 -
110,955 1,148

6 LOSS BEFORE TAX

Loss before tax is arrived at:

After charging the following items:

Auditor's remuneration
- Provision for the year/period 27,660 15,000
Depreciation of property, plant and equipment 46,544 13,217
Depreciation of right of use asset 416,643 447,126
Staff cost (excluding directors’ emoluments – Note 9)
- Staff salaries, allowances and related cost 1,996,384 1,020,352
- Employer's mandatory provident fund scheme contributions 12,600 4,500

7 INCOME TAX EXPENSES

a. No Hong Kong profits tax has been provided as the Company have a tax adjusted loss during the year. (2019: Nil)
b. Taxation in the statement of comprehensive income represents:

418 Annual Report 2020

 2020 2019
HK$ HK$
Reconciliation between tax expense and accounting profit at applicable tax rate:
Loss before tax (2,179,606) (1,879,734)
Tax at the domestic tax rate of 16.5% (359,635) (310,156)
Tax effect of non-taxable income (4,627) (190)
Tax effect of non-deductible expenses 68,746 75,756
Tax effect of lease payment (76,581) (74,880)
Tax effect of temporary differences on property, plant and equipment 336 (26,794)
(371,761) (336,264)
Adjusted loss carried forward 371,761 336,264
Actual tax expense - -
c. Taxation in the statement of financial position represents:

Tax (refund)/paid during the year/period - -

Provision for Hong Kong profits tax for the year/period - -
Current income tax (payable)/repayable - -
Accelerated tax
depreciation HK$ Total HK$
d. Movement in net deferred tax assets/(liabilities) is recognised as follows:
As at 31 December 2019 (26,794) (26,794)
Debit to profit or loss for the year - -
Credit to profit or loss for the year 336 336
As at 31 December 2020 (26,485) (26,485)
e. Movement in deferred tax assets/(liabilities) is recognised as follows:
Deferred tax assets - -
Deferred tax liabilities (26,458) (26,794)
(26,458) (26,794)

8 DIRECTORS' EMOLUMENTS
Directors’ emoluments disclosed pursuant to section 383 (1) of the Hong Kong Companies Ordinance are as follows:
Fees - -
Other emoluments:
Salaries, allowances and benefits in kind - -
Bonus - -
Employer's mandatory provident fund scheme contribution - -
- -

Furniture Computer
9 PROPERTY, PLANT AND EQUIPMENT and fixtures HK$ equipment HK$ Total HK$
Cost:
As at 31 December 2019 62,436 133,152 195,588
Additions - 40,506 40,506
As at 31 December 2020 62,436 173,658 236,094

Accumulated depreciation:
As at 31 December 2019 5,486 7,731 13,217
Charge for the year 12,487 34,057 46,544
As at 31 December 2020 17,973 41,788 59,761

Carrying amount:
At 31 December 2020 44,463 131,870 176,333

At 31 December 2019 56,950 125,421 182,371

419
 Leasehold
10 RIGHT OF USE ASSET building HK$

Cost:
As at 31 December 2019 894,252
Modification of lease payments (30,483)
As at 31 December 2020 863,769

Accumulated depreciation:
As at 31 December 2019 447,126
Charge for the year 416,643
As at 31 December 2020 863,769

Carrying amount:
At 31 December 2020 -
447,126
At 31 December 2019

2019 2019
HK$ HK$
11 CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash balance with banks and in hands. Cash and cash equivalents included in the cash flow
statements comprise the following financial position amounts:

Cash and cash equivalents 156,904 974,438

Back overdraft (14,810,169) -
(14,653,265) 974,438

12 ACCRUAL AND DEPOSIT RECEIVED

Accrual 49,867 27,500
Deposit received 28,284 709
78,151 28,209

13 SHARE CAPITAL
Issued and fully paid:
6,000,000 ordinary shares (2019: 1 ordinary share) 6,000,000 1

By an ordinary resolution passed at the extraordinary general meeting held on 27 August 2020, the Company's ordinary shares
were increased to HK$ 6,000,000 by the creation of an additional 5,999,999 ordinary shares of HK$1 each were issued at par
therein, ranking pari' passu with the existing ordinary shares of the Company in all respects.

14 DEFERRED TAX
The deferred tax liabilities are the tax effects of expected future income tax liabilities relating to the fixed assets, which book value
already deducted in depreciation allowance but has not been depreciated as an expense in measuring the profit of the Company
for the year.
The following are recognised deferred tax liabilities/(assets): Computer Furniture
equipment HK$ and fixture HK$ Total HK$

As at 31 December 2019 20,694 6,100 26,794

Debit to profit for the year 1,065 - 1,065
Credit to profit for the year - (1,401) (1,401)
As at 31 December 2020 21,759 4,699 26,458

Deferred tax liabilities 26,458 26,794

Deferred tax assets - -
26,458 26,794

420 Annual Report 2020

15 RELATED PARTIES TRANSACTIONS
(a) The table below summaries the names of related parties and nature of relationship with the Company:

Related parties Relationship with the Company

The City Bank Limited Ultimate holding company

(b) Balances with related parties

As at the financial year end date, the Company had the following balances with related parties:

Current:
Bank overdraft due to The City Bank Limited 14,810,169 -

Non-current:
Amount due to The City Bank Limited 161,938 3,321,93
All the above balance with related party is unsecured, interest-free and repayable on demand.

16 FINANCIAL RISK MANAGEMENT

Exposure to credit, liquidity, interest and currency risks arise in the normal course of the Company's business. The Company's
exposure to these risk and the financial risk management policies and practices used by the Company to manage these risks are
described below.

a) Credit risk
The Company's credit risk is primarily attributable to the bills discounting. Management has a credit policy in place and the
exposures to these credit risks are monitored on an ongoing basis.
Cash is deposited with financial institutions with sound credit ratings and the Company has exposure limit to any single financial
institution. Given their high credit ratings, management does not expect any of these financial institutions will fail to meet their
obligations.
The Company has policies in place to ensure that all the trade finance activities are secured by the bills and received acceptance
from the correspondent bank before release the loan.
Since the bills purchased by the company getting the applicant's bank guarantee where the probability of bank liquation is low,
the directors consider the credit risk is low.
b) Liquidity risk
The Company policy is to regularly and its compliance with lending covenants, to ensure that it maintains sufficient reserves of
cash and adequate committed lines of funding from banks to meet its liquidity requirements in short and longer term.
The following table shows the remaining contractual maturities at the end of the reporting period of the Company's
non-derivative financial liabilities, which are based on contractual undiscounted cash flows (including interest payments
computed using contractual rates or, if floating, based on rates current at the end of the reporting period) and to earliest date the
Company can be required to pay:
2020 2019
Contractual Contractual
Carrying undiscounted Carrying undiscounted
amounts cash flow amounts cash flow
HK$ HK$ HK$ HK$
Discount bills payable - - 946,176 946,176
Lease payable - - 479,351 479,351
Other payable 98,041 98,041 158,482 158,482
Accruals 49,867 49,867 27,500 27,500
Deposit received 28,284 28,284 709 709
Amount due to related party 161,938 161,938 3,321,937 3,321,937
338,130 338,130 4,934,155 4,934,155

421
 c) Interest rate risk
The Company is exposed to cash flow interest rate risk in relation to variable-rate bank balances. The Company's cash flow
interest rate risk is mainly concentrated on the fluctuation of interest rates on bank balances.
The Company's exposure to interest rates on financial liabilities are detailed in the liquidity risk management section of this note.
The directors of the Company consider that the overall interest rate risk is not significant as the fluctuation of the interest rates
on bank balance is minimal. Accordingly, no sensitivity analysis is prepared and presented.

d) Currency risk
The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to United States Dollar ("USD") and Hong Kong Dollars ("HKD"). Foreign exchange risk arises when future
commercial transactions or recognised assets and liabilities are denominated in a currency that is not the respective functional
currency of the Company.
The Company manages its foreign exchange risk by performing regular reviews of the Company's net foreign exchange
exposures and tries to minimise these exposures through natural hedges, wherever possible, and may enter into foreign
exchange contracts, when necessary.
At 31 December 2020, management considers that any reasonable changes in foreign exchange rates of the above currencies
against the major functional currencies would not result in a significant change in the Company's results, given the exchange rate
peg between USD and HKD. Accordingly, no sensitivity analysis is presented for foreign exchange risk.
The management considers that the Company does not have any significant exposure to credit risk, liquidity risk, interest rate
risk, currency risk and fair value estimation.

17 HOLDING COMPANY
The City Bank Limited, a company incorporated in People's Republic of Bangladesh, is regarded by the directors as the
Company's holding company as at 31 December 2020.

18 COMPARATIVE FIGURES
Certain comparative figures have been restated or re-classified to conform to the current year's presentation.

DETAILED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2020
(For management purposes only)

2020 2019
HK$ HK$
Interest income from discounted bills 496,597 13,178
Services income
- Agency income 397,361 58,199
- Courier charge recovery 295,992 13,152
693,353 71,351
Total revenue 1,189,950 84,529
Add: Other income
Bank interest income 1,046 1,148
Government grant 27,000 -
Net exchange gain 82,909 -
110,955 1,148

Less: General and administrative expenses (Appendix A) 3,162,187 1,926,496

Less: Finance cost
Interest expense on lease payment 15,263 38,915
Interest on bank overdraft 303,061 -
318,324 38,915

Loss before tax (2,179,606) (1,879,734)

422 Annual Report 2020

 Appendix A

DETAILED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2020

2020 2019
HK$ HK$

General and administrative expenses

Advertising - 11,250
Auditor's remuneration
- Provision for the period 27,660 15,000
Bank charge 10,539 9,946
Business entertainment - 8,697
Depreciation of property, plant and equipment 46,643 13,217
Depreciation of right of use asset 4,166,643 447,126
Insurance 12,378 -
Legal, professional expenses and secretarial fees 13,330 231,744
Mandatory provident fund contribution 12,600 4,500
Net exchange loss - 10,010
Printing and stationery 12,258 1,847
Postage and courier 130,858 10,733
Management fee, government rate and stamp duty 98,072 105,347
Salaries and allowance 1,996,384 1,020,352
Services charges 294,485 15,256
Sundry expenses 14,660 3,947
Telecommunication charge 70,814 16,456
Trip expenses 349 -
Utilities 4,613 1,068
3,162,187 1,926,496

423
 BASEL III PILLAR 3
MARKET DISCIPLINE OF THE CITY BANK LTD.
Disclosure on Risk Based Capital
Annual Disclosure for the year ended December 31, 2020

Basel III Pillar 3: Disclosures on Risk Based Capital

INTRODUCTION
Capital management is considered as an integral part of the risk Market discipline (Pillar 3) comprises a set of disclosures on the
management process of the bank as capital ensures cushion capital, risk assessment processes, capital adequacy and
against any loss suffered by the bank and saves bank from remuneration practices of the bank. Improved transparency,
running off. Banking Industry of Bangladesh entered into the underpinned by high quality and timely market disclosures will
Basel III from Basel II regime from 1 January 2015. Therefore, City enhance market discipline, efficiency and confidence. The key
Bank has applied the Basel III framework as part of its capital objective is, therefore, to provide a market driven incentive for a
management strategy in line with the Revised Guidelines on bank to conduct business in a safe and sound manner. This
Risk Based Capital Adequacy (RBCA) issued by Bangladesh Market Discipline disclosure under Basel III is made following
Bank in December 2014. Similar to Basel II, Basel III accord is also bank’s disclosure policy, approved by the Board of Directors and
made up of three pillars; namely: ‘Guidelines on Risk Based Capital Adequacy (Revised Regulatory
l Pillar-1 (Minimum Capital Requirement) covers the Capital Framework for Banks in line with Basel III)’ for banks
calculation of risk-weighted assets and minimum capital issued by Bangladesh Bank in December 2014.
requirement for credit risk, market risk and operational risk The report is prepared once a year, except in exceptional
l Pillar-2 (Supervisory Review Process) intends to ensure that circumstances, according to Disclosure Policy of City Bank and
banks have adequate capital to address all the risks in their Bangladesh Bank’s guidelines. For the ease of stakeholders,
business Disclosures on Risk Based Capital is published in Annual Report
of the bank and is also made available at City Bank’s website
l Pillar-3 (Market Disclosure) speaks of ensuring market
(www. thecitybank.com)
discipline by disclosing adequate information to the
stakeholders

Key Metrics (Solo Basis):

Capital to Risk Weighted Asset Common Equity Tier 1 Capital ratio Leverage Ratio
15.53% 9.88% 6.06%
2019: 15.16% 2019: 9.66% 2019: 5.48%
Total Eligible Capital Common Equity Tier 1Capital Additional Tier 1 Capital
Tk 4,181.69 crore Tk 2,661.66 crore Tk 240.00 crore
2019: Tk 3,713.58 crore 2019: Tk 2,366.43 crore 2019: Tk 00 crore

Tier 2 Capital Total Risk Weighted Asset Credit Risk RWA

Tk 1,280.03 crore Tk 26,932.20 crore Tk 23,324.54 crore
2019: Tk 1,347.15 crore 2019: Tk 24,492.47 crore 2019: Tk 21,358.37 crore

Presentation of information
In this report, City Bank’s information is presented on solo and consolidated basis. All amounts in the tables of this Pillar 3 disclosure
are denominated in Bangladeshi Taka, unless stated otherwise. Certain figures in this document have been calculated using rounded
figures.

424 Annual Report 2020

Table 1: SCOPE OF APPLICATION
Qualitative Disclosures
a) The name of the top corporate entity in the Name of the bank is The City Bank Ltd. However, the bank does not belong to
group to which this guidelines applies. any group.
b) An outline of differences in the basis of Presently City Bank does not have any Associates and/or Joint Venture, but
consolidation for accounting and has four subsidiaries. These are
regulatory purposes, with a brief
description of the entities within the group
a. City Brokerage Limited: City Brokerage Limited ('the company') was
(i) That are fully consolidated; incorporated in Bangladesh as a private limited company on 31 March
(ii) That are given a deduction treatment; 2010, vide registration no. C-83616/10 under the Companies Act, 1994. The
legal status of the Company has been converted into public limited
(iii) That are neither consolidated nor company from private limited company in June 2012 in compliance with
deducted (e.g. where the investment is Bangladesh Securities and Exchange Commission Rules 2000.
risk-weighted). Previously the bank launched its brokerage division on 4 August 2009
which was subsequently separated from the bank on 15 November 2010.
On 31 December 2020 the bank held 99.9963% shares of the company.

b. City Bank Capital Resources Limited: City Bank Capital Resources

Limited (CBCRL) was incorporated in Bangladesh as a private limited
company on 17 August 2009, vide registration no. C-79186/09 under the
Companies Act, 1994. The registered office of CBCRL is at 90/1, City
Center (13th Floor), Motijheel Commercial Area, Dhaka-1000. CBCRL
delivers a whole range of investment banking services including
merchant banking activities such as issue management, underwriting,
portfolio management and corporate advisory. On 31 December 2020
the bank held 99.9933% shares of CBCRL.

c. CBL Money Transfer SDN BHD: CBL Money Transfer Sdn. Bhd. (CMTS) is
a private limited company by shares incorporated under the laws of
Malaysia and registered with the Companies Commission of Malaysia
with Registration No. 769212M carrying on money services business
under the Money Services Business Act 2011 under a Class B License No.
00127 from the Bank Negara Malaysia. CMTS is principally engaged as
inbound and outbound remittance service provider.

d. City Hong Kong Limited: City Hong Kong Limited ("the Company") is
incorporated and domiciled in Hong Kong and has its registered office
and principal place of business at Units 904 & 906, 9th Floor, Austin
Tower, Nos. 22-26 Austin Avenue, Tsimshatsui, Kowloon, Hong Kong. City
Hong Kong Limited is a fully owned (100% shares) subsidiary of The City
Bank Limited established at the end of 2019 to facilitate international trade
business through advising letter of credits, handling documentary
collections and bill financing (discounting) against letters of credit.

425
 Qualitative Disclosures
The financials are fully consolidated of all the subsidiaries, which have been
prepared in accordance with IFRS 10 “Consolidated Financial Statements”.
Intercompany transaction and balances are eliminated; minority interest of Tk.
0.01 crore has been added in the Tier-1 capital.

c) Any restrictions, or other major Not Applicable

impediments, on transfer of funds or
regulatory capital within the group.

Quantitative Disclosures

The aggregate amount of surplus capital of Not applicable

insurance subsidiaries (whether deducted or
subjected to an alternative method) included in
the capital of the consolidated group.

Table 2: CAPITAL STRUCTURE

Qualitative Disclosures

Summary information on the terms and Regulatory capital base is quite different from Accounting capital. As per
conditions of the main features of all capital Bangladesh Bank guidelines based on Basel III accord, regulatory capital is
instruments, especially in thecase of capital classified into two broad categories namely, Tier 1 Capital (going -concern
instruments eligible for inclusion in capital) and Tier II Capital (gone-concern capital). Additionally, Tier 1 Capital is
CET1,Additional Tier 1 or Tier 2. further divided into two categories, Common Equity Tier 1 (CET1) and Additional
Tier 1 (AT1).
l Common Equity Tier-1 (CET1) capital of City Bank consists of Fully
Paid-up Capital, Statutory Reserves, Non-repayable Share Premium,
General Reserve, Retained Earnings, Dividend Equalisation Reserve and
Minority Interest in its subsidiary (in case of consolidation) less
Regulatory adjustments applicable on CET1.
l Additional Tier-1 (AT-1) capital of City Bank consists of Basel III compliant
perpetual bond
l Tier-2 capital of City Bank consists of general provision and
subordinated debt less Regulatory adjustment applicable on Tier-2
Capital.

426 Annual Report 2020

 Quantitative Disclosures

Eligible Regulatory Capital Base as on 31 December 2020 (Tk in crore):

Sl. No. Particulars Solo Consolidated
(a) Common Equity Tier 1 Capital (CET- 1)
a.1 Fully Paid-up Capital 1,016.39 1,016.39
a.2 Statutory Reserve 865.95 865.95
a.3 Non-repayable Share Premium account 150.44 150.44
a.4 General Reserve 1.14 1.14
a.5 Retained Earnings 609.92 580.92
a.6 Minority Interest in Subsidiaries 0.00 0.01
a.7 Dividend Equalisation Reserve 53.08 53.08
a.8 Sub-total Common Equity Tier 1 Capital (CET- 1) 2,696.91 2,667.93
(b) Deductions from CET-1
b.1 Book value of goodwill which are shown as assets 0.00 (3.60)
b.2 Deferred Tax Asset (35.10) (32.53)
b.3 100% of Excess investment in equity of other banks, FI and Ins Co. (0.15) (98.71)
(c) Total Common Equity Tier 1 Capital 2,661.66 2,533.08
(d) Additional Tier 1 Capital
d.1 Perpetual Bond 240.00 240.00
(e) Total Tier 1 Capital 2,901.66 2,773.08
(f) Tier 2 Capital
f.1 General Provisions (provisions for UC + SMA + OBS exposure) 636.18 636.18
f.2 Tier II Subordinated Bond 644.00 644.00
f.3 Sub-Total of Tier 2 Capital 1,280.18 1,280.18
(g) Deduction from Tier 2 Capital
g.1 100% of Excess investment in equity of other banks, FI and Ins Co. (0.15) (124.34)
(h) Total Tier II Capital 1,280.03 1,155.84
(i) Total Eligible Regulatory Capital 4,181.69 3,928.92

427
 Table 3: CAPITAL ADEQUACY
Qualitative Disclosures

A summary discussion of the bank’s approach Approaches followed by bank for Capital Calculation:
to assessingthe adequacy of its capital to
support current and future activities. Banking industry of Bangladesh made the transition to Basel III from Basel II
since the beginning of 2015. In this regard, Bangladesh Bank, in line with the
Basel Committee on Banking Supervision (BCBS) recommendations and
international best practices, issued revised guideline on Risk Based Capital
Adequacy based on Basel III with the purpose of fully implementing it by the
end of 2019. Accordingly, City Bank applied the Basel III framework as part of
its capital management strategy. City Bank is applying the following
approaches for its risk wise capital calculation.
l Credit Risk: Standardised Approach (SA)
l Market Risk: Standardised Approach (SA)
l Operational Risk: Basic Indicator Approach (BIA)

Risk Weighted Assets of the Bank:

As on 31 December 2020, Total Risk Weighted Asset (RWA) of the bank was Tk
26,932.20 crore on solo basis and Tk 27,513.82 crore on consolidated basis.
Where Credit risk accounted for 86.60% (on solo basis) and 84.39% (on
consolidated basis) of RWA, followed by Operational risk for 10.70% and
10.78% respectively and Market risk for 2.70% and 4.83% respectively. To
improve the capital requirement under credit risk, City Bank continuously
pursues for external credit rating of its client base. At the end of 2020, City
Bank managed to cover around 86% of its total eligible loans under valid
external credit rating.
Compliance with Regulatory Requirements:
As per Basel III guideline, Minimum Capital Requirement (MCR) for the banks
in Bangladesh is currently 10% of its total RWA with the addition of Capital
Conservation Buffer which is 2.5% of total RWA. City Bank is well ahead of this
minimum target both on Solo basis and Consolidated basis as of December
2020. City Bank maintained:
l Capital to Risk Weighted Asset Ratio (CRAR) is 15.53% on solo basis and
14.28% on consolidated basis
l Common Equity Tier 1 capital ratio is 9.88% on solo basis and 9.21% on
consolidated basis.
l Tier 2 capital is 48.09% of CET 1 on Solo basis and 45.63% of CET 1 on
consolidated basis against the maximum limit of 88.89%.
l Capital Conservation Buffer is 4.77% on solo basis and 4.08% on
consolidated basis against required level 2.5% of RWA

Excess Capital to Support Current and Future Activities:

After maintaining total required capital (minimum capital requirement and

capital conservation buffer), City Bank managed to maintain surplus capital of
3.03% on solo basis and 1.78% on Consolidated basis. The surplus capital
maintained by City Bank will act as cushion to absorb the risk arises from the
material risks under Pillar II and to upkeep the future business growth of the
bank. Furthermore, forward looking capital assessment based on the
prospective business growth is also conducted to comprehend and to
manage the future uncertainty.

428 Annual Report 2020

 Quantitative Disclosures

Capital Requirement under Credit, Market and Operational Risk (Tk in crore)

Sl. No. Particulars Solo Consolidated

1.0 Capital requirements for Credit Risk: 2,332.45 2,322.00
1.1 Portfolios subject to standardised approach-Funded 1,902.75 1,892.30
1.2 Portfolios subject to standardised approach-Non-Funded 429.70 429.70
2.0 Capital requirements for Market Risk 72.64 132.85
2.1 Interest rate risk (Standardised Approach) 13.41 13.41
2.2 Equity risk (Standardised Approach) 57.74 117.95
2.3 Foreign exchange risk (Standardised Approach) 1.49 1.49
3.0 Capital requirements for Operational Risk (Basic Indicator Approach) 288.13 296.54
4.0 Total Capital Required 2,693.22 2,751.38
5.0 Capital Ratios
5.1 Total Capital Ratio 15.53% 14.28%
5.2 CET 1 Capital Ratio 9.88% 9.21%
5.3 Total Tier 1 Capital Ratio 10.77% 10.08%
5.4 Tier 2 Capital Ratio 4.75% 4.20%
6.0 Capital Conservation Buffer (Minimum requirement is 2.5% of RWA) 4.77% 4.08%
7.0 Available Capital under Pillar II requirement 815.17 489.69

Table 4: CREDIT RISK

Qualitative Disclosures

The general qualitative disclosure requirement Credit Risk:

with respect to credit risk Credit risk refers to the probability of loss due to a borrower’s failure to make
l Definitions of past due and impaired (for payments on any type of debt. For most banks, loans are the largest and most
accounting purposes) obvious source of credit risk. However, there are other sources of credit risk
both on and off the balance sheet. Off-balance sheet items include letters of
l Description of approaches followed for
credit, non-funded loan commitments, and lines of credit etc. Credit risk
specific and general allowances and
management is the process of mitigating those losses by understanding the
statistical methods
adequacy of both a bank’s capital and loan loss reserves at any given time.
l Discussion of the bank’s credit risk Credit Risk Management at City Bank:
management policy
Credit risk is managed through a framework which sets out policies and
procedures covering the measurement and management of credit risk. There
is a clear segregation of duties between transaction originators in the
businesses and approvers in the Risk function. All credit exposure limits are
approved within a defined credit approval authority framework. Final authority
for all activities related to credit risk lies with the Board of Directors. The Board
however, delegates authority to the Managing Director and CEO and he
further delegates his credit authority to respective credit risk officials.
Credit risk of Corporate, Commercial and SME-M business are being assessed
by Credit Risk Management Division (CRMD), while SME-SB, Credit Card and
Retail credit are assessed by Credit & Collection, Retail & Small Business Risk
Division. After approval, Credit Administration Division (CAD) completes the
required credit documentation and disburses the credit approved by

429
 Qualitative Disclosures

Credit Risk Management Division (CRMD), while Asset Operation team of

Credit & Collection, Retail & Small Business Risk Division completes the
required credit documentation and disburses for the SME-SB and Retail Credit.
Classified credits are handled by Special Asset Management Division (SAMD)
where the same of Retail & Cards business are managed by Collection team of
Credit & Collection Division. Both these divisions are supported by Legal
Division of the bank. Additionally, Internal Control and Compliance Division
(ICCD) conducts on-site and off-site audit for all credits. City Bank has a
structured Credit Risk Management Policy known as Credit Policy Manual
(CPM) approved by the Board of Directors, first in 2008 and which was last
reviewed in 2020. The CPM defines organisation structure, role and
responsibilities and the processes whereby the credit risks carried by the bank
can be identified, quantified and managed within the framework that the bank
considers consistent with its mandate and risk tolerance.
Bank also has a system of identifying and monitoring problem accounts at the
early stages of their delinquency through auto generation of past- due report,
so that timely corrective measures are initiated. Retail, Cards and SME-SB
segment offer different customised products and are guided by separate
Product Program Guidelines (PPGs) approved by the Board and/or
management.

Loan Classification Criterion:

Loan products are broadly divided into Continuous loan, Demand loan, Fixed
term loan and Short term agricultural and Micro credit. City Bank is following
the relevant Bangladesh Bank guidelines for classification of its loan products.
Presently, there are 5 categories of classification on objective criterion, they
are: Standard (STD), Special Mention Account (SMA), Sub-standard (SS),
Doubtful (DF) and Bad-loss (BL).

Definition of past due/overdue:

i. Any Continuous Loan if not repaid/renewed within the fixed expiry
date for repayment or after the demand by the bank will be treated as
past due/overdue from the following day of the expiry date
ii. Any Demand Loan if not repaid within the fixed expiry date for
repayment or after the demand by the bank will be treated as past
due/overdue from the following day of the expiry date
iii. In case of any installment(s) or part of installment(s) of a Fixed Term
Loan is not repaid within the fixed expiry date, the amount of unpaid
installment(s) will be treated as past due/overdue after six months of
the expiry date;
iv. The Short-term Agricultural and Micro-Credit if not repaid within the
fixed expiry date for repayment will be considered past due/overdue
after six months of the expiry date.

430 Annual Report 2020

A summary of some objective criteria for loan classification is stated below:

Qualitative Disclosures
Overdue Period for Loans Classification
Type of Facility
Sub Standard Doubtful Bad & Loss
Continuous & 3 months or more 9 months or 12 months or
Demand Loan but less than 9 more but less more
(except CMSME) months than 12 months
Continuous & 6 months or more 18 months or 30 months or
Demand Loan but less than 18 more but less more
(BRPD circular months than 30 months
no.16 under
CMSME)
Fixed Term Loan 3 months or more 9 months or 12 months or
(except CMSME) but less than 9 more but less more
months than 12 months
Fixed Term Loan 6 months or more 18 months or 30 months or
(BRPD circular no. but less than 18 more but less more
16 under CMSME) months than 30 months

Short Term 12 months or more 36 months or 60 months or

Agricultural & but less than 36 more but less more
Micro Credit months than 60 months
Reschedule Reschedule accounts will be marked as per BRPD
accounts Circular No. 15, September 23, 2012
As per BRPD circular no. 17, dated 28 September 2020, loans cannot be
classified adversely up to December 31, 2020 than its status on January 01,
2020. However, improvement of classification status during this period can be
reported.

Guidelines for Loan Loss Provisions:

Specific provisions for classified loans and general provisions for unclassified
loans and advances and contingent assets are measured as per BB prescribed
provisioning rates as mentioned below:
General provision : Rate
Unclassified (STD & SMA) general loans and advances 1.00%
Unclassified (STD & SMA) small and medium enterprise 0.25%
Unclassified (STD & SMA) Loans to BHs/MBs/SDs against shares etc. 2.00%
Unclassified (STD & SMA) loans for housing finance and on loans for
professionals 1.00%
Unclassified (STD & SMA) consumer financing other than housing finance
and loans for professionals 2.00%
Unclassified (STD & SMA) Credit Card loans under Consumer Financing 2.00%
Unclassified Short term agricultural credit and micro credit 1.00%
Off balance sheet exposures 1.00%

Specific provision :
Substandard loans and advances other than short term agricultural credit
and micro credit 20.00%
Doubtful loans and advances other than short term agricultural credit and
micro credit 50.00%
Bad & loss loans and advances 100.00%
Substandard & Doubtful short term agricultural credit and micro credit 5.00%
Substandard Cottage, Micro and Small credits under CMSME under BRPD
circular no.16 date 21 July-2020 5.00%
Doubtful Cottage, Micro and Small credits under CMSME under BRPD
circular no.16 date 21 July-2020 20.00%

431
 Quantitative Disclosures
Total gross credit risk exposures broken down Type wise Credit Exposure Amount in crore Tk.
by majortypes of credit exposure
Continuous loan
Small & Medium Enterprise Financing (SMEF) 1,211.67
Consumer Finance 1,109.26
Loans to BHs/MBs/SDs against Shares - 58.74
Other than SMEF, CF, BHs/MBs/SDs 2,151.22
Demand loan
Small & Medium Enterprise Financing (SMEF) 1,022.35
Consumer Finance -
Loans to BHs/MBs/SDs against Shares 20.36
Other than SMEF, CF, BHs/MBs/SDs 8,859.47
Term loan
Small & Medium Enterprise Financing (SMEF) 2,142.04
Consumer Finance (including staff, other than HF) 2,457.66
Housing Finance (HF) 872.10
Loans to Professionals to setup business (LP) -
Loans to BHs/MBs/SDs against Shares 20.27
Other than SMEF, CF, BHs/MBs/SDs 6,448.97
Short term agri. credit and microcredit
Short term agri. credit 79.98
Staff loan 366.06
Total Credit Exposure 26,820.15

Geographical exposure Amount in crore Tk.

Geographical distribution of exposures, broken
down in significant areas by major types of credit Dhaka 21,981.30
exposure Chattogram 3,052.19
Rajshahi 751.98
Khulna 486.91
Rangpur 296.25
Sylhet 128.54
Barishal 92.33
Mymensingh 30.65
Total Exposure 26,820.15

Industry or counterparty type distribution of Industry wise distribution of exposure Amount in crore Tk.
exposures, broken down by major types of
Readymade garments industry 4,723.45
credit exposure
Consumer credit 4,047.19
Energy and power industry 3,250.02
Trade service 3,063.34
Other manufacturing industry 2,889.12
Textile & spinning mills 1,455.68
Real estate financing 1,260.64
Steel industry 1,178.37
Agri & micro-credit through NGO 1,133.10
Service industry 627.88

432 Annual Report 2020

 Quantitative Disclosures
Others 611.20
Assembling industry 592.49
Pharmaceuticals industry 581.20
Edible oil and food processing 453.55
Construction 395.35
Transport, storage & communication 307.19
Ship breaking & building 131.74
Chemical industry 72.05
Hospitals 46.59
Total Exposure 26,820.15
Residual contractual maturity breakdown of the Residual contractual maturity wise exposure Amount in crore Tk.
whole portfolio, broken down by major types of Repayable on Demand 2,661.38
credit exposure Not more than 3 months 5,617.30
Over 3 months but not more than 1 year 6,559.24
Over 1 year but not more than 5 years 8,785.43
Over 5 years 3,196.80
Total Exposure 26,820.15

Counterparty wise distribution of impaired loans Amount in crore Tk.

By major industry or counterparty type:
and past due loans NPL SMA
l Amount of impaired loans and if available,
past due loans Small & Medium Enterprise Financing (SMEF) 671.07 45.40
Consumer Financing (Other than HF & LP) 106.86 10.04
l Specific and general provisions; and
Loans to BHs/MBs/SDs - -
l Charges for specific allowances and
charge-offs duringthe period Other than SMEF, CF, BHs/MBs/SDs 294.92 9.97
Housing Finance (HF) 9.60 -
Loans for Professionals to setup business (LP) - -
Short Term Agri. Credit 2.55 -
Microcredit - -
Staff Loan - -
Total Exposure 1,085.01 65.41
Particulars of specific and general provisions for entire loan Amount in
portfolio and off-balance sheet exposures crore Tk.
Specific provision for loans and advances 393.31
General provision for loans and advances 515.95
General provision for off-balance sheet exposures 120.23
Non-Performing Assets Amount in crore Tk.
l Gross Non-Performing Assets Gross Non-Performing Assets (NPAs) 1,085.01
l Non-Performing Assets to Outstanding NPAs to outstanding loans and advances (%) 4.05%
Loans & advances
Movement of NPAs (Gross)
l Movement of Non-Performing Assets Opening balance 1,424.42
NPAs)
Additions 39.70
l Movement of Specific provisions for
NPAs Less: Reductions (Cash Recovery, Rescheduling, W/O) 379.11
Closing balance 1,085.01

433
 Quantitative Disclosures
Movement of specific provisions for NPAs
Opening balance 582.97
Less: Fully provided debts written off during year 148.99
Less: Fully waived during the year 0.66
Less: Transfer to general provision 4.99
Add: Specific provision made during the year (48.56)
Add: Recoveries of amounts previously written off 13.54
Add: Provision made for Partially write off loans 0.00
Closing balance 393.31

Table 05 : EQUITIES – DISCLOSURES FOR BANKING BOOK POSITIONS

Qualitative Disclosures
The general qualitative disclosure requirement Bank’s investment in equity securities are broadly categorised into two
with respect toequity risk, including: categories:

l Differentiation between holdings on l Quoted Securities: The instruments are quoted in active markets. These
which capital gains are expected and securities include Common shares, Mutual funds listed with Stock
those taken under other objectives Exchanges. These instruments are categorised as trading book assets.
including for relationship and strategic Investment in trading book includes securities holding for capital gains,
reasons; and dividend income and securities holding for strategic reasons.

l Discussion of important policies l Unquoted Securities: Unquoted Securities have no active market for
covering the valuation and accounting of price quotation. These instruments are categorized as banking book
equity holdings in the banking book. This assets. Once unquoted securities get listed in secondary market, is
includes the accounting techniques and reclassified as quoted and trading book assets.
valuation methodologies used, including
As per Bangladesh Bank circular (ref: BRPD circular number -14 dated June 25,
key assumptions and practices affecting
2003), the quoted shares are valued as per market price in the stock
valuation as well as significant changes in
exchange(s).
these practices
Quoted share Under special fund are not revalued at market price according to
DOS circular number- 1 dated 10 February 2020.
Equity securities holdings in the banking book or unquoted are recognised at
cost price.
Provisions for shares are maintained for unrealised loss (gain net off) arising
from diminution in value of investments. Provision for shares against
unrealised loss (gain net off) has been made according to DOS circular
number-04 dated 24 November 2011 and for mutual funds (closed-end)
according to DOS circular letter no. 3 dated 12 March 2015 of Bangladesh Bank.

Quantitative Disclosures

l Value disclosed in the balance sheet of Particulars Solo Basis Consolidated Basis
investments, as well as the fair value of (Tk in crore) Cost Market Cost Market
those investments; for quoted securities, Price value Price value
a comparison to publicly quoted share
Value of Quoted 113.38 272.28 517.27 770.72
values where the share price is
shares
materially different from fair value.
Value of Unquoted 10.60 16.92
shares

434 Annual Report 2020

 Quantitative Disclosures
The cumulative realised gains Particulars Consolidated
l Solo Basis
(Tk in crore) Basis
(losses) arising from sales and
liquidations in the reporting period. The cumulative realised gains (losses)
arising from sales and liquidations in the
l Total unrealised gains (losses)
reporting period 2.78 7.14
l Total latent revaluation gains
(losses) Total unrealised gains (losses) 150.07 247.53
l Any amounts of the above included Total latent revaluation gains (losses) - -
in Tier 2 capital.
Any amounts of the above included in - -
Tier-2 capital

Risk Weighted Solo Basis Consolidated Basis

l Capital requirements broken down by Assets and Capital
appropriate equity groupings, consistent Balance Balance
Charge for
with the bank’s methodology, as well as Sheet RWA Sheet RWA
Unquoted shares
the aggregate amounts and the type of Amount Amount
equity investments subject to any (Tk in crore)
supervisory provisions regarding Unquoted shares 8.80 11.01 15.12 18.90
regulatory capital requirements.
Unquoted shares (venture
capital) 1.8 1.5 1.8 1.5

Total Unquoted Shares 10.60 12.51 16.92 20.40

Capital requirement @ 10%
of RWA 1.25 2.04

Table 06 : INTEREST RATE RISK IN BANKING BOOK (IRRBB)

Qualitative Disclosures
The general qualitative disclosure requirement Interest Rate Risk:
including the nature of Interest Rate Risk in Interest Rate Risk is the risk which affects the bank’s financial condition due to
Banking Book (IRRBB) and key assumptions, changes of market interest rates. Changes in interest rates affect both the current
including assumptions regarding loan earnings (earnings perspective) and also the net worth of the bank (economic
prepayments and behavior of non-maturity value perspective).
deposits, and frequency of IRRBB measurement.
Nature of Interest Rate Risk Management:
Bank assesses the interest rate risk both in earning and economic value
perspective.
Earning Perspective: The focus of this perspective is the impact of variation in
interest rates on accrual or reported earnings, because reduced earnings can
threaten the financial stability of a bank by undermining its capital adequacy and
by reducing market confidence.
Economic Value Perspective: This perspective reflects the sensitivity of the net
worth of the bank to fluctuations in interest rates.
Key Assumptions for Interest Risk Measurement:
Interest Rate Risk Management Policy, Targets and Controls are comprehended in
Asset Liability Management Policy of the bank.
Assumption for assets, liabilities, and instruments with predefined maturity is that,
these are bucketed as per residual maturity or next repricing date.
Assumption for non-maturity assets, liabilities, and instruments is that, they can be
bucketed based on previously observed withdrawal and payment behavior
patterns.

Interest rate risk in banking book is measured through the following approaches:

435
 1. Interest Rate Sensitivity analysis (Gap Analysis): Interest Rate Sensitivity
(or Interest Rate Gap) Analysis is used to measure and manage interest
rate risk exposure specifically, bank’s re-pricing and maturity imbalances.
This analysis is conducted on monthly basis.
2. Duration Analysis on Economic Value of Equity: A weighted
maturity/re-pricing schedule is used to evaluate the effects of changing
interest rates on bank’s economic value by applying sensitivity weights to
each time band. Such weights are based on estimates of the duration of
the assets and liabilities that fall into each time band. The duration analysis
is conducted on quarterly basis.
Stress Testing: It is used for measuring the Interest rate risk on its Balance
Sheet exposure for estimating the impact on the Capital to Risk Weighted
Assets Ratio. Stress Testing is conducted on quarterly basis.

Quantitative Disclosures

The increase (decline) in earnings or economic The plausible Interest rate risk in Banking book as of Dec 31, 2020 is calculat-
value (or relevant measure used by ed as below:
management) for upward and downward rate
shocks according to management’s method for Interest Rate Sensitivity Analysis:
measuring IRRBB, broken down by currency (as Interest rate change 1% 2% 3%
relevant). Change in Net Interest Income in
short term bucket (Tk in crore) (21.01) (42.02) (63.03)

Duration Gap Analysis:

Interest rate change 1% 2% 3%
Change in market value of equity (285.45) (570.90) (856.36)
(Tk in crore)

Table 07: MARKET RISK – DISCLOSURESRELATING TO MARKET RISK IN TRADING BOOK

Qualitative Disclosures
a) Views of BOD on trading/investment Market risk is the risk of potential losses in the on-balance sheet and off-balance
activities sheet positions of a bank, steamming from adverse movements in market rates
or prices such as interest rates, foreign exchange rates, equity prices, credit
spreads and/or commodity prices. Market risk exposure may be explicit in
bank’s trading book and banking book. The objective of the market risk
management is to minimise the impact of losses on bank’s earnings and
shareholders’ equity.

The Board of Director establishes trading and investment objectives, limits, and
other risk controls through different board approved policies, guidelines, and
frameworks. The delegation chain for trading and investment activities initiates
from the Board, which further establishes control limits, and responsibility
centers for these activities. Furthermore, the Board regularly reviews trading
and investment activities, and makes necessary advices and
recommendations.

b) Market Risk Management system Bank follows a market risk management process that allows risk-taking within
well-defined limits in order to create and enhance shareholder value and to
minimise risk. Regular market risk reports are presented to the Board’s Risk
Management, Assets & Liabilities Management Committee, Executive Risk
Management Committee and Investment Committee.

436 Annual Report 2020

 Qualitative Disclosures

Board and Board’s Risk Management Committee have the superior authority
to set market risk management strategy. Board has delegated its technical
functions to the Assets & Liabilities Management Committee, Executive Risk
Management Committee and Investment Committee. To administer technical
policies concerning financial models and risk management techniques and to
implement bank’s market risk management policies, procedures and systems,
Asset Liability Management desk, Market Risk Management desk and Treasury
Middle Office are functioning in tandem.

c) Policies and processes for mitigating Bank has Foreign Exchange Risk Management Policy, Asset Liability
market risk Management Policy and Investment Policy, duly approved by the Board of
Directors. These policies work in conjunction with the Board approved Market
and Liquidity Risk Management Framework, Risk Management Guidelines of
CBL, and other internal risk management policies.These policies delineate the
management process of Market Risk Factors. The bank reviews these policies
preferably on yearly basis for effective management of interest rate risk,
liquidity risk and foreign exchange risk.

Bank measures its market risk exposure using Value at Risk (VaR) Model which
is a quantitative approach to measure potential loss for market risk. Stress
Testing is used on asset and liability portfolios to assess sensitivity on bank’s
capital in different situations including stressed scenario. This test also
evaluates resilience capacity of the bank.

d) Methods used to measure Market risk Major methodologies employed to measure market risk are Interest Rate
Sensitivity Gap Analysis, Duration Gap Analysis, FX VaR, and Equity VaR
computations.

Disciplined presentation and monitoring of these methods and control of loss

from trading assets are ensured by putting in place Risk Appetite Statement,
Management Action Triggers (MAT) and Stop loss limit. Notional limit and
Exposure limits are set for Trading portfolios and Foreign Exchange Open
Position. Foreign exchange risk is computed on the sum of net short positions
or net long positions, whichever is higher, of the foreign currency positions held
by the Bank.

Quantitative Disclosures

The capital requirements for: As on 31 December 2020, Capital Allocation for Market Risk using
Standardised Approach as below:
l interest rate risk; Solo Basis:
Capital Requirement for Amount in crore Tk
l equity position risk; Interest rate risk 13.41
Equity position risk 57.74
l foreign exchange risk; and
Foreign Exchange risk 1.49
l commodity risk. Commodity risk 0.00
Total capital requirement 72.64

Consolidated Basis:
Capital Requirement for Amount in crore Tk
Interest rate risk 13.41
Equity position risk 117.95
Foreign Exchange risk 1.49
Commodity risk 0.00
Total capital requirement 132.84

437
 Table 08 : OPERATIONAL RISK
Qualitative Disclosures
a) Views of BOD on System to reduce Operational risk refers to the risk or possibility of loss resulting from inadequate
Operational risk or failed internal process, people and system or impact of external events. The
definition includes legal risk but excludes strategic and reputational risk.

The Board of Directors (BOD) is persistently promoting an organisational

culture prioritising effective risk management and adherence to sound
operating controls. BOD has approved structured operational Risk
Management (ORM) which is working unswervingly to ensure operational risk
exposures are managed within acceptable tolerance limits using dynamic tools
and techniques following international best practices.

b) Performance gap of executive and staffs City Bank demonstrates commitment to achieve team objectives and is
dedicated to develop and make an individual confident enough to perform
surpassing the limits. Employees’ performance is assessed according to
predefined performance objectives and Key Performance Indicators (KPI)
which are shared at the beginning of the year. City Bank aims to create a
workplace which rewards individuals for their efforts, promotes work-life
balance, offers employees to grow by facilitating personal development
through different types of learning intervention, during pandemic online
training session was widely used. Furthermore, step by step meticulous and
user-friendly manuals, policies and processes addressing clear responsibilities
and accountabilities towards individual’s job mitigate performance gaps and
enable users to operate more efficiently with least chances of failure.

c) Potential external events External events may derive systematic and unsystematic risk. City Bank
remains vigilant about its role against every event irrespective of their
frequency of occurrence. The bank adopts different strategy to mitigate the
negative effect of systematic risk within tolerable limit. It has developed
different policies and processes to diversify unsystematic risk such as
up-to-date contingency plans against pandemic situation for business
continuity, train and aware the employees about money laundering,
cybercrime, emergency situation, fraud, forgery etc. which are contributing
towards managing operational risk.

d) Policies and processes for mitigating Operational risk is inherent in every business organisation. Therefore,
operational risk necessary policies and processes are developed by the bank such as:
l Operational Risk Management Framework
l Revised Risk Management Guideline of CBL
l Reviewed crucial policies and processes with cross functional teams
l Initiated Risk Control Self-Assessment (RCSA) in major operational
processes

Moreover, key Operational Risk areas of the bank have been identified to
manage risk impacts and exposure mitigation tactics. To capture these risks,
Departmental Control Function Check List (DCFCL), Quarterly Operation
Report (QOR), internal and external audit reports, risk report etc. are checked.
City Bank has dedicated committees named Operational Risk Management
Committee (ORMC) composed of risk champions from cross functional
departments and Executive Risk Management Committee (ERMC) composed
of members of senior management of various risk functions aimed to create
common platform for critical analysis of risk aspects and implication of the
outcome. Activities of ERMC are implemented through Enterprise Risk
Management (ERM) and ORM team under independent Risk Management
Division (RMD). RMD pinpoints, analyses, and highlights different dimensions of
operational risks and reports to the Management, Board, and stakeholders for
necessary actions.

438 Annual Report 2020

 Qualitative Disclosures
Internal Control and Compliance Division (ICCD) assesses and monitors
operational procedure of the bank by undertaking periodic and special audit to
review the operation and compliance of statutory requirements. The reports
are subsequently reviewed by the Audit Committee of the Board (ACB) who
directly oversees the activities of ICCD to control operational risks. City Bank
also has Fraud Risk Management (FRM) Division that comprises three distinct
departments - Fraud Detection, Investigation & Vigilance, and Chargeback &
Dispute Management. All of these departments are pledged to tighten the
loose rivets that may exist within the operations of the bank.
e) Approach for calculating capital charge City Bank has adopted Basic Indicator Approach (BIA) to assess the capital
charge for operational risk as of the reporting date. Accordingly, bank’s
for operational risk
operational risk capital charge has been assessed at 15% of positive annual
average gross income over the previous three years as defined by the
guideline of Risk Based Capital Adequacy (RBCA).

Quantitative Disclosures
Capital Requirement for Operational Risk for the year 2020:
Sl. No. Particulars Amount in crore Tk
01 Capital Charge for Operational Risk under MCR (Solo Basis) 288.12
02 Capital Charge for Operational Risk under MCR (Consolidated Basis) 296.54

Table 09: LIQUIDITY RATIO

Qualitative Disclosures
a)) Views of BOD on System to reduce Liquidity risk is the risk to the bank's earnings and capital arising from its
liquidity risk inability to timely meet obligations when they come due without incurring
unacceptable losses. Liquidity risk primarily arises due to the maturity
mismatch associated with assets and liabilities of the bank. Therefore, the
Board of Directors of the bank set policy, different liquidity ratio limits and risk
appetite for liquidity risk management.

b) Liquidity risk management system The Board of Directors of the bank set policy, different liquidity ratio limits, and
risk appetite for liquidity risk management. Asset and Liability Management
Committee is responsible for both statutory and prudential liquidity
management. Ongoing liquidity management is discussed as a regular agenda
of ALCO meeting, which takes place on a monthly basis. At the ALCO meeting,
bank’s liquidity position, limit utilisation, changes in exposure and liquidity
policy compliance are presented to the committee. Asset Liability
Management Desk closely monitors and controls liquidity requirements on a
daily basis.

c) Methods used to measure liquidity risk Key liquidity metrics on both local currency and foreign currency balance
sheets are monitored to evaluate the liquidity mismatches and prudential limits
such as:
l Cash Reserve Ratio (CRR)
l Statutory Liquidity Requirement (SLR)
l Advance to Deposit Ratio (ADR)
l Structural Liquidity Profile (SLP)
l Maximum Cumulative Outflow (MCO)
l Liquidity Coverage Ratio (LCR)
l Net Stable Funding Ratio (NSFR)
l Liquid Asset to Total Deposit Ratio
l Liquid Asset to Short Term Liabilities
l Undrawn Commitment Limit
l Wholesale Borrowing

439
 Qualitative Disclosures
d) Policies and process for mitigating Liquidly Risk Management is guided by Asset Liability Management Policy of
liquidity risk the bank. Liquidly risk management and Liquidity Contingency Plan are the
two major aspects in the ALM policy. The Liquidity Contingency Plan clearly
defines the responsibilities of the Contingency Management Team and
ensures the business continuity through close monitoring of the bank’s
liquidity position against the pre-defined liquidity Management Action Triggers

Quantitative Disclosures
Sl. No. Particulars Solo
01 Liquidity Coverage Ratio 173.50%
02 Net Stable Funding Ratio (NSFR) 104.60%
03 Stock of High Quality Liquid Assets (Tk in crore) 6,464.90
04 Total net cash outflows over the next 30 calendar days (Tk in crore) 3,726.24
05 Available amount of stable funding (Tk in crore) 27,001.19
06 Required amount of stable funding (Tk in crore) 25,813.38

Table 10: LEVERAGE RATIO

Qualitative Disclosures
a) Views of BOD on System to reduce Basel III guidelines introduced a simple, transparent, non-risk based ratio known
excessive leverage as leverage ratio in order to avoid building-up excessive on and off balance
sheet leverage in the banking system. City Bank has embraced this ratio along
with Basel III guideline as it acts as a credible supplementary measure to risk
based capital requirement and assesses the ratio periodically in order to
properly address the issue.

b) Policies and processes for maintaining Revised guideline of RBCA based on Basel III as provided by BRPD of
excessive on and off-balance sheet Bangladesh Bank is followed by the bank while managing excessive on and
leverage off-balance sheet leverage of the bank, and the regulatory requirement has
been addressed in the ALM Policy of the bank. As per RBCA leverage ratio shall
be Tier I Capital divided by Total Exposure after related deductions.
c) Approach for calculating exposure
City Bank follows the approach mentioned in the revised RBCA, for calculating
exposure of the bank. The exposure measure for the leverage ratio generally
follows the accounting measure of exposure. In order to measure the exposure
consistently with financial accounts, the following are applied by the bank:
a. On balance sheet, non-derivative exposures will be net of specific
provisions and valuation adjustments.
b. No physical or financial collateral, guarantee or credit risk mitigation is
considered.
c. No netting of loans and deposits is considered

Quantitative Disclosures
Sl. No. Particulars Solo Consolidated
01 Leverage Ratio (%) 6.06% 5.74%
02 On balance sheet exposure (Tk in crore) 37,899.26 38,466.08
03 Off balance sheet exposure (Tk in crore) 9,978.00 9,978.00
04 Total exposure (Tk in crore) 47,842.01 48,309.23

440 Annual Report 2020

Table 11: REMUNERATION
Qualitative Disclosures
a) Information relating to the bodies that Governing body of Remuneration Policy and Process:
oversee remuneration.
City Bank has a board approved Compensation and Benefit Policy that outlines
the rules relating to compensation structure and the benefit package of the
organisation and gives detailed procedures for exercising them in order to
promote fair treatment and consistency within the bank. The policy is
approved by Board, while it is the Management that implements the same
across the organization. However, operational aspects of the policy are being
taken care by Human Resources (HR) Division of the bank.
External consultants whose advice has been sought, the body by which they
were commissioned, and in what areas of the remuneration process:
City Bank takes help of external consultant for certain areas during designing
the remuneration under Compensation and Benefit Policy. Assignment of any
consultancy services is carried out in line with Board approved Procurement
Policy of City Bank, while each consultant is appointed by Management/Board,
as appropriate. At City Bank we have the practice to appoint following
consultants, as and when required:
l Tax advisors on salary and benefits
l Actuary for valuation of gratuity

l Auditor for provident fund and gratuity

l Salary survey vendors

l Head hunters, etc.

Scope of City Bank Remuneration Policy:

Policy applies to all the permanent employees of the bank. Additionally,
separate Compensation and Benefit Package is usually approved for
temporary and casual staff on case to case basis. Any other benefit is guided by
the contract agreement with individual employees.

Material Risk Takers and Senior Management of City Bank:

At City Bank, Chief Executive Officer and other members of Management
Committee (MANCOM) hold the prime authority to take key decisions and
ultimate implementation. As such, CEO and MANCOM are considered as
material risk takers. However, in course of implementation, Division Heads also
play a pivotal role in banking business. Composition of MANCOM as on 31
December 2020 is provided below:
l MD & CEO 01
l AMD 01
l DMD 04
l SEVP 05
l EVP 07
l SVP 01

b) Information relating to the design and Objectives and key features of Remuneration Policy:
structure of remuneration processes
Compensation and Benefits policy of City Bank outlines the rules relating to
compensation structure and the benefit package of the organisation and gives
detailed procedures for exercising them with the objective of promoting fair
treatment and consistency across the bank. Additionally, Compensation to be
commensuration to individual’s performance, desired role in the organisation,
quality of past experience, quality of training received, and technical
competency. Key features of the policy besides the base salary are:

441
 Qualitative Disclosures
l Provident Fund
l Gratuity Benefit
l Group Term Life Insurance
l Bonuses
l Medical Benefits
l Various Allowances
l Financial Assistance Schemes
l Advance Salary etc.
l House building loan facility
l House building loan insurance
l Car loan facility
l Provident Fund loan facility

Review of Remuneration Policy:

As per the policy, compensation structure of the bank will be reviewed as and
when management deems appropriate to allow for adjustments in the Cost of
Living and market forces pertaining to the banking industry. The HR Division is
responsible for initiating the review process and their recommendations are
approved/ disapproved or amended by the Governing Body. In the latest
review, City Bank incorporated House Building Loan Insurance, and upgraded
as well as enhanced the scope of Group Hospitalisation Plan, and Car Purchase
Plan.

Independence of Risk & Compliance employees from businesses they

oversee:
CRO supervises the bank’s overall risk management activities which is
independent from business verticals and reports to Board’s Risk Management
Committee. On the other hand, all compliance professionals report to Head of
Internal Control and Compliance Division (ICCD), who reports to Board’s Audit
Committee. Hence, their evaluation process is also independent of the
Businesses they oversee.

c) Information relating to the design and Key risks taken into account when implementing remuneration measures:
structure of remuneration processes
In the competitive financial sector like Bangladesh, remuneration system is
basically driven by market dynamics. Due to huge competition in a crowded
market with substantial number of participants, restructuring of compensation
package is more frequent than other industries. However, such revisions
sometimes may lead to market distortion, excessive profit motive and disparity
in work-life balance. Nevertheless, City Bank always strives to design
remuneration strategies so that the competitive staff members are rewarded
compensation package they really deserve. On top of it, City Bank is committed
to ensure maintaining internal equity and fair treatment in its compensation
system across the organisation.

Key measures used to take account of these risks:

To make the compensation package judicious, market survey is conducted as
and when felt required so that the package logically compensates employees
for their expertise, time, mental and social engagement with the organisation.

442 Annual Report 2020

 Qualitative Disclosures
Ways in which these measures affect remuneration:
These measures ensure that the remuneration process of City Bank is
l Commensuration to individual’s performance, desired role in the
organisation, quality of past experience, quality of training received,
technical competency.
l Fair and Equal for different position of the bank
l In line with the market dynamics and practices

Changes in the nature and type of these measures over the past year:
To cope up with the impact of COVID-19, bank decided to cut salary by 10% for
employees whose gross salary is above 40,000 per month.

d) Description of the ways in which the Overview of main performance metrics of City Bank:
bank seeks to link performance during a
At City Bank, we believe in a performance based management culture. We
performance measurement period with
believe that all employees working with us must be evaluated in a fair and
levels of remuneration
transparent manner and the Performance Management Policy of City Bank
ensures that. As per policy, performance evaluation is done for all permanent
employees once every year. Additionally, to make the process more structured
and to provide a direction to the employee on his/her performance, a mid year
review is also performed. These evaluation are done based on two main
parameters
l Performance objectives of the employee
l Behavioral indicators of the Values of City Bank

Linkage between remuneration and performance:

The overall rating of an individual will be based on the cumulative rating of
above mentioned two parameters. In order to translate performance into
remuneration, City Bank associates this overall rating of an individual’s with
different features of remuneration policy such as yearly increment, bonuses
etc. In City Bank’s case, Club 1 is the highest rating whilst Club 5 is the lowest.

Adjustment of remuneration in the event that performance metrics are

weak:
The Performance Management Policy of City Bank is dynamic in nature that
considers overall performance scenario of the bank while ensuring fair and
transparent evaluation of individuals.
e) Description of the ways in which the City Bank believes that the individual and team effort and performance should
bank seek to adjust remuneration to be regularly appreciated and recognised so as to keep our employees
take account of longer-term motivated to give in their best efforts. And more importantly by recognising
performance these performances, we reinforce, with our chosen means of recognition, the
actions and behaviours we want City Bank employees to repeat most.
City Bank relates yearly overall rating of individuals which is based on their
performance with different features of remuneration policy such as yearly
increment, bonuses etc. Additionally, two or more years of rating are also
considered for promotion recommendation of individuals if suitable opening is
available commensurate with individual skills and expertise.
f) Description of the different forms of City Bank recognises the effort and performance of its employees based on its
variable remuneration that the bank Compensation and Benefit policy which consist of base salary and different
utilizes and the rationale for using these benefit packages mentioned earlier. However, City Bank occasionally practices
different forms commission based remuneration process for temporary staff as per its
Compensation and Benefit Package. There is also a Reward & Recognition
(R&R) program that recognises extraordinary contribution not only for
business gain but also those that inspire and set high quality services, support
or standard.

443
 Quantitative Disclosures
Number of meetings held by the main body overseeing remuneration during 2020 and remuneration NA*
paidto its member

Number of employees having received a variable remuneration award during 2020 NA**
Number and total amount of guaranteed bonuses awarded during 2020 2 Festival Bonus
(Tk 36.95 crore)
Number and total amount of sign-on awards made during 2020 492 employees and Tk
Number and total amount of severance payments made during 2020 0.78 crore

Total amount of outstanding deferred remuneration, split into cash, shares and share-linked instruments
and other forms. NA**
Total amount of deferred remuneration paid out in 2020.

Breakdown of amount of remuneration awards for 2020 to show:

l Fixed and Variable NA
l Deferred and Non-deferred
l Different forms used (cash, shares and share linked instruments, other forms)

Quantitative information about employees’ exposure to implicit and explicit adjustments of

deferredremuneration and retained remuneration: NA
l Total amount of outstanding deferred remuneration and retained remuneration exposed to ex
post explicit and/or implicit adjustments
l Total amount of reductions during the financial year due to ex post explicit adjustments
l Total amount of reductions during the financial year due to ex post implicit adjustments.

Note:

* In City Bank, no separate and exclusive meeting of the governing body takes place to oversee the remuneration. Rather,
HR is assigned to initiate any proposal on remuneration as per the Compensation and Benefit Policy of the bank and upon
consent of the management committee, the same is also placed regular Board meetings for approval and further actions.

** During 2020, Compensation and Benefit Policy of City Bank did not have provision of any kind of variable remuneration,
deferred remuneration, severance payment or other forms of remuneration as mentioned above for its permanent staff.
However, City Bank provides commission based remuneration to its temporary and casual staff which doesn’t fall under the
scope of the above mentioned policy.

444 Annual Report 2020

Branch list
Principal Office Islampur Road Branch Mymensingh Branch
House: 10 Jibon Bima Tower (GR fl), Area: House: 18 Sonar Bangla Market (1st fl), Road: House: 20 (1st fl), Road: Choto Bazar, Area:
Dilkusha Commercial Area, PO: GPO, PS: Islampur Road, Area: Islampur, PO: Dhaka Mymensingh, PO: Mymensingh, PS:
Motijheel, Dist: Dhaka - 1000. Sadar, PS: Kotwali, Dist: Dhaka - 1100. Kotwali, Dist: Mymensingh - 2200.

B.B. Avenue Branch Khulna Branch Syedpur Branch

House: 12 Hasan Building (GR fl & 1st fl), House: 7 (GR fl), Road: Sir Iqbal Road, House: 361 (GR fl), Road: Shahid Dr. Zikrul
Area: 12 B.B Avenue, PO: GPO, PS: Paltan, Area: Khulna Sadar, PO: GPO, PS: Kotwali, Haque Road, Area: Saidpur, PO: Saidpur,
Dist: Dhaka - 1000. Dist : Khulna - 9100. PS: Saidpur, Dist: Nilphamari - 5310.

Pabna Branch Bandura Bazar Branch Dhaka Dakshin Branch

House: 472 (1st fl), Road: Aurangzeb Road, House: Dennis Business Heaven (1st fl), House: Latif Mansion (1st fl), Road:
Area: Pabna, PO: Pabna, PS: Pabna Sadar, Area: Bandura Bazar, PO: Old Bandura, PS: College Road, PO: Dhaka Dakshin, PS:
Dist: Pabna - 6600. Nawabganj, Dist: Dhaka - 1320. Golapganj, Dist.: Sylhet, Post Code : 3161.

Agrabad Branch Bogura Branch New Market Branch

House: Banani Complex, 942/A (GR fl), Masuma Plaza, Holding No: 766, Rangpur House: 5 Novera Square (1st fl), Road# 2,
Area: Agrabad C/A, Road: Sheikh Mujib Road, Ward No: 3, PS: Bogura, District: Area: Dhanmondi R/A, PO: Dhanmondi,
Road, PO: Bandar, PS: Double Mooring, Bogura. PS: Dhanmondi, Dist: Dhaka - 1205.
Dist: Chattogram - 4100.
Cumilla Branch Narsingdi Branch
Khatungonj Branch House: 437 Artisan Nasir Centre (1st fl.), House: 192 Bazar (1st fl), Area: Narsingdi,
1628/1671, Ramjoy Mohajon Lane (1st fl), Road: Nazrul Avenue, Kandirpar, Area: PO: Narsingdi, PS: Narsingdi, Dist:
Asadgonj, P.O. Lamarbazar, PS: Kotwali, Cumilla, PO: Cumilla Sadar, PS: Cumilla, Narsingdi - 1600.
Dist: Chattogram- 4000 Dist: Cumilla - 3500.
Chauddagram Branch
Imamgonj Branch Patherhat Branch House: (1st fl) of Baitul Maleque Mansion,
173-174 Mitford Road, Imamgonj, PS: House: Hazi Siddique Ahmed (1st fl), Road: Chauddagram Bazar, Dhaka- Chattogram
Chawkbazar, Dhaka Kaptai Road, Area: Noapara, Guzra Union, High Way Area: Chauddagram Bazar, PO:
PO: Guzra Noapara, PS: Raozan, Dist: Chauddagram, PS: Chauddagram, Dist:
Bandar Bazar Branch Chattogram - 4346. Comilla - 3550.
House: Metro Centre (1st fl), Road: South
Dhopadighir Paar, Bandar Bazar East, Tangail Branch Bandartila Branch
Area: Sylhet, P.O: Sadar, P.S: Kotwali, Dist: House: 1869/77 (1st fl), Road: Main Road, House: 2461 A-Chamber (1st fl), Road:
Sylhet - 3100. PO: Tangail Sadar, PS: Tangail Sadar, Dist: Airport Road, Area: Bandartila, PO: Sailor’s
Tangail - 1900. Colony, PS: Bandar, Dist: Chattogram -
Narayangonj Branch 4218.
House: 72 Islam Market (1st fl), Road: BB Moulvibazar Branch
Road, Area: Narayangonj, PO: Narayangonj, House: Kusumbagh Shopping City (2nd Gulshan Branch
PS: Narayangonj, Dist: Narayangonj - fl), Road: Sylhet Road, Area: Moulvibazar, “Crystal Palace”, Ground & (1st fl),
1400. PO: Moulvibazar, PS: Moulvibazar, Dist: House-22, Road-140, Gulshan South
Moulvibazar - 3200. Avenue, Gulshan-1 Dhaka-1212
Zinzira Branch
Amin Complex, (1st fl), Zinzira Bus Stand Jashore Branch Tongi Branch
Road, Zinzira Bazaar, Dhaka. House: 28-29 R.S Tower (1st fl), Road: M.K House: 244 Zarzis Bhaban (1st fl), Road:
Road, Area: Jashore, PO: Jashore, PS: Anarkali Road, Area: Tongi Pourosova,
Rangpur Branch Kotwali, Dist : Jashore - 7400. PO: Monnu Nagar, PS: Tongi, Dist: Gazipur
House: 97/1 Central Point (1st fl), Road: - 1710.
Central Road, Area: Rangpur Town, PO: Jubilee Road Branch
Rangpur Sadar, PS: Kotwali, Dist: Rangpur House: 181 Gulshan Plaza (1st fl), Road: Chandpur Branch
- 5400. Golap Shing Lane, Area: Chattogram, PO: House: 57/54 Rajanigandha Shoping
GPO, PS: Kotwali, Dist: Chattogram - Centre (1st fl), Road: Comilla Road, Area:
Johnson Road Branch 4000. Natun Bazar, PO: Chandpur, PS: Chandpur,
House: 31 Aziz Center (1st fl), Road: Johnson Dist: Chandpur - 3600.
Road, Area: Raishaheb Bazar, PO: Dhaka Rajshahi Branch
Sadar, PS: Kotwali, Dist: Dhaka - 1100. House: 125 Star Mansion (1st fl), Road: Feni Branch
Natore Road, Area: Shaheb Bazar 0 Point, 188, Sadek Building (1st fl), Road: SSK
PO: Ghoramara, PS: Boalia, Dist: Rajshahi - Road, Area: Feni, PO: Feni, PS: Feni Sadar,
6100. Dist: Feni: 3900.

445
 Kaligonj Branch
Sirajgonj Branch Satkania Branch House: Bikrampur Plaza (1st fl.), Road:
House: 979 (1st fl), Road: SS Road, Area: House: 580 Mokbul Seraji Shopping Shahid Delwar Hossain Road, Area:
Sirajgonj, PO: Sirajgonj, PS: Sirajgonj, Dist: Complex (1st fl), R:Station Road, Area: Aganagar, Gudaraghat, PO: Suvaidda, South
Sirajgonj - 6700. Satkania, PO: Satkania, PS: Satkania, Dist: Keranigonj, PS: Keranigonj, Dist: Dhaka -
Chattogram - 4386. 1310.
Gobindagonj Branch
House: 575 Rajmoti Super Market (1st fl.), Andarkilla Branch Chawmuhani Branch
Area: Maddhapara, Buzruk Boalia, PO: Equity Antara. Holding No. 352/ 536. (1st fl.) Chowmuhani Plaza, D.B. Road (1st fl.)
Gobindagonj, PS: Gobindagonj, Dist: 123, Momin Road, Kotowali, Chattogram- Chowmuhani. PS: Begumgonj, Noakhali.
Gaibandha - 5740. 4000.
Mouchak Branch
Kadamtali Branch Barishal Branch House: 80/A Shahjalal Tower (1st fl.), Road:
House: 295 Rahat Centre (1st fl.), Road: DT House: 19 Razzak Mansion (1st fl.), Area: Siddeswari Circular Road, Area: Malibagh, PO:
Road, Area: Chattogram, PO: Chattogram Barishal, PO: Barishal, PS: Kotwali, Dist: Shantinagar, PS: Ramna, Dist: Dhaka - 1217.
Sadar, PS: Double Mooring, Dist: Barishal- 8200.
Chattogram- 4000. Dinajpur Branch
Ambarkhana Branch House: 1067, 1070 & 1078, Mona Tower &
Cox's Bazar Branch House: B 100, (1st Fl.), East Dargha Gate, Shopping Complex (1st fl.), Area: Modern
House: Ali Noor Plaza (1st fl.), Road: Main Airport Road, Ambarkhana, Sylhet. Moar, Goneshtola, PO: Dinajpur, PS:
Road, Area: West Bazarghata, PO: Cox's Dinajpur Sadar, Dist: Dinajpur - 5200.
Bazar, PS: Cox's Bazar Sadar, Dist: Cox's Netaigonj Branch
Bazar - 4700. House: 217 (1st fl), Road: BK Road, Area: Madhobdi Branch
Netaigonj, PO: Narayangonj, PS: Narayangonj, House: 4 (1st & 2nd fl.), Road: Bank Road,
Nawabgonj Branch Dist: Narayangonj - 1400. Area: Madhabdi Bazar, PO: Madhabdi, PS:
House: Younus Shoping Complex (1st fl.), Narsingdhi, Dist: Narsingdhi - 1604.
Area: Nawabgonj Main Road, Area: Kushtia Branch
Nawabgonj Upozilla, : PO: Nawabgonj, PS: House: 114 Kadari Super Market, Road: R.A. Sreemongol Branch
Nawabgonj, Dist: Dhaka - 1320. Khan Chow Sarak, Area: Sapla Chattar, PO: House: 70 Al-Amin Mansion (1st fl.), Road:
Kushtia, PS: Kushtia, Dist: Kushtia - 7000. Moulvi Bazar Road, Area: Sreemongal, PO:
Shaymoli Branch Sreemongal, PS: Sreemongal, Dist: Moulvi
House: 23/6 Rupayan Shelford (1st fl), Pahartali Branch Bazar - 3210.
Road: Khilji Road, Block: B, Area: Shaymoli, House: 302 Sanowara Guest House (1st fl),
PO: Mohammadpur, PS: Mohammadpur, Road: Dhaka Trunk Road, Area: Pahartali, Foreign Exchange Branch
Dist: Dhaka - 1207. P.O: Pahartali, P.S: Double Mooring, Dist: House: 27 Baitul Hossain Building (GR fl.),
Chattogram - 4202. Area: Dilkusha C/A, PO: Dilkusha, PS:
Zindabazar Branch Motijheel, Dist: Dhaka - 1000.
House: Kaniz Plaza (1st fl.), Area: Zindabazar, Posta Branch
PO: Sylhet, PS: Kotwali, Dist: Sylhet - 3100. House: 35 Seraj Court (1st & 2nd fl.), Road: Benapole Branch
Shaesta Khan Road, Area: Lalbagh, PO: House: 381, Selim Sumon Super Market
Dhanmondi Branch Posta, PS: Chak Bazar, Dist: Dhaka - 1211. (Ground Floor), Jessore Road, P.O.: Benapole,
House: 312 Suvastu Zenim Plaza (2nd fl.), P.S.: Benapole, Dist: Jessore - 7431.
Road: 27 (Old), 32 (New), Area: Dhanmondi Hajigonj Branch
R/A, PO: Dhanmondi, PS: Dhanmondi, Dist: House: Royal Rowshan Super Market (1st fl), Manikgonj Branch
Dhaka - 1205. Road: Main Road, Area: Hajigonj, PO: House: 173/174 (1st & 2nd fl.), Road:
Hajigonj, PS: Hajigonj, Dist: Chandpur - Shaheed Rafique Sarak, Area: Manikgonj
Doulatgonj Branch 1600. Bazar, P.O: Manikgonj, P.S: Manikgonj, Dist:
House: 252 (1st fl.), Road: Bank Road, Area: Manikgonj - 1800.
Daulatgonj Bazar, PO: Daulatgonj Bazar, Rekabi Bazar Branch
PS: Daulatgonj, Dist: Comilla - 3570. House: Abdul Motalebs House (1st fl.), Mirpur Branch
Road: Binodpur High School Road, Area: House: 1 (1st fl.), Road: Dar-us-Salam Road,
Laxmipur Branch Ponchasar, PO: Rekabi Bazar, PS: S: 1, Area: Mirpur, PO: Mirpur, PS: Mirpur,
House: Kundo Tower (1st fl) Road: Chak Munshigonj Sadar, Dist: Munshigonj - 1501. Dist: Dhaka - 1216.
Mosjid Road, PO: Lakshmipur Sadar, PS:
Lakshmipur, Dist.: Lakshmipur, Post Code: Faridpur Branch Nawabpur Branch
3700. House: 5/1 (1st fl), Road: Sheikh Mujib House: Anowara Bhavan (1st fl.), Road:
Road, Area: Niltuly, PO: Faridpur, PS: 12-14 Nawabpur Road, PO: Nawabpur, PS:
Karwan Bazar Branch Kotwali, Dist : Faridpur - 7800. Wari, Dist: Dhaka -1100
House: 8 UTC Building (1st fl), Road: 8,
Panthapath, Area: Kawran Bazar, PO:
Tejgaon, PS: Tejgaon, Dist: Dhaka - 1215.

446 Annual Report 2020

Urdu Road Branch
House: Haji Mansion (2nd fl.), Road: 10 Urdu Biswanath Branch Alfadanga Branch
Road, Area: Dhaka City Corp, PO: Posta, PS: House: K Ali Shoping Complex (1st fl.), Village: Sukurhata, PO: Alfadanga, P.S:
Chawkbazar, Dist: Dhaka - 1211. Road: Rampasha Road, Area: Natun Alfadanga Dist: Faridpur.
Bazar, PO: PS: Bishwanath, Dist: Sylhet -
O.R. Nizam Road Branch 3130. Halishahar Branch
(1st fl.), 1 Shahid Abdul Hamid Road, East C.K. Tower (1st floor), House No. 02 & 04,
Nasirabad, GEC crossing, Chattogram. VIP Road Branch Road No. 03, Lane- 03, Block- K,
Orchard Faruque Tower, 72, Naya Paltan, Halishahar H/E, Chattogram-4216
Jagannathpur Branch VIP Road, Dhaka
House: (GR fl.), Road: T & T Road, Area: Jamuna Future Park Branch
Jagnnathpur, PO: Jagnnathpur, PS: Progati Sarani Branch Ka-244, Progati Sarani, Ward: 17, Dhaka
Jagnnathpur, Dist: Sunamgonj - 3060. The Pearl Trade Center (Ground Floor), North City Corporation, P.O. Bhatara,
Cha-90/3, Progati Sarani, Shahjadpur, Dhaka. District: Dhaka.
Chapainawabgonj Branch
House: 11 Jabun Nessa Super Market (1st fl.), Nikunja Branch Raipur Branch
Road: Godagari Road, Area: House: Lotus Kamal Tower-1, 57 Zoar Holding No. 517, Shahid Plaza, Pir Fozlullah
Chapainawabgonj, PO: Chapainawabgonj, PS: Shahara (GR fl), Road: Airport Road, Area: Sarak, Raipur, Laxmipur.
Chapainawabgonj, Dist: Chapainawab- gonj - Nikunja-2, PO: Khilkhet, PS: Khilkhet, Dist:
6300. Dhaka - 1229. Chondrogonj Branch
Lakshmipur, Shahjoki Shopping Complex,
Satkhira Branch Kachua Branch Poeshim Bazar, Chondrogonj.
House: 400/450 City Market (1st fl), Road: House: Biponi Polash (GR fl.), Road: Hospital
Boro Bazar Road, Area: Satkhira, PO: Satkhira, Road, Area: Polashpur, PO: Kachua, PS: Kanaipur Bazar Branch
PS: Satkhira Sadar, Dist: Stakhira - 9400. Kachua, Dist: Chandpur - 3630. Kanaipur High School, 2 No Market,
Kanaipur Sadar, Faridpur.
Sherpur Branch Gulshan Avenue Branch
Holding No: 1761-05/06, Mahmud Tower, City Bank Center, 136 Gulshan Avenue, Gazipur Branch
(Ground floor), Dhaka Bogura High Way, Gulshan-2, Dhaka - 1212. House 501, Noljani, Joydevpur, Chandana,
Pourosova Road, Sherpur Bus Stand, Gazipur.
Sherpur, Bogura-5840 Probartak Branch
House: 1486/1672 Al-Nur Badrun Center Bhulta Branch
Sadarghat Branch (1st fl.), Road: O.R Nizam Road, Area: Nurjahan Market, Bhulta, Rupgonj,
House: Patuatuly Bhaban (2nd fl.), Road: 78 Probartak Moor, PO: Ctg Medical, PS: Golakandail, Narayangonj.
Loyal Street, Patuatuly, Area: Sadarghat, PO: Panchlaish, Dist: Chattogram - 4203.
Sadarghat, PS: Kotwali, Dist: Dhaka - 1100. Sonargaon Janapath, Uttara Branch
Brahmanbaria Branch House-02, Sector-12, Sonargaon Janapath
Bhairab Bazar Branch House: 1329/1 Razzaque Plaza (1st fl.), Road, Uttara Model Town, Union-
House: 129 (1st fl.), Road: Kali Bari Road, Area: Kawtali, PO: Brahmanbaria Sadar, Harirampur, Uttara, Dhaka.
Area: Bhairab Bazar, PO: Bhairab Bazar, PS: PS: Brahmanbaria Sadar, Dist:
Bhairab, Dist: Kishoregonj - 2350. Brahmanbaria - 3400. Subarnachar Branch
Rubina Super Market (1st Floor), Dag No :
Motijheel Branch Banani Branch MRR : 880, Khatian No: MRR : 248, Char Bata
Motaleb Mansion, Holding No. 2, R K House: 28 (GR fl., 1st & 2nd fl.), Road: 11, Union Parishad, P.S : Subarna char, Noakhali.
Mission Road, Ward No. 39, PS: Wari, Block: F, Area: Banani, P.O: Banani, P.S:
Dhaka - 1203. Gulshan, Dist: Dhaka - 1213. Senbagh Branch
D.K. Plaza (1st fl.), Holding no : 346, Upozila
Uttara Branch Moghbazar Branch Road, Senbagh Bazar, Senbagh, Noakhali.
House: 8 Barek Monjil (GR fl.), Road: House: 1 Razzak Plaza (1st fl.), Road: New
Rabindro Sarani Road, Sector-7, Area: Eskaton Road, Area: Moghbazar, PO: GPO, Rohanpur Branch
Azampur, P.O: Uttara, P.S: Uttara, Dist: PS: Ramna, Dist: Dhaka - 1000. Holding No: 1125, Godown Road, Ward no:
Dhaka - 1230. 05, P.S.: Gomostapur, Puroshava: Rohanpur,
Pallabi Branch Dist: Chapainawabganj.
Beani Bazar Branch House: 132 Spring Rahmat-E-Tuba Complex
House: (GR fl.), Road: Hospital Road, Area: (1st fl.), Road:2, Block: A, Section: 12, PO: Naogaon Branch
Nayagram, P.O: Beani Bazar, P.S: Beani Mirpur, P.S: Mirpur, Dhaka- 1216. Amir Uddin Bhaban, Chakdevpara
Bazar, Dist: Sylhet - 3170. Holding No: 20674, Ward no: 03, P.S:
Ashulia Branch Naogaon, Puroshava: Naogaon, Dist:
Chawk Bazar Branch Nigar Plaza” (1st fl.), House No: 1/94, Road Naogaon.
House: 452/494 Marium Tower (1st fl.), No: 04, Lane: 02, PO: Jamgora, PS:
Road: 210, Kapashgola Road, Area: Chawk- Ashulia, Dhaka-1339.
bazar, PO: Chawkbazar, PS: Panchlaish,
Dist: Chattogram - 4203.

447
 Kabirhat Branch Bagher Bazar Branch Bhatiary AGRI Branch
Momtaj Mahal, D.B. Road (1st Floor), Haji Samsuddin & Banesa Market (1st House: Rahman Tower, Bhatiary Bazar,
Chaprashirhat Bazar, PS: Kabirhat, Dist: Floor), Shirir Chala, Bagher Bazar Branch, Road: Bhatiary Station Road, PO:
Noakhali. Dag no : R.S – 2572, Khatian no : R.S - 221, Sitakunda, PS: Sitakunda, Dist: Chattogram -
Mouza : Mohana Vhabanipur, Union : 4001.
Gouripur Branch Bhawalgarh, Upazila : Gazipur Sadar,
Hatim Tower, Gouripur Bazar, P.S.- District : Gazipur-1700. Joypara AGRI Branch
Daudkandi, Dist: Comilla. House: 77 Ahmed Shopping Complex
Gopalganj Branch (1st fl.), Road: 260, Area: Joypara, PO:
Banani Lake View Branch Zaman Tower (1st fl), Holding No: 116, Joypara, PS: Dohar, Dist: Dhaka - 1330.
Ventura Iconia (1st Floor), Holding No: 37, Saudagor Road, Ward no: 2, Puroshova:
Road: 11, Ward: 19, Block: H, P.S: Banani, Gopalganj, Upazila: Gopalganj Sadar, Savar AGRI Branch
Dhaka North City Corporation. Dist: District: Gopalganj. House: 111/A(1st fl.), Road: Savar Bazar
Dhaka. Road, Area: Savar, PO: Savar, PS: Savar,
Rokeya Sarani Branch Dist: Dhaka - 1340.
Oxygen Moor Branch Dinaj Tower (1st fl.), Holding No. 752/2,
M Rahman Heights (1st fl.) Oxygen Moor, West Shewrapara, Begum Rokeya Sarani, Jatrabari Branch
Ward No– 2 no. Jalalabad, P.S.- Bayezid Mirpur, Dhaka. House: 314, A/5 Yousuf Mansion(1st fl),
Bostami, Chattogram City Corporation, Road: A.T.M Haider Road, Area: Pubali
Dist- Chattogram. Shibpur Branch Area, PO: Jatrabari, PS: Jatrabari, Dist:
Holding No: 181, (1st fl.), Ward No: 5, Dhaka - 1232.
Kulaura Branch Shibpur Sadar Road, Shibpur Bazar Road,
Nazma Gani Market (1st Floor), Holding Thana & Pourashava : Shibpur, Narsingdhi. Natore AGRI Branch
No : 220, Ward No : 5, Puroshova : House: 240/241, F.K. Zaman Plaza (GR fl.),
Kulaura, Upazila : Kulaura, District : Gulshan Women Branch Area: Alaipur Boipotty, PO: Natore, PS:
Moulvibazar. Gulshan Women Branch, Shanta Sky Natore Sadar, Dist: Natore - 6400.
Mark (Ground fl.), Holding No. 18, Gulshan
Kalurghat Branch Avenue Road, Ward No. 19, Police Station: Chhatak Agri Branch
Holding No: 2898/4561 (1st fl.), Gulshan, Dhaka North City Corporation, House: 28 Tahir Centre (1st fl), Road: Traffic
Chandgaon, Kaptai Raster Matha, Ward District: Dhaka. Point, Area: Chhatak Municipality, P.O:
No: 5, Thana: Chandgaon, Chattogram City Chhatak, P.S: Chhatak, Dist: Sunamganj -
Corporation, District: Chattogram. Jamalpur AGRI Branch 3080.
House: 422 Thakur Bhaban (1st fl.), Road:
Pagla Branch Station Road, Area: Jamalpur, PO: Islami Banking
Namira Tower (1st fl.), Dag no: C.S & S.A - Jamalpur, PS: Jamalpur Sadar, Dist: Al-Razi Complex (1st floor), 166-167,
316 and R.S - 318, Khatian no: C.S – 105, S.A Jamalpur - 2000. Shahid Sayed Nazrul Islam Sarani, Bijoy
– 107, R.S – 230, Mouza: Pagla, Union: Nagar, Purana Paltan, Dhaka.-1000
Kutubpur, Thana: Fatullah model Thana, Maijdi AGRI Branch
District: Narayanganj. Sreenath Bhaban, (1st fl.), Main Road,
Maijdi Court, Sadar, Noakhali.
Ati Bazar Branch
Abrar Tower (1st fl.), Shahid Nagar, Dag Hobiganj AGRI Branch
no: R.S 489, Khatian no: R.S – 221, Mouza: House: 3557/KA Amir Chand Complex (1st
Ghatar Chor, Union: Taranagar, Upazilla: fl), Road: Badiuzzaman Khan Road, Area:
Keraniganj, District: Dhaka. Hobigonj, PO: Hobiganj, PS: Hobigonj
Sadar, Dist: Hobigonj - 3300.
Patuakhali Branch
Holding No : 063-01 (1st fl.), Old Steamer Gazipur AGRI Branch
Ghat Road, Natun Bazar, Ward no: 6, Jalal Shopping Center House: N/A (1st fl.),
Puroshova: Patuakhali, Upazila: Patuakhali, Road: N/A, Area: Kalmeshwar, Board Bazar,
District: Patuakhali. PO: National University, PS: Gazipur Sadar,
Dist: Gazipur - 1704.
Fatikchhari Branch
Fatikchhari Branch, Ananda Tower (1st Kishoreganj SME/Agri Branch
Fl.), Ananda Tower, Jhankar Moor, Mouza: 239, Alhaz Mahtab Uddin Super Market
Farhadabad, Puroshova: Najirhat, (1st fl.), Boro Bazar, Kishoreganj.
Upazila: Fatikchhari, District: Chattogram.
Lohagara AGRI Branch
Phultala Branch House: Mostafa City (1st fl.), Area:
Hazi Marker (1st fl.), Khulna Jessore Main Amirabad, Lohagara, PO: Lohagara, PS:
Road, Union: 4 no. Phultala, Upazila: Lohagara, Dist: Chattogram - 4396.
Phultala, District: Khulna.

448 Annual Report 2020

PHOTO
ALBUM
 City Bank’s
37th Annual General
Meeting on digital
platform
The 37th Annual General Meeting (AGM) of City
Bank was held on Thursday, August 13, 2020 through
virtual platform. Mr. Aziz Al Kaiser, Chairman of the
Bank, presided over the meeting. Vice Chairman
Mr. Hossain Khaled, Directors Mrs. Tabassum Kaiser,
Mr. Hossain Mehmood, Mr. Rajibul Huq Chowdhury,
Mr. Rafiqul Islam Khan, Mrs. Syeda Shaireen Aziz,
Mrs. Savera H. Mahmood, Independent Directors
Mr. Farooq Sobhan, Dr. Salim Mahmud, Managing
Director & CEO Mr. Mashrur Arefin, Additional
Managing Director Mr. Sheikh Mohammad Maroof,
DMD & Chief Financial Officer Mr. Md. Mahbubur
Rahman, and large number of shareholders and the
Bank’s senior officials also attended the
meeting on virtual platform.

450 Annual Report 2020

City Bank’s
Extraordinary
General Meeting
The Extraordinary General Meeting (EGM) of
City Bank was held on November 17, 2020 over the
virtual platform. Mr. Aziz Al Kaiser, Chairman of the
Bank presided over the meeting. Vice Chairman
Mr. Hossain Khaled and Directors Mrs. Tabassum Kaiser,
Mr. Hossain Mehmood, Mr. Rajibul Huq Chowdhury,
Mr. Rafiqul Islam Khan, Mrs. Syeda Shaireen Aziz,
Mrs. Savera H. Mahmood, Ms. Rebecca Brosnan,
Independent Directors Mr. Farooq Sobhan, Dr. Salim
Mahmud, Managing Director & CEO Mr. Mashrur
Arefin, Deputy Managing Director & CFO
Mr. Md. Mahbubur Rahman and large number
of shareholders also attended the meeting. The
shareholders unanimously approved contingent
Convertible perpetual Bond for Tk. 400 crore
(Additional Tier-I Capital), subject to the
approval of the regulators.

451
 City Bank Holds
Subscription Closing
Ceremony of the Country’s
First Ever Contingent-Convertible
Perpetual Bond
City Bank has completed issuance of the country’s first ever
Basel-III compliant, Additional Tier-I, Contingent-Convertible
Perpetual Bond of BDT 400 Crore. In this connection, the bank
held a subscription closing ceremony at The Westin Dhaka on
16th March 2021, engaging several stakeholders and well-wishers
of the bank. Mr. Salman F Rahman, MP, Private Industry &
Investment Advisor to the Hon’ble Prime Minister of Bangladesh
delivered a Video Speech at the event. Special guests were
Professor Shibli Rubayat Ul Islam, Chairman, Bangladesh
Securities and Exchange Commission, Mr. Ahmed Jamal,
Deputy Governor, Bangladesh Bank, Mr. Aziz Al Kaiser,
Chairman of City Bank and Mr.Aziz Al Mahmood, Chairman
of City Bank Capital Resources Limited, along with many
prominent senior officials from the financial industry.

452 Annual Report 2020

City Bank opens newly
renovated City Bank
American Express Lounge
at Airport Dhaka
City Bank opened its newly renovated City Bank American
Express Lounge at Hazrat Shahjalal International Airport (HSIA)
on November 03, 2020. This international-class airport lounge
is the first of its kind in Bangladesh. Since 2010, it has been
serving thousands of American Express cardmembers with
pride and up to their utmost satisfaction. The lounge was
inaugurated by Mr. Aziz Al Kaiser, Chairman of City Bank
as the chief guest. Mr. Md. Nazmus Sadat Salim, Company
Secretary, Bangladesh Services Limited, Group Captain A H M
Towhid-U Ahsan, Director, Hazrat Shahjalal International
Airport attended the event as special guest.

The launch event was also attended by Mr. Mashrur Arefin,

Managing Director and CEO of City Bank, Mr. Marc Reissinger,
General Manager of Intercontinental Dhaka, Mr. Sheikh
Mohammad Maroof, Additional Managing Director, Mr. Md.
Zafrul Hasan, Head of Digital Financial Services, Mr. Arifur
Rahman, Head of Cards of City Bank. Other senior officials
from Civil Aviation Authority of Bangladesh, Bangladesh
Services Ltd and City Bank were also present.

453
 City Bank
inaugurates
it’s relocated
Gulshan Branch
City Bank formally opened its relocated Gulshan
Branch located at Gulshan 1 on 25th January, 2021.
Mr. Aziz Al Kaiser, Chairman of the bank inaugurated
the branch, which is equipped with full-fledged
modern and digital banking facilities. Also present
at the occasion were Mr. Mashrur Arefin, Managing
Director & CEO, Mr. Sheikh Mohammad Maroof,
AMD and other senior officials of the bank.

454 Annual Report 2020

City Bank introduces
real time cash deposit
machine (RCDM) for
instant transaction
City Bank has introduced specialised real time cash
deposit machine (RCDM) which is first time in the
country allowing customers to deposit money into
their accounts instantly, regular cash Deposit
machines take time till end of the transaction day
to reflect the same deposit in account. But real time
CDM enables depositors to make instant transaction
in the accounts and also to pay credit card bills in
real time. The facility allows bearers also to deposit
cash. Mr. Mashrur Arefin, Managing Director &
CEO of City Bank inaugurated this alternative
channel at its head office.

455
 City Bank and World
Vision Bangladesh
Sign Agreement
City Bank will work with World Vision
Bangladesh (WVB) to facilitate access Certificate Giving
to banking service to financially
disadvantaged people. Initially, City Bank Ceremony of City Alo
and WVB made an bilateral agreement
to reach banking service through agent With the aim of providing women
banking in Satkhira and Khulna. The entrepreneurs a competitive edge in the
agreement will improve financial inclusion complex business world, the certificate
through decentralised banking service giving ceremony of the fifth batch of City
to help country to attain sustainable Alo Certification program was held at City
development goals. Mr. Mashrur Arefin, Bank Center. 30 participants from diversified
Managing Director & CEO of City Bank fields of business were awarded with
and Mr. Suresh Bartlett, National Director certificates and crests in the program. This
Earnings Disclosure of World Vision Bangladesh signed the was the first time the entire program was
agreement on behalf of their respective conducted online due to the overall COVID
City Bank organised its Earnings organisations. Among others, Mr. Md. pandemic situation; as a result a lot of
Disclosure web cast event based on 3rd Zafrul Hasan, Head of Digital Financial women entrepreneurs residing outside
Quarter 2020 financial performance. The Services and Mr. Kamrul Mehedi, Head Dhaka city had participated in the program.
event was held on 2nd November, 2020 of Small Business of City Bank, Mr. Rakesh
over digital platform. Existing & potential Katal Chief of Party – Nobo Jatra Project The guests of this grand closing ceremony
investors across the globe, researchers & and Mr. Alex Bekunda, Deputy Chief of were Prof. Atiqul Islam, Vice Chancellor, Dr.
analysts and many other individuals Party – Nobo Jatra Project and other Abdul Hannan Chowdhury, Dean, School
involved in capital market activities joined senior officials of the two organisations of Business, Prof. Sharif Nurul Ahkam,
the event through web platforms. Mr. were also present at the ceremony. Director, Graduate Studies and the
Mashrur Arefin, Managing Director & CEO facilitators of North South University, Mr.
of City Bank briefly spoke of the Bank’s Mashrur Arefin, Managing Director & CEO,
long-term vision and current strategy. Mr. Ms. Mahia Juned, Deputy Managing Director
Md. Mahbubur Rahman, Deputy Managing and COO Mr. Arup Haider, Head of Retail
Director & Chief Financial Officer of Banking and Ms. Nishat Anwar, Head of
the bank also gave an overview of the Human Resources of City Bank were
financial performance of the bank. present at the ceremony.

City Bank and Shohoz

Sign Agreement
City Bank has signed an agreement with
Shohoz, one of the fastest growing
start-ups in Bangladesh with a one stop
solution for multiple services. Under this
agreement, City Bank will be facilitating City Bank inaugurates
online digital collections and payments to it’s Islami Banking Branch
Shohoz through the bank’s digital platform.
Mr. Sheikh Mohammad Maroof, Additional
Managing Director of City Bank and Ms. City Bank formally opened its relocated
Maliha M Quadir, Managing Director of Islami Banking Branch at Bijoy Nagar.
Shohoz signed the agreement on behalf Mr. Md. Mahbubur Rahman, Deputy
of their respective organisations. Managing Director & CFO of the bank
formally inaugurated the branch equipped
with full-fledged modern Islami Banking
facilities. Also present on the occasion
were Mr. Arup Haider, Head of Retail
Banking, Mr. Safiul Amin, Head of
Branches and other officials
of the bank.

456 Annual Report 2020

 City Bank and Petrochem
(Bangladesh) Ltd Sign
Agreement
City Bank signed an agreement with
City Bank and Petrochem (Bangladesh) Ltd for Employee
Aamartaka.com Banking facility. The agreement was City Bank and ADDIE Soft
Sign Agreement handed over by Mr. Md. Abdul Wadud, Limited Sign Agreement
Deputy Managing Director and Head of
City Bank signed an agreement with Commercial & Trade Business of City Bank Students of leading educational institutions
Aamartaka.com. Under this agreement, and Mr. Saif Uddowlah, Managing Director who are associated with ADDIE Soft, a
Aamartaka.com will act as an authorized of Petrochem (Bangladesh) Ltd. Mr. Md. reputed software solution provider, will be
sales agent for Retail Loans & Credit Cards Arup Haider Head of Retail Banking, Mr. able to pay their tuition fees online by
for City Bank. Mr. Md. Mahbubur Rahman, Hasan Uddin Ahmed Head of Employee using Amex, Visa, Master and UnionPay
Deputy Managing Director & CFO of City Banking of City Bank, Mr. Mozammail Card through City Bank Internet payment
Bank and Mr. Md. Mahmud Al Maruf Toufiq, Hossain, General Manager of Petrochem gateway. An agreement to this effect was
Managing Director of Aamartaka.com (Bangladesh) Ltd and few other higher signed between City Bank and ADDIE Soft
signed the agreement. Mr. Md. Arup officials from both the organisations Limited. Mr. Md. Zafrul Hasan, Head of
Haider, Head of Retail Banking, Mr. Md. were also present at the ceremony. Digital Financial Services, Mr. Arifur
Zafrul Hasan, Head of Digital Financial Rahman, Head of Cards of City Bank and
Services of City Bank, Mr. Nazim Farhan Mr. Md Shakib Rabbani, Managing Director,
Chowdhury, Chairman, Ms. Afra Anika, Mr. M A Mannan, Director of ADDIE Soft
Manager, Channel Marketing & Alliances were present on the occasion.
of Aamartaka.com and other officials
of both the companies were
present at the ceremony.

City Bank and GD Assist

Limited Sign Agreement
City Bank and GD Assist Limited have City Bank and Manabik
signed an agreement. Under the
agreement, GD Assist–Bangladesh’s first Shahajya Sangstha
Healthcare Management and Medical Sign Agreement
City Bank and Barikoi Tourism Company will be offering exclusive
healthcare offers to all the women City Bank and Manabik Shahajya Sangstha
Technologies Ltd customers of City Bank. Mr. Arup Haider, (MSS) signed an agreement for Agri Loan
Sign Agreement Head of Retail Banking of City Bank and Disbursement. Mr. Nurul Azam Mazumder,
Mr. Syed Moinuddin Ahmed, Managing Head of Medium Business of City Bank Mr.
City Bank signed an agreement with Director of GD Assist Ltd. and Additional Munawar Reza Khan, Executive Director
Barikoi Technologies Ltd to implement the Managing Director and Company of MSS signed the agreement on behalf
first ever digitised contact point verification Secretary, Green Delta Insurance Company of their respective organisations. Other
with City Bank. Mr. Md. Zabid Iqbal, Chief Ltd. signed the agreement on behalf of senior officials from both part took part
Risk Officer of City Bank and Mr. Md. their respective organizations. Mr. Ashanur in the signing event.
Al-Amin Sarker, Managing Director of Rahman, Chief Economist & Country
Barikoi Technologies Ltd signed the Business Manager, Mr. Rafiqul Islam,
agreement on behalf of their respective Managing Director of Green Delta Capital
organisations. Among others Mr. Md. Limited, Ms. Kaynath Khan, Relationship
Ashanur Rahman, Chief Economist & Manager, GD Assist Limited and other
Country Business Manager, Mr. Subir senior officials of the two organisations
Kumar Kundu, Head of Products, were also present in the signing ceremony.
Segments & Direct Acquisitions, Mr.
Mohammad Waliullah, Head of Credit
& Collection of City Bank were
present at the occasion.
457
 The City Bank Limited
Head Office: City Bank Center, 136 Bir Uttam Mir Shawkat Sarak, Gulshan Ave., Gulshan-2, Dhaka-1212, Bangladesh
Share Department: 11, Dilkusha C/A. (1st Floor), Dhaka-1000, Bangladesh

NOTICE OF THE 38th

ANNUAL GENERAL MEETING
Notice is hereby given to all members of The City Bank Limited that the 38 th Annual General Meeting (AGM) of the bank will
be held through Digital Platform on Wednesday, May 19, 2021 at 2:30 P.M. (BD Dhaka Time) to transact the following business
and to adopt necessary resolutions:

AGENDA
Agenda-1 : To receive, consider and adopt the Accounts of the Company for the year ended on31st December, 2020 along with the
Auditors’ Report and the Directors’ Report thereon.
Agenda-2 : To declare 17.50% Cash Dividend and 5.00% Stock Dividend for the year ended 31st December, 2020 as recommended
by the Board of Directors.
Agenda-3 : To elect/re-elect Directors.
Agenda-4 : To Appoint/re-appoint Auditors for the company and to fix their remuneration for the term until next AGM.
Agenda-5 : To Appoint Corporate Governance Compliance Auditor for the year 2021 for certification on Corporate Governance
status under BSEC Corporate Governance Code and to fix their remuneration.
Agenda-6 : To consider any other relevant business with the permission of the Chair.

By order of the Board,

Dated : Dhaka
19 April, 2021 Md. Kafi Khan
Company Secretary
NOTES :
1. The ‘Record Date’ for the 38thAnnual General Meeting (AGM) is scheduled on April 13, 2021.
2. Members whose names appeared in the Central Depository System/Register of Members at the close of Record Date i.e. April 13,
2021 shall be eligible to attend and vote at the AGM and will be entitled for the dividend, as approved. Votes may be given either
personally or by an attorney or by a proxy or, in the case of a corporation by a representative duly authorized. As per Article 86 of
the Articles of Association of the Company, a Proxy must be a member of the Company.
3. Proxy Form duly stamped and signed by the Member must be submitted to Share Department, The City Bank Limited, 11, Dilkusha
C/A, Dhaka at least 48 (Forty Eight) hours before the time fixed for date of AGM for attestation. Upon receipt of attested Proxy Form,
the nominated person or attorney or authorized person from a Company/Corporation may attend/vote in the AGM. Annual
Report-2020, Attendance Slip and Proxy Form may be collected from Share Department or from the website of the Company:
www.thecitybank.com
4. Link for joining in AGM through Digital Platform: (Short Link:http://thecitybank.capmark.com.bd) Shareholders can join virtual AGM
from Laptop, PC, Mobile or Tab putting 16-Digit BO ID. For virtual AGM guidance, the concerned members may contact at the
numbers: 01719007279 and 01976156080.
5. Full login/participation process for the Digital Platform meeting will also be available in the Company’s
website:www.thecitybank.com
6. Pursuant to the Bangladesh Securities and Exchange Commission (BSEC) Notification No.SEC/CNRRCD/2006-158/Admin/81 dated
20 June, 2018 link of the downloadable PDF copy of the Annual Report 2020, among others are to be sent to respective members’
email address available in beneficiary owner (BO) account with the depository participant (DP).
7. Members are requested to submit their queries on the Directors’ Report and the Audited Financial Statements for the year ended
on 31 st December, 2020 through e-mail:[email protected] or in writing at least 5 (Five) working days before the day of
AGM.
8. Respected BO Account Holders who have updated their BO Accounts and submitted their 12 digit e-TIN to concerned DP house
and Share Department of The City Bank Ltd. (in case of Folio) before Record Date, their tax will be deducted 10% from his Cash
Dividend otherwise 15% (in case of Individual) according to THE INCOME TAX ORDINANCE, 1984 Ordinance No.XXXVI, Section-54.
9. Merchant Banks and Depository Participant (DPs) are requested to email the soft copy of their margin clients based on said Record
Date (In MS Excel format) within April 29, 2021 to the CBL Share department [email protected] facilitating payment of
cash dividend.

QR Code : To join the Virtual AGM from Laptop, PC, Mobile or Tab:

458 Annual Report 2020

The City Bank Limited
Head Office: City Bank Center, 136 Bir Uttam Mir Shawkat Sarak, Gulshan Ave., Gulshan-2, Dhaka-1212, Bangladesh
Share Department: 11, Dilkusha C/A. (1st Floor), Dhaka-1000, Bangladesh

PROXY FORM
I/We
of
being member of The City Bank Limited do hereby appoint
Mr./Mrs./Ms of
(or failing
him/her) Mr./Mrs./Ms of
as my/our proxy to attend and vote for me/us and on my/our behalf
at the 38th Annual General Meeting of the Company to be held on May 19, 2021 at 02:30 P.M. and at any adjournment there of.

As witness I put my/our hand(s) this

day of 2021

20/-

Witnesses : Signature of Member

1. Folio/BO A/c. No.

2.
Signature of Member

Folio/BO A/c. No.

IMPORTANT :
1. This Form of Proxy duly completed must be deposited at the Share Department, The City Bank Limited, 11,Dilkusha C/A,
Dhaka-1000 at least 48 (forty eight) hours before the meeting. The proxy will not be valid if it is not duly stamped and signed.
Signature of the Shareholder(s) and the Proxy must agree with the respective specimen signatures recorded with the Company.
2. A member of the Company may only be appointed as a Proxy.

The City Bank Limited

Head Office: City Bank Center, 136 Bir Uttam Mir Shawkat Sarak, Gulshan Ave., Gulshan-2, Dhaka-1212, Bangladesh
Share Department: 11, Dilkusha C/A. (1st Floor), Dhaka-1000, Bangladesh

ATTENDANCE SLIP
I/We (Folio/BO A/c. No.)
hereby record my/our attendance at the 38th Annual General Meeting of the Company being held on May 19, 2021 at 02:30
P.M. through Digital Platform.

Signature of Member/Proxy
459
Accrual basis General provision Provision
Recognizing the effects of transactions and other events General provision is made on outstanding loan and Amounts set aside against possible losses on net
when they occur without waiting for the receipt or advance without considering the quality of loans and receivable of facilities granted to clients, as a result of
payment of cash or its equivalent. advances according to the prescribed rate of bangladesh them becoming partly or wholly uncollectible.
bank.
Bills for collection Related parties
A bill of exchange drawn by an exporter usually at a term, Guarantee Parties where one party has the ability to control the
on an importer overseas and brought by the exporter to Three party agreement involving a promise by one party other party or exercise significant influence over the
his bank with a request to collect the proceeds. (the guarantor) to fulfill the obligation of a personal owing other party in making financial and operating decisions,
a debt if that person fails to perform. directly or indirectly as per international accounting
Bonus issue standard (IAS)-24 on "related party disclosures".
The issue of new shares existing shareholders in Held for trading (HFT)
proportion to their shareholdings. It is a process for Investment classified in this category are acquired Return on assets (ROA)
converting a company's reserves (in whole or part) into principally for the purpose of selling or repurchasing in Profit after tax divided by the average assets.
stated capital and hence does not involve all infusion of short trading or if designated as such by the manage-
cash. ment. Return on equity (ROE)
Profit after tax divided by the average shareholders'
Capital adequacy ratio Held to maturity (HTM) equity.
A measurement of a bank's capital. It is expressed as a Investments which have "fixed or determinable
percentage of a bank's risk weighted asset exposures. payments' and are intended to be "held to maturity", other Risk weighted assets (RWA)
than those that meet the definition of "held at amortized On balance sheet assets and the credit equivalent of off
Cash basis cost others' are classified as held to maturity. balance sheet assets multiplied by the relevant risk
Recognizing the effects of transactions and events when weighting factors. Trading book multiplied by the relevant
receipt or payment of cash or cash equivalent occurs. Intangible assets risk factor and 15% of operating income.
An intangible asset is as identifiable non-monetary asset
Commitments without physical substance. Revaluation reserve
Credit facilities approved but not yet utilized by the client Revaluation reserve in made on HFT and HTM securities
as at the balance sheet date. Interest cost using marked to market concept according to
Interest cost is the sum of monies accrued and payable to Bangladesh Bank guideline.
Consolidated financial Statements the sources of borrowed working capital.
Financial statements of a group presented as those of a Segment reporting
single company. Interest suspense Analysis of information by segments of an enterprise,
Classified loans and advances of the banks are specifically the different industries and the different
Contingencies categorized as sub-standard, doubtful and bad/ loss as geographical areas in which it operates.
A condition or situation existing at balance sheet date per guidelines of the bangladesh bank. Interest accrued
where the outcome will be confirmed only by occurrence on sub-standard, doubtful and bad/loss loans is recorded Subsidiary company
or non-occurrence of one or more future events. as 'interest suspense' and not taken to income. This Subsidiary is a company that is controlled (power to
interest is recognized as income as and when it is realized govern the financial and operating policies of an
Cost to income ratio in cash by the bank. enterprise so as to obtain benefits from its activities) by
Operating expenses as a percentage of total income. another company known as the parent.
Loan losses & provision
Corporate governance Amount set aside against possible losses on loans, Statutory reserve
The set of processes, customs, policies, laws and advances and other credit facilities as a result of such Capital reserve created as per provisions of section 24 of
institutions affecting the way a corporation is directed, facilities becoming partly or wholly uncollectible. the bank companies act, 1991.
administered or controlled.
Market capitalization Tier-I capital
Dividend Number of ordinary shares in issue multiplied by the Core capital representing permanent shareholders' equity
Distribution of a portion of a company's earnings, decided market value of a share as at the year end. and reserves created or' increased by appropriations of
by the board of directors, to a class of its shareholders. retained earnings or other surpluses.
Marked-to-market
Earnings per share (EPS) The valuation of certain financial instruments at fair value Tier-II capital
Profit attributable to ordinary shareholders divided by the as of the balance sheet date. Supplementary capital representing general provisions,
number of ordinary shares in issue. preference share, exchange equalisation fund and other
Materiality capital instruments which combine certain characteristics
Economic value added (EVA) The relative significance of a transaction or all events the of equity and debt such as hybrid capital instruments and
EVA is a profitability measure designed to recognize the omission or misstatement of which could influence the subordinated term debts.
requirement to generate a satisfactory return on the economic decisions of users of financial statements.
economic capital invested in the business. If the business Value added
produces profit in excess of its cost of capital then value is Net interest margin Value added statement shows the total wealth created
created for shareholders. Net interest income, on a taxable equivalent basis, how it was distributed to meet certain obligations and
expressed as a percentage of average total assets. reward those responsible for its creation and the portion
Fair value retained for the continued operation and expansion.
Fair value, also called fair price, is a concept used in Net asset value per share
finance and economics, defined as a rational and Shareholders' funds excluding preference shares if any,
unbiased estimate of the potential market price of a good, divided by the number of ordinary shares in issue.
service, or asset.
Net interest income
Finance lease The difference between what a bank earns on assets such
A contract whereby a lessor conveys to the lessee the as loans and securities and what it pays on liabilities such
right to use all asset for rent over an agreed period of time as deposits, refinance funds and inter bank borrowings.
which is sufficient to amortize the capital outlay of the
lessor. The lessor retains ownership of the asset but Non performing loans
transfers substantially all the risks and rewards of All loans are classified as non-performing when a
ownership to the lessee. payment is 9 months in arrears.

Foreign exchange earnings Off-balance sheet transaction

Profit earned on foreign currency transactions arising Transactions that are not recognized as assets or liabilities
from the difference in foreign exchange rates between in the balance sheet but which give rise to contingencies
the transaction/last balance sheet date and the and commitments.
settlement/ balance sheet date. Also arises from trading in
foreign currencies. Price earnings ratio (P/E Ratio)
P/E ratio is calculated market price of a share divided by
earnings per share.
City Bank Center
136, Gulshan Avenue, Gulshan - 2
Dhaka - 1212, Bangladesh
Tel: +88 02 58813483, 58814375, 58813126
Fax: +88 02 9884446
Email: [email protected] Scan here for
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Web: www.thecitybank.com Report