STRATEGY FOR

FLEXIBILITY
Competitive pressures on business and a slow pace of economy in 2014
created the need for a better understanding of our processes and a
greater need for making our business strategy flexible to keep us on the
growth path that is sustainable. What we have realized last year is when
growth opportunities are limited in the marketplace it is always rewarding
to look inward and remodel and rewrite processes to stabilize growth. In
the process, we have felt the need to have a strategy that is flexible and
a mindset that is open to repositioning or realigning business. Our new
stance on business and operation has already had a palpable impact
on our competitive strength and business performance. 2014 was for
us a year of soul searching, a year of restructuring and remodeling, and
a year of reviewing our strategy for making it more flexible to adapt to
changes occurring in the marketplace. All this is to continue with the
tradition of a sustainable growth that we have so efficiently established.
For we believe, winning for today is building for tomorrow.
THE WINNING SPIRIT
Ingenuity, responsible finance, and the leadership ability to Our two other business units and significant contributors to
put insights and perspectives into action have helped Eastern our wallet, corporate and SME banking, also brought local
Bank Limited (EBL) emerge as one of the most valuable and international laurels for us making a point that when it
brands in the financial sector of Bangladesh. comes to innovation and service excellence they are no less
active and meticulous than our retail banking. The underlying
At EBL we believe in generating consistent quality in product
spirit is that we are flourishing and growing as a team and the
and service propositions, and everything that we do is geared
business units are complementing each other in the pursuit of
towards creating value for our stakeholders.
excellence.
How we are producing consistent quality in every aspect of
In corporate banking, we are now being regarded as a leader
service and product offering? Or what are the guiding principles
in Bangladesh. With innovative and customized solutions and
for executing our strategy up to their considerable potential?
services, our corporate division emerged as a single point
The answer to these questions lies in our culture of team spirit solution provider for customers including project financing,
and belief in sustainable growth. Our performance over the past working capital, trade, supply chain, cash management
six years or so provides strong evidence how we are pursuing solutions, payroll, syndication, merger, acquisition, and
sustainability principles in our everyday banking operations. advisory service. EBL has been closely working with
Our focus has always been on performance and efficiency multilaterals such as IFC, DEG, ADB, FMO, Proparco, CDC,
and these qualities are now deeply rooted in our banking Norfund to develop products and build up the largest OBU
operations. That we have been registering one of the highest Asset book among the local banks.
per employee profit for a considerable period of time in the In 2013 IFC recognized 25 financial institutions as its best
market is a testimony to our passion for performance and partners in trade and supply chain finance for 2013. The
adherence to sustainable growth strategy. awards were announced at the 6th Global Trade Partners
Meeting, which took place in Lisbon in 2014. Our corporate
For us 2014 ended with a high note as we were felicitated
banking was awarded the “Best Partner for Working Capital
with ICSB National Award for Corporate Governance
Systemic Solutions” for our innovative solutions for working
Excellence. This award reflects our commitment to corporate
capital finance to importers and counter party exporters
governance and recognition to the importance we attach
including Offshore Bill Financing.
to governance issues in our organization. As a strong
believer of sustainable growth, principles of good corporate Our passion for excellence is reflected in our effort to adopt
governance form the core values of EBL. In order to achieve international best practices and go for globally recognized
transparent and sound corporate governance, we have ISO 9001:2008 certification of our processes. In 2011 we
adopted international best practices to help us sustain in this got ISO for our Trade Service followed by certification for
globalized competitive free market economy. our Service Delivery in 2012. The effort came to a full-circle
in 2014 when we were awarded ISO for our centralized
Despite relatively slow pace of business, 2014 was significant Operations Division that deals with whole of banking product
for us because all three professional bodies, who measure processing and delivery to support consumer, corporate,
performance of corporate bodies on different parameters of SME and treasury business.
financial reporting, corporate health and governance in the
Starting with only 25 people in 2006, our SME unit today is a
country, gave us recognition for our quality and consistency
key contributor to the profitability of the bank. To be awarded
of performance excellence. Apart from ICSB, the other two
the Structured SME Bank of the Year at SME Financing Fair
professional organizations are ICAB and ICMAB.
jointly organized by Bangladesh Bank and SME Foundation in
The most happening unit of our bank is our retail banking. It 2014 was a great recognition for our SME unit and a proof of
is said that ‘retail is all about detail’ and at EBL we focus on our innovative and personalized services.
the minute details of every product and service we offer to our Our passion for excellence has contributed greatly to
customers. Our retail banking stands tall in the market for its enhance our brand value and our perception in the market
consistency in innovation and value creation. about world class banking services we offer. At EBL we strive
Our passion to serve our customer with warmth, hospitality for and compete to win hearts of our customers and not just
and efficiency has been recognized by the Asian Banker share of their wallet. The accolade we received at the Global
Excellence in Retail Financial Services Awards Program, which Brand Excellence Awards held in Singapore in July 2014
has become performance bench mark for consumer banking speaks volumes about sustainability in innovative branding.
in Asia Pacific, Central Asia, the Middle East and Africa. The This is the second time we have won the Brand Excellence
award program evaluates a total of 252 banks in 42 countries Award. This award is a telling evidence of our consistency in
in a thorough evaluation process. delivery of brand excellence.
EBL has successfully undergone the stringent evaluation We believe that our culture of working together as a team
criteria of the award program for each product and process is helping us grow sustainably and our winning spirit and
to emerge as the best retail bank of Bangladesh for two insatiable hunger to perform is paying dividend in whatever
consecutive years, 2013-14. that we do together as a team.

2
EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

ICSB National Award for Corporate Governance Excellence Structured SME Bank of the Year 2014
2013 in the banking company category

Best Retail Bank in Bangladesh 2014 awarded ICMAB Best Corporate Award 2013
by the Asian Banker

Global Brand Excellence Award by The World Brand Congress The 14th ICAB National Awards for the Best
Presented Annual Reports 2013

3
EASTERN BANK LIMITED ANNUAL REPORT 2014
CONTENTS

11 Letter of Transmittal Stakeholders Information Corporate Governance Report

12 Disclaimer 59 Our Stakeholders 73 Corporate Governance
Practices in EBL
13 Vision 60 Financial Highlights
14 Mission 61 Five-Year Progression of EBL 86 BB Guidelines for Corporate
Governance:
15 Values 63 Market Price Information Our Compliance Status
16 Strategic Priority 63 DSE Price Volume Chart of 93 BSEC Guidelines for
EBL share Corporate Governance:
17 Code of Conduct and
Ethical Guidelines 64 Vital Graphs Our Compliance Status

18 Corporate Directory 67 Value Added Statement 99 Certificate on Compliance

20 Company Milestones 68 Economic Value Added Statement of Corporate Governance
Guidelines
22 EBL Organogram 68 Market Value Added Statement
23 Board of Directors 69 Financial Goals & Performance
30 Management Committees 69 Financial Calendar
35 Directors’ Responsibility 71 Glimpses of the 22nd AGM
Statement
37 Report of the
Audit Committee
40 Report of the
Risk Management
Committee of the Board
42 Chairman’s Statement
46 Review of the
Managing Director & CEO
48 Directors’ Report 2014

4
 FINANCIAL
REPORTS
2014

Sustainability Report Management Discussion 176 Auditor’s Report to the

100 Sustainability: An Overview and Analysis Shareholders

100 Approach to Sustainability 178 Consolidated & Separate Financial

116 Financial Review
Statements
100 Sustainable Activities
121 Business Review 247 Highlights on the overall activities
101 Environmental and Social
Obligations 122 Corporate Banking
248 Financial Statements of Offshore
101 Environmental and Social 125 Treasury Banking Unit (OBU)
Initiatives 127 Consumer Banking
263 Financial Reports of the
102 Sustainability Management 131 SME Banking Subsidiaries:
102 General Code of Conduct
134 Business Support 264 EBL Securities Ltd.
102 Integrated Report: Delivering
135 Operations Division 272 EBL Investments Ltd.
our Promises
138 Information Technology 279 EBL Finance (HK) Ltd.
105 SME Success Stories 139 Human Resources 289 EBL Asset Management Ltd.

Corporate Social Responsibility 142 Risk Management

108 Building Social Capital
108 Connecting with Customers 158 Disclosures on Risk Based 295 Branch Network
Capital (Basel II)
109 The Change Agent 297 Correspondent Bank Network
109 Contribution to National
168 Product Basket and Service 301 Abbreviations
Exchequer
Propositions
110 Participation in National 302 Notice of the 23rd AGM
168 Consumer Banking
Events 303 Proxy Form
171 SME Banking
110 Caring for the Society
172 Corporate Banking
110 Participation in Sports
Development 173 Treasury

112 Engagement of People 174 Statement on Integrity of

Financial Statements

5
STANDARD DISCLOSURE INDEX
The following Disclosure Checklist will help the reader to indentify the key sections of the Annual Report 2014:

Particulars Page
Corporate Objectives, Values & Structure
 Vision and Mission 13-14
 Overall strategic objectives 16
 Core values and code of conduct/ethical principles 15, 17
 Profile of the Company 18-19
 Directors profiles and their representation on Board of other companies & Organization 23-29, 240-242, 22
Chart
Management Report/ Commentary and analysis including Directors Report / Chairman’s
Review/CEO’s Review etc.
 A general review of the performance of the company 42-47, 116-141
 Description of the performance of the various activities / products / segments of the 48-57, 59-70, 168-173,
company and its group companies during the period under review 116-132
 A brief summary of the Business and other Risks facing the organization and steps taken 40-41, 143-167
to effectively manage such risks
 A general review of the future prospects/outlook 50, 123, 126-132, 138, 140
 Information on how the company contributed to its responsibilities towards the staff 139-141
(including health & safety)
 Information on company's contribution to the national exchequer & to the economy 57, 108-114
Sustainability Reporting 100-106
 Social Responsibility Initiatives ( CSR) 108-114
 Environment related Initiatives 101-102
 Environmental & Social Obligations 101
 Integrated Reporting 102-104
Appropriateness of Disclosure of Accounting policies and General Disclosure
 Disclosure of adequate and properly worded accounting policies relevant to assets,
liabilities, Income and expenditure in line with best reporting standards
 Any Specific accounting policies
190-204
 Impairment of Assets
 Changes in accounting policies/estimates
 Accounting Policy on Subsidiaries
Segment Information
 Comprehensive segment related information bifurcating segment revenue, segment 246, 121
results and segment capital employed
 Availability of information regarding different segments and units of the entity as well as 121-132, 134-141
non-segmental entities/units
 Segment analysis of:
Segment Revenue
Segment Results
Turnover 246
Operating profit
Carrying amount of Net Segment assets
Financial Statements
 Disclosures of all contingencies and commitments 179, 185, 230
 Comprehensive related party disclosures 240-244
 Disclosures of Remuneration & Facilities provided to Directors & CEO 80, 233

6
EASTERN BANK LIMITED ANNUAL REPORT 2014
Particulars Page
 Statement of Financial Position / Balance Sheet and relevant schedules
 Income Statement / Profit and Loss Account and relevant schedules
 Statement of Changes in Equity / Reserves & Surplus Schedule
 Disclosure of Types of Share Capital
178-294
 Statement of Cash Flow
 Consolidated Financial Statement (CFS)
 Extent of compliance with the core IAS/IFRS or equivalent National Standards
 Disclosures / Contents of Notes to Accounts
Information about Corporate Governance
 Board of Directors, Chairman and CEO 18-19, 23-29, 73-80
 Audit Committee (Composition, role, meetings, attendance, etc.), Internal Control & Risk 37-39, 55-56, 78-80, 84-86
Management
 Ethics and Compliance 17, 81, 86-99
 Remuneration and other Committees of Board 78-80
 Human Capital 81, 139-141
 Communication to Shareholders & Stakeholders 81-82
- Information available on website www.ebl.com.bd
- Other information 69-70, 81-86
 Management Review and Responsibility 82-84, 116-141
 Disclosure by Board of Directors or Audit Committee on evaluation of quarterly reports 39, 53
 Any other investor friendly information 69-70
Risk Management & Control Environment
 Description of the Risk Management Framework
 Risk Mitigation Methodology 40-41, 143-167
 Disclosure of Risk Reporting
Stakeholders Information
 Distribution of shareholdering (Number of shares as well as category wise, e.g Promoter
group, FII etc.) 75-76
 Shares held by Directors/Executives and relatives of Directors/Executives
 Redressal of investors complaints 82
Graphical/ Pictorial Data
 Earnings per Share
 Net Assets
 Stock Performance 64-69
 Shareholders’ Funds
 Return on Shareholders Fund
Horizontal/Vertical Analysis including following
Operating Performance (Income Statement)
 Total Revenue
 Operating profit
 Profit before Tax 60-62, 116-121
 Profit after Tax
 EPS
Statement of Financial Position (Balance Sheet)
 Shareholders Fund
 Property, Plant & Equipment
60-62, 118-120
 Net Current Assets
 Long Term Liabilities/Current Liabilities

7
EASTERN BANK LIMITED ANNUAL REPORT 2014
Particulars Page
Profitability/Dividends/ Performance and Liquidity Ratios
 Gross Profit Ratio /Net interest margin ratio
 Earning before Interest, Depreciation and Tax / Profit before Provision and Tax
 Price earning ratio (Times)
62, 64-66
 Current Ratios / SLR (%), CRR (%)
 Return on Capital Employed / Return on Equity
 Debt Equity Ratio / Total liabilities to shareholders’ equity
Statement of Value Added and its Distribution
 Government as taxes
 Shareholders as dividend
 Employees as bonus/remuneration
67-68
 Retained by the entity
 Market share information of the Company’s product/services
 Economic value added
Specific Areas for Banking Sector
Disclosure of Ratings given by various rating agencies for Instruments issued by/of Bank e.g. 19
FD, CD, Tier I perpetual Bonds
Details of Advances portfolio Classification wise as per the direction issued by the central 119, 153-154, 161-164,
bank of the respective countries 211-216, 224-225
Disclosure for Non Performing assets
 Movements in NPA
 Sector-wise breakup of NPA
214-216, 224-225
 Movement of Provisions made against NPA
 Details of accounts restructured as per regulatory guidelines
Maturity Pattern of Key Assets and Liabilities (ALM) 183, 189, 208-211, 220,
222-223
Classification and valuation of investments as per regulatory guidelines/Accounting Standards 195, 208-210
Business Ratio/Information
 Statutory Liquidity Reserve (Ratio) 205-206
 Net interest income as a percentage of working funds / Operating cost - Efficiency ratio 62
 Return on Average Asset 62
 Cost / Income ratio 62
 Net Asset Value Per Share 62
 Profit per employee 62
 Capital Adequacy ratio 61, 159-160, 228
 Operating profit as a percentage of working funds / Return on Asset 62
 Cash Reserve Ratio / Liquid Asset ratio 60, 205-206
 Dividend Cover ratio 62
 Gross Non-Performing assets to gross advances/Non-Performing Loans (Assets) to Total 61
Loans (Assets)
Details of credit concentration / Sector wise exposures 163-164, 212-215
The break-up of ‘Provisions and contingencies’ included in the Profit and Loss Account 195-196, 198, 224-225
Disclosure under regulatory guidelines 86-99, 158-167, 228
Details of Non-Statutory investment portfolio 209-210
Disclosure in respect of assets given on operating & finance lease No such assets
Disclosures for derivative investments No such instruments
Bank's Network : List of Centers or Branches 295-300

8
EASTERN BANK LIMITED ANNUAL REPORT 2014
CORPORATE GOVERNANCE
DISCLOSURE CHECKLIST
Particulars Page

1. Board of Directors, Chairman and CEO

1.1 Company's policy on appointment of directors disclosed 74
1.2 Adequate representation of non executive directors i.e. one third of the board, subject to a 74
minimum of two
1.3 At least one independent director on the board and disclosure/ affirmation of the board on such 74
director’s independence
1.4 Chairman to be independent of CEO 76
1.5 Responsibilities of the Chairman of the Board appropriately defined and disclosed. Disclosure of 77
independence of Non Executive Directors
1.6 Existence of a scheme for annual appraisal of the boards performance and disclosure of the same 77-78
1.7 Disclosure of policy on annual evaluation of the CEO by the Board 78
1.8 Disclosure of policy on training (including details of the continuing training program) of directors 77-78
and type and nature of training courses organized for directors during the year. Existence of a
scheme for annual appraisal of the boards performance.
1.9 At least one director having thorough knowledge and expertise in finance and accounting to 78
provide guidance in the matters applicable to accounting and auditing standards to ensure
reliable financial reporting
1.10 Disclosure of number of meetings of the board and participation of each director (at least 4 74-75
meetings are required to be held)
1.11 Directors issue a report on compliance with best practices on Corporate Governance that is 78, 86-99
reviewed by the external auditors
2. Vision / Mission and Strategy
2.1 Company’s vision / mission statements are approved by the board and disclosed in the annual report 13-14, 78
2.2 Identification of business objectives and areas of business focus disclosed 122-132
2.3 General description of strategies to achieve the company's business objectives 16
3 Audit Committees
3.1 Appointment and Composition
3.1.1 Whether the Audit Committee Chairman is an independent Non – Executive Director and 37
Professionally Qualified
3.1.2 Whether it has specific terms of reference and whether it is empowered to investigate / question 37-38
employees and retain external counsel
3.1.3 More than two thirds of the members are to be Non Executive Directors 74
3.1.4 All members of the audit committee to be suitably qualified and at least one member to have 37
expert knowledge of finance and accounting
3.1.5 Head of internal audit to have direct access to audit committee 38
3.1.6 The committee to meet at least four times a year and the number of meetings and attendance by 37, 38
individual members disclosed in the annual report
3.2 Objectives & Activities
3.2.1 Statement on Audit Committee’s review to ensure that internal controls are well conceived 37-38, 55-56
properly administered and satisfactorily monitored
3.2.2 Statement to indicate audit committees role in ensuring compliance with Laws, Regulations and 38
timely settlements of Statutory dues

9
EASTERN BANK LIMITED ANNUAL REPORT 2014
Particulars Page

3.2.3 Statement of Audit committee involvement in the review of the external audit function
 Ensure effective coordination of external audit function
 Ensure independence of external auditors
 To review the external auditors findings in order to be satisfied that appropriate action is
38
being taken
 Review and approve any non audit work assigned to the external auditor and ensure that
such work does not compromise the independence of the external auditors
 Recommend external auditor for appointment/ reappointment
3.2.4 Statement on Audit committee involvement in selection of appropriate accounting policies that 38-39, 56-57
are in line will applicable accounting standards and annual review
3.2.5 Statement of Audit Committee involvement in the review and recommend to the board of 39
directors, annual and interim financial releases
3.2.6 Reliability of the management information used for such computation 39
4. Internal Control & Risk Management
4.1 Statement of Directors’ responsibility to establish appropriate system of internal control 35-36, 80
4.2 Narrative description of key features of the internal control system and the manner in which the 35-36, 37, 55-56,
system is monitored by the Board, Audit Committee or Senior Management 80, 88
4.3 Statement that the Directors have reviewed the adequacy of the system of internal controls 35-36, 55-56, 88

4.4 Disclosure of the identification of risks the company is exposed to both internally & externally 35, 80, 87
4.5 Disclosure of the strategies adopted to manage and mitigate the risks 143-167
5. Ethics and Compliance
5.1 Disclosure of statement of ethics and values, covering basic principles such as integrity, conflict 15,17, 81
of interest, compliance with laws and regulations etc.
5.2 Dissemination / communication of the statement of ethics & business practices to all directors 81
and employees and their acknowledgement of the same
5.3 Board’s statement on its commitment to establishing high level of ethics and compliance within 81
the organization
5.4 Establishing effective anti-fraud programs and controls, including effective protection of whistle 81
blowers, establishing a hot line reporting of irregularities etc.
6. Remuneration Committee
6.1 Disclosure of the charter (role and responsibilities) of the committee
6.2 Disclosure of the composition of the committee (majority of the committee should be non-
executive directors, but should also include some executive directors)
79-80, 89
6.3 Disclosure of key policies with regard to remuneration of directors, senior management and
employees
6.4 Disclosure of number of meetings and work performed
6.5 Disclosure of Remuneration of directors, chairman, chief executive and senior executives 80, 233
7. Human Capital
7.1 Disclosure of general description of the policies and practices codified and adopted by the 81, 88, 139-141
company with respect to Human Resource Development and Management, including succession
planning, merit based recruitment, performance appraisal system, promotion and reward and
motivation, training and development, grievance management and counseling
7.2 Organizational Chart 22
8. Communication to Shareholders & Stakeholders
8.1 Disclosure of the Company's policy/strategy to facilitate effective communication with 81-82
shareholders and other stakeholders
8.2 Disclosure of company’s policy on ensuring participation of shareholders in the Annual General 81
Meeting and providing reasonable opportunity for the shareholder participation in the AGM
9. Environmental and Social Obligations
9.1 Disclosure of general description of the company's policies and practices relating to social and 82, 100-104,
environmental responsibility of the entity 101-102
9.2 Disclosure of specific activities undertaken by the entity in pursuance of these policies and 82, 100-104,
practices 101-102

10
EASTERN BANK LIMITED ANNUAL REPORT 2014
LETTER OF
TRANSMITTAL
All Shareholders of Eastern Bank Limited
Bangladesh Bank
Bangladesh Securities and Exchange Commission (BSEC)
Registrar of Joint stock Companies & Firms
Dhaka Stock Exchange Limited (DSE)
Chittagong Stock Exchange Limited (CSE)

Dear Sir,

Annual report of Eastern Bank Limited for the year ended 31 December 2014.

We are pleased to present before you the Bank’s (EBL) Annual Report 2014 along with
the audited Financial Statements (Consolidated and Separate) for the year ended 31
December 2014 and as on that date.

Financial Statements of ‘The Bank’ comprise those of EBL On-shore (main operation)
and Off-shore Banking Unit (presented separately) whereas consolidated Financial
Statements comprise Financial Statements of ‘The Bank’ and those of its subsidiaries
[EBL Securities Ltd., EBL Investments Ltd., EBL Finance (HK) Ltd. and EBL Asset
Management Ltd.] presented separately. Analyses in this report, unless explicitly
mentioned otherwise, are based on the financials of ‘The Bank’ not the consolidated
financials.

Yours Sincerely,

Safiar Rahman, FCS

Company Secretary

11
EASTERN BANK LIMITED ANNUAL REPORT 2014
DISCLAIMER
This Annual Report 2014 contains audited financial  Capital market exposure limit reduced: As per the
statements of the Bank (EBL) and its four subsidiaries. newly amended Bank Company Act 1991, capital market
Review of business and financials presented in the Directors’ exposure limit for banks has already been tagged with
Report and Management Discussion & Analysis sections four components of capital instead of liabilities which will
are based on audited financials as well as management force banks to reduce their exposure by July 2016.
information (mostly unaudited unless otherwise specified) of  Energy crisis and weak infrastructure: Infrastructure
the Bank. bottlenecks, lack of adequate supply of energy to
As a scheduled and listed bank in Bangladesh, the Bank has production facilities, political uncertainty, rising cost of
to comply with relevant circulars and instructions from two of doing businesses may continue to cause slower growth
its key regulators i.e. Bangladesh Bank (BB) and Bangladesh of manufacturing and industrial activities.
Securities and Exchange Commission (BSEC) while reporting  Challenges in asset-liability management: Banking
its annual financial statements and Annual Report. So, the industry in Bangladesh has been burdened with excess
Bank while preparing and reporting financial statements of liquidity mainly due to lower demand for private sector
the Bank, followed relevant ‘Bangladesh Financial Reporting credit. Higher growth of deposit than that of loans
Standards’ (BFRSs) except in some cases where BB may force banks to go for low yielding govt. treasury
instructed all the scheduled banks to follow the prescribed securities and accept fall in profitability.
treatments. Treatment of govt. treasury securities under
 Rising capital requirement: Under Pillar II of Basel II
HFT category, provision against quoted shares, unclassified
loans and contingent assets etc. are the major areas where (Supervisory Review Process) Banks in Bangladesh may
requirement of BFRSs and those of BB contradict. However, have to maintain more capital to cushion extended areas
the bank followed instructions from Bangladesh Bank, of risks whereas in the run up to implement Basel III
being the prime regulator for banks, and made adequate eligible portion of revaluation reserve from fixed assets
disclosures of the deviations (Please see Note 2.1 of financial and securities (govt. treasury and corporate) will be
statements). phased out @20% each year starting from 2015.
 Capital market volatility: Although the capital market
Hence, this Annual Report does not constitute an invitation
to invest in EBL shares. Any decision taken in reliance of exposure of the Bank never exceeds 3% of total
this information must be made at sole responsibility of the assets, volatility of share price might cause earnings to
investors or prospective investors. decrease.
 Directed lending: Regulators or govt. may direct banks
Business ‘outlook’ and management estimates and
assumptions in recognizing certain financial transactions to take credit exposure to agricultural, renewable energy,
presented in different parts of this Annual Report can be no eco-friendly projects or some other under-served sectors
assurance that actual outcomes will not differ materially from at defined rates which may not produce reasonable risk-
the estimates/projections. Some of the challenges that may adjusted return.
cause projected outcomes differ from the actual ones can be  Climate change effect and natural calamity: Bangladesh
put forth, which are not exhaustive as well: is one of the most vulnerable countries to climate change
 Changes in macro-economic conditions: Political effects and natural disaster. Agriculture sector, which
turmoil if continues for long can impact macro-economic contributes around 18 percent of GDP, is the most
stability including further slowing down of GDP growth. susceptible sector to such risk.
 Risk of Fraud: Internal fraud and external financial crime
 Changes in government and regulatory policy: To
compensate gradual fall of tax revenue from banks are increasing in the industry due to weak corporate
and corporate bodies NBR may broaden new avenues governance, control weakness, and increasing use of
of tax and VAT mostly to be shouldered by banks and technology by criminals. EBL remains highly vigilant to
corporates. In addition to lowering fees charged by prevent any type of surprises with heightened control
banks, BB may impose new regulation to contain rising measures, strong corporate governance and risk
NPL. management practices.

12
EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

13
EASTERN BANK LIMITED ANNUAL REPORT 2014
MISSION

We will deliver service excellence to

all our customers, both internal and
external.
We will ensure to maximize
shareholders’ value.
We will constantly challenge our
systems, procedures and training to
maintain a cohesive and professional
team in order to achieve service
excellence.
We will create an enabling environment
and embrace a team based culture
where people will excel.

14
EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

VALUES
Service Excellence
We passionately drive customer
delight.
We use customer satisfaction to
accelerate growth.
We believe in change to bring in
timely solution.
Openness
We share business plan.
We encourage two-way
communications.
We recognize achievements,
celebrate results.
Trust
We care for each other.
We share knowledge.
We empower our people.
Commitment
We know our roadmap.
We believe in continuous
improvement.
We do our task before we are told.
Integrity
We say what we believe in.
We respect every relationship.
We are against abuse of
information power.
Responsible Corporate Citizen
We are tax-abiding citizen.
We promote protection of the
environment for our progeny.
We conform to all laws, rules,
norms, sentiments and values of
the land.

15
EASTERN BANK LIMITED ANNUAL REPORT 2014
STRATEGIC
PRIORITY
Making business strategy
flexible to keep us on track for
a sustainable growth.
Ensuring responsible corporate
governance through conformity
with the law and by conducting
all our actions honestly,
responsibly and ethically.
Creating a corporate culture in
which performance is rewarded
equitably and sustainably.
Bringing the attitudes and
goals of our staff in line with
the needs of our clients and the
overall economy.
Designing products and
services that must meet clients’
financial needs and objectives,
beneficial for the environment
and also provide adequate
financial return for the bank.
Pursue balance sheet growth
through selective lending and
by offering value proposition.
Leveraging balance sheet
management through improved
productivity, recovery and cost
rationalization.

16
EASTERN BANK LIMITED ANNUAL REPORT 2014
CODE OF CONDUCT AND
ETHICAL GUIDELINES

At EBL we believe in consistency in corporate governance and to ensure that we have an effective and efficient
monitoring system in place. We have established sophisticated processes and structures detailed in our Code
of Conduct and Ethical Guidelines for a responsible and values driven management and control. Our Code of
Conduct and Ethical Guidelines reflect our commitment to international standards and best practices, including:

Compliance of Laws: All our employees are to follow and comply with the laws of the land and internal
rules and regulations of the bank.
Integrity of Records: All our employees are expected to maintain books and records with integrity and
ensure accuracy and timeliness of all transactions. They should shore up the privacy of the customers’
affairs. Then as well, employees must not divulge the bank’s plans, methods, and activities, considered
by the employer to be proprietary and classified confidential. Moreover, employees are not expected to
disclose such information without proper authorization.
Misappropriation of Assets: Any employee of the bank shall not convert any funds and property which
are not legitimately theirs to their own use and benefit nor deliberately assist another person in such
exploitation.
Conflict of Interest: Employees must not use their position in the bank for personal emolument or to obtain
benefits for themselves together with members of their families or friends. Employees who are members of
different school boards, society or recreational bodies should be aware of conflicts of interest and declare
any such conflict.
Speculation in Stocks: Employees and their dependents should not speculate/trade in stocks, shares,
securities or commodities of any description nor connected with the formation or management of a joint-
stock company.
Honesty and Integrity: Our employees are expected to act honestly and with integrity at all times. They
should act uprightly and equitably when dealing with the public and other employees of the bank.
Acceptance of Gift: Our employees are not encouraged to accept gifts, benefits or any sort of invitations
from the customers of the bank or persons having business interest with the bank.

17
EASTERN BANK LIMITED ANNUAL REPORT 2014
CORPORATE DIRECTORY
Name of the Company geographically centralized in Dhaka and Chittagong, but it
uses nationwide EBL branches, correspondent banks and
Eastern Bank Limited
affiliated networks worldwide to serve the large corporate
Legal Form banking clients of the country.
A public limited company incorporated in Bangladesh on 08 Consumer Banking customers are served through a network
August 1992 with primary objective to carry out all kinds of of 76 Branches, 191 ATMs, 71 Bills Pay Machines and 14
banking businesses in and outside Bangladesh. Having taken priority centers countrywide. The bank has its presence
over the businesses, assets, liabilities and losses of erstwhile in major cities/towns in the country including Dhaka,
Bank of Credit & Commerce International (Overseas) Limited Chittagong, Sylhet, Khulna, Barisal, Rajshahi and Rangpur.
as per BCCI Reconstruction Scheme 1992 of Bangladesh In 2006 our SME banking began its modest journey with
Bank, the Bank commenced Banking Operations on 16 limited propositions and today it is a key contributor to the
August 1992. profitability of the bank. To be awarded the Structured SME
Bank of the Year at SME Financing Fair jointly organized by
Group Composition Structure
Bangladesh Bank and SME Foundation in 2014 was a great
Eastern Bank Limited (Group) recognition for our SME unit and a proof of our innovative and
Bank Subsidiaries (fully owned) personalized services. SME Banking customers are served
Eastern Bank EBL Securities Limited through 56 SME centers located across the country.
Limited (Stock Dealer & Brokerage) Board of Directors
Off-Shore Banking EBL Investments Limited
Chairman
Unit (Merchant Banking Operations)
EBL Asset Management Limited M. Ghaziul Haque

(Asset management i.e. managing Directors (Other than chairman)

mutual funds)
Sl. Name Position
EBL Finance (HK) Limited
(First foreign subsidiary doing trade 1. Mir Nasir Hossain Director
finance and off-shore banking Representing Mir Holdings Ltd.
business in Hong Kong)
2. A. M. Shaukat Ali Director
Our Core Business
Over the years EBL has established itself as a leading 3. Md. Showkat Ali Chowdhury Director
private commercial bank in the country with established Representing Namreen Enterprise Ltd.
leadership in Corporate Banking and growing focus on SME 4. Salina Ali Director
and Consumer businesses. The Bank offers a wide range of
Representing Borak Real Estate (Pvt.)
depository, loan and card products and a variety of services
Ltd.
to cater virtually for every customer segment. From Student
Banking to Priority Banking to Visa Signature card, EBL has 5. Anis Ahmed Director
almost all banking products in its repertoire. The product Representing Aquamarine Distributions
basket is rich in content featuring different types of Savings Ltd.
and Current Accounts, Personal Loans, Debit Cards, Credit 6. Meah Mohammed Abdur Rahim Independent
Cards, Pre-paid Cards, Internet Banking, Corporate Banking, Director
SME Banking, Investment Banking, Treasury & Syndication 7. Mufakkharul Islam Khasru Director
services etc. Representing Namreen Enterprise Ltd.
Network 8. Ormaan Rafay Nizam Independent
Director
Businesses of the bank are broadly segmented into three
divisions: Corporate, Consumer and SME Banking. 9. Gazi Md. Shakhawat Hossain Director
Representing Purnima Construction
The Corporate banking division has 9 relationship units; 6 of
(Pvt.) Ltd.
them are stationed in suitable business locations in Dhaka
and the rest 3 are in Chittagong. To facilitate and support 10. Ali Reza Iftekhar Managing
business units we have three product specific solution Director &
based units i.e. Structured Finance Unit (SFU), Transaction CEO
Banking (TB) and Product & Portfolio Support Unit (PPSU). Company Secretary
Transaction Banking is supported by 3 particular Units i.e.
Cash Management Unit (CMU), Trade Sales Unit (TSU) and Safiar Rahman, FCS
Financial Institutions (FI) Unit. EBL Corporate Banking is

18
EASTERN BANK LIMITED ANNUAL REPORT 2014
Committees of the Board of Directors Ownership Composition
As on 31 December 2014, shareholding position of EBL by
Executive Committee the Directors, General Public & Financial Institutions are
presented below:
Status Status
Status with the
Sl. Name with the
Bank Number of % of total
Committee Composition
Shares shares
1. Mir Nasir Hossain Director Chairman
Directors 192,923,886 31.57%
2. Md. Showkat Ali Director Member General Public 348,032,336 56.94%
Chowdhury Financial Institutions 70,223,563 11.49%
3. Salina Ali Director Member Total 611,179,785 100.00%
4. Ali Reza Iftekhar Managing Member Stock Exchange Listing
Director & CEO
Ordinary share of the Bank is listed with both Dhaka Stock
Secretary: Safiar Rahman, FCS
Exchange Limited and Chittagong Stock Exchange Limited.
Audit Committee Shares of EBL are categorized as ‘A’ in the Stock Exchanges.
Market lot is 200 each and stock symbol is EBL.
Status with Status with
Sl. Name
the Bank the Committee Capital (31 December 2014)
1. Meah Mohammed Independent Chairman Authorized Tk. 12,000,000,000 (1,200,000,000 ordinary
Abdur Rahim Director Capital shares of Tk. 10 each)
2. A.M. Shaukat Ali Director Member Paid-up Tk. 6,111,797,850 (611,179,785 ordinary
Capital shares of Tk. 10 each)
3. Mufakkharul Islam Director Member Accounting Year-end
Khasru 31 December.
4. Ormaan Rafay Independent Member Head of Finance
Nizam Director Masudul Hoque Sardar
5. Gazi Md. Director Member
Head of Internal Control & Compliance
Shakhawat Hossain
Akhtar Kamal Talukder
Secretary: Safiar Rahman, FCS
Auditors
Risk Management Committee Hoda Vasi Chowdhury & Co.
Status Chartered Accountants
Status with
Sl. Name with the
the Bank Tax Consultant
Committee
ACNABIN
1. Mir Nasir Hossain Director Chairman
Chartered Accountants
2. Meah Mohammed Abdur Rahim Independent Member
Legal Advisors
Director
Sadat, Sarwat & Associates and
3. Gazi Md. Shakhawat Hossain Director Member
Sadia Rowshan Jahan
Secretary: Safiar Rahman, FCS
Company Registration Number
Credit Rating C-22554(961)/92
The Bank has completed its credit rating by Credit Rating
Information and Services Limited (CRISL) based on the Bangladesh Bank License Number
Financial Statements dated 31 December 2013 and was BL/DA/5926/92
awarded ‘AA’ in the Long Term and ‘ST-2’ in the Short Term.
Registered & Head Office
Rating by CRISL Jiban Bima Bhaban,
Rating Status Long term Short term 10, Dilkusha Commercial Area,
Surveillance Rating 2013 AA ST-2 Dhaka-1000, Bangladesh.
Surveillance Rating 2012 AA ST-2 Telephone: 880-2-9556360,
Fax: 880-2-9562364, 9554610
Outlook Stable
Swift: EBLDBDDH, Cable: EASTBANK
e-mail: [email protected]

Web: www.ebl.com.bd

19
EASTERN BANK LIMITED ANNUAL REPORT 2014
COMPANY MILESTONES

20
EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

21
EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL ORGANOGRAM

22
EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

23
EASTERN BANK LIMITED ANNUAL REPORT 2014
BOARD OF DIRECTORS

24
EASTERN BANK LIMITED ANNUAL REPORT 2014
 25
EASTERN BANK LIMITED ANNUAL REPORT 2014
M. Ghaziul Haque Mir Nasir Hossain A.M. Shaukat Ali
Chairman Director Director

A respected business leader, M. A leading entrepreneur of the country, A.M. Shaukat Ali did his graduation in
Ghaziul Haque is the longest serving Mir Nasir Hossain has a diverse Civil Engineering under the University
Board Member of Eastern Bank range of business interests including of Dhaka in 1961 and higher education
Limited. He joined the Board in 1993 construction, real estate, telecom, ICT, in Japan in Construction Engineering in
and is still serving the board with an ceramic tiles manufacturing, banking 1977. His interests are not only limited
interval of about five years between and insurance. In his academic to construction. He takes keen interest
2006 and 2011. Currently, he is serving career he excelled as a student and in banking and healthcare as well.
his second term as the Chairman of the accomplished his post-graduation He held the position of Project Director
Board of Directors. His first term was in Accounting from the University of of World Bank, Asian Development
from 30 August 2000 to 21 May 2006. Dhaka with flying colors. He joined EBL Bank projects under the Ministry of
He graduated from Chittagong board in 1993. Health and Family Planning from 1987
Government College under Dhaka He is also the Chairman of both to 1993. Between 1993 and 1999, he
University in 1955 and began his career the Executive Committee and Risk was the Chairman of Project Builders
with the reputed British Company Management Committee of the Board Limited.
Bird & Co. Limited and rose to the of Directors of EBL. He joined the Board of EBL in 1993.
position of Managing Director in 1976 Between 2005 and 2007, he led the He is also a member of the Audit
when the name was changed to Birds apex trade organization of the country, Committee of the Board of Directors of
Bangladesh Ltd. Federation of Bangladesh Chambers the EBL.
In 1980 he left the company to venture of Commerce and Industry (FBCCI) He is the Chairman of Engineering
into business and partnered with as its president with commitment Consultants & Associates Limited and
Aquamarine Limited, a Chittagong- and dedication. He has held many sponsor Director of Samorita Hospital
based Shipping Company. Later, important positions in various regional Limited.
he formed a joint venture company business bodies including Senior
Maersk Bangladesh Limited of Vice President of SAARC Chamber of
Maersk Lines, Copenhagen, Denmark. Commerce and Industry (SCCI) and
He served as the Chairman of the Vice President of Confederation of
company until 1997 with commendable Asia Pacific Chambers of Commerce
success. and Industry (CACCI). At present,
Currently Chairman of MGH Group, he he is the President of Association
has diverse experience in shipping and of Telecommunication Infrastructure
forwarding, import, export, marketing, Operators of Bangladesh (TIOB).
banking, international business He is actively engaged in various
relations, collaborations and joint social works, most notable of which
ventures. is his Life Membership of Bangladesh
Red Crescent Society and contributes
generously to a number of hospitals
and orphanages.

26
EASTERN BANK LIMITED ANNUAL REPORT 2014
 BOARD OF DIRECTORS

Md. Showkat Ali Chowdhury Salina Ali Anis Ahmed

Director Director Director

Md. Showkat Ali Chowdhury, an Salina Ali is the Chairman of Unique Anis Ahmed is the Group Managing
accomplished business leader, is Group, a renowned business Director and CEO of MGH Group.
successfully running a business conglomerate in Bangladesh, having The group has diverse business
conglomerate with diverse interests business interests in real estate, hotel interests from regional supply chain
in ship breaking and recycling, services, ceramic industry, power plant, for global fast fashion, discount
tea plantation & production, RMG aviation services, tourism, manpower retailers, automotive brands, to airlines
industries, real estate, agency business export, banking services, and human GSAs, computer reservation systems,
& engineering services, container resources development. A pioneer FM-radio stations, cable network, to
terminal & handling, commercial in setting up the first 5-Star Hotel in software development, information
banking, insurance, shares & securities. private sector in the country, she is technology, tea and rubber plantations,
He joined the board of EBL in 1993. also the Chairman of Unique Hotels real estate, food and beverage
He is also a member of the Executive and Resorts Ltd. The Westin Dhaka retail, mining and exploration, and
Committee of the Board of Directors of now stands for quality and hospitality. commercial banking.
the Bank (EBL). She did her Honors and Masters in He did his Bachelor of Science
Sociology from the University of Dhaka. (Finance) from the University of
A graduate from the University of
Chittagong, he is involved with many She is also a member of the Executive Utah, and MBA from Arkansas State
local and international organizations Committee of the Board of Directors University.
that includes a life member of SAARC of Eastern Bank Ltd. (EBL). She After completing his MBA, he began
Chamber of Commerce & Industry is involved in many social and his career with A.P. Moller Maersk as a
(SAARC CCI), Bhatiary Golf & Country philanthropic activities. global trainee at the Morristown, New
Club Limited, Chittagong Press Jersey, headquarters. He later joined
Club Limited, Chattagram Maa O his father’s business, an A.P. Moller
Shisu General Hospital, Director of Maersk joint venture in Bangladesh,
Chittagong Metropolitan Chamber of and left after a 4-year stint with Maersk
Commerce & Industry (CMCCI) and to establish MGH, named after his
member of Chittagong Club Limited, father M. Ghaziul Haque (MGH), the
Chittagong Senior’s Club Limited and current Chairman of the group.
Bangladesh Ship Breakers Association. He is also the founder and trustee
He is also involved in many other social member of MGH Foundation which
activities. manages multiple orphanages, building
self-sustaining revenue sources for
Charitable Initiatives like Charity
Begins @ Home (CB@H), LAUF (Legal
Aid for Unfortunate) now operating in
Bangladesh during its launch phase.
LAUF provide financial supports to
Bangladeshis stranded in various parts
of the world, unable to return home
due to lack of financial abilities.

27
EASTERN BANK LIMITED ANNUAL REPORT 2014
Meah Mohammed Abdur Rahim Mufakkharul Islam Khasru Ormaan Rafay Nizam
Independent Director Director Independent Director

Meah Mohammed Abdur Rahim, Born in a respected family of Ormaan Rafay Nizam joined the
Director of Eastern Bank Limited Chittagong, Mufakkharul Islam Khasru Board of Eastern Bank Limited on
is a renowned businessman. He is did his Bachelor of Commerce from November 29, 2008 as Director from
the Managing Director of Ancient Chittagong Commerce College and the Depositors and was subsequently
Steamship Company Limited and MBA from Institute of Business appointed as an Independent
Hudig & Meah (Bangladesh) Limited. Administration, Dhaka. Currently, he Director on 20 November 2012 by
He is the Chairman of the Audit is the Managing Director of Finlay the Board upon fulfilling the criteria
Committee and also a Member of the Properties Ltd., an affiliate of JF set by Bangladesh Securities and
Risk Management Committee (RMC) (Bangladesh) Ltd. Before taking Exchange Commission (BSEC). He is
of the Board of Directors of the Bank up the reins of responsibilities of also the Director of National Brokers
(EBL). Finlay Properties in 2010, he was Limited, one of the oldest Tea Broking
CEO of SANMAR Properties Ltd., Company in Bangladesh, member of
Academically & professionally, Rahim a leading business conglomerate Chittagong Club and Bhatiary Golf
obtained Bachelor of Commerce diversified in property development, & Country Club and also involved in
Degree, Diploma in Banking & Business custom brokerage, stevedoring, and organizing Cricket Sports activities at
Studies as well as Diploma in Shipping, commodity-trading. national level.
A.I.C.S.
He is a member of the Audit Committee He is a member of the Audit
He has expertise in the areas of of the Board of Directors of Eastern Committee of the Board of Directors
Business Studies, Banking, Finance, Bank Ltd. of Eastern Bank Ltd.
Management etc. He is involved in
many social activities and is also a An avid reader, he has a strong impulse A cricket organizer and golfer,
widely travelled person across the to travel and explore the world. He is a he obtained his Bachelor degree
globe on business trips. sport enthusiast and enjoys socializing. in Commerce from Chittagong
As popular and active member of University and completed higher
number of clubs including Chittagong education from London School of
Club, Bhatiary Golf & Country Club, Education (LSE). He has consummate
Chittagong Boat Club, Bangladesh expertise in the areas of Business
Diabetic Society, his contributions are Studies, Finance and Management.
noteworthy.

28
EASTERN BANK LIMITED ANNUAL REPORT 2014
 BOARD OF DIRECTORS
THE WINNING SPIRIT

Gazi Md. Shakhawat Hossain Ali Reza Iftekhar

Director Managing Director & CEO

Gazi Md. Shakhawat Hossain, Director A visionary banker and a dynamic leader,
of Eastern Bank Limited is a promising Ali Reza Iftekhar is an ardent promoter of
businessman. He is the Chairman of the concept of sustainable development.
Bay Hill Hotel & Resorts Ltd, Managing As the CEO and MD of Eastern Bank
Director of Purnima Construction (Pvt.) Limited he has successfully introduced
Ltd, Member of Policy Committee international best practices and ethical
of Westin Hotel and also Director banking and transformed the organization
of Unique Hotel & Resorts Ltd. and into the most valuable financial brand in the
General Electric Company (BD) country. Under his leadership, the bank has
Limited. achieved many a laurel including the Best
He is Member of both the Audit Retail Bank in Bangladesh awarded by The
Committee and Risk Management Asian Banker for two consecutive years
Committee (RMC) of the Board of 2013 and 2014; the IFC Global Award for the
Directors of the Bank (EBL). Best Partner for Working Capital Systemic
Solution; ICSB National Award 2014 for
Hossain obtained his M.Com in Corporate Governance Excellence; the Best
Accounting from the University of Financial Institution 2010 at the DHL-Daily
Dhaka. He has expertise in the areas of Star Bangladesh Business Award. He is
Financial Reporting and Management, also heading the Association of Bankers,
Banking, Insurance, International Hotel Bangladesh (ABB), the apex body for
& Restaurant etc. banking professionals of the country, as its
chairman for the term of 2014–15.
He also sits on the Board of the
International Leasing and Financial Services
Limited (ILFSL). A 1982 graduate from
the University of Dhaka in Marketing,
his specialization in risk management,
corporate banking, operations and retail
made him one of the leading bankers of
the country. To keep him updated with
the current management thoughts, he
attended Harvard Business School Program
on Leadership in Financial Organizations
in 2012, participated in the Strategic
Leadership Program at University of Oxford,
UK in 2013, and took part in Executive
Program in Corporate Governance and
Strategic Management at Haas School of
Business, University of California, Berkeley
in 2014.

29
EASTERN BANK LIMITED ANNUAL REPORT 2014
MANAGEMENT COMMITTEES

MANCOM (from left to right)

Sl No. Name Designation

1 Abul Moqsud DMD & Chief Risk Officer (CRO)
2 Hassan O. Rashid DMD (Corporate & Treasury)
3 Ali Reza Iftekhar Managing Director & CEO
4 Akhtar Kamal Talukder DMD (Operations & ICC)
5 Md. Khurshed Alam EVP & Head of SME Banking
6 Ahsan Zaman Chowdhury EVP & Area Head, Corporate Banking, Chittagong
7 Nazeem A. Choudhury EVP & Head of Consumer Banking

30
EASTERN BANK LIMITED ANNUAL REPORT 2014
MANCOM (from left to right)

Sl No. Name Designation

8 A.M.M. Moyen Uddin EVP & Head of Information Technology (IT)
9 S. M. Akhtaruzzaman Chowdhury SEVP & Head of Operations
10 Safiar Rahman SEVP & Company Secretary
11 Monjurul Alam VP & Head of Human Resources
12 Ahmed Shaheen SEVP & Area Head, Corporate Banking, Dhaka
13 Masudul Hoque Sardar VP & Head of Finance
14 Sami Karim SEVP & Head of SAMD
15 Mehdi Zaman SVP & Head of Treasury

31
EASTERN BANK LIMITED ANNUAL REPORT 2014
Expanded Management Team (EMT)

Sl No. Name Designation Status in EMT

1 Ahmed Shaheen SEVP & Area Head, Corporate Banking, Dhaka Chairman
2 Mohammad Musa EVP & Head of Service Delivery Member Secretary
3 Md. Abdul Hakim EVP & Unit Head, Corporate Banking, Dhaka Member
4 Junaid Masrur EVP & Head of Transaction Banking, Corporate Banking Member
5 Habibur Rahman EVP & Head of CRM Member
6 Abdul Halim EVP & Head of Cards Operation Member
7 Maj Md. Abdus Salam, psc, (Retd) SVP & Head of Administration & Security Member
8 Ziaul Karim SVP & Head of Communication Member
9 Syed Sazzad Haider Chowdhury SVP & Head of Trade Operations Member
10 Iftekhar Uddin Chowdhury SVP & Branch Area Head, Chittagong Area Member
11 Ashraf- Uz-Zaman SVP & Head of Compliance, ICCD Member
12 Saidul Amin SVP & Head of Liability and Wealth Management Member
13 Anwar Faruq Talukder SVP & Head of Business, SME Banking Member
14 Md. Rezaul Karim VP & Head of Service Management, IT Member
15 Md. Abdul Awal VP & Head of Operation Risk Member
16 Md. Rezaul Islam VP & Head of Internal Control Member
17 S. K. M. Shariful Alam VP & Head of Core Banking and Cards Application, IT Member
18 Tapash Chakraborty FAVP & Head of People's Planning & Acquisition, HRD Member
19 Md. Safiqul Islam Zahid FAVP & Sr. Manager, Financial Operations & Control Member
20 Riyadh Ferdous AVP & Sr. Manager, Brand Member

Asset Liability Committee (ALCO)

Sl No. Name Designation Status in ALCO

1 Ali Reza Iftekhar Managing Director & CEO Chairman
2 Hassan O. Rashid DMD (Corporate & Treasury) Member
3 Abul Moqsud DMD & CRO Member
4 Ahmed Shaheen SEVP & Area Head, Corporate Banking, Dhaka Member
5 Md. Khurshed Alam EVP & Head of SME Banking Member
6 Junaid Masrur EVP & Head of Transaction Banking, Corporate Banking Member
7 Nazeem A. Choudhury EVP & Head of Consumer Banking Member
8 Saidul Amin SVP & Head of Liability & Wealth Management Member
9 Masudul Hoque Sardar VP & Head of Finance Member
10 Mehdi Zaman SVP & Head of Treasury Member & Head
of ALM Desk

Bank Risk Management Committee (BRMC)

Sl No. Name Designation Status in BRMC

1 Abul Moqsud DMD & CRO Chairman
2 Akhtar Kamal Talukder DMD (Operations & ICC) Member
3 S.M. Akhtaruzzaman Chwodhury SEVP & Head of Operations Member
4 A.M.M. Moyen Uddin EVP & Head of Information Technology (IT) Member
5 Mohammad Musa EVP & Head of Service Delivery Member
6 Mehdi Zaman SVP & Head of Treasury Member
7 Masudul Hoque Sardar VP & Head of Finance Member

32
EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT COMMITTEES

Sl No. Name Designation Status in BRMC

8 Rashadul Karim SAVP & Head of Treasury & Investment Banking Operations Member
9 Saiful Islam FAVP & Sr. Manager, RMU Member Secretary

Bank Operational Risk Committee (BORC)

Sl No. Name Designation Status in BORC

1 Akhtar Kamal Talukder DMD (Operations & ICC) Chairman
2 Hassan O. Rashid DMD (Corporate & Treasury) Member
3 S.M. Akhtaruzzaman Chwodhury SEVP & Head of Operations Member
4 Sami Karim SEVP & Head of SAMD Member
5 A.M.M. Moyen Uddin EVP & Head of Information Technology (IT) Member
6 Md. Khurshed Alam EVP & Head of SME Banking Member
7 Nazeem A Chowdhury EVP & Head of Consumer Banking Member
8 Habibur Rahman EVP & Head of CRM Member
9 Maj Md. Abdus Salam, psc, (Retd) SVP & Head of Administration & Security Member
10 Monjurul Alam VP & Head of Human Resources Member
11 Masudul Hoque Sardar VP & Head of Finance Member

Purchase Committee (PC)

Status in
Sl No. Name Designation
Committee
1 Akhtar Kamal Talukder DMD (Operations & ICC) Member
2 A.M.M. Moyen Uddin EVP & Head of Information Technology (IT) Member
3 Maj Md. Abdus Salam, psc, (Retd) SVP & Head of Administration & Security Convenor
4 Ziaul Karim SVP & Head of Communication Member
5 Masudul Hoque Sardar VP & Head of Finance Member

Credit Committee

Status in
Sl No. Name Designation
Committee
1 Abul Moqsud DMD & CRO Chairman
2 Hassan O. Rashid DMD (Corporate & Treasury) Member
3 Md. Khurshed Alam EVP & Head of SME Banking Member
4 Nazeem A. Choudhury EVP & Head of Consumer Banking Member
5 Habibur Rahman EVP & Head of CRM Member
6 Masudul Hoque Sardar VP & Head of Finance Member
7 Saiful Islam FAVP & Sr. Manager, RMU Acting Member
Secretary

33
EASTERN BANK LIMITED ANNUAL REPORT 2014
Green Banking Cell

Status in
Sl No. Name Designation
Committee
1 Hassan O. Rashid DMD (Corporate & Treasury) Chairman
2 Abul Moqsud DMD & CRO Member
3 A.M.M. Moyen Uddin EVP & Head of Information Technology (IT) Member
4 Md. Khurshed Alam EVP & Head of SME Banking Member
5 Maj Md. Abdus Salam, psc, (Retd) SVP & Head of Administration & Security Member
6 Ziaul Karim SVP & Head of Communication Member
7 Monjurul Alam VP & Head of Human Resources Member
8 Saiful Islam FAVP & Sr. Manager, RMU Member Secretary

BASEL III Committee

Status in
Sl No. Name Designation
Committee
1 Akhtar Kamal Talukder DMD (Operations & ICC) Chairman
2 Abul Moqsud DMD & CRO Member
3 S.M. Akhtaruzzaman Chowdhury SEVP & Head of Operations Member
4 A.M.M. Moyen Uddin EVP & Head of Information Technology (IT) Member
5 Mehdi Zaman SVP & Head of Treasury Member
6 Masudul Hoque Sardar VP & Head of Finance Member
7 Saiful Islam FAVP & Sr. Manager, RMU Member Secretary

Central Compliance Unit (CCU)

Status in
Sl No. Name Designation
Committee
1 Akhtar Kamal Talukder DMD (Operations & ICC) CAMLCO and
Head of CCU
2 Ashraf- Uz-Zaman SVP & Head of Compliance, ICC Deputy CAMLCO
3 Md. Abdul Awal VP & Head of Operation Risk, ICC Deputy CAMLCO
4 Md. Rezaul Islam VP & Head of Internal Control, ICC Deputy CAMLCO
5 Md. Shahjahan Ali FAVP & Head of Regulatory Affairs, ICC Deputy CAMLCO

34
EASTERN BANK LIMITED ANNUAL REPORT 2014
DIRECTORS’ RESPONSIBILITY
STATEMENT
In addition to the oversight responsibilities, the Board of  Discussion on Operating Performance: A brief
Directors also ensures that the Financial Statements of description in this regard has been presented in
the Bank and its subsidiaries are prepared in accordance “Financial Performance Highlights” part of the Directors’
with applicable Bangladesh Financial Reporting Standards Report 2014.
(including Bangladesh Accounting Standards), relevant  Discussion on continuity of any Extra-Ordinary gain
provisions of the Companies Act 1994, Bank Company or loss: In last five years EBL has not experienced any
Act 1991 (amended up to 2013), rules and regulations of extra-ordinary gain or loss. EBL’s Five Years Progression
Bangladesh Bank and Bangladesh Securities and Exchange presented in the “Stakeholders Information” section will
Commission (BSEC), listing rules of Dhaka Stock Exchange provide details information in support of this.
Ltd. and Chittagong Stock Exchange Ltd. and other  Basis for related party transactions and a statement
applicable laws, rules and regulations. of all related party transactions: The basis for related
In compliance with section 184 of Companies Act 1994, party transactions has been stated in the “Corporate
the Annual Report which is presented in the Annual General Governance Report” and a statement of related party
Meeting (AGM) has a separate section as ‘Directors’ Report transactions has been presented in the Annexure C1 of
2014’ containing, among others, a review of the following the Financial Statements 2014.
issues:  Utilization of proceeds from public issues, rights issues
 State of the Bank’s affairs: A review of financial and/or through any others instruments: The Bank
performance and position has been presented in the took over the businesses, assets, liabilities and losses
Directors’ Report 2014 and Management Discussion and of erstwhile Bank of Credit & Commerce International
Analysis (MD&A) section with relevant analytics. (Overseas) Limited as they stood after reduction or
adjustments in accordance with the provisions of the
 Any recommended reserve in the balance sheet: An Bank of Credit & Commerce International (Overseas)
amount of BDT 749.37 million has been transferred to Limited (Reconstruction) Scheme, 1992. Therefore,
‘Statutory Reserve’ which is required to equate the same the bank has not yet raised any capital through public
with paid up capital as per section 24 of Bank Company issues except a Right Issue in 2009. However, the history
Act 1991 (amended up to 2013). of raising capital has been presented in the Directors’
 Recommended dividend: The Board has recommended Report 2014.
20% cash dividend equivalent to BDT 1,222.36 million  Deterioration of financial results after the company
for the completed year 2014. goes for IPO, Rights Offer, Direct Listing, etc.: Refer
to the earlier paragraph, the bank issued Right Share in
 Any event after balance sheet date which may affect
2009 but after that financial results of the Bank did not
company’s financial condition: An amount of BDT 2,500
deteriorate.
million on account of 7 Years Non-convertible Floating
Rate Subordinated Bond received in mid- February 2015  Explanation of variances between Quarterly and Annual
and booked as tier-ii capital which will increase solvency Financial performance: A brief discussion along with
as well as lending capacity (especially to single borrower) financial information in this regard has been presented in
of the Bank. the Directors’ Report 2014.
 Remuneration to directors including independent
 Any change in bank’s activities, subsidiaries’ activities
directors: Remuneration provided to directors has been
etc.: No major change in strategy and actions in the
presented in the Corporate Governance Report and Note
Bank and Subsidiaries experienced in 2014.
36 and Note 37 to the Financial Statements.
In compliance with BSEC Corporate Governance notification
 The financial statements prepared by the management
dated 07 August 2012 the Directors of the Bank hereby
present fairly its state of affairs, the result of its
declare on following issues, among others, in their report as operations, cash flows and changes in equity: A brief
prescribed: description in this regard has been presented in Review
 Industry outlook and possible future developments of Financial Reporting Section in Directors’ Report 2014.
in the industry: A brief review in this regard has been  Maintenance of proper books of account: A brief
presented in the Director’s Report 2014. description in this regard has been presented in Review
 Segment-wise or Product-wise Performance: Business- of Financial Reporting Section in Directors’ Report 2014.
wise performance has been presented in the MD&A  Consistent application of appropriate accounting
section. policies and estimates in preparation of financial
 Risks and Concerns: A detailed discussion regarding statements: A brief description in this regard has been
risks and management of the same has been presented presented in the Review of Financial Reporting Section in
in “Risk Management” section of this Annual Report. Directors’ Report 2014.

35
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Following International Accounting Standards (IAS)/  The pattern of shareholdings: Please see page number
Bangladesh Accounting Standards (BAS)/ International 75 of the Corporate Governance Report 2014 and note
Financial Reporting Standards (IFRS)/ Bangladesh 14.1 of the Notes to the Financial Statements 2014.
Financial Reporting Standards (BFRS), as applicable  Brief resume of the directors and nature of their
in Bangladesh, in preparation of financial statements expertise in specific functional areas: Brief profile of
and any departure there from has been adequately directors and their representation in other companies
disclosed: Details description including disclosure of have been presented in page no. 26 -29 of this report
departures has been presented in Note 2 to the Financial and Annexure C of the Financial Statements 2014.
Statements 2014.
To adhere to good corporate governance practices, the
 The system of internal control is sound in design and Bank has been complying with two paramount guidelines
has been effectively implemented and monitored: A from Bangladesh Bank (BRPD Circular No 11, 18 and 19
brief description in this regard has been presented in the dated 27 October 2013) and BSEC (Notification No. SEC/
Review of Internal Control System in Directors’ Report CMRRCD/2006-158/134/Admin/44 dated 07 August 2012).
2014. EBL’s compliance status to those prescribed practices is
 Significant doubts upon the Bank’s ability to continue presented in Corporate Governance Report 2014.
as a going concern: Nothing as yet. The Directors, to the best of their knowledge and information,
 Explanations to significant deviations from the last hereby confirm that the Annual Report 2014 together with the
year’s operating results: NII (Net Interest Income), Directors’ Report and the Financial Statements have been
income from investment and provision against loans and prepared in compliance with applicable governing Acts, rules,
equity investments experienced significant deviations regulations, guidelines and laws of various regulatory bodies
in 2014 which have been adequately discussed in the including Bangladesh Bank and BSEC.
Directors’ Report 2014 and MD&A section.
 Summarization of last five year’s key operating and On behalf of the Board of Directors
financial data: Please see ‘Five Year Progression of EBL’
in the section of Stakeholders’ Information.
 Declaration of dividend or not: Declared 20% cash
dividend for the year 2014.
 No. of Board meetings and directors’ attendance in
M. Ghaziul Haque
2014: Please see page number 74 of the Corporate
Governance Report 2014. Chairman

36
EASTERN BANK LIMITED ANNUAL REPORT 2014
REPORT OF THE
AUDIT COMMITTEE

Audit Committee of the Board

In compliance with Bangladesh Bank guidelines and Bangladesh Securities and Exchange Commission (BSEC) Notification
on Corporate Governance, the Audit Committee (AC) of the Board of Directors of Eastern Bank Limited (EBL) was formed by
the Board to provide independent oversight of the company’s financial reporting, non-financial corporate disclosures, internal
control systems and compliance to governing rules and laws etc. Following are the major objectives of the AC:
 To review the financial reporting process, the system and effectiveness of internal control process, compliance status
of inspection report from Bangladesh Bank and assessment of the overall processes and procedures for monitoring
compliance with laws and regulations and its own code of business conduct.
 To 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.

Composition and Qualifications

In compliance with Corporate Governance Notification issued by BSEC on 07 August 2012, and Bangladesh Bank BRPD
Circular No.11 dated 27 October 2013, AC of EBL Board was last re-constituted in the 533 Board Meeting held on 01 June
2014 with the following Board Members:

SL Status with the Status with the Educational Meeting

Name
No. Bank Committee Qualification Attendance
01. Meah Mohammed Abdur Rahim Independent Chairman Bachelor of Commerce/ 10/12
Director A.I.C.S
02. A.M. Shaukat Ali Director Member B. Sc (Engg.), Civil 12/12
03. Mufakkharul Islam Khasru, Director Member MBA (IBA) 5/7*
(Representing Namreen
Enterprise Ltd.)
04. Gazi Md. Shakhawat Hossain Director Member M.com (Accounting) 12/12
(Representing Purnima
Construction Pvt. Ltd.)
05. Ormaan Rafay Nizam Independent Member Commerce Graduate 9/12
Director
* Mr. Mufakkharul Islam Khasru was appointed as a Member of the AC in the 533 Board Meeting held on 01 June 2014 replacing Mr. A.Q.I. Chowdhury, OBE, who
resigned on 12 May 2014. However, Mr. A.Q.I. Chowdhury, OBE, attended only 1 (one) AC meeting out of 4 (four) during his tenure.

The Company Secretary acts as the Secretary of the Audit  Review the arrangements made by the management
Committee of the Board. for developing and maintaining a suitable Management
Information System (MIS).
Roles and Responsibilities of Audit
 Consider whether internal control strategies
Committee recommended by internal and external auditors have
The roles and responsibilities of Audit Committee of EBL been implemented timely by the management.
Board have been framed by following the provisions of  Review the existing risk management policy and
BRPD Circular No 11 dated 27 October 2013, Corporate procedures for ensuring an effective internal check and
Governance Notification issued by BSEC on 07 August 2012, control system.
and other best practice corporate governance guidelines
 Review the corrective measures taken by the
and standards. Some important roles and responsibilities are
management as regards to the reports relating to fraud-
highlighted below:
forgery, deficiency in internal control or other similar
issues detected by internal and external auditors and
Internal Control
inspectors from the regulators and inform the Board on a
 Evaluate whether management is adhering to the regular basis.
appropriate compliance culture by communicating the
importance of internal control and risk management to
ensure that all employees have clear understanding of
their respective roles and responsibilities.

37
EASTERN BANK LIMITED ANNUAL REPORT 2014
Financial Reporting meet the external auditor at least once a year, without
management being present; to discuss their remit and
 Review the Annual Financial Statements and determine
any issues arising from the audit.
whether they are complete and consistent with
applicable accounting and reporting standards set by  Review the findings and recommendations made by the
respective governing bodies and regulatory authorities. external auditors for removing the irregularities, if any,
detected are duly acted upon by the management in
 Meet with Management and External/Statutory Auditors
running the affairs of the bank.
to review annual financial statements before their
finalization.
Compliance with existing laws and regulations
 Review along with management, the quarterly, half-yearly
Review whether the laws and regulations framed by the
and annual financial statements before submission to the
regulatory authorities (Central Bank, BSEC and other bodies)
Board for approval.
and internal circular/instructions/policy/regulations approved
by the Board and Management have been complied with.
Internal Audit
 Monitor/evaluate whether internal audit functions are Miscellaneous
conducted independently from the management.
 The AC will submit a ‘Compliance Report’ on quarterly
 Review the activities and organizational structure of the rest to the Board mentioning any errors and irregularities,
internal audit function and ensure that no unjustified fraud and forgery and other anomalies pointed by
restrictions or limitations are made. Internal and External Auditor and Inspection Team from
 Review and assess the annual internal audit plan. Bangladesh Bank.
 Review the efficiency and effectiveness of internal audit  The AC will submit the evaluation report relating to
function. Internal and External Auditor of the Bank to the Board.
 Review that findings and recommendations made by the  This committee will supervise other assignments
Internal Auditors for removing the irregularities, if any, delegated by the Board and evaluate its own
detected are duly acted upon by the management in performance regularly.
running the affairs of the bank.
Meetings of the Audit Committee
 Meet the Head of ICC and the Head of internal audit at
Bangladesh Bank suggested banks to hold at least 4
least once in a year, without management being present,
meetings in a year. The Audit Committee of EBL held
to discuss their remit and any issues arising from the
12 (Twelve) meetings in the year 2014 and had detailed
internal audits carried out. In addition, the Head of ICC
discussions and review session with the Head of Internal
and the Head of internal audit shall be given the right of
Audit, Head of Internal Control & Compliance, External
direct access to the Chairman of the Audit Committee.
Auditors etc. regarding their findings, observations and
remedial suggestions on issues of bank affairs that need
External Audit
improvement. The AC instructed management to follow those
 Consider and make recommendations to the Board, remedial suggestions and monitored accordingly. Meeting
to be put to Shareholders for approval at the AGM, in dates are as follows:
relation to the appointment, re-appointment and removal
of the bank’s external auditors. The Committee shall SL No. Meetings Date of Meeting
oversee the selection process of new auditors and shall 01. 56 Audit Committee Meeting 29 January 2014
investigate any issue that might have led auditors to
02. 57 Audit Committee Meeting 27 February 2014
resign.
03. 58 Audit Committee Meeting 20 March 2014
 Oversee the relationship with the external auditors
including: 04. 59 Audit Committee Meeting 12 May 2014
Approval of their remuneration, i.e. fees for audit or 05. 60 Audit Committee Meeting 19 June 2014
non-audit services. 06. 61 Audit Committee Meeting 17 July 2014
Assessing annually their independence and 07. 62 Audit Committee Meeting 23 July 2014
objectivity taking into account relevant professional
08. 63 Audit Committee Meeting 31 August 2014
and regulatory requirements and the relationship
with the auditor as a whole, including the provision 09. 64 Audit Committee Meeting 24 September 2014
of any non-audit services. 10. 65 Audit Committee Meeting 29 October 2014
Satisfying itself that there are no relationships (such 11. 66 Audit Committee Meeting 27 November 2014
as family, employment, investment, financial or 12. 67 Audit Committee Meeting 29 December 2014
business) between the auditor and the bank (other
than in the ordinary course of business).
 Meet regularly with the external auditor, including once
at the planning stage before the audit and once after
the audit at the reporting stage. The Committee shall

38
EASTERN BANK LIMITED ANNUAL REPORT 2014
 REPORT OF THE AUDIT COMMITTEE

Major areas focused by AC in 2014 year ended 31 December 2013 as submitted by the
External Auditors and subsequent compliance by the
The major areas of focus by the Audit Committee of the Bank
management thereof.
during the year 2014 are mentioned below:
 Review of the First Quarter (Q1), half-yearly and Third
 Review and approve ‘Annual Audit Plan 2015’ and ‘Risk
Quarter (Q3) Financial Statements (Un-Audited) for the
Based Audit Plan 2015’.
year 2014 before submission to the Board for approval
 Review of Suspicious Transaction Report for the year in compliance with the BSEC’s Corporate Governance
2013. Guidelines 2012.
 Review of the Mystery Shopper’s Survey Results 2013.  Review of Financial Highlights of EBL for the Third
 Review of the audit ratings of all branches for the year Quarter (Q3) from 01 January to 30 September 2014
2013 and 2014 and departments for the year 2013. compared to last year.
 Review of Bangladesh Bank, DOS Circular Letter No.  Review of the Bangladesh Bank Comprehensive
17 dated 7 November 2012 regarding Report of Self- Inspection Report on EBL Head Office as on 31
Assessment of Anti-Fraud Internal Controls on Quarterly December 2013 and subsequent compliance by the
basis through specific format to be signed by the MD & management there of.
CEO of the Bank and countersigned by the Chairman of  Review of AML rating of all Branches for the year 2014.
the Audit Committee.
 Review of Business Budget of EBL for the year 2015.
 Review of the process of strengthening Internal Control
 Review of compliance and related risk level of Branches,
Systems and Procedures of the Bank.
various Departments and Subsidiaries.
 Review of the annual financial statements of the bank
 Review of Annual Report on the Financial Health of the
for the year ended 31 December 2013 as certified by
Bank, 2013.
the External Auditors, M/S. Hoda Vasi Chowdhury & Co,
Chartered Accountants, before submission to the Board
for approval.
The Minutes of the Audit Committee meetings containing
 Review of Bangladesh Bank’s BRPD Circular No. 4
various suggestions and recommendations to the
dated 23 February 2014 on the Rules and Regulations in
making transactions with people associated with Boards Management and the Board are placed subsequently to the
and Management of the Banks. Board for ratification on regular basis.
 Review of re-appointment of External Auditors of EBL at
the 22nd AGM of EBL till the next AGM.
On behalf of the Audit Committee,
 Review of Corporate Governance Compliance Report of
EBL for the year ended 31 December 2013 as submitted
by Rahman Rahman Huq, Chartered Accountants.
 Review the status of various types of staff loans (those
remained outstanding as of 30 June 2014) i.e. LAMS,
LAPF, Car Loan, Home Loan, Credit Card, etc. to the
employees of mid-level and above specially who left the Meah Mohammed Abdur Rahim
job during the period from July 2013 to June 2014. Chairman of the Audit Committee of the Board
 Review of the Management Report on the bank for the

39
EASTERN BANK LIMITED ANNUAL REPORT 2014
REPORT OF THE
RISK MANAGEMENT COMMITTEE
OF THE BOARD
In compliance with BRPD Circular No. 11 dated 27 October 2013, the Board of Directors of Eastern Bank Limited formed
a three-member Risk Management Committee (RMC) of the Board on 07 November 2013 and reconstituted in 542-Board
of Directors Meeting held on 29 October 2014. The objective of the committee is to reduce probable risks arising during
implementation of Board approved policies, procedures and strategies.

Composition and Qualifications

All three members of RMC are Non-Executive Directors of the Board. The qualification of members, their status in the RMC and
attendance in RMC meetings are noted below:

Status
Sl Status with the Meeting
Name with the Educational Qualification
No. Bank Attendance
Committee
1 Mir Nasir Hossain Director Chairman M.com (Accounting) 4/4
2 Gazi Md. Shakhawat Hossain Director Member M.com (Accounting) 4/4
3 Meah Mohammed Abdur Rahim Independent Director Member Bachelor of Commerce/ A.I.C.S 1/1*
*Mr. Meah Mohammed Abdur Rahim was appointed as a member of the RMC in the 542 Board Meeting held on 29 October 2014 replacing Mr. Asif Mahmood who
resigned on 22 September 2014. However, Mr. Asif Mahmood attended all 03 meetings during his tenure.

The Company Secretary acts as the Secretary of the Risk  The committee shall monitor the overall implementation
Management Committee of the Board. of risk management policy of the bank and also examine
whether remedial measures have been taken for
Roles and Responsibilities of RMC minimization of credit risk, market risk and operation risk
The roles and responsibilities of RMC of EBL have been of the bank.
framed in line with the provisions of BRPD Circular No.  The committee shall review different decisions taken by
11, dated 27 October 2013 and other best practices and the different risk committees formed at management
standards. Some important roles and responsibilities are level and RMC’s recommendations to be submitted to
highlighted below: the Board on regular basis.
 To identify and assess risk of the bank and guide  The committee shall comply with different directives/
management to formulate strategies for minimizing/ guidelines as issued by Regulators from time to time.
controlling of risk. The committee shall review the risk
management policy of the bank and modify the same as Meetings of the RMC
per requirement. Bangladesh Bank advised to hold at least 4 meetings in a
 For controlling of risk, it is the responsibility of RMC to year. The RMC of EBL held 4 (Four) meetings during 2014
ensure suitable administrative structure at the bank. having detailed discussions and review session with the Chief
To ensure compliance of risk management guidelines Risk Officer (CRO) regarding their findings, observations and
relating to credit risk, foreign exchange risk, internal recommendations on the issues of bank affairs that need
control and compliance risk, money laundering risk and improvement. Meeting dates were as follows:
information and communication technology risk, ALM
risk, the RMC shall form separate committees at the Sl. No. Meetings Date of Meeting
management level and also monitor their activities. 01. RMC Meeting 01 22 January 2014
 RMC shall review the risk management policy and 02. RMC Meeting 02 21 April 2014
guidelines of the bank at least once in a year, make 03. RMC Meeting 03 25 August 2014
necessary modifications as per requirement and submit
04. RMC Meeting 04 23 December 2014
the same to the Board for approval. Besides, the
committee shall review the approval limits of loan and
others and take necessary initiatives to modify the same
Major areas focused by RMC in 2014
as per requirement. The major areas focused and perused by the RMC of EBL
during 2014 are highlighted below:
 The committee shall review and examine the system
regarding preservation of information and reporting of the  In line with the BRPD Circular No. 11 dated 27 October
management and recommend appropriate measures for 2013 adopted the detailed Roles and Functions along
the same. with ToR (Terms of Reference) of the RMC of EBL.

40
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Reviewed and endorsed Bank’s ‘Investment Policy’ as  Followed up and monitored classified, special mentions,
advised by the Board of EBL. written-off and compromised settlement A/C outstanding
 Reviewed and approved Bank’s ICAAP (Internal Capital and recovery status from written-off and compromised
Adequacy Assessment Process) document and SRP settlement A/C.
(Supervisory Review Process) return for the year 2011,  Approved ‘Credit Policy for Counterparty Limit for
2012 and 2013 for onward submission to Bangladesh Financial Institutions’.
Bank.  Reviewed Bangladesh Bank’s report on EBL’s Risk
 Approved Enterprise Risk Management (ERM) Policy for Rating and Stress Test.
EBL.
 Approved Risk Matrix (Key Risk Indicators) with MAT The Minutes of the RMC Meetings containing various
(Management Action Trigger) for the year 2014 and 2015. suggestions and recommendations to the management were
placed to the Board subsequently for ratification on regular
 Reviewed Risk Papers, discussed on recommendations
of BRMC (Bank Risk Management Committee) for basis.
the period from July 2013 to September 2014 and
with certain directions endorsed the same for onward On behalf of the Risk Management Committee,
submission to Bangladesh Bank.
 Reviewed Stress Test Reports from quarter ended
September 2013 to quarter ended September 2014
and endorsed the same for onward submission to
Mir Nasir Hossain
Bangladesh Bank.
Chairman of the Risk Management Committee of the Board

41
EASTERN BANK LIMITED ANNUAL REPORT 2014
CHAIRMAN’S STATEMENT

As a responsible corporate citizen, we consider ourselves integral

to the fabric of the society we operate in, generating growth and
contributing to economy.

EARNINGS PER SHARE BDT 3.45

DIVIDEND PER SHARE BDT 2.00
Dear Shareholders, narrow the trade deficit in FY2014. Workers’ remittances
declined slightly but were sufficient to offset the trade
I welcome you at the 23rd Annual General Meeting (AGM)
deficit and push the current account to a surplus equal to
of EBL. It is my honor and privilege to share with you our
1.0% of GDP, not the 0.5% deficit that had been projected.
achievements, challenges and how we have negotiated
through the ever changing terrain of global and national The growth of the industry sector was lower in FY14
economy. Our commitment to continue to play a vital role compared to the preceding year partly due to political
in the country’s economic wellbeing and address economic unrest and uncertainty. Moderate growth of agriculture
challenges facing us and return substantial growth is well sector along with satisfactory growth of services sector
reflected in the Annual Report featuring audited Financial helped achieve the 6.1% growth of the overall economy.
Statements for 2014. During FY14, the average inflation showed an upward
trend, mainly due to increase in food inflation although the
Global Economic Outlook non-food inflation declined during the same period. Total
The global economy is still having difficulty to gain domestic credit increased from 10.9% in FY13 to 11.6%
momentum as high-income countries continue to struggle in FY14. Private sector credit growth was 12.3% in FY14
with legacies of the global financial crisis and emerging which was lower against the targeted growth of 16.5%
economies are less dynamic than in the past. According mainly due to sluggish credit demand, political uncertainty
to World Bank, global growth in 2014 was lower than and stringent lending practices by banks following scams
expected: growth picked up only marginally to 2.6 percent in some banks.
from 2.5 percent in 2013. Bangladesh achieved Ba3 (Moody’s) and BB-(Standard and
Though there has been a palpable momentum witnessed Poor’s) with stable outlook for the 5th consecutive years.
in the United States and the United Kingdom as labor Stable real GDP growth and strong external balances
markets beginning to heal and monetary policy remains have helped Bangladesh to achieve BB- rating with stable
eminently accommodative, the recovery has been outlook from Fitch Ratings for the first time.
sputtering in Euro area and Japan in particular as shadows Banking Industry: Facing Multiple Challenges
of the financial crisis linger. China, on the other hand, is
The industry as a whole continued to face multiple
undergoing a carefully managed slowdown. Emerging
challenges: falling credit growth, declining interest rate and
markets are no longer a beacon of hope in the world
profitability, weakening governance and rising NPL and
economy: Brazil is sinking in stagflation while Russia is in
deteriorating soundness. Credit growth and maintenance
recession, beaten by Western sanctions and the slump in
of asset quality were major challenges in 2014 mainly due
the oil price.
to a sense of uncertainty concerning long term political
The World Bank expects that global growth to rise instability, subdued economic activities and spillover
moderately to 3.0 percent in 2015. In developing countries, effects of certain large scale financial scams. Non-
as the domestic headwind shows sign of easing up and performing loan (NPL) rose to 9.69 percent at year-end
the recovery in high-income countries slowly strengthens, 2014 which was 8.93 percent at year-end last year. Ample
growth prospect seems brighter, rising from 4.4 percent in liquidity resulted from lower than targeted credit growth
2014 to 4.8 percent in 2015. There are silver linings behind forced the banking industry to go for low yielding govt.
the clouds. The chief economist of the World Bank Kaushik treasury securities.
Basu says about the current slump in oil prices, ‘The lower
Delivering Consistency
oil price creates a window of opportunity for oil-importing
countries, such as China and India. What is critical is for Despite facing formidable challenges, the Bank has
nations to use this window to usher in fiscal and structural continued to deliver consistent financial performance
reforms, which can boost long-run growth and inclusive except a hefty rise of loan loss provision. Continued
development.’ lackluster performance of some of the business sectors
the bank is exposed to require us to maintain a handsome
Bangladesh Economy: Slow yet Resilient
amount of loan loss provision which has eaten up
Despite political unrest ahead of national election, considerable part of operating profit. Our NPL ratio remains
Bangladesh witnessed GDP growth in FY14 at 6.1%, half at 4.36 percent at year-end 2014 against 3.59 percent
a percentage point higher than projected in the Asian last year which requires management to intensify all out
Development Outlook 2014 in April. Food prices were high efforts to bring it down below 4 percent by year-end
for much of FY14 because political unrest disrupted supply, 2015. Efficient balance sheet management has produced
pushing inflation up by 60 basis points to an average of satisfactory result in core banking activities. Excess liquid
7.4% for the year. assets were invested in safer vehicles i.e. govt. T-Bills/
Bangladesh Bank report stated a strong expansion in Bonds in absence of adequate credit demand from private
exports outweighed a more moderate rise in imports to sector which eventually produced much higher investment

43
EASTERN BANK LIMITED ANNUAL REPORT 2014
income (61% positive growth) to compensate 18% negative advisory service. When our corporate banking was awarded
growth of Net Interest Income (NII) during 2014. Significant the “Best Partner for Working Capital Systemic Solutions” by
rise of loan loss provision partly compensated by lower IFC for our innovative solutions for working capital finance
tax provision eventually produced Profit After Tax (PAT) of to importers and counter party exporters including Offshore
BDT 2,106.51 million which is 18 percent lower than that Bill Financing in 2014 it came confirmation of our leadership
of 2013. Consequentially our Earnings Per Share (EPS) has ability in corporate banking.
decreased to BDT 3.45 (consolidated BDT 3.50) against BDT In retail banking our commitment to innovate products
4.20 in 2013. Board has recommended a Cash Dividend @ and services is well appreciated and the Singapore based
20 percent or BDT 2.0 dividend per share (DPS) for the year financial magazine and research organization felicitated us
2014 after a mandatory transfer of BDT 1.23 per share to with the Best Retail Bank in Bangladesh for consecutive
statutory reserve. years 2013-14 in the category of ‘Excellence in Retail
Responsible Banking Financial Services.’

As a responsible corporate citizen, we consider ourselves Corporate Citizenship

integral to the fabric of the society we operate in, generating As a compliant and responsible corporate citizen, EBL
growth and contributing to economy. We believe in always pays corporate tax on time. Like previous years EBL
sustainable banking. Sustainability demands integrity and continues to contribute to the Government’s revenue line by
responsibility in all banking actions. Our actions are guided depositing excise duty, withheld tax and VAT to Government
and governed by sustainability principles. In everything exchequer on time. During the calendar year 2014 we
we do, we aim not only to create value for our clients, contributed BDT 4,534.24 million to national exchequer as
shareholders and employees, but also to meet environmental tax, VAT and excise duty. The bank has also been engaged in
and social challenges. a number of CSR and benevolent causes all through the year
Our corporate philosophy of sustainability and flexibility to focusing on the areas of health, education, sports, art and
cope with the market changes have enabled us to absorb culture.
shocks and sputters generated in the volatile marketplace.
The limited growth opportunity of FY14 called for We Remain Grateful
introspection and we got back to our drawing board to revise Finally, I express my sincere gratitude to all our stakeholders
our internal processes and strategic moves. For us 2014 will including shareholders, customers and regulators especially
be marked as special when we were felicitated with ICSB Bangladesh Bank and BSEC for their continued support and
National Award for Corporate Governance Excellence. This judicious guidance. I am grateful to my fellow Members of the
award reflects our commitment to corporate governance and Board of Directors for their invaluable support and constant
recognition to the importance we attach to governance issues cooperation. My thanks are also due to the team EBL and
in our organization. particularly to Mr. Ali Reza Iftekhar, Managing Director & CEO
At EBL we put our shareholders interest above everything for their passion to perform, commitment and initiatives to
else and our source of passion to perform comes from our take on new challenges facing us. We believe people are our
commitment to our shareholders. The epithet that expresses core brand: they drive our journey to excellence.
our performance culture is ‘consistency and consistency.’
This also speaks volumes about the accuracy and direction of
our corporate strategy.
In corporate banking, we are now being regarded as a leader
in Bangladesh. With innovative and customized solutions and
services, our corporate division emerged as a single point
solution provider for customers including project financing, M. Ghaziul Haque
working capital, trade, supply chain, cash management
Chairman of the Board of Directors
solutions, payroll, syndication, merger, acquisition, and

44
EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

OUR BRAND

VALUE
PROPOSITION

Sustainability
Setting Standards
Mobilizing Capital

Innovation
Embracing Changes
Devising Solutions

Impact
Promoting
Green Banking
Creating Lasting
Value Commitment
Initiating
Co-Creation
Building Social
Capital

45
EASTERN BANK LIMITED ANNUAL REPORT 2014
REVIEW OF THE
MANAGING DIRECTOR & CEO

A solid outlook amid tepid recovery Banking industry: Weaker-than-

Bangladesh economy, arguably the most expected performance
stable in South Asia for more than a Lower than expected credit growth,
decade in terms of growth and inflation, deteriorating asset quality, excess
Our journey of more was left relatively unscathed by the liquidity, lack of good governance in
than two decades political unrest of 2013. With a sustained
spell of six-plus percent real average
certain banks, and poor condition of
some big commodity traders had had a
has taught us to GDP growth for more than a decade now debilitating impact on the performance of
with the latest score of 6.10 percent in the banking sector. Private sector credit
have a flexible FY14, Bangladesh has become a case demand remained almost suppressed in
strategy and an story for economic miracle. Steady and the first half but started to pick up only
incessant drive of inclusive growth by in the second half of 2014 although with
open mindset for the central bank is causing poverty to limited success. Industry NPL ratio shot
repositioning or recede fast. GNI per capita has risen
to USD 1190 in FY14 with a continual
up to 11.6 percent in September, but
came down to 9.69 percent at the end of
realigning business uptrend. FX reserves continued to build 2014. Continued lackluster performance
up clocking a record high of over USD of the capital market failed to contribute
in a competitive 22 billion. The outlook for Bangladesh much to the revenue line of banks,
environment. despite everything remains solid. exposed to secondary market.
Consistent financial performance in service proposition have become synonymous with EBL.
To uphold that reputation, we have introduced a feedback
A strong supporter of sustainability principles, EBL fared well
module in all our major branch counters to enable customers
in 2014 compared to those of peer banks, but fell short to
in sharing their feedback through a smart tab just upon
its own standard. Bank’s credit grew by 15 percent mostly receiving the service. It aids us in monitoring the branch
in the second half of the year. Lower credit demand pushed service level centrally and knowing real time customers
the bank to invest a sizeable amount of lendable funds to satisfaction/dissatisfaction for taking necessary initiatives to
govt. treasury securities, which produced lower return than improve our services further.
corporate credit. As a result, the negative growth of Net
Interest Income (by 18 percent) was more than compensated Our priorities in 2015
by a positive growth of investment income (61 percent) We strongly believe that our responsibility extends beyond
which eventually resulted in a 7 percent growth of Operating our core business. The most secure investment is investment
Income. Operating profit remains almost at the same level as in the societies in which we operate. Every year we are
that of 2013; however higher growth of loan loss provision providing scholarships to students (300 on an average) of all
75 departments of the University of Dhaka in association with
partly compensated by negative growth of provision against
Dhaka University Alumni Association. We are committed to
quoted shares and tax provision resulted in an 18 percent
continue helping young people to fulfill their potentials.
negative growth of Profit After Tax (PAT) to BDT 2,107 million.
In everything that we do we keep our shareholders first. We
NPL ratio of the bank stood at 4.36 percent at the end of are confident that we are well positioned to drive further
the year despite concerted efforts to bring it down. We are value for our shareholders. As the challenges have increased,
not complacent with less than half NPL ratio of the industry and our momentum slowed, we have been taking action
average and believe with process engineering and revisiting to alleviate the effect and to accustom ourselves with
our business strategy we can contain our NPL within 4 the changing situation. To adapt to the new realities and
percent by the end of 2015. We will continue with our core challenges of 2015, we are making changes. These changes
values of prudent asset quality management, ethical business relate to our strategy to shape ourselves and to deploy our
practice, strong corporate governance to achieve that goal. resources for delivering the sustainable, profitable growth
The bank remains liquid as well as solvent and returns that drive shareholder value. In the coming
years, we will keep innovating, digitizing and simplifying in
Although liquidity has a cost in terms of profitability, our bank order to improve productivity and effectiveness and will keep
remained liquid with AD ratio hovering around 80 percent investing for growth simultaneously. At the same time our
(as per BB format) all the year round. In terms of solvency, focus will be to maintain our asset quality, recover the dues,
the Capital Adequacy Ratio (CAR) of the bank has been and improve our deposit mix by increasing the portion of
consistently above the threshold level of Minimum Capital low cost deposits, cost rationalization and taking our service
Requirement (10% of RWA) and stood at 13.22% (Solo Basis) excellence to a new level by successfully implementing 0-5
at the year-end. In the mid February 2015, we received the day service policy.
full proceeds from issuance of Subordinated Debt amounting
BDT 2,500 million which will further strengthen our capital Our dream of spreading our wings in the region found an
base and the resulting shock absorption capacity. impetus when we obtained all regulatory approvals to open
our representative office in Yangon, Myanmar. We are now set
Strategy for flexibility to open the doors of our rep office by May 2015. This office
will provide banking and business information to the business
Competitive pressures on business and a slow pace of
people of the two countries willing to engage in trade and
economy in 2014 created the need for a better understanding
commerce.
of our processes and a greater need for making our business
strategy flexible to keep us on the sustainable growth path. Thank you
Our journey of more than two decades has taught us to have
a flexible strategy and an open mindset for repositioning I express my sincere gratitude to the Governor of Bangladesh
or realigning business in a competitive environment. 2014 Bank and his team for their constant support and advice and
was for us a year of soul searching, a year of restructuring BSEC for prudent guidance. I owe a great debt to the Board
and remodeling, and a year of reviewing our strategy for of Directors for their valuable advice, foresight, guidance
making it more flexible to adapt to changes occurring in the and leadership. I would also like to thank our customers for
marketplace. All this is to continue with the tradition of a placing their trust in us and supporting us over the year. Last
sustainable growth that we have so efficiently established. but certainly not the least, I thank the team of EBL for their
commitment and passion to perform. And finally, the privilege
Customer delight not just customer satisfaction is mine leading a winning team. Winning today is building for
tomorrow.
Adaptability is the foundation of our sustainable growth
strategy. Ability to change and accept the new conditions of
the environment is the key of surviving in this ever changing
challenging environment. We continuously attempt to
upgrade ourselves technologically, introduce innovative
products and achieve service excellence to adapt to the
challenging market scenario.
We innovate, remodel and adapt to changes, and
Ali Reza Iftekhar
continuously upgrade our method of operation. Over the
Managing Director & CEO
past 22 years, state-of-the-art IT solutions and excellence

47
EASTERN BANK LIMITED ANNUAL REPORT 2014
DIRECTORS’ REPORT 2014
The Board of Directors of Eastern Bank Limited takes GDP growth
pleasure in welcoming you all to the 23rd Annual General (year-on-year, in percent)
Meeting (AGM) and presenting Annual Report along with
the Audited Financial Statements for the year 2014. Before 2013 2014 2015 p
going into details performance of the Bank, let’s start with the World 3.3 3.3 3.5
status of local and global economy in brief. Advanced Economies 1.3 1.8 2.4
Global Economy: An Overview Other Advanced Economies 2.2 2.8 3.0
The global economy is still struggling to gain desired Euro Area -0.5 0.8 1.2
momentum. Despite impediments, an uneven global recovery USA 2.2 2.4 3.6
continues. In advanced economies, the legacies of the
Emerging Market and 4.7 4.4 4.3
pre-crisis boom and the subsequent crisis, including high
Developing Economies
private and public debt, still cast a shadow on the recovery.
Emerging markets are adjusting to rates of economic China 7.8 7.4 6.8
growth lower than those reached in the pre-crisis boom and India 5.0 5.8 6.3
the post-crisis recovery. Overall, the pace of recovery is
Source: IMF World Economic Outlook (January 2015); p for projection.
becoming more country specific rather than global.
The activities in the United States and the United Kingdom Soft commodity prices, persistently low interest rates but
have gathered momentum as unemployment declined further increasingly divergent monetary policies across major
riding mainly on extremely accommodative monetary policy. economies and weak world trade are major forces that shape
In the euro area, growth has been weaker than expected the global outlook. In particular, the sharp decline in oil prices
mainly due to weak investment and exports. In Japan, private from mid-2014 will support global activity and help offset
domestic demand did not accelerate as expected after the some of the headwinds to growth in oil-importing developing
increase in the consumption tax rate, despite a cushion economies. However, it will reduce growth prospects for oil-
from increased infrastructure spending. In Russia and the exporting countries, with significant regional consequences.
Commonwealth of Independent States, the weakness reflects Bangladesh Economy: A Brief Review
the impact of geopolitical tensions on foreign investment,
The economy of Bangladesh has been experiencing slower
confidence and domestic production. China is undergoing
growth for last three fiscal years (FY) and made 6.1 % GDP
a carefully managed slowdown and to reach its growth
growth in FY 2014 (ended 30 June 2014) caused mainly by
target, the authorities deployed policy measures to support
political strife and inadequate improvements in the provision
activity, including tax relief for small and medium enterprises,
of power, gas and infrastructure facilities. A decline in growth
accelerated fiscal and infrastructure spending, and targeted
observed in industry sector from 9.6% in FY 2013 to 8.4% in
cuts in banks’ required reserves. Disappointing growth in
FY 2014 which reflected decreasing growth of manufacturing
other developing countries in 2014 has been in place due to
from 10.3% in FY 2013 to 8.7% percent in FY 2014. Despite
weak external demand, domestic policy tightening, political
prolonged disruption in activities in the first half due to work
uncertainties and supply-side constraints.
stoppages for national strikes and blockades, construction
Outlook 2015: As per IMF projections, the global growth sector registered a growth rate of 8.6% which is the highest
is expected to be 3.5% in 2015 in consideration of recent in the last five years. Agricultural growth increased to 3.4% in
prospects in China, Russia, the euro area, and Japan as well FY 2014 from 2.5% percent in FY 2013. The services sector,
as weaker activity in some major oil exporters because of which is over half of GDP, registered a growth of 5.8% in FY
the sharp drop in oil prices. From the advanced economies 2014 from 5.5% in FY 2013.
the growth is expected to be 2.4% on the back of gradually
In FY 2014 export made a growth of 11.7% in comparison
recovering labor markets, ebbing fiscal consolidation, and
to 11.2% in FY 2013 while import made a moderate growth
still-low financing costs. Among major advanced economies,
of 8.9% in FY 2014 (0.8% in FY 2013) largely contributed
growth in the U.S. economy is projected to 3.6%, with
by growth of import of intermediate and capital goods.
domestic demand supported by lower oil prices, more
Remittances declined by 1.6% in FY 2014 (registering a
moderate fiscal adjustment and continued support from
growth of 12.6% in FY 2013) mainly due to drop in the
accommodative monetary policy. In the euro area, the growth
number of workers migrated in FY 2013. In spite of lower
is projected to be 1.2% which is expected to be supported
trade deficit, reflecting a rise in export growth, the current
by lower oil prices, further monetary easing, and more neutral
account surplus narrowed in FY 2014 because of decline in
fiscal policy stance. In emerging and developing economies,
remittances. However, the overall balance of payment surplus
growth is projected to remain stable at 4.3%. Slower growth
increased from USD 5.1 billion in FY 2013 to about USD
in China will have important regional effects to downward
5.5 billion in FY 2014, creating an upward pressure on the
growth in much of emerging Asia. The growth forecast in
nominal exchange rate. Bangladesh Bank remained active
India is broadly unchanged as weaker external demand
on the buying side of the foreign exchange market to prevent
is offset by the boost to the terms of trade from lower oil
any significant nominal exchange rate appreciation.
prices and a pickup in industrial and investment activity after
reforming of policy.

48
EASTERN BANK LIMITED ANNUAL REPORT 2014
External Sector Performance in H1, FY 2015: Export receipts Banking Industry in 2014
boosted up in December 2014 by 17.65% over the previous
Banking sector has been facing numerous challenges mainly
month, recording 1.56% growth in July-December 2014 (H1) due to increase in non-performing loan (NPL), low credit
compared to the same period of the previous year. Observing growth in private sector, poor risk management, excess
the growing trend in last two months of H1, FY 2015, the liquidity, decrease in government borrowing and slack
central bank is expecting 8% growth in export by June 2015 surveillance over the system. The increasing trend of gross
if political and other situations remain under control. Import NPL of the banking sector continued till third quarter of
payments based on shipment data boosted up by 16.64% 2014. The ratio increased to 11.6% at the end of September
during July-November 2014 over the corresponding period of 2014 from 8.9% at the end of December 2013. This rise
the previous year and import L/C opening data during July- happened due to implementation of the new guideline for
November 2014 also suggest that the import payments will loan classification and rescheduling after June 2014 and
have a momentum in the second half of FY2015. Remittance the slowing profitability of borrowers due to uncertainties
growth in the first half (H1) of FY 2015 is returning to normalcy originating from political fronts. However, the NPL of banking
sector dropped in the last quarter of 2014 to 9.69% as on 31
with a solid growth prospect.
December 2014 (Source: The Daily Star, 10 February 2015)
The overall current account balance recorded a deficit of USD due to taking strong recovery drives, conducting rescheduling
1.26 billion during July- November of FY 2015 compared to and write-offs by the bank companies upon strong direction
a surplus of USD 1.23 billion during the same period of FY and supervision of central bank.
2014 and the said negative balance created on account of Private sector credit registered 12.7% growth at the end of
import growth exceeding export growth. Remittance inflows November 2014 compared to the revised program growth
increased by 11.6% to USD 6.22 billion during July-November of 14% at the end of December 2014. Political uncertainty
of FY 2015 compared to USD 5.57 billion during the same and infrastructural bottlenecks are holding the pace of
period of FY 2014. The overall balance of payments (BoP) expected private investment back. The opportunity of private
posted a surplus of USD 1.16 billion during July-November entrepreneurs to borrow loans in foreign currency from
of FY15 along with a reserve of foreign exchanges of USD foreign sources at lower interest rate is another reason for low
22.04 billion at the end of November 2014. The nominal value demand for private sector credit. On the other side, public
of BDT against USD slightly depreciated by o.41 percentage sector credit registered 6% growth at the end of November
2014 compared to the revised program growth of 10.9% at
points in the first half of FY 2015 though there is scope for
the end of December 2014. The lower demand for credit by
depreciation. The central bank rightly maintained the stability
the public sector occurred due to relatively lower payment
of exchange rate of BDT against USD by augmenting foreign
for imports by government such as for petroleum products
exchange reserves. in view of falling oil prices in the international market and
Inflation: The 12-month average inflation based on the mobilization of resources from other sources remarkably from
consumer price index (CPI) maintained a declining trend sales of National Savings Deposit certificates.
during the last six months and came down to 6.99% in Due to lower demand for private and public sectors credit
December 2014 from 7.28% in July 2014 mainly due to banks are overflowing with liquidity which was 82% more
declining food prices. Average food inflation moderated to at the end of September 2014 than that of September 2013
7.92% in December 2014 from 8.55% in July 2014 while and 6.8% higher than that of June 2014. Call money rates
average nonfood inflation edged up to 5.60% from 5.41% have leveled off and average interest rate spreads have fallen
over the same time points. Food inflation from July to close to 5%. Interest rate spreads have fallen on average from
December 2014 has been declining partly as a consequence 5.31% in June 2014 to 5.17% in November 2014. The lending
of declining global and regional food prices and particularly rates have fallen faster than deposit rates. Domestic lending
rates have fallen due to lower cost of funds for banks, lower
moderating food prices in India. Nonfood inflation for the first
demand for credit as well as due to increasing competition
three months of FY2015 (July-September 2014) has been
from overseas lenders whose lending rates are in single digits.
declining due to a slowdown in credit growth and remittances.
Average CPI inflation pattern in rural and urban areas was Capital adequacy ratio (CAR) decreased to 10.6% at the end
of September 2014 from 11.5% in December 2013 which is
almost similar but urban inflation (7.35%) was more acute
still exceeding the Basel accord of the minimum 10% capital
than the rural one (6.80 percent) in December 2014.
adequacy ratio. Private commercial banks (PCBs) and foreign
An expected rise in gas and electricity prices and inflation commercial banks (FCBs) are successfully maintaining the
expectations originating from the upcoming salary hike in the prevailing standard since December 2010 whereas SCBs
public sector and the resulting wage hike in the private sector and specialized banks (SBs) are still struggling to fulfill this
may put forth pressure on prices particularly on the nonfood regulatory requirement.
prices in coming months. On the other side, price pressures The central bank has taken various steps to improve
are expected to moderate with improvement in supply chain supervision so that financial frauds can be minimized if not
which is being disrupted to a great extent since the beginning eliminated entirely in the banking sector. Digital technology
of 2015. A better crop outlook and a continued supportive has been deployed to investigate big financial transactions
stance of monetary policy by Bangladesh Bank may help and loans in order to stop the repetition of banking
maintaining a moderate rate of inflation in 2015. irregularities. The Real Time Electronic Dashboard is an
example in this regard.

49
EASTERN BANK LIMITED ANNUAL REPORT 2014
Economy and Business Outlook 2015 Finally, the overall economic and business activities in H2
of FY 2015 will be critically dependent on improvement of
Bangladesh Bank’s second half yearly (H2, FY 2015) monetary
political environment which is now taking place in the country.
policy stance takes the recent economic and financial sector
developments into account and targeted a monetary growth Financial Performance Highlights
path aiming to bring down average annual inflation to 6.5%,
Banking sector in Bangladesh passed a very challenging
while ensuring that credit growth is sufficient to stimulate
year in terms of governance, profitability and soundness in
inclusive economic growth. This would require a monetary
2014. Continued setback suffered by some major sectors
program framework that limits reserve money growth to
in the economy i.e. textiles, ship-breaking, real estate and
15.9% and broad money growth to 16.5% by June 2015. The
commodity trading and lackluster performance of the capital
ceiling for private sector credit growth of 15.5% has been
market put pressure on banks’ asset quality and profitability.
kept well in line with economic growth targets. This level is
However, EBL managed its portfolio efficiently and NPL
sufficient to accommodate any substantial rise in investment
reached to 4.36% at year-end (YE) 2014 (3.59% in 2013)
and trade-finance over the next six months.
which is lower than that of industry average (9.69%).
It has been observed that political turbulence and lack of
In trying times of 2014 prime concern was maintaining
adequate infrastructure and energy are creating the major
consistency in financial performance, emphasizing more on
obstructions to local and foreign investment in Bangladesh.
service excellence, revisiting processes and incorporating
Bangladesh Bank urges the commercial banks to devise ways
flexibility strategy to face challenges of volatility in the
to reduce the lending rates which did not come down along
marketplace.
with inflation correspondingly.
Net interest income (NII) which contributed 40% of total
The monetary stance also aims to further consolidate
operating income decreased 18% and Non-interest income
the country’s external sector stability. Bangladesh Bank
increased by 34% in 2014 (major contributions made by
anticipates further buildup in foreign exchange reserves in H2
income from investment which increased by 61% from last
of FY 2015 though at a more moderate pace than FY 2014. It
year) resulting an operating income of BDT 10,134 million in
is expected that Bangladesh Bank will continue to support a
2014, which is 7% higher than that of last year. Due to higher
market based exchange rate while seeking to avoid excessive
growth of operating expense (18%), the operating profit of
exchange rate volatility.
the bank decreased slightly by 0.22% in 2014 than that of
In the first half of FY 2015 Bangladesh Bank has introduced a last year. Although provision for equity investments and other
number of new investor friendly regulatory reforms facilitating assets decreased by 105%, total provision increased by
external transactions of foreign and local businesses including 89% mainly due to increase in specific provision (118%) for
investors in the capital market. Consequent to one such major classified loans which eventually reduced profit before tax
reform, foreign equity investments in unlisted local companies (PBT) by 18% to BDT 3,973 million than that of 2013. Profit
can now be sold to local investors at market based prices after Tax (PAT) decreased by 18% or BDT 461 million in 2014.
rather than at net asset value. It is expected that such kind
of initiatives regarding financial stability and capital market
development will be continued and strengthened in the
upcoming periods.

Following table summarizes comparative financial performance of EBL both as a Group and as the Bank:
(Figures are in million BDT)

Group Bank % %
Particulars Change Change
2014 2013 2014 2013 (Group) (Bank)
Total operating income 10,316.44 9,581.87 10,134.19 9,469.37 8% 7%
Total operating expense 4,456.10 3,754.45 4,358.77 3,681.12 19% 18%
Operating profit (Profit before provision and tax) 5,860.34 5,827.42 5,775.41 5,788.26 1% -0.22%

Provision for loans and contingent assets:

Specific provision 1,540.21 706.27 1,540.21 706.27 118% 118%
General provision 270.98 84.15 270.98 84.15 222% 222%
Provision for equity investments and other assets (0.34) 197.33 (8.84) 162.09 -100% -105%
Total provisions 1,810.85 987.74 1,802.35 952.51 83% 89%
Profit before tax for the year 4,049.49 4,839.68 3,973.06 4,835.75 -16% -18%
Tax provision 1,911.61 2,304.58 1,866.55 2,267.88 -17% -18%
Profit after tax (PAT) 2,137.87 2,535.09 2,106.51 2,567.86 -16% -18%
Earnings per share (EPS) 3.50 4.15 3.45 4.20 -16% -18%

50
EASTERN BANK LIMITED ANNUAL REPORT 2014
 DIRECTORS’ REPORT 2014

Following table also summarizes both the stand alone performance of the Bank and its four subsidiaries along with overall
group during the year 2014:
(Figures are in million BDT)

Eastern Bank Limited Subsidiaries

EBL Inter
Particulars Finance company Consolidated
Onshore Offshore Total EBLSL EBLIL EBLAML elimination
(HK)
Limited
Net Interest Income (NII) 3,771.03 238.13 4,009.16 36.32 33.44 7.59 1.40 - 4,087.91
Non Interest income 6,072.41 52.62 6,125.03 109.18 21.39 37.96 - (65.04) 6,228.52
Total operating income 9,843.43 290.75 10,134.19 145.50 54.83 45.56 1.40 (65.04) 10,316.44
Total operating expense 4,329.53 29.25 4,358.77 55.13 13.88 28.04 0.31 (0.04) 4,456.10
Profit before provisions 5,513.91 261.51 5,775.41 90.37 40.95 17.51 1.09 (65.00) 5,860.34
Total provisions 1,775.49 26.86 1,802.35 4.19 4.31 - - - 1,810.85
Profit before tax (PBT) 3,738.42 234.64 3,973.06 86.17 36.64 17.51 1.09 (65.00) 4,049.49
Profit after tax (PAT) 1,871.87 234.64 2,106.51 53.32 26.17 16.15 0.71 (65.00) 2,137.87

ROE and ROA have decreased in 2014 due to decease in PAT by 18%. Cost to income ratio has increased due to higher
growth of operating expense than that of operating income. The capital adequacy ratio has increased to 13.22% in 2014 from
11.95% in 2013. Following table presents some of the key financial ratios:
BANK
Particulars
Year 2014 Year 2013

Return on average equity (PAT/Average Equity) 10.93% 14.44%

Return on average assets (PAT/Average Assets) 1.28% 1.68%
Cost to income ratio (Operating expense/Revenue) 43.01% 38.87%
Capital adequacy ratio (Basel II) 13.22% 11.95%
NPL ratio 4.36% 3.59%
EPS (BDT) 3.45 4.20
Price to book value ratio 82.76% 96.39%

Appropriation of Profit
Profit after tax (PAT) of the Bank is BDT 2,106.51 million which contains a deferred tax income of BDT 144.89 million calculated
on specific provision made against classified loans (Bad/Loss Only) during the year 2014. As per BRPD Circular No.11 dated
12 December 2011 of Bangladesh Bank, benefit arising out of deferred tax income (on specific provision made against
classified loans – Bad/ Loss only) can neither be distributed nor shown as a component of tier 1 capital while reporting Capital
Adequacy Status of the Bank. After a mandatory transfer of BDT 749.37 million to statutory reserve (to equate statutory
reserve with paid up capital), profit available for distribution stands at BDT 1,248.12 million. However, the Board of Directors
recommended 20% cash dividend for the year 2014:
(Figures are in million BDT)

BANK
Particulars % Change
2014 2013
Profit to be appropriated (excluding deferred tax income*) 1,997.50 2,226.34 -10.28%
Less: Transfer to statutory reserve (749.37) (967.15) -22.52%
Profit available for distribution 1,248.12 1,259.19 -0.88%

Dividend for the year (recommended):

Dividend (Cash 20%) 1,222.36 1,222.36
Retained earnings to be carried forward 25.76 36.83
Dividend Payout Ratio (Dividend/PAT) 58.03% 47.60%
* Deferred tax income on specific provision (against Bad /Loss loans only) is excluded from distributable profit as per BRPD Circular No. 11 dated 12 December 2011.

51
EASTERN BANK LIMITED ANNUAL REPORT 2014
Payment of Dividend: In a commendable continuity of paying to pay 20% cash dividend for the year 2014.
consistent rate of dividend, EBL has been paying more than Capital Adequacy Status Under Basel II: Bank has been
30% dividend for the years 2007 through 2011 except in the maintaining 12% plus CAR in all the quarters of 2014 against
year of 2008 when 20% dividend was paid due to increased required MCR of 10% without injecting any fresh capital
paid up capital base from issue of right shares. Except for the through Right Issue, Subordinated Debt etc. as presented
year 2009 when 20% cash and 17% stock dividend was paid, in following table. Bank’s strength in capital base is also
all the distributions were through stock dividend to enhance signified in the fact that the ratio of Tier i capital to RWA was
solvency through capital adequacy. While stock dividend always hovering above 9.5% throughout the year.
increases re-investible resources and strengthen capital base,
it puts pressure on future EPS due to larger capital base. As Following is the summary of Basel II reports of EBL (Solo
there was no regulatory restriction whatsoever for the bank in Basis) as reported to BB during 2014:
paying cash dividend, the Board of Directors of EBL proposes
(Figures are in million BDT)
Risk weighted assets (RWA) for Q4, 2014 Q3, 2014 Q2, 2014 Q1, 2014
A. Credit Risk for 109,927 110,226 108,504 103,431
On Balance Sheet exposures 85,798 89,033 83,640 81,205
Off Balance Sheet exposures 24,129 21,193 24,864 22,226
B. Market Risk (capital charge X 10) for: 11,445 10,983 13,470 15,302
a. Interest Rate Related Instruments 5,750 5,925 8,467 8,244
b. Equities 4,487 4,205 4,444 4,997
c. Foreign Exchange Position 1,208 853 559 2,061
C. Operational Risk (capital charge X 10) 15,665 14,253 14,253 14,253
Total Risk Weighted Assets (A + B + C) 137,037 135,462 136,227 132,986
D. Eligible Capital
1. Tier-1 (Core Capital ) 13,958 13,259 12,956 12,680
2. Tier-2 (Supplementary Capital) 4,163 4,085 3,769 3,637
3. Tier-3 (Eligible for market risk only) - - - -
4. Total Eligible Capital ( 1+2+3) 18,121 17,344 16,725 16,317
E. Total Risk Weighted Assets (RWA) 137,037 135,462 136,227 132,986
F. Capital Adequacy Ratio (CAR) (D4/E)*100 13.22% 12.80% 12.28% 12.27%
G. Core Capital to RWA (D1/E)*100 10.19% 9.79% 9.51% 9.53%
H. Supplementary Capital to RWA {(D2+D3)/E}*100 3.03% 3.02% 2.77% 2.73%
I. Minimum Capital Requirement % (10% of RWA) 13,704 13,546 13,623 13,299
Minimum CAR Requirement 10% 10% 10% 10%
Excess/(Shortfall) Capital over MCR 4,417 3,798 3,102 3,018

Highlights of Capital Adequacy Status: Vigorous initiative of bank management to pursue it’s corporate and mid segment
(SME) customers to do their entity rating by eligible ECAIs played a major role in decreasing capital requirement. As on the
reporting date, number of corporate (including SME-Mid) customers having valid entity rating with funded exposure were 224
whereas funded exposure to rated regular corporate customers was BDT 59,617 million or 50.40% of total funded exposure.
Though our credit grew at a slower pace than expected, volume of funded exposure to customers with 1 and 2 rating increased
in 2014 (BDT 50,866 million at YE 2014 vs. BDT 29,803 million at YE 2013) which testifies that EBL is focusing more on
customers with good rating. We did not have any clients with rating 5 in our portfolio at YE 2014.
Funded exposure to a customer having external rating of at least double B (BB) (equivalent to Bangladesh Bank rating grade
4) requires risk weight of 100% whereas exposure to any unrated customer is risk weighted by 125%. Since external rating of
most of our rated corporate and mid segment customers falls in the range of A to AAA (Bangladesh Bank rating grade 1 & 2)
bearing risk weight of 50% or below, the more our customers do their entity rating, the less will be the capital requirement for
EBL. So, drive of the Bank to this end will continue throughout the year 2015. In 2015 as per BB guideline, we have to deduct
20% of our revaluation reserve from tier 2 capital and General provision will be capped to 1.25 % of risk weighted assets under
Credit Risk (On and Off balance sheet). So maintaining a client portfolio with good rating is crucial.

52
EASTERN BANK LIMITED ANNUAL REPORT 2014
 DIRECTORS’ REPORT 2014

History of raising capital: As on the reporting date (31-12-2014), the bank had paid up capital of BDT 6,111,797,850 of which
78.84% was raised through stock dividend. The history of raising our paid up capital to BDT 6,111.80 million as on YE 2014 is
presented below:
Cumulative Paid up
AGM Date Particulars No. of Shares* Volume in Taka
Capital in Taka
9 December 1993 As per MOA & AOA 60,000,000 600,000,000 600,000,000
5 August 2001 20% Bonus Share 12,000,000 120,000,000 720,000,000
8 December 2003 15% Bonus Share 10,800,000 108,000,000 828,000,000
12 June 2007 25% Bonus Share 20,700,000 207,000,000 1,035,000,000
25 May 2008 34% Bonus Share 35,190,000 351,900,000 1,386,900,000
25 May 2008 Right Share 2:1 at Par 69,345,000 693,450,000 2,080,350,000
28 April 2009 20% Bonus Share 41,607,000 416,070,000 2,496,420,000
30 March 2010 17% Bonus Share 42,439,140 424,391,400 2,920,811,400
30 March 2011 55% Bonus Share 160,644,627 1,606,446,270 4,527,257,670
29 March 2012 35% Bonus Share 158,454,018 1,584,540,180 6,111,797,850
31 March 2013 20% Cash Dividend - - 6,111,797,850
31 March 2014 20% Cash Dividend - - 6,111,797,850
31 March 2015 20% Cash Dividend - - 6,111,797,850
*Face value per share of BDT 10 has been considered in all the cases to conform to comparability.
Status of Asset Quality: In 2014, banking industry experienced an increasing trend in Non- performing loan (NPL) and reached
to 11.6% at the end of September 2014. However, after taking strong recovery drives, conducting rescheduling and write-
offs by the bank companies upon strong direction and supervision of central bank this ratio finally reduced to 9.69% as on 31
December 2014 (Source: The Daily Star, 10 February 2015). High NPL in the banking sector can be attributed to large scale
financial frauds and subdued economic activities due to political violence and agitation.
The NPL ratio stood at 4.36% at the end of 2014 which was 3.59% at the end of 2013. The status of unclassified and classified
loan of the bank is as follows:
(Figures are in million BDT)

Particulars 31-12-2014 31-12-2013 % Change

Unclassified loans: 113,134.28 99,212.99 14.03%
Standard (Including staff loan) 110,767.93 98,333.01 12.65%
Special Mention Accounts (SMA) 2,366.35 879.98 168.91%
Classified loans: 5,157.07 3,697.23 39.48%
Sub-standard (SS) 885.96 479.77 84.67%
Doubtful (DF) 812.26 193.34 320.11%
Bad/loss (BL) 3,458.85 3,024.12 14.38%
Total loans 118,291.35 102,910.22 14.95%
NPL % 4.36% 3.59%

Variance between Quarterly Financial Performance and Annual Financial Statements

To gauge the said variance, five key financial information of each quarter of 2014 (Q1 to Q4) was analyzed or compared using
Quarterly Average (QA) as the base. Profit before Tax was not considered mainly due to abrupt change in provision against
loans in Q3 and Q4 whereas Profit after Tax was not considered due to deferred tax calculated once in a year (Q4). Following
table presents stand-alone quarterly information with average of four quarters.
(Figures are in Million BDT)

Particulars Q1, 2014 Q2, 2014 Q3, 2014 Q4, 2014 QA*, 2014 Annual 2014
Net Interest Income 987 1,016 987 1,019 1,002 4,009
Non-Interest Income 1,434 1,500 1,447 1,744 1,531 6,125
Operating Income 2,420 2,517 2,434 2,763 2,534 10,134
Operating Expense 865 1,086 1,095 1,313 1,090 4,359
Operating Profit 1,555 1,431 1,339 1,451 1,444 5,775
*Quarterly Average

53
EASTERN BANK LIMITED ANNUAL REPORT 2014
Setting 25% variance as threshold for being significant, no growth of Bangladesh. In order to facilitate trade business, it
significant variance was observed in 2014. If we reduce it 20% is currently providing LC Advising, Document Collection and
then only the operating expense in the Q4 slightly exceeded Bill Financing facilities. It is the first subsidiary of a local bank
the threshold level. Operating expenses increased significantly with direct SWIFT Connectivity in Hong Kong. The company
(20.46% higher than QA) in Q4 mainly due to channel expansion has been able to establish SWIFT relationship with 34 reputed
initiatives (launching of new branches, ATMs, EBL 365, service local banks in Bangladesh.
centers etc.) and making accrual of performance bonuses for EBL Finance (HK) Ltd. has registered an impressive
the employees. performance in FY 2014 and has successfully surpassed its
Brief Review of Subsidiaries Business breakeven point. During FY 2014, it has advised a total of
5,420 Letters of Credit and handled 2,366 documents. Trade
In pursuance of an inorganic growth route and to open up Sales Dept., exclusively dedicated to generate business for
diversified earnings stream, EBL established or acquired four EBL Finance (HK) Ltd., has successfully penetrated into the
subsidiaries, all of them fully owned, till the reporting date i.e. Correspondent Banking business with extensive coverage in
31 December 2014. A brief review of subsidiaries business more than 300 AD branches of local banks. In addition, the
during 2014 has been presented below: company has been able to achieve impressive growth in all
EBL Securities Limited (EBLSL): EBLSL is the TREC major income categories and undoubtedly on its way towards
(Trading Right Entitlement Certificate) holder of both the becoming a consistent revenue generator for the bank.
demutualized stock exchanges, namely DSE (TREC # 026) EBL Asset Management Ltd. (EBLAML): A private limited
and CSE (TREC # 021) for buying, selling and settlement of company was formed to grab the potential business
securities on behalf of the clients. It also holds the Dealer opportunity in managing mutual funds and institutional
License to manage its own investment in the capital market. wealth. EBLAML has already obtained permission from
The Company has reached a very prominent position in very Bangladesh Bank and has applied to BSEC for the license.
short span of time. The Company’s success is strengthened However, in 2014 EBL subscribed BDT 50 million as capital to
by its strong network of key clients and its unparallel EBLAML for doing its business.
standard of service quality, offering clients the highest level of
convenience and reliability in transacting business. Highlights of business and operation of EBL
EBLSL passed a successful year in terms of business growth, Major loans/deals: The bank made following major foreign
profitability and brand image. It entered the list of ‘TOP 10’ and local currency deals during the year 2014:
brokerage of DSE in October 2014 and held the 8th position  Arranged a Syndication Loan of USD 34.28 million for
in December 2014. It maintained its organic growth by SM Spinning Mills Limited.
increasing market share to around 2.44% in 2014 compared
 Arranged Syndicated financing on account of HG
to 2.18% in 2013. Turnover of EBLSL increased by around Aviation to the tune of BDT 530 million to finance flight
41% in 2014 whereas the turnover of DSE increased only by operations in international routes.
24.75%. Prudent margin loan management has restricted
 Facilitated the issuance of BDT 2,000 Million bond by
the number of negative equity clients. Loan monitoring
Bangladesh Steel Re-rolling Mills Ltd. as Trustee.
department has been nursing the portfolios to recover margin
loan loss. However, it has declared and disbursed cash  Obtained Off-shore Term Financing of USD 40 million
dividend amounting BDT 35.00 million during 2014. from DEG and FMO for the Bank.
EBL Investments Limited (EBLIL): EBLIL is a fully owned Arrangement of Central Revenue Collection for DPDCL:
subsidiary of EBL involved in the business of merchant EBL has provided a unique cash management solution to pull
banking operations. Starting in 2013, EBLIL has made fund to Central Revenue Collection Account of Dhaka Power
Distribution Company Limited (DPDCL) through Bangladesh
growth in its bottom line, 64% up in net profit after tax in
Electronic Fund Transfer Network (BEFTN). Indeed EBL is the
2014 from 2013 by establishing strong client base, building
first bank offering BEFTN to any public sector company.
strong research team and innovating new products. Portfolio
management wing of the company has done a great job by Arrangement of Commercial Paper for Shanta Properties
outperforming the market, i.e. DSEX index (Market return Limited: As a pioneer of introducing commercial paper (in
was 13.50% during the tenure whereas own portfolio return 2013) in Bangladesh, EBL has arranged Commercial Paper
was 34%). The company has also strong footsteps in the for Shanta Properties Limited amounting to BDT 500 Million
in 2014.
arena of Underwriting and at the end of the year 2014 it has
almost BDT 63 crore of underwriting commitments for 9 Pre-financing Deal with SME Foundation: EBL has signed
different reputed companies who wish to come through IPO. an agreement with SME Foundation under which EBL will
The company has signed agreement for issue management receive BDT 50 Million pre-finance for financing to footwear
services with few companies and discussion is going on with and leather goods manufacturer. Under this arrangement
some other organizations as well. special focus will be given to Bhairab Shoe Cluster,
Brahmanbaria Shoe Cluster, Hazaribag Tannery Cluster and
EBL Finance (HK) Limited: EBL Finance (HK) Ltd., a fully other promising leather products zones around the country.
owned subsidiary of EBL, started its commercial operations
Launching collateral free credit facilities for SME: EBL
in March 2013 in Kowloon, Tsim Sha Tsui, the business hub of
has launched a collateral free new business loan named
Hong Kong. The subsidiary was established to meet the ever
‘EBL Utkorsho’ for the high end SME client in 2014. EBL
expanding business requirements of the country’s RMG and
Utkorsho is a terminating loan facility (EMI based) for working
other sectors as well as contribute meaningfully to the trade

54
EASTERN BANK LIMITED ANNUAL REPORT 2014
 DIRECTORS’ REPORT 2014

capital, fixed asset purchase or any other legitimate business Structured SME Bank of the Year-2014: Adjudged the
purpose. The customer who has minimum yearly sales ‘Structured SME Bank of the Year’ in the SME Banking
turnover BDT 120 Million will be eligible to apply for the loan Award-2014 jointly organized by Bangladesh Bank and SME
with minimum 3 Million to maximum 10 Million. Foundation for the first time.
Launching of EBL ZIP: EBL has launched ‘EBL ZIP’ Best Retail Bank in Bangladesh for 2014: EBL won the ‘Best
(Zero Installment Program) for its credit cardholders. It is Retail Bank in Bangladesh’ award for 2014 consecutively for
a non-interest bearing equal installment plan that allows the second time awarded by The Asian Bankers.
credit cardholders the flexibility to convert retail purchase
transactions at designated outlets into an installment scheme. Global Brand Excellence Awards: EBL received ‘Global
The customer pays back the amount over a tenor ranging Brand Excellence Awards’ from The World Brand Congress
from 3 months to 24 months without any interest. in ‘Brand Revitalization’ category in recognition of EBL’s
EMV Card: EBL has introduced EMV Chip Cards. EMV Chip sustainability in innovative branding.
technology is both secure and smart. This technology makes Best Partner for Working Capital Systemic Solutions:
it virtually impossible to copy and reproduce card ensuring Adjudged the ‘Best Partner for Working Capital Systemic
highest level security. Solutions in 2013’ by IFC announced in the 6th Global Trade
New security feature for cheque and fund transfer through Partners Meeting in Lisbon, Portugal.
internet banking: New security feature “QR code” (Quick Annual Report 2013 recognized by ICAB and ICMAB:
Response code) has been implemented in EBL cheque in 2014. The Institute of Cost and Management Accountants of
EBL has also introduced fund transfer facilities for its customers Bangladesh (ICMAB) awarded EBL Second Prize in the ‘Best
through internet banking. With added security feature of 2nd Corporate Award 2014’ under Private Commercial Banks
Factor Authentication process customer can now use OTP (one (Traditional Operations) category consecutively for the second
time password) for any third party fund transfer. time. Also, Annual Report 2013 awarded 3rd prize in ‘Best
Compliance with Master Circular on Anti Money Laundering Presented Annual Reports’ by ICAB under the category of
and Prevention of Terrorist Financing: In compliance with BFIU Private Sector Banks (including Co-operative Banks).
circular 10 dated 28 December 2014, Eastern Bank Limited has
reviewed the previous policies and arranged several meetings
Review of Internal Control System
with BAMLCO to raise awareness. CCU team has been ‘EBL has a sound system of internal controls to safeguard
enlarged upon reconstitution to make it more effective. shareholders’ investments and the Bank’s assets. The Board
retains the ultimate responsibility for its operations, though
Compliance in respect to Foreign Account Tax Compliance
Act (FATCA): Bangladesh Bank (BB) issued a Circular Letter has delegated to the Audit Committee for the review of the
(BRPD Circular Letter No. 01 dated 10/01/2014) on the issue adequacy and effectiveness of the system of internal controls.’
of Foreign Account Tax Compliance Act. FATCA is a United EBL believes in sustainable development and a sound and
States legislation that aims to reduce tax evasion by U.S. effective internal control system can ensure sustainable
citizens, U.S. tax residents and U.S. entities. Enacted in 2010 growth by mitigating the risks. The design and implementation
in the USA, FATCA requires a Foreign Financial Institution of any internal control system depends largely on a bank’s
(FFI) to report to the US Internal Revenue Services (IRS) size, the mode of its operation and its risk profile. Effective
about accounts held by the tax payers of USA or by foreign control practices generally include –
entities in which US taxpayers hold a substantial ownership
interest. To enforce compliance, a 30% withholding tax will be
imposed by Internal Revenue Services (IRS), USA on certain
payments made to FFIs that fail to make required disclosures.
So to have a smooth transaction flow EBL got registered
under IRS as a Participatory Financial Institution on May 04,
2014 and consequently IRS has assigned a GIIN (Global
Intermediary Identification Number) to EBL.
Development of human capital: Recognizing human resource
as the most valuable soft factor of the organization, EBL
continued to invest to enhance and upgrade skill sets of the
people. A significant number of seminars, workshops and
trainings both in home and abroad were arranged during
the year. In 2014, EBL HR arranged 306 training programs
in home and abroad for 7,900 participants on various issues
related to banking operations. A first in the banking industry,
EBL initiated a unique lecture series for its senior executives
and potential leaders to engage them with the best of minds
of the society. Leaders from different fields were invited to
share with us stories of their life, its challenges, frustrations
and how they have handled all those and come out victorious.
Major Awards and Recognitions
Control Environment: Control Environment of EBL has been
National Award for Corporate Governance Excellence: designed in a sound and effective way to protect the interest
EBL won the maiden first prize in ‘ICSB National Award
of all the stakeholders of the Bank in the best possible way.
for Corporate Governess Excellence 2013’ in the ‘Banking
Companies’ category introduced by the Institute of Chartered The business model of EBL segregates its whole crew into
Secretaries of Bangladesh (ICSB). two major groups; business segment and support services.

55
EASTERN BANK LIMITED ANNUAL REPORT 2014
While business segments are assigned with a set business IT Security: As a significant part of the modern and high tech-
target, support teams including the centralized operations based banking system, EBL is very much committed to ensure
are totally independent from the business team entrusted IT Security. EBL has introduced Universal Banking System
with bulk business processing, checking conflicts of interest, (UBS) software for running its daily activities in a faster, safer
ensuring better risk management and control practices. and smoother way. EBL has also introduced a new Card
Notable beauties of centralized operations are operational Management Software to centrally monitor, control the card
efficiency and better control practices reflected in the fact that
business in an effective way. IT security is monitored rigorously
EBL has been delivering highest profit per employee for last
and ensured to keep its network off limit from malicious
few years despite having a moderate sized balance sheet.
attempts keeping maximum layers of failover process for
Risk Assessment: Risk assessment is the identification, all types of system related services. Data is replicated from
measurement, analysis and management of risks, both Live to Disaster Recovery site on real time basis and Bank’s
internal and external, at individual business level and for
Internet Banking service was awarded as “Secure” grade by
the bank as a whole. EBL has formed a Risk Management
external auditor at their Penetration Testing.
Committee (RMC) of the Board and a Risk Management
Unit (RMU) as per Bangladesh Bank guidelines to oversee Self-Assessment/Monitoring: For making an independent
and monitor bank wide risk assessment, identification, review, EBL has an independent internal risk based audit
measurement, analysis and mitigation activities performed by system in place who are regularly evaluating, assessing and
different risk management functions. RMU under supervision rating the risks of various Departments and Branches and
of RMC of the Board sets the risk appetite of the Bank. submit these audit reports periodically to the Audit Committee
Control Activities: Control activities are those which ensure of the Board for their further evaluation and recommendation.
all the firewalls/checkpoints established through various Surprise visit to different branches/departments has also been
policies, procedures and best practices are in order so that introduced as a part of strong monitoring and control over the
the Bank is exposed to surprises, financial or otherwise, daily activities of the Bank. The Compliance Unit of ICCD is
to the acceptable minimum level. EBL has developed and also monitoring the regulatory compliance status of EBL on
is following appropriate policies, procedures, guidelines a continuous basis and updating the relevant departments
and best practices as well as all the regulatory guidelines upon the compliance of any new issue imposed by regulatory
to control its daily activities. For example, a loan proposal
authorities.
sourced by relationship manager is assessed by the Certified
Credit Analyst of Credit Risk Management Department, However, Bangladesh Bank vides its DOS circular letter no.
documentation and disbursement done by Credit 17/2012 has launched a Self-Assessment Format in order
Administration Department and collection (if it becomes to aid Bank for assessing itself and advised Bank to send
classified) done by Special Assets Management Department. a quarterly assessment to BB. EBL has started its self-
EBL has been maintaining an NPL ratio far below the industry assessment activities to report to Bangladesh Bank timely.
average (4.36% at year-end 2014) under more stringent
The external auditors i.e. Hoda Vasi Chowdhury & Co.,
regime of classification criteria set by Bangladesh Bank.
Chartered Accountants also provided their opinion on
Segregation of Duties: Segregation of duties reduces a adequacy of internal audit, internal control and risk
person’s opportunity to commit and conceal fraud or errors.
management arrangements of the bank under point (ii) of the
EBL has introduced segregation of duties for each employee
“Report on Other Legal and Regulatory Requirements” of
through a specific job description and separate reporting line
their audit report. The said audit report has been mentioned in
to make every employee accountable and responsible for his
job. Due to separation of cards business and credit appraisal page no. 176-177.
and approval (done by CFC), there are minimum opportunities Review of Financial Reporting
for employees to commit frauds. The Bank further segregated
cards operations and ATM operations from the umbrella of Fair Presentation of Financial Statements
cards business and ATM business respectively to Central The management of EBL is responsible for the preparation
Operations for avoiding any influence of cards and ATM and fair presentation of the Financial Statements. The said
business teams upon the cards and ATM operations. The financial statements prepared by the management as at
ethical business practice, better credit appraisal and internal
and for the year ended 31 December 2014 present fairly,
control mechanism of the Bank so far protected it from
in all material respects, its state of affairs, the results of its
negative outcome of the incidence.
operations, cash flows and changes in equity. The external
Accounting Information and Reconciliation: A proper auditors i.e. Hoda Vasi Chowdhury & Co., Chartered
system and environment has been established in the Bank Accountants also provided their opinion on the same by
to provide accurate and updated accounting information and issuing an unqualified audit report. We are referring page
proper reconciliation of accounts on timely basis. Authentic no. 176-177 to see the audit report issued by the external
information is sent to the Bank’s Board of Directors and auditors.
management for proper decision making to achieve desired
business objectives. EBL has a “GL Control & Reconciliation Maintenance of Proper Books of Account
Policy” to ensure better control and monitoring over financial Proper books of account as required by law have been kept
transactions and reduction of financial irregularities by taking by EBL. The external auditors i.e. Hoda Vasi Chowdhury &
confirmation of GL (General Ledger) balances from GL Co., Chartered Accountants also provided their opinion on the
Owners on quarterly basis. same in point (iv) of “Report on Other Legal and Regulatory

56
EASTERN BANK LIMITED ANNUAL REPORT 2014
 DIRECTORS’ REPORT 2014

Requirements” of their audit report. The said audit report has Disclosure of Related Party Transactions
been mentioned in page no. 176-177. The basis for related party transactions has been stated in
Application of Accounting Policies and Accounting the Corporate Governance Report and a statement of related
Estimates party transactions has been presented in the Annexure C1 of
Notes to the Financial Statements.
Appropriate accounting policies have been consistently
applied in preparation of the financial statements of the CSR Activities
Bank and that the accounting estimates are based on Being a socially responsible corporate, EBL continued to be
reasonable and prudent judgment. Estimates and underlying engaged in a number of CSR activities throughout the year,
assumptions are reviewed on an ongoing basis and any including a number of donations towards charitable causes.
revisions to these are recognized in the period in which
the estimate is revised and in any future period affected. EBL donated BDT 5 Million for organizing a historic event
The significant accounting policies applied and accounting “Lakho Konthe Sonar Bangla”. As a responsible corporate
estimates used for preparation of the financial statements of citizen EBL also donated BDT 5 million to ‘Bangladesh
the Bank have been stated in detail in Notes to the Financial Cricket Board’ for the growth and expansion of cricket in
Statements. Bangladesh. To fulfill a continued commitment for ten years
effective from March 2009, EBL contributed BDT 4.8 lacs
Preparation of Financial Statements as per BAS/BFRS and to Prime Minister’s Relief & Welfare Fund every year to one
any Departure therefrom family of a martyred army officer killed in BDR carnage in
The financial statements of the Bank as at and for the February 2009. To stand beside the victims of flood affected
year ended 31 December 2014 have been prepared people EBL donated BDT 5 million to the Prime Minister’s
under historical cost convention and in accordance with Relief & Welfare Fund in 2014.
Bangladesh Financial Reporting Standards (BFRSs), the Contribution to National Exchequer
“First Schedule” (section 38) of the Bank Company Act 1991,
EBL regularly pays corporate tax on time, sometime even
as amended by the BRPD Circular no. 14 dated 25 June
before it falls due as required and asked by the tax authority.
2003, other Bangladesh Bank Circulars, the Companies
We also deposit excise duty, withheld tax and VAT to govt.
Act 1994, the Securities and Exchange Rules 1987, Dhaka
exchequer on time deducted from employees’ salary as well
and Chittagong Stock Exchange’s listing regulations and
as on bills from third parties including vendors. During the
other laws and rules applicable in Bangladesh. In case the
calendar year 2014 we contributed BDT 4,534.24 million
requirement of provisions and circulars issued by Bangladesh
to national exchequer as tax, VAT and excise duty. We
Bank differ with those of other regulatory authorities and
paid advance corporate tax of BDT 2,399.84 million while
accounting standards, the provisions and circulars issued by
deposited withheld tax of BDT 1,662.88 million, VAT of BDT
Bangladesh Bank shall prevail.
332.12 million and Excise Duty of BDT 139.40 million during
As such the Bank has departed from certain specific the year 2014.
requirements of BFRSs which contradict with those of
Bangladesh Bank, being the prime regulator, which are
adequately disclosed in Note 2.1 (i) to (xv) to the financial On behalf of the Board of Directors
statements.

Going Concern of EBL’s Business

There are no significant doubts upon the Bank’s ability to
continue as a going concern. The financial statements of the
Bank have been prepared on the assumption that the entity
(i.e. EBL) is a going concern and will continue in operation M. Ghaziul Haque
for the foreseeable future. Hence, it is assumed that EBL has Chairman of the Board of Directors
neither intention nor the need to liquidate or curtail materially
the scale of its operations. Dhaka, 25 February 2015

57
EASTERN BANK LIMITED ANNUAL REPORT 2014
 STAKEHOLDERS
INFORMATION
58
EASTERN BANK LIMITED ANNUAL REPORT 2014
OUR STAKEHOLDERS
The bracing motto of EBL is: banking must become more for their needs. It is far more than a compliance issue but is
sustainable. For us this means that integrity and responsibility central to creating a sustainable business.
must guide all our actions. In everything that we do, we
We receive customer feedback directly; through various
aim not only to create value for our clients, shareholders
customer events, mystery shopping survey etc. To our clients,
and employees, but also to meet environmental and social
we offer competitive interest rates without complicated terms
challenges. Our clients, shareholders and employees are key
and conditions.
in the composition of our stakeholders.
We put our stakeholders financial needs and objectives Employees
above everything else while designing a product or a service. Our people have always been our most important asset and
At the same time we ensure that these products and services therefore an important stakeholder. We invest in the personal
should create benefit for the society and the environment. We and professional development of our people because their
want to be a responsible business partner of our stakeholders capability and commitment define our success. We provide
by attaching highest priority to ethical conduct and integrity an environment where employees are treated with respect,
and by protecting their interest. and diversity and differences are valued.
We constantly engage and interact with our stakeholders in
different forms, from exchanging dialogue to direct feedback
Society and the environment
requests. We value all their inputs and feedbacks and try to We want to play a pioneering role in addressing the
incorporate them in designing our products and services. environmental and social issues being a responsible
Major groups of stakeholders for EBL and the way the corporate. Our ambition is to be a trustworthy, transparent
engagement takes place are as follows: and sustainable bank taking action to minimize negative
impact on the environment and to contribute to building a
sustainable society for future generations.
For local communities, we are engaged through donation,
education and collaboration with development organization.

Business partners and suppliers

We expect our business partners and suppliers to act as
responsible corporate citizens and consider social and
environmental issues in the dealings we are in depending on
the nature and impact of the activities.
Business partners and suppliers
Regulators
We comply with all legal and regulatory aspects of business and
aim to maintain strong and open relationships with regulators
(Bangladesh Bank, Bangladesh Securities and Exchange
Commission) and other supervisory bodies. We are committed
to being transparent and meet expectations of regulators.

Government
The Government is responsible for the framework in which
Investors
public and private organizations operate; they create
In addition to ensuring a consistent and reasonable rate of legislation and regulations, influencing the way EBL can do
return on funds provided by shareholders and financiers, business.
we are committed to maintain a sustainable relationship
We hold dialogues with the responsible government
with them. We offer innovative and suitable products for our
representatives of National Board of Revenue on tax related
financiers.
issues and actively try to contribute to developments in the
We are transparent; provide accessible information on our financial sector of our country.
company and communicate with shareholders through
Annual General Meeting (AGM), Annual Report, shareholder Rating agency
updates, quarterly financial statements and through our Rating agency provides EBL a short term and long term
website. credit rating. We therefore have continuous dialogues
with our rating agency i.e. CRISL. We always maintain
Customers
transparency, integrity and accuracy in our reporting to keep
We have an obligation to ensure that the customers we serve our creditworthiness more meaningful.
are treated fairly and are sold products that are appropriate

59
EASTERN BANK LIMITED ANNUAL REPORT 2014
FINANCIAL HIGHLIGHTS
BDT Million

Group Bank
Change Change
Particulars 2014 2013 2014 2013
% %
Performance During the Year
Net Interest Income 4,088 4,956 -17.52% 4,009 4,892 -18.04%
Non Interest Income 6,229 4,626 34.65% 6,125 4,578 33.80%
Operating Income 10,316 9,582 7.67% 10,134 9,469 7.02%
Operating Profit 5,860 5,827 0.56% 5,775 5,788 -0.22%
Profit After Tax 2,138 2,535 -15.67% 2,107 2,568 -17.97%

Year End Financial Position

Loan 120,012 103,331 16.14% 118,291 102,910 14.95%
Investment 24,920 26,018 -4.22% 24,655 25,904 -4.82%
Deposits 116,722 117,037 -0.27% 116,792 117,102 -0.26%
Shareholders equity 20,235 18,559 9.03% 20,087 18,450 8.87%
Total Asset 173,444 158,163 9.66% 172,124 157,882 9.02%

Information Per Ordinary Share

Earnings per share (BDT) 3.50 4.15 -15.71% 3.45 4.20 -17.94%
Dividend (%) 20% 20% 0.00% 20% 20% 0.00%
Price earning ratio (times) 7.78 7.01 10.89% 7.89 6.93 13.90%
Net asset value per share (BDT) 33.11 30.37 9.04% 32.87 30.19 8.87%
Market price per share (BDT) 27.20 29.10 -6.53% 27.20 29.10 -6.53%

Ratios (%)
Capital adequacy ratio (as per Basel II) 13.18% 12.01% 9.74% 13.22% 11.95% 10.63%
Non performing loans 4.32% 3.60% 20.00% 4.36% 3.59% 21.45%
Cost to income ratio 43.19% 39.18% 10.23% 43.01% 38.87% 10.65%

Reaching Closer: Channel Standing 2014

Branch ATM Bills pay Priority Center SME Center

76 191 71 14 56
Phone Banking (24X7 Contact Center): Just a call away to 16230
Internet Banking: log in from PC or mobile from anywhere in the world

SMS Banking: Just an SMS away to 6969

60
EASTERN BANK LIMITED ANNUAL REPORT 2014
 STAKEHOLDERS INFORMATION

FIVE-YEAR PROGRESSION OF EBL

BDT Million

Particulars 2014 2013 2012 2011 2010

Balance Sheet Metric

Authorised capital 12,000 12,000 12,000 12,000 12,000
Paid up capital 6,112 6,112 6,112 4,527 2,921
Shareholders equity 20,087 18,450 17,109 14,407 12,084
Deposits 116,792 117,102 91,781 75,536 56,425
Borrowing 26,021 14,080 31,158 21,652 9,257
Loans and advances 118,291 102,910 96,720 81,774 58,607
Credit to deposit ratio - Gross (excluding OBU loans) 91.42% 85.56% 95.36% 99.86% 95.09%
Liabilities to shareholders equity (times) 7.57 7.56 7.60 7.16 5.79
Investment 24,655 25,904 21,655 16,910 9,827
Fixed assets 7,087 6,897 5,970 4,453 3,614
Interest bearing assets 146,689 133,057 119,334 104,572 71,759
Total assets 172,124 157,882 147,148 117,601 82,098
Income Statement Metric
Net interest income (excluding investment income) 4,009 4,892 4,814 3,314 2,973
Non-interest income 6,125 4,578 3,913 4,476 3,487
Investment income 3,343 2,071 1,495 1,970 2,050
Operating income 10,134 9,469 8,727 7,791 6,461
Operating expense 4,359 3,681 3,263 2,683 2,051
Operating profit (profit before provision and tax) 5,775 5,788 5,464 5,107 4,410
Provision for loans, investment and other assets 1,802 953 1,244 978 417
Profit before tax 3,973 4,836 4,220 4,129 3,992
Profit after tax (PAT) 2,107 2,568 2,275 2,521 2,425
Capital Metric (As per Basel II)
Risk weighted assets (RWA) 137,037 140,279 129,812 130,351 104,440
Core capital (Tier 1) 13,958 13,245 12,232 10,199 8,375
Supplementary capital (Tier 2) 4,163 3,519 3,414 3,071 2,912
Total/Regulatory capital (Tier 1 and 2) 18,121 16,764 15,646 13,270 11,287
Statutory capital (Paid up capital and statutory reserve) 12,224 11,474 10,507 8,079 5,646
Capital adequacy ratio-solo (regulatory capital/RWA) 13.22% 11.95% 12.05% 10.18% 10.81%
Core capital (Tier 1) to RWA 10.19% 9.44% 9.42% 7.82% 8.02%
RWA to total assets 79.62% 88.85% 88.22% 110.84% 127.21%
Credit Quality
Non performing /classified loans (NPLs) 5,157 3,697 3,071 1,561 1,169
Specific provision 2,409 1,929 1,387 866 611
General provision 1,916 1,644 1,563 1,541 1,107
NPL to total loans and advance 4.36% 3.59% 3.17% 1.91% 1.99%

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 BDT Million

PARTICULARS 2014 2013 2012 2011 2010

Trade Business Metric
Export 77,542 74,003 67,518 58,589 39,633
Import (LC) 104,939 112,977 103,171 100,639 70,665
Guarantee 5,573 6,307 6,528 4,497 2,727
Efficiency / Productivity Ratios
Return on average equity (ROE) 10.93% 14.44% 14.44% 19.03% 23.64%
Return on average assets (ROA) 1.28% 1.68% 1.72% 2.52% 3.19%
Cost to income ratio 43.01% 38.87% 37.39% 34.44% 32.10%
Weighted average interest rate of loan (at close of the year) 12.43% 14.57% 14.80% 14.04% 12.44%
Weighted average interest rate of deposit (at close of the year) 7.26% 8.84% 9.50% 9.28% 7.06%
Net interest margin ratio 2.87% 3.88% 4.30% 3.76% 4.44%
Statutory liquidity ratio (SLR) (at close of the year) 22.23% 29.88% 22.93% 24.98% 19.93%
Cash reserve ratio (CRR) (at close of the year) 7.27% 6.10% 5.98% 6.00% 5.84%
Operating profit per employee 3.70 3.86 4.07 4.21 4.53
Operating profit per branch 75.99 81.52 81.55 86.57 89.99
Share Distribution Metric
Earnings per share (EPS) in BDT 3.45 4.20 3.72 4.12 5.36
Operating profit per share in BDT 9.45 9.47 8.94 8.36 15.10
Price earning ratio (times) 7.89 6.93 8.52 15.97 24.16
Market price per share (BDT) as on close of the year at DSE 27.20 29.10 31.70 65.80 129.40
NAV (book value) per share in BDT 32.87 30.19 27.99 31.82 41.37
Dividend Cover ratio: (EPS/DPS) 1.72 2.10 1.86 1.18 0.97
Dividend (%) 20 20 20 35 55
Cash (%) (proposed for 2014) 20 20 20 - -
Stock (%) - - - 35 55
Market capitalization (at close of year) 16,624 17,785 19,374 29,789 37,795
Market price to net assets ratio (times) 0.83 0.96 1.13 2.07 3.13
Other Information (Actual Figure)
Number of branches 76 71 67 59 49
Number of employees (regular) 1,559 1,498 1,343 1,214 973
Number of deposit accounts 380,156 352,627 305,363 218,239 194,351
Number of loan Accounts 179,328 178,896 132,238 88,375 65,656
Number of foreign correspondents 697 715 663 660 644
Number of ATM 191 175 160 125 74
Number of SME Centers 56 55 50 40 33
Number of bills pay machine 71 42 42 27 10
Number of priority center 14 11 8 7 6

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 STAKEHOLDERS INFORMATION

MARKET PRICE INFORMATION

DSE CSE Total
Month Total Volume Total Volume Volume on
Month High Month Low Month High Month Low DSE & CSE
(Number) (Number)

Jan-14 32.80 27.70 3,559,600 32.90 27.50 422,534 3,982,134

Feb-14 34.80 31.60 5,564,600 34.80 32.00 271,501 5,836,101
Mar-14 32.80 26.60 5,100,000 32.90 26.30 195,411 5,295,411
Apr-14 28.00 26.30 2,803,000 28.20 26.20 105,111 2,908,111
May-14 27.10 26.00 2,960,800 27.00 25.40 96,352 3,057,152
Jun-14 28.80 26.10 2,203,000 28.30 25.70 119,612 2,322,612
Jul-14 29.30 28.10 1,715,600 29.90 27.70 44,051 1,759,651
Aug-14 28.90 27.20 2,374,200 28.30 26.30 36,787 2,410,987
Sep-14 29.80 26.30 3,107,600 29.80 26.20 115,138 3,222,738
Oct-14 31.20 29.10 2,220,000 30.50 28.90 99,280 2,319,280
Nov-14 29.50 26.50 4,128,400 29.90 27.00 45,493 4,173,893
Dec-14 27.50 26.40 7,860,962 27.40 26.50 148,212 8,009,174

DSE PRICE VOLUME CHART OF EBL SHARE: 2014

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EASTERN BANK LIMITED ANNUAL REPORT 2014
VITAL GRAPHS
Key Performance Indicators: Per Share

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 STAKEHOLDERS INFORMATION

VITAL GRAPHS
Year-end Financial Position 2014

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EASTERN BANK LIMITED ANNUAL REPORT 2014
VITAL GRAPHS
Performance during the year 2014

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 STAKEHOLDERS INFORMATION

VALUE ADDED STATEMENT

Value added is the wealth accretion made by Eastern Bank Limited through providing banking and other financial services in
2014 for it’s employees, directors, government and shareholders in the form of salaries & allowances, remuneration, duties &
taxes, net profit after tax respectively and also indicates value of use of fixed assets through depreciation.

Figures in BDT

Value Added for the year ended 31 December

2014 2013
Particulars
Taka Taka
Wealth creation:
Revenue from Banking services 19,230,435,841 19,339,742,807
Less: Cost of services & supplies (10,783,805,793) (11,302,397,778)
8,446,630,048 8,037,345,029
Non-banking income 54,563,478 45,228,403
Provision for loans & other assets (1,802,353,952) (952,509,071)
Total wealth creation 6,698,839,574 7,130,064,362

Wealth distribution:
Employees & Directors
Employees as salaries & allowances 2,374,178,826 1,963,508,938
Directors as remuneration & fees 21,612,816 19,158,517
Government 1,959,344,745 2,348,830,401
Corporate tax 1,866,548,501 2,267,883,136
Service tax/ Value added tax 90,699,914 79,122,032
Municipalties / local taxes 1,226,330 889,786
Excise duties 870,000 935,446
Shareholders
Dividend to shareholders 1,222,359,570 1,222,359,570
Retention for future business growth
Retained earnings 884,152,163 1,345,504,261
Depreciation and amortization 237,191,454 230,702,675
Total Wealth Distribution 6,698,839,574 7,130,064,362

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EASTERN BANK LIMITED ANNUAL REPORT 2014
ECONOMIC VALUE ADDED STATEMENT
Economic Value Added (EVA) is the measure of financial performance of an organization. It is based on the principle that since
a company’s owner 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 wealth.
EVA is equal to Profit after Tax (PAT) plus the provision for loans & 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
the risk free rate based on weighted average rate of 10 years treasury bond issued by Bangladesh Government plus 2% risk
premium.

EVA statement for the year ended 31 December

Figures in BDT

Particulars 2014 2013

Shareholders equity 20,086,851,401 18,450,498,173
Add: Accumulated provision for loans & advances and other assets 5,212,596,942 4,481,469,159
Capital Employed 25,299,448,343 22,931,967,333

Average Capital Employed / Shareholders' equity 24,115,707,838 21,868,542,394

Earnings:
Profit after tax 2,106,511,733 2,567,863,831
Add:Provision for loans & advances and other assets charged during the year 1,802,353,952 952,509,071
Less: Written off loans during the year 1,328,982,042 322,366,338
Net earnings 2,579,883,642 3,198,006,564

Cost of equity:
Average cost of equity (Based on weighted avergae rate of 10 years treasury bond 13.00% 14.16%
issued by the Bangladesh Government) Plus 2% risk premium
Capital charge (Cost of average equity) 3,135,042,019 3,096,585,603
Economic Value Added (555,158,377) 101,420,961

MARKET VALUE ADDED STATEMENT

Market value added statement reflects the company’s performance evaluated by the market through the share price. This
amount is derived from the difference between market capitalization and book value of the shares outstanding. It signifies the
enhancement of financial solvency as perceived by the market.

Market Value Added statement as at 31 December

Particulars 2014 2013

Face value per share (BDT) 10.00 10.00
Market value per share (BDT) 27.20 29.10
Number of shares outstanding 611,179,785 611,179,785
Total market capitalization (BDT million) 16,624.09 17,785.33
Book value of paid up capital (BDT million) 6,111.80 6,111.80
Market value added (BDT million) 10,512.29 11,673.53

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 STAKEHOLDERS INFORMATION

FINANCIAL GOALS AND PERFORMANCE (BANK)

Particulars Goals 2015 Actual 2014 Goals 2014 Actual 2013

Capital adequacy ratio (CAR) % 13% Plus 13.22% 11% Plus 11.95%
Return on average equity (ROE) % 14% Plus 10.93% 20% Plus 14.44%
Return on average assets (ROA) % 2% plus 1.28% 2.5% plus 1.68%
Cost to income ratio (%) Less than 40% 43.01% Less than 35% 38.87%
NPL to total loans and advance (%) Less than 4% 4.36% Less than 3% 3.59%
Weighted average credit risk grade (Number) 4.50 4.82 4.50 4.93
Deposits (BDT million) 139,368 116,792 126,085 117,102
Loans and advances (BDT million) 137,309 118,291 124,663 102,910

FINANCIAL CALENDAR
Quarterly Results

Particulars Submission Date to BSEC

Unaudited consolidated results for the 1st quarter ended 31 March 2014 May 12, 2014
Unaudited consolidated results for the 2nd quarter and half-year ended 30 June 2014 July 27, 2014
Unaudited consolidated results for the 3rd quarter ended 30 September 2014 October 29, 2014

Dividends
22nd Annual General Meeting Notice Date March 2, 2014
Distribution of 20% cash dividend in respect of financial year ended 31 Record Date March 11, 2014
December 2013
22nd Annual General Meeting Held on March 31, 2014
Distribution of Cash Dividend Date of Disbursement April 7, 2014

Taxation on Dividend Income

Stock dividend is tax exempted. In case of cash dividend, following is the current deduction of tax at source on dividend
income as per current fiscal act:
 If the shareholder is a company, either resident or non-resident, at the rate applicable to the company i.e. 20%
 If the shareholder is a resident or non-resident Bangladeshi person, other than company, at the rate of 10%
 If the shareholder is a non-resident (other than Bangladeshi) person, other than company, at the rate of 30%
Since stock dividend is out of the loop of withholding tax deduction, its effective rate of return is much higher than cash
dividend.

Taxation Arising From Capital Gain

Capital gain arising from transfer or sale of Government securities is tax exempted. Capital gain arising from transfer or sale of
Stocks and shares of public companies listed with stock exchanges is taxable at the rate of 10%.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Stock Details
Particulars DSE CSE
Stock Symbol EBL EBL
Company Code 148 22025
Listing Year 1993 2004
Market Category A A
Electronic Share Yes Yes
Market Lot (Nos) 200 200
Face Value (Taka) 10 10
Total Number of Securities (Nos) 611,179,785 611,179,785

Information Sensitive to Share Price

Particulars Date of Disclosure
Corporate Disclosure for approval of Financial Statements 2013, Recommendation of Dividend, February 27, 2014
Record Date for Dividend entitlement of 22nd AGM (31.03.2014) of EBL
Corporate Disclosure of 6th EGM of EBL for issuance of EBL Sub-ordinated Bond. April 17, 2014
Corporate Disclosure of Consent from the Bangladesh Securities & Exchange Commission to October 29, 2014
issue Non-Convertible EBL Sub-ordinated Bond

Accessibility of Annual Report 2014

Annual Report 2014 and other information about EBL may be observed on EBL’s website www.ebl.com.bd. EBL provides
copies of Annual Reports to the Securities and Exchange Commission, Bangladesh Bank, Dhaka Stock Exchange and
Chittagong Stock Exchange for their reference. Respectable stakeholders may read them at their public reference room or
library.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 STAKEHOLDERS INFORMATION

GLIMPSES OF THE 22ND AGM

1 2

3 4

5 6

1 Directors of EBL are seen on the dais at the 22nd AGM.

2 Registration of shareholders for the 22nd AGM of EBL in progress.
3 A one minute silence being observed in memory of deceased shareholders.
4 A shareholder gives his remarks on the Annual Report of 2013.
5 A section of the shareholders during the presentation of the Directors’ Report.
6 A shareholder reviews performance of the bank at the 22nd AGM.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE
GOVERNANCE
REPORT

72
EASTERN BANK LIMITED ANNUAL REPORT 2014
CORPORATE GOVERNANCE
PRACTICES IN EBL
Corporate Governance Framework governance are embedded in the core values of EBL.
Corporate governance is of paramount importance to Understanding the complexity of governance allows
a company and is almost as important as its primary organizational leaders and managers to improve all aspects
business plan. Governance issues are of concern not only in of governance, including compliance and performance
developing market economies like ours, governance lapses improvement, and to intervene when change is needed.
and weaknesses in large financial institutions in mature At EBL given due importance to major parameters of
markets figured significantly in precipitating the global corporate governance such as board system and its
financial crisis. independence; function of board sub-committees, internal
To achieve long term institutional viability and soundness, control over financial reporting; transparency, disclosure and
there is no alternative to adopt international best practices compliance; consistency of stakeholders value enhancement
in corporate governance. The continuous effort of EBL to and all our banking activities are guided by these key
adopt and adapt to international best practices in corporate principles of good governance.
governance has been recognized in 2014 by Institute of The corporate governance framework of EBL is aligned with
Chartered Secretaries of Bangladesh (ICSB). As a strong the bank’s well-defined vision, mission, values and strategies.
believer of sustainable growth, principles of good corporate

The Board of Directors of EBL plays the pivotal role in bank Guiding Philosophy of Corporate Governance
governance through their choice of strategy and leadership to Practices
drive the company to growth path. The Board is responsible
for both designing and implementing governance mechanism As a locally incorporated bank, EBL is guided in its
including appointment and supervision of respective Board corporate governance practices mainly by two regulatory
committees and top management. The onus of setting bodies: Bangladesh Bank (Central Bank of Bangladesh) and
strategic aims and goals of the company is also on the Bangladesh Securities and Exchange Commission (BSEC).
Board. The management of EBL as an extended wing of the However, the Bank’s corporate governance philosophy
Board executes policies and procedures set by the Board for encompasses not only regulatory and legal requirements but
the greater interest of shareholders and other stakeholders. also various internal rules, policies, procedures and practices
The risk management and overall support functions of EBL based on the best practices of local and global banks. At
has been designed and kept fully independent from Business EBL we attach a simple meaning to ‘Corporate Governance’
to guard against any unforeseen events that undermine the which is ‘Due diligence’ in observing responsibilities by
brand value of the Bank. Board as well as by management to safeguard interest of

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EASTERN BANK LIMITED ANNUAL REPORT 2014
key stakeholders i.e. depositors, shareholders, employees  Mr. Anis Ahmed was appointed as Director on the
and the society at large. Two very important pillars of a Board of EBL on 15 October 2014 representing ‘M/s.
good corporate governance structure are “Transparency” Aquamarine Distributions Ltd.’ in place of Mr. Asif
and “Accountability” backed by strong Internal Control and Mahmood who resigned on 22 September 2014.
Compliance Structure and MIS capabilities. For us these two To comply with the Corporate Governance Guidelines
key elements are of paramount importance in our everyday issued by BSEC on 07 August 2012, the BoD appointed
banking activities. Meah Mohammed Abdur Rahim & Ormaan Rafay Nizam
as Independent Directors of the Board of EBL which was
Structure of the Board subsequently approved by the Shareholders in the 21st AGM
According to Clauses 94 of the Articles of Association of of EBL held on 31 March 2013.
Eastern Bank Limited, the Board of Directors (BoD) currently
As per Clauses 105 & 106 of the Articles of Association of the
comprises 11 directors among whom 10 (ten) are Non-
Bank, 3 (three) Directors shall retire by rotation from the office
executive directors including the Chairman and 1 (one) is
of the BoD at the 23rd AGM.
the Managing Director (Ex-Officio). The existing BoD of the
Bank includes two Independent Directors as prescribed in All the retiring Directors are eligible for re-election in the
the BSEC Corporate Governance Guidelines (No. 1.2), and ensuing 23rd AGM subject to compliance with the BSEC
Section 15 of Bank Company Act 1991 (amended up to 2013). Notifications dated 22 November 2011 and dated 07
December 2011 respectively.
Policy on Appointment of Directors
Non-Executive Director
Directors are appointed following relevant provision/clause
of Companies Act 1994, Bank Company Act 1991 (amended All the Directors of EBL including the Chairman are Non-
up to 2013), Corporate Governance Guidelines of BSEC, Executive Directors except the Managing Director & CEO.
Guidelines of Bangladesh Bank and Articles of Association of
the Bank. Independent Directors
The BoD is consisted of noted entrepreneurs and business EBL encourages effective representation of independent
professionals having experience and acumen in diverse range directors in its BoD so that as a team it includes core
of businesses and operations. Collectively they have enriched competencies relevant to banking business. In compliance
the Board with the knowledge and expertise in banking with the Corporate Governance Guidelines issued by
and finance, IT, accounting, marketing, administration, and BSEC, Bank Company Act 1991 (amended up to 2013) and
engineering. Their rich and diverse backgrounds have given Corporate Governance Guidelines issued by Bangladesh
the Board a vantage point in directing and monitoring the Bank, the BoD has appointed 02 (two) independent directors,
Bank to achieve its desired objectives. subsequently approved by shareholders in the 21st
Annual General Meeting (AGM). The independent directors
Retirement and Election of Directors being conversant in the field of financial, regulatory and
corporate laws enjoy full freedom to carry out their assigned
According to clauses 105 and 106 of the Articles of
responsibilities. With them they have brought in more than 12
Association of the bank, following directors retired and being
years of corporate management/professional experiences to
eligible were re-elected at the 22nd Annual General Meeting
the BoD.
(AGM) held on 31 March 2014.

SL. Mode of Board meetings and attendance

Name of Director
No. Change The Board of Directors holds meetings on a regular basis:
1. Mir Nasir Hossain Re-elected usually twice in a month but emergency meetings are called
(Representing Mir Holdings Ltd.) when required. Management provides information, references
and detailed working papers for each item of agenda to all
2. Md. Showkat Ali Chowdhury Re-elected the Directors well ahead of time fixed for the BoD meeting
(Representing Namreen Enterprise Ltd.) for consideration. In the meeting, the Chairman of the BoD
3. A.Q.I. Chowdhury, OBE Re-elected allocates sufficient time for the Directors to consider each
(Representing Namreen Enterprise Ltd.) item of the agenda and allow them to discuss, inquire, and
express opinions freely on the items of interest so that they
Subsequently, Namreen Enterprise Ltd. and Aquamarine can fulfill their duties to the best of their abilities. During
Distributions Ltd. changed their representatives from the the year 2014, a total 25 Board Meetings were held; the
Board with the following members. The newly joined Directors attendance records are as follows:
of EBL are:
 Mr. Mufakkharul Islam Khasru was appointed as Director
on the Board of EBL on 01 June 2014 representing
‘M/s. Namreen Enterprise Ltd.’ in place of Mr. A. Q. I.
Chowdhury, OBE who resigned on 12 May 2014.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

No. of Meetings
Sl. Name Position
attended
1. M. Ghaziul Haque Chairman 23
2. Mir Nasir Hossain Director 18
(Representing Mir Holdings Ltd.)
3. A. M. Shaukat Ali Director 22
4. Md. Showkat Ali Chowdhury Director 17
(Representing Namreen Enterprise Ltd.)
5. Salina Ali Director 17
(Representing Borak Real Estate (Pvt.) Ltd.)
6. Anis Ahmed Director 02*
(Representing Aquamarine Distributions Ltd.)
7. Meah Mohammed Abdur Rahim Independent Director 19
8. Mufakkharul Islam Khasru Director 12*
(Representing Namreen Enterprise Ltd.)
9. Ormaan Rafay Nizam Independent Director 13
10. Gazi Md. Shakhawat Hossain Director 25
(Representing Purnima Construction (Pvt.) Ltd.)
11. Ali Reza Iftekhar Managing Director & CEO 25
Directors who could not attend the meeting(s) were granted leave of absence by the Board.

* Note: Attendance of HoF and CS in Board Meeting

 Mr. Anis Ahmed was appointed as Director on the The Head of Finance (HoF) and the Company Secretary (CS)
Board of EBL on 15 October 2014 representing ‘M/s. of the Bank attend the meetings of the Board of Directors,
Aquamarine Distributions Ltd.’ in place of Mr. Asif provided that the Head of Finance and/or the Company
Mahmood who resigned on 22 September 2014. Secretary do not attend such part of a meeting which involves
However, Mr. Asif Mahmood attended 13 Board Meetings consideration of an agenda item relating to their personal
out of 18 during his tenure. matters.
 Mr. Mufakkharul Islam Khasru was appointed as Director
on the Board of EBL on 01 June 2014 representing Ownership Composition
‘M/s. Namreen Enterprise Ltd.’ in place of Mr. A. Q. As on 31 December 2014 the Directors of Eastern Bank
I. Chowdhury, OBE, who resigned on 12 May 2014. Limited held 31.57% of total shares whereas Financial
However, Mr. A. Q. I. Chowdhury, OBE, attended 06 Institutions and General Public were holding 11.49% and
Board Meetings out of 10 during his tenure. 56.94% respectively:

31-12-2014 31-12-2013
Sl. Composition No of Shares Held % of total shares No of Shares Held % of total shares
1 Directors 192,923,886 31.57% 192,923,886 31.57%
2 General Public 348,032,336 56.94% 348,023,246 56.94%
3 Financial Institutions 70,223,563 11.49% 70,232,653 11.49%
Total 611,179,785 100.00% 611,179,785 100.00%

Directors’ Shareholding Status (other than independent directors) of EBL have been holding
required percentage of shares individually (minimum 2%) as
In compliance with SEC Notifications dated 22 November
well as jointly (minimum 30%).
2011 and dated 07 December 2011, all the eligible directors

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Shareholding structure of directors is as follows:

No of Shares % of total
Sl. Name Position
Held shares
1. M. Ghaziul Haque Director 19,625,599 3.21%
2. Mir Holdings Ltd. Director 30,476,236 4.99%
(Represented by Mir Nasir Hossain)
3. A. M. Shaukat Ali Director 12,518,491 2.05%
4. Namreen Enterprise Ltd. Director 60,908,280 9.97%
(Represented by Md. Showkat Ali Chowdhury)
5. Namreen Enterprise Ltd. Director
(Represented by Mufakkharul Islam Khasru)
6. Borak Real Estate (Pvt.) Ltd. Director 29,315,925 4.79%
(Represented by Salina Ali)
7. Aquamarine Distributions Ltd. Director 12,466,796 2.04%
(Represented by Anis Ahmed)
8. Meah Mohammed Abdur Rahim Independent Director 36,869 0.006%
9. Ormaan Rafay Nizam Independent Director - -
10. Purnima Construction (Pvt.) Ltd. Director 27,575,690 4.51%
(Represented by Gazi Md. Shakhawat Hossain)
11. Ali Reza Iftekhar Managing Director & CEO - -
Total 192,923,886 31.57%

Shareholding of CEO, CS, HoF, Head of ICC and  Implement the policies and strategic direction
top 5 Salaried Executives established by the Board;

Please refer to Note 14.1 to the Financial Statements of 2014.  Establish and maintain a strong system of internal
controls;
Separation of Chairman and Chief Executive  Ensure Bank’s compliance with applicable legal and
Officer Roles regulatory requirements.
In compliance with Bangladesh Bank BRPD Circular No. 11
Roles and Responsibilities of the Board of
and Circular Letter No. 18 dated 27 October 2013 and Clause
1.4 of BSEC CG Guidelines dated 07 August 2012, we report Directors
that the Chairman of the Board Mr. M. Ghaziul Haque has The major roles and responsibilities of the Board, among
been elected from among the Directors and there are clear others, are to set the vision, mission and policies of the Bank
and defined roles and responsibilities of the Chairman and and to determine the goals, objectives and strategies to
the Chief Executive Officer Mr. Ali Reza Iftekhar. ensure efficient utilization of the Bank’s resources. The roles
The Chairman of the Board approves the agenda for the and responsibilities of the Board of Directors are outlined
Board meetings, assisted by the Managing Director and the below (but not limited to) in compliance with Bangladesh
Company Secretary. Regular agenda items include approving Bank BRPD Circular No. 11 dated 27 October 2013:
credits beyond CEO’s authority and aspects of the Bank’s  Work planning and strategic management
corporate strategy, financial performance, core risks and  Lending and Risk Management
credit policy, corporate governance, CSR and organizational
 Internal Control Management
structure, human resources policy, customer and services
strategies, procurement policy, etc.  Human Resources Management and Development
On the other hand, CEO, being the Head of management  Financial Management
team of the Bank, is accountable to the Board and its  Formation of Supporting Committees
Committees to run and manage the Bank in accordance with
 Appointment of Independent Directors
the prescribed policies, principles and strategies established
by the Board and rules, regulations and guidelines from  Appointment of Alternate Directors
the Central Bank, BSEC and other regulatory authorities.  Appointment of Managing Director & CEO
Management’s primary responsibilities are to:
 Manage the operation of the Bank safeguarding interests
of customers and other stakeholders in compliance with
the highest standards of ethics and integrity;

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

Responsibilities of the Chairman of the Board implementation thereof and prudent administrative and
financial management.
To set out the following responsibilities, BRPD Circular No.
11 dated 27 October 2013 issued by Bangladesh Bank and  The CEO shall ensure compliance of the Bank Company
Corporate Governance Notification issued by BSEC on 07 Act 1991 and other relevant laws and regulations in
August 2012 has been taken into consideration. discharging routine functions of the bank.
 The CEO shall include clearly any violation from Bank
The overall responsibility of the Chairman is to:
Company Act 1991 and/or other relevant laws and
 Ensure that the Board sets and implements the Bank’s regulations in the “Memo” presented to the meeting of
direction and strategy effectively. the BoD or any other Committee (s) engaged by the BoD.
 Act as the Bank’s lead representative, explaining aims  The CEO shall report to Bangladesh Bank of issues in
and policies to the Shareholders. violation of the Bank Company Act 1991 or of other laws/
 Ensure no participation in or interference into the regulations.
administrative or operational and routine affairs of the  The recruitment and promotion of all staffs of the bank
Bank. except those in the two tiers below him shall rest on
The specific responsibilities of the Chairman, among the CEO. He shall act in such cases in accordance with
others, are to: the approved service rules on the basis of the human
resources policy and approved delegation of employees
 Provide overall leadership to the Board, setting vision as approved by the BoD.
and driving innovation, working closely with the CEO.
 The authority relating to transfer of and disciplinary
 Take a leading role in determining the composition measures against the staff, except those at two tiers
and structure of the Board which will involve regular below the CEO, shall rest on him, which he shall apply
assessment of the: in accordance with the approved service rules. Besides,
size of the Board, under the purview of the human resources policy as
interaction, harmony and involvement of the approved by the BoD, he shall nominate officers for
Directors. training and other related issues.

 Set the Board’s Agenda and plan Board Meetings. Appointment of HoF, Head of ICC and CS
 Chair all Board Meetings, directing debate towards The Bank appointed a Head of Finance, a Head of Internal
consensus. Control & Compliance and a Company Secretary as per
 Ensure the Board receives appropriate, accurate, timely the policy of the Bank and other regulatory laws and
and clear information. regulations. They are well conversant in the field of financial,
regulatory and corporate laws to carry out their assigned
 Chair the AGM and other Shareholders’ Meetings to
responsibilities.
foster effective dialogue with Shareholders.
 Ensure that the views of shareholders are communicated Independence of Non-Executive Directors
to the Board as a whole.
All the Non-Executive Directors enjoy full freedom to carry out
 Work with Chairman of Board Committees. their coveted responsibilities. They attend Board meetings
 Conduct (if required) on-site inspection of any bank- regularly and participate in the deliberation and discussions
branch or financing activities under the purview of the effectively. They actively involve in the matter of formulation
oversight responsibilities of the Board. of general strategies of the Bank. But they do not participate
in or interfere into the administrative or operational or routine
Roles and Responsibilities of CEO, HoF, CS and affairs of the Bank. However, they ensure confidentiality of the
Head of ICC Bank’s agenda papers, discussions at the Board/Committee
Meetings, Notes and Minutes.
The Board of Directors of EBL clearly defined and approved
the respective roles, responsibilities and duties of Chief Annual Appraisal of the Board’s Performance
Executive Officer (CEO), Head of Finance (HoF), Company
At AGM shareholders critically appraise the performance of
Secretary (CS) and Head of Internal Control & Compliance
the Board freely through evaluation of financial position and
(ICC).
performance of the bank, its adequacy and effectiveness of
To set out the following responsibilities of CEO, BRPD internal control system and overall governance mechanisms.
Circular Letter No. 18 dated 27 October 2013 issued by The shareholders also ask questions and make queries to the
Bangladesh Bank and Corporate Governance Notification BoD during AGM and the Chairman of BoD gives a patient
issued by BSEC on 07 August 2012 has been taken into hearing and responds to all their queries.
consideration.
The performance of the Board is appraised based on certain
 In terms of the financial, business and administrative parameters such as shareholder return, share price, return
authorities vested upon him by the BoD, the CEO shall on capital employed, earnings per share etc. of the bank.
discharge his own responsibilities. He shall remain The attendance of Directors and their active participation in
accountable for achievement of financial and other the meeting on various agenda is ensured in every Board
business targets by means of business plan, efficient meeting. The Board approves annual budget at the beginning

77
EASTERN BANK LIMITED ANNUAL REPORT 2014
of each year and monitors the status of the same on quarterly 13-14 of this annual report. The said statements are
basis to ensure achievement of the target. The Board’s also disclosed in Bank’s website and other related
performance is greatly dependent on the achievement (under publications.
or over) of budgeted target. Besides, the performance  Strategic priorities which are time to time directed by the
reports of supporting committees of the Board are also Board have been presented in page no. 16 of this annual
placed in the Board meeting through which the performances report.
of the Board members are regularly assessed.
 Our sector wise business objectives, strategies, priorities
Annual Evaluation of the MD & CEO by the Board and future business outlooks have been elaborately
described in “Management Discussion and Analysis”
The Board of Directors of EBL clearly defined and approved
section of this annual report.
the roles, responsibilities and duties of Chief Executive
Officer (CEO). Based on these assigned responsibilities, Board Committees and their Responsibilities
BoD makes annual evaluation of MD & CEO. Furthermore,
the performance evaluation of MD & CEO is done by the To ensure good governance i.e. corporate governance in
Board through various reports like financial position and bank management, Bangladesh Bank issued a circular (BRPD
performance report of the Bank, knowing update of various Circular No. 11 dated 27 October 2013) restricting banks to
assignments given by the Board to the CEO and the form more than three committees or sub-committees of the
Management from time to time and doing variance analysis of Board.
Budget with Actual result and steps taken by CEO to achieve To ensure proper accountability and transparency
the Budgeted target. Among the financial parameters, NPL through ‘due diligence’, EBL has three Board committees
ratio, Growth of Loan & Deposit, Cost to Income Ratio, Loans namely Executive Committee, Audit Committee and Risk
write off and its recovery, Capital Adequacy Ratio, Credit to Management Committee mainly to oversee and direct the
Deposit Ratio etc. are the common ones. operations, performance and strategic direction of the Bank.
The composition of the said Board Committees is presented
Policy on Training of Directors in the page no. 19.
The policy on training of Directors includes providing training
and information on the latest update related to banking Executive Committee (EC)
business such as relevant laws, policy guidelines, circulars,  Appointment and Composition
rules and regulations issued by the regulatory authorities; so In Compliance with Section 15B (2) of The Bank Company
that they could effectively discharge the responsibilities as a Act 1991 (amended up to 2013) and BRPD Circular No. 11
Director of the Bank. Sometimes special discussion sessions dated 27 October 2013, the Board of Directors of EBL has
are arranged with the experts regarding highly technical and re-constituted the Executive Committee (EC) of the Board in
complex issues. They also participate in the programs and 2014 with four members (maximum limit is seven members).
seminars organized by various professional bodies at home None of them are the members of Audit Committee of the
and abroad on business, economic, technical, professional Board. The Company Secretary acts as the secretary of the
and corporate governance issues. committee.

Directors’ Knowledge and Expertise in Finance The EC is comprised of 3 (Three) Non–Executive Directors
and Managing Director & CEO of the Bank. Details of EC
and Accounting
members are stated in page no. 19.
Two Directors in the Board of the Bank obtained post-
 Meeting and Responsibilities of EC
graduation major in Accounting from the University of
Dhaka. They have expertise in the field of accounting The EC of a larger sized BoD usually acts as a proxy for
and finance. Other Directors, majority of whom are either full BoD, can attend a meeting with short notice and take
successful entrepreneurs or seasoned professionals, are decisions to ensure smooth flow of banking businesses.
also well conversant in the field of business, economics and However, any decision taken by the committee has to be
administration. subsequently ratified by the full Board.
Since the current size of the Board of EBL (11 members
Directors’ Report on Compliance with Best including MD & CEO) is slim enough to hold two meetings in
Practices on Corporate Governance a month on a regular basis, there was no such urgent issue
The status of compliance of corporate governance guidelines required for EC to deal with during 2014. Hence, no EC
issued by Bangladesh Bank has been presented in page meeting was held in 2014.
no. 86-93 and the guidelines issued by BSEC have been
presented in page no. 93-98. Rahman Rahman Huq,
Audit Committee (AC)
Chartered Accountants, duly certified the compliance status The Audit Committee of the Bank carries out its functions
of corporate governance guidelines and issued a report based on the Terms of Reference (ToR) approved by the
which is presented in page no. 94. Board and is accountable to the Board of Directors of the
Bank. To make the quorum of the AC meeting at least 01
Vision, Mission and Strategy of the Bank (one) Independent Director has to be present. The Company
 The vision and mission statement of the Bank approved Secretary acts as the secretary of the committee.
by the Board of Directors is presented in page no.

78
EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

 Appointment and Composition The Minutes of the Audit Committee Meetings containing
In compliance with Bangladesh Bank BRPD Circular various suggestions and recommendations to the
No.11dated 27 October 2013 and BSEC’s Corporate Management and the Board are placed to the Board for
Governance Guidelines dated 07 August 2012, Audit ratification on a regular basis. The major areas focused by the
Committee (AC) of EBL Board has been re-constituted by AC during the year 2014 have been presented in “Report of
the BoD from time to time to review and oversee company’s the Audit Committee” section of this annual report.
financial reporting, non-financial corporate disclosures,
internal control systems and compliance to governing laws,
Risk Management Committee (RMC)
rules and regulations etc. independently. Details of AC  Appointment and Composition
members are stated in page no. 19. In Compliance with BRPD Circular No. 11 dated 27 October
 Chairman of the AC 2013, the Board of Directors of EBL has reconstituted a three
members’ Risk Management Committee (RMC) of the Board
The Chairman of the AC is an Independent Director who
in 2014 (maximum limit is five members). The RMC has been
performs his duties with full freedom.
formed to reduce probable risks which could be arisen during
 Members are Non-Executive Directors implementation of Board approved policies, procedures and
All members of the AC are Non-executive Directors. No strategies. The RMC is entrusted to examine and review
Executive of the Bank is eligible to become a member of whether management is properly working on identification,
the AC. Also, no member of EC has been nominated as the management and mitigation of credit risk, foreign exchange
member of the AC. risk, internal control and compliance risk, money laundering
risk, information and communication technology risk,
 Qualification of Members of AC
operation risk, interest rate risk and liquidity risk and keeping
All members of the AC are financially literate and two adequate provision and capital against the said risks.
members have post-graduation degree in Accounting and
All three members of this RMC are Non–Executive Directors
Business Administration respectively. Moreover, all members
of the Board and details of RMC members are stated in page
of the AC have reasonable knowledge on banking business,
no. 19.
its operations, and risks involved in it.
 Roles and Responsibilities of RMC
 Terms of Reference (ToR) of AC
It is the responsibility of RMC to identify and assess risk of
The ToR of the AC has been framed in line with the provisions
the bank and guide management to formulate strategies
of BRPD Circular No. 11 dated 27 October 2013, Corporate
for minimizing/controlling of risk. The committee shall
Governance Guidelines issued by BESC on 07 August 2012,
review the risk management policy of the bank and modify
and other best practice corporate governance guidelines
the same as per requirement. Some important roles and
and standards. Some important roles and responsibilities of
responsibilities of RMC have been described in “Report of
AC as per ToR have been described in “Report of the Audit
the Risk Management Committee of the Board” section of
Committee” section of this annual report.
this annual report.
 Internal Control & Compliance Division’s Access to AC
 Activities of RMC
The Head of Internal Control & Compliance (ICC) and the
Major activities of the RMC conducted in 2014 have been
Head of Internal Audit have direct access to the AC as and
described in “Report of the Risk Management Committee of
when required. In addition, the AC meets the Head of ICC
the Board” section of this annual report.
and the Head of Internal Audit at least once in a year, without
management being present, to discuss their remit and any  Meeting of the RMC
issues arising from the internal audits carried out. The committee is entitled to conduct at least four meetings
 Objectives and Activities of the AC in a year and call meeting at any time as per requirement.
The committee may call the CEO, Chief Risk Officer (CRO)
The AC regularly reviews the internal control systems of
or any executive to attend the committee meeting. The RMC
the Bank and also reviews along with the management,
of EBL held 4 (Four) meetings during 2014 having detailed
the quarterly, half yearly and annual financial statements of
discussions and review session with the CRO regarding their
the Bank before submission to the Board for approval. The
findings, observations and recommendations on issues of
objectives and activities of the AC have been described in
bank affairs that need improvement. The major areas focused
“Report of the Audit Committee” section of this annual report.
by the RMC during the year 2014 have been presented in
 Meeting of the Audit Committee “Report of the Risk Management Committee of the Board”
The Audit Committee of EBL held 12 (twelve) meetings in the section of this annual report.
year 2014 and had detailed discussions and review session
with the Head of Internal Control & Compliance, Head of No Remuneration Committee but Activities
Internal Audit, External Auditors etc. regarding their findings, As the Bank is restricted (by Central Bank) to have more than
observations and suggestions with corrective measures on three sub-committees of the Board, the Board oversees the
the related areas and on other issues of Bank affairs that recruitment and remuneration process of the employees by
need improvement. The AC instructed the management to reviewing/approving of the following:
follow those suggestions and monitored accordingly from
1. Human Resources (HR) Policies i.e. “People Management
time to time.
Manual” of the Bank.

79
EASTERN BANK LIMITED ANNUAL REPORT 2014
2. Recruitment, promotion and remuneration process of are subject to continuous scrutiny of the Internal Control &
top executives (Up to two-level below the rank of the Compliance Division (ICCD) to ensure appropriateness and
Managing Director & CEO) as per the Bangladesh Bank integrity of the risk management mechanism.
Circular (BRPD Circular No.11 dated 27 October 2013). The risk management system of EBL has been described in
3. Other than the above as mentioned in (2), all “Risk Management” section of this annual report. Also the
appointments, promotions and fixing remuneration are roles and responsibilities of RMC and major areas focused
made by the Managing Director & CEO of the Bank as by RMC in 2014 have been presented in “Report of the
authorized by the Board. Risk Management Committee of the Board” section of this
4. Appointment of Management Consultants one-off basis annual report.
for conducting periodic (usually once in every two years)
Salary Survey to determine EBL’s competitive position
Appointment of External Auditors
with peer Banks in the industry. Based on the Survey The Board of Directors of EBL in the 22nd AGM held on
Result, Board approves required adjustments to existing 31 March 2014 appointed Hoda Vasi Chowdhury & Co.,
benefit packages for the employees of the Bank. Chartered Accountants, as the statutory auditors for the year
2014.
Benefits provided to Directors and Managing
Director Services not provided by External Auditors
According to the Circulars and Guidelines issued by Complying with provision 4 of BSEC guidelines we declare
Bangladesh Bank from time to time, banks in Bangladesh can that Hoda Vasi Chowdhury & Co., Chartered Accountants,
only provide the following facilities to the Directors: involved in statutory audit, was not engaged in any of
following services during 2014:
 Chairman: The Chairman of the Board of Directors may
 Appraisal or valuation services or fairness opinions.
be provided an office chamber, private secretary, office
assistant, a telephone in office and a full time car and  Financial information system design and implementation.
a mobile phone to be used within the country. The  Bookkeeping or other services related to accounting
Chairman of EBL Board did not accept any support staff records or financial statements.
and private secretary from the bank.
 Broker-dealer service.
 Directors: Directors are entitled to fees and other
 Actuarial services.
benefits for attending the Board/support committee (EC/
AC/ RMC) meetings (The benefits provided to Directors  Internal audit services.
of EBL have been mentioned in Note 37 to the Financial  Audit/ certification services on compliance of corporate
Statements). governance guidelines issued by BSEC.
 Managing Director & CEO: Managing Director is paid  Any other service that the Audit Committee determines.
salary, allowances and other facilities according to
No partner or employees of the Hoda Vasi Chowdhury & Co.,
his service contract as approved by the Board and
Chartered Accountants, possesses any share of the EBL
Bangladesh Bank. (The benefits provided to MD & CEO
during the tenure of their audit assignment at EBL.
of EBL have been mentioned in Note 36 to the Financial
Statements). Highlights on Central Bank Inspections
The Bank (EBL) has fully complied with Bangladesh Bank Bangladesh Bank carried out a comprehensive inspection
Circular and Guidelines. of EBL Head Office and 27 branches, 5 core risks and
03 Foreign Exchange and Trade Inspection in 2014. They
Establishment and Review of Internal Control
submitted their detailed inspection report during 2014.
System Major findings of the inspection were discussed in a meeting
EBL has a sound system of internal control to safeguard participated by the Board, Bangladesh Bank representatives
shareholders’ investments, customer deposits and the Bank’s and related management personnel of the Bank. The
assets. The Board of Directors of EBL retains the ultimate Board took the observations with utmost importance and
responsibility for its operations, though has delegated to instructed management to comply with BB suggestions for
the Audit Committee for the review of the adequacy and improvement. BB also conducted several other audits on
effectiveness of the system of internal controls. different units/departments of the bank all the year round
A detail review of internal control system has been presented which include Treasury Department, Trade Operations
in “Directors’ Report” of this annual report. Department, Credit Administration Department and Off-shore
Banking Unit etc.
Risk Management
Related Party Transactions
The Risk Management Unit (RMU) of EBL is responsible for
management, integration and monitoring of all risks within The Bank in its ordinary course of business undertook
the risk appetite set by the RMC. The Risk Management financial transactions with some entities or persons that fall
Committee (RMC) of the Board reviews and monitors the within the definition of ‘Related Party’ as contained in BAS 24
overall risk management system of the Bank and updates to (Related Party Disclosures) and relevant provisions of Bank
the Board from time to time. Risk management functions Company Act 1991 (amended up to 2013) and Bangladesh

80
EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

Bank BRPD Circular No. 14 dated 25 June 2003. As on procedures for detection and prevention of fraud.
the reporting date, the Bank had funded and non-funded The Internal Control & Compliance Division (ICCD) of the
exposures with its subsidiaries, non-funded exposures to Bank always engage in examination of whether any fraud-
some current and ex-directors and credit card limit to some forgery or irregularities is going on in the Bank. The ICCD also
of its Directors. Besides, the Bank had procured some goods conducts special audit or investigations as instructed by the
and services from the entities of related party (ies) during Board or Audit Committee of the Bank. The ICCD submits
2014. Please refer to Annexure C1 of financial statements for reports upon the observations they detected throughout their
details of related party transactions. audit to the Audit Committee at a regular interval.
Ethics and Compliance Human Capital
 Code of Conduct and Ethical Guidelines Employee first is the bracing motto of EBL. We believe that
EBL has written Code of Conduct and Ethical Guidelines the source of our competitive advantage lay deep inside our
for the Board of Directors and Employees of the Bank. The company, in our people. Our core brand has always been our
basic premise of the code of conduct is that each employee, employees, appreciated for their passion to perform. For us
while on the payroll of EBL, shall place EBL ahead of his/ employees are the best brand. We do not offer our employees
her personal interest. The management relies on each of the a job, we offer them a career. We have highest per employee
employees to make a judgment of what is right and proper in productivity in the banking industry for last couple of years.
any particular situation. In 2012 our HR policy and practices got international
 Compliance of Code of Conduct and Ethical Guidelines recognition when we were awarded the Asia’s Best Employer
Brand Award at World HRD Congress in Singapore. Our
The Board of Directors complies with all applicable Laws
Human Resources Division is also the first in Bangladesh to
and Regulations of the land and with the Memorandum and
achieve ISO certification for its commitment to quality HR
Articles of the Bank and the policies of the Bank adopted by
Practice in People Management.
the Board from time to time.
The details discussion on the bank’s “Human Resources”
All employees of the Bank maintain the Code of Conduct
has been presented in page 139-141 of this annual report.
and demonstrate highest ethical standards. The employees
of the Bank undertake at all times to comply with or observe Communication to Shareholders and Other
all applicable laws and regulations of the country and the Stakeholders
Bank, everywhere they operate. They maintain books and
 Policy on Communication with Shareholders and Other
records with integrity and ensure accuracy and timeliness
Stakeholders
of all transactions. They do not share the Bank’s plans,
methods and activities considered by the management to The Share Department (which is under the Board Secretariat)
be proprietary and confidential. An employee is discouraged of the Bank plays an instrumental role to make effective
to accept gift, benefit, hospitalities, invitation to meals or communication with its shareholders and other stakeholders.
offers for travel and lodging from our customers or persons Shareholders and other stakeholders of the Bank may
intending to have business dealings with the Bank. contact to this Department during office hour for any sort
of information and queries. Common services include but
 Effective Anti-Money Laundering and Anti-terrorism Program not limited to allow or rejection of transfer or transmission
The Bank has established a separate Central Compliance of shares, issue of duplicate certificates, allotment of shares
Unit (CCU) and appointed a senior official as Head of CCU to issued from time to time, opening and operation of bank
ensure compliance of Anti-Money Laundering Prevention Act accounts for payment of dividend, redemption of paper
and Anti-Terrorism Act. shares and the listing of securities on stock exchanges etc.
Furthermore, EBL provides updated information in its website
The CCU nominates Department Anti-Money Laundering
from time to time for the shareholders and other stakeholders
Compliance Officer (DAMLCO) and Branch Anti-Money of the Bank.
Laundering Compliance Officer (BAMLCO) and guides them
 Policy on Ensuring Participation of Shareholders at
about their day to day compliance activities.
AGM
The CCU arranges DAMLCO and BAMLCO conference every
To ensure effective and efficient participation of shareholders
year and train up bank employees through in-house experts
in AGM, EBL publishes notice of AGM in daily newspapers
and also hires experts from BB.
with necessary details within reasonable time-frame.
 Whistleblowing and Anti-Fraud Program The arrangement of AGM normally takes place in a well-
The Audit Committee of the Board reviews the Bank’s known place and at convenient time. Annual Reports are
arrangements for its employees to raise concerns, in circulated as per the provision of Companies Act 1994, so
confidence, about possible wrongdoing in financial reporting that shareholders would get sufficient time to go through
or other matters. The Audit Committee ensures that the report and freely provide their valuable comments and
suggestions in the AGM.
these arrangements allow proportionate and independent
investigation of such matters and appropriate follow up The Glimpses of the 22nd AGM have been presented in
action. The Audit Committee also reviews the Bank’s “Stakeholders Information” section of this annual report.

81
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Redressal of Shareholders Complaints Central Bank for carbon credits. A detailed description
Any complaint, received at AGM or throughout the year, regarding environmental and social obligation has been
related to transfer and transmission of shares, non-receipt of presented in “Sustainability Report” and “Corporate Social
Annual Reports, and dividends timely and other share related Responsibility” sections of this Annual Report.
matters is resolved lawfully in time.
Management committees and their
The Company Secretary of EBL plays the role as a Chief
responsibilities
Compliance Officer in handling any such issue related to our
shareholders, investors etc. In an effective CG structure, corporate/bank management
has a collective mandate under the leadership of MD &
Environmental and Social Obligations CEO to carry out daily operations to the best interest of the
shareholders. Besides conventional segregation of functional
We believe that every small “GREEN” step taken today would
departments, EBL has some designated committees
go a long way in building a greener future. As an environment
entrusted with specific objectives. The composition of
responsive Bank we initiated Go Green campaign in our
all these committees is presented in the “Management
Bank. EBL is the first Bank to claim refinance from the

Committees” section of this annual report. excel the projects and initiatives approved by the MANCOM.

The Management Committee (MANCOM) Bank Risk Management Committee (BRMC)

MANCOM is the highest decision and policy making authority Following BB instructions (DOS EW 1164/14 EBL/2009-449
of the management comprising the CEO and different dated 10 June 2009 and DOS EW 1164/14 EBL/2009-590
business and support unit heads. The major roles and dated 24 September 2009), the Bank formed a separate risk
responsibilities of MANCOM are as follows: management unit named ‘Bank Risk Management Committee
 Set or review vision, mission and strategies of the (BRMC)’ to ensure proper and timely identification,
Bank as a whole and for business units for effective measurement and mitigation of risks exposed by the bank
in a comprehensive way. At present, this committee is
discharging of management responsibilities.
being headed by the DMD & CRO. The major roles and
 Strategic and tactical decisions relating to business, responsibilities of BRMC are as follows:
credit, operations, administration, HR, internal and
 Review of organizational structure and functions of all
financial control and compliance etc.
individuals involved in risk taking as well as managing.
 Analysis of business and financial performance of the  Review and recommend establishing/formulating of
Bank. overall risk assessment and management policies,
 Review and discuss policies and procedures of the Bank methodologies, guidelines, and procedures in line
and make changes if necessary before taking to the with Bangladesh Bank guidelines for identification,
Board (if needed). measurement and monitoring of risks.
 Finalize periodic (usually once in a year) employee  Review of Bank’s risk appetites and recommend
performance appraisal and promotions. necessary changes to retain Bank’s exposure within the
acceptable level of risks as set by risk appetites.
 Discuss and approve Budget before forwarding to Board.
 Endorse portfolio objectives in line with Bank’s agreed
 Consider and propose innovative projects, products risk appetites, and recommend tolerance limits/
and services as well as management methodology and benchmarks for each type of risk.
business strategies to the Board of Directors (if needed).
 Assist development of effective and efficient information
 Acting Managing Director can preside over the MANCOM system/ MIS inflow process and data management
meeting in absence of the MD. capabilities to support the risk management functions of
the bank.
Expanded Management Team (EMT)
Asset Liability Committee (ALCO)
Expanded Management Team (EMT) is a platform to enhance
leadership capability of the potential individuals to drive ALCO of EBL is engaged with full of activities in setting
business results. The team is represented by member(s) from strategies and revamping previously taken strategies to
every division and is accountable to Management Committee cope with current market scenario. The major roles and
for its deliverables. Chairman of this EMT is a MANCOM responsibilities of ALCO are as follows:
member by default who acts as a bridge between EMT and  Measuring overall risk appetite of the Bank both in
MANCOM. EMT comprises mid-level managers (20 members banking book and in trading book.
at present) from cross sections nominated by their respective  Measuring liquidity requirement of the Bank in various
divisional heads on yearly basis. The Scope of this team is to time buckets and taking strategic and proactive actions
82
EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

to meet the requirements. branches, PC opens the sealed quotations in front of

 Monitoring the interest rate risk of the Bank and taking vendors and declares the name of winning vendor. This
actions to keep the interest rate gap at the desired level. practice has increased competitiveness among vendors
which resulted in cost effectiveness in procurement of
 Monitoring the movement of macro variables and yield goods and services which ultimately increased the value
curve shift and taking strategy for short, mid and long to all stakeholders.
term interest rate risk management.
 Keeping the balance sheet mix at desired level for Main BASEL III Committee
Operation and OBU. The seven-member BASEL III Committee has been formed
 Measuring and monitoring concentration risk, drawing members from CRM, Operations, Finance,
diversification and product profitability. Treasury, RMU and IT to play an instrumental role regarding
implementation of BASEL Guidelines as per the requirements
Bank Operational Risk Committee (BORC) of Bangladesh Bank from time to time. The committee was
It’s a key ‘Operations Risk Management’ forum of the approved by the Board in its 513th meeting dated 17 July
Bank to identify, measure, manage and monitor issues that 2013. This committee will work as SRP (Supervisory Review
expose the Bank to operational risks. The major roles and Process) Team which will be headed by MD & CEO. The
responsibilities of BORC are as follows: major roles and responsibilities of BASEL III Committee and
SRP Team are as follows:
 To transform BORC into a proactive forum of senior
management to discuss, evaluate and decide on existing  Implementation of BASEL Guidelines as per the
and potential operation risks. requirements of Bangladesh Bank from time to time.
 To ensure that Managing Director & CEO is being  Coordination of functions related to risk review process
informed timely regarding status of compliance by the and capital planning.
respective employees.  Review and recommendation of ICAAP (Internal Capital
 To ensure compliance with business/function operation Adequacy Assessment Process).
risk policies and procedures across all units in the Bank.  Oversee the adequacy of risk governance framework to
 To ensure that operation risks identified within meet minimum requirements under BASEL guidelines
businesses are assessed in terms of wider implications applicable in the country.
of business and strategic risks and those risks are  Ensure inclusion of SRP implementation agenda in each
reviewed and reported accordingly. meeting of the Audit Committee.
 To assess reputational implication of operation risks  Placement of annual ICAAP document to Board of
identified and ensure that MANCOM is duly updated of Directors for approval.
the same.  Engage in the dialogue with Bangladesh Bank SREP
 To ensure that all significant issues raised through team, when required.
internal audit and regulatory review are resolved  Any other activity required to comply with Bangladesh
effectively within agreed timeline. Bank and other regulatory requirement.
 To ensure implementation of the real time incident
reporting process. Credit Committee
The seven-member Credit Committee has been formed under
Purchase Committee (PC) the requirements of Enterprise Risk Management (ERM)
The five-member Purchase Committee (PC) consisting Policy and the Credit Policy Manual (CPM) of the bank for
members from Administration, Operations, Finance, IT overall supervision of the credit risk of EBL including; review
and Communication, plays an instrumental role in the of underwriting standards, lending practices, collection
procurement procedure of the Bank. The main objective of process and problem loan management. The members of the
this committee is to ensure transparency in procurement Committee consist of Chief Risk Officer, all Business Heads,
activity seeking ‘value for money’ in each deal made. Formed Head of CRM and Head of Finance. However, MD & CEO can
as per the Board approved ‘Procurement and Disposal nominate any other executive in the committee. The major
Manual’, the PC is mainly entrusted with the followings: roles and responsibilities of Credit Committee are as follows:
 This committee recommends the lists of vendors  Review of bank’s credit risk appetite, tolerance
for annual enlistment after thorough investigation of and strategy considering current and prospective
submitted documents and physical visit of vendors’ macroeconomic and financial environment.
facilities (if required) to the Managing Director & CEO for  Review of bank’s Credit Risk Management policies and
final approval. procedures.
 As per Procurement and Disposal Manual, sealed  Review and monitor effectiveness and application of
quotations are opened by the PC which recommends the Credit Risk Management Policy related standards and
vendors considering price and quality of the goods and procedures and the control environment with respect to
services. credit decisions.
 In case of large procurement such as renovation of  Monitor credit risk on a bank wide basis and ensure

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 compliance of the limits approved by the Board of
Directors or any Board Committee.
 Review of prudential limits on large credit exposure,
standards for loan collateral, credit concentration, loan
pricing, early alert system, monitoring and evaluation of
relationship techniques.
 Review and oversee the development in loan loss
provision policy and assess appropriateness and
adequacy of such policies in line with the credit risk
embedded in EBL loan portfolio; while compliance of
minimum regulatory requirement is to be ensured.
 Ensure regulatory and legal compliance in all aspects of
credit operations.
 Review bank’s problem loan management process and in order to identify, assess, monitor and control/mitigate
developments in delinquent portfolio. operational risk of various branches, units, departments
and divisions of the Bank. ORU sets the strategy based
 Investigate any classified loan relationship and to
on management policies, methods, tools, techniques and
recommend accountability report, if such responsibility
procedures as well as the guidelines of Bangladesh Bank.
is assigned by the Board or MD&CEO on case to case
It also collects relevant data, information, and reports and
basis.
analyzes them to assess the risk of operational areas of the
Internal Controls: the watchdog of transparency bank. ORU normally uses the following five steps to conduct
their activities:
and accountability
1. Identification of operation risk through analysis of
Effective internal control system results in better risk workflow and processes
management practices in terms of identification,
2. Assessment of risk identified with its severity and
measurement, monitoring and mitigation of risks. Internal
probability of happening
Control and Compliance (ICC) Division of EBL continually
recognizes and assesses all the material risks that could 3. Mitigation or control of risk identified through control
choices and control decision
adversely affect the achievement of the Bank’s goals.
The risk assessment by internal control focuses more on 4. Steps taken for monitoring, mitigation and control of risk
compliance with regulatory requirements, social, ethical 5. Proactively introduce various tools and reports to mitigate
and environmental risks that affect the banking industry. the operation risks
It ensures reliable financial and managerial information In case of any lapses/ irregularities found, ORU takes
that promote better strategic decision for the Bank. ICC appropriate corrective measures within the respective
ensures compliance with laws and regulations, policies and business/operation areas. If they find any significant
procedures issued by both the bank management and the operational lapses, they recommend the issue to the higher
regulators. Better internal controls may enable a business to management (MANCOM/EMT/BORC) through Head of ICC
engage safely in more profitable activities that would be too for immediate resolution of the same. Some major tools of
risky for a competitor without those controls. ICC enhances this unit are as follows:
public confidence over the banks and facilitates risk based  A framework for business and support functions to
bank examination. identify their major operational risks and mitigation plans.

At EBL, the Head of ICC has dual reporting lines to CEO  Branch/ Departmental Control Function Checklist
(DCFCL), EOD and BO report.
and Audit Committee of the Board and thus acts as a bridge
between management and Board. ICC acts as a watchdog  Prime Risk Indicator (PRI).
to ensure safe, sound and compliant operations of the  Quarterly Operations Report (QOR).
Bank. It keeps informed the management and Board (where  Spot check/ Surprise visit in Branches, Departments and
necessary) with any relevant update which is not routinely Divisions
covered by financial reporting and other non-financial
 Continuous monitoring in Trade Ops/Treasury/SD/Cards
disclosures. etc.
Depending on the size of the Bank and its requirement,  Incident Report from various areas etc.
ICC of EBL comprises of four units i.e. Operation Risk Unit,
Compliance Unit: This unit is entrusted to ensure that bank
Compliance Unit, Internal Control (it comprises audit unit) complies with all regulatory requirements while running its
Unit and Legal Unit. operations. They maintain liaison with the regulators at all
Operation Risk Unit (ORU): This unit is responsible to set levels and notify the other units/departments regarding the
up an operational risk management system within the Bank regulatory changes. Some major functions of this unit are as
as per the nature and complexity of the business operations follows:

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

 Ensure compliance with the suggestions and instructions The internal audit unit of EBL is independent from the internal
made by Bangladesh Bank based on comprehensive and control process in order to avoid any conflict of interest
special inspections. and it is given appropriate standing within the bank to carry
out its assignments. It is not assigned the responsibility of
 Ensure compliance of regulatory bodies like the central
performing other accounting or operational functions. The
bank, tax authority, Ministry of Finance, Law enforcing
management of EBL ensures that the internal audit staff
agencies and other regulators.
performs their duties with objectivity and impartiality.
 Ensure all the regulations of Bangladesh Bank and other
Results and status of internal audit in 2014: In 2014,
regulatory authorities have been implemented in the bank.
71 branches (67 branches in 2013) and 49 divisions/
 Review the Quarterly Operation Report.
departments/units (also 49 in 2013) were audited by the audit
 Ensure appropriate and required reporting to different unit of the Bank as per audit plan. After finalization of audit
entities. report, audit rating is calculated based on audit findings and
 Review of Policies, Guidelines and PPGs of the Bank. EBL Audit Policy and Guidelines and this rating is informed to
 Checking whether the appropriate policies include the related management with audit report.
a. top level review, b. appropriate activity controls Major audit findings include but not limited to different types
for different departments and divisions, c. system of of operational lapses due to human error, non-compliance
approval and authorizations, d. appropriate segregation of internal policies or circulars, lack of thorough knowledge
of duties and personnel are not assigned with conflicting about relevant laws and regulations etc. The deficiencies
responsibilities. identified during the audits are notified to the appropriate
 Arrange training of Anti Money Laundering as a “Lead level (business and support functions heads) and significant
Bank”. audit findings are reported to the Managing Director & CEO
 Arrange various training for the employees of the Bank and to the Audit Committee as well.
as per requirement.
Legal Unit: Business and Law is very much interconnected
 Support and advice departments and branches in to each other. A financial organization is appreciated as
complying with their various regulatory and other compliant when it runs business and others activities
compliance issues as required. abiding all rules and regulations of the country. Legal Unit
 Supervise and monitor the legal issues against the bank. of ICCD ensures the legal compliance of the bank ensuring
 Ensure compliance of Internal Audit Report. legal support to all branches and departments of EBL and
 Ensure smooth resolution of various complaints of maintaining liaison with different regulatory bodies such as
branches and departments under legal framework; Bangladesh Bank, tax authority, Ministry of Finance, Anti-
 Follow up of Bank’s regular and ad hoc submission of Corruption Commission, CID, Police, Central Intelligence Cell
returns/ reports/ queries to Bangladesh Bank and other etc. by mitigating their queries regarding illegal and irregular
regulatory bodies. transactions/ activities and complained matter. The major
responsibilities of this unit are as follows:
Internal Control (Audit) Unit: Audit unit of EBL is applying
risk based internal audit methodology for doing their audit  Monitoring and follow up of the suits/ cases/ writs/
functions. Risk based internal audit includes, in addition Appeals/ Revisions filed, by and against the Bank, in the
to selective transaction testing, an evaluation of the risk Judge Court and Supreme Court of Bangladesh.
management systems and control procedures prevailing in  Obtaining Legal Opinion from the Retainer/ Legal
various areas of the Bank’s operations. Under risk-based Advisors/ Expert Lawyers on complicated issues, and
internal audit, the focus shifts from the full-scale transaction sending and reply of Legal Notice through our panel
testing to risk identification, prioritization of audit areas and lawyers on behalf of bank to the stakeholders as per the
allocation of audit resources in accordance with the risk requirements of management.
assessment. While focusing on effective risk management
 Maintaining Liaison with Retainer/ Panel lawyer for
and controls, risk-based internal audit would not only offer
smoothly conducting the suits/cases/writs/Appeals/
suggestions for mitigating current risks but also anticipate
Revisions and providing them all kinds of logistic and
areas of potential risks and play an important role in
documentary support for proper execution of the
protecting the bank from various risks. The primary focus of
respective cases.
risk based internal audit of EBL is to provide a reasonable
assurance to the EBL’s Board and top management about  Mitigating the queries of different authorities such as
the adequacy and effectiveness of the risk management and Bangladesh Bank, tax authority, Ministry of Finance,
control framework in the bank’s operations. The audit team Anti-Corruption Commission, Courts, CID, Police,
of the ICCD assesses the effectiveness of the internal control Central Intelligence Cell etc. regarding various illegal and
system of the bank through periodic internal audit. irregular transactions and activities and investigation of
different cases.
Annual audit plan is prepared by considering all risk areas
and their prioritization based on the level and directions of  Taking initiative and performing all procedures regarding
risks. For example, high risky branch or department (based enlistment (i.e. making memo, submitting the memo
on previous audit rating, higher management’s and regulatory before the Board, making offer letter after final approval
requirement) is to be audited at shorter intervals as compared of the Board in favor of enlisted lawyers) of Panel lawyers
to medium or less risky branch or department, as applicable. and renewal of Retainer for the Bank.
This annual audit plan is approved by the bank’s senior  Providing up to date report regarding conducting cases
management and by the Audit Committee of the Board as per requirements of internal and external authorities.
before starting of New Year.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Vetting of property documents as well as Lease  Drafting of Lease Agreement and vetting of property
Agreements in connection with the floor spaces documents purchased for the ATM Booth.
purchased for the Branch Premises.  Providing legal supports other units of ICCD and
 Vetting of property documents as well as Contract for different branches and departments of the bank as per
Sale and Deed of Sale in connection with Land/Floor requirement.
Spaces to be purchased by the Bank.

BB Guidelines for Corporate Governance: Our Compliance Status

To ensure good governance i.e. corporate governance in bank management, Bangladesh Bank (BB) issued three Circulars in
2013 covering three broad areas as follows:

1. BRPD Circular No.11 dated 27 October 2013: Formation and responsibilities of Board of Directors (BoD).

2. BRPD Circular Letter No. 18 dated 27 October 2013: Appointment and responsibilities of Chief Executive Officer (CEO).

3. BRPD Circular Letter No. 19 dated 27 October 2013: Contractual appointment of Advisor and Consultant.
The summary of the BB guidelines and EBL’s compliance thereto are presented below:

1. Formation and responsibilities of Board of Directors (BoD)

Compliance
Sl. No. Particulars
Status
1 Formation of BoD: Prior approval from BB to be taken before appointment of new Directors, Complied.
as well as dismissal, termination or removal of any Director from the post. Qualification No such
and competency of Directors, maximum number of Directors of the Board, appointment of instance so far.
independent Directors, appointment of maximum 02 (two) members from a family as Director.
1.1 Appointment of New Directors: Every bank company, other than specialized banks, at the time of
taking prior approval from BB while appointing Directors should furnish the following information
along with the application:
a. Personal information of the nominated person Complied
b. Declaration of nominated person Complied
c. Declaration for confidentiality by the nominated person Complied
d. In case of independent director, the approval letter from BSEC Complied
e. CIB report of the nominated person Complied
f. Updated list of Directors Complied
1.2 Vacancy of office of a Director
(a) The office of a Director shall be vacated as per the provision of Section 108(1) of Companies Act
1994. Besides, provision of Section 17 of Bank Company Act 1991, providing false declaration at No such case
the time of appointment or observing shortfall of qualification as a Director.
(b) If the office of a Director is vacated as per Section 17 of Bank Company Act 1991, s/he will not
be eligible to become Director of that bank company or any other bank company or financial
institutions within one year from the date of repayment of the total dues to the bank. The dues can No such
be adjusted with the shares held by the Director in that bank company and he cannot transfer his incident
shares of that bank company until he repays his all the liabilities of that bank company or financial
institutions.
(c) BB can remove Directors or Chairman of a bank company other than the state-owned banks for
doing any activity that is detrimental to the interest of the banks depositors or against the public No such
interest under Section 46 and can also dissolve the Board of a bank company under Section 47 of instance as yet
Bank Company Act 1991.
1.3 Removal of Directors from office: With the prior approval of Bangladesh Bank, any Director of
a bank company other than specialized banks can be removed from his office for the reasons
No such
specified in its Articles of Association. The reason and grounds of the dismissal/removal and the
instance as yet
copy of such decision taken by BoD and a list of Directors shall be submitted to Bangladesh
Bank. Such removal shall be effective from the date of BB’s approval.
1.4 Appointment of Alternate Director: An alternate director can be appointed to act for a director
No such
during his absence for a continuous period of not less than three months from Bangladesh by
Director in EBL
fulfilling following instructions:

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

Compliance
Sl. No. Particulars
Status
(a) Bank has to collect and properly maintain the documentary evidences relating to departure and
arrival of the original director while traveling abroad. If there is any exception, the CEO should N/A
immediately inform it to BB.
(b) The copy of the decision of the BoD regarding appointment of alternate director, with original
director's probable returning date from abroad should be sent to BB within 7 days of taking the N/A
decision and the director's arrival date must be intimated to BB immediately after his/her return.
(c) Any loan defaulter or any person who is not eligible to become a director as per any relevant
N/A
guiding rules and regulations will not be appointed as an alternate director.
(d) As an alternate director is appointed temporarily; therefore, he/she will not be included in any kind
N/A
of committee constituted by the BoD.
(e) The alternate director or his/her affiliated organization will not get any kind of loan facilities from
the bank. In case of previous loan, enhancement of limit or extension of time period or any kind of
N/A
exemption or interest waiver will not be allowed. Moreover, all restrictions applicable to directors
according to rules and regulations will also be applicable to the alternate director.
2 Director from Depositors: As per Bank Company Act 1991 (amended in 2013) appointment of Complied.
Directors from depositors is no longer required. But, in compliance with the provision of section
No Depositor
15(9) of Bank Company Act 1991 (amended up to 2013), bank company may consider the tenure
Director in EBL
of existing Directors from depositors or may appoint them as the Independent Director of the
company.
3 Information regarding Directors: Banks are advised to take the following steps regarding directors
information:
(a) Every bank should keep an updated list of bank directors. Complied
(b) Banks should send a directors' list to other banks or financial institutions immediately after the
Complied
appointment or release of director.
(c) Banks should display a list of directors on the website and update it on a regular basis. Complied
4 Responsibilities of the Board of Directors (BoD)
4.1 Responsibilities and Authorities of the BoD:
(a) Work planning and strategic management
(i) The BoD shall determine the objectives and goals and to this end shall chalk out strategies Complied
and work plans on annual basis. It shall analyze/monitor at quarterly rests the development of
implementation of work plans.
(ii) The BoD shall have its analytical review presented in the Annual Report as regard to success/
failure in achieving the business and other targets as set out in its annual work plan and shall
apprise the shareholders of its opinions/recommendations on future plans and strategies. It shall Complied
set the Key Performance Indicators (KPIs) for the CEO and executives immediate two tiers below
the CEO and have it evaluated at times.
(b) Loan and Risk Management:
(i) The policies, procedures, strategies, etc. in respect of appraisal of loan/investment proposal,
sanction, disbursement, recovery, re-scheduling and write-off thereof shall be made with the
BoD’s approval under the purview of the existing laws, rules and regulations. The BoD shall Complied
specifically distribute the power of sanction of loan/investment and such distribution should
desirably be made among the CEO and his subordinate executives as much as possible. No
director, however, shall interfere, directly or indirectly, into the process of loan approval.
(ii) The board shall frame policies for Risk Management and get them complied with and shall
monitor the compliance at quarterly rests and review the concerned report of the risk management
Complied
team and shall compile in the minutes of the board meeting. The BoD shall monitor the
compliance of the guidelines of BB regarding key risk management.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Compliance
Sl. No. Particulars
Status
(c) Internal Control Management:
The Board shall be vigilant on the internal control system of the bank in order to attain and
maintain satisfactory health or grade of its loan/investment portfolio. The board will establish such
an internal control system so that the internal audit process can be conducted independently from Complied
the management. It shall review at quarterly rests the reports submitted by its audit committee
regarding the compliance of recommendations made in internal and external audit reports and the
BB inspection reports.
(d) Human Resources (HR) Management and Development:
Complied.
(i) Policies relating to recruitment, promotion, transfer, disciplinary and punitive measures,
EBL BoD
human resources development etc. and service rules shall be framed and approved by the
approves HR
BoD. The chairman or the directors shall in no way involve themselves and interfere into
policy from
or influence over any administrative affairs including recruitment, promotion, transfer and
time to time
disciplinary measures as executed under the set service rules. No member of the BoD shall
which guides
be included in the selection committees for recruitment and promotion to different levels.
all actions
Recruitment, promotion, transfer and punishment of the executives immediate two tiers
or decisions
below the CEO shall, however, rest upon the BoD. Such recruitment and promotion shall
related to HR of
have to be carried out complying with the service rules i.e., policies for recruitment and
EBL.
promotion.
(ii) The BoD shall place special attention to the development of skills set of bank’s staff in different
fields of its business activities including prudent appraisal of loan/investment proposals, and to
the adoption of modern electronic and information technologies, and the introduction of effective Complied
Management Information System (MIS). The BoD shall get these programs incorporated in its
annual work plan.
(iii) The BoD will compose Code of Ethics for every tier of employees and they will follow it Complied
properly. The BoD will promote healthy code of conducts for developing a compliance culture.
(e) Financial Management:
(i) The annual budget and the statutory financial statements will be prepared with the approval
of the BoD. It will at quarterly rests review/monitor the positions in respect of bank’s income, Complied
expenditure, liquidity, non-performing assets, capital base and adequacy, maintenance
of loan loss provision and steps taken for recovery of defaulted loans including legal
measures.
(ii) The BoD will frame the policies and procedures for bank’s purchase and procurement activities Complied.
and shall accordingly approve the distribution of power for making such expenditures. The EBL follows
maximum possible delegation of such power shall rest on the CEO and his subordinates. The a Board
decision on matters relating to infrastructure development and purchase of land, building, vehicles approved
etc. for the purpose of bank’s business shall, however, be taken with the approval of the BoD. ‘Procurement
and disposal
policy’.
(iii) The BoD will review whether an Asset-Liability Committee (ALCO) has been formed and it is Complied
working according to BB guidelines.
(f) Appointment of Chief Executive Officer (CEO): In order to strengthen the financial base of the Complied
bank and obtain confidence of the depositors, one of the major responsibilities of the BoD is to
appoint an honest, efficient, experienced and suitable CEO or Managing Director. The BoD will
appoint a competent CEO for the bank with the approval of BB.
(g) Other responsibilities of the BoD: Complied.
In accordance to BB Guidelines issued from time to time. The BoD will do
so as and when
required by BB.
4.2 Meetings of the Board of Directors: Board of Directors may meet once or more than once in a Complied.
month upon necessity and shall meet at least once in every three months. Excessive meetings are Usually EBL
discouraged. holds two
Board Meetings
in a month.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

Compliance
Sl. No. Particulars
Status
4.3 Responsibilities of the Chairman of the BoD:
(a) As the Chairman of the BoD or Chairman of any committee formed by the BoD or any director
does not personally possess the jurisdiction to apply policy making or executive authority, he/she
Complied
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 BoD. He may call for any information relating
to bank’s operation or ask for investigation into any such affairs; he may submit such information
or investigation report to the meeting of the BoD or the executive committee and if deemed Complied
necessary, with the approval of the BoD, 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
apprised to BB through the BoD along with the statement of the CEO.
(c) The Chairman may be offered an office room, a personal secretary/assistant, a peon/MLSS, a
telephone at the office, a mobile phone usable inside the country and a vehicle in the business Complied
interest of the bank subject to the approval of the BoD.
5 Formation of Supportive Committees of the Board: The BoD of every Bank Company can form
only three supporting committees of the BoD i.e. Executive Committee (EC), Audit Committee (AC) Complied
and Risk Management Committee (RMC).
5.1 Executive Committee (EC): EC is to be formed for taking decision on urgent and day-to-day or
routine activities between the intervals of two BoD meetings. The EC will perform according to the
terms of reference set by the BoD.
The EC will be formed with maximum of 07 (seven) members for a period of 03 (three) years. The
Chairman of the BoD can also be the member of the EC. The company secretary of the bank
shall act as the secretary of the EC. EC members, besides being honest and sincere, should have
reasonable knowledge on banking business, its operations and risk management and be capable Complied
of making valuable and effective contributions in the functioning of the Committee. The committee
shall discharge responsibilities and take decision on the matters as instructed by the BoD except
discharging of those responsibilities and taking decisions that are specifically assigned to the full
BoD by the Bank Company Act 1991 or other related laws and regulations. The decisions taken by
the Committee shall be ratified in the next BoD meeting. Upon necessity the Committee can call
meeting at any time. The Committee may invite CEO, Chief Risk Officer or any executive to attend
the committee meeting.
5.2 Audit Committee (AC): The AC should have maximum five members and two of them shall be
Independent Directors. It should be constituted of such members who are not members of the EC
of the BoD. The members of the Committee may be nominated for three years and the company Complied
secretary of the bank shall act as the secretary of the Committee. Please see ‘Report of the Audit
Committee’ for details.
5.3 Risk Management Committee (RMC): The RMC is to be formed to mitigate impending risks which
could be arisen during implementation of BoD approved policies, procedures and strategies.
This committee is entrusted to examine and review whether management is properly working on
identifying and mitigation of credit risk, foreign exchange risk, internal control and compliance risk,
money laundering risk, information and communication technology risk, operation risk, interest
rate risk and liquidity risk and keeping adequate capital and provision against the risks identified.
The RMC is to be formed with maximum five members who will be appointed for 03 (three) years. Complied
Each member should be capable of making valuable and effective contributions in the functioning
of the Committee. The company secretary of the bank shall act as the secretary of the Committee.
RMC shall review the risk management policy and guidelines of the bank at least once in a year,
make necessary modifications as per requirement and submit the same to the BoD for approval.
Besides, lending limits and other limits should be reviewed at least once in a year and should be
amended, if necessary. Please see ‘Report of the Risk Management Committee’ for details.
6 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 Complied
responsibilities as a Director of the bank.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Compliance
Sl. No. Particulars
Status
7. Intimation of the Circular to the Board and related persons by CEO: The CEO will inform about
Complied
this Circular to the directors and other related persons.

2. Appointment and responsibilities of Chief Executive Officer (CEO)

Compliance
Sl. No. Particulars
Status
A Rules and regulations for appointment of the CEO
1 Moral Integrity: In case of appointment to the post of CEO, satisfaction in respect of the
concerned person should be ensured to the effects that:
a) He has not been convicted by any Criminal Court of Law.
b) He has not been punished for violating any rules, regulations or procedures/ norms set by any Complied
regulatory authority.
c) He was not associated with any such company/organization; registration or license of which
has been cancelled.
2 Experience and Suitability:
a) For appointment as a CEO, the concerned person must have experience in banking profession
for at least 15 (fifteen) years as an active officer and at least 02 (two) years experience in a post
immediate below the CEO of a bank.
b) He must have a Master’s degree at minimum from any recognized university. Higher academic
education in the field of Economics, Banking and Finance or Business Administration will be
treated as additional qualification for the concerned person. Complied

c) In respect of service, the concerned person should have excellent track record of performance.
d) Satisfaction should be ensured that the concerned person was not dismissed from service
when he was chairman/director/official of any company.
e) Any director of any bank or financial institution or any person who has business interest in the
concerned bank will not be eligible for appointment to the post of the CEO.
3 Transparency and financial integrity: Before making appointment as a CEO, satisfaction should
be ensured to the effects that:
a. The concerned person was not involved in any illegal activity while performing duties in his
own or banking profession.
Complied
b. He has not deferred payment to creditors or has not compromised with his creditors to be
relieved from debts or he is not a loan defaulter.
c. He is not a tax defaulter.
d. He has never been adjudicated a bankrupt by the Court.
4 Age Limit: No person crossing the age of 65 years shall hold the post of CEO of a bank. Complied
5 Tenure: The tenure of the CEO shall not be more than 03 (three) years, which is renewable. If the
candidate has less than 3 years left to attain 65 years, he/she can be appointed for that shorter Complied
period.

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Compliance
Sl. No. Particulars
Status
6 Guidelines in fixing the salary and allowances: Banks are required to follow the guidelines stated
below while determining the salary and allowances of the CEO and submitting such proposal to
BB:
a. In fixing the salary and allowances of the CEO, financial condition, scope of operation,
business-volume and earning capacity of the bank; qualifications, achievement of the
candidate in the past, age and experience and the remuneration paid to the persons
occupying same position in the peer banks shall have to be taken into consideration.
b. Total salary shall be comprised of direct salary covering ‘Basic Salary’ and ‘House Rent’ and
allowances as ‘Others’. The allowances (e.g., provident fund, utility bill, leave-fare assistance)
in ‘Others’ head should be specified in amount/ceiling. Besides, other facilities (e.g., car, fuel,
driver etc.), as far as possible, shall have to be converted in the monetary value and thus
determining monthly total salary, it shall have to be mentioned in the proposal submitted to
BB. In the proposal, Basic Salary, House Rent, Festival Allowance, other allowances and other Complied
facilities shall have to be specified in Taka amount.
c. Without improving the bank’s major financial indicator like- CAMELS, annual salary increment
will not be payable.
d. Terms of salary-allowances and other facilities as specified in the terms and conditions of
appointment cannot be changed during the tenure. In case of renewal, proposal may be made
for re-fixation of the salary considering the work performance of the current CEO.
e. The CEO so appointed shall not get any other direct or indirect facilities (e.g., dividend,
commission, club expense, etc.) other than the salary-allowances and other facilities as
enumerated in clause (b) above.
f. The bank shall not pay any income tax for the CEO, i.e., the CEO so appointed shall have to
pay it.
7 Incentive Bonus: The CEO will get incentive bonus subject to paying incentive bonus to all
executives/officers/workers of the bank and the said bonus amount will not exceed BDT Complied
1,000,000 in a year.
8 Honorarium for attending the Board Meeting: Being a salaried executive, CEO will not get any
Complied
honorarium for attending the Board meeting or Board formed Committee meeting.
9 Evaluation Report: For reappointment of the CEO, the Chairman of the bank shall have to submit
Complied
a Board approved evaluation report to BB.
10 Prior Approval from Bangladesh Bank: Prior approval from Bangladesh Bank is mandatory before
appointing CEO as per section 15(4) & (5) of Bank Company Act 1991 (amended up to 2013).
For processing such approval, along with the proposal signed by the Chairman of the BoD, the
Complied
selected person's complete resume, offer letter (mentioning the direct & indirect remuneration and
facilities) and copy of Board's approval must be submitted to BB. The selected person must also
submit declarations as per Annexure A & Annexure B to BB.
11 Decision of Bangladesh Bank is final: The decision of BB for appointment of the CEO will be
treated as final and the CEO such appointed cannot be terminated, released or removed from his/ Complied
her office without prior approval from BB.
B Responsibilities and Authorities of the CEO: The CEO of the bank, whatever name called, shall
discharge the responsibilities and exercise the authorities as follows:
a. In terms of the financial, business and administrative authorities vested upon him by the BoD,
the CEO shall discharge his own responsibilities. He shall remain accountable for achievement
Complied
of financial and other business targets by means of business plan, efficient implementation
thereof and prudent administrative and financial management.
b. The CEO shall ensure compliance of the Bank Company Act 1991 and other relevant laws and
Complied
regulations in discharging of routine functions of the bank.
c. The CEO shall include clearly any violation from Bank Company Act 1991 and/or other
relevant laws and regulations in the “Memo” presented to the meeting of the BoD or any other Complied
Committee (s) engaged by the BoD.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Compliance
Sl. No. Particulars
Status
d. The CEO shall report to Bangladesh Bank of issues in violation of the Bank Company Act 1991
Complied
or of other laws/regulations.
e. The recruitment and promotion of all staffs of the bank except those in the two tiers below
him/her shall rest on the CEO. He/she shall act in such cases in accordance with the approved
Complied
service rules on the basis of the human resources policy and approved delegation of
employees as approved by the BoD.
f. The authority relating to transfer of and disciplinary measures against the staff, except those
at two tiers below the CEO, shall rest on him/her, which he/she shall apply in accordance
Complied
with the approved service rules. Besides, under the purview of the human resources policy as
approved by the BoD, he/she shall nominate officers for training etc.

3. Contractual appointment of Advisor and Consultant

Compliance
Sl. No. Particulars
Status
A Rules and regulations for appointment of an Advisor No such
advisor in EBL
1 Experience and Suitability: For appointment as advisor, the concerned person will have to fulfill
the following requirements with regard to experience and qualifications:
a. Experience in Banking or Administration for at least 15 (fifteen) years or have a long experience
in social activities.
b. Higher academic education in the field of Economics, Banking and Finance or Business
Administration will be treated as additional qualification for the concerned person.
N/A
c. Satisfaction should be ensured that the concerned person was not dismissed from his service
when he was Chairman/ Director/ Executive of any company.
d. The person who is working in any bank or financial institution or who has business interest in
that bank will not be eligible for appointment to the post of Advisor.
e. Satisfaction should be ensured that the concerned person is not a loan defaulter or tax
defaulter and has never been adjudicated a bankrupt by the Court.
2 Responsibilities of the Advisor: The roles and responsibilities of the Advisor should be defined
specifically. The Advisor can advise the Board of Directors or CEO only on those matters specified
in the appointment letter. The routine and general activities of the bank will not be included in his N/A
terms of reference. He will not be entitled to exercise any power or involved himself in the decision
making process of financial, administrative, operations or other activities of the bank.
3 Prior approval from Bangladesh Bank: Prior approval from BB is mandatory before appointing
an Advisor. For such appointment, the justifications of the post of advisor, responsibilities or
terms of reference, complete resume of the concerned person, terms of appointment (mentioning
N/A
remuneration and facilities) and copy of BoD’s approval shall be submitted to BB. The nominated
person has to make a declaration as per Annexure A. This declaration shall also be submitted to
BB.
4 Remuneration and other facilities of Advisor: The post of Advisor is not a fixed or substantive
post in the bank’s organization structure. Advisor will not be entitled to salaries and allowances
as regular employee except gross amount of remuneration, transport and telephone facilities. N/A
Remunerations inconsistent with the terms of reference of the advisor will not be considered as
acceptable to BB.
5 Tenure of Advisor: The tenure of the Advisor shall be maximum 01(one) year, which is renewable.
An evaluation report (by the Chairman that is approved by the BoD) of previous tenure should be N/A
submitted to BB along with the re-appointment proposal.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

Compliance
Sl. No. Particulars
Status
6 Appointment of Ex-executive: For ensuring good governance, any former Director, CEO or
any other Executive of the bank will not be eligible to become an Advisor in the same bank
N/A
immediately after their retirement or resignation. However, after one year from such retirement or
resignation, he/she will be eligible for appointment as Advisor.
B Rules and regulations for appointment of a Consultant
1 Terms of reference of Consultant: Consultant can be appointed for specialized tasks like tax, law
and legal procedures, engineering and technical works, information technology, etc. Consultants'
Complied
appointment should be avoided as much as possible for those works that could be done by
regular employees of the bank.
2 Responsibilities of a Consultant: The responsibilities or term of reference of a Consultant should
be specified. He/she should not be involved in any activities beyond his/her terms of references
Complied
and he/she cannot exercise any kind of power in bank operation or cannot participate in the
decision making process.
3 Appointment of a Consultant: A Consultant can be appointed with the approval of the BoD. After
such appointment the bank shall send the Consultant's complete resume, terms of reference and Complied
details of remuneration to BB immediately.
4 Tenure of a Consultant: The tenure of a Consultant should be consistent with the terms of
reference, but would not exceed 02 (two) years. Generally the Consultant will not be eligible for
re-appointment. But to complete the unfinished tasks, his contract may be extended for maximum
Complied
period of 01 (one) year with the approval of BB. The Chairman of the bank upon approval of the
BoD shall have to submit the extension proposal to BB with the evaluation report of his previous
tenure.
5 Remuneration/honorarium of a Consultant: The Consultant's remuneration should be in the form
Complied
of monthly or single lump-sum payment, and he is not entitled to any other facilities.
6 Appointment of Ex-executive: For ensuring good governance, any former Director, CEO or any
other Executive of the bank will not be eligible for appointment as a Consultant in the same bank
No such case
immediately after their retirement or resignation. However, after one year from such retirement or
resignation, he/ she will be eligible for appointment as a Consultant.

BSEC Guidelines for Corporate Governance: Our Compliance Status

The Bangladesh Securities and Exchange Commission (BSEC) issued a Corporate Governance (CG) Guidelines in 2012 which
is being followed by banks on ‘Comply’ basis. Status of compliance by EBL with the said CG guidelines issued by BSEC
through Notification no. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012 issued under section 2CC of the
Securities and Exchange Ordinance, 1969 and also BSEC Notification No. SEC/CMRRCD/2006-158/147/Admin/48 dated 21
July 2013 are as follows:

(Report under Condition No. 7.00)

Compliance Status
(Put  in the
Condition appropriate column) Remarks
Title
No. (if any)
Not
Complied
complied
1.0 Board of Directors
1.1 Board’s Size: Board members shall not be less than 5 (Five) and

more than 20 (Twenty)
1.2 Independent Director
1.2 (i) Independent Director: At least 1/5th 
1.2 (ii) For the purpose of this clause “independent director” means a
director:
1.2 (ii) a) Independent Directors do not hold any share or hold less than one

percent (1%) shares of total paid up capital.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Compliance Status
(Put  in the
Condition appropriate column) Remarks
Title
No. (if any)
Not
Complied
complied
1.2 (ii) b) Independent Directors are not connected with the company’s

Sponsor or Director or Shareholder who holds 1% or more shares.
1.2 (ii) c) Independent Directors do not have any other relationship, whether
pecuniary or otherwise, with the company or its Subsidiary/ 
Associated Companies.
1.2 (ii) d) Independent Directors are not the Members, Directors or Officers

of any Stock Exchange.
1.2 (ii) e) Independent Directors are not the Shareholders, Directors or
Officers of any member of Stock Exchange or an Intermediary of 
the Capital Market.
1.2 (ii) f) Independent Directors are/were not the partners or executives
during preceding 3 (three) years of concerned company’s Statutory 
Audit Firm.
1.2 (ii) g) They are not the Independent Directors in more than 3 (three) listed

Companies.
1.2 (ii) h) They are not 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).
1.2 (ii) i) They have not been convicted for a criminal offence involving

moral turpitude.
1.2 (iii) The Independent Directors shall be appointed by the Board of Done in the
Directors and approved by the Shareholders in the AGM.  21st AGM of
EBL.
1.2 (iv) The post of Independent Directors cannot remain vacant for more

than 90 days.
1.2 (v) The Board shall lay down a Code of Conduct of all Board Members

and Annual Compliance of the Code to be recorded.
1.2 (vi) The tenure of office of an Independent Directors shall be for a
period of 3 (three) years which may be extended for 1 (one) Term 
only.
1.3 Qualification of Independent Director (ID)
1.3 (i) Independent Director shall be knowledgeable individual with

integrity
1.3 (ii) The Independent Director must have at least 12 (twelve) years of

corporate management/ professional experiences
1.3 (iii) In special cases above qualification may be relaxed by the Commission N/A
1.4 Separate Chairman and CEO and their clearly defined roles and

responsibilities.
1.5 Directors Report to Shareholders
1.5 (i) Industry outlook and possible future developments in the industry 
1.5 (ii) Segment-wise or product-wise performance Please refer to

MD&A Section
1.5 (iii) Risks and concerns 
1.5 (iv) Discussion on cost of goods sold, gross profit margin and net Discussion on
profit margin interest income,
expense,

operating
and net profit
provided.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

Compliance Status
(Put  in the
Condition appropriate column) Remarks
Title
No. (if any)
Not
Complied
complied
1.5 (v) Discussion on continuity of any Extra-Ordinary gain or loss 
1.5 (vi) Basis for related party transaction- a statement of all related party Please refer to
transactions should be disclosed in the annual report  Annexure C &
C1.
1.5 (vii) Utilization of proceeds from public issues, right issues and/ or N/A
through any others instruments.
1.5 (viii) An explanation if the financial results deteriorate after the company N/A
goes for IPO, RPO, Rights Offer, Direct Listing etc.
1.5 (ix) If significant variance occurs between Quarterly Financial Please refer
performance and Annual Financial Statements the management  to Directors’
shall explain about the variance on their Annual Report. Report
1.5 (x) Remuneration to directors including independent directors. Please refer to

Note 37 of FS.
1.5 (xi) The financial statements prepared by the management of the
issuer company present fairly its state of affairs, the results of its 
operation, cash flows and changes in equity.
1.5 (xii) Proper books of account of the issuer company have been

maintained.
1.5 (xiii) 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.
1.5 (xiv) International Accounting Standards (IAS)/Bangladesh Accounting Departure
Standards (BAS)/International Financial Reporting Standards has been
(IFRS)/Bangladesh Financial Reporting Standards (BFRS), as adequately
applicable in Bangladesh, have been followed in preparation of  explained in
the financial statements and any departure there-from has been Note 2.1 to
adequately disclosed. the Financial
Statements.
1.5 (xv) The system of internal control is sound in design and has been

effectively implemented and monitored.
1.5 (xvi) There are no significant doubts 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
thereof should be disclosed.
1.5 (xvii) Significant deviations from the last year’s operating results of
the issuer company shall be highlighted and the reasons thereof 
should be explained.
1.5 (xviii) Key operating and financial data of at least preceding 5 (five) years

shall be summarized.
1.5 (xix) If the issuer company has not declared dividend (cash or stock) for N/A
the year, the reasons thereof shall be given.
1.5 (xx) The number of Board meetings held during the year and

attendance by each director shall be disclosed.
1.5 (xxi) The pattern of shareholding shall be reported to disclose the aggregate number of shares (along with name
wise details where stated below) held by:
1.5 (xxi) a) Parent/Subsidiary/Associated Companies and other related parties

(name wise details);

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Compliance Status
(Put  in the
Condition appropriate column) Remarks
Title
No. (if any)
Not
Complied
complied
1.5 (xxi) b) Directors, Chief Executive Officer, Company Secretary, Chief Please refer to
Financial Officer, Head of Internal Audit and their spouses and  Note 14.1 of
minor children (name wise details); the FS.
1.5 (xxi) c) Executives (top five salaried employees of the company other than Please refer to
stated in 1.5(xxi)b);  Note 14.1 of
the FS.
1.5 (xxi) d) Shareholders holding ten percent (10%) or more voting interest in NIL Please refer to
the company (name wise details). Note 14.1 of
the FS.
1.5 (xxii) In case of appointment/re-appointment of a Director the Company shall disclose the following information
to the Shareholders:
1.5 (xxii) a) a brief resume of the Director; 
1.5 (xxii) b) Nature of his/her expertise in specific functional areas. 
1.5 (xxii) c) Names of companies in which the person also holds the Please refer to
directorship and the membership of committees of the board.  Annexure C of
the FS
2.0 Chief Financial Officer, Head of Internal Audit & Company Secretary
2.1 Appointment of CFO, Head of Internal Audit and Company Head of
Secretary and their clearly defined roles, responsibilities and  Finance in
duties. place of CFO
2.2 Attendance of CFO and the Company Secretary at Board of

Directors meeting
3 Audit Committee:
3 (i) Audit Committee shall be the sub-committee of the Board of

Directors.
3 (ii) The Audit Committee shall assist the Board of Directors in ensuring Please refer
that the financial statements reflect true and fair view of the state to the Report

of affairs of the Company and in ensuring a good monitoring of the Audit
system within the business. Committee.
3 (iii) The Audit Committee shall be responsible to the Board of Please refer
Directors. The duties of the Audit Committee shall be clearly set to the Report

forth in writing. of the Audit
Committee.
3.1 Constitution of the Audit Committee
3.1 (i) The Audit Committee shall be composed of at least 3 (three)

members.
3.1 (ii) Constitution of Audit Committee with Board Members including

one Independent Director.
3.1 (iii) All members of the Audit Committee should be “financially literate”
and at least 1 (one) member shall have accounting or related 
financial management experience.
3.1 (iv) Filling of Casual Vacancy in Committee 
3.1 (v) The Company Secretary shall act as the secretary of the

Committee.
3.1 (vi) The quorum of the Audit Committee meeting shall not constitute

without at least 1 (one) independent director.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

Compliance Status
(Put  in the
Condition appropriate column) Remarks
Title
No. (if any)
Not
Complied
complied
3.2 Chairman of the Audit Committee
3.2 (i) Chairman of the Audit Committee shall be an Independent

Director.
3.2 (ii) Chairman of the audit committee shall remain present in the

Annual General Meeting (AGM).
3.3 Role of Audit Committee
3.3 (i) Oversee the financial reporting process. 
3.3 (ii) Monitor choice of accounting policies and principles. 
3.3 (iii) Monitor Internal Control Risk management process. 
3.3 (iv) Oversee hiring and performance of external auditors. 
3.3 (v) Review along with the management, the annual financial
 Please refer
statements before submission to the board for approval.
to the Report
3.3 (vi) Review along with the management, the quarterly and half yearly of the Audit

Financial Statements before submission to the Board for approval. Committee.
3.3 (vii) Review the adequacy of internal audit function. 
3.3 (viii) Review statement of significant related party transactions

submitted by the management.
3.3 (ix) Review Management Letters/ Letter of Internal Control weakness

issued by statutory auditors.
3.3 (x) When money is raised through Initial Public Offering (IPO)/ Repeat
Public Offering (RPO)/Rights Issue the company shall disclose
to the Audit Committee about the uses/ applications of funds
N/A
by major category (capital expenditure, sales and marketing
expenses, working capital, etc.), on a quarterly basis, as a part of
their quarterly declaration of financial results.
3.4 Reporting of the Audit Committee
3.4.1 Reporting to the Board of Directors
3.4.1 (i) The Audit Committee shall report on its activities to the Board of

Directors.
3.4.1 (ii) The Audit Committee shall immediately report to the Board of
Directors on the following findings, if any:
3.4.1 (ii) a) Report on conflicts of Interests. NIL
3.4.1 (ii) b) Suspected or presumed fraud or irregularity or material defect in NIL
the internal control system;
3.4.1 (ii) c) Suspected infringement of laws, including securities related laws, NIL
rules and regulations;
3.4.1 (ii) d) Any other matter which shall be disclosed to the Board of Directors NIL
immediately.
3.4.2 Reporting of anything having material financial impact to the NIL
Commission.
3.5 Reporting to the Shareholders and General Investors. NIL
4 External/Statutory Auditors:
4 (i) Appraisal or valuation services or fairness opinions. 
4 (ii) Financial information systems design and implementation. 
4 (iii) Book-keeping or other services related to the accounting records

or financial statements.

97
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Compliance Status
(Put  in the
Condition appropriate column) Remarks
Title
No. (if any)
Not
Complied
complied
4 (iv) Broker-dealer services. 
4 (v) Actuarial services. 
4 (vi) Internal audit services. 
4 (vii) Any other service that the Audit Committee determines. 
4 (viii) 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.
4 (ix) Audit/ certification services on compliance of corporate

governance as required under clause (i) of condition No. 7
5 Subsidiary Company
5 (i) Provisions relating to the composition of the Board of Directors of
the holding company shall be made applicable to the composition 
of the Board of Directors of the subsidiary company.
5 (ii) At least 1 (one) independent director on the Board of Directors of
the holding company shall be a director on the Board of Directors 
of the subsidiary company.
5 (iii) The minutes of the Board meeting of the subsidiary company shall
be placed for review at the following Board meeting of the holding 
company.
5 (iv) The Minutes of the respective Board meeting of the holding
company shall state that they have reviewed the affairs of the 
Subsidiary Company also.
5 (v) The Audit Committee of the holding company shall also review the
Financial Statements, in particular the investments made by the 
Subsidiary Company.
6 Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO):
6 (i) They have reviewed financial Statements for the year and that to

the best of their knowledge and belief:
6 (i) a) These statements do not contain any materially untrue statement
or omit any material fact or contain statements that might be  Please refer to
misleading. the Statement
on Integrity of
6 (i) b) These statements together present a true and fair view of the FS by MD &
company’s affairs and are in compliance with existing accounting  CEO and Head
standards and applicable laws. of Finance.
6 (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 violation of the company’s code of conduct.
7 Reporting and Compliance of Corporate Governance:
The company shall obtain a Certificate from a Professional Please refer to
Accountant/ Secretary (CA/CMA/CS) regarding compliance the following
7 (i) of conditions of Corporate Governance Guidelines of the  page.
Commission and shall send the same to the shareholders along
with the Annual Report on a yearly basis.
The directors of the company shall state, in accordance with the
7 (ii) Annexure attached, in the directors' report whether the company 
has complied with these conditions.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE GOVERNANCE REPORT

99
EASTERN BANK LIMITED ANNUAL REPORT 2014
SUSTAINABILITY REPORT
Sustainability: An Overview taking responsible decisions in context of ethical, social
and environmental issues as well as long term welfare of the
Sustainability for EBL means carrying out its business
community.
continuously to contribute in economic and social wellbeing
of the community in which we operate. In order to meet For the third time we are publishing this concise version of
expectation of stakeholders we must make our business sustainability report in the annual report covering our major
sustainable. Competitive pressures on business and a slow activities in the year 2014. This report is self-declared and
pace of economy in 2014 created the need for a better is not authenticated by any external authority and covers all
understanding of our processes and a greater need for operations and activities of the bank only.
making our business strategy flexible to keep us on the
Approach to Sustainability
growth path that is sustainable. When growth opportunities
are limited in the marketplace it is always rewarding to Our approach to sustainability lies on:
look inward and remodel and rewrite processes to stabilize  Adaptability with our long term vision challenging the
growth. In the process, we have learned that we need to changes in natural and economic environment.
have a strategy that is flexible and a mindset that is open  Integration of ethical, social and environmental criteria
to repositioning or realigning business. Our new stance on into the business decision making process.
business and operation has already had a palpable impact
on our competitive strength and business performance. We  Adherence to compliance, transparency, and corporate
always believe that growth should be both inclusive and governance.
environmentally sound to reduce poverty and build shared  Contribution to social and economic progress in the
prosperity for our society to continue to meet the needs of communities where the bank is doing business.
future generations.  Continuation of stable and lasting relationships with all
It is necessary to have a solid business model capable related stakeholders including employees of the bank.
of generating recurring and stable revenue, delighted  Promotion of sustainable finance with strong focus on
customers, disciplined use of capital, rationalization of cost, the renewable energy and clean technology sector.
prudent risk management, and strength of Brand to become
sustainable corporate house. Being sustainable also means

Sustainable Activities
Customer and Service Quality Products and Services E&S Risk Management
Customer’s delight is the centre of EBL’s EBL offers cost effective and sustainable EBL takes into account and
business model. The bank has over 386 products and services to meet assesses social and environmental
thousand customers, who recognize the customers’ need. These products and aspects in the credit risk analysis
brand as reliable partner. Understanding services are not offered solely on financial and decision-making processes
their needs, providing innovative solutions considerations but also to incorporate for its financing operations. Bank’s
and building long-term relationships ethical, social and environmental aspects. Environmental and Social (E&S) risk
based on trust and transparency created Examples include indirect microcredit management process is developed
foundation of bank’s business model via micro financing institutions and direct on EBRD (European Bank for
aiming at generation of stable and recurrent lending to certain disadvantaged groups Reconstructions and Development)
revenue. including small farmers at subsidized guidelines. EBL also follows the
Continuous pursuance for delightful price. minimum regulatory requirement for
customer service is essential for EBL in assessment of Environmental Risk
its business. In recent years, the Bank has Rating.
been surveying customer satisfaction by Application of IFC performance
third parties at service delivery points to standard in assessment of E&S
understand the areas where improvement risk for all large projects has been
is needed. initiated.
The bank planned to invest in systems for
3600 customer relationship management
and automated system for managing
incidents, claims and complains.

100
EASTERN BANK LIMITED ANNUAL REPORT 2014
Sustainable Technology and Process Promoting Sustainable Finance Employee
EBL’s technological and operational Our main impact on people and the The 1,559 EBL employees
systems make it one of the most efficient environment is through the business nationwide are the people who
online banks in the country. The bank is activities we finance. We work closely make the bank’s sustainable
investing in technology to ensure data with our clients and customers to business model possible and enable
security, faster and reliable customer manage potential environmental and it to offer the best service to its
service, as well as minimizing operational social risks associated with our financing customers.
risk to customers. decisions and to identify opportunities to EBL pursue its people development
The Bank focuses its efforts on improving finance cleaner technologies. program so that the professionalism
its internal processes to become more of all staff goes beyond complying
efficient and add value for the customer. with laws, codes of conduct and
internal regulations; they respect the
social, ethical and environmental
commitment of the Bank.
Financial Inclusion Corporate Governance Corporate Social Responsibility
The lending is done to support job creation Good governance contributes to the At EBL, we believe that the most
and economic development in the country. long-term success of a company, rewarding investment is investing
We are also committed to extending creating trust and engagement between for the society. We are driven
access to finance for individuals and the company and its stakeholders. The by our purpose to sustain and
small businesses that have traditionally right culture, behavior and values have ensure growth by making profit
been underserved by financial institutions. been established and promoted at all for people and not over them. We
SMEs are key business segment for EBL levels of the bank. believe in creating lasting value for
to accelerate growth and productivity. In our clientele, shareholders, and
2014, we increased lending to SMEs by 10 employees and above all for the
percent to BDT 18,281 million. For us 2014 ended with a high note as we community we operate in.
were felicitated with ICSB National Award
for Corporate Governance Excellence. As a responsible corporate,
We remain committed to microfinance as This award reflects our commitment to we ensure our CSR activities
a means of poverty alleviation. We have corporate governance and recognition are anchored on the principle
partnered with a good numbers of MFIs to to the importance we attach to of ‘Building Social Capital’.
disburse small loans to primary agriculture, governance issues in our organization. We recognize that we have
solar home systems, and other rural In order to achieve transparent and some definite responsibilities
economic activities. sound corporate governance, we have to our customers, employees,
adopted international best practices government, environment, and to
and this will ultimately help us sustain in the communities at large.
this globalized competitive free market A detail report on CSR has been
economy. presented separately in the annual
report.

Environmental and Social Obligations Environmental and Social Initiatives

EBL itself use resources for its operations and emits carbon. EBL strives to meet and exceed the social and environmental
Responsible consumption of resources can reduce bank’s expectations beyond the minimum regulatory requirements.
carbon footprint. Given its operation by size and its nature, Integration of ethical, social and environmental criteria in
environmental impacts of such activities are much lower business decision making process was our core initiatives in
than the activities of bank’s customers. The formation and 2014. Some notable initiatives are given below:
existence of EBL is for the well-being of the community 1. Application of Environmental and Social (E&S) risk
where the bank is doing its business. Longer term sustainable management procedures in assessing all credit
development of the community cannot be ensured without applications over BDT 2.5 million for SMEs and BDT 10.0
considering the environment and the society as a whole. million for corporate and real estate.
While pursuing the triple bottom line motto, EBL has engaged
itself to influence its customers to operate responsibly and 2. Maintain negative list of sectors (adversely impacting the
minimize impacts on climate change issues, hazardous waste environment) in the credit policy as best practice.
disposal, and depletion of non-renewable natural resources. 3. Preparation of Green Office Guide with the aim to reduce
EBL also considers the responsibility for protection of human our own carbon footprint.
rights, gender equity, and consumer protection.EBL strongly 4. Introduction of new SME product titled as “EBL Utpadon”
believes that the essence of the contract between the society to increase the scope of financial inclusion.
and the business is that companies shall not pursue their
5. Introduction of new product titled as “EBL Projukti” for
immediate profit objectives at the expense of the longer term
procurement of agricultural machinery/ equipment by the
interests of the community.
farmers.

101
EASTERN BANK LIMITED ANNUAL REPORT 2014
6. Disbursement of loan to farmers for cultivation of maize, to the business activities, risk management is supervised
oilseeds, onion, ginger, and pulses at subsidized interest by the Risk Management Committee of the Board through
rate of 4.00% p.a. a high level management committee and independent risk
7. Indirect lending through partner Micro Finance Institutions management unit. Besides the risk committee, there is a
(MFIs) for purchasing solar home systems in off grid Board Audit Committee to ensure compliance and internal
areas. control.

8. Direct lending to farmers at subsidized interest @ 11.00% Green Banking Cell

p.a.
This working group is headed by Deputy Managing Director
9. Indirect lending through partner MFIs in primary and team is made up from the risk, technology, brand and
agriculture and to the people who were previously operations division. Its main functions include reduction of
considered unbankable. carbon footprint of bank’s own operations and compliance
10. Partnering initiatives of development financial institutions with E&S risk policies while lending to customers.
for sustainable and effective improvement in ship breaking
sector bringing all stakeholders together. This effort has Environmental and Social Risk Management
achieved a milestone by delivering Joint Statement of The bank has appointed Environmental and Social Risk
Commitment by Bangladesh Ship Breaking Association Manager as custodian of environmental and social risk
(BSBA) and Association of Bankers Bangladesh (ABB) management policies and procedures. This individual is
to extend cooperation for improvement in environmental responsible for development, review, and administration of
and social practices to minimize pollution and enhance E&S risk management system in the bank. E&S risk manager
workplace safety. also appointed E&S risk officer for assistance.
Sustainability Management General Code of Conduct
Board of Directors sets the framework for sustainability This code brings together the ethical principles and rules of
management by formulating business strategies and conduct governing the actions of the entire Bank’s staff and
budget, policies for lending decisions, capital planning, risk is the central element of the Bank’s compliance program.
appetite, corporate social responsibility, etc. The business Some key issues relating to code of conduct and ethical
strategy is expressed by a three years’ plan discussed and guidelines have been presented in “Code of Conduct and
summarized in annual strategy session. As a counterweight Ethical Guidelines” section of this annual report.

Integrated Report: Delivering Our Promises

Value Addition and Distribution to Economy Year 2013 Year 2014

Value Added
Income from Banking Services 19,339.74 19,230.44
(-) Cost of services (11,296.24) (10,759.39)
Value added by Banking Services 8,043.50 8,471.04
(+) Non Banking Income 45.23 54.56
(-) Loan losses and provisions (952.51) (1,802.35)
Total 7,136.22 6,723.25

Distribution of Added Value

(a) To Employees and Directors
Salaries and other benefits 1,963.51 2,374.18
Remuneration and fees 19.16 21.61
Total to Employees and Directors 1,982.67 2,395.79
(b) To Capital Providers
Dividend to shareholders 1,222.36 1,222.36
Interest to debenture/bond holders - -
Total to Providers of Capital 1,222.36 1,222.36
(c) To Government
Income tax 2,589.79 1,995.21
VAT 79.12 90.70
Other duties & taxes 1.83 2.10
Total to Government 2,670.74 2,088.01

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 SUSTAINABILITY REPORT

Value Addition and Distribution to Economy Year 2013 Year 2014

(d) To Expansion and Growth
Retained profit 1,345.50 884.15
Depreciation 230.70 237.19
Deferred tax (321.90) (128.66)
Total to Expansion and Growth 1,254.30 992.68
(e) To Community Investments
Donations and Gifts 6.15 24.41
Total to Community Investments 6.15 24.41
Total Distributed(a+b+c+d+e) 7,136.22 6,723.25
Note: All figures above are in Million Bangladesh Taka

Excellence in Customer Service Year 2013 Year 2014

Number of average customers* 353,842 386,778
Number of complaints received through all channels 1,365 2,114
Complaints per 1000 customers 2.11 2.79
Usual turnaround time to resolve any complaint 3-7 days 0-5 days
Total number of complaints regarding breaches of customer privacy and
Nil Nil
losses of customer data
*Simple average of number of customers at the beginning and ending of the year 2014

Financial Inclusion Year 2013 Year 2014

Cumulative Agricultural and Rural Credit extended through MFIs (BDT in Million) 1,734 2,014
Cumulative Agricultural Credit extended through own network (BDT in Million) 47 35
Cumulative Agricultural and Rural Credit extended from ADB fund (BDT in Million) 1,377.65 904.28
Total Number of individual impacted* 96,662 1,60,083
Total Number of MFI partnered 13 14

Tackling Financial Crime Year 2013 Year 2014

Number of staffs completed training on AML 1,071 551
Number of Suspicious Transactions reported to Bangladesh Bank 6 6
Number of accounts closed for unsatisfactory KYC - -

Promoting Sustainable Finance Year 2013 Year 2014

Amount financed for installation of ETP to plants in operations - -
Amount financed in plants having ETP (loan disbursed to projects having ETP)* 16,457 22,119
Amount financed to solar panel / renewable energy plants - -
Amount financed to Bio-fertilizer plants - -
Amount financed to brick kilns adopted cleaner technology - 53
Amount financed to other green projects** 40 20
Total Sustainable Finance 16,497 22,192
Note: All figures above are in Million BDT
*Approximate amount
**Solar Home System Through MFI
Number of employee trained in sustainable finance 35 6
Employer of Choice Year 2013 Year 2014
Headcount (Permanent staff) [As on 31 December 2013 and 2014] 1,498 1,559
Percentage* of female representation 20.5 % 20%
Percentage* of voluntary attrition 6.5 % 6%
Number of permanent staff received training 3,613 4,712
Total number of training days 8,009 11,400
Average training days per employee 5 7

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Employer of Choice Year 2013 Year 2014
Percentage* Growth in Headcounts 10% 4%
Number of fresh graduates recruited as Management Trainee Officer (MTO) 18 4
Number of fresh graduates recruited as Probationary Officer 27 24
Number of fresh graduates recruited in other positions 35 23
Years of service with EBL as percentage* of total permanent staff headcount

Less than 5 years 67% 64%

5 > 10 years 19% 22%

10 > 15 years 4% 5%
Over 15 years 10% 9%
No. of employees coordinating employees in case of health and safety emergencies to help, monitor and advise under occupational health and safety programs.
No. of GAP Owner 186** 97
No. of Fire wardens 218 228
Note: *Expressed as percentage of Total permanent staff headcounts
**Including alternative GAP owner. (Alternative GAP owner post were discontinued in 2014)

Protecting Environment Year 2013 Year 2014

Number of customers eligible for Environmental Due Diligence 89 141
Number of customers appraised for Environmental Risk Rating 89 141
Low 78 127
Moderate 9 10
High 2 4
Cost of water consumed by the bank (BDT in Million) 8.61 6.20
Cost of paper consumed by the bank (BDT in Million) 3.68 4.51
Cost of energy (electricity, fuel, and gas) consumed by the bank (BDT in Million) 58.41 83.91
Installed capacity of solar energy to run bank premises and ATMs (in Kilowatt) 2.59 2.59
Percentage of bank branches connected online 100% 100%
Number of staff received training on Environmental and Social Risk Management 6 6

Corporate Social Responsibility Year 2013 Year 2014

Major Expenditure for CSR (BDT in Million) 6.15 24.41

Financial Assistance Received from Government Year 2013 Year 2014

Balance of borrowing from Bangladesh Bank under different Refinance
5,659.97 6,999.21
programs (as of 31 December) (in BDT Million)
Interest loss compensation received from Bangladesh Bank against
26,351 17,049
disbursements in specified agricultural products @ 4%
Note: All figures above are in Bangladesh Taka
Governance Year 2013 Year 2014
No. of Incidents of non-compliance with regulations resulting in fine or penalty Nil Nil

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EASTERN BANK LIMITED ANNUAL REPORT 2014
SME SUCCESS STORIES
products on credit. The goodwill of father and the hard work
of son worked well for their business to flourish.
Growth of business demands expansion of business. To
inject new capital in the business, they approached EBL for
a loan of BDT 10 lac. And eventually they got a term loan
of BDT 5 lac for two years. This was a modest beginning of
banking relationship with EBL. And the rest is history.
The new injection of capital helped Elias build new stocks of
fabrics and gave fresh impetus to the business growth. After
repaying 14 regular EMIs, he again applied for Loan of BDT
10 lac. The bank authority entertained his request for a further
extension of loan with a condition to adjust the existing loan.
This time around, he purchased the possession of his rented
shop, whose current market value is no less than BDT 2
crore. Again after 12 regular payments of the second loan,
he turned to the bank for another loan and subsequently the
bank authority approved partial security-backed loan for BDT
The Chemistry of Growth 15 lac with a term of three years. The new loan helped him
For a curtain market broker of the city’s New Elephant Road diversify into curtain making.
area Md. Harun Sheikh, life was fraught with challenges. But
In 2012 he bought a 1,150 sft apartment at Elephant Road.
his biggest capital was his goodwill and his relationship with
He availed another loan of BDT 60 lac from another bank by
big traders in the business. His long experience of the trade
mortgaging his flat. The following year, he opened crockery
and his wealth of goodwill came good when he ventured into
showroom ‘Unique Gallery’ at Gulshan-2.
business in 1998. He rented a shop and entrusted his son
Md. Elias Sheikh with the operation of the business, Unique The successful entrepreneur now lives in his own flat with his
Fabrics. family and parents. Perhaps the chemistry of family bondage
is the key of his success.
Initially, Elias managed to run the business with a shoestring
budget. But their goodwill in the market enabled them to get

husband had to retire from his construction business because

of his ill health. The family had to move to Dhaka in 2000 and
the whole responsibility of the family was now on her tender
shoulders. Her natural talent for designing was her resource
and she started her dress-making business from her small
drawing room. Her dresses became an instant hit among her
neighbours.
Three years into her business, she rented a showroom
at Dhanmandi’s Anam Rangs Plaza in 2003. She then
approached EBL for a BDT 3 lac loan and got it sanctioned.
With the small ‘Mukti Loan’ her business found the impetus
that she was looking for. As her business began to grow,
she opened her second showroom at Plaza AR in 2008.
Considering her growth potential, the bank enhanced her
loan to BDT 14 lac the next year. The loan helped her going
for expansion and she opened her third outlet on Baily
Road. To support her expansion, she set up her factory at
Kalabagan. As she grew, her credit line with the bank also
Knitting Success grew exponentially. In 2011 she was given a loan of BDT 25
It was early 80s. In a quiet village of Mymensigh, there lived a lac followed by another 25 lac in 2013.
young mother of three Shahana Kader with her husband. She Her honesty, integrity and dedication have brought smiles to
used to design and sew dresses for her daughters. She found her family as well. All her three received good education. Her
admirers of her dresses in her neighbours, who requested her second daughter, Humaira Hasin did a Diploma in Fashion
to design dresses for their kids. Designing after completing her Post-graduation in Home
Inspired and motivated by her well-wishers, she ventured Economics. Humaira helps her mother in her business.
into dress making business from her own house in 1997. She Shahana’s story is story of resolve, commitment and dream
also enjoyed gifting dresses to her neighbours. In 1998 her to make a difference.
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EASTERN BANK LIMITED ANNUAL REPORT 2014
 She began with a modest TK. 23,000 from her husband and
began supplying home textiles such as bed covers, cushion
covers, table cloth, and other handicraft items.
As the business grew, she set up her own factory in a four-
storied building in Mirpur. The ground and first floors house
the factory. Currently she supplies salwar kameezes, muslin
saris, panjabis, drapes, bed covers and cushion covers to
Aarong.
The mother of a 15-year old daughter said she is externally
lucky to have support from her in-laws in running the
business. Getting financial support was the main problem
during her initial days, but ‘Things however have changed a
lot now a day.’
The Metamorphosis ‘The mindset of people towards small business has changed,’
Salina Hossain began her career as a salesperson at Mini she said recalling her days when she had to put in lot of
Mart in Dhanmondi, the country’s first chain shop operated efforts to manage women workers.
by women entrepreneurs in early 2000. The next door ‘Government and financial institutions are now keen on
neighbor girl now runs a successful company and employs supporting women entrepreneurs. Girls should not waste their
over 300 people. time at home anymore. They should come up with new idea
‘I worked along with 20 other women at Mini Mart. I told and set up their own businesses, which will not only employ
myself, if these women could set up their own venture, them, but also create employment for others,’ said she with
why not I,’ said Salina about her inspiration and added, aplomb.
‘While working for Mini Mart, I found that many women did At 45, she now dreams of setting up handicraft projects in
handicraft work. That was the source of my inspiration to do different districts of the country, women empowerment and
something in handicrafts.’ contribute in mitigation of poverty.
She had a knack for fashion designing from childhood and With personal assets worth over BDT 150.00 lac, and
her sister, who was with for Aarong, a leading fashion house business assets worth about BDT 80.00 lac, hers is fairytale
of the country, helped her honing her skills. story of success backed by confidence and determination to
Her sister found her designs interesting and helped her show make a change for her and people around her.
her products to Aarong, a social enterprise of BRAC, the Salina enjoys EBL Mukti Loan of BDT 25.00 Lac.
world’s largest non-government organization. They liked her
products and she won a regular supply order from the fashion
giant.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

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EASTERN BANK LIMITED ANNUAL REPORT 2014
CORPORATE SOCIAL RESPONSIBILITY
Beyond Banking of University of Dhaka were awarded under the financial
grant program. The governor of Bangladesh Bank Dr. Atiur
EBL believes that our responsibility extends beyond our core
Rahman, who attended the event as chief guest and handed
business to the society in which we operate. For us investing
over the scholarship certificates among the awardees, said,
in today is building for tomorrow. Our future is our society.
‘In this age and time when everything is knowledge-based
Therefore, investing in the society in which we operate in is
there is no alternative to knowledge-centric development.
basically investing in our own future.
In this globalized world knowledge will be the differentiating
The ethos and principles that guide us and govern our actions factor between the nations. The importance of knowledge is
are values and sustainability. To achieve sustainable growth, much greater than any time in history now.’
we consider corporate governance as our fundamental pillar
Under the program, each student received Tk. 5,000 through
around which all our banking actions revolve. Our recent
EBL Lifestyle Card. The festivity and emotion running through
gold award in corporate governance from the Institute of
the event was the right occasion for EBL to salute the spirit of
Chartered Secretaries of Bangladesh is suggestive of the
these young achievers.
importance we attach to corporate governance.
We want to be a responsible partner of our customers,
shareholders and other stakeholders attaching highest
priority to ethical conduct and integrity. The two-word phrase
that governs our corporate governance is ‘Integrity and
responsibility.’ In everything that we do, we aim not only to
create value for our clients, shareholders and employees, but
also to meet environmental and social challenges. Markets
are volatile and prone to risk. In a world of change, our goal
is to grow sustainably. For only principles of ethical and moral
values are universal and consistent.

Building Social Capital

Sustainable growth can only be achieved through
building social capital by enabling talent, promoting equal
opportunity and driving social change. In keeping with
Bangladesh Bank Governor Dr. Atiur Rahman, Vice-chancellor of the University
our corporate culture, we aim to raise social capital by of Dhaka Dr. A A M S Arefin Siddique and other guests seen with a recipient of
investing in education. The legendary Nelson Mandela ‘EBL-DUAA Inspiration’ scholarship.
once said: ‘Education is the most powerful weapon we
Apart from EBL-DUAA initiative, we have also donated
can use to change the world.’ In our time of fast changing
BDT 1.5 million and more than 30 computers to various
global economy knowledge has become the key point of
schools and educational institutions to support the cause of
differentiation between nations. As a responsive corporate
education in the society.
citizen we have anchored our CSR initiatives on education.
Our initiative is based on two pillars: strengthening youth Our commitment to education is to help young people
confidence by raising aspirations and providing pathways to discover their own creative potential, develop skills and build
education and employment opportunities. confidence.

The Approach we have applied Connecting with Customers

To strengthening youth confidence and to providing pathways Sustainability is at the core of everything that we do. Our goal
to education, we have established partnership alliance with is to create a culture of high-performance and dedicate our
Dhaka University Alumni Association (DUAA) back in 2007 services and propositions to have an impact to the lives we
and since then awarding scholarships to deserving students, touch with our banking services.
at least four from each department, to pursue their education For us customers are the cause of existence, never just
and to prepare them to enter into the job market. Why tertiary a queue in the bank counter. Recognizing ‘customer
education? Students at this level are about to enter the job satisfaction’ as a journey not destination, EBL is determined
market and contribute to the society in a meaningful way. to serve its customers’ needs by offering innovative but
The great Mahatma Gandhi once asked, ‘Is not education the useful financial products and services, while maintaining
art of drawing out full manhood of the child under training?’ good relationships with them as their trusted partner. We
At EBL we believe that it is our corporate responsibility to have taken several measures to raise the bar of our service
prepare the meritorious but disadvantaged students for the excellence including training, mystery shopping, telephone
bigger role in the society. Since the scholarship EBL-DUAA etiquette test and customer feedback surveys through
Inspiration came into being, each year we are awarding independent research houses. First in Bangladesh in 2014 we
financial grants to over 250 students at different level of their have initiated an automated customer feedback management
studies, starting from a sophomore. module and customer feedback tabs installed in our major
Last year 566 deserving students from all 74 departments branches. This module enables us to monitor centrally the

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EASTERN BANK LIMITED ANNUAL REPORT 2014
level of service offered at branches. In another major initiative We initiated a lecture program called EBL Leadership Lecture
taken during 2014 to ensure service delivery commitment is Series in June last year with the idea to invite visionary
0-5 day turnaround time for every service of the bank. leaders of different fields ranging from corporate Bangladesh,
teaching, social work to judiciary to arts who share their
The Change Agent success stories and their challenges in life with us. Every
For us human resources are the most valuable asset and they month starting in June we invited leaders from different fields;
are the change agent. EBL has established a competitive and listened to their journey of life, challenges, their dreams,
enabling working environment to help employees perform their frustration and how they have handled all those and
their best and engage with the brand emotionally. In this age come out victorious. The interactions with the achievers
of technological development and knowledge-sharing, the were invigorating, inspiring and eye-opening to say the least.
competitive advantage based on technology is diminishing For every session, we selected a mix of around 80 of our
and the divide between rich and poor is also shrinking. The colleagues to interact with our invitees, ask them questions
key agent of differentiation in this globalized world is people about their leadership method and people management
and the quality of service they offer. This is why some of the formula they have successfully applied in their lives. Our
leading management gurus are advocating for employee first idea was to provide our employees an intellectual and
and customer second policy for the enterprises. Creating a emotional rendezvous. The series begins on Tuesday, June
culture of healthy competition driven by knowledge is what 10 with Latifur Rahman, Chairman and Managing Director
we believe is the best way to prepare our employees to take of Transcom Group, and winner of the prestigious ‘Oslo
up challenges of the contemporary business world. Business for Peace Award’ in 2012.
In 2014 a staggering 306 learning and development This event becomes an instant success and now an eagerly-
programs were conducted for 7,900 participants, which is awaited monthly program for the employees of the Bank.
about 24 percent up in number of events and participants Contribution to National Exchequer
over 2013. We have also arranged specialized training for
Being a responsible and tax abiding corporate citizen, we
women employees to nurture leadership skills in them and
regularly pay corporate tax on time, sometime even before
arranged training for 150 up-and-coming women leaders in
the due date. We also deposit excise duty, withheld tax and
the bank. Nasreen Sattar, Management Skills Development
VAT to govt. exchequer on time deducted from employees’
Specialist and former CEO SCB, Afghanistan, conducted a
salary as well as payments to customers and vendors.
series of programs to hone in the leadership abilities among
Following graph shows our contribution:
our women employees. Nazneen Sultana, Deputy Governor,
Bangladesh Bank, who herself an icon in banking industry Contribution to National Exchequer
attended one of the training sessions and narrated stories of
her life and the challenges she had to face. 2,400 2,464

1,663 1,780
BDT Million

332 358
139 114

2014 2013

Corporate Tax Excise Duty on Loans & Deposits

Withholding Tax Value Added Tax (VAT)

We are Environment-responsive
For empowering women and creating tomorrow’s corporate leaders, EBL
organized a series of Leadership Programs for the female colleagues of We believe that every small ‘GREEN’ step taken today
EBL. Nazneen Sultana, Deputy Governor, Bangladesh Bank inaugurated and would go a long way in building a greener future. As an
conducted one such program. environment-responsive bank we initiated Go Green
To attract talents and retain competency, we have a balanced campaign in our Bank. After reducing the use of electricity
compensation scheme comprising financial and qualitative and paper at the office, EBL is now gearing up for carbon
benefits. Besides providing competitive package, the Bank trading to show its commitment to environment-friendly
provides various welfare schemes such as healthcare and funding. EBL is the first bank to claim refinance from the
contributory provident funds, house building and car loan central bank for carbon credits. Some of our branches and
schemes as well as gratuity and superannuation benefits ATM’s of the bank are now run on solar power.
to eligible employees. Various annual conferences and The Bank also ensures that the customer having production
recreational events are arranged for the employees which facilities susceptible to damage environment has due
add vitality and motivation towards work and organization. environmental clearance certificate from the concerned
Employees are provided with orientation, local and foreign ministry while granting or renewing credit facilities. EBL is the
training and development programs. first bank in Bangladesh to offer Sustainable Energy Finance

109
EASTERN BANK LIMITED ANNUAL REPORT 2014
loan product with assistance from the South Asia Enterprise
Development Facility (SEDF), managed by IFC in partnership
with the UK Department for International Development and
the Norwegian Agency for Development Cooperation to help
companies implement energy-saving measures and boosting
the competitiveness of private enterprises.

Participation in National Events

We feel proud to be associated with any event that fosters
solidarity and helps enhancing image of the nation. EBL
donated BDT 5 Million for organizing a historic event “Lakho
Konthe Sonar Bangla”. On 26 March 2014, our Independence
Day, people from all walks of life assembled at the National
Parade Ground to sing the national anthem together. The
number of participants was so overwhelming and filled with
passion and patriotism; this event earned into the Guinness M. Ghaziul Haque, Chairman, Eastern Bank Limited, hands over the dummy
key of an ambulance to Md. Shamsul Hoque Chisty, President of Anjuman
World Record.
Mufidul Islam.

EBL chairman said, ‘Anjuman Mufidul Islam’s free health

services to poor and needy people irrespective of caste,
creed and religion and humanitarian activities to orphans,
widows, poor, disabled, handicapped and destitute are
internationally acclaimed. We feel privileged to be a part of
their activities.’
EBL believes that health is the key to rapid socioeconomic
development of the country; the Bank has donated large
volume of equipments to various hospitals across the country
to underline its commitment to quality healthcare delivery in
Bangladesh.

Participation in Sports development

Bangladesh sets a new world record for most people singing national anthem Sports help building nation both physically and mentally.
on 26 March 2014 at the National Parade Ground. It can play a role in improving lives of not only individuals
The Guinness World Record later made the following but also the whole communities. A planned development
announcement on its official website: “The most people of sports activities can initiate positive social change. As a
singing a national anthem simultaneously is 254,537 and was responsible corporate citizen we have donated BDT 5 million
achieved by the Ministry of Cultural Affairs, Government of to ‘Bangladesh Cricket Board’ for the growth and expansion
the Peoples’ Republic of Bangladesh at the National Parade of cricket in Bangladesh.
Ground in Dhaka, Bangladesh, on 26 March 2014”.
We are here for the humanity
Caring for the Society EBL considers the society as an extended family. We are
Anjuman Mufidul Islam is a voluntary, non-profit and non- always at their side when they are in distress and need our
political organization. Operationally, it is now the biggest help most. Every year, we distribute blankets to the cold
human welfare organisation in the country. This organization hit people of the country. EBL distributed a large number
is one of the leading ambulance service providers in of blankets among the cold-hit people of Dhanbari Upazilla
Bangladesh too. Anjuman Mufidul Islam provides ambulances under Tangail District.
to carry patients as well as dead bodies both within and Md. Nasiruzzaman, General Manager, Bangladesh Financial
outside Dhaka City. Intelligence Unit ( BFIU), Bangladesh Bank was present as
We donated a state of-the-art ambulance to be used by Chief Guest and EBL Vice President & Head of Operation Risk
Anjuman Mufidul Islam for their free health services to poor Md. Abdul Awal distributed the blankets on behalf of Eastern
and needy people. The chairman of EBL, M. Ghaziul Haque, Bank Limited with the help of Upazilla Administration, Tangail.
handed over the key of the ambulance to the president of EBL distributed a large number of blankets among the
Anjuman Mufidul Islam, Md. Shamsul Hoque Chisty, at a poor and old ages cold-hit people of Pakundia Pourosava
simple ceremony held at the EBL Head Office in Dilkusha on under Kishoregonj District. M Mahfuzur Rahman, Executive
11 September 2014. EBL Director A M Shaukat Ali, Managing Director, Bangladesh Bank was present as Chief Guest, EBL
Director and CEO Ali Reza Iftekhar, other senior executives DMD Akhtar Kamal Talukder, Head of Operation Risk Md.
and different committee members of Anjuman Mufidul Islam Abdul Awal distributed the blankets to cold-hit people of
were also present at the ceremony. Kishoregonj.
In 2014 EBL also donated BDT 5 Million to Prime Minister’s
Relief Fund for Flood Affected People of the country.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORPORATE SOCIAL RESPONSIBILITY

CSR ALBUM

1 2

3 4

1 EBL donated blankets to Prime Minister’s Relief and Welfare Fund for the cold-hit people of the country.

2 Prime Minister Sheikh Hasina hands over a cheque for Tk. 4.8 lac to a family member of one of the officers killed in BDR carnage. Mir Nasir Hossain and
Meah Mohammed Abdur Rahim, Directors of EBL were present during the handing over of the cheque.

3 Md. Nasiruzzaman, General Manager of Bangladesh Bank is seen during blanket distribution at Dhanbari Upazilla, Tangail.

4 M Mahfuzur Rahman, Executive Director, Bangladesh Bank and EBL DMD Akhtar Kamal Talukder distribute blankets at Pakundia, Kishoregonj.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
ENGAGEMENT OF PEOPLE
EBL has always considered people as its core brand and In August a selection of 39 best images of the contest was
valued engagement of people with the organization. The year put up for a 3-day exhibition at Drik Gallery. Shitangshu
2014 that has lapsed into eternity will remain etched in the Kumar Sur Chowdhury, Deputy Governor, Bangladesh Bank
collective memory of the Bank’s employees for a number of inaugurated the photo show as chief guest along with the MD
engagement programs that have been initiated to scout latent and CEO of EBL.
talents of the employees and inspire them. It was indeed ‘the
year of people’s engagement.’ The guiding philosophy behind Esho Mili Surey Surey
all the engagements which have been initiated in 2014 and The engagement program that created much excitement
plan to continue with is that every human being is endowed among the employees was the music talent hunt ‘Esho Mili
with immense potential and all that is needed is a platform to Surey Surey.’. A shortlist of five best singers, who performed
express them. at the annual ‘Town Hall’ program were gleaned through a
series of three audition rounds.
Simple Pleasures of Life

The five finalists of ‘Esho Mili Surey Surey’ with the jury.
A three-member jury board consisting of renowned photographers Shafiqul The audition rounds took place in the musically important setting
Alam Kiron, Jannatul Mawa and Munem Wasif looking at the entries.
of Chhayanaut auditorium. An elite panel of judges featuring
The photography contest for the employees ‘Simple singer and music director did selection job for the bank.
Pleasures of Life’ that was pegged on the theme ‘My City’
witnessed a flourish of imagination in capturing the city life
and its many-layered reality. Initiated in 2012, the second
edition of the photo contest during 2014 was a pleasant
surprise for everyone for the quality of entries. A staggering
73 entries from 22 participants explored life and living of the
major cities of the country with great enthusiasm, emotion,
and sensitivity. Renowned photographers were on the jury
with the representative of Fujifilm. The jury board selected
the best three images for the awards and 12 pictures for the
contents of 2015 calendar of EBL. Fujifilm joined the contest
as partner and will give further training to all the contestants.

The elite panel of judges of ‘Esho Mili Surey Surey’ featuring Rabindra Sangeet
exponent Rezwana Chowdhury Bonnya, noted music director Sheikh Sadi
Khan, and music director and founder member of the band Feedback Piaru
Khan.

Chobir Deshe Ronger Beshe

If the employees of EBL constitute a family, then the family
members of the employees are the Bank’s extended family.
This sentiment was behind the holding of art competition for
the children of EBL employees. The art competition Chobir
Deshe Ronger Beshe held at Faculty of Fine Arts, University
of Dhaka witnessed nearly 100 children making a riot of
colors in pastel and water color. Divided in two age groups,
A three-day exhibition was organized at Drik Gallery showcasing all the entries
for the ‘Simple Pleasures of Life.’ S. K. Sur Chowdhury, Deputy Governor of the little artists explored the ‘My City’ with rich vibrant color.
Bangladesh Bank inaugurated the photo exhibition as chief guest.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 EBL Leadership Lecture Series was conceived and initiated in
June 2014 with the idea to invite visionary leaders of different
fields ranging from corporate Bangladesh to teaching to
social work to judiciary to arts who will share their success
stories and their challenges in life with us. The Bank invited
the following leaders in 2014 and listened to their journey of
life, challenges, their dreams, their frustration and how they
have handled all those and come out victorious:
 Latifur Rahman, Chairman and Managing Director
of Transcom Group, winner of the prestigious ‘Oslo
Business for Peace Award’ in 2012.
 Professor Abdullah Abu Sayeed, the eminent
educationist and founder of Bishwo Shahitto Kendra,
who has chased the dream of enlightening the nation all
Internationally renowned painters Qayyum Chowdhury, Rafiqun Nabi and Abul
Barq Alvi select the three best works from each age group.
his life and established the Kendra with the motto Alokito
Manush Chai.
Children between six and nine years expressed themselves
in oil pastels while the senior group between 10-13 years  Advocate Sultana Kamal, an icon in the area of human
revealed their imagination in water colors. Internationally rights, is the Executive Director of Ain O Salish Kendra
renowned painters were in the jury board and selected the (ASK), an organization that provides shelter and legal
three best works from each age group. The winners were assistance to vulnerable social groups and individuals.
awarded prizes and crests, while each participant was given She is also the Chairperson of Transparency International
a certificate of attendance. Bangladesh.
 Dr. Mohammed Farashuddin, a renowned educationist
and economist of the country who was the Governor of
Bangladesh Bank from 1998-2001.
 Barrister Rafique-ul Haq, a renowned Lawyer of the
country and former Attorney General of Bangladesh. He
was a main writer of many of the country’s laws.

Artists Qayyum Chowdhury, Rafiqun Nabi, Abul Barq Alvi and Managing
Director & CEO of EBL Ali Reza Iftekhar pose for photographs with the
participants and winners.

Leadership Lecture Series

Leaders are crucial to change the course of history, to
transform a company, to win a sport. A first in the banking
industry, EBL initiated a unique lecture series for its senior
executives and potential leaders of the company in 2014 to
engage them with the best of minds of the society.
Professor Abdullah Abu Sayeed mesmerizes the audiance with his deep
knowledge on history and sharp humor.

The interactions with the achievers were invigorating,

inspiring and eye-opening to say the least. For every session,
management selected a mix of around 80 employees to
interact with the invitees, ask them questions about their
leadership method and people management formula they
have successfully applied in their lives.
The journey to engaging and bonding people has just begun.
EBL believes that building today is winning tomorrow. The
finishing line can only be reached if the employees can work
and perform as a team. 2014 will always be remembered for
that start of a collective journey and start of a new bondage.
Latifur Rahman making a point during his lecture on leadership.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
LEADERSHIP LECTURE SERIES ALBUM

1 2

1 Advocate Sultana Kamal, an indefatigable campaigner for human rights issues speaks at the lecture series program.

2 Barrister Rafique-Ul Huq, a legendary lawyer of the country, speaks at the leadership lecture series program.

3 Dr. Mohammed Farashuddin, a renowned educationist, economist and ex-governer of Bangladesh Bank at the lecture series program.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 THE WINNING SPIRIT

M AN AGE ME NT DISCUSSION AND

ANALYSIS

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EASTERN BANK LIMITED ANNUAL REPORT 2014
FINANCIAL REVIEW
Business Environment in 2014 repositioning or realigning of business concentration, took an
approach of cost rationalization, and gave more emphasis on
Politics, the major defining force for Bangladesh economy,
service excellence (0-5 Days service delivery commitment)
has been somewhat stable over the year after general
and product innovations.
election in January 2014. However, the business sentiment
and outlook did not seem completely free from uncertainty Income Statement for 2014
from another round of seasonal political chaos and instability Our core banking results have been moderated by a
sooner or later. Despite achieving a 6.10% growth in GDP combination of factors. However, they still remain satisfactory
in FY 2014, major macro-economic indicators like growth in the wider context of industry performance and the
of exports and remittance, suppressed private sector
economic environment that prevailed in 2014. Despite
credit growth, and weaker consumer confidence continued
negative growth in net interest income of 18%, a healthy
to be impacted by uncertainty of political instability and
growth in non-interest income (34%) resulted in 7% growth
infrastructure bottlenecks.
in overall operating income. Higher growth of operating
Given the fragmented pattern of country’s banking sectors expenses (+18%) was mainly caused by a bi-annual market
divided into SoCBs, PCBs, FBs and SBs based on their adjustment of salary (in addition to regular increment),
unique premise and features, overall performance of the strategic promotional activities and higher cost of doing
banking sector can not be explained in similar note. The
businesses. Thus, operating profit of the Bank declined
overall sector got impacted by certain factors: excess
by 0.22% or BDT 13 million to BDT 5,775 million in 2014
liquidity, very high NPL in public sector Banks, probability
compared to that of 2013. Profit after tax declined at a higher
of re-classification of loans earlier rescheduled taking the
rate than operating profit by 18% to BDT 2,107 million mainly
temporary flexibility from regulators, and slower demand
due to higher loan loss provisioning (129%) resulting from
for credit from private sector. Moreover credit performance
subdued business condition in 2014 in certain sectors though
of few large commodity traders and importers continues
to put pressure on NPL as well as profitability of banking current tax provision declined by 23%.
sectors. Establishing or maintaining good governance, Operating Income (+7%)
managing NPL including collecting bad loans and increasing
The bank’s total operating income comprise of two major
profitability were major challenges for 2014 since recovery
items: net interest income (NII) and non-interest income (NoII).
from rescheduled loans was not encouraging. Major industrial
sectors did not perform in line with expectations mainly due In 2014, NII accounted for 40% while NoII accounted for 60%
to infrastructural bottlenecks. of total operating income (33% from investment income, 26%
from fees, commission and FX income and 1% from other
Credit growth in the banking sector remained lower than
operating income).
expected. Private sector credit registered 12.7 percent
growth at the end of November 2014. Lower growth in credit Investment income increased significantly by 61% in 2014 to
coupled with increasing trend of non-performing loans (NPL) BDT 3,343 million (Investment income share in total operating
worsened the performance of the banking sector. Low capital income increased from 22% in 2013 to 33% in 2014) while
adequacy and poor asset quality are also worries of the State our net interest income decreased by 18% in 2014 to BDT
Owned Commercial Banks (SoCBs). Though capital market 4,009 million (NII share in total operating income decreased
was relatively stable during FY2014, it is far from complete from 52% in 2013 to 40% in 2014). Our operating income mix
recovery from the wounds that it suffered in 2010. for 2014 and 2013 is compared below:
This brief overview indicates that the economy could not
pick up the steam in 2014 due to a number of challenges.
Maintaining macroeconomic stability, increasing efficiency in
project implementation, particularly that of the infrastructure
and improving governance are some of those challenges.
Under above circumstances, although many of the related
targets were off-track with indiscipline featuring in several
banks, EBL continued to deliver consistent financial
performance.

Review of Eastern Bank Financials in 2014

Over the years, the Bank has shown its resilience facing odds
and challenges under volatile operating environment. The
year 2014 was no exception. Some of the major challenges
that affected the financial industry were low credit appetite,
excess liquidity in the market and rising trend of NPL. In
face of these challenges, the bank deployed a strategic

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 not placement income (a component of NII) while borrowing
expense was booked under the head of interest expense.
Beside these lower spreads in 2014 (5.17% in 2014
compared to 5.73% in 2013) also caused the negative growth
of net interest income in 2014 by 18% to BDT 4,009 million.

Investment income (+61%)

Bank investment income is usually generated from fixed
income securities, secondary market portfolio, preference
share and bond and also dividend income from subsidiaries.
Overall investment income increased significantly (61% or
BDT 1,272 million) with substantial contribution from fixed
income securities as loanable funds were parked in safer
govt. treasury securities due to lack of adequate credit
demand in the market.
Average daily money market turnover stood at BDT 21,760
million in 2014 compared to BDT 23,007 million in 2013
showing negative growth of 5.42% by keeping average daily
Details are explained below: spread of 4.17%. This negative growth in money market
turnover resulted from shifting of huge fund to government
Net Interest Income (-18%) securities with the objective to optimize return. Although
EBL is not a Primary Dealer (PD), EBL is very active in the
Round the year 2014, bank experienced a mismatch between
secondary Govt. Securities trading in both buy side and sell
loan and deposit growth, which affected our net interest
side and this trading activity generated a substantial amount
income. In 2014, bank interest income decreased by 11% of revenue for the bank. Total secondary market trading
while bank interest expense decreased by 8% for following turnover was BDT 18,300 million, yielding net capital gain of
reasons: BDT 341.53 million.
Interest Income (-11%) Investment income from quoted securities (in the form of
dividend and capital gain) increased by 4% to BDT 95 million
Bank’s interest income from loans, the principal component
in 2014, compared to 2013. Bank received BDT 65 million as
of interest income, decreased by 11% or BDT 1,647 million
dividend income from the subsidiaries in the year 2014, which
mainly for following reasons:
was BDT 39 million in 2013.
 Although loans and advances increased by 15% to BDT
118,291 million at year-end 2014 from BDT 102,910 Fees, Commission and FX income (+12%)
million at year-end 2013, there was an observed Fees and commission together with FX income experienced
stagnancy in credit growth during first half (H1) of 2014 a moderate growth (12% or BDT 274 million) in 2014 riding
and a positive turnaround from the third quarter of 2014. mainly on higher growth of FX income which increased by
 Weighted average return on loans and advances 32% to BDT 736 million from forward dealing, corporate
decreased to 12.43 percent in December 2014 as dealing, SWAP etc.
compared to 14.57 percent in the previous year However, our fees, commission and charges income
mainly due to lower credit appetite and rise of NPL witnessed minimal growth (5% or BDT 96 million) with trade
(interest income is transferred to suspense account on related income taking center stage. Our export, import
classification). business of 2014 and 2013 is compared below:
Interest Expense (-8%)
Bank’s interest expense on deposits, the principal component
of interest expenses, decreased by 8% or BDT 765 million
mainly for following reasons:
 2014 experienced continued fall in interest rate and the
bank cut deposit rates by 0.50% to 2.50% on different
buckets to reduce cost of deposit by 183 bps.
 Weighted average cost of deposit as on December
2014 was 7.26 percent compared to 8.84 percent in the
previous year, mainly due to the bank’s utmost efforts
on booking savings deposit (43% growth in 2014) to get
rid of high cost deposit and decreased concentration of
fixed deposit (4% growth in 2014).
In 2014, due to excess liquidity in money market and lower
spread, bank shifted investible resources from money
market placement to short term Govt. securities (classified
as HFT), which resulted the higher investment income but

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Operating expenses (+18%) and off-balance sheet exposures charged during the year
increased by BDT 187 million in 2014 mainly due to (15%
Total operating expenses of the Bank increased by 18% or
increase of loan in 2014 compared to 2013) growth of loan
BDT 678 million compared to that of 2013 mainly for the
and outstanding off balance sheet exposures in the banking
following reasons:
book at the end of 2014. Nonetheless, the general provision
 Salary and allowances have increased by 21% or BDT is allowed (by BB) to be treated as Tier-II capital of the bank
412 million in 2014 over that of 2013 caused mainly due and provides safeguard against future default as well as
to two events: a bi-annual market adjustment of salary supports business growth by strengthening the capital base.
(in addition to regular increment from March 2014) and
additional head count in different levels. In 2014, 679 Provision for loss on revaluation of shares (-97%)
new members including 28 future leaders joined the EBL As per BRPD Circular of BB, investments in quoted shares
family of which 207 people joined in permanent position. and unquoted shares were revalued at the year-end
 Overall bank rent and tax, utility bills, insurance comparing market price and carrying value of last audited
premium, printing and stationary, repair, maintenance, balance sheet respectively. Provision is made on ‘portfolio
office security, advertisement and business promotion basis’ for any loss arising from diminution in value of
expenses increased considerably during 2014 mainly investments. Provision charged during the year 2014 against
because of channel expansion initiatives (addition of revaluation of shares decreased by 97% or BDT 131 million
branches, ATM, Priority centers), renewal of many of its against that of previous year since the year-end market price
rent agreements at significantly higher rates (24 number of shares remained almost the same in 2014 as well as in
of new rental agreement, 13 number of renewal rental 2013.
agreement of which more than 35% increment loaded)
and renting new office location at different places. Profit before Tax (-18%)
Overall cost to income ratio of EBL increased from 38.87% After making above provisions, profit before tax stands at
to 43.01% during 2014, mainly because of higher growth BDT 3,973 million in 2014 registering a negative growth of
of operating expenses (18%) than that of operating income 18%. Higher growth of FX income (32%+) and investment
(7%). As expected, the channel expansion initiatives triggered income (61%+), could not offset the higher growth of
instant increase of operating expenses but will take a operating expense (18%+) and total provision (89%+) leading
reasonable time to generate income causing the mentioned to a decrease of the profit before tax by 18% in 2014.
rise of cost to income ratio. Our cost to income ratio of 2014
and 2013 is compared below:
Provision for Income Tax (-18%)
Tax Provision (net of deferred tax income) decreased by
18% to BDT 1,866 million compared to that of preceding
year. Although the applicable tax rate for the bank 42.5%,
our effective tax rate stands at 50.22% which is down from
53.24% in 2013 mainly due to increase of tax exempted
income resulting from capital gain on trading of govt.
securities and admissible expenses as per tax rules.

Profit After Tax or PAT (-18%)

Bank profit after tax stands at BDT 2,107 million registering
a negative growth of 18 percent during 2014 mainly due to
higher amount of loan loss provisions offset partially by lower
tax provision. Earnings per share (EPS) decreased to BDT
3.45 in 2014 from BDT 4.20 in the previous year. As a result,
Return on Assets (ROA) and Return on Equity (ROE) stood at
1.28 percent and 10.93 percent respectively.
As per Bank Company Act 1991 (amended up to 2013), 20%
of profit before tax is required to be transferred to statutory
reserve until the balance of the same reaches to the level of
paid up capital and as such an amount of BDT 749 million
Total Provision (+89%) has been transferred to statutory reserve during the year.

Provision for loans and advance (+129%) Balance sheet as at 31 December 2014
Provision for loans and advances and off- balance sheet Total assets of the Bank stood at BDT 172,124 million at
exposures increased by 129 percent to BDT 1,811 million year-end 2014 against BDT 157,882 million at year-end 2013
during the year 2014. Specific provision charged during the registering a growth of 9%. Loans and advance grew by
year 2014 against classified loans increased by 118% or BDT 15% whereas deposits remained almost static (over that of
834 million against that of previous year due to increase of 2013) by year-end 2014. In 2014, from asset side loans and
classified loan in 2014 (NPL was 4.36% in 2014 compared to advances (69%) comprised the largest component of assets
3.59% in 2013). General provision against unclassified loans followed by investments (14%) and from liability side deposit

118
EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

(68%) comprised the largest component of liability followed Deposits (-0.26%)

by borrowing (15%).
Overall deposits of the bank decreased marginally by 0.26%
and stood at BDT 116,792 million at year end 2014. Our
Loans and Advances (+15%)
deposit mix improved in 2014 because of online banking with
In 2014, total loan and advances registered a growth of 15% expanded ATM network and tailor made customer services,
and stood at BDT 118,291 million at year- end. With a share which helped to increase confidence of customers and
of around 74% in corporate lending, EBL’s credit exposure is to strengthen brand image of EBL. As a result, number of
well diversified and spread over more than 15 sectors such savings and current accounts as well as amount of deposits
as textile and RMG, agriculture, pharmaceuticals, telecom, substantially increased in 2014. The share of savings deposit
ship-breaking, transportation, electronic goods and service increased to 17% of total deposits in 2014 (12% in 2013).
industries, etc. Retail and SME together constitute the rest As a result, the bank’s weighted average cost of deposit
26% of the loan portfolio. During the year 2014, our working decreased to 7.26 % in December 2014 from 8.84% in 2013.
capital loan like demand loan and other short term loan The savings deposits of the bank increased by BDT 6,067
increased in commensurate with the nature of sources of million or 43% to BDT 20,079 million from BDT 14,012 million
funds. Classified loans as a percentage of total loan portfolio of the preceding year.
increased to 4.36 % at the end of 2014 compared to 3.59%
at the end of 2013. However, full provision was made against
classified loans. Despite adverse business conditions,
serious efforts were being made to bring down the amount
and percentage of classified loans by exploring all options
including legal actions and out of court settlements
depending on the merit of the cases.

Investment (-5%)
Overall investment of the bank decreased by 5% and stood
at BDT 24,655 million at year end 2014. In 2014, we had
a considerable exposure in Government securities, which

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 and under different forms from Bangladesh Bank mainly due
to slower deposit growth than loan growth and available
liquidity from money market round the year. At the year-end
2014, the bank’s total borrowing stood at BDT 26,021 million,
which is 15% of total liabilities.

Asset Liability Management in 2014

Bangladesh economy experienced a bearish mood in credit
growth during 2014. Banking sector was burdened with
surplus liquidity. EBL aptly utilized the excess liquidity by
investing in Govt. securities of shorter to medium tenors.
From balance sheet perspective, major priority from ALM
desk was to invest the excess liquidity into the market,
increase the CASA base and maintain reasonable return on
loan.
Overall, EBL passed a very good year from the perspective
comprised of BDT 21,224 million (86% of total investment in of balance sheet management as the interest rate and macro
2014) and others (investment in debenture, corporate bond, bet from ALM desk were accurate leading balance sheet
ordinary share and preference share etc.) comprised of BDT
composition close to the desired level.
3,431 million.
The year under review started with the continued trajectory
Borrowing (+85%) of fall in interest rate from previous year. EBL reaped benefits
In 2014, overall borrowing of the bank increased significantly from falling interest rates by cutting deposit rates from 0.50%
by 85% in the form of demand borrowing, term borrowing to 2.50% on different buckets. EBL was able to reduce cost
of deposit by 183 bps while return on loan reduced by 151
bps, giving us 32 bps spread on the whole balance sheet.
In the deposit side, EBL put its utmost effort on booking
CASA deposit and decreasing concentration of term deposit.
Moreover on the asset side, EBL focused on booking good
loans with comparatively higher yield.
However, considering the down trend of interest rate, we
created a negative gap of BDT 13,670 million in 2014. In
addition, the bank maintained sufficient liquid assets as it
bought large amount of bills/bonds to take exposure on
interest rate and to utilize excess fund. Liquid asset to total
asset ratio was 23.76% and medium term funding ratio was
43.96% at the end of 4th quarter of 2014.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW
At EBL, we believe in relationship banking. Relationship EBL follows centralized business line based matrix as
grows over time and deepens with sensing and responding opposed to branch based business matrix, used by most
to the changing customers’ needs. We have always put of the local banks. The Business Matrix of EBL consists
our customers at first and their financial needs at top of of Corporate, Treasury, Consumer and SME Banking as
our business agenda. We would like to see our customers core business units. Treasury being the manager of funds,
delighted and not just satisfied. We are constantly looking for maintains CRR/SLR as per regulatory requirements, makes
better ways to provide, combine and deliver products that optimum use of excess funds, source funds from money and
meet our customers’ expectations. We try to listen closely capital markets, and deals with foreign exchange, etc.
to our customers, especially when they complain. Our motto
is: Staying close to the customers, learning their preferences
and catering to them.

“Corporate Banking along with Treasury, contributes the lion share to the bottom line of the Bank. Corporate Banking occupies the largest pie of loan book (around
74%) whereas Consumer Banking contributes mostly in mobilizing funds (around 65%) as of year end 2014. The high priority Small and Medium Enterprise (SME)
division continued to experience growth in both loan and deposit.”

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EASTERN BANK LIMITED ANNUAL REPORT 2014
CORPORATE BANKING
In 2014, EBL Corporate Banking remained true to its banking services to customers.
conviction of being a customer centric, business friendly Structured Finance Unit (SFU): Our Structured Finance unit
and compliant bank, and continued to make a difference is the most active structured finance solution provider in
to its valued clientele. At the very core of what we do, the the country covering both offshore and onshore solutions. It
fundamental thing that drives us is adding value for all our has come a long way since it started its journey in 2003 and
stakeholders and delivering what is expected from the now, one of the best in the market for product structuring,
premiere corporate bank of the country. Throughout the year, syndication arrangement, trustee services and agency
we have assessed different areas and looked for scopes of functions. EBL Structured Finance Unit (SFU) structures
improvement. syndication finance, equity participations, JV projects, bond
Corporate Banking of EBL is considered to be a leader issuance, agency arrangements, commercial paper issuance
in wholesale banking in Bangladesh. It gives us immense arrangement and package solution to its customers.
pleasure when our customers trust us with their most Transaction Banking (TB): Transaction Banking is
important financial transactions, complex credit structuring comprised of Trade Sales, Cash Management Unit and
and a partner in their growth. At the same time, we regard it Financial Institutions Unit. Trade Sales team is responsible
as a reminder that we must not be complacent and continue for ensuring maximization of non funded business through
to strive for excellence. providing customized trade solutions to customers. Cash
Here at EBL corporate, we have a dedicated relationship Management Unit works to channel low cost corporate funds
management team, which acts as an all-inclusive, innovative through providing innovative cash management solutions.
and customized solution delivery point for our valued Financial Institution Unit maintains Correspondent Banking
corporate clients. This particular division acts as a single Relationship with number of banks at home and abroad in
point solution provider for all banking services including order to facilitate Foreign Exchange (FX), Foreign Trade and
project financing, working capital, trade, supply chain, Other Foreign Currency (FCY) business and transactions
cash management solutions, payroll, syndication, merger, and also responsible for maintaining liaison with a number of
acquisition and advisory services. partner institutions at home and abroad.

Key Highlights

Loans & Advances

+16%
2014: BDT 86,021 million
2013: BDT 73,919 million

2014: 74% of Total loan

2013: 73% of Total loan

Business Relationship Unit: To facilitate the services to our

Deposits
ever-growing list of corporate clients, we have in place, a total
of 9 corporate relationship units in Dhaka and Chittagong.
Relationship managers, equipped with efficient management –32%
skill and sound knowledge about the industry, are here to
provide a full array of corporate banking solutions, ranging 2014: BDT 32,576 million
from working capital management, cash management, 2013: BDT 47,758 million
foreign exchange and currency hedging services to trade
finance, term loans and structured products. They also 2014: 28% of Total deposit
partner with our Structure Finance and Investment Banking 2013: 41% of Total deposit
units to deliver the large project financing and investment

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

Corporate Banking Initiatives 2014 routes and for Chevron Bangladesh.

 EBL along with Standard Chartered Bank and The
Major Deals of Cash Management Services in City Bank Ltd., jointly mandated as lead arranger,
2014 successfully arranged commercial loan of USD 66 million
DPDCL signed agreement for Central Revenue Collection as delivery financing of 2 (two) 777-300 ER Aircrafts
EBL provided a unique cash management solution to pull from Boeing for Biman Bangladesh Airlines Ltd.
funds to Central Revenue Collection Account of Dhaka Power  Facilitated the issuance of BDT 2,000 million bond by
Distribution Company Limited (DPDCL) through Bangladesh Bangladesh Steel Re-rolling Mills Ltd. as Trustee.
Electronic Fund Transfer Network (BEFTN). An agreement
to this effect was signed between Dhaka Power Distribution Offshore Banking Services:
Company Limited and Eastern Bank Limited. EBL is the first  EBL has been the pioneer among local banks to develop
bank to offer BEFTN to any public sector company. the Offshore Banking Unit and product offerings,
Biman Hajj Flight Collection including Bill Discounting/Financing, bilateral and
syndicated Term Loan and other products for Export
EBL handled the collection of airfare of the Hajj pilgrims by
Processing Zone customers and local manufacturing
providing a unique cash management solution to Biman
industries.
Bangladesh Airlines Limited. This year EBL handled the entire
hajj flight collections from Dhaka, Chittagong and Sylhet.  Closely working with the multilaterals, including IFC,
Earlier EBL was entrusted to handle Dhaka collections only. DEG, ADB, FMO, Proparco, CDC, Norfund and others.
EBL has developed products and the largest OBU Asset
Daffodil International University Students Tuition Fees
book among the local banks.
Collection
Daffodil International University signed an agreement with Key Priorities in 2015
Eastern Bank Limited to ensure smooth collection of tuition  Launching innovative products to tap into the growing
fees. Under this agreement, students will get the opportunity cross border opportunities.
to deposit academic fees through EBL Internet Banking  Managing and growing corporate deposits through
facility (EBL a/c holder only), Bills Pay Machine / Cash integrated customized solution.
Deposit Machine and branch networks with customized
 Maintaining quality of existing portfolio with focus on
deposit slip.
trade and structured financing.
Major Deals of Structured Finance in 2014  Lowering the cost of fund with focus on low cost deposit
 Off-shore term loan financing of USD 40 Million from though innovative solutions and multilateral fund.
DEG and FMO for Eastern Bank Ltd.  Achieving Sustainable balance sheet growth.
 Closure of Dual currency denominated Syndicated Term  Increasing focus on non traditional income opportunity
Loan of USD 34.28 million for SM Spinning Mills Limited such as advisory services, merger and acquisitions etc.
with the participation of Local banks only – BDT 1,484
 Looking for synergistic opportunity from packaging of
million in USD and BDT 1,194 million.
overall solutions to the clients.
 Arranged BDT 500 million worth of Commercial Paper for
 Continuing to invest in people and technology to improve
Shanta Properties Limited.
productivity and customer satisfaction.
 Arranged Syndicated financing for HG Aviation of BDT
530 Million to finance flight operations in international

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EASTERN BANK LIMITED ANNUAL REPORT 2014
CORPORATE BANKING HIGHLIGHTS 2014

1 2

3 4

5 6

1 Deal Closing Ceremony of dual currency Syndicate Term Loan of USD 34.28 Million for SM Spinning Mills Limited. The ceremony was
arranged by Structured Finance Unit of EBL and participated by other local banks.
2 Deal Closing Ceremony of Delivery Financing up to USD 66 Million Commercial Loan for Biman Bangladesh Airlines Ltd. EBL together
with Standard Chartered Bank and The City Bank Ltd. acted as joint mandated lead arrangers.
3 EBL and Daffodil International University (DIU) sign an agreement for Students Tuition Fees Collection.
4 Agreement signing ceremony between EBL and Dhaka Power Distribution Company Limited (DPDCL) for Central Revenue Collection
of DPDCL.
5 Team building and people engagement are two main pillars of EBL corporate culture. The annual Corporate Banking Conference titled
‘Going the Distance’ has been organized to set the goal for the coming years and uphold the winning spirit of EBL.
6 Corporate Banking Dhaka evaluates business performance and awards star performers at an event called ‘Shifting the Gear’ on
October 01, 2014 at Lamda Hall of Gulshan Club.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

TREASURY

EBL has a dynamic and innovative treasury team adept in Fixed income and investment Desk
providing all possible treasury solutions through an array of
EBL fixed income desk is responsible for investment in
treasury products at better prices and superior services. EBL
government securities including treasury bills and bonds
treasury has been performing consistently with respect to
as well as debentures that qualify for SLR. In spite of not
contribution to bank’s profit. It performed remarkably well in
being a primary dealer, EBL was very active in the secondary
2014 through executing strategies properly and forecasting
market accurately especially in a market burdened with market of government securities throughout the year in order
surplus liquidity mainly due to bearish demand for credit. to gain from trading which helped to bring dynamism in the
EBL treasury has the following separate desks with a view development of vibrant bond market.
to delivering complete package of treasury solutions to its
customers.
Key Highlights
Total Money Market Income

+41%
2014 : BDT 3,087 million

2013 : BDT 2,191 million

Average Daily Money Market

Turnover
Exclusive Achievements of EBL Treasury
in 2014 -05%
 Diversified its investment portfolio through discovering
new investment opportunities. It invested in PRAN 2014 : BDT 21,760 million
AGRO commercial paper in line with appreciating
innovative ideas, which are important for the growth and
2013 : BDT 23,007 million
development of the financial market.

 Created stronger corporate sales desk with annual

Net Exchange Income
turnover of USD 422.33 million in corporate FX sales.

 Automated most of front office activities, which is saving

substantial time and cost in line with promoting green
+32%
banking. 2014 : BDT 738 million
Money Market Desk
2013 : BDT 558 million
EBL money market (MM) desk is one of the most active and
well-organized treasury desks in Bangladesh generating
handsome revenue for EBL. Revenue generated from MM Total FX Transaction Volume
Desk in 2014 depicts that picture. Average daily money
market turnover stood at BDT 21,760 million in 2014,
compared to BDT 23,007 Million in 2013 showing a negative
growth of 5.42% by keeping average daily spread of 4.17%.
-20%
This negative growth in money market turnover resulted from 2014 : USD 11.90 billion
larger funds shifting to government securities to optimize
return. 2013 : USD 14.96 billion

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Total secondary market trading turnover was BDT 18,300 maintained a short FX position to support the overall banking
million, yielding net capital gain of BDT 341.53 million. Total book and maximize the profitability through revaluation. At
income from Govt. securities in 2014 was BDT 2,756.4 times of tight liquidity and rising exchange rates, it maintained
million, which helped to boost up bank’s profit. a proper long position to balance the overall revaluation
impact while still giving support to the banking book and
Foreign Exchange Desk trading book.
EBL treasury maintained its open position within the set limit
of USD 29.37 million until the end of June 2014 and USD
Asset Liability Management Desk
31.51 million from July to the rest of the year. EBL FX desk ALM is one of the most important aspects for banks to
continuously makes forecast about future exchange rate manage Balance Sheet Risk, especially liquidity and interest
movement and maintains its open position accordingly that rate risk. EBL has a resourceful ALM Desk that provides
is, when projection in BDT will appreciate against USD, it analysis, instruction and guidance to the senior management
maintains short position in USD and vice versa. in the area of management of balance sheet. ALM Desk also
conducts comparative analysis of other banks’ deposit and
Performance related to overall FX position advance rates to forecast interest rate movement.
EBL Treasury has one of the most efficient FX Sales desks
Corporate Sales Desk
in the banking industry of our country. This year, the desk
has been able to do business as the market progressed. The EBL Treasury has a dedicated corporate sales desk that
market experienced some stability during the first half of the assists clients in managing their risk exposure so as to
year while showing slight volatility afterwards. Movements minimize the impact of market volatility on the companies.
of exchange rates were driven mainly by corporate clients’ This desk is expected to play a vital role in taking corporate
overseas borrowing and import payments. At times of customers under the umbrella of secondary bond business.
excessive liquidity and falling exchange rates, EBL Treasury Treasury priorities in 2015
Net Open Position and Exchange Rate Movement, 2014  Maximizing portfolio size and returns by discovering new
30.00 78.00
77.90
investment opportunities.
20.00

10.00
77.80
 Diversifying Fixed income securities Customer Base.
77.70
- 77.60  Creating stronger Currency Trading Desk.
(10.00) 77.50

(20.00)
77.40  Revamping ALM and FTP Desk.
77.30
(30.00)
77.20  Striving for building rapport with external and internal
(40.00) 77.10 counterparts.
10-Sep-14
21-Sep-14
30-Sep-14
13-Jan-14
23-Jan-14

17-Jun-14
26-Jun-14

21-Dec-14
12-Feb-14
23-Feb-14

11-Aug-14
21-Aug-14
1-Sep-14

10-Nov-14
19-Nov-14
30-Nov-14
20-Oct-14
29-Oct-14
17-Jul-14
31-Jul-14
1-Jan-14

19-May-14
28-May-14
8-Jun-14

9-Dec-14
16-Apr-14
27-Apr-14
3-Feb-14

13-Mar-14
25-Mar-14

8-Jul-14
7-May-14
6-Apr-14
4-Mar-14

 Exploring new avenues to utilize market opportunities.

NOP USD/BDT Exchange Rate

126
EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

CONSUMER BANKING
2014 was a challenging year marked by political turbulence, EBL Priority Banking
uncertainty and investment rigidity; nevertheless it was a
EBL Priority Banking remains the top in providing premium
successful year for EBL Consumer Banking.
Banking Service in the Country. It added three new feathers
EBL Consumer Banking operates through multiple Value in its cap, with two new centers in Chittagong and one in
Centers and departments. The Value Centers work together Dhaka. We have also infused state of the art technology and
seamlessly to ensure top class banking experience for valued software solutions via PBMS (Priority Banking Management
EBL customers. EBL Consumer Banking can be broadly System), to provide our customers the premium banking
defined by the following statements: experience they deserve. Currently, we have 14 Priority
 Improving customers’ experience with every interaction Centers strategically placed countrywide to serve our
– delivering real business benefits, while consistently customers better.
building improved customer loyalty, increased revenue
Key Priority in 2015
and enhanced profitability.
Better manage our portfolio to reduce interest expense, while
 Enhancing the banking customer value proposition
achieving our deposit target.
through technology-led innovation
In order to ensure customer delight by providing top class Consumer Asset and Recovery Management
banking services and giving full operational support to EBL Consumer Asset Portfolio has increased by more than
various business initiatives, EBL Consumer Banking is driven 1,270 million, the highest in the history of EBL. The year 2014
by the following key value centers: was very fruitful, yielding positive changes in almost all key
indicators like Relationship Manager (RM) productivity, value
addition to existing products offering, optimization in portfolio
mix, new product packaging and so on.
For the first time EBL CNB business team has taken over
the responsibility of recovery/collection activities and it
was a tremendous success. The performance was superior
compared to previous years. In 2014, classified loan volume
in personal loan portfolio decreased by around 30%.

Key Highlights

Loans and Advances

Consumer Banking Initiatives 2014

+12%
2014: BDT 12,441 million
Liability and Wealth Management 2013: BDT 11,112 million
With a view to better manage Bank’s Deposit Portfolio
through optimum mix of Current Account and Savings (CASA) 2014: 10% of Total loan
and Fixed Deposit accounts (FD), EBL had launched eight
new deposit products in 2013. This was a bold step that has 2013: 11% of Total loan
paid rich dividends. In 2014, EBL Consumer CASA growth
has been higher than its FD growth, while achieving both FD
and CASA targets quite handsomely. This has improved our Deposits
deposit portfolio and helped to keep our interest expense
way below budget, thus contributing heavily in the net profit
of the Bank.
Our CNB CASA average balance per account has increased
+21%
around 20%, which is reflected in the positive shift in the 2014: BDT 75,227 million
CASA: TD ratio, with CASA portion increasing by almost
4.5% in 2014. EBL CNB has had its highest deposit growth in 2013: BDT 62,010 million
recent history thanks to the innovative product features and
strong customer proposition tagged with its premium savings 2014: 65% of Total deposit
products. 2013: 53% of Total deposit

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Key Priority in 2015 deliver superior services with state of the art technological
Maintaining a delicate balance between portfolio growth and initiatives. The department has an arsenal of different
asset quality to ensure both profitability and sustainability in alternative channels (i.e. ATM, Cash Deposit Machine,
the long run. SMS banking, Phone banking, Internet Banking, Contact
Centre etc.) to meet the ever evolving financial needs of
Cards Business our customers. We are working hard to make the channels
more attractive, utilized and convenient. The introduction
EBL Cards Business has undergone a tremendous innovation
of Two-Factor Authentication (2FA) in Internet Banking has
and dynamism in the year 2014. EBL offers multiple cards,
been launched to provide customers with the highest level
especially suited to the needs of our diverse customer base
of security for transferring funds. Efficiency in ATM cash
under the generic Debit, Credit and Prepaid Card Categories.
management has been achieved tremendously; no ATM was
Dual currency option is available to enable the customers’
out of cash, even for a minute in 2014!
foreign purchase requirement. Every type of card comes with
a host of privileges and benefits. Some of the salient projects EBL boasts its state-of-the-art Contact Centre, which
and initiatives taken by the Cards Division is stated below: provides superior customer service relentlessly on 24x7x365
basis. Separate call routing engine was launched for Priority
 EBL ZIP: EBL launched Zero % Installment plan (EBL
and Signature customer segments in 2014. Call pick up
ZIP) for EBL Credit Cardholders on June 16, 2014. It is
within 20 seconds rate has increased by 20% from the
a non-interest bearing EMI based plan. It allows credit
previous year. Average wait time in 2014 was 11 seconds
cardholders the flexibility to convert retail purchase
which is a 17% decrease from the previous year.
transactions at designated outlets into an installment
scheme. Key Priority in 2015
 EMV Card: EBL has introduced EMV Chip Cards. A full-blown mobile app is almost there on the verge of
EMV Chip technology is both secure and smart. This launching. Just by navigating through the menus on their
technology makes it virtually impossible to copy and mobile phones, users will be able to perform almost all the
reproduce cards, ensuring the highest level of security. banking services.
 EBL POS Acquiring Business: EBL has introduced
EBL POS machines that facilitates acceptance of both Payroll Banking and Customer Proposition
magnetic strip and EMV chip cards. After revamping payroll banking offerings in 2013, it has been
 Co-branded Credit Card: EBL launched co-branded one of the fastest growing CNB Units with over 24,000 salary
credit card arrangement with GP and Robi with special accounts and 500+ companies. The year 2014 was very
features and privileges on personal loans, locker successful in this regard, doubling almost every component
services, student banking services plus added lifestyle of the portfolio composition. EBL Payroll Banking provides
benefits. customized and integrated payroll services that reduce costs,
eliminate paperwork and improve security of the prospective
 Introduced Limited Edition Prepaid Cards for World organizations, while providing valuable services to their
Cup Football 2014: Six World Cup team theme prepaid employees.
cards were launched to mark the gala event.
Customer proposition department routinely organizes events
Key Priority in 2015 with the customers in order to understand their needs and
Continuing innovation while ensuring highest possible wants and introduces discounts and privilege arrangements
security standards. to cater the needs of individual target group - ultimately
coordinating the overall value enhancing activities for the
Alternative Distribution Channel (ADC) customers.
To provide customers with absolute peace of mind in fulfilling Key Priorities in 2015
their financial needs in the most hassle-free way, Alternative
Consolidating and ensuring cross business relationship to
Distribution Channel (ADC) of EBL constantly thrives to
enhance overall CNB portfolio.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

SERVICE QUALITY
Service Quality-A Journey towards Continuously Assessing the Service
“Customer Delight” Standards
As embedded in its values, Eastern Bank Limited is always To track the service level, every year the bank conducts
ardent to maintain the best in class service in the industry. Mystery Shopping Survey. In the year 2014 a total of 628
Our vision is to become the most valuable brand in the employees from all the branches were surveyed at least twice
financial services in Bangladesh by crafting long lasting under the project. The survey was conducted by a reputed
value for the stakeholders and above all for the community third party vendor. The objective of the survey was to assess
by delivering sustainable growth. In striving for sustainable the prevailing service level with the benchmark and also to
growth, EBL must ensure delivering of quality customer identify the improvement areas.
services that are well responsive to the needs of our
community. This includes building an organizational culture Training & Development
that recognizes the benefits of true “Service Excellence”. We believe, employee development is a shared
To ensure ultimate customer delight, at EBL we have adapted responsibility of management and the individual employee.
with and adept in a four way matrix stated below The responsibility of management is to provide the right
resources and an environment that support the growth
and development needs of the individual employee. In the
year 2014, we have conducted 10 training & development
sessions on Service Excellence across the country covering
more than 300 employees.

Consumer Safety-Protecting customer’s right

At EBL we have a dedicated consumer protection team
to ensure customer rights. The department works as an
independent cell to monitor compliance of customer rights.
In 2014, we successfully resolved 2114 number of customer
complaints.

Giving Value to Customers Opinion NUMBER OF COMPLAINT

At EBL, we always believe in valuing our customers’ opinion RECEIVED IN 2014 2,114
and make our customers believe that their opinions are truly
important to us. With that conviction, we have introduced NUMBER OF COMPLAINT
a feedback module in all our major branch counters, where RESOLVED IN 2014 2,114
our customers are being able to share their feedback through
a smart tab just upon receiving the service. This feedback Key Priority in 2015
module enables us to monitor the branch service level
centrally and also help us to know the reason of customers’ Ensuring Customer
dissatisfaction instantaneously, if any, upon which we can Service within 0-5 Days
take necessary initiatives to improve our service further. At EBL, we believe,
Moreover, to acknowledge the changing norms and demands
customer delight
of the customers, we have conducted a comprehensive
depends on the efficient
customer satisfaction rating survey under which a total of
delivery of product
1100 customers had been surveyed by a reputed third party
research firm to identify the customer satisfaction drivers and and services before
present satisfaction standing as well as comparative analysis customers’ expectation
with the major competitors on those satisfaction drivers. time. Organization’s
effectiveness, efficiency
and productivity depend
on how & when we are
delivering to our valued customers. With a vision of becoming
the fastest bank in terms of delivering service in the financial
industry of Bangladesh, for the first time in Bangladesh,
EBL has adopted a concept of 0-5 days customer service
approach, where we are committed to deliver any product or
service within 0-5 days.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
CONSUMER BANKING HIGHLIGHTS 2014

1 2

3 4

5 6

1 Chairman of EBL M. Ghaziul Haque addresses a gathering of priority customers at the Westin, Dhaka.
2 Noted chef and TV personality Nahid Osman conducts a cooking class organized by EBL for the priority customers at a city hotel.
3 Ali Reza Iftekhar, Managing Director & CEO of EBL, handing over the crest to Salina Islam, a top NRB remitter of EBL.
4 Managing Director & CEO of EBL, speaks at the inauguration of EBL Sky Lounge. EBL set up a world class lounge at Hazrat Shahjalal
International Airport, Dhaka to provide exclusive services to the priority customers, signature and platinum cardholders of the bank.
5 Vivek Sood, CEO of Grameenphone Limited and Ali Reza Iftekhar, Managing Director & CEO of EBL at the launching of a host of
banking solutions for the Platinum STAR Customers of Grameenphone Limited.
6 EBL Payroll Banking Department organized an event called ‘An Evening Like Never Before’ for their customers to celebrate Valentine’s
Day at Platinum Suites, Dhaka.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

SME BANKING
EBL SME Banking adjudged the Structured Bank for consecutive five years among all commercial
banks in the country.
SME Bank of the year-2014 jointly by
Bangladesh Bank and SME Foundation.  Launched collateral free SME loan product “EBL
Utkorsho” with maximum limit of BDT 10 million.
Eastern Bank Limited started its formal operation of SME
Banking Division in June 2006 right after the publication  Extended credit support to flower cultivators by EBL Agri
of Prudential Guidelines for SME Financing by the Central unit.
Bank of Bangladesh. From the very beginning, EBL was
 Appropriate monitoring and collection strategies were
determined to do the SME Business in a focused, dedicated
implemented by Agri Unit to maintain zero classification.
and structured manner. As a part of that, EBL SME had
been built upon a robust structure segmenting all its related Key priorities in 2015
departments, from sourcing through recovery. As a result of
 Introducing complete financial solutions for Small
that, EBL SME banking came across the way so far with high
Business clients through offering composite facilities.
performance trend without compromising compliance and
quality of business.  Marketing of small business products through all
Branches.
In doing the lending business by a bank, FOUR major
departments, Business, Approval, Documentation and  Introducing Credit Score Card for analyzing PPG based
Recovery, play the vital role to work effectively. loan appraisals.
At EBL, SME lending business is being performed through  Introducing start up financing for new entrepreneurs.
four departments: Business, Credit Risk Management,
 Emphasizing on cluster approach by identifying new
Credit Administration and Special Asset Management where clusters like leather goods, solar electricity, etc. and
dedicated group of people from Credit Risk Management offering customized product for each cluster.
are entrusted with independent decision making authority
in line with prevailing rules and policies. Separation of  Reducing turnaround time through process re-
business sourcing from credit evaluation and approval engineering and standardizing product parameters.
along with dedicated separate units assigned with specific
responsibilities gave EBL SME a structured shape and helped
to earn an honor “Structured SME Bank of the year-2014”
by Bangladesh Bank and SME Foundation of Bangladesh. Key Highlights
Initially, EBL SME Banking Division was formed with three
segments: Small Business, Medium Business and MIS &
Monitoring Unit. Later, SME Liability and SME Business
Loans & Advances
Collection segment have been introduced to ensure smooth
operation. A dedicated Women Cell has been developed to
support lending to women entrepreneurs. A dedicated Agri
+10%
Unit is also in place to support direct lending to the farmers.
2014: BDT 18,279 million
Relationship Unit 2013: BDT 16,640 million
Small Business Agri Business 2014: 16% of Total loan
2013: 16% of Total loan
SME Banking

Medium Business Women Cell

Liability Business Business Collection Unit

Deposits
MIS and Monitoring
+22%
SME Banking Initiatives 2014 2014: BDT 7,955 million
Small Business Highlights 2014 2013: BDT 6,544 million
 Received BDT 50 million pre-finance from SME 2014: 7% of Total deposit
Foundation to finance footwear and leather goods cluster.
2013: 6% of Total deposit
 Obtained highest amount of refinance from Bangladesh

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Medium Business liability campaign to boost-up employee engagement to
achieve liability business goals of SME Banking.
Medium Business segment was formed to cater financial
needs of medium enterprises as per Bangladesh Bank  Introduced SMS Alert services for the Proprietorship
definition. Under Head of Medium Business there are 8 Unit Business accounts to encourage SMEs to bank with
Heads sitting in Dhaka (5) and Chittagong (3). Outstation EBL.
centers are associated with Dhaka based Units for direct
Key priorities in 2015
reporting and supervision. In addition to the conventional
lending products, EBL has two PPG based products (EBL  Strengthening “Cash Management Solutions Unit” for the
Banijyo and EBL Invoice Factoring) under medium segment SME Clientele to increase Current deposit mix as the key
to provide quick financial solution to mid segment clients. objective.
 Strengthening special “Priority Banking Proposition
Medium Business Highlights 2014 Unit” for the SMEs with bundles of value added services
 1,438 number of solar panel financing through Micro proposition and privileges to create customer loyalty with
Finance Institution. brand EBL.
 Eco-friendly brick-field financing.  Introducing product or account wise liability target for
RMs, SME Centers and Unit Heads.
Key priorities in 2015
 Launching two new PPG Driven Liability Products “High
 Shifting focus to manufacturing companies from trading Performance Account-SME” and “SME Profit First”.
concern.
 Arranging customer event “SME Customer
 Emphasizing on larger customers with high ticket loans. Carnival-2015” for its Liability customers to create
 Re-structuring Chittagong mid segment. customer bondage and brand loyalty.
 Preferring companies in the backward and forward  Cross-selling through Branch channel.
linkage of multinational companies, especially those who
are corporate clients of EBL. Strategic Alliances Made in 2014
 Engaging more with limited liability companies than  Signed a MoU with SME Foundation under which
proprietorship companies. EBL received BDT 50 million pre-finance for financing
footwear and leather goods manufacturer.
Liability Business:  MoU signed with “For the Women, By the Women
 Introduced “SME Cash Management Solutions-Business (FWBW)”. Under this agreement EBL and FWBW will
Unit” for SME entrepreneurs. jointly work for women entrepreneurs’ development.
 Launched special “Priority Banking Proposition” for the  Participated on National Seminar on “Sustainable
SME clientele. Business Model for SME Banking”
 Successfully conducted “SME CASA Fest-2014”, a

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

SME BANKING HIGHLIGHTS 2014

1 2

3 4

5 6

1 Finance Minister AMA Muhith hands over the crest for the Structured SME Bank of the Year to EBL. Abul Moqsud, Deputy Managing
Director and Md. Khurshed Alam, Head of SME Banking received the award from Finance Minister.
2 Ali Reza Iftekhar, Managing Director & CEO of EBL, hands over a dummy cheque to a client for a new collateral free business loan
EBL Utkorsho at the bank’s corporate head office. The new loan is designed for the small, medium and emerging corporate.
3 Md. Khurshed Alam, Head of SME of EBL, hands over a cheque to a flower cultivator of Savar at the bank’s Savar branch.
4 Managing Director & CEO of EBL Ali Reza Iftekhar and Managing Director of SME Foundation Dr. Syed Md. Ihsanul Karim exchange
documents after signing an agreement. Under the agreement, EBL will receive pre-finance for footwear and leather goods
manufacturers.
5 Participants of the workshop on Access to Finance for the Women by the Women pose for a group photograph. Md. Khurshed Alam,
EBL Head of SME Banking, Leif Anderson, Commercial Bank Training Expert, Shamsunnahar, Acting President of FWBW Forum and
other senior officials of EBL and FWBW were present at the workshop.
6 Ali Reza Iftekhar, Managing Director & CEO of EBL was the keynote speaker on ‘Sustainable Business Model for SME Banking’ at a
national seminar on the subject. Governor of Bangladesh Bank Dr. Atiur Rahman attended the seminar as chief guest.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
BUSINESS SUPPORT

EBL Centralized Operations

Centralization of Banking Operations is a phenomenon, where product processing is moved from various points to one point
or specific number of points under supervision of entities independent of business objectives. The decision making and control
functions are retained centrally by specific level of management in the organization. EBL management sees Centralization
of Operations in terms of better control and monitoring of activities to ensure that they are regularly accomplished as per
organizational objectives and without any deviation. The most apparent aspects of centralization of operations in EBL are its
enhanced capability to closely monitor and control transaction activities, implement uniform set of policies, best procedures
and practices across the Bank to carry out day to day customer services.

Objectives of Centralized Operations

Efficient
Risk Human Cost Effective
Business
Management Resource Effectiveness Control
Support

To achieve capacity To keep To ensure optimum The uniformity Standardization of

by offering best appropriate utilization and of activities and product & process,
class support to control over better skill specialization in greater degree
each business units regular operational development work process lead of supervision,
in their planned activities which prospect of to cost effective effective co-
progress through ensures better human resources. operations and operation, self
prompt and operational risk Centralized best utilization of and departmental
compliant delivery management and processing human resources. integration ensures
of services along ensure service concept helps effective control
with significant quality. in establishing and service
reduction in leadership for delivery.
bulk transaction efficient and
processing time. appropriate
decision making
and yields for the
organization.

Subsequently, with the expansion of EBL branches across the country during last three/four years, the “Hub and Spoke (H&S)”
concept has been adopted to establish presence near to customer concentrated location for facilitating transactions. Under
H&S concept a group of selected branches across a defined geographical location are being facilitated with customer services
through an extended Operations office. All such offices are under the umbrella and supervision of Centralized Operations at
Head Office.

134
EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

Overview of Operations Division  Skill Development and Certification

Operations division of EBL was fully centralized in 2006 This year, two more officials of Trade Operations obtained
with a mission to provide cost effective one-stop services to the prestigious Certified Documentary Credit Specialists
both internal and external customers complying internal and (CDCS) degree (CDCS was developed in partnership by the
external rules and regulations. In 2014, Cards Operations was ifs School of Finance, UK and the International Financial
also brought under the periphery of Operations Division to Services Association (BAFT-IFSA) and endorsed by the
handle interrelated processes and strengthen control activities. International Chamber of Commerce), which takes the total
number of CDCS at EBL to 14. Side by side, there are 35 IFC
Having recognized ‘Customer Satisfaction’ and ‘Self
FIT graduates, 1 CITF and 4 DC Masters; who have given the
Improvement’ as a continuous journey, EBL Operations
Trade team the competitive edge it requires. In addition, there
focuses on providing services in a manner that not only
are 7 ISO certified Lead Auditors at Operations Division, who
delights customers but also intends to go a long way
have upheld EBL’s image by playing an instrumental role in
in retaining customers and partnering in their business
achieving and maintaining its Quality Management System as
growth. This has been reflected through the whole division’s
per ISO 9001:2008 standards.
recertification to globally accepted Quality Management
Systems (QMS) as per ISO 9001:2008 standards in 2014. Off-shore Banking Operations
Trade Operations Off-Shore Banking Unit (OBU) Operations of EBL is delivering
‘Together, We’- the slogan for yearly Operations Conference superior services to the customers through different products
held in 2014 was not just another tagline. Trade officials like Bill Finance / Bill Discounting, Letter of Credit, Post
over the years have actively taken part in numerous projects Import-Export Finance and also Term Finance to the industrial
and initiatives taken by EBL and have engaged in several units within and outside of EPZ areas. EBL Off-Shore Banking
feedback-seeking programs with the internal customers to Operations, one of the leading business support units
improve the level of services that would ensure expanding among the local banks operating in Bangladesh, attained
customer base and retention in the long run. Additionally, the substantial non-funded business growth during the year. In
recently formed dedicated Operations Team is continuously 2014, OBU Operations issued 391 Import LCs for USD 28.57
visiting external customers in order to feel their pulses with million, processed 196 Export Bills for USD 22.61 million and
regards to current service quality and ways to improve them. 110 Documentary collections for USD 2.76 million with an
overall growth of 118% in number of transactions and 337%
Signature Achievements in volume compared to the previous year. Besides, OBU
Operations has financed / discounted 1,450 Bills under LCs
This year, albeit overall increase in number of transactions,
issued by EBL Domestic Banking Unit other than processing
Trade Operations has made some major inroads in terms of
numerous post import and post export loans, term loans and
achievements:
handling numerous import bills for type ‘A’ units of EPZ. OBU
 Generation of Automated Transaction Advices Operations is growing efficiently with different innovative
To serve customers in a more efficient manner and to solutions together with significant business growth aligned
uphold the spirit of Green Banking, Trade Operations has with different business needs.
introduced automated transaction advice generation, sending
it through e-mail to the customers within a few minutes of Performance Highlights of Trade Operations
completion of transactions. This has significantly reduced
2014 has seen a paradigm shift in terms of trade
the cost and manual intervention. Significant amount of desk
transactions, as the concentration of RMG and Textile has
activities have also been eliminated, thus earning customers
been slightly dwindled and there have been significant
satisfaction.
increases in transactions of unconventional sectors, which,
 Development of Knowledge Base in the long run, should allow EBL to build a harmonious
EBL believes that the people are its premier resources. customer portfolio. Overall, in 2014, Trade Operations has
Trade Operations, guided by this motto, conducted number processed LCs worth BDT 104,939.43 million, issued LG
of In-house training/experience-sharing programs this worth BDT 5,572.79 million and handled Foreign & Inland
year including the training for RMs of SME Banking to help Export bills worth BDT 60,518.12 and BDT 17,023.97 million
augment knowledge base. Detailed e-learning materials have respectively.
been prepared on contemporary trade business. Cash Management Operations
 Strategic Alliance with Bank of America Cash Management Operations (CMO) offers effective
EBL Operations, in collaboration with Transaction Banking solutions to different corporate customers with vast range
under Corporate Division, has entered into an in-sourcing of products and services for meeting day to day complex
partnership with Bank of America, where EBL will serve and challenging business needs. Some of the significant
the latter’s global customers operating in Bangladesh and achievements of CMO team are:
provide them with necessary transactional and advisory  Processed Payroll Transfer of 370 payroll customers,
services on behalf of Bank of America. This is a significant which is 84.23% higher than that of previous year.
breakthrough and one of the first of its kind deals that has  Introduced cash transfer to other Bank’s account through
allowed EBL to lay a stronger foothold in the global banking Internet Banking.
fraternity.  Introduced debit transaction for corporate customer

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 through BEFTN (Bangladesh Electronic Fund Transfer processed under BACH. Positive pay instruction is now
Network). mandatory according to Bangladesh Bank.
 Successfully handled IPO Subscription of THE
PENINSULA CHITTAGONG LIMITED as the lead banker Alternate Channel Operations
to the issue and arranged refund warrant payments of In 2014, EBL’s Internet Banking platform has been enriched
AFC AGRO and Mozaffar Hossain Spinning Mills Ltd. further to facilitate its customers with user-friendly features
 Successfully distributed 82,886 dividend warrants of and added securities with the inclusion of second level
three renowned companies. authentication. Significant achievements of ACO in 2014 are -
 Obtained 56 special permissions from Bangladesh Bank  Enabling fund transfer to other bank accounts.
for outward remittances, which were considered as
 Introducing Wimax Payment for Banglalion & Qubee.
exceptional in nature.
 Introducing EBL Access for fund Transfer. With added
Service Delivery (SD) security feature of 2nd Factor Authentication process
Since the inception, Service Delivery is continuously customer can now use OTP (one time password), for any
enhancing its capacity and windows to provide efficient and third party fund transfer.
compliant customer services to support all EBL branches  Establishing more reliable and cost effective direct
across the country. Connectivity for SWIFT Platform through “Alliance
Four functional units, namely Account Services, Item Remote Gateway”.
Processing, NRB Operations and Alternate Channel
NRB Operations
Operations under Service Delivery, are ensuring smooth
services to its customers across the country through three EBL NRB Operations is processing foreign remittances of
regional offices located in Dhaka, Chittagong and Sylhet expatriates received through 19 overseas exchange houses
using Document Management System (DMS) for electronic mainly located in the Middle-East. Remittances received
archival of customer’s documents. In Dhaka, Service Delivery in 2014 increased by USD 16 million compared to 2013.
has extended its presence in customer concentrated In 2014, EBL tied up its remittance business with Western
areas like Gulshan, Uttara and Shyamoli through extended Union, the world’s largest remittance processing company.
Operation’s Offices to provide quick support to the
customers.
Cards Operations
Cards Operations of EBL has merged with Central Operations
Performance Highlights of Service Delivery since January, 2014, for rendering controlled and quality
services, related to different card products in conjunction
Account Service Unit: with different payment networks (VISA, MasterCard etc).
This centralized account service unit provides seamless Starting from personalization of card plastics and pins, it
support to 76 branches of the bank out of which 20 distant provides after sales services to customers, processes card
branches are served using Document Management System transactions (particularly retail transactions through ATM,
(DMS) solution. POS and cheque), receives payments, pays merchants for
Significant achievements of Account Services in 2014 are acquiring transactions etc.
appended below: This year, the organogram of Cards Operations has seen a
 Implementation of new security feature “QR code” (Quick paradigm shift which added a new dimension to Operations
Response code) in EBL cheque. Division. Cards Operations has been segregated from its
generic organogram to six distinct operational units namely,
 Enabling transaction alert option for all individual
Cards Account Issuance & Maintenance, Cards Settlement,
customers through SMS. In 2014 about 123,000
Reconciliation, Merchant Service Ops, Product & User Admin
accounts have been enabled with SMS alert option and
and ATM Ops. This enables EBL to better manage operational
further enrolling is continuing.
risks related to cards in every aspect.
 Concluded customer’s document update project in 2014.
About 46,000 accounts have been updated under this Performance highlights of EBL Cards Operations
project.  Joined the National Payment Switch Bangladesh (NPSB) to
Item Processing unit (IPU): ensure better and wider services to EBL customers across
Bangladesh.
IPU is a centralized, mostly technology based, automated
 Joined with new payment association like MasterCard and
unit that processes 100% inward & outward cheque clearing
activities since commencement of Bangladesh Automated opening up the opportunity to offer wider range of products
Clearing House. Significant achievements of IPU in 2014 are- and services.
 Formed Central Cards Archive with wider space, facilitating
 Processed 691,000 IPO Refund Warrants as the lead
banker of three companies - The Peninsula Chittagong the storage of all KYCs related to cards in a single place
Ltd., Mozaffar Hossain Spinning Mills Ltd. & AFC Agro efficiently and effectively.
Industries Ltd.  Commencement of merchant acquiring to facilitate VISA
 Implementation of internal process for obtaining and MasterCard holders in performing retail transactions at
Positive Pay Instructions (confirmation) against cheques any EBL merchants / partners outlet.

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 MANAGEMENT DISCUSSION AND ANALYSIS

 Introduced Zero% Installment Plan (ZIP), facilitating the investment banking and other wholesale operations, e.g.
credit cardholders to convert retail purchase transactions at Syndication, Corporate and SME refinancing activities
designated merchant outlets into an installment scheme. etc. Despite facing many changes in rapidly varying and
increasingly challenging treasury and investment banking
Card transaction summary business scenario in Bangladesh, in terms of nature and
During the year 2014, ATM withdrawals have been increased regulations, the Team performed well in line with its vision of
by 40% over 2013. efficient delivery and risk management. Some of the notable
achievements are:
BDT million
 Managed almost 25% transaction growth in FX and
Growth
Transaction Transaction in Transaction in Money Market treasury deals.
over 2013
Category 2013 2014  Efficiently handled volume of BDT 25,000 million Govt.
(%)
ATM 16,102 22,601 Securities (Treasury Bills/Bonds) operations. EBL is one
40%
of the most active participants in the securities market
POS 10,462 8,977 -14% operations in Bangladesh.
 Effectively communicated large pull of sensitive
Regulatory Reporting and Reconciliation and time-bound data to internal as well as external
Regulatory Reporting and Reconciliation (RRR) is the newest stakeholders through 28 reports and returns.
venture of Centralized Operations to bring all the regulatory
reporting and regulatory affairs related to foreign exchange
and foreign trade transactions under a single umbrella. Role of Operations Division in Risk
RRR comprises of two wings, namely, Regulatory Reporting Management
and Reconciliation. Regulatory reporting involves both online Operations division plays the key role in mitigating operation
and offline (manual) reporting to pertinent authority. Online risk across the bank. In fact, a good deal of superior
reports include Export, Import, Inward, Outward remittance, corporate governance status of the bank is due to its
reporting related to Nostro accounts and Rationalized Input centralized operations structure. As such, Operations Division
Template (RIT). Manual reports include all types of periodical has undergone a number of risk-minimizing measures for the
statements and returns. Side by side, the Reconciliation unit sake of the betterment of the whole organization, such as-
reconciles the foreign currency and local currency Nostro  Online price monitoring of imported commodities.
accounts transactions.
 Operation and Transaction monitoring in line with up to
Performance summary of RRR in 2014 is appended below: date UN/US sanctions.
Online Reporting Category 2013 2014 Growth  Online screening of Vessel and Containers for High-
valued Import Commodities.
Exp issue 30,000 34,134 14%
 Implementation of enhanced security for financial
Duplicate Exp 28,000 33,587 20%
transaction through Internet Banking platform by
Triplicate Exp 27,000 33,826 25% introducing two factor authentications.
LCAF & LC foreign 7,500 9,236 23%  Introduction of enhanced security features in EBL
IMP & BOE 10,500 12,822 22% cheque to prevent fraudulent attempts.

Local LC 5,412 5,508 2%  Update customer information as part of ‘Know Your

Customer’ (KYC) procedure in line with Bangladesh Bank
Local acceptance 5,884 6,293 7% guidelines.
Local payment 4,118 6,446 57%  Introduction of instant SMS alert to notify any transaction
in individual customer account.
Treasury & Investment Banking Operations  Implementation of positive pay instruction procedure
The team of Treasury & Investment Banking Operations for clearing of cheques through BACH to prevent any
of EBL has been functioning independently to render high unwanted attempt.
quality services of product solutions related with treasury,

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EASTERN BANK LIMITED ANNUAL REPORT 2014
INFORMATION TECHNOLOGY (IT)
Business Continuity is a strategy adopted in the Banking customers need immensely by reducing the wait time for
Industry world wide with the aim to continue operations if a such information.
place of business is affected by different levels of disaster Some benchmark projects of Card Business has been
including a permanent loss of a building. In 2014, Eastern implemented in 2014 to provide better service to customers
Bank Limited further strengthened its Business Continuity and to enhance the spectrum of Card business. With the
strategy by including a Second Disaster Recovery Site in introduction of Installment Module(Zero Percent Interest Plan,
Jessore to mitigate the risks of earth quakes in Dhaka region. ZIP) for credit card holders, EBL’s Credit cardholder can
Eastern Bank Limited is the first Bank in the Banking industry enjoy monthly installment based credit facility in purchasing
in Bangladesh to have setup a Disaster Recovery site in commodity. EBL also ventured into Point of Sale (POS)
Jessore which is located on a stable seismological plate. Acquiring business in 2014. Cash-In and Cash-Out facilities
Eastern Bank Limited is also the first Bank to implement real through POS for Prepaid Cardholder was introduced;
time data replication amongst all three sites in Bangladesh. specially for Grameen Phone.
Through the robust technologies of EMC, online real time
Through the introduction of Two factor authentication
data replication is initiated from Dilkusha, the primary site to
(VCAS), E-commerce (Card Not Present) transactions with
both DR sites in Uttara and Jessore.
Visa Credit, Debit or Pre-paid cardholders has been made
possible where the customer receives dynamically generated
Onetime Password (OTP) on his registered mobile while
initiating E-commerce transaction on any Verified by Visa
(VBV) website. Furthermore, to provide advanced security to
EBL Cardholders, EBL launched VISA EMV Card which would
lessen fraudulent transaction with Card.
With the implementation of National Payment Switch of
Bangladesh Bank (NPSB), member bank customers including
EBL customers can now use NPSB network for Cash
Withdrawal, Balance Enquiry, Mini statement at a reduced
rate. Other portfolio enhancement product of 2014 includes
the soft launching of MasterCard (Magstripe) for both issuing
and acquiring. In-house solution is ready for Agent Banking.

Priorities in 2015
 Through implementation of MiGS of MasterCard, EBL will
step into E-Commerce Acquiring business
 MasterCard EMV project for both issuing and acquiring
Another major initiative of 2014 has been the introduction will be implemented by which our MasterCard Card
of Positive Pay- an in house developed solution to prevent holders will get secured EMV card. Our MasterCard
fraudulent cheque transactions. As advised by Bangladesh Acquiring will also be EMV compliant.
Bank, to prevent any possibility of fraud through counterfeit
 With the introduction of Anti-Money Laundering (AML)
cheque, fake signature, MICR Line distortion etc., every System, Eastern Bank Limited will be in a position to
individual customer/personal accountholder has to provide a automatically check several national and international
mandatory Positive Pay Instruction through Internet Banking, published lists and use historical as well as different
Corporate Self Service Portal, E-mail, SMS, Call Center and pattern analysis to detect AML activities.
by filing out a form through Branch.  In order to excel in Customer Service, Customer
As part of Eastern Bank Limited’s Green Banking initiatives, Relationship Management (CRM) project will be taken
an in-house software has been developed to send automated up. With this technology, it will enable Eastern Bank
advises and automated loan balance confirmation letters Limited to manage Customer Relationship and to learn
through e-mail. Automated advises for Letter of Credit, more about customers’ needs and behaviors in order to
develop stronger liaison with them.
Export & Import Bill are being sent to customer’s e-mail on
a daily, weekly and monthly basis and this has served the

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 MANAGEMENT DISCUSSION AND ANALYSIS

HUMAN RESOURCES
Employer of Choice Code of conduct and ethical guidelines for
‘Employee First’ is our bracing motto. We believe that the employees
source of our competitive advantage lies deep inside our Code of conduct is a set of rules outlining the responsibilities
company, in our people. Our core brand has always been our of proper practices for an individual or organization. As
employees, appreciated for their passion to perform. per the ‘Code of Conduct and Ethical Guidelines’ for EBL
Our “people first” policy and practices, passion of our people employees, all have to maintain the code of conduct and
to come to work, performance driven culture, quality of demonstrate highest ethical standards. These are the core
working environment, healthy work life balance, recognition values EBL people must follow and nurture. The basic
for the performers and investing in people differentiates EBL premise of this code of conduct is that each employee,
as an excellent workplace in the country. while on the payroll of EBL, shall place EBL ahead of his/her
At EBL we do not offer jobs to the employees rather we personal interests.
shape their careers. Numeric features of Team EBL
Values of EBLHR Job Category No. 2014
 Engaging people Permanent 1,559
 Business Partner; align HR strategy in line with business Trainee 717
 Leadership; explore and exploit future leaders Sales Executive 649
 Hiring attitude and train them for skills Total employee 2,925
 Respect our values, beliefs, policies and people
Particulars 2014 2013 2012
Sustainable employee relations Number of employees 2,925 3,232 2,685
At EBL we believe in People not in Process. We believe our Female Representation 20.7% 20.5% 20%
employees are smart, so we want to remain transparent and
Average Employee Age 32.75 32.83 33
honest. We encourage open communication, feedback and
years years years
new ideas. We are consistent in our communications across
the organization. Average Length of Service 6 years 6 years 6 years

Our People’s Policy is made open on intranet; all the Age wise staff distribution
employees of the bank can access it. We also conduct town
Age Class 2014 2013
hall program (all staff gathering), family day, away days, etc.
We conduct a lot of Focus Group Discussions for welcoming 29 years 22% 22%
people views and criticisms on the way the organization 30-39 years 58.5% 57%
operates. 40-49 years 15% 16%
We communicate things to our people timely, actually we tell 50> years 4.5% 5%
them first as we believe our employees are influential. We
Area wise staff distribution
also believe our employees are knowledgeable that’s why
we ask for feedback, listen, acknowledge and act on it. We Region 2014 2013
celebrate success of our people and promote best practices
Chittagong 19.88% 19.23%
among them.
Dhaka 71.33% 72.96%
We are committed to provide our people a stable work
environment with equal opportunity for learning and personal Khulna 2.18% 2.07%
growth. Creativity and innovation are encouraged for Rajshahi 2.89% 2.27%
improving the effectiveness of the organization as a whole.
Sylhet 3.72% 3.47%
Above all, people are treated with the same concern, respect
and caring attitude. Department wise staff distribution
To accomplish the goals and uphold the values, we have Sales
a commitment to providing a professional, caring work Division Permanent Trainee Total %
Executive
environment dedicated equally to both individual and Consumer 779 496 476 1,751 59.86%
team achievement. We strive to focus on each individual’s Banking
needs and successes as well as the spirit and rewards of Corporate 85 7 - 92 3.15%
teamwork. We are individuals working together to achieve Banking
common goals. Most importantly, we provide a progressive SME Banking 138 28 173 339 11.59%
workplace with open communication, promotion of employee Treasury 7 - - 7 0.24%
involvement and the celebration of our successes. Our Administration 13 7 - 20 0.68%
employees play a vital role in all of our past accomplishments Board 5 - - 5 0.17%
and in many coming in the future. Secretariat

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Sales  Organized 13 in-house Banking Foundation programs
Division Permanent Trainee Total % for 462 employees who are comparatively new in the
Executive
banking arena and 3 Advance Banking Foundation
Brand 3 - - 3 0.10%
programs at BIBM.
Communications 2 - - 2 0.07%
 Apart from foundation training last year we organized
CRM 147 15 - 162 5.54% training on some contemporary topics like Major Policy
Finance 16 - - 16 0.55% Issues and Directives of Bangladesh Bank, Legal
HRD (including 21 6 - 27 0.92% Aspects of Banking, Credit Risk Management and
6 Future Managing Fraud in Banks.
Leaders)  Organized 306 training events where total numbers of
ICCD 37 - - 37 1.26% participants were 7,900, which is 23% higher than the
previous year.
IT Division 46 10 - 56 1.91%
 For developing and enhancing people’s capacity
MD's 11 - - 11 0.38%
eblHR has organized country wide 16 e-learning exam
Secretariat
sessions in 5 different venues. Total 2790 EBL employees
Operations 196 107 - 303 10.36% attended these exams.
SAMD 53 41 - 94 3.21%  516 employees attended training on Money Laundering
Grand Total 1,559 717 649 2,925 100.00% Prevention Act-2012 and Anti-Terrorism Act 2009.
 7 employees achieved Credit Skill Assessment
EBL HR in 2014 qualification awarded by Omega, UK.
EBL HR treats all our colleagues as valued customers  Launched training program for Six Sigma certification.
while contributing positively to the bottom line through
Learning and Development: 2014 Vs 2013
comprehensive programs that displays a thorough
understanding of all aspects of the human resources
2014 2013
profession.
Types of L&D No of No of
Program No of No of
Resourcing L&D
Participant
L&D
Participant
At EBL we hire attitude not skill. We recognize the importance Program Program
of having the right people working for us to achieve our Local 178 473 136 340
organizational goals. Our resourcing processes are designed Training
to attract and retain suitable candidates. EBL only hires In house 98 4,604 74 3,316
people who demonstrate an alignment with our company Training
values and philosophy, because recruiting decision has a
Foreign 14 33 11 19
major impact on our business. In 2014, 679 new members
Training
including 28 future leaders joined the EBL family.
e-learning 16 2,790 25 2,737
Type of Employee Number %
Total 306 7,900 246 6,412
Employees in Permanent 207 30.49%
Position
People’s Benefit
Officers in Trainee Position 162 23.86%
Our compensation and benefits strategy has been
Consumer and SME Sales Team 310 45.66% devised to foster high performance culture keeping
Total 679 100% market competitiveness in mind. Throughout the year, we
remained focused to our people - their performance and pay
Recruitment: 2014 Vs 2013 satisfaction.
Changes Market driven compensation package along with subsidized
Particulars 2014 2013 Changes
(%) House Building Loan (HBL), interest free Car Loan, lower
Total 679 1439 - 760 - 52.81% interest Loan Against Monthly Salary (LAMS), Loan Against
Number of Provident Fund (LAPF), Furniture and Equipment Allowance,
Recruitment life insurance coverage of all Staff House Building Loan
Borrowers, Provident Fund, Gratuity, Superannuation, Leave
Human Capital Development in 2014 Encashment, and every other approach is headed to retain
 Emphasized on cross functional training with the our people with their satisfaction.
objective of fitting people at any desk. Every year we try to provide more amount to our people as
 For empowering women leadership and creating pay and benefit than the previous year.
tomorrow’s corporate leaders, eblHR organized 4 Women
Leadership Programs where 150 female employees
participated.

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 MANAGEMENT DISCUSSION AND ANALYSIS

People’s Benefit Analysis: 2014 Vs 2013 Occupational Health and Safety

2014 2013 Changes We consult with our employees in health and safety matters
Facility to ensure their involvement. To meet our commitment, EBL
BDT BDT
No. No. (%) remains always ready to take all reasonably practicable
million million
steps to ensure the health and safety of people by the
Staff HBL 141 422.79 106 268.24 57.62%
development, implementation and enforcement of policies
Staff Car Loan 115 165.37 96 138.21 19.65% and procedures.
LAMS 106 10.41 172 21.17 -50.83% To assist in facilitating communication between management
LAPF 88 19.42 108 21.83 -11.04% and staff on health and safety matters EBL provides Hand
F&E Allowance 147 13.95 121 13 7.31% Books on First Aid and Guideline on Fire Safety & Security
at Bank Premises to every employee during their joining.
Total 597 631.94 603 462.45 36.65%
Moreover, we arrange annual fire drill where participation is
compulsory for the employees.
In 2014, our best attempt to enhance people benefit was
given in Market Adjustment for Permanent as well as Trainee Other achievements of EBL Human Resources in 2014
EBL Staff. Mentionable, we have revised the marketing  Introduced paperless Performance Appraisal System.
allowance of each Branch Manager. We have enhanced it
 Revamped People Management Policy to comply with
to twice as it was in 2013. Another heartiest effort was to
the country’s law as well as Central Bank’s policy.
enhance Staff House Building Loan facility and we made it
possible to increase the ceiling in each grade from 33.33%  Reviewed our Compensation and Benefit plan to remain
to 105.88%. Eligible staffs are allowed to purchase 6 (six) competitive in the prevailing market.
years old (previously it was five) reconditioned car, which  Best ever employee engagement activities i.e. staff
in fact have reduced their asset purchase cost. Staff Loans photography competition, staff music competition, kids
are at times approved and disbursed even on the same painting competition, etc.
day considering their urgency without compromising with
compliance. Priorities in 2015
 Learning and development effort will continue with more
Occupational health and safety is of paramount importance
focus on e-learning; individual skill development as well
to EBL. The bank values its people and their wellbeing and
as capacity building of the whole organization.
is committed to providing the highest standards of safe and
healthy workplace for all staff, contractors, customers and  Aligning the employees with the brand ‘EBL’ by giving
visitors. more emphasis on employee loyalty and engagement.
 Reviewing long term benefits.
 Benchmarking of compensation and benefit plan for
more equitable pay policy.

A day-long strategic conference titled ‘Together, We’ was held at BRAC CDM, Gazipur. Managing Director & CEO Ali Reza Iftekhar, is seen with other staff members
of EBL family.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 142
EASTERN BANK LIMITED ANNUAL REPORT 2014
RISK MANAGEMENT
Risk Performance 2014 partners predicted GDP growth within 5.5% to 5.8%; much
lower than last four years average. Bangladesh Bank, in its
Bangladesh economy made significant progress in 2014;
Monetary Policy for the second half of fiscal year 2014-15,
foreign exchange reserve touched new height of $ 22.31
estimated that the GDP growth will range from 6.2% - 6.5%.
billion, inflation eased steadily to 6.99%, public debt
It also predicted that construction and trading sector will
declined, moderate growth experienced in export and
perform sluggish in rest of current fiscal year, export may
remittance; but expected GDP growth remain unattained.
grow slower than expectation, and remittance is assumed to
Private sector credit growth marked a historical fall as be stable. Under such circumstances, we assume that the
political uncertainties curbed the demand for investment, resilience gained in a decade is stretched and the recovery
contributing to ample liquidity in the banking sector. Banking largely depends on political stability, macroeconomic solidity,
sector’s growth was slower due to weaker demand for credit country’s competitiveness, and confidence of investors.
and increasing impaired loans. The main challenge was Remittance and Export, two key factors that kept the
managing impaired assets and excess liquidity. economy afloat in 2014, may face tough challenges. Although
During 2014, EBL performed better than many of its peers. export situation is still under control, there are signs that
Loan loss provisions were higher than the historic lows orders are being cancelled and diverted to other countries.
experienced in 2011, driven by increase of specific provision Though remittance showed declining trend in Q4, 2014,
of corporate banking exposure. In SME and Consumer recent deal with Saudi Arabia to recruit 10,000 per month for
Banking, the amount of total provision remains stable but as domestic workers and driver; reopened the doors of Saudi
percentage of total loans and advances it was lower than that labor market.
of preceding year. We remain disciplined in our approach to
credit risk management and proactive in our collection efforts Major risks and uncertainties in 2015
to minimize account delinquencies. In Corporate Banking, Taking risk is in the core of banking business and EBL is not
the increase in provisions was primarily related to a few an exception. As a responsible bank we accept selected risk
large clients but the number may increase if political turmoil by taking informed decision, and such decisions are exposed
continues. AD ratio remained at 78.7% while all liquidity to uncertainties. We seek to contain and mitigate these risks
parameters were satisfactory. within our appetite set by the Board of Directors and price
Capital, considered as key mitigate of risk, was more than for adequate compensation against risks taken in due course
adequate of the regulatory requirement, and bank has of business. Since risks by their nature are uncertain, tools
windows open to raise additional capital to support its growth are not available that can prevent unfavorable outcome
in following years. Overall, the bank preserved its competitive with certainty. Good judgment and prediction of future with
strength to grow at constant pace in coming years. greater accuracy are fundamental for risk management.
Some major uncertainties bank may face in coming year are
Economic Outlook 2015 set out below. This should not be regarded as a complete
and comprehensive statement of all potential risks and
The economic outlook may not be promising in 2015 if
uncertainties that the bank may experience.
current political turmoil continues further. Major development

Principal Uncertainties
Risks Description Mitigates
Deteriorating Macroeconomic Deteriorating macroeconomic conditions We closely monitor macro economic
conditions leads to lower GDP growth that may have trends in markets and continuously
impact on personal income and consumption review the suitability of our risk appetite
pattern, demand for products and services, and controls.
debt servicing capacity, and saving
propensity. In general, slower GDP growth
and unfavorable macroeconomic conditions
affect our business negatively.
Change in regulatory policies and It is not predictable to foresee the nature We review key regulatory developments
compliance and impact of future changes in economic in order to anticipate changes and their
policies, laws and regulations and such potential impact on our performance. If
changes may contradict with our strategic necessary, we discuss both bilaterally
interests. The outcome of such changes is and unilaterally.
generally difficult to predict and could be
material to the bank.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Risks Description Mitigates
Geopolitical events We face a risk that geopolitical tensions We actively monitor the political
or conflict in countries where we or our situation in major trading partner
customers have business interest could countries of Bangladesh in order to
impact trade flows, customers’ repayment anticipate any potential impact on our
ability, and our ability to continue business. customers who buy or sell products
from these countries.
Uncertainty in political fronts The risk that violent political agitation like We actively monitor political
strike and blockade disrupt production, developments and watch on sectoral
distribution, and movement of goods of our outlook/shock to assess potential
customers continuously and erode their impacts and way out.
repayment capacity.
Natural calamity The risk that natural calamity like flood Insurance of inventory is widely used to
and cyclone may cause disruption of our mitigate such risks.
customers business including damage of
inventory.
Risk of Fraud The risk of fraud and other criminal activities We have measures in place to monitor
is growing as criminals becoming more and mitigate this risk. Controls
sophisticated and as they take advantage of are embedded in our policies and
the increasing use of technology in society. procedures across the range of bank’s
activities.

Risk Management c. Risk Quantification and Aggregation

d. Monitoring and Reporting
Objective of Risk Management
e. Risk and Control Optimization
Our risk philosophy is that the risk we take should be in
line with the risk appetite set by our Board of Directors.
We accept risks fits with the business strategy, assisted
by prudent decision-making process and management
effectiveness. The risk framework of the bank is designed
within the scope of Bangladesh Bank guidelines on Risk
Management, issued on 15 February 2012 vide DOS circular
-02 and other guidelines on core risks: Credit, Foreign
Exchange, Asset-Liability Management, Internal Control,
ICT and Anti Money Laundering. Risk management is the
discipline at the core of our organization and encompasses
all the activities that affect its risk profile. The framework
involves identification, measurement, monitoring, and
controlling risks to ensure that:
a. Individuals who take or manage risks clearly understand it;
b. The organization’s risk exposure is within the limits
established by the Board;
c. Risk taking decisions are explicit and clear;
d. Risk taking decisions are in line with the business
strategy and objectives set by the board;
e. The expected payoffs compensate for the risks taken; and
f. Sufficient capital as a buffer is available to take risk.

Elements of Risk Management Framework

Effective Risk Management is fundamental to being able
to generate profits consistently and sustainably. Hence,
Risk Management is the central part of the financial and
operational management of the bank. Our Risk Management
Framework has elements and flexibility to establish
enterprise-wide Risks Management System. Elements of our
Risk Management Framework are:
a. Risk Governance
b. Risk Assessment

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 RISK MANAGEMENT

Risk Management Committees

Committee Key Objectives Represented by
Risk Management To ensure that the bank wide risks are Mir Nasir Hossain, Director and Chairman of the
Committee (RMC) of Board managed within the risk strategy and committee
appetite established by the Board of Asif Mahmood, Director and Member of the
Directors. committee (resigned on Sep 22, ’14 from Office
of the Director)
Meah Mohammed Abdur Rahim-Independent
Director and Member of the committee
(Appointed on Oct 29, ’14)
Gazi Md. Shakhawat Hossain, Director and
Member of the committee
Bank Risk Management To monitor activities of the Risk Risk Management, Treasury, Operations, IT,
Committee (BRMC) Management Unit responsible for integrated Finance and Internal Control & Compliance.
risk management across the bank.
Bank Operational Risk To supervise operational risk management All business units, risk management, operations,
Committee (BORC) activities of all functional areas of the bank. treasury, support functions, branch operations,
and Internal Control & Compliance.
Asset Liability Committee To optimize bank’s financial goal retaining Business units, risk management, treasury,
(ALCO) liquidity risk and interest rate risk of the Finance, Deputy Managing Director and
bank at desired level. Managing Director.
BASEL III Committee Implementation of BASEL Guidelines as Operations, IT, Treasury, Finance, Risk
per requirements of Bangladesh Bank time Management and DMD-Ops, DMD & CRO
to time. Regulatory requirements to be the
minimum standards to establish.
Credit Committee Review of bank’s credit risk appetite, Business Heads, Risk Management, Finance,
tolerance and strategy considering current Credit Risk Management and Deputy Managing
and prospective macroeconomic and Director & CRO
financial environment. Monitor credit risk
on a bank wide basis ensuring compliance
of the limits approved by the Board of
Directors or any Board Committee.

Risk Management Unit the bank to credit risk rests with the Board of Directors. The
Board however delegated authority to the Managing Director
Risk Management Unit (RMU) has been established on 03
and CEO or other officers of the credit risk management
July 2012 as per the requirement of Bangladesh Bank Risk
division. The Board also set credit policies and delegates
Management Guidelines. Head of RMU now reports to the
authority to the management for setting procedures, to
Deputy Managing Director & Chief Risk Officer. RMU works as
structure the credit risk management framework in the bank.
the secretariat of the CRO and support achieving his objectives.
The Credit Policy Manual contains the core principles for
In addition to the regulatory measures and compliance, RMU
identifying, measuring, approving, and managing credit
continues to enrich risk culture and management techniques
risk in the bank and designed to meet the organizational
sharing knowledge on global best practices.
requirements that exist today as well as to provide flexibility
for future. These policies represent the minimum standards
Management of Credit Risk for credit extension by the bank, and are not a substitute for
Credit Risk: experience and good judgment.
Credit risk is the risk of loss that may occur from the failure of The policy covers corporate, retail, small and medium
any counterparty to make required payments in accordance enterprise exposures. Policies and procedures has structured
with agreed terms and conditions and/or deterioration of and standardized credit risk management process both
creditworthiness. Credit risk may arise from the banking book, in obligor and portfolio level. There is a comprehensive
trading book even from non funded exposures. Credit risk is credit appraisal procedure that covers industry/business
managed through a framework set by policies and procedures risk, management risk, financial risk, facility structure risk,
established by the Board. The responsibility is clearly security risk, environmental risk, reputational risk, and
segregated between origination of business transaction and account performance risk. Credit risk management function
approval of the transaction. is Independent of business origination functions to establish
better internal control and to reduce conflict of interest.
Governance of Credit Risk: The Head of Credit Risk Management (HoCRM) has clear
Final authority and responsibility for all activities that expose responsibility for management of credit risk.

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Credit Management Process:

Loan origination and risk The loan origination process comprises initial screening and credit assessment. The evaluation
appraisal focuses on the borrower’s ability to meet its obligations in a timely manner. Efforts are made to
ensure consistent standards are maintained in credit approval. Collateral and guarantees form
an important part of the credit risk mitigation process. Internal policy dictates the type of security
offered, standards for periodic valuations and assessment of realizable value of collateral. A basic
risk rating model is in place for customers other than retail and consumer segments. The internal
risk rating is an important part that compares customers’ risk profile using a common scale
though credit decision are not taken solely on the basis of credit rating. Lending is primarily made
on the basis of cash flow and repayment ability; which are distinct from collateral based lending.
Loan approval and The Bank has established clear guidelines for loan approvals/renewals by adopting individual
sanction authority based approval structure for better responsibility. All credit applications require
assessment by the independent credit risk team who do not have any revenue target.
Credit Administration Bank’s loan portfolio is administered through a centralized Credit Administration Division
and Disbursement which ensures efficient and effective post sanction customer support including disbursement,
settlements, processing, renewal notices and advising customers on interest rate amendments.
This division works independently and reports to Head of Credit Risk Management to ensure
clear segregation of duties from business origination. Disbursements made only after stipulated
conditions have been met and relevant security documents obtained.
Credit Measurement To safeguard the bank against possible credit losses, problem loans need to be identified early.
and Monitoring The Credit Risk Management Division measures and tracks the status of the credit portfolio,
undertakes impact studies and detects early warning signals pointing to deterioration in the
financial health of a borrower. Accountability for credit risk performance is vested with individual
business units and unhealthy trends addressed at all levels.
Recoveries Non Performing Loans are managed by the Special Asset Management Division. This unit is
responsible for all aspects of an adversely classified facility, follow up of rescheduled facilities,
monitoring the value of the applicable collateral and liquidation, scrutiny of legal documents
and liaising with the customer until all recovery matters are finalized. This division’s activities are
seamlessly integrated with Credit Administration and Credit Risk Management to ensure effective
follow up.

Internal Rating Scale: exposure and to sub-delegate such authority to the Managing
Risk measurement plays a central role along with judgment Director and CEO with or without authority for further sub
and experience in informed risk taking decisions, and delegation. We have adopted individual authority based
portfolio management. For the purpose of risk measurement, approval structure to ensure better accountability.
we use a numerical grading system associated with the
Classification and Provisioning Policy:
borrower. Though this rating system, ‘Credit Risk grading
Matrix’ (CRGM), is not a lending decision making tool but EBL follows Bangladesh Bank Circulars and Guidelines for
used as a general indicator to compare one customer with loan classification and provisioning. Existing guidelines are
another set of customers, and weighted average CRG of described in BRPD circular no. 14 dated 23 September
all customers indicates movement of the portfolio risk. 2012, BRPD circular no. 19 dated 27 December 2012 and
CRGM analyze a borrower against a range of quantitative subsequent amendments to this circular. These circulars are
and qualitative measures. The numeric grade from 1 to 11 publicly available information at: www.bangladesh-bank.org/
indicates creditworthiness of the borrower - lower numbers mediaroom/circulars/circulars.php
are indicative of lower likelihood of default, while 9 to 11
grades are assigned to default borrowers. However, we Credit Risk Mitigation and Control:
are yet to assign Probability of Default (PD) corresponding The bank obtains collateral against its credit exposure
to each risk grade and to cap exposure both at borrower wherever possible as secondary recourse to the borrowers.
and portfolio level against each risk grade. No score card Primary recourse remains being the cash flow of the
or rating model for retail and SME (small) borrowers are business. The reliance on these mitigants is carefully
currently in practice; rather borrowers are assessed against
assessed in light of issues such as legal certainty and
pre approved criteria outlined in Product Program Guidelines
enforceability, market valuation, and counterparty risk of the
(PPG) approved by the Board of Directors. Thus the Credit
guarantor. Collateral is held to mitigate credit risk exposures
Risk Grading Matrix facilitates objectivity for making credit
and risk mitigation policies determine the eligibility of
decisions; however final decisions are taken on subjective
collateral types.
judgment and prudence of the approver.
Collateral types that are eligible for risk mitigation include:
Credit Approval Authority: cash and bank deposits; residential, commercial and
Board of Directors has sole authority to approve any credit industrial property; fixed assets such as motor vehicles,

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 RISK MANAGEMENT

aircraft, plant and machinery; marketable securities;

commodities; bank guarantees; and standby letters of credit. Market
Documentation must be held to enable the bank to realize Risk Management
the asset without the co-operation of the asset owner in the Structure
event that this is necessary. Regular valuation of collateral
is required in accordance with banks Policy for obtaining
Collateral Security and credit risk policy, which prescribes
both the process of valuation and the frequency of valuation
for different collateral types. Bank also performs stress test
on changes in collateral (land and building) values for total
portfolios to assist senior management in managing the risks Interest Exchange Equity
in those portfolios given the value of collateral declines by Rate Risk Rate Risk Price Risk
10 percent, 20 percent and 40 percent. Physical collateral is
required to be insured covering most relevant risks, keeping
the bank as loss payee under the insurance policy.
Impact on Impact on Marking to
Where guarantees are used as credit risk mitigation the NII Fx Position Market
creditworthiness of the guarantor is assessed and established
using the credit approval process in addition to that of the
obligor or main counterparty. The main types of guarantors Value at
Re-pricing Risk at 95%
include bank guarantees, non banking financial institutions,
Gaps confidence
parent companies, and shareholders.
This may be pertinent to mention that the bank did not use
credit derivatives to mitigate credit risk or dealt with these Net
instruments in the year ended on 31 December 2014. Interest
Margin
Credit concentration risk
Credit concentration risk may arise from a single large Marking to
exposure or from multiple exposures that are closely Mkt of
correlated. This is managed within concentration caps set bond/bill
by industrial sector. Additional concentration thresholds
are set and monitored, where appropriate, by geographical are primarily responsible for management of liquidity in the
location, tenor profile and products. Credit concentrations bank. A monthly projection of fund flows is reviewed in ALCO
are monitored in each of the businesses and concentration meeting regularly.
limits that are material to the bank are reviewed and approved Liquidity Risk Measurement:
at least annually by the Credit Risk Management Division or
At a very basic level, liquidity measurement involves
Managing Director & CEO.
assessing all of a bank’s cash inflows against its outflows
Management of Liquidity Risk to identify the potential for any net shortfalls going forward.
This also includes funding requirements for off balance sheet
Liquidity Risk: commitments.
Liquidity Risk is the potential for loss to a bank arising from An important aspect of measuring liquidity is making
either its inability to meet its obligations as they fall due or assumptions about future funding needs. While certain cash
to fund increases in assets without incurring unacceptable inflows and outflows can be easily calculated or predicted,
cost or losses. Liquidity risk is often triggered by the bank also make assumptions about future liquidity needs,
consequences of other financial risks such as credit risk, both in the very short-term and for longer time periods.
interest rate risk, foreign exchange risk, etc. One important factor to consider is the critical role a bank’s
reputation plays in its ability to access funds readily and at
Liquidity Risk governance:
reasonable terms.
The intensity and sophistication of liquidity risk management
We have identified several key liquidity risk indicators, which
processe depend on the nature, size and complexity
are monitored on a regular basis to ensure healthy liquidity
of a bank’s activities. Sound liquidity risk management
position. These ratios are:
employed in measuring, monitoring and controlling liquidity
risk is critical to the viability of the bank. Our liquidity risk i. Statutory Liquidity Requirement;
management procedures are comprehensive and holistic. ii. Cash Reserve Ratio;
Responsibility of managing and controlling liquidity of the iii. Asset to Deposit Ratio;
bank lies with Asset Liability Committee (ALCO) and the
iv. Structural Liquidity Profile;
committee meets at least once in every month. Asset Liability
Management (ALM) desk of the treasury function closely v. Maximum Cumulative Outflow;
monitors and controls liquidity requirements on a daily basis vi. Medium Term Funding Ratio;
by appropriate coordination of funding activities and they vii. Volatile Liability Dependency Ratio;

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EASTERN BANK LIMITED ANNUAL REPORT 2014
viii. Liquid Asset to Total Deposit Ratio; Management of Market Risk
ix. Liquid Asset to Short Term Liabilities;
Market Risk:
x. Liquidity Coverage Ratio (LCR)
Market Risk is the risk of potential losses in the on balance
Liquidity Risk management and mitigation: sheet and off balance sheet positions of a bank stemming from
adverse movements in market rates or prices such as interest
In order to develop comprehensive liquidity risk management rates, foreign exchange rates, equity prices, credit spreads,
framework, we have Contingency Funding Plan (CFP), which is and/or commodity prices. Market risk can be subdivided into
a set of policies and procedures that serves as a blueprint for three categories depending on risk factors:
the bank to meet its funding needs in a timely manner and at a
reasonable cost. i. Interest Rate Risk,
For day-to-day liquidity risk management, CFP ensures ii. Foreign Exchange Risk, and
that the bank is best prepared to respond to an unexpected iii. Equity Price Risk.
problem. In this sense, a CFP is an extension of ongoing
The primary objective of the market risk management is to
liquidity management and formalizes the objectives of liquidity
ensure that bank’s activities which are exposed to various
management by ensuring:
market risks are generating optimum return, and downside
a) A reasonable amount of liquid assets are maintained; risks are in control and within the limit of agreed appetite.
b) Measurement and projection of funding requirements
Market Risk Governance:
during various scenarios; and
Risk Management Unit (RMU) and the bank’s treasury
c) Management of access to funding sources.
division are responsible for risk identification, measurement,
CFP also provides directions for plausible actions in distress monitoring, control, and management reporting in relation to
and emergency situations. In case of a sudden liquidity stress, market risk. Treasury Middle Office is an integral part of market
it is important for the bank to be seemed organized, can risk management which independently evaluates and monitors
did, and efficient to meet its obligations to the stakeholders. treasury department’s transaction from risk perspective.
Since such a situation requires a spontaneous action, CFP Overall risk parameters and exposures of the bank are
will put the bank in better position to address the liquidity monitored by RMU and periodically reported to Bank Risk
problem more efficiently and effectively. CFP ensures that Management Committee (BRMC).
bank management and key staffs are ready to respond to any
distress situations. Interest Rate Risk:
Maturity ladder of cash inflows and outflows are effective tool to Interest Rate Risk is the potential impact on a bank’s earning
determine banks cash position. A maturity ladder estimates a and net asset value due to changes in market interest rates. In
bank’s cash inflows and outflows and thus net deficit or surplus simple words, interest risk arises when bank is obliged to pay
(GAP) both on a day to day basis and over a series of specified more interest for liabilities but cannot charge more on assets.
time periods. A bucket wise (e.g. call, 2-7 days, 1 month, 1-3 Such risk cannot be eliminated as re-pricing period of assets
months, 3-12 months, 1-5 years, over 5 years) maturity and liabilities are different.
profile of the assets and liabilities is prepared to understand
Other than re-pricing issue, other sources of interest risk
mismatch in every bucket. A structural maturity ladder or
are: yield curve risk, basis risk, and embedded options. The
profile is prepared periodically following guidelines of the
immediate impact of a variation in interest is on the bank’s
Bangladesh Bank DOS circular no. 02 dated 29 March 2011.
net interest income, while a long term impact is on bank’s net
Internal Control: worth since economic value of banks assets, liabilities and off
balance sheet exposures are affected.
Bank has adequate internal controls to ensure the integrity
of its liquidity risk management process. These systems Measurement of Interest Rate Risk:
promote effective and efficient operations, reliable financial
Bank’s interest rate risk measurement system takes into
and regulatory reporting, and compliance with relevant laws,
account the specific characteristics of each individual interest
regulations and internal policies. An effective system of
sensitive position, and captures the potential movements in
internal control for liquidity risk includes:
interest rates. Re-pricing schedules is used as interest rate risk
a) a strong control environment; measurement techniques.
b) an adequate process for identifying and evaluating The techniques for measuring bank’s interest rate risk
liquidity risk; exposure begin with a maturity/re-pricing schedule that
c) the establishment of control activities such as policies and distributes interest sensitive assets, liabilities, and off-
procedures; balance sheet positions into a certain number of predefined
time bands according to their maturity (if fixed rate) or time
d) adequate information systems; and
remaining to their next re-pricing (if floating rate). Those
e) continual review of adherence to established policies and liabilities lacking definitive re-pricing intervals (e.g. sight
procedures. deposits or savings accounts) are assigned to re-pricing bands
With regard to control policies and procedures, attention has according to the judgment and past experience of the bank.
been given to appropriate approval processes, limits, reviews
Gap Analysis:
and other mechanisms designed to provide a reasonable
assurance that the bank’s liquidity risk management objectives Simple maturity/re-pricing schedules are used to generate
are achieved. simple indicators of the interest rate risk sensitivity of both

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 RISK MANAGEMENT

earnings and economic value to changing interest rates. This of following basic elements in the management of assets,
approach is typically referred to as gap analysis. To evaluate liabilities, and Off Balance Sheet instruments. Principles of
earnings exposure, interest rate sensitive liabilities (ISL) in each interest rate risk management include:
time band are subtracted from the corresponding interest rate a) Appropriate board and senior management oversight;
sensitive assets (ISA) to produce a re-pricing “gap” for that
time band. A negative or liability sensitive gap occurs when b) Adequate risk management policies and procedures;
ISL exceed ISA in a given time band. This gap implies that c) Appropriate risk measurement, monitoring, and control
an increase in market interest rates could cause a decline in functions; and
net interest income. In this situation, a decrease in interest d) Comprehensive internal controls and independent audits.
rates should improve the net interest rate spread in the short
term, as deposits are rolled over at lower rates before the Bank has developed and implemented effective and
corresponding assets. An increase in interest rates lowers comprehensive procedures and information systems to
earnings by narrowing or eliminating the interest spread. manage and control interest rate risk in accordance with its
Conversely, a positive or asset-sensitive gap occurs when interest rate risk policies. Internal inspections/audits are a
ISA exceeds ISL in a given time band. This gap implies that key element in managing and controlling interest rate risk
a decrease in market interest rates could cause a decline in management program.
net interest income. In this situation, a decline in interest rates
should lower or eliminate the net interest rate spread in the
Exchange Rate Risk:
short term, as assets are rolled over at lower rates before the Exchange Rate Risk is the current or prospective risk to
corresponding liabilities. An increase in interest rates should earnings and capital arising from adverse movements in
increase the net interest spread. currency exchange rates. Banks foreign exchange risk may
arise from following activities:
From Gap schedules mentioned above, the bank computes an
estimate of changes in bank’s net interest income (NII) given Trading in foreign currencies as a market maker or position
changes in interest rates. The gap for particular time band can taker including the unhedged positions arising from customer
be multiplied by a hypothetical change in interest rate to obtain driven foreign exchange transactions;
an approximate change in net interest income. i. Holding foreign currency position in the banking book in
Duration Analysis: the form of loans in foreign currency.

Duration is the time-weighted average maturity of the present ii. Engaging in derivative transactions that are denominated
value of the cash flows from assets, liabilities and off-balance in foreign currency for trading or hedging purpose.
sheet items. It measures the relative sensitivity of the value of iii. Settlement risk due to default of counter parties.
these instruments to changing interest rates (the average term
iv. Time-zone risk, which arises out of time lags in settlement
to re pricing), and therefore reflects how changes in interest
of one currency in one center and settlement of another
rates will affect the bank’s economic value, that is, the present
currency in another center located at different time zone.
value of equity. In this context, the maturity of an investment
is used to provide an indication of interest rate risk. Generally, Bank’s foreign exchange risk management policies and
the longer the term to maturity (next re pricing date) of an procedure include:
investment and the smaller the payments that occur before i. accounting and management information systems to
maturity (e.g. coupon payments), the higher is the duration (in measure and monitor foreign exchange positions, foreign
absolute value). Higher duration implies that a given change in exchange risk and foreign exchange gains or losses;
the level of interest rates will have a larger impact on economic
value. Duration based weights can be used in combination ii. governing the management of foreign currency activities;
with a maturity/re pricing schedule to provide a rough and
approximation of the change in bank’s economic value that iii. independent inspections or audits.
could occur given a particular set of changes in market interest
rates. Specifically, an “average” duration is assumed for the Measurement of Foreign Exchange Risk
positions that fall into each time band. The average durations Bank ensures that all people dealing with foreign exchange
are then multiplied by an assumed change in interest rates to transactions have clear understanding of the amount at risk
construct a weight for each time band. The weighted gaps are and the impact of changes in exchange rates on this foreign
aggregated across time bands to produce an estimate of the currency exposure. The Bank has an effective accounting
change in economic value of the bank that would result from and management information system in place that accurately
the assumed changes in interest rates. Duration incorporates and frequently records and measures its foreign exchange
an instrument’s remaining time to maturity, the level of exposure and the impact of potential exchange rate changes
interest rates, and intermediate cash flows. If a fixed income on the bank. At a minimum, the bank monitors and reports:
instrument has only single cash flow, as a zero coupon bond
 the net spot and forward positions in each currency or
does, duration will equal the maturity of the instrument: a zero
pairings of currencies in which the bank is authorized to
coupon bond with five years remaining to maturity has duration
of five years. If coupon payments are received before maturity, have exposure;
the duration of the bond declines, reflecting the fact that some  the aggregate net spot and forward positions in all
cash is received before final maturity. currencies; and

Interest Rate Risk Management and Control:  transactional and translational gains and losses relating
to trading and structural foreign exchange activities and
Bank’s interest rate risk management involves the application
exposures.

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Control of Foreign Exchange Activities consistent with the foreign exchange risk management
The key elements of foreign exchange control program are well policies.
defined procedures governing:
Equity Price Risk:
a) organizational controls to ensure that there
Equity price risk is the risk of losses caused by changes in
exists a clear and effective segregation of duties
equity prices. These losses could arise because of changes in
between those persons who initiate foreign exchange
the value of listed shares held directly by the bank; changes in
transactions and those persons who are responsible
the value of listed shares held by a bank subsidiary; changes
for operational functions such as arranging prompt
in the value of listed shares used as collateral for loans from a
and accurate settlement, and timely exchanging and bank or a bank subsidiary, whether or not the loan was made
reconciliation of confirmations, or account for foreign for the purpose of buying the shares; and changes in the value
exchange activities. of unlisted shares.
b) procedural controls to ensure that: Equity price risk could be systematic or unsystematic.
i. transactions are fully recorded in the books of The former refers to sensitivity of portfolio’s value to
account of the bank; changes in overall level of equity prices, while the latter is
associated with price volatility that is determined by firm
ii. transactions are promptly and correctly settled;
specific characteristics. From an accounting perspective in
and Bangladesh, equity risk is ‘one-sided’– equity securities must
iii. unauthorized dealing is promptly identified and be held at the lower of cost or market value. If market value
reported to management; and drops below cost, bank is required to form loss allowances or
c) controls to ensure that foreign exchange activities ‘provisions’ on the liability side of the balance sheet, by means
of an expense on the profit and loss statement. However,
are monitored frequently against the bank’s foreign
if market values rise above cost, there is no corresponding
exchange risk, counterparty and other limits and that
income recorded unless the security is sold. Even though the
excesses are reported.
one-sided risk is purely in an accounting sense, it will has a
Moreover, bank ensures that employees conducting real implication for bank if regulatory capital falls below the
foreign exchange trading activities on behalf of the bank minimum requirement due to excessive shock from the decline
do so within a written code of conduct governing foreign in market value of securities the bank holds.
exchange dealing. Such a code of conduct should include
guidance respecting trading with related parties and Measuring Equity Price Risk
transactions in which potential conflicts of interest Value at Risk (VaR) is generally accepted and widely used tool
exists. These should include trading with affiliated entities, for measuring market risk inherent in trading portfolios. VaR
personal foreign exchange trading activities of foreign summarizes the predicted maximum loss (or worst loss) over a
exchange traders, and foreign exchange trading target horizon within a given confidence level. The bank is yet
relationships with foreign exchange and money market to compute VaR on equity portfolio to measure Equity Price
brokers with whom the bank deals. Each bank should Risk but managing the risk by keeping its exposure within the
ensure that these guidelines are periodically reviewed with regulatory limits. As on 31 December 2014, total exposure to
all foreign exchange traders. capital market was 30.48% of bank’s capital (Paid up Capital,
Share premium, Retained Earnings and Statutory Reserve to be
Independent Audits
considered as capital) against regulatory requirement of 25%.
Independent audits are a key element in managing and
Marking to Market is the tool bank applies offsetting losses
controlling foreign exchange risk management program.
arisen from changes in market price of securities. As off 31
Bank use the independent audit team to ensure compliance
December 2014, bank set aside Tk. 86.43 crore charging
with, and the integrity of, the foreign exchange policies and
its profit and loss account to cover the differential amount
procedures. Independent audits test the bank’s foreign
between purchase price and market price of shares and
exchange risk management activities in order to:
securities under its portfolio.
a. ensure foreign exchange management policies and
procedures are being adhered to; Independent Audit
b. ensure effective management controls over foreign Independent audits provide an objective assessment of
exchange positions; the securities portfolios’ existence, quality and value, the
integrity of the securities portfolio management process,
c. verify the adequacy and accuracy of management and they promote the detection of problems relating thereto.
information reports regarding the bank’s foreign exchange Independent audit ensures that:
risk management activities;
a. investment in securities activities are in compliance with
d. ensure that foreign exchange hedging activities bank’s securities portfolio management policies and
are consistent with the bank’s foreign exchange risk procedures, and with the laws and regulations to which
management policies, strategies and procedures; and these activities are subject;
e. ensure that personnel involved in foreign exchange b. securities transactions are duly authorized and accurately
risk management are provided with accurate and and completely recorded on the books of the bank;
complete information about the bank’s foreign exchange
c. recorded securities are conservatively valued on the
risk policies and risk limits and positions and have
books of the bank;
the expertise required to make effective decisions

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 RISK MANAGEMENT

d. securities held by depositories to the order of the bank

confirm with the records of the bank;
e. management has established suitably designed controls
over securities positions and that such controls operate
effectively;
f. adequacy and accuracy of management information
reports regarding the bank’s securities portfolio
management activities; and
g. personnel involved in securities portfolio management are
provided with accurate and complete information on the
bank’s securities portfolio management policies and risk
limits and have the expertise required to make effective
decisions consistent with these policies.

Management of Operational Risk

Operational Risk:
Operational Risk is defined as the risk of unexpected losses
due to physical catastrophe, technical failure, and human
error in the operation of a bank; including fraud, failure of
management, internal process errors and unforeseeable ensure compliance of Anti-Money Laundering Prevention Act
external events excluding legal and strategic risk. and Anti-Terrorism Act. The CCU nominates Department Anti-
Operation risk is different as there is no upside of this risks – Money Laundering Compliance Officer (DAMLCO) and Branch
these risk cannot be taken for direct reward. Thus objective of Anti-Money Laundering Compliance Officer (BAMLCO) and
the management of operational risk is to minimize the risk in guides them about their day to day compliance activities.
cost effective manner, if elimination is not possible. The CCU arranges DAMLCO and BAMLCO conference
Currently bank is not using any model or tool to capture every year and train up bank employees through in-house
operational loss data for historical analysis rather it is a self experts and also hires experts from BB. The core roles and
assessment process. Bank has a separate Operational Risk responsibilities of CCU are as follows:
Management unit reporting to the Head of Internal Control and  Ensure compliance of the Bank’s Anti-Money Laundering
Compliance Division. (AML) & Countering Financing of Terrorism (CFT)
Policy and review and update the policy as and when
Operational Risk Governance: necessary.
Operational Risk Management Unit is primarily responsible  Set strategy and program for combating Money
for risk identification, measurement, monitoring, control, and Laundering and Terrorist Financing.
reporting of operational risk. This unit presently reports to
Head of ICCD (Internal Control and Compliance Division).  Ensure appropriate training for the employees on AML
Besides, there is a committee called ‘Bank Operational Risk issues so that employees are aware of the regulatory
Committee’ (BORC) plays the supervisory role in this respect issues to discharge their responsibilities effectively and
that reports to MD & CEO. efficiently.
 Examine and analyze the STR report received from
Operational Risk Mitigation & Control: branches and if required, report the same to Bangladesh
Operational risks are analyzed through review of Departmental Bank.
Control Function Check List (DCFCL). This is a self  Address any query from Bangladesh Financial
assessment process for detecting HIGH risk areas and finding
Intelligence Unit (BFIU) for any account of a customer.
mitigation of those risks. These DCFCLs are then discussed in
monthly meeting of Bank Operational Risk Committee (BORC).  Freeze/mark “no debit” or withdrawal option as
The committee analyze HIGH and MODERATE risk indicators instructed by BFIU.
and set responsibility for specific people to resolve the issue. If
anything remains unresolved or marked HIGH, it is referred to
Management of Information Technology
MANCOM. and Communication Risk
Information Technology and Communication (ICT) risk is
Management of Money Laundering Risk
defined as risk of direct or indirect loss resulting from
Money laundering risk is defined as the risk of direct and (i) Unacceptable use of the ICT system by or through staff,
indirect losses which the bank may incur due to lack of contractors, partners and former employees,
diligence in applying appropriate KYC procedures. These (ii) breaches in established defenses, poor/changes to
losses could probably have been avoided and damage to configuration without risk analysis,
the bank’s reputation significantly diminished had the bank (iii) Systems lifecycle management, poor requirements
maintained effective KYC program. definition, poor system design and inadequate testing, and
The bank has established separate Central Compliance Unit (iv) inadequate resilience, poor business continuity
(CCU) and appointed a senior official as Head of CCU to management.

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In this 21st century, information is treated as the most valuable unauthorized use and/or fraud. That’s why EBL IT Division
as well as vulnerable asset and needs to be suitably protected has best practices to identifying and assessing information
which can ensure business continuity, minimize business risk, and related technological risks and also to ensure acceptable
maximize return on investments and can help business to gain level of security establishing security standards and controls
a competitive edge and opportunities. As banking business, against threats, vulnerabilities, attacks and frauds through its
EBL amass a great deal of confidential information about IT Security Department.
their customers, employees, products, services, research and In-addition, IT Division is protecting and ensuring the
financial status and people makes relation with EBL based confidentiality, integrity, and availability of information systems
on entrust and reliability and believes EBL as convergent and related technology in today’s highly cyber threatened
entity for safe keeping the money, information and other environment. Some controls are shown in the following:
assets. In return EBL always pay greater values to customer
information and assets and protects those from any type of

Risk Indicators Controls

IT Security Policy (i) EBL has comprehensive IT Security Policies and procedures which are formally documented
and endorsed by top management.
(ii) IT Security Policies and procedures are reviewed periodically.
(iii) Approved IT Security Policies, procedures and amendments are communicated/ distributed to
concern departments/ branches duly.
(iv) IT strictly follows IT Security Policy, procedures and request others to do the same.
IT Operation Manuals IT Division has process guideline/manual for all key activities and operations.
IT Organogram IT Division has approved organogram chart.
IT Strategy/Plan EBL IT has formally documented IT Strategy and short term plans to achieve the strategy.
Job Descriptions (JD) Each staff in IT Division has own Job description (JD). IT maintains approved roster schedule.
IT Security Training EBL IT ensures that all IT personnel (including new joiners) are getting proper education, training,
& Awareness, Job updates and awareness on relevant job functions, IT security activities and business foundations.
related training
Protection of 1. EBL IT has established standard Physical & Environmental Security Measures (e.g. Locked Door,
Sensitive Area/ Locked rack, CCTV, AC, Fire Extinguisher, etc.) to all Sensitive area (e.g. Data Centre, Disaster
Information Store Recovery Site, Power Rooms, Server Rooms, etc.).
& Processing Zone 2. IT has standard Logical Security Measures (e.g. Access card, Password Protected Server,
(ISPZ) Access Log, Measuring Device Logs, Periodic Testing Results, etc.) to all core device (server,
PC, etc.), connecting device (switch, router, etc.), security device (firewall, IDS, etc.), all
applications (core banking system, antivirus, firewall, VPN, utilities, etc.), databases, networks
and others.
3. EBL IT has prescribed access request and revocation form for security zone.
4. IT has authorized and updated access list for security zones.
5. IT maintains and reviews visitor book for accessing security zone.
6. IT performs testing of measuring and controlling devices/systems (e.g. smoke, fire, water
detector).
Problem Management IT Division handles all system and device related problems with adequate care and as per approved
process guideline and maintains all logs with resolution.
Change Management IT division manages all changes as per approved policy and process and also maintains all logs/
forms.
Asset Management 1. All IT Assets are identified through tag/label and covered by insurance.
2. IT Assets inventory is adequately maintained and reviewed periodically.
3. IT Asset purchase, use, destroy, render all are done as per policy.
User Management IT provides necessary hardware-PC, UPS, Printer, email, internet and create, delete or modify user
accounts, passwords, role/rights, etc. through proper requisition.
Network Management IT has standard design and practice in network connectivity, access, build-up, configuration,
monitoring, maintenance and security.
Business Continuity IT has Business Continuity Management (BCM) to support and handle any human made or natural
Management incident/disaster; moreover regular backup schedule and retention avoids the risk of data loss
based on the criticality of the system. All incidents and failure logs are investigated and brought to
resolution.

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 RISK MANAGEMENT

Management of Reputational Risk Bank is not using any technique to quantify reputation risk.
Qualitative statements are agreed as below:
Reputation Risk May arise from the possibility that negative
publicity regarding the bank and its business practices, in the i. Under no circumstance bank’s reputation to be
territory or elsewhere through related entities, and whether compromised by revenue generating activities.
accurate or not will adversely impact the operations and ii. EBL shall always avoid potential brand damaging issues.
positions of the bank.
iii. EBL shall avoid anti environment and anti social elements
Reputation risk is difficult to measure and manage. The in its business.

Risk Reporting
Self
Assessed
Risk Category Risk Analysis and Management Actions
Risk Rating
2014
Effectiveness of Credit Policy Credit policy manual reviewed and effectiveness of credit policies
Risk arises where credit policy assessed regularly based on feedback from the related departments.
amendments do not keep pace Amendments made to credit policies are approved by the Board of
with changes in the local and Directors; and procedures by the Managing Director & CEO. Performance
global environment. Low against internally defined risk appetite and related regulatory guidelines
are reviewed at a regular interval. Potential risk exposures arising from
changes in the local and global economic environment are also monitored.
Reports are circulated to relevant Business Units, Bank Risk Management
Committees and Risk Management Committee of the Board.
Adequacy of Portfolio monitoring The credit quality of the corporate banking portfolio has displayed a
risk arises where systems and gradual improvement in 2014. Corporate credit portfolio represents 74% of
controls are not in place to bank’s total loans and advances. Corporate portfolio distribution in terms
regularly assess the health of the of internal rating in the year 2014 & 2013 is presented below.
credit portfolio. Portfolio by Internal Risk Rating
NPL 9-11
Special Mention 8
Marginal 7
Risk Grade

Low Watch 6
Fair 5
Acceptable 4
Satisfactory 3
Good 2
Superior 1

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

% of Total Portfolio

December 31,2014 December 31,2013

Credit Concentration Risk Sectoral Exposure:

[Risk arises where Credit Sectoral exposure concentration risk is measured by Harfindahl-Hirschman
Portfolio is not sufficiently Index (HHI). As on 31 December 2014 index indicates low concentration.
diversified]

Moderate

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Self
Assessed
Risk Category Risk Analysis and Management Actions
Risk Rating
2014

Top 20 customer exposure:

Fund based exposure to top 20 customers are measured as percentage
of total loans and advances as mentioned in the balance sheet. Some
consideration to top 20 customers exists since the EBL has about 74%
exposure in corporate banking. The bank pursuing its business in SME
sector for last seven years to reduce concentration on large borrower
ad SME portfolio now consists about 16% of total portfolio. Bank shall
continue its priority in SME sector to reduce concentration risk on large
borrowers.
Moderate

Adequacy of Recovery Process Non-Performing Loans (NPL):

Gross NPL and net NPL (Gross NPL less specific provision and interest
[Risk arises where systems suspense) as percentage of Loans and Advances for last five years are
shown below:
and controls are not in place to
monitor recoveries
and adequate bad debt
provisioning]

Moderate

The challenging external environment spurred the Bank to look at different

ways of restricting the growth of NPA during the year. Strategies were
adopted to identify accounts reflecting signs of delinquency and proactive
measures were taken to prevent such accounts migrating to the non
performing category by restricting existing exposure according to revised
cash flow. Furthermore the recovery processes were strengthened and
minimum regulatory loan loss provision has been provided.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 RISK MANAGEMENT

Self
Assessed
Risk Category Risk Analysis and Management Actions
Risk Rating
2014
Risk arising from inability to raise We continuously review liquidity policy and contingency funding plan to
capital in a liquidity crisis. Low address funding methods in an emergency situation. Since the bank is yet
to issue sub debt to raise capital, its ability to raise capital remains better.
Risk arising from inability to Reliance on short term interbank borrowings decreased in 2014 since
meet maturing deposit liabilities lower demand for credit prevailed in the market. Asset Deposit (AD) ratio
as they fall due. was around 78.7% through-out the year. Adherence to the statutory, liquid
Low
asset ratio (SLR) monitored. The SLR mandates that 19.5% of time and
demand liabilities excluding shareholder funds should be held in defined
liquid assets.
Risk of potential losses which Bank has implemented stress tests to measure the resilience of its liquidity
could arise from low liquidity in if average withdrawal increased by six percent in consecutive five working
Low
markets. days. Stress test result as on 31 December 2014 shows that the bank will
remain liquid under such stress.
Risk arising from adverse The impact of interest rates on portfolios minimal due to the Bank holding
movements in interest rates. Low treasury bills and bonds with short maturities and mainly for maintenance
of SLR.
Risk arising from Maturity Contractual maturity mismatch of Assets and Liabilities reviewed monthly
Mismatch Low and implications identified. Risk from such mismatch was low in 2013 as
the market was liquid and availability of customers’ deposit was adequate.
General appetite for Market Risk We continuously review the Treasury Policy to incorporate regulatory
Low
based on Treasury activity developments and internal decisionmaking process.
Equity Risk EBL’s equity portfolio recorded a lower return in 2014 which is also
[Risk arising from adverse Low reflected in the poor performance of the local stock market indices.
movements in stock markets]
Foreign Exchange Risk Bank mainly holds USD and there is a regulatory limit for Net Open
[Risk arising from unhedged Position, time to time set by Bangladesh Bank. In 2014, exchange rate was
foreign exchange positions and stable though local currency gained against US dollar. Bangladesh Bank
poor treasury controls] Low intervention kept the rate exporter friendly.
Value at Risk (VaR) is calculated following historical value method and
limits are monitored regularly. If Fx VaR exceeds internal limit, the issue
immediately raised to the Managing Director & CEO.
Effectiveness of Operational Risk Operational Risk Policies reviewed during the year and updated in line with
Moderate
Policy regulatory developments and internal decisions.
Risks arising from a poor Control Bank’s operational risk management team collects operational loss data
Environment. from all branches of the bank. Bank Operational Risk Committee (BORC)
Low
sits in every month and resolve ‘HIGH’ risk issues reported in Departmental
Control Function Checklists.
Technology Risk Periodic review of information security to protect the Bank’s data from un
[Risk arising from system authorized access, modification or deletion and to ensure its confidentiality,
Low
breakdowns and disruptions] integrity and availability. System disruptions reviewed during every month
in BORC.
High Impact Unforeseen Risk Assessment and Business Continuity Plans reviewed across the Bank,
Events Risk arising due to lack including IT Disaster Recovery Plan.
Low
of preparedness to natural
disasters and terrorism.
Risk arising from inadequate risk Bank is working to introduce internal loss limit to track actual loss with the
Low
mitigation strategies. given appetite set by the Board of Directors.
People Risk Talent sourcing, development, retention of top performers in all
[Risk arising from inability to departments are key focus areas. Promoting leadership and succession
attract and retain skilled staff] planning are key mitigate of people risk.
Risk arising from outsourced KRIs on security service provider such as number of guards on duty, shifts
Low
security service Activities worked monitored and feedback given to service provider.
Legal Risk Review of legal charter and monitoring of legal cases and recovery process
[Risk arising from litigation are regularly done by Special Asset Management Division. Standard and
Low Non standard contracts and collateral documents are vetted by panel
against the bank or faulty legal
documentation] lawyers.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Stress Testing Exchange Rate Risk
Stress testing is a simulation technique to determine the The stress for Exchange Rate Risk assesses the impact of
reactions of different financial institutions under a set of exchange rate on Capital Adequacy Ratio (CAR). The stress
exceptional, but plausible assumptions. EBL performs is determined by computing the decline of the value of
quarterly stress testing within the scope of Bangladesh Bank assets (net short/long Fx position) due to adverse change in
DOS (Department of Off-Site Supervision) Circular: 01 dated exchange rate by 5%, 10% and 15%.
23 February 2011.
Equity Price Risk
The scope of stress testing is limited to simple sensitivity
analysis. Followings describe the methodology of stress The stress for Equity Price Risk assesses the impact of the
testing and calibration of shocks: fall of market price of shares and securities on bank’s capital
market exposure. Levels of shock are 10%, 20% and 40%,
Credit Risk which are calibrated on CAR.
Stress test for credit risk assesses the impact of the increase
Liquidity Risk
of non performing loans triggered by five pre determined
shock events with three levels of shock – Minor, Moderate The stress test Liquidity risk evaluates the resilience of the
and Major. These five shock events are: bank if the bank faces cash withdrawal pressure above the
average pattern for continuous five working days. A bank
i. Increase in NPL: This individual shock explains the impact
is considered well liquid if it survives continuous stress for
if a portion of performing loan directly downgraded to
5 working days without resorting liquidity from outside.
‘Bad & Loss’ category that requires 100% loan loss
Standard levels of shock are 2%, 4% and 6% over normal
provision. Levels of shock are: 3%, 9% and 15%.
withdrawal.
ii. Increase in NPL due to large top borrowers: Default of
large borrowers can create significant impact on the Combined Shock
bank. This indicator explains the impact of three standard The stress test also measures effect of combined shocks
events; default of 3 top borrowers, top 7 borrowers, and on Capital Adequacy Ratio for assumptions that include:
top 10 borrowers directly to ‘Bad & Loss’ category. decrease in the FSV of the collateral, increase in Non
iii. Fall in the forced sale value of mortgaged collateral: This Performing Loans, negative shift in NPL categories, change in
measures the loss bank could suffer from the event of interest rate, change in foreign exchange rate, and change in
decrease in market value of Land & Building mortgaged the market value of shares and securities. Combined shocks
with the bank as collateral. Standard levels of shock are from all these events are calibrated on CAR.
applied @ 10%, 20% and 40%.
Credit shock under Basel II
iv. Negative shift in NPL category: This shock indicator
measures additional requirement of loan loss provision Standardized approach of Basel II allows banks to compute
due to negative shift of a portion of non performing loan its Risk Weighted Assets following external rating of the
to the next worst category. For example, Special Mention borrower. Higher the external rating, lower the risk weight;
to Sub Standard, Sub Standard to Doubtful and Doubtful hence regulatory requirement of capital depends on the
to Bad & Loss. Applied levels of shock are 5%, 10%, and external rating customers. Under such circumstance, if credit
15%. rating of any customer downgraded, CAR of the bank will be
affected. The stress test measures how CAR will be affected
v. Increase of NPL in RMG and Capital Market sectors
if risk weighted assets are increased due to downgrading of
(EBL’s Top 2 exposed sectors): This shock indicator
customer’s external rating. Applied levels of shock are 5%,
measures additional requirement of loan loss provision
10% and 15%.
due to shift of performing loans of the RMG and Capital
Market segments directly into ‘Bad & Loss’ category. Summary of Stress Testing Results as on 31 December 2014
Applied levels of shock are 3%, 9%, and 15%. is presented below:
Stress Test : Simple Sensitivity Analysis
Interest Rate Risk
Positions as on : 31 December 2014
Interest rate risk is potential that the value of the on balance
sheet and off balance sheet positions of the bank would be
Regulatory CAR : 10.00%
negatively affected with the change in the interest rates. The
vulnerability of adverse effect due to interest rate can be CAR before shock : 13.22%
measured by ‘simple sensitivity’ and ‘duration gap’ analysis.
Simple sensitivity analysis measures the impact on NII (Net CAR after shocks (%)
Individual Shocks
Interest Income) at each maturity bucket resulted from the Minor Moderate Major
change in interest rate. On the other hand Duration Gap Performing loan directly
Analysis measures a single duration GAP form weighted downgraded to B/L 12.79 11.92 11.03
average remaining maturity of each risk sensitive assets and
(Other Manufacturing Industry)
liabilities. Once the GAP is determined, effect on NII can
be computed applying level of shocks. For both measures,
shock levels are fixed at 1%, 2% and 3%.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 RISK MANAGEMENT

CAR after shocks (%) Credit Risk

Individual Shocks
Minor Moderate Major In 2014, EBL’s loans & advances portfolio experienced
Performing loan directly moderate growth of 14.95%. However exposure in Retail
downgraded to B/L 13.11 12.87 12.64 Banking increased by 13.28% over previous year. In non
funded business, share of Bank Guarantee decreased while
(RMG sector)
LC (both sight and deferred) was in increasing trend.
Increase in NPLs due to default
8.54 3.31 -0.50 During 2014, EBL’s main challenge was to manage NPL
of top large borrowers
and raise recovery from NPL and Write off loans. Moreover
Negative shift in NPL
12.83 12.04 11.65 major portion of NPL was concentrated to B/L bucket and
categories
geographically in Chittagong region due to sluggish business
Decrease in FSV of the
13.04 12.86 12.50 growth in few sectors; commodity, ship recycling, etc.
collateral
Interest Rate 12.95 12.68 12.41 Credit concentration to Top 10 large borrowers was another
risk indicator for EBL; which generated shock on capital
FEx: Currency Depreciation 13.18 13.15 13.11
adequacy in minor level stressed scenario. To mention; all
Equity Shock 13.07 12.92 12.62
those are top tier clients of respective business sector. To
mitigate this risk of concentration; EBL strategies growth
Level of Shock through SME segment in coming years.
Particulars
Minor Moderate Major EBL’s high exposure on loans without having any collateral is
CAR after combined shock 10.81 6.23 0.80 another area of risk. Commercial lending are mostly in cash
CAR after credit shock under flow based business; monitoring and supervision has been
Basel II 13.10 12.98 12.87 increased to restrict those from downgrading to NPL.
(Balance Sheet) Market Risk
CAR after credit shock under
Capital Market Exposure of EBL was 30.48% of capital at
Basel II 13.16 13.10 13.05 marking to market, which is required to bring down gradually
( Off Balance Sheet) to 25% by July 21, 2016. To comply with the requirement, a
gradual reduction strategy of capital market exposure has
[Bank’s Pillar 3 disclosures for 31 December 2014, provide been taken.
details from a regulatory perspective on certain aspects of
EBL was exposed in interest rate risk since Risk Sensitive
credit risk, market risk and operational risk and are available
Asset was lesser than Risk Sensitive Liability in both three
on our website.]
months and one year bucket.
Risk Management Paper
Capital Management
Risk Management Paper is prepared on monthly interval
Capital Adequacy Ratio (CAR): CAR level was recorded
to record 56 risks related issues of credit, market and
12.27%, 12.28%, 12.80% and 13.22% in successive 04
operational risk across the Bank during the month and
quarters of 2014. 2014 was closed with excess capital of Tk.
submitted to Bangladesh Bank on quarterly interval by 30
441.70 Crore.
days following the quarter end. Bank Risk Management
Committee (BRMC) reviews these papers on monthly Operational Risk
interval; recommend action plans to concern department
EBL measured capital charge for Operations Risk using
for mitigating identified risk areas and follow-up the
Basic Indicator Approach (BIA). As of December 31, 2014
implementation of previous recommendations. 12
BDT 156.65 crore was charged as capital for operational risk
BRMC meetings were held during 2014 from which 25
which was BDT 14.12 crore higher than that of December 31,
recommendation/action plans suggested and 21 have been
2013.
fully implemented.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
DISCLOSURES ON
RISK BASED CAPITAL (BASEL II)
Background: These disclosures under Pillar III of Basel II are made following revised ‘Guidelines on Risk Based Capital
Adequacy (RBCA)’ for banks issued by Bangladesh Bank (Central Bank of Bangladesh) in December 2010. These quantitative
and qualitative disclosures are intended to complement the Minimum Capital Requirement (MCR) under Pillar I and Supervisory
Review Process (SRP) under Pillar II of Basel II.
The purpose of these disclosures is to present relevant information on adequacy of capital in relation to overall risk exposures
of the Bank so that the market participants can assess the position and direction of the Bank in making economic decisions.
Consistency and Validation: The quantitative disclosures are made on the basis of consolidated audited financial statements
of EBL and its Subsidiaries as at and for the year ended 31 December 2014 prepared under relevant international accounting
and financial reporting standards as adopted by the Institute of Chartered Accountants of Bangladesh (ICAB) and related
circulars/instructions issued by Bangladesh Bank from time to time. The assets, liabilities, revenues and expenses of the
subsidiaries are combined with those of the parent company (EBL), eliminating intercompany transactions. Assets of the
subsidiaries were risk weighted and equities of subsidiaries were crossed out with the investment of EBL while consolidating.
So, information presented in the ‘Quantitative Disclosures’ section can easily be verified and validated with corresponding
information presented in the consolidated audited financial statements 2014 of EBL and its Subsidiaries along with separate
audited financial statements 2014 of the Bank available on the website of the Bank (www.ebl.com.bd).

Scope of Application
Applicable top corporate entity: The Risk Based Capital Adequacy framework applies to Eastern Bank Limited (EBL) on
‘Consolidated Basis’ as there were four subsidiaries of the Bank as on the reporting date i.e. 31 December 2014. However,
‘Solo Basis’ information has been presented beside those of ‘Consolidated Basis’ to facilitate comparison.
Entities within the group: The Bank had four subsidiaries, all of them are fully owned, as on the reporting date i.e. 31
December 2014.
EBL Securities Limited: EBL Securities Ltd., a leading brokerage firm of the country, was acquired in two phases and was
renamed from ‘LRK Securities Limited’. The principal activities of the company are to buy, sell, deal and invest in shares,
stocks, debentures and other securities.
The company is the TREC holder (Trading Right Entitlement Certificate) of both Dhaka Stock Exchange (DSE) and Chittagong
Stock Exchange (CSE) bearing certificate no. 026 and 021 dated 03 November 2013 and 28 October 2013 respectively
(Previous membership no. 026 and 021 of DSE and CSE respectively).
EBL Investments Ltd.: EBL Investments Limited (EBLIL)was incorporated in Bangladesh on 30 December 2009 as a Private
Limited Company under the Companies Act 1994 and obtained required merchant banking license from BSEC on 27 January
2013.
EBL Finance (HK) Limited: The first foreign subsidiary of EBL was incorporated on 28 November 2011 with Hong Kong (HK)
authority to act as a routing and discounting intermediary of LCs issued by EBL and to advise other local and foreign banks’
LCs. EBL obtained all the required licenses from Bangladesh and HK authority. It is now in full operation.
EBL Asset Management Ltd.: EBL Asset Management Limited (EBLAML) was incorporated in Bangladesh on 9 January 2011
as a Private Limited Company under the Companies Act 1994 and is under process to get license from Bangladesh Securities
Exchange Commission (BSEC) for full-fledged asset management operation.
Restriction on movements of funds: The rules and regulations of BRPD of Bangladesh Bank that govern ‘Single Borrower
Exposure Limit’ for the customers are equally applicable for the Bank in financing its own subsidiaries. Bank is following
latest Bangladesh Bank circular in determining maximum amount of finance to the subsidiaries of the Bank. As on year end
2014, EBL had a credit line to ‘EBL Securities Ltd.’of BDT 459.20 million and a Guarantee of BDT 150 million (against clearing
settlements with DSE).
Aggregate amount of capital deficiencies: As on the reporting date there was no such deficiency.

Capital Structure
Summary information on the terms and conditions of tier 1 & 2 capital instruments: Regulatory capital, as stipulated in
the revised RBCA guidelines by BB, is categorized into three tiers according to the order of quality of capital (Tier 1, 2 & 3).
Tier 1 or Core Capital comprises the highest quality capital components, Tier 2 or Supplementary Capital comprises capital
elements that fall short of some of the characteristics of core capital but contribute to overall strength of the Bank and Tier 3
or Additional Supplementary Capital comprises short term subordinated debt with maturity of two to five years. As on year end
2014, there was no tier 3 component of capital at EBL. Component wise details are presented in the quantitative disclosure
part that follows:

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Conditions for maintaining regulatory capital: The Bank complied with all the required conditions for maintaining regulatory
capital as stipulated in the revised RBCA guidelines by Bangladesh Bank as per following details:
 The amount of Tier 2 capital will be limited to 100% of the amount of Tier 1 capital:
Status of Compliance: Complied.
 50% of revaluation reserves for fixed assets and securities eligible for Tier 2 capital:
Status of Compliance: Complied.
 10% of revaluation reserves for equity instruments eligible for Tier 2 capital:
Status of Compliance: There was no unrealized gain from quoted equities as on the reporting date.
 Subordinated debt shall be limited to a maximum of 30% of the amount of Tier 1 capital:
Status of Compliance: As on the reporting date there was no subordinated debt in the capital structure of EBL.
 Limitation of Tier 3: A minimum of about 28.5% of market risk needs to be supported by Tier 1 capital. Supporting of
Market Risk from Tier 3 capital shall be limited up to maximum of 250% of a bank’s Tier 1 capital that is available after
meeting credit risk capital requirement.
Status of compliance: Complied. Capital required for meeting credit risk was BDT 10,992.71 million and tier 1 capital
maintained was BDT 13,957.76 million. Capital required for meeting 28.5% of market risks was BDT 326.19 million
(BDT 1,144.51 X 28.5%) as on the reporting date.
There are certain deductions from tier 1 capital which are noted with the status of compliance in the respective table presented
below.
Quantitative Disclosures: As on the reporting date (31 December 2014), the Bank had a consolidated capital of BDT 18,259.58
million comprising tier 1 capital of BDT 14,096.56 million and tier 2 capital of BDT 4,163.02 million. Following table presents
component wise details of capital (Tier 1 & 2) as on reporting date i.e. 31 December 2014:
(Figures are in million BDT)

A Tier – 1 ( Core Capital) Consolidated Solo (Bank)

1 Fully Paid-up Capital 6,111.80 6,111.80
2 Statutory Reserve 6,111.80 6,111.80
3 Non- repayable Share premium account - -
4 General Reserve 130.00 130.00
5 Retained Earnings 1,386.92 1,248.12
6 Minority interest in Subsidiaries - -
7 Non- Cumulative irredeemable Preference shares - -
8 Dividend Equalization Account 356.04 356.04
9 Other (if any item approved by Bangladesh Bank) - -
10 Sub-Total: (1 to 9) 14,096.56 13,957.76
B Tier -2 (Supplementary Capital)
1 General Provision (Unclassified loans + SMA+ off balance sheet exposure) 1,915.66 1,915.67
2 Assets Revaluation Reserves up to 50% 1,844.75 1,844.75
3 Revaluation Reserve for Securities up to 50% 402.60 402.60
4 Revaluation Reserve for equity instruments up to 10% - -
5 All other preferences shares - -
6 Subordinated debt - -
7 Other (if any item approved by Bangladesh Bank) - -
8 Sub total (1 to 7) 4,163.02 4,163.02
9 Deductions from tier i and ii capital (if any) - -
C Total Eligible Capital (A+B) 18,259.58 18,120.78
Capital Adequacy
Assessment of the adequacy of capital: Assessing regulatory capital in relation to overall risk exposures of a bank is an
integrated and comprehensive process. EBL follows the ‘asset based’ rather than ‘capital based’ approach in assessing the
adequacy of capital to support current and projected business activities.
The Bank focuses on strengthening risk management and control environment rather than increasing capital to cover up
weak risk management and control practices. EBL has been generating most of its incremental capital from retained profit
(stock dividend and statutory reserve transfer etc.) and occasional issue of right shares to support incremental growth of
Risk Weighted Assets (RWA). Besides meeting regulatory capital requirement, the Bank maintains adequate capital to absorb
material risks foreseen. Therefore, the Bank’s Capital Adequacy Ratio (CAR) remains consistently within the comfort zone since

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EASTERN BANK LIMITED ANNUAL REPORT 2014
the parallel run from 1 January 2009. During the year 2014, the CAR ranges from 12.26 % to 13.18 % on consolidated basis
and from 12.27% to 13.22% on solo basis against minimum requirement of 10% of RWA.
Risk Management Unit (RMU) under guidance of the SRP team/BRMC (Bank Risk Management Committee), is taking active
measures to identify, quantify, manage and monitor all risks to which the Bank is exposed to.
Quantitative Disclosures: Following table shows component wise allocation of capital to meet three risks and an amount of
additional capital maintained over MCR i.e. 10% of RWA. As on the reporting date i.e. 31 December 2014, EBL maintained a
Capital Adequacy Ratio (CAR) of 13.18% on ‘Consolidated Basis’ and 13.22% on ‘Solo Basis’ against required minimum of
10%. We had an excess capital of BDT 4,404.91 million (Consolidated) after meeting all three risks as on the reporting date as
shown in the following table:
(Figures are in million BDT)

Capital Adequacy Consolidated Solo (Bank)

Capital requirement for Credit Risk 11,079.10 10,992.72
Capital requirement for Market Risk 1,189.71 1,144.51
Capital requirement for Operational Risk 1,585.86 1,566.52
Minimum capital requirement (MCR) 13,854.67 13,703.75
Additional capital maintained over MCR 4,404.91 4,417.03
Total capital maintained 18,259.58 18,120.78
Risk weighted assets 138,546.71 137,037.47
Total capital ratio (CAR) 13.18 % 13.22 %
Tier 1 capital ratio 10.17 % 10.19 %

Credit Risk
Qualitative Disclosures:
Definition of Credit Risk: Credit risk is the risk of loss that may occur from the failure of any counterparty to make required
payments in accordance with agreed terms and conditions and/or deterioration of credit worthiness. Credit risk may arise from
both the banking book and trading book and is managed through a framework set by policies and procedures established by
the Board of Directors. The responsibility is clearly segregated between originator of business transaction and approver in the
risk function.
Credit approval: Board of Directors of EBL has the sole authority to approve any credit exposure subject to maintaining Single
Borrower Exposure limit and to delegate such authority to the Managing Director & CEO with or without authority for further
sub delegation. We have adopted individual authority based approval structure to ensure better accountability. Currently, MD
& CEO’s lending authority is further sub delegated to DMD & CRO and to Head of Credit Risk Management Division and to
Departmental Heads.
Credit policies and procedures: The Credit Policy Manual contains the core principles for identifying, measuring, approving,
and managing credit risk in the bank. These policies are established by the Board of Directors, and are designed to meet
the organizational requirements that exist today, and to provide flexibility for future. These policies represent the minimum
standards for credit extension by the bank, and are not a substitute for experience and good judgment.
There is a comprehensive credit appraisal procedure that covers industry/business risk, management risk, financial risk,
facility structure risk, security risk, environmental risk, reputational risk, and account performance risk. Credit risk management
function is independent of business originating functions to establish better control and check, and to reduce conflict of
interest. The Head of Credit Risk Management (HoCRM) has clear responsibility for management of credit risk.
Credit risk grading and measurement: Risk measurement along with judgment and experience play a central role in informed
risk taking decisions, and portfolio management. For the purpose of risk measurement we use a numerical grading system
‘Credit Risk Grading Matrix’ (CRGM) associated with a borrower. This CRGM is not a lending decision making tool but used as
a general indicator to compare one set of customers with another set, and its weighted average value indicate movement of
portfolio risk.
CRGM analyzes a borrower against a range of quantitative and qualitative measures. Quantitative measurements scale has
numeric grades from 1 to 11; lower numbers are indicative of lower likelihood of default while 9 to 11 grades are assigned
to default borrowers. No score card or rating model for retail and SME (small) borrowers) are currently in practice; rather
borrowers are assessed against some pre approved criteria outlined in Product Program Guidelines (PPG), which are approved
by the Board of Directors.
Credit risk mitigation: Potential credit losses from any given account, customer or portfolio are mitigated using a range of
tools such as collateral, netting agreements, credit insurance, and other guarantees. The reliance that can be placed on these
mitigants is carefully assessed in light of issues such as legal certainty and enforceability, market valuation, and counterparty
risk of the guarantor. Collateral types which are eligible for risk mitigation include: cash; residential, commercial and industrial

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 DISCLOSURES ON RISK BASED CAPITAL (BASEL II)

property; fixed assets such as motor vehicles, aircraft, plant and machinery; marketable securities; commodities; bank
guarantees; and letters of credit. Collateral is valued by independent third party surveyor in accordance with our credit policy
and procedures.
Credit monitoring: Credit exposures and portfolio performance are monitored on regular basis. Corporate and medium
enterprise accounts are continuously monitored under a clearly set out ‘Early Alert’ policy. Sign of deteriorations are well
defined and broad guidelines are given in the credit policy to be followed by business origination units. Early Alerts are raised
for financial deterioration, management weakness, irregular repayments, breach of covenants, eroding position in the industry,
etc. If early alerts are raised, account plans are then reevaluated; remedial actions are agreed and monitored. Remedial actions
include but not limited to exposure reduction, security enhancement, exiting the relationship or immediate movement to our
Special Asset Management Division (SAMD) – the dedicated loan recovery unit of the Bank.
Definitions of past due and impaired credit: To define past due and impairment through classification and provisioning, the
bank follows Bangladesh Bank Circulars and Guidelines. The summary of some objective criteria for loan classification and
provisioning requirement as stipulated by the central bank BRPD circular no. 14 dated 23 September 2012 and BRPD circular
no.16 dated 18 November 2014 are as below:

Loans Classification
Sub Standard Doubtful Bad & Loss
Type of Facility
Overdue Provision Overdue Period Provision Overdue Provision
Period (%) (%) Period (%)
Continuous Loan 3 months or more 20% 6 months or more but 50% 9 months or more 100%
but less than 6 less than 9 months
months
Demand Loan 3 months or more 20% 6 months or more but 50% 9 months or more 100%
but less than 6 less than 9 months
months
Fixed Term Loan 3 months or more 20% 6 months or more but 50% 9 months or more 100%
more than Tk. 10 lac but less than 6 less than 9 months
months
Fixed Term Loan up 6 months or more 20% 9 months or more but 50% 12 months or more 100%
to Tk. 10 lac but less than 9 less than 12 months
months
Short Term 12 months or more 5% 36 months or more but 5% 60 months or more 100%
Agricultural & Micro but less than 36 less than 60 months
Credit months

Specific provision for classified loans and general provisions for unclassified loans and advances and contingent assets are
measured following BB prescribed provisioning rates as mentioned below:

General provision on: (For both Standard and Special mention account) Rate
Unclassified general loans and advances 1%
Unclassified small and medium enterprise 0.25%
Loans to BHs/MBs/SDs against shares etc. 2%
Unclassified loans for housing finance and on loans for professionals 2%
Unclassified consumer financing other than housing financing and loans for professionals 5%
Short term agri credit and micro credit 2.5%
Off balance sheet exposures 1%
Specific provision on:
Substandard loans and advances other than short term agri credit and micro credit 20%
Doubtful loans and advances other than short term agri credit and micro credit 50%
Bad/loss loans and advances 100%
Substandard short term agri credit and micro credit 5%
Doubtful short term agri credit and micro credit 5%
Problem Credit Management: The Bank has a Special Asset Management Division (SAMD), dedicated for management, settlement
and recovery of problem credits. Major responsibility of this department is to formulate strategy and action plans for minimization of
risk, prevention of loss, maximization of recoveries, and restructuring, direct recovery, and/or pursuing legal actions.

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Quantitative Disclosures:
Total gross credit risk exposures by major types: Bangladesh Bank guidelines on Basel II, stipulated to segregate bank’s
asset portfolio into different categories, and the below table shows our gross exposure in each asset category.
(Figures are in million BDT)

Exposures
SL Exposure Type Consolidated Solo (Bank)
a) Cash 1,707.01 1,706.94
Claims on Bangladesh Government (Other than PSEs) and BB (denominated in 18,586.78 18,586.78
b) domestic and foreign currency)
c) Claims on Public Sector Entities
Different Risk Weights 930.77 930.77
Unrated 24.71 24.71
d) Claims on Banks and NBFIs (denominated in domestic as well as foreign currency)
i) Original maturity over 3 months:
Different Risk Weights 2,587.54 2,587.54
Unrated 1,569.48 1,569.48
ii) Original maturity less than 3 months 5,588.58 5,012.28
e) Claims on Corporate (excluding equity exposures):
Different Risk Weights 58,507.18 58,507.18
Unrated 13,345.90 13,345.9
f) Claims on SME
Rated 1,040.22 1,040.22
Unrated 15,703.99 15,703.99
g) Claims under Credit Risk Mitigation (Corporate) 788.26 788.26
h) Claims categorized as retail portfolio & Small Enterprise (excluding consumer 2,242.79 2,242.79
finance and staff loans)
Claims Under Credit Risk Mitigation (Consumer) 2,849.11 2,849.11
Claims categorized as retail portfolio (excluding consumer finance, small 21.21 21.21
enterprise and staff loans) up to 1 Crore
i) Consumer finance 8,214.18 8214.18
j) Claims fully secured by residential property (excluding staff loan) 908.70 908.70
k) 1. Past Due Claims (Risk weights are to be assigned net of specific provision):
Where specific provisions are less than 20 percent of the outstanding amount of 1,513.82 1,513.82
the past due claim
Where specific provisions are no less than 20 percent of the outstanding amount 1,053.55 1,05
of the past due claim 3.55
Where specific provisions are more than 50 percent of the outstanding amount 364.02 364.02
of the past due claim
2. Claims fully secured against residential property that are past due for more 12.21 12.21
than 90 days and/or impaired and specific provision held there-against is less
than 20% of outstanding amount.
3. Loans and claims fully secured against residential property that are past due 0.38 0.38
for more than 90 days and /or impaired and specific provision held there-against
is more than 20% of outstanding amount.
l) Capital market exposures 1,414.02 459.20
m) Unlisted equity investments and regulatory capital instruments issued by other 1,265.42 1,263.98
banks (other than those deducted from capital) held in banking book.
n) Investments in venture capital 20.00 -
o) Investments in premises, plant and equipment and all other fixed assets 7,096.63 7,086.87
p) All other assets:
i) Claims on GoB & BB (e.g. Coupon Receivable from Govt. T Bonds & 939.08 939.08
reimbursable from BB on PSP, Shadharan shanchaypatra, etc.)
ii) Staff loan/investment 1,549.74 1,549.74
v) Other assets (net of specific provision, if any) 1,616.77 2,103.34
Total: 151,462.05 150,386.23

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 DISCLOSURES ON RISK BASED CAPITAL (BASEL II)

Geographical distribution of exposures: Our business is concentrated in two major cities – Dhaka and Chittagong as country’s
business activities are concentrated in these two locations. Below table shows our credit exposure as at year end 2014 in
different divisions:
(Figures are in million BDT)
Division Corp SME CNB including staff Total
Dhaka 61,468.10 11,608.88 10,677.61 83,754.58
Chittagong 24,313.08 4,666.19 2,389.97 31,369.24
Sylhet - 318.93 287.02 605.95
Rajshahi 240.03 722.92 242.89 1,205.83
Khulna - 832.44 343.47 1,175.91
Rangpur - 125.83 43.90 169.73
Barishal - 4.27 5.83 10.10
Total 86,021.21 18,279.45 13,990.69 118,291.35

Industry wise distribution of exposures: Major industry wise credit exposure of the bank (not group) as on 31 December 2014
was as below, and the numbers remained within the appetite of the bank as approved by the Board of Directors.
(Figures are in million BDT)
Industry/sector 2014 Mix 2013 Mix
Commercial and Trading 18,929.35 16.00% 18,768.87 18.24%
Construction 1,234.95 1.04% 1,606.80 1.56%
Sugar & Edible Oil Refinery 4,664.24 3.94% 2,997.69 2.91%
Crops, fisheries & live stocks 3,179.60 2.69% 1,593.56 1.55%
Electronics & Electrical Goods 2,119.65 1.79% 2,951.15 2.87%
Individuals 13,991.04 11.83% 12,344.81 12.00%
Pharmaceuticals Industries 3,709.26 3.14% 4,034.23 3.92%
Readymade Garments Industry 13,263.03 11.21% 10,700.66 10.40%
Ship Breaking Industry 2,994.67 2.53% 3,196.89 3.11%
Metal & Steel Products 7,155.73 6.05% 7,867.56 7.65%
Transport & E-communication 7,869.59 6.65% 6,015.25 5.85%
Textile Mills 11,057.55 9.35% 9,771.75 9.50%
Rubber & Plastic Industries 3,005.13 2.54% 2,448.02 2.38%
Power & Fuel 5,199.78 4.40% 2,539.08 2.47%
Agri & Micro credit through NGO 4,375.67 3.70% 2,734.82 2.66%
Others 15,542.11 13.14% 13,339.07 12.96%
Total 118,291.35 100.00% 102,910.22 100.00%

Residual contractual maturity of credit exposure: Residual maturity of credit exposure as on 31 December 2014 was as
below:
(Figures are in million BDT)
Particulars Amount
On demand 5,177.28
In not more than one month 9,740.63
In more than one month but not more than three months 23,439.10
In more than three months but not more than one year 45,271.88
In more than one year but not more than five years 30,526.64
In more than five years 4,135.82
Total 118,291.35

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Business segment wise impaired or non performing loans: as on 31 December 2014:
(Figures are in million BDT)
Total Classified
Business type SS DF BL
Loans
Corp 565.70 219.72 2,403.77 3,189.19
SME (small) 86.19 77.22 315.90 479.31
SME (medium) 146.52 446.47 426.61 1,019.60
Consumer 87.55 68.84 312.58 468.97
Total 885.96 812.25 3,458.86 5,157.07
Gross Non Performing Assets (NPAs): As on the reporting date i.e. 31 December 2014, NPA ratio was 4.36%.
Movement of NPAs: Movement of classified loans during the year is presented in the following table:
(Figures are in million BDT)
Particulars 2014 2013
Opening Balance as on 01 January 3,697.23 3,070.77
Additions during the year 3,267.09 3,998.58
Reductions during the year 1,807.26 3,372.13
Closing Balance as on 31 December 5,157.07 3,697.23

Movement of Specific Provisions for NPAs (provisions for classified loans) is presented in following table:
(Figures are in million BDT)
Particulars 2014 2013
Opening balance of provision held 1,929.24 1387.32
New provisions during the year 1,645.93 816.70
Provisions no longer required (written off loans) (1,166.09) (274.78)
Closing balance of provision held 2,409.08 1,929.24

Equities: Disclosures for banking book positions

Nature and purpose of Equity investment: Investment of EBL in equity securities is broadly categorized into two parts:
securities (Ordinary shares, Mutual Fund) that are traded in the secondary market (trading book assets) and Un-quoted
securities (including preference share and subscription for private placement). Unquoted securities are categorized as
banking book equity exposures which are further subdivided into two groups: unquoted securities which are invested without
any expectation that these will be quoted in near future (i.e. held to maturity) and securities that are acquired under private
placement or IPO and are going to be traded in the secondary market after completing required formalities. Usually these
securities are held for trading or investment for making capital gains.
Policies for valuation and accounting of equity holdings: For valuation of Unquoted HTM and quoted HFT equity securities,
relevant BFRS and Bangladesh Bank circulars are followed respectively. Unquoted HTM securities are recorded at purchase
price including transactions costs, if any and are impairment tested whereas quoted HFT securities are marked to market
quarterly.Revaluation loss (if any) is booked accordingly calculated on portfolio basis (gain net off). No unrealized gain is
booked against HFT equity securities as per Bank policy. Dividends received from these securities are accounted for as and
when received.
Quantitative Disclosures: As EBL Securities Ltd and EBL Investment maintain an insignificant portfolio of proprietary equity
investment, comparison between consolidated and solo (bank) positions showed almost identical balance as on the reporting
date i.e. 31 December 2014. For unquoted equities (including private placement), market value has been assumed identical to
cost in the following table only to facilitate calculation of unrealized losses.
(Figures are in million BDT)

Cost Market Value

Particulars
Consolidated Solo (Bank) Consolidated Solo (Bank)
Quoted shares and Mutual Funds 3,347.42 3,103.83 2,469.18 2,243.17
Unquoted shares and Mutual Funds: 51.80 31.80 51.80 31.80
Unquoted (HTM) 6.30 6.30 6.30 6.30
Private placement 45.50 25.50 45.50 25.50
Total 3,399.22 3,135.63 2,520.98 2,274.97

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 DISCLOSURES ON RISK BASED CAPITAL (BASEL II)

Other information related to equity investments including capital requirement for the year has been presented as follows:
(Figures are in million BDT)

Particulars Consolidated Solo (Bank)

Cumulative realized gains (losses) arising from sales 78.46 52.83
Total unrealized gains (losses) (881.85) (864.26)
Total latent revaluation gains (losses) - -
Any amount of the above included in Tier 2 capital - -
Capital required for quoted securities: 493.84 448.64
Specific risk 246.92 224.32
General market risk 246.92 224.32
Interest Rate Risk in the Banking Book
Interest rate risk is the risk that a bank will experience deterioration in its financial position as interest rates move over time.
Interest rate risk is typically divided into two parts:
- Traded interest rate risk
- Non-traded interest rate risk (balance sheet)
Interest rate risk in the banking book (IRRBB) arises from a bank’s core banking activities. It arises from differences between
the timing of rate changes and the timing of cash flows (re-pricing risk); from changing rate relationships among yield curves
that affect bank activities (basis risk); from changing rate relationships across the range of maturities (yield curve risk); and from
interest-rate-related options embedded in bank products (option risk).
The process of interest rate risk management by the bank involves determination of the business objectives, expectation about
future macro economic variables and understanding the money markets and debt market in which it operates. Interest rate risk
management also includes quantifying the appetite for market risk to which bank is comfortable.
The Bank uses the following approach to manage interest rate risks inherent in the Balance sheet:
Simple Gap Analysis: Traditional Gap analysis of on-balance sheet Asset Liability Management (ALM) involves careful
allocations of assets and liabilities according to repricing/maturity buckets. This approach quantifies the potential change in net
interest income using a specified shift in interest rates, e.g. 100 or 200 basis points, or a simulated future path of interest rates.
Assumptions: For Gap analysis, bank considers the following:
 For fixed-rate contract, remaining maturity is considered
 For contracts with provision of re-pricing, time remaining for next re-pricing is considered.
 For assets and liabilities which lack definitive re-pricing interval or for which there is no stated maturity, bank determines
the core and volatile portion. For asset, volatile portion is bucketed till 3 months using historical repayment behavior and
stable portion is bucketed in 6-12 months bucket. For liabilities, volatile portion is bucketed till 1 year using historical
withdrawal behavior and stable portion is bucketed in over 1 year segment.
Also, following assumptions are met:
 The main assumption of gap analysis is that interest rate moves on parallel fashion. In reality however, interest rate does
not move upward.
 Contractual repayment schedule are met.
 Re-pricing of assets and liabilities takes place in the midpoint of time bucket.
 The expectation that loan payment will occur in schedule.
 Optionally embedded in different products is not considered.
Quantitative Disclosure: Result of Gap analysis as on December 31, 2014:
Particulars 3 month 6 Months
For 100 basis point increase/decrease in Interest rate, Impact on NII +-9.6 million +-56.30 million
For 200 basis point increase/decrease in Interest rate, Impact on NII +-19.2 million +-112.60 million

Duration Analysis: The focus of the Duration Analysis is to measure the level of a bank’s exposure to interest rate risk in terms of
sensitivity of Market Value of its Equity (MVE) to interest rate movements. Duration Gap can be used to evaluate the impact on
the Market Value of Equity of the bank under different interest rate scenarios. ALCO monitors the Leveraged Liability Duration and
duration gap of the total bank balance sheet on a quarterly basis to assess the impact of parallel shift of the assumed yield curve.
Particulars Dec-31, 2013 June-30, 2014 Dec-31, 2014
Duration of Asset 1.04 1.34 1.18
Duration of Liabilities 0.41 0.45 0.41
Leveraged Liability Duration 0.67 0.95 0.82
Duration Gap 0.37 0.39 0.36

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Market Risk
Qualitative Disclosures:
Market Risk: Market Risk is defined as the possibility of loss due to changes in the market variables. It is the risk that the value
of on/off-balance sheet positions will be adversely affected by movements in equity price, interest rate and currency exchange
rates. The objective of our market risk policies and processes is to obtain the best balance of risk and return whilst meeting
customers’ requirements. The primary categories of market risk for the bank are:
Interest rate risk: arising from changes in yield curves, credit spreads and implied volatilities on interest rate options.
Currency exchange rate risk: arising from changes in exchange rates and implied volatilities on foreign exchange options.
Equity price risk: arising from changes in the prices of equities, equity indices, equity baskets and implied volatilities on related
options.
Bank has comprehensive Treasury Trading Policy, Asset-Liability Management Policy, Investment Policy approved by Board of
Directors to assess, monitor and manage all the above market risks. Bank has defined various internal limits to monitor market
risk and is computing the capital requirement as per standardized approach of Basel II.
Methods used to measure Market Risk: Bank applies maturity method in measuring interest rate risk in respect of securities
in trading book. The capital charge for entire market risk exposure is computed under the standardized approach using the
maturity method and in accordance with the guideline issued by Bangladesh Bank.
Market Risk Management System: To manage the interest rate risk, ALCO regularly monitors various ratios and parameters.
Among the ratios, the key ratios that ALCO regularly monitors are Liquid asset to total assets, Volatile liability dependency
ratio, and medium term funding ratio, Snap liquidity ratio and Short term borrowing to Liquid assets ratio. ALCO also regularly
monitors the interest rate sensitive gap and duration gap of total portfolio.
To manage foreign exchange risk of the bank, the Bank has adopted the limit by central bank to monitor foreign exchange
open positions. 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.
Bank is using Value at Risk (VaR) analysis based on historical method to assess the minimum level of loss on foreign currency
holding that is likely to be exceeded at certain level of probability (5% probability) in 1 day. Also, based on VaR, bank has
set Management Trigger Point at BDT 10.00 million for aggregate currency exposure, based on 1 day VaR at 95% level of
confidence.
Value-at-Risk estimates (Loss in domestic currency) presented below:
Particulars Time horizon
Confidence level 1 day 2 days 3 days 4 days 5 days
90% 566,325 859,721 1,063,501 1,360,529 1,709,587
95% 682,379 1,155,317 1,451,986 1,742,814 2,166,067
99% 1,215,409 1,732,829 2,103,788 2,251,198 2,596,646
The Bank has been active in secondary market during the year with 1.82% assets invested in equity securities as on the
reporting date. To manage equity risk, the Investment Committee of the bank ensures taking prudent investment decisions
complying sectoral preference as per investment policy of the bank and capital market exposure limit set by BB.
Quantitative Disclosures: Capital required (Solo basis) for market risk as on the reporting date follows:
(Figures are in million BDT)
a Interest rate risk 575.02
b Equities 448.63
c Foreign exchange risk 120.86
d Commodity risk -
Total 1,144.51

Operational Risk
Qualitative Disclosures:
Operational Risk: Operational risk is the risk of direct or indirect loss due to an event or action resulting from the failure of
internal processes, people and systems, or from external events. We seek to minimize exposure to operational risk, subject to
cost benefit trade-offs.
The bank captures some pre identified risk events associated with all functional departments of the bank through standard
reporting format. Bank’s Operational Risk Committee (BORC) sits every month with all these reports and decides action plans
to resolve risk issues by specific individual and/or group within an agreed timeline. The committee also escalates ‘high level
risk’ issues to MANCOM (Management Committee) and BRMC (Bank Risk Management Committee) based on importance

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 DISCLOSURES ON RISK BASED CAPITAL (BASEL II)

and urgency of taking effective decisions. BORC is responsible for setting and maintaining standards for operational risk
management and measurement, which is separate from the business functions.
Performance gap of executives and staffs: EBL is an equal opportunity employer. At EBL we recognize the importance of
having the right people at right positions to achieve organizational goals. Our recruitment and selection is governed by the
philosophies of fairness, transparency and diversity. Understanding what is working well and what requires further support is
essential to our performance management system. The performance management process aims to clarify what is expected
from employees as well as how it is to be achieved.
At the beginning of a year we adequately communicate to our direct reports what are expected from him/her during ensuing
period. A half yearly and yearly performance appraisal practices are in place to review achievements based on which rewards
and recognition decisions are made. Internal control & compliance (ICC) is continuously monitoring to minimize any potential
brand damaging performance gap by employees especially fraud-forgery, misuse of power of attorney, weak customer
services, weak internal and regulatory compliance etc.
However, our learning and development strategy puts special focus on continuous professional development to strengthen
individual’s skill level by removing the weakness to perform the assigned job with perfection. We have a wide range of internal
& external training programs to enhance capabilities to minimize performance gap and to contribute more to bottom line.
The reward and recognition policy of the bank is designed to motivate our people to perform better be it business or supporting
business. Our strategy of reinforcing people’s positive behaviors is based on following premises:
 Is rooted in an understanding of what really motivates our people.
 Encourage teamwork, by creating a culture where individual and team success is recognized.
 Regular benchmarking to compare our reward and recognition strategy with similar organizations.
Potential external events: We understand that business operates in an umbrella of inter connected socio-economic and
political environment. Few externalities affect business performance directly such as macro economic conditions, regulatory
changes, change in demand, status of infrastructure whereas few factors affect operations of the business directly or indirectly
such as force shut down due to political instability, threat of vandalism to the bank’s sophisticated physical outlets including IT
equipments etc.
Policies and processes for mitigating operational risk: As there is no upside of this risk, the objective of the management of
operational risk is to minimize the risk in cost effective manner, if elimination is not possible.
Currently bank is not using any model or tool to capture operational loss data for historical analysis rather it is a self
assessment process. Bank has a separate Operational Risk Management Unit responsible for risk identification, measurement,
monitoring, control, and reporting of operational risk.
Operational risks are analyzed through review of Departmental Control Function Check List (DCFCL). This is a self assessment
process for detecting HIGH risk areas and finding mitigation of those risks. These DCFCLs are then discussed in monthly
meeting of Bank’s Operational Risk Committee (BORC). The committee analyzes HIGH and MODERATE risk indicators and
set responsibility for suitable personnel to resolve the issue. If anything remains unresolved or marked HIGH, it is referred to
MANCOM.
Approach for calculating capital charge for operational risk: The bank applies ‘Basic Indicator Approach’ of Basel II as
prescribed by BB in revised RBCA guidelines. Under this approach, banks have to calculate average annual gross income
(GI) of last three years and multiply the result by 15% to determine required capital charge. Gross Income is the sum of ‘Net
Interest Income’ and ‘Net non-interest income’ of a year or it is ‘Total Operating Income’ of the bank with some adjustments as
noted below. GI shall:
 Be gross of any provision (e.g. for unpaid interest),
 Be gross of operating expenses, including fees paid to outsourcing service providers,
 Exclude realized profits/losses from sale of securities held to maturity in the banking book,
 Exclude extraordinary or irregular items,
 Exclude income derived from insurance and
 Include lost interest i.e. interest suspense on SMA and classified loans.
Quantitative Disclosures: The capital requirement for operational risk is as follows:
(Figures are in million BDT)

Particulars Consolidated Solo (Bank)

Last three year's average Gross Income (adjusted) 10,572.43 10,443.47
Capital charge required (15% of GI) 1,585.86 1,566.52

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EASTERN BANK LIMITED ANNUAL REPORT 2014
PRODUCT BASKET & SERVICE PROPOSITIONS
CONSUMER BANKING Fixed Deposit
Fixed deposits of different tenures (1 month to 3 years) for the
Deposit Products convenience of the customers.
EBL Savings Account Extra Value Fixed Deposit
EBL Classic Savings Fixed deposit with minimum initial deposit of BDT 10 lac.
A Savings account with interest paid half yearly. All EBL Fixed Deposit products come with secured loan
EBL Power Savings facility.

A Savings account with interest paid monthly on the small Payroll Products
deposits of the customers.
EBL Executive Account
EBL Max Saver
A special savings account for payroll customers of EBL;
A Savings account with interest paid monthly on day end comes with free account maintenance facility and an
balance of the account. attractive interest rate.
EBL Premium Savings EBL Visa Payroll Card
A tier based Savings account with interest paid monthly A prepaid card for the payroll customers of EBL.
on average balance of the account; comes with special
customer propositions. Student Banking Products
EBL 50+ Savings EBL Junior
A tier based savings account exclusively for people of fifty An insurance backed savings account with higher interest
years and above, comes with special customer propositions. rate designed exclusively for children aged between 6 to18
years, operated by parents until his/her maturity (18 years)
EBL Smart Women’s Savings
A tier based savings account exclusively for female citizens of EBL Campus
Bangladesh, comes with special customer propositions A specialized insurance incorporated savings account with
attractive interest rate on daily balance for the students aged
EBL Current Account between 18 - 28 years.
EBL Current Account EBL Child Future Plan
Standard current account with unlimited transaction facility. A unique recurring Deposit Pension Scheme (DPS) for the
EBL Current Plus tenure of 3, 5, 10 and 15 years with monthly installment in
any multiple of BDT 500; ranges from BDT 500-15,000.
A unique current account that comprises unlimited
transaction facility with a wide range of privileges. Services
EBL DPS Account Priority Banking Service
EBL Confidence EBL offers the country’s best Priority Banking services with
A monthly savings scheme with flexible tenures (3/5/7/10 14 state-of-the-art priority centers strategically located in
years) and monthly installments in any multiple of BDT 500; Dhaka, Chittagong & Sylhet. EBL Priority offers a wide range
up to BDT 20,000. of attractive propositions and personalized services, adding
value to the premium customer base of the bank while
EBL Millionaire Scheme contributing heavily to the overall deposit portfolio of the
A monthly savings scheme with flexible long term tenures Bank.
(3/5/7/10/12/15 years) and maturity value of BDT 1 (one)
million. Loan Products
EBL Fixed Deposit EBL Jibandhara
An any purpose personal loan facility.
EBL Repeat
A term deposit product with the interest paid to the customer Fast Cash
every month. A secured overdraft facility.
EBL 50+ FD Fast Loan
A term deposit product exclusively for people of fifty years A secured term loan facility.
and above with interest paid at a higher rate to the customer
every month.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL Women’s Loan Business Debit
An any purpose personal loan facility for salaried women’s For EBL SME account holders its works as ‘more than a
only. checkbook, better than an ATM Card’, with increased number
and size of withdrawals and retail purchases from both ATM
EBL Auto Loan and POS.
A term loan to purchase automobile.
Global Debit
EBL Home Loan Enables Foreign currency account holders to use their FCY
A term Loan to purchase/extend/renovate house/apartment. Account Balance worldwide making the life more simple and
easy.
EBL Education Finance pack
Comprises of Unsecured Term Loan, Secured Term Loan EBL Pre-paid Card
& Secured OD Facility to finance education at home and A payment card that lets customers make virtually any kind
abroad. of purchase, direct deposit, bills and more with funds directly
without having to maintain any bank account at EBL.
Card Products
EBL Lifestyle prepaid card
EBL Consumer Credit Card
Local currency card for students and non-account holding
Simple revolving loan facility with a host of benefits for
customers.
customers depending upon the income level and social
status. EBL Travel prepaid card
Signature A card for all travel purposes; can be used anywhere outside
EBL signature credit card is now more suited to serve our Bangladesh.
premium customer base with unique facilities. EBL Smart Remit Card
Platinum Local currency card with great facility for NRB customers to
Customers from higher income class can enjoy credit limit send remittance directly to the card.
of minimum 150,000 with a range of facilities including EBL
EBL Payroll Card
Skylounge and insurance benefit up to BDT 10 lac.
Provides corporate houses with easy salary and employee
Gold
payment solution.
Now available with dual currency facility for all with a
minimum credit limit of BDT 50,000. EBL Hajj card
Issued against the personal Hajj expense entitlement (Hajj
Classic
quota) for individual Hajj and Umrah pilgrims.
Customers with a monthly income of BDT 20,000 at minimum
can enjoy credit facilities along with a pool of other discount EBL ACCA Card
and attractive facilities. A convenient solution for ACCA Bangladesh customers to
make online payments of their exam registration and annual
EBL Corporate Credit Card
subscription fees.
Revolving loan facilities for corporate houses to manage
Company’s travel and entertainment expenses more Co-branded Card
effectively (Locally and Globally).
GP Star Platinum Plus
EBL Debit Card Debit and credit card facilities only for GP Platinum plus
Allow customers to access their EBL Current/Savings STAR Customers.
Account for withdrawal of cash or payment for goods and
Robi Co-Branded
services.
Gold and Platinum card with free Robi-Udoy Postpaid
Signature connection and International Roaming subscription also with
Dual currency international debit card for EBL priority triple insurance benefit.
customers along with BDT 1 Crore travel accident insurance
Skymiles Reward Program
coverage.
A reward program bundled with a world of travel privileges.
Platinum Customers can earn miles against their card purchases on
Dual Currency Debit Card for EBL Premium, EBL Smart their EBL Signature & Platinum Credit Cards.
Women’s & EBL 50+ Savings accountholders; comes with
EBL Zip
insurance Benefit.
An equal monthly installment plan allowing cardholders
Classic to convert their high volume retail purchase transactions
For regular EBL accountholders providing them with smarter at partner outlets into an installment scheme without any
payment facility than cash within the country. interest.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL CAS NRB Loan products
Consumer Authentication service aimed for securing Personal Secured Loan (FAST Loan)
customer’s e-commerce transactions by authenticating Personal Secured Credit (FAST Cash)
customer’s identity prior to authorization process, adding a
Investment
powerful layer of protection against fraud.
Wage Earners Development Bond (WEDB) Issued in BDT:
EBL Acquiring
Interest payable in BDT.
EBL is providing acquiring services to the merchants. With
US Dollar Investment Bond (USDIB) Issued in USD: Interest
EBL POS, merchants can offer acceptance of VISA and
payable in USD.
MasterCard debit, credit and prepaid cards issued locally
and globally to customers. Furthermore, EBL POS machines US Dollar Premium Bond (USDPB) Issued in USD: Interest
facilitate acceptance of both magnetic strip and EMV chip payable in BDT.
cards. Swadesh Biniyog
NRB Products Gateway for the NRBs to invest in the capital market of
Bangladesh through Non-resident Investors Taka Account
Matribhumi is a tailor-made product and service propositions
(NITA). NRBs can participate in both primary and secondary
for the NRBs which includes:
market with the fund of NITA through Beneficiary Owners
NRB Deposits products (BO) account maintained with EBL Securities Ltd.
EBL Global ADC Services
Foreign Currency (FCY) current account offered in USD/
Internet Banking
GBP/EURO where the fund remains in foreign currency and
is freely remittable abroad. Global Visa debit card issued Distance, time or location are no longer any issues for EBL
against this account can be used anywhere in the world customers as EBL offers 24 hour banking service through its
Internet Banking facility.
EBL NFCD
Bundled with features like utility bill payments, instant mobile
Auto renewable Foreign Currency Fixed/Time Deposit top-up, fund transfer (even in other bank accounts) and many
Account in USD/GBP/EURO for the tenure of 1/3/6/12 more, EBL Internet Banking Service allows customers to
months. access banking services anytime from anywhere.
EBL Shonchoy EBL 365
Interest bearing Local Currency Savings Account for NRBs. Having a nationwide network of 191 ATMs (branded as EBL
Fund sent from abroad can be invested in different NRB 365) open for 24X7 and 365 days a year, EBL makes its
bonds. Local Visa debit card issued against this account customers feel never far away from the bank.
EBL Paribar EBL Dropbox
Interest bearing Local Currency Savings Account for the EBL has 72 Cash Deposit Machines (branded as EBL
resident family members of NRBs. Fund can be sent from any Dropbox) in its fleet making it the second largest bank with
part of the world to this account. Local Visa debit card issued the widest network of Cash Deposit Machines in the country
against this account. allowing the customers to pay bills and deposit cash &
EBL RFCD cheque, which are collected and settled twice a day. EBL is
the only local bank to offer this service.
Foreign currency account (USD/EUR/GBP) for resident
Bangladeshis which can be opened with foreign currency EBL Contact Center with Phone Banking facility
brought at the time of their return from abroad. International Equipped with state of the art technology and full set of IVR
Card can be issued against the account balance (lien card) or services, EBL Contact Centre acts as the ‘one stop solution’
by loading the account balance to the card. for various kinds of banking services to its valued customers
Remittances on 24X7X365 basis over the phone. Just a call to 16230 or
8332232 fulfills a lot of banking needs.
Simple, quick and safe way to send money to Bangladesh
through different distribution channels from abroad. Remitted EBL SMS Banking and SMS Alert Service
fund can be disbursed through EBL branches, designated EBL SMS banking provides its customers with access to EBL
mobile outlets of Robi and Banglalink, mobile account products & services while SMS Alert Service sends instant
(M-Wallet) service of Banglalink and smart remit card. Funds notifications to the customers’ mobile phones for any usage
also can be directly credited into the accounts maintained of their respective account or credit card.
with EBL or other banks located in Bangladesh.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 PRODUCT BASKET & SERVICE PROPOSITIONS

SME BANKING Agri Business Loan Products

EBL Krishi Rin

Small Segment Loan Products
Short Term collateral free loan for providing financial support
EBL Asha to direct farmers and share croppers for cultivation of crops
An EMI based collateral free loan product for small segment and high value crops
clients with a repayment period of maximum 48 months. Loan
EBL Projukti
amount ranges between BDT 200,000 and BDT 1500,000.
A collateral free loan for individual farmer involved in direct
EBL Agrim farming to purchase agricultural machinery/equipment.
This is a seasonal/festival loan product for SME
Medium Segment Loan Products
Entrepreneurs with single shot repayment facility. Loan
amount ranges between BDT 200,000 and BDT 950,000. EBL Banijyo
EBL Mukti A bundle of products comprising LC, LTR, and OD. Maximum
loan is BDT 20,000,000 against 30%-40% EBL FDR.
A unique and collateral free loan product for women
entrepreneurs in the small segment with only 10% interest EBL Invoice Factoring
rate. Loan amount is up to BDT 2,500,000.
EBL Invoice Factoring is a mode of extending finances to
EBL Uddog organizations/suppliers against the direct assignment of their
receivables to the Factor (Financial Institutions).
An EMI based partially secured loan by EBL FDR for small
and mid-segment clients with a repayment period up to 60
Other Conventional mid segment Loan Products
months.
Cash Credit
EBL Uddom
Secured Overdraft
A bundle loan product partially secured by EBL FDR, loan
Overdraft
for small segment clients with a repayment period up to 60
months. Demand Loan
Import Loan
EBL Unnoti
Time Loan
Collateral based secured bundle loan up to BDT3,00,00,000
for SME clients for purchasing of fixed assets as well as to Letter of Credit
meet up the working capital. Loan against Trust Receipt

EBL Nobodoy Letter of Guarantee

A loan product for the SME entrepreneurs for a agro based Usance Letter of Credit
industries including renewable energy. Interest rate is 10% Acceptance
and loan amount is up to BDT 1,00,00,000. Local Bill Purchased Documentary
EBL Udoy Foreign Bill Purchased Documentary
A special single digit interest loan product for the producers
of leather goods. It is EMI based and collateral free loan pre-
SME Deposit Products
financed by SME Foundation. EBL Subidha
EBL Utpadon A deposit product for SME clients with operational facilities
of a Current Account but financial benefit of a short notice
A special loan product under JICA-BB refinance scheme
deposit account.
for financing the SME entrepreneurs to establish new
manufacturing projects or to expand the existing one. Loan EBL Equity Builder
amount ranges from BDT 500,000 to BDT 30,000,000.
An equity multiplier deposit product for SME clients. An
EBL Utkorsho Entrepreneur of SME can build equity by depositing on
monthly basis for his/her enterprise’s name.
Collateral/security free EMI based term loan for maximum
BDT1,00,00,000 to cater financial needs of high end small SME Double Return
business clients.
A term deposit product designed for SME entrepreneurs
EBL E Cash/Loan where the fixed deposit amount will be doubled after the
maturity period.
100% cash covered loan facility for urgent requirement
of SME entrepreneurs. Loan facility from BDT 50,000 to EBL Repeat SME
10,00,00,000.
A term deposit scheme where a SME Client can earn interest
monthly as well as yearly basis.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
CORPORATE BANKING Funded Facilities
Eastern Bank Limited is the leader in offering customized  Import Loan: Post import facility against L/C
corporate banking products, services and solutions to its  Demand Loan: To meet cash requirement from time to
valued clients including large local corporate, multinational, time (local purchase/duty/tax etc).
Development organizations, Financial Institutions, Non-bank
 Manufacturers Demand Loan: Facilitating the
Financial Institutions and public corporations.
manufacturers with low cost working capital Loan
We serve more than 2,000 clients- including many of the
 Overdraft: To meet day to day overhead expenses.
industry leaders- through our dedicated relationship teams,
industry specialists and product experts.  Time Loan: To meet short term requirement/ post import
against Machinery LC etc.
EBL Corporate Banking is committed to deliver the full
spectrum of banking solutions, from simple transactional  Packing Credit: To meet fund requirement of the
products to complex structured finance that eventually helps exporters to make export items.
the customer to achieve their financial goal:  Local Documentary Bill Purchased (LDBP): To
purchase/discount against Local L/C
Cash Management Solutions
 Foreign Documentary Bill Purchased (FDBP): To
These solutions aim at managing client’s business liquidity purchase/discount/negotiate export documents against
effectively and efficiently through extending extensive range Sight/Usance Export L/C.
of products and services. Some common deposit products
 EDF Loan: To finance LC under Export Development
like Current Deposit, Short Notice Deposit, Fixed Deposit,
Fund.
High Performance Account etc are offered to corporate
customers. Non Funded Facilities
Nationwide Collection Services (NCS) Letter of Credit (Cash/Back to Back)
Nationwide Collection Services (NCS) is formulated to  Sight LC: To import locally/from abroad on sight basis.
facilitate collecting daily funds through EBL own branch
 Usance/ Deferred LC: To import locally/ from abroad on
network and corresponding bank network and crediting the
usance/deferred basis.
same to the single collection account maintained with EBL
which will facilitate large corporate by providing faster funds  Structured LC/OBU: Usance LC with sight payment
availability in a cost-effective manner. arrangement to beneficiary after shipment by EBL
Offshore Banking Unit or correspondent Bank.
Payment Transfer Services (PTS)
Guarantee (Open Ended/close Ended)
Eastern Bank’s Payment Transfer Service (PTS) is formulated
to facilitate organizations to transfer funds to their respective  Performance Guarantee
Branch Offices through EBL own branches and also through  Bid Bond
Bangladesh Electronic Fund Transfer Network (BEFTN)  Advance payment Guarantee
across the country which facilitates the corporate clients  Retention Bond
by providing faster fund transfer solution in a cost-effective  Security Bond
manner.
Bridge Financing
EBL Cheq Pro To finance temporary funded requirement for onward
EBL Cheq Pro is very user-friendly software which facilitates conversion to other facilities.
the preparation, printing, recording and reconciliation of
Eastern Bank Limited cheques and generates different kinds Long term Financing:
of MIS.  Term Loan (Normal/ Amortized/ Capitalized): To finance
capital Expenditure (Building/Machines etc).
Cash Pick-up & Delivery Service
 Term Loan (IPFF): World Bank (IDA) funded projects with
Cash Pick-up & Delivery Service is designed for cash pick-up
specific criteria.
from the designated EBL branch and to be delivered in the
office premises of the client and the service provided through  Term Loan (Special Products against Government Fund/
enlisted security company of the Bank. Multilateral Fund)

Working Capital Solutions Offshore Financing

Provides flexible financing to smooth and improve cash flow, Foreign Currency Financing from Offshore Banking Unit:
full range of Working Capital products can help customers
 Import Loan (Funded Short Term)
to meet day-to-day financial obligations and fund business
growth. Working capital solutions comprises full range of  Demand Loan (Funded Short Term)
Trade solutions. Trade solution is designed to enhance  Bill Discounting/Financing (Funded Short Term)
trading status and to help achieving client’s domestic and
 Term loan (Funded Long Term)
international trade objectives:
 Guarantee. (Non-Funded)

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 PRODUCT BASKET & SERVICE PROPOSITIONS

Structured Financing TREASURY PRODUCTS

Structured Finance Unit is one of the specialized units of
corporate banking to facilitate syndication arrangements,
Money Market
Agency and Trustee services, Pre-investment feasibility Call money
Studies and customized financial product development to Term Money
cater client’s distinctive needs.
Foreign Exchange SWAP
 Bangladeshi Taka syndication arrangement
Repo/Reverse Repo
 USD term Loan and syndication
Promissory Note
 Multilateral financing
Commercial Paper
 Advisory services
 Trustee and agency services Fixed Income and Investment
 Arranging Debt (Bonds/Commercial Paper) Treasury Bill/Bonds to inter-bank
 Equity Financing Treasury Bill/Bonds to Retail/NBFIs/Corporate/Insurance
 Customized financial solutions Companies/Pension Funds/Provident Funds
 Special arrangements (IPFF/ Special fund of BB/ Agri- Foreign Exchange and Corporate Sales
business Loan etc)
Spot/ Forward in USD/BDT
EBL Internet Banking Spot/Forward in major cross currencies
This facility will allow faster reconciliation of collection Derivative products in major currencies
process by viewing transactions, downloading statements Derivative products in Commodities
and taking printout of the statements sitting in the office. The
information reporting capability through EBL internet banking Derivative products based on Interest Rate
gives a whole new way to access banking information quickly
and reliably. It provides access to balances, end-of-day and
intra-day account statements, transaction details. This will
add value in reconciliation in terms of automation.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
STATEMENT ON INTEGRITY OF FINANCIAL STATEMENTS
BY MD & CEO AND HEAD OF FINANCE

We hereby certify that the Financial Statements (FS) of as well as other irregularities, which is reviewed, evaluated
Eastern Bank Limited (the Bank) as at and for the year ended and updated on an ongoing basis. Our Internal Auditor has
31 December 2014 have been prepared in accordance with conducted periodic audits to provide reasonable assurance
Bangladesh Financial Reporting Standards (BFRSs), the that the established policies and procedures of the Bank are
“First Schedule” (section 38) of the Bank Company Act 1991 consistently followed. However, there are inherent limitations
(amended up to 2013), BRPD Circular no. 14 dated 25 June that should be recognized in weighing the assurance
2003 and other Bangladesh Bank Circulars/instructions. provided by any system of internal controls and accounting.
The accounting policies used in preparation of the FS are We certify to the Board that:
appropriate and are consistently applied by the Bank. In
case the requirement of provisions and circulars issued i. We have reviewed Financial Statements of the Bank for
by Bangladesh Bank differ with those of other regulatory the year 2014 and to the best of our knowledge and
authorities and accounting standards, the provisions belief:
and circulars issued by Bangladesh Bank shall prevail. a) these statements do not contain any materially
Accordingly, adequate disclosures of deviations have been untrue statement or omit any material fact or contain
made in Note 2.1 to the FS. statements that might be misleading;
Estimates and judgments relating to the FS were made on a b) these statements together present a true and fair
prudent and reasonable basis; in order that the FS reflect in a view of the Bank’s affairs and are in compliance with
true and fair manner, the form and substance of transactions existing accounting standards and applicable laws.
and present the state of affairs reasonably. To ensure this, ii. There are, to the best of knowledge and belief, no
the Bank has taken proper and sufficient care in installing transactions entered into by the Bank during the year
a system of internal control and accounting records, for which are fraudulent, illegal or violation of the Bank’s code
safeguarding assets and preventing and detecting frauds of conduct.

Masudul Hoque Sardar Ali Reza Iftekhar

Head of Finance Managing Director & CEO

Dhaka, 24 February 2015

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

FINANCIAL REPORTS 2014

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Independent Auditor’s Report
to the shareholders of Eastern Bank Limited

We have audited the accompanying consolidated financial statements of Eastern Bank Limited (EBL) and its subsidiaries (together
referred to as the “Group”) as well as the separate financial statements of Eastern Bank Limited (the “Bank”) which comprise
the consolidated and separate balance sheets as at 31 December 2014, consolidated and separate profit and loss accounts,
statements of changes in equity and cash flow statements for the year then ended, and a summary of significant accounting
policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements of the Group and
also separate financial statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting
Standards (BFRS) as explained in Note 2 and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements of the Group and also separate financial statements of the Bank that are free
from material misstatement, whether due to fraud or error. The Bank Company Act 1991 and the local central bank (Bangladesh
Bank) Regulations require the Management to ensure effective internal audit, internal control and risk management functions of
the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and
report to Bangladesh Bank on instances of fraud and forgeries.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate financial
statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSA).
Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements of the Group and the separate financial statements of the Bank are free from
material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements of the Group and separate financial statements of the Bank. The procedures selected depend on our judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements of the Group and the
separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments, we consider internal
control relevant to the entity’s preparation of consolidated financial statements of the Group and separate financial statements
of the Bank that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated financial statements of the Group and the
separate financial statements of the Bank.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements of the Group and also separate financial statements of the Bank give a true
and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December
2014, and of its consolidated and separate financial performance and cash flows for the year then ended in accordance with
Bangladesh Financial Reporting Standards (BFRS) as explained in Note 2.

Report on Other Legal and Regulatory Requirements

In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act 1991 and the rules
and regulations issued by Bangladesh Bank, we also report that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
purpose of our audit and made due verification thereof;

(ii) to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s Responsibility
section in forming the above opinion on the consolidated financial statements 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 Management’s Responsibility 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 Note 2 to 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;

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

(iii) financial statements of all subsidiaries of the Bank have been audited by us as well as other auditors and have been properly
reflected in the consolidated financial statements;

(iv) in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it appeared
from our examination of those books and proper returns adequate for the purpose of our audit have been received from
branches not visited by us;

(v) the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance sheet and
separate profit and loss account of the Bank together with the annexed notes dealt with by the report are in agreement with
the books of account and returns;

(vi) the expenditures incurred was for the purpose of the Bank’s business;

(vii) 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;

(viii) adequate provisions have been made for advance and other assets which are in our opinion, doubtful of recovery;

(ix) the records and statements submitted by the branches have been properly maintained and consolidated in the financial
statements;

(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 we have spent around 3,575 person hours during
the audit; and

(xii) Capital Adequacy Ratio (CAR) as required by the Bangladesh Bank has been maintained adequately during the year.

Hoda Vasi Chowdhury & Co

Dhaka, 25 February 2015 Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Eastern Bank Limited and its subsidiaries
Consolidated Balance Sheet
As at 31 December 2014

2014 2013
Note
Taka Taka
PROPERTY AND ASSETS
Cash 3
Cash in hand (including foreign currencies) 3.1 1,707,006,385 1,752,685,015
Balances with Bangladesh Bank and its agent bank(s) (including foreign currencies) 3.2 8,594,833,742 6,428,136,805
10,301,840,127 8,180,821,820
Balances with other Banks and Financial Institutions 4
In Bangladesh 4.1 5,811,308,229 8,432,060,955
Outside Bangladesh 4.2 382,916,367 2,121,282,542
6,194,224,596 10,553,343,497
Money at call and short notice 5 1,060,000,000 -
Investments 6
Government 6.1 21,224,314,333 21,659,579,849
Others 6.2 3,695,667,824 4,358,216,416
24,919,982,157 26,017,796,265
Loans and advances 7
Loans, Cash Credits, Overdraft etc. 7.1 112,393,132,778 94,617,143,691
Bills discounted and purchased 7.2 7,619,210,264 8,713,673,891
120,012,343,042 103,330,817,582

Fixed assets including land, building, furniture and fixtures 8 7,096,632,691 6,908,244,830
Other assets 9 3,666,794,180 2,980,600,498
Non banking assets 10 191,733,000 191,733,000
TOTAL ASSETS 173,443,549,792 158,163,357,490

LIABILITIES AND CAPITAL

Liabilities
Borrowing from other banks, financial institutions and agents 11 26,861,374,492 14,079,880,398
Deposits and other accounts 12
Current deposits & other accounts, etc. 12.1 10,307,565,783 9,860,812,866
Bills payable 12.2 1,034,027,209 789,543,484
Savings bank deposits 12.3 23,982,033,088 16,923,994,211
Fixed deposits 12.4 81,398,775,594 89,462,490,607
Bearer certificates of deposits 12.5 - -
116,722,401,675 117,036,841,168
Other liabilities 13 9,625,224,915 8,487,815,290
TOTAL LIABILITIES 153,209,001,083 139,604,536,856
SHAREHOLDERS' EQUITY
Share Capital-Paid up capital 14 6,111,797,850 6,111,797,850
Statutory reserve 15 6,111,797,850 5,362,423,626
Dividend equalisation reserve 16 356,040,000 356,040,000
Excess of reserve against pre take over loss-BCCI 17 586,531,031 581,681,032
Asset revaluation reserve 18 3,689,495,550 3,689,495,550
Reserve for amortization of treasury securities (HTM) 19 2,076,822 827,635
Reserve for revaluation of treasury securities (HFT) 20 805,190,521 59,972,091
General reserve 21 130,000,000 130,000,000
Reserve for non banking assets 22 178,971,165 178,971,165

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Eastern Bank Limited and its subsidiaries

Consolidated Balance Sheet
As at 31 December 2014

2014 2013
Note
Taka Taka
Foreign currency translation gain 23 9,963,290 103,896
Profit & loss account - retained earnings 24 2,252,684,630 2,087,507,790
TOTAL SHAREHOLDERS' EQUITY 20,234,548,709 18,558,820,634
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 173,443,549,792 158,163,357,490

OFF BALANCE SHEET ITEMS

Contingent liabilities 25
Acceptances and endorsements 25.1 29,802,563,348 26,827,594,612
Letters of guarantees 25.2 9,974,191,339 12,515,097,423
Irrevocable letters of credit 25.3 16,329,554,466 15,562,071,032
Bills for collection 25.4 5,152,721,657 5,110,318,372
Other contingent liabilities - -
61,259,030,810 60,015,081,437

Other commitments
Documentary credits and short term trade -related transactions - -
Forward assets purchased and forward deposits placed - -
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Claims against the Bank not acknowledged as debt - -
TOTAL OFF-BALANCE SHEET ITEMS 61,259,030,810 60,015,081,437

These financial statements should be read in conjunction with the annexed notes.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Eastern Bank Limited and its subsidiaries
Consolidated Profit & Loss Account
For the year ended 31 December 2014

2014 2013
Particulars Note
Taka Taka

Interest Income 26 13,286,033,926 14,859,455,868

Less: Interest paid on deposits and borrowings 27 9,198,120,160 9,903,211,484
Net Interest Income 4,087,913,766 4,956,244,384

Income from investments 28 3,307,863,405 2,043,952,370

Fees, commission and brokerage 29 2,770,456,552 2,431,683,365
Other operating income 30 150,204,334 149,992,549
Total operating income 10,316,438,057 9,581,872,667

Salary & allowances 31 2,425,524,161 1,997,616,366

Rent, taxes, insurance, utilities etc. 32 550,702,308 437,696,891
Legal & professional expenses 33 57,125,140 50,958,931
Postage, stamp, telecommunication etc. 34 130,253,964 106,558,598
Stationery, printing, advertisement etc. 35 250,042,837 234,260,245
Managing Director's salary and allowances 36 17,980,516 16,155,930
Directors' Fees & Expenses 37 3,710,300 3,083,587
Audit fees 38 1,331,687 951,609
Charges on loan losses - -
Repairs, maintenance and depreciation 39 430,618,361 441,553,824
Other operating expenses 40 588,810,773 465,615,029
Total operating expenses 4,456,100,047 3,754,451,011
Profit before provisions 5,860,338,010 5,827,421,657
Provision for loans and advances 13.4.1
Specific provision 1,540,210,858 706,268,210
General provision 270,983,161 84,148,586
1,811,194,019 790,416,796
Other provision 41 (341,470) 197,328,131
Total provisions 1,810,852,549 987,744,927
Profit before tax for the year 4,049,485,462 4,839,676,730
Provision for tax made for the year 13.3.1 (2,040,275,595) (2,626,486,626)
Deferred tax income 42 128,661,236 321,904,353
Profit after tax for the year 2,137,871,104 2,535,094,458
Appropriation
Statutory reserve 15 (749,374,225) (967,149,393)
General reserve - -
(749,374,225) (967,149,393)
Retained earnings carried forward 1,388,496,879 1,567,945,065

Earnings per share (EPS) 43 3.50 4.15

These financial statements should be read in conjunction with the annexed notes.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015 Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Eastern Bank Limited and its subsidiaries

Consolidated Cash Flow Statement
For the year ended 31 December 2014

2014 2013
Note
Taka Taka
A) Cash flows from operating activities
Interest received 13,127,556,490 14,448,839,300
Interest paid (9,344,895,865) (9,308,256,163)
Dividend received 59,648,553 47,126,403
Fees and commission received 2,770,456,552 2,431,683,365
Income from investment 3,063,874,220 1,996,825,967
Recovery of loans previously written off 13.4 105,720,099 110,434,318
Cash paid to employees (including directors) (2,416,689,480) (1,996,855,883)
Cash paid to suppliers (1,418,742,610) (1,271,028,490)
Income taxes paid 13.3.2 (2,440,048,251) (2,498,021,720)
Received from other operating activities 150,204,333 149,992,549
Paid for other operating activities (347,424,200) (231,266,730)
Operating cash flow before changes in operating assets and liabilities 3,309,659,842 3,879,472,915
Increase/(decrease) in Operating Assets & Liabilities
Changes in trading securities 1,701,124,036 (10,021,682,719)
Loans and advances to customers (other than banks) (16,450,977,598) (6,271,154,951)
Non banking assets - 543,369
Other assets 44 (573,923,476) (357,376,190)
Deposits from other Banks 12.a.1 882,148,921 1,188,456,427
Deposits from customers (other than banks) (983,576,735) 23,838,144,179
Recovery from/ (Payment against) BCCI assets 4,849,999 (20,283,906)
Liability for tax 528,433,893 193,439,447
Liabilities for provision (1,916,572,648) (1,098,179,245)
Other liabilities 45 1,039,316,468 1,245,329,609
Net Cash (used in)/received from operating activities (12,459,517,300) 12,576,708,935
B) Cash flows from investing activities
Changes in non-trading securities 144,251,090 5,704,755,084
Purchase/sale of property, plant and equipment (429,774,435) (1,163,460,797)
Net cash (used in)/received from investing activities (285,523,343) 4,541,294,287
C) Cash flows from financing activities
Borrowings from other banks, financial institutions and agents 12,781,494,095 (17,078,192,640)
Dividend paid (cash dividend) (1,222,359,570) (1,222,359,570)
Net cash received from/(used in) financing activities 11,559,134,525 (18,300,552,210)
D) Net (decrease) / increase in cash (A+B+C) (1,185,906,119) (1,182,548,988)
E) Effects of exchange rate changes on cash and cash equivalents 8,898,923 (4,666,264)
F) Opening cash and cash-equivalents 18,736,894,818 19,924,110,070
G) Closing cash and cash-equivalents (D+E+F)* 17,559,887,622 18,736,894,818
*Closing cash and cash-equivalents
Cash in hand (including foreign currencies) 3.1 1,707,006,385 1,752,685,015
Balances with Bangladesh Bank and its agent bank (s) 3.2 8,594,833,742 6,428,136,805
Balances with other Banks and Financial Institutions 4 6,194,224,596 10,553,343,498
Money at call and short notice 5 1,060,000,000 -
Prize bonds 6.1 3,822,900 2,729,500
17,559,887,622 18,736,894,818

These financial statements should be read in conjunction with the annexed notes.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015
181
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Eastern Bank Limited and its subsidiaries
Consolidated Statement of Changes in Equity
For the year ended 31 December 2014

Figures are in Taka

Reserve
Excess of Reserve for for Foreign
Dividend reserve Asset Reserve for
Paid up Statutory amortization revaluation General currency Retained
Particulars capital equalisation against pre revaluation of treasury non banking Total
reserve take over securities of treasury reserve translation earnings
reserve reserve assets
loss-BCCI (HTM) securities gain / (loss)
(HFT)
Balance as on 1 January 2014 6,111,797,850 5,362,423,625 356,040,000 581,681,032 3,689,495,550 827,635 59,972,091 130,000,000 178,971,165 103,896 2,087,507,790 18,558,820,634
Foreign currency transaction
- - - - - - - - - - (960,471) (960,471)
adjustment for OBU RE
Net profit for the year after tax - - - - - - - - - - 2,137,871,104 2,137,871,104

Transfer to statutory reserve - 749,374,225 - - - - - - - - (749,374,225) -

Cash Dividend Paid - - - - - - - - - (1,222,359,570) (1,222,359,570)

EASTERN BANK LIMITED

Reserve for revaluation of
- - - - - - 745,218,430 - - - - 745,218,430
treasury securities (HFT)

182
Reserve for HTM securities - - - - - 1,249,187 - - - - - 1,249,187

Recovery of pre-takeover loss - - - 4,850,000 - - - - - - 4,850,000

Currency translation difference - - - - - - - - 9,859,394 - 9,859,394

Balance as at 31 December 2014 6,111,797,850 6,111,797,850 356,040,000 586,531,032 3,689,495,550 2,076,822 805,190,521 130,000,000 178,971,165 9,963,290 2,252,684,630 20,234,548,709

Balance as at 31 December 2013 6,111,797,850 5,362,423,625 356,040,000 581,681,032 3,689,495,550 827,635 59,972,091 130,000,000 178,971,165 103,896 2,087,507,790 18,558,820,634

ANNUAL REPORT 2014

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

 Eastern Bank Limited and its subsidiaries
Consolidated Liquidity Statement
(Asset and Liability Maturity Analysis)
As at 31 December 2014

Figures are in Taka

Not more than Above 5-years
Particulars 1-3 months term 3-12 months term 1-5 years term term Total
1 month term
Assets
Cash in hand (including balance with
10,301,840,127 - - - - 10,301,840,127
Bangladesh Bank and its agent Bank)
Balances with other banks
3,626,692,575 1,718,383,151 849,148,870 - - 6,194,224,596
and financial institutions
Money at call and short notice 1,060,000,000 - - - - 1,060,000,000
Investments 80,860,351 135,246,509 4,236,323,224 13,121,246,696 7,346,305,377 24,919,982,157

EASTERN BANK LIMITED

Loans and advances 14,917,906,726 24,393,921,552 46,038,055,893 30,526,636,388 4,135,822,483 120,012,343,042
Fixed assets including land, building,
13,486,071 26,972,142 122,860,040 544,048,342 6,389,266,097 7,096,632,691
furniture and fixtures

183
Other assets 62,643,946 1,362,164,383 389,175,974 1,150,112,622 702,697,254 3,666,794,180
Non-banking assets 66,027,000 - - 125,706,000 - 191,733,000
Total Assets 30,129,456,796 27,636,687,737 51,635,564,000 45,467,750,049 18,574,091,212 173,443,549,792

Liabilities
Borrowing from other banks, financial
12,284,031,142 4,021,623,167 8,182,954,972 997,420,485 1,375,344,726 26,861,374,492
institutions and agents

ANNUAL REPORT 2014

Deposits and other accounts 15,169,372,311 21,826,134,512 34,792,488,809 43,127,861,080 1,806,544,963 116,722,401,675
Provisions & other liabilities 836,492,267 726,553,003 375,922,227 5,799,778,875 1,886,478,544 9,625,224,915
Total Liabilities 28,289,895,720 26,574,310,681 43,351,366,008 49,925,060,440 5,068,368,233 153,209,001,083
Net Liquidity Gap 1,839,561,076 1,062,377,055 8,284,197,992 (4,457,310,391) 13,505,722,979 20,234,548,709
Cumulative Net Liquidity Gap 1,839,561,076 2,901,938,131 11,186,136,124 6,728,825,733 20,234,548,709 -
FINANCIAL REPORTS 2014
Eastern Bank Limited
Balance Sheet
As at 31 December 2014

2014 2013
Note
Taka Taka
PROPERTY AND ASSETS

Cash 3
Cash in hand (including foreign currencies) 3.1 1,706,937,953 1,752,660,726
Balances with Bangladesh Bank and its agent bank(s) (including foreign currencies) 3.2 8,594,833,742 6,428,136,805
10,301,771,695 8,180,797,531
Balances with other Banks and Financial Institutions 4
In Bangladesh 4.1 5,349,573,125 8,012,554,438
Outside Bangladesh 4.2 1,034,533,216 2,390,509,831
6,384,106,341 10,403,064,269

Money at call and short notice 5 1,060,000,000 -

Investments 6
Government 6.1 21,224,314,333 21,659,579,849
Others 6.2 3,430,622,784 4,244,004,844
24,654,937,117 25,903,584,693
Loans and advances 7
Loans, Cash Credits, Overdraft etc. 7.1 111,438,313,688 94,491,939,790
Bills discounted and purchased 7.2 6,853,032,495 8,418,279,159
118,291,346,183 102,910,218,949

Fixed assets including land, building, furniture and fixtures 8 7,086,875,736 6,897,393,729
Other assets 9 4,153,360,814 3,394,841,686
Non banking assets 10 191,733,000 191,733,000
TOTAL ASSETS 172,124,130,885 157,881,633,856

LIABILITIES AND CAPITAL

Liabilities
Borrowing from other banks, financial institutions and agents 11 26,020,637,050 14,079,880,398
Deposits and other accounts 12
Current deposits & other accounts etc. 12.1 10,314,018,874 9,894,881,567
Bills payable 12.2 1,034,027,209 789,543,484
Savings bank deposits 12.3 23,982,033,088 16,923,994,211
Fixed deposits 12.4 81,461,596,944 89,493,288,918
Bearer certificates of deposits 12.5 - -
116,791,676,116 117,101,708,180

Other liabilities 13 9,224,966,318 8,249,547,103

TOTAL LIABILITIES 152,037,279,484 139,431,135,681

SHAREHOLDERS' EQUITY
Share Capital-Paid up capital 14 6,111,797,850 6,111,797,850
Statutory reserve 15 6,111,797,850 5,362,423,625
Dividend equalisation reserve 16 356,040,000 356,040,000
Excess of reserve against pre-take over loss-BCCI 17 586,531,031 581,681,032
Asset revaluation reserve 18 3,689,495,550 3,689,495,550
Reserve for amortization of treasury securities (HTM) 19 2,076,822 827,635
Reserve for revaluation of treasury securities (HFT) 20 805,190,521 59,972,091

184
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Eastern Bank Limited

Balance Sheet
As at 31 December 2014

2014 2013
Note
Taka Taka
General reserve 21 130,000,000 130,000,000
Reserve for non banking assets 22 178,971,165 178,971,165
Foreign currency translation gain/(loss) 23 1,062,706 (781,214)
Profit & loss account - retained earnings 24 2,113,887,906 1,980,070,442
TOTAL SHAREHOLDERS' EQUITY 20,086,851,401 18,450,498,175
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 172,124,130,885 157,881,633,856

OFF BALANCE SHEET ITEMS

Contingent liabilities 25
Acceptances and endorsements 25.1 29,802,563,348 26,827,594,612
Letters of guarantees 25.2 9,974,191,339 12,515,097,423
Irrevocable letters of credit 25.3 16,329,554,466 15,562,071,032
Bills for collection 25.4 5,152,721,657 5,110,318,372
Other contingent liabilities - -
61,259,030,810 60,015,081,437
Other commitments
Documentary credits and short term trade-related transactions - -
Forward assets purchased and forward deposits placed - -
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Claims against the Bank not acknowledged as debt - -
TOTAL OFF-BALANCE SHEET ITEMS 61,259,030,810 60,015,081,437

These financial statements should be read in conjunction with the annexed notes.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Chartered Accountants

185
EASTERN BANK LIMITED ANNUAL REPORT 2014
Eastern Bank Limited
Profit & Loss Account
For the year ended 31 December 2014

2014 2013
Particulars Note
Taka Taka

Interest Income 26 13,159,969,636 14,807,156,889

Less: Interest paid on deposits and borrowings 27 9,150,812,052 9,915,598,012
Net Interest Income 4,009,157,584 4,891,558,876

Income from investments 28 3,343,293,787 2,070,848,267

Fees, commission and brokerage 29 2,631,754,006 2,357,317,315
Other operating income 30 149,981,889 149,648,740
Total operating income 10,134,187,267 9,469,373,198
Salary & allowances 31 2,374,178,826 1,963,508,938
Rent, taxes, insurance, utilities etc. 32 535,990,983 423,237,948
Legal & professional expenses 33 56,859,201 50,841,431
Postage, stamp, telecommunication etc. 34 123,655,535 102,784,849
Stationery, printing, advertisement etc. 35 248,638,946 233,344,345
Managing Director's salary and allowances 36 17,980,516 16,155,930
Directors' Fees & Expenses 37 3,632,300 3,002,587
Audit fees 38 460,000 460,000
Charges on loan losses - -
Repairs, maintenance and depreciation 39 424,200,508 436,238,593
Other operating expenses 40 573,176,266 451,542,538
Total operating expenses 4,358,773,082 3,681,117,160
Profit before provisions 5,775,414,185 5,788,256,038
Provision for loans and advances 13.4.1
Specific provision 1,540,210,858 706,268,210
General provision 270,983,161 84,148,586
1,811,194,019 790,416,796
Other provisions 41 (8,840,067) 162,092,275
Total provisions 1,802,353,952 952,509,071
Profit before tax for the year 3,973,060,233 4,835,746,967
Provision for tax made for the year 13.3.1 (1,995,209,737) (2,589,787,489)
Deferred tax income 42 128,661,236 321,904,353
Profit after tax for the year 2,106,511,733 2,567,863,831
Appropriation
Statutory reserve 15 (749,374,225) (967,149,393)
General reserve - -
(749,374,225) (967,149,393)
Retained earnings carried forward 1,357,137,508 1,600,714,437
Earnings per share (EPS) 43 3.45 4.20

These financial statements should be read in conjunction with the annexed notes.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Chartered Accountants
186
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Eastern Bank Limited

Cash Flow Statement
For the year ended 31 December 2014

2014 2013
Note
Taka Taka
A) Cash flows from operating activities
Interest received 12,997,605,116 14,408,570,438
Interest paid (9,308,330,074) (9,317,789,985)
Dividend received 120,261,913 84,228,403
Fees and commission received 2,631,754,006 2,357,317,315
Income from investment 3,038,691,242 1,986,619,864
Recovery of loans previously written off 13.4.1 105,720,099 110,434,318
Cash paid to employees (including directors) (2,367,069,819) (1,962,667,455)
Cash paid to suppliers (1,389,345,173) (1,246,447,167)
Income taxes paid 13.3.2 (2,399,835,591) (2,464,182,418)
Received from other operating activities 149,981,889 149,648,740
Paid for other operating activities (335,984,815) (220,839,863)
Operating cash flow before changes in operating assets and liabilities 3,243,448,794 3,884,892,189
Increase/(decrease) in Operating Assets & Liabilities
Changes in trading securities 1,830,515,504 (9,907,493,070)
Loans and advances to customers (other than banks) (15,146,692,288) (6,037,021,054)
Non banking assets - 543,369
Other assets 44 (596,249,022) (339,180,805)
Deposits from other Banks 12.a.1 882,148,921 1,188,456,427
Deposits from customers (other than banks) (979,169,306) 23,554,080,732
Recovery from/ (Payment against) BCCI assets 4,849,999 (20,283,906)
Liability for tax 533,287,090 196,299,282
Liabilities for provision (1,908,074,051) (1,062,943,389)
Other liabilities 45 890,743,728 1,109,528,292
Net Cash (used in)/received from operating activities (11,245,190,630) 12,566,878,067
B) Cash flows from investing activities
Changes in non-trading securities 165,693,090 5,704,755,084
Purchase/sale of property, plant and equipment (426,673,459) (1,158,509,656)
Investment in Subsidiary-EBL Securities Limited - (100,000,000)
Investment in Subsidiary-EBL Finance (HK) Limited - (7,538,698)
Investment in Subsidiary-EBL Asset Management Limited (49,999,900) -
Net cash (used in)/received from investing activities (310,980,268) 4,438,706,730
C) Cash flows from financing activities
Borrowings from other banks, financial institutions and agents 11,940,756,653 (17,078,192,640)
Dividend paid (cash dividend) (1,222,359,570) (1,222,359,570)
Net cash received from/(used in) financing activities 10,718,397,083 (18,300,552,210)
D) Net (decrease) / increase in cash (A+B+C) (837,773,815) (1,294,967,413)
E) Effects of exchange rate changes on cash and cash equivalents 883,449 (5,551,374)
F) Opening cash and cash-equivalents 18,586,591,300 19,887,110,087
G) Closing cash and cash-equivalents (D+E+F)* 17,749,700,936 18,586,591,300
*Closing cash and cash-equivalents
Cash in hand (including foreign currencies) 3.1 1,706,937,953 1,752,660,726
Balances with Bangladesh Bank and its agent bank (s) 3.2 8,594,833,742 6,428,136,805
Balances with other Banks and Financial Institutions 4 6,384,106,341 10,403,064,269
Money at call and short notice 5 1,060,000,000 -
Prize bonds 6.1 3,822,900 2,729,500
17,749,700,936 18,586,591,300

These financial statements should be read in conjunction with the annexed notes.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

187
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Eastern Bank Limited
Statement of Changes in Equity
For the year ended 31 December 2014

Figures are in Taka

Excess of Reserve for Reserve

Dividend reserve Asset for Reserve for Foreign
Paid up Statutory amortization revaluation General currency Retained
Particulars reserve equalisation against pre revaluation of treasury of treasury reserve non banking translation earnings Total
capital reserve take over securities assets
reserve securities gain / (loss)
loss-BCCI (HTM) (HFT)
Balance as on 1 January 2014 6,111,797,850 5,362,423,625 356,040,000 581,681,031 3,689,495,550 827,635 59,972,091 130,000,000 178,971,165 (781,214) 1,980,070,442 18,450,498,176

Foreign currency transaction

- - - - - - - - - - (960,471) (960,471)
adjustment for OBU RE

Net profit for the year after tax - - - - - - - - - - 2,106,511,733 2,106,511,733

Transfer to statutory reserve - 749,374,225 - - - - - - - - -

(749,374,225)
Cash Dividend Paid - - - - - - - - - - (1,222,359,570) (1,222,359,570)

EASTERN BANK LIMITED

Reserve for revaluation of
- - - - - - 745,218,430 - - - - 745,218,430
treasury securities (HFT)

188
Reserve for HTM securities - - - - - 1,249,187 - - - - 1,249,187

Recovery of pre-takeover loss - - - 4,850,000 - - - - - 4,850,000

Currency translation difference - - - - - - - - 1,843,920 - 1,843,920

Balance as at 31 December 2014 6,111,797,850 6,111,797,850 356,040,000 586,531,031 3,689,495,550 2,076,822 805,190,521 130,000,000 178,971,165 1,062,706 2,113,887,906 20,086,851,401

Balance as at 31 December 2013 6,111,797,850 5,362,423,625 356,040,000 581,681,031 3,689,495,550 827,635 59,972,091 130,000,000 178,971,165 (781,214) 1,980,070,442 18,450,498,175

ANNUAL REPORT 2014

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

 Eastern Bank Limited
Liquidity Statement
(Asset and Liability Maturity Analysis)
As at 31 December 2014

Figures are in Taka

Not more than Above 5-years
Particulars 1-3 months term 3-12 months term 1-5 years term Total
1 month term term
Assets
Cash in hand (including balance with
10,301,771,695 - - - - 10,301,771,695
Bangladesh Bank and its agent Bank)
Balances with other banks
3,264,106,341 2,370,000,000 750,000,000 - - 6,384,106,341
and financial institutions
Money at call and short notice 1,060,000,000 - - - - 1,060,000,000
Investments 80,860,351 135,246,509 3,971,278,184 13,121,246,696 7,346,305,377 24,654,937,117
Loans and advances 14,917,906,726 23,439,102,462 45,271,878,124 30,526,636,388 4,135,822,483 118,291,346,183
Fixed assets including land, building,

EASTERN BANK LIMITED

13,486,071 26,972,142 121,374,639 535,776,787 6,389,266,097 7,086,875,736
furniture and fixtures
Other assets 26,226,711 1,360,067,123 385,869,094 1,149,018,733 1,232,179,152 4,153,360,814

189
Non-banking assets 66,027,000 - - 125,706,000 - 191,733,000
Total Assets 29,730,384,895 27,331,388,236 50,500,400,040 45,458,384,605 19,103,573,110 172,124,130,885

Liabilities
Borrowing from other banks, financial
12,284,031,142 3,180,885,725 8,182,954,972 997,420,485 1,375,344,726 26,020,637,050
institutions and agents
Deposits and other accounts 15,175,825,402 21,888,955,862 34,792,488,809 43,127,861,080 1,806,544,962 116,791,676,116

ANNUAL REPORT 2014

Provisions & other liabilities 836,492,267 715,502,363 361,573,226 5,571,613,318 1,739,785,144 9,224,966,318
Total Liabilities 28,296,348,811 25,785,343,949 43,337,017,007 49,696,894,883 4,921,674,832 152,037,279,484
Net Liquidity Gap 1,434,036,084 1,546,044,286 7,163,383,034 (4,238,510,278) 14,181,898,278 20,086,851,401
Cumulative Net Liquidity Gap 1,434,036,084 2,980,080,370 10,143,463,404 5,904,953,126 20,086,851,401 -
FINANCIAL REPORTS 2014
Eastern Bank Limited and its subsidiaries
Notes to the Financial Statements
as at and for the year ended 31 December 2014

1 The Bank and its activities

1.1 Incorporated in Bangladesh, Eastern Bank Limited ("the Bank") was formed as a public limited company with primary
objective to carry out all kinds of banking businesses inside and outside Bangladesh. The Bank took over the
businesses, assets, liabilities and losses of erstwhile Bank of Credit & Commerce International (Overseas) Limited
(hereinafter called BCCI) as they stood after reduction or adjustments in accordance with the provisions of the BCCI
(Reconstruction) Scheme, 1992. The Bank commenced operations from 16 August 1992 with 4 branches and at present
it has 76 branches all over Bangladesh. Shares of the Bank is listed with both Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited. The registered office of the Bank is located at Jiban Bima Bhaban, 10 Dilkusha
C/A, Dhaka-1000.

The principal activities of the Bank are to provide a comprehensive range of financial products (loans and deposits)
and services, personal and commercial banking, trade services, cash management, treasury, securities and custodial
services.

1.2 Offshore Banking Unit

Offshore Banking Unit (OBU) is a separate business unit of Eastern Bank Limited, governed under the Rules and
Guidelines of Bangladesh Bank. The Bank obtained permission for OBU operations vide Bangladesh Bank's letter
no. BRPD(P)744/(89)/2004-303 dated 25 January 2004. It gives loans (on and off-balance sheet exposures) and takes
deposits only in freely convertible foreign currencies to and from non-resident person/institutions, fully foreign owned
EPZ companies etc. The unit commenced its operation from 19 May 2004 and its office is located at Jiban Bima
Bhaban, 10 Dilkusha C/A (1st floor), Dhaka.

1.3 Subsidiaries of the Bank

The Bank has four fully owned subsidiaries; three of them has been in operations as on the reporting date. These are
EBL Securities Ltd., EBL Investments Ltd. and EBL Finance (HK) Ltd. Although the subscription of another fully owned
subsidiary 'EBL Asset Management Limited' is complete, full fledged opertion of this company is yet to start.

EBL Securities Limited - fully owned

EBL Securities Limited (EBLSL), a fully acquired securities brokerage firm, has membership of both the bourses i.e.
Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. The principal activities of this subsidiary is to buying,
selling and settlement of securities on behalf of investors and in its own portfolio. It's registered office is located at 59,
Motijheel C/A (1st Floor), Dhaka.

EBL Investments Limited - fully owned

EBL Investments Limited (EBLIL), another fully owned subsidiary of EBL was incorporated on 30 December 2009. It
obtained required license from BSEC in January 2013 and started full fledged operations of merchant banking, portfolio
management, underwriting etc. since June 2013. It's registered office is located at 59, Motijheel C/A (1st Floor), Dhaka.

EBL Finance (HK) Limited - fully owned foreign subsidiary

EBL Finance (HK) Limited, the fully owned first foreign subsidiary of EBL, was incorporated on 28 November 2011
with Hongkong (HK) authority. This subsidiary started its full fledged business operations (i.e. offshore trade finance,
advising, documents collection etc.) in Hongkong during 2013 after obtaining all the required licenses from Bangladesh
and HK authority. It's registered office is Unit 1201, 12th Floor, Albion Plaza, 2-6 Granville Road, Tsimshatsui,
Hongkong.

EBL Asset Management Limited - fully owned

EBL Asset Management Limited (EBLAML), another fully owned subsidiary of EBL, was incorporated on 9 January 2011
to carry out the business of asset management, capital market operation, equity investment etc. Subscription of this
company was completed in 2014 but full fleged business operation is yet to start after getting license from BSEC.

1.4 Separate and consolidated financial statements

The separate financial statements of the bank as at and for the year ended 31 December 2014 comprise those of
Domestic Banking (Main Operations) and Offshore Banking Unit (OBU), and the consolidated financial statements
of the group as at and for the year ended 31 December 2014 comprise those of 'the bank' (parent company) and its
subsidiaries (together referred to as 'the group' and individually referred to as 'group entities/subsidiaries').

There were no significant changes in the nature of the principal business activities of the bank and the group during the
financial year that are under review and disclosed in these finacial statements.

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2 Basis of preparation and significant accounting policies

Basis of preparation:

2.1 Statement of compliance

The consolidated financial statements of the Group and the separate financial statements of the Bank have been
prepared under the historical cost convention except land which gets revalued fulfilling BB & BSEC guidelines and Govt
treasury securities (Bills/Bonds) classified as held for trading (HFT) which are measured at fair value, and in accordance
with Bangladesh Financial Reporting Standards (BFRSs), the "First Schedule" (section 38) of the Bank Companies
Act 1991 (amendment upto 2013), BRPD Circular no. 14 dated 25 June 2003, other Bangladesh Bank Circulars, the
Companies Act 1994, the Securities and Exchange Rules 1987, Dhaka and Chittagong Stock Exchange's listing
regulations and other laws and rules applicable in Bangladesh. In case the requirement of provisions and Circulars
issued by Bangladesh Bank differs with those of other regulatory authorities and accounting standards, the provisions
and Circulars issued by Bangladesh Bank shall prevail.

As such the Group and the Bank has departed from certain contradictory requirements of BFRS in order to comply with
the rules and regulations of Bangladesh Bank which are disclosed below:

i) Presentation of financial statements

BFRSs: As per BAS 1 Financial Statements shall comprise statement of financial position, comprehensive income
statement, changes in equity, cash flows statement, adequate notes comprising summary of accounting policies and
other explanatory information. As per para 60 of BAS 1, the entity shall also present current and non-current assets and
current and non-current liabilities as separate classifications in its statement of financial position.
Bangladesh Bank: The presentation of the financial statements in prescribed format (i.e. balance sheet, profit and loss
account, cash flows statement, changes in equity, liquidity statement) and certain disclosures therein are guided by
the "First Schedule" (section 38) of the Bank Companies Act 1991 (amendment upto 2013) and BRPD Circular no. 14
dated 25 June 2003 and subsequent guidelines of BB. In the prescribed format there is no option to present assets and
liabilities under current and non-current classifications.

ii) Investments in shares and securities

BFRSs: As per requirements of BAS 39 investments in shares and securities generally fall either under 'at fair value
through Profit and Loss Account' or under 'available for sale' where any change in the fair value at the year-end is taken
to Profit and Loss Account or Revaluation Reserve Account respectively.

Bangladesh Bank: As per BRPD Circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted
shares are revalued at the year-end market price and as per book value of last audited balance sheet respectively.
Provision should be made for any loss arising from diminution in value of investments (portfolio basis); otherwise
investments are recognized at costs.

iii) Revaluation gain/loss on Government securities

BFRSs: As per requirement of BAS 39, T-bills and T-bonds fall under the category of 'held for trading (HFT)' and 'held
to maturity (HTM)' where any change in the fair value of HFT securities is recognized in Profit and Loss Account, and
amortized cost method is applicable for HTM securities using an effective interest rate.

Bangladesh Bank: According to DOS Circular no. 05 dated 26 May 2008 and subsequent clarification in DOS Circular
no. 05 dated 28 January 2009, loss on revaluation of Government securities (T-bill / T-bond) which are categorized as
HFT should be charged through Profit and Loss Account, but any gain on such revaluation should be recorded under
Revaluation Reserve Account. However, if there is any revaluation gain from any particular T-bill/T-bond under HFT at
the year-end; such gain can be used to offset any revaluation loss related to that particular T-bill/T-bond (HFT) up to the
extent of loss.
T-bills/T-bonds designated as held to maturity are measured at amortized cost method but interest income/gain should
be recognized through reserve.

iv) Provision on loans and advances

BFRSs: As per BAS 39 an entity should undertake impairment assessment when objective evidence of impairment
exists for financial assets that are individually significant. For financial assets which are not individually significant, the
assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: As per BRPD Circular no. 14 dated 23 September 2012, BRPD Circular no. 19 dated 27 December
2012 and BRPD Circular no. 16 dated 18 November 2014, a general provision @ 0.25% to 5% under different
categories of unclassified loans (standard/SMA loans) should be maintained regardless of objective evidence of
impairment. And specific provision for sub-standard/doubtful/bad-loss loans should be made at 20%, 50% and 100%
respectively on loans net off eligible securities (if any). Also, a general provision @ 1% should be provided for certain
off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39.

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v) Other comprehensive income
BFRSs: As per BAS 1 elements of Other Comprehensive Income (OCI) can be presented in a separate statement i.e.
Other Comprehensive Income or can be included in a Single Statement of Comprehensive Income.

Bangladesh Bank: The scheduled banks in Bangladesh have been using certain prescribed templates of financial
statements (including names of those financial statements) issued by Bangladesh Bank. Those templates do not include
‘Other Comprehensive Income’ nor are the elements of OCI allowed to be included in a Single Comprehensive Income
Statement (Profit & Loss Account, as per BB format). As such the bank does not prepare a separate OCI Statement.
However elements of OCI, if any, are shown in the statements of changes in equity.

vi) Financial instruments - presentation and disclosure

As per BB guidelines, in certain cases financial instruments are categorized, recognized, measured and presented
differently from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and
BAS 32 cannot be made in these financial statements.

vii) REPO transactions

BFRSs: When an entity sells a financial asset and simultaneously enters into an agreement to repurchase the same
(or a similar asset) at a fixed price on a future date (REPO or stock lending), the arrangement is accounted for as a
collateralized borrowing and the underlying asset continues to be recognized in the entity’s financial statements. This
transaction will be treated as borrowing and the difference between selling price and repurchase price will be treated as
interest expense.

Bangladesh Bank: As per BB circulars/guidelines, when a bank sells a financial asset and simultaneously enters into
an agreement to repurchase the same (or a similar asset) at a fixed price on a future date (REPO or stock lending),
the arrangement is accounted for as a normal sale transaction and the financial assets should be derecognized in the
seller’s book and recognized in the buyer’s book.

viii) Financial guarantees

BFRSs: As per BAS 39 financial guarantees are contracts that require an entity to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with
the terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and the initial fair
value is amortized over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the
higher of this amortized amount and the present value of any expected payment when a payment under the guarantee
has become probable. Financial guarantees are prescribed to be included within other liabilities.

Bangladesh Bank: As per BRPD circular 14, 2003, financial guarantees such as L/C, L/G should be treated as off
balance sheet items. No liability is recognized for the guarantee except the cash margin.

ix) Cash and cash equivalents

BFRSs: Cash and cash equivalent items should be reported as cash item as per BAS 7.

Bangladesh Bank: Some highly liquid assets such as money at call and short notice, T-bills/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.

x) Non-banking assets
BFRSs: No indication of non banking assets is found in any BFRSs.

Bangladesh Bank: As per BRPD Circular no.14 dated 25 June 2003, there exists a face item named non banking assets.

xi) Cash flows statement

BFRSs: Cash flow statement can be prepared either in direct method or indirect method. The presentation method
is selected to present cash flow information in a manner that is most suitable for the business or industry. Whichever
method selected should be applied consistently.

Bangladesh Bank: As per BRPD circular 14 dated 25 June 2003, cash flow statement is to be prepared following a
mixture of direct and indirect method.

xii) Balance with Bangladesh Bank: (CRR)

BFRSs: Balance with Bangladesh Bank should be treated as other assets as it is not available for use in day to day
operations as per BAS 7.

Bangladesh Bank: Balance with Bangladesh Bank should be treated as cash and cash equivalents.

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xiii) Off balance sheet items

BFRSs: No requirement of disclosure for off balance sheet items as there is no concept of off balance sheet items in
any BFRS.
Bangladesh Bank: As per BRPD Circular no.14 dated 25 June 2003, off balance sheet items e. g. L/C, L/G,
Acceptance should be disclosed separately on the face of the Balance Sheet.

xiv) Disclosure of appropriation of profit

BFRSs: There is no requirement to show appropriation of profit in the face of statement of comprehensive income.

Bangladesh Bank: As per BRPD circular 14 dated 25 June 2003, an appropriation of profit should be disclosed on the
face of Profit and Loss Account.

xv) Loans and advance net of provision

BFRSs: Loans and advances should be presented net of provisions.

Bangladesh Bank: As per BRPD circular 14 dated 25 June 2003, provision on loans and advances should be
presented separately as liability and cannot be netted off against loans and advances.

[Please refer to Note 2A (II) Compliance of Bangladesh Accounting Standards (BASs) and Bangladesh Financial
Reporting Standards (BFRSs) for further details]

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following material items:
- Government Treasury Bills and Bonds designated as ‘Held for Trading (HFT)’ at present value using ‘mark to market’
concept with gain credited to revaluation reserve but loss charged to Profit and Loss Account.
- Government Treasury Bills and Bonds designated as ‘Held to Maturity (HTM)’ at present value using amortization concept.
- Zero Coupon Bond at present value using amortization concept.
- Land is recognized at cost at the time of acquisition and subsequently measured at fair value as per BAS-16
‘Property Plant & Equipment’ and BSEC notification SEC/CMRRCD/2009-193/150/Admin dated 18 August 2013.

2.3 Use of estimates and judgments

The preparation of the consolidated financial statements of the Group and the financial statements of the Bank in
conformity with BFRSs require management to make judgments, estimates and assumptions that affect the application
of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised and in any future period affected.
Key estimates include the following:
- Loan loss provision
- Revaluation of land
- Deferred tax assets/liabilities
- Gratuity & Superannuation fund

2.4 Foreign Currency Transactions and Translations

Functional and presentation currency
The consolidated financial statements of the Group and the financial statements of the Bank are presented in
Bangladesh Taka (BDT) which is the functional currency of the Group and the Bank except OBU where functional
currency is US Dollar (USD) and EBL Finance (HK) Ltd. where functional currency is Hongkong Dollar (HKD). All financial
information presented in Taka has been rounded off to the nearest integer, except when otherwise indicated.

Foreign currency transactions

Transactions/Day End Balances in foreign currencies are converted into respective functional currencies (Bangladesh
Taka in case of EBL Main Operations, US Dollar in case of OBU and HKD in case of EBL Finance (HK) Ltd.) at the rate
of exchange ruling at the date of transactions as per BAS 21 'The Effects of Changes in Foreign Exchange Rates'.
Effects of Exchange rate differences (rates at which transactions were initially recorded and the rate prevailing on the
reporting date/date of settlements) applied on the monetary assets or liabilities of the bank are recorded in the Profit
and Loss Account.

Foreign currency translations for foreign operations

As per BAS 21 'The Effects of Changes in Foreign Exchange Rates', Assets and liabilities of OBU and EBL Finance (HK)
Ltd. have been presented into Taka (which is functional currency of the Parent i.e. Bank) using year-end standard mid-
rare of exchange (i.e. the closing rate) of the Bank. Yearly income and expenses of the said subsidiaries are translated
using monthly average rate of standard mid-rates of exchange. The net cumulative amount of the exchange differences
has been presented separately as a component of equity.

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2.5 Basis of consolidation
- Subsidiaries (investees) are entities controlled by the parent (investor). Control exists when the investor has the
power over the investee that gives right to direct relevant activities, exposure, or rights, to variable returns from
its involvement with the investee, and the ability to use its power over the investee to affect the amount of the
investor’s returns.
- The consolidated financial statements incorporate the financial statements of the bank and the financial statements
of the subsidiary companies from the date that control commences until the date that control ceases. The financial
statements of such subsidiary companies are incorporated on a line by line basis and the investments held by
the parent (bank) are eliminated against the corresponding share capital of group entities (subsidiaries) in the
consolidated financial statements.
- All financial assets and financial liabilities are offset and the net amount reported in the consolidated financial
statements only when there is legally enforceable right to offset the recognized amounts and there is an intention
to settle on a net basis or to realize the asset and settle the liability simultaneously. Items are not offset in the
consolidated financial statements unless required or permitted by accounting standards and regulators.
- Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group
transactions are eliminated in preparing the consolidated financial statements. Unrealized losses are eliminated in
the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
Loss of control
Upon the loss of control of a subsidiary the group derecognises the assets (including any goodwill) and liabilities of
the subsidiary at carrying amount, any non controlling interests and the other components of equity related to the
subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit and loss account. If the group
retains any interest in the former/previous/ex subsidiary, then such interest is measured at fair value at the date that the
control is lost.

2.6 Cash flow statement

Cash flow statement has been prepared in accordance with Bangladesh Accounting Standard (BAS) 7 "Statement of
Cash Flows" and under the guideline of Bangladesh Bank BRPD Circular no.14 dated 25 June 2003. The Statement
shows the structure of changes in cash and cash equivalents during the financial year.

2.7 Reporting period

These financial statements of the Group, the Bank and its subsidiaries cover one calendar year from 1 January to 31 December.

2.8 Liquidity statement

The liquidity statement has been prepared in accordance with remaining maturity grouping of Assets and Liabilities as
at the close of the year as per following bases:

Particulars Basis of Use

Cash, Balance with other banks and financial Stated maturity/observed behavioral trend.
institutions, money at call and short notice etc.
Investments Residual maturity term.
Loans and advances Repayment/maturity schedule and behavioral trend (non-maturity products).
Fixed assets Useful life.
Other assets Realization/amortization basis.
Borrowings from other banks and financial institutions Maturity/repayment term.
Deposits and other accounts Maturity and behavioral trend (non-maturity products).
Other long term liability Maturity term.
Provision and other liability Settlement/adjustment schedule basis.
2.9 Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these financial
statements, and have been applied consistently by group entities except otherwise instructed by the Central Bank as
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 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. The financial statements of subsidiaries have been prepared using the calendar year ended 31 December which
is also same for the Bank. 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 EBL Finance (HK) Limited which is incorporated in Hong Kong.

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A. Assets and basis of their valuation

i) Cash and cash equivalents
Cash and cash equivalents include notes and coins in hand and at ATM, unrestricted balances held with Bangladesh
Bank and its agent bank, balance with other banks and financial institutions, money at call and on short notice and prize
bond which are not ordinarily susceptible to change in value.
ii) Investments
All investments (other than government treasury securities) are initially recognized at cost, including acquisition charges
associated with the investment. Accounting treatment of government treasury securities (categorized as HFT or/and
HTM) is made following Bangladesh Bank DOS Circular no. 05 dated 26 May 2008 and subsequent clarifications on 28
January 2009.
Held to Maturity (HTM)
Investments which are intended to be held till maturity are classified as “Held to Maturity”. These are measured
at amortized cost at each year end by taking into account any discount or premium on acquisition. Premiums are
amortized and discount accredited, using the effective or historical yield method. Any increase or decrease in value of
such investments is booked to equity.
Held for Trading (HFT)
These are investments primarily held for selling or trading. After initial recognition, investments are marked to market
weekly and any decrease in the present value is recognized in the Profit and Loss Account and any increase is booked
to Revaluation Reserve Account through Profit and Loss Account as per Bangladesh Bank DOS Circular no. 05 dated
28 January 2009.
REPO and Reverse REPO
Since 1 September 2010 transactions of REPO and Reverse REPO are recorded based on DOS Circular no. 06, dated
15 July 2010 of Bangladesh Bank. In case of REPO of both coupon and non-coupon bearing (Treasury bill) securities,
the Bank adjusts the Revaluation Reserve Account for HFT securities and stops the weekly revaluation (if the revaluation
date falls within the REPO period) of the same security. For interest bearing security, the Bank does not accrue interest
during REPO period.
Investments – Initial recognition and subsequent measurement at a glance
Investments are stated as per following bases:
Initial Measurement after
Investment class Recording of changes
recognition initial recognition
Govt. T-bills/bonds - Held for Cost Fair value Loss to Profit and Loss Account, gain
Trading (HFT) to Revaluation Reserve through Profit
and Loss Account.
Govt. T-bills/bonds - Held to Maturity (HTM) Cost Amortised cost Increase or decrease in value to equity.
Debenture/Bond Face value None None
Shares (Quoted) * Cost Lower of cost or market Loss (gain net off) to Profit and Loss
value (overall portfolio) Account but no unrealized gain booking.
Shares (Unquoted)* Cost Lower of cost or Net Loss to Profit and Loss Account but no
Asset Value (NAV) unrealized gain booking.
Prize bond Cost Cost None
* Provision has been made on unrealized loss (gain net off) according to DOS Circular no. 4, dated 24 November 2011.
Investment in Subsidiaries
Investment in subsidiaries are accounted for under the cost method of accounting in the Bank’s financial statements
in accordance with BAS 27 “Consolidated and Separate Financial Statements” and BFRS 3 “Business Combination”.
Impairment of investment in subsidiaries is made as per the provision of BAS 36 “Impairment of Assets”.
iii) Loans, advances and provisions
Loans and advances are stated at gross amount. General provisions on unclassified loans and contingent assets,
specific provisions for classified loans and interest suspense thereon are shown under other liabilities. Provision
against classified loans and advances is made on the basis of quarter end review by the management and instructions
contained in BRPD Circular no.14 dated 23 September 2012, BRPD Circular no.19 dated 27 December 2012 and BRPD
Circular no.16 dated 18 November 2014.

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 Heads Rates
General provision on:
Unclassified (including SMA) general loans and advances 1%
Unclassified (including SMA) small and medium enterprise 0.25%
Unclassified (including SMA) Loans to BHs/MBs/SDs against shares etc. 2%
Unclassified (including SMA) loans for housing finance and on loans for professionals 2%
Unclassified consumer financing other than housing finance and loans for professionals 5%
Short term agri credit and micro credit 2.5%
Off balance sheet exposures 1%
Specific provision on:
Substandard loans and advances other than short term agri credit and micro credit 20%
Doubtful loans and advances other than short term agri credit and micro credit 50%
Bad/loss loans and advances 100%
Substandard short term agri credit and micro credit 5%
Doubtful short term agri credit and micro credit 5%
iv) Fixed assets and depreciation
Recognition and measurement
Fixed assets except land are stated at cost less accumulated depreciation as per BAS-16 ‘Property, Plant and
Equipment’. Land is recognized at cost at the time of acquisition and subsequently measured at revalued amounts
which are the fair value at the time of revaluation done by independent valuer and any surplus on revaluation is shown
as equity component until the asset is disposed.
The cost of an item of fixed assets is recognized as an asset if it is probable that future economic benefits associated
with the item will flow to the entity, and the cost of the item can be measured reliably.
The cost of an item of fixed assets comprises:
- its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
- any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of
operating in the manner intended by management.
- the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent costs
Subsequent costs are capitalized only when it is probable that the future economic benefits associated with the costs
will flow to the entity and cost can be measured reliably. The carrying amount of the replaced portion is derecognized.
The costs of day to day servicing of fixed assets i.e. repairs and maintenance is charged to profit and loss account as
expense when incurred.
Depreciation
Depreciation is charged at the rates stated below on all fixed assets on the basis of estimated useful lives as
determined in the fixed asset policy of the Bank. In all cases depreciation is calculated on the straight line method.
Charging depreciation commences from the month of acquisition (for full month) and ceases at the month when the
assets are disposed. No depreciation is charged on building under construction until the usage of the assets.
Depreciation rates used for each type of fixed assets are as follows:
Particulars of fixed assets Rate of depreciation/ amortisation p.a. Estimated useful lives (Years)
Buildings 2.50% 40
Furniture and Fixtures 10.00% 10
Machineries and equipment 20.00% 5
Computers 33.33% 3
Stabilisers and UPS (for PC) 33.33% 3
Vehicles 20.00% 5
Software 20.00% 5
Repairs and maintenance are charged to profit and loss account as expense when incurred.
Capital work in progress/Building under Construction
Building under construction is recognized and reported under Fixed Assets as per BAS 16 ‘Property, Plant & Equipment’
as Capital work in progress until the construction work is completed and the asset is ready for intended use. This asset
is stated at cost and depreciation of the asset will be charged from the date of its intended use.

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Derecognition of fixed assets

The carrying amount of an item of fixed assets is derecognized on disposal or when no future economic benefits
are expected from its use or disposal. The gain or loss arising from de recognition of an item of fixed assets is to be
recorded in profit or loss when the item is de recognized.
v) Leased Assets
Fixed assets which are procured under finance lease arrangement (under which substantially all the risks and rewards
incidental to ownership are transferred to the lessees i.e. EBL) are reported as leased assets as per BAS 17 ‘Leases’.
These assets held under finance lease are recognized as assets of the bank at an amount equal to the lower of their
fair value and the present value of minimum lease payments. The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation. Any initial direct costs incurred are added to the amount recognized as
leased asset.
These assets are depreciated fully over the shorter of the lease terms and their useful lives.
vi) Intangible assets
Intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset is recognized if it
is probable that the future economic benefits that are attributable to the assets will flow to the entity and the cost of the
asset can be measured reliably in accordance with BAS 38: ‘Intangible Assets’.
Subsequent expenditure on intangible asset of the Group is capitalized only when it increases the future economic
benefits embodied in the specific assets to which it relates. All other expenditure is expensed as incurred.
Intangible assets are dereognised on disposal or when no future economic benefits are expected from their use. Gain or
loss arising from derecognition of an intangible asset are measured as the difference between the net disposal proceed
and the carrying amount of that intangibly asset and are recognised in profit and loss account.
The core banking software used by EBL (not by subsidiaries) represents the value of application software licensed for
the use of the bank. Software is carried at cost less accumulated amortization and any impairment losses. Initial cost
comprises license fees paid at the time of purchase and other directly attributable costs incurred for customizing the
software for its intended use. Software is amortized using the straight line method over the estimated useful life of 5
(five) years commencing from the month at which the application software is made available for use.
vii) Impairment of Assets
An asset is impaired when its carrying amount exceeds its recoverable amount as per BAS 36 ‘Impairment of Assets’.
The Bank and the subsidiaries assess at the end of each reporting period whether there is any indication that an asset
may be impaired and/or whenever events or changes in circumstances indicate that the carrying value of the asset
may not be recovered. If any such indication exists, the Bank and the subsidiaries make an estimate of the recoverable
amount of the assets. The carrying amount of the asset is reduced to its recoverable amount, if the recoverable
amount is less than its carrying amount and impairment losses are recognized in the profit and loss account. However,
impairment of financial assets are guided by the relevant BB circulars/instructions and BAS 39.
viii) Other assets
Other assets include investment in subsidiaries, Membership of DSE & CSE, advance for operating and capital
expenditure, stocks of stationary and stamps, security deposits to government agencies etc. As per BRPD Circular
No. 14 dated 25 June 2003, Income & Non-income-generating other assets item(s) have been shown separately in the
relevant notes to the financial statements.
ix) Non-banking assets
Non-banking assets are acquired on account of the failure of a borrower to repay the loan in time after receiving
the decree from the court regarding the right and title of the mortgaged property. The bank was awarded absolute
ownership on few mortgaged properties (mostly land) through the verdict of honorable court under section 33(7) of the
‘Artharin Adalat Act 2003’. The value of the properties has been recognized in the financial statements as non-earning
assets on the basis of third party valuation report. Value of the assets received in addition to the loan outstanding has
been kept as reserve against non-banking assets. Party wise details (including possession date) of the properties are
seperately presented (in Note 10).
B. Liabilities and provisions
i) Borrowings from other banks, financial institutions and agents
Borrowings from other banks, financial institutions and agents include interest bearing borrowings which are stated
in the financial statements at principal amount of the outstanding balance. Interest payables on such borrowings are
reported under other liabilities.
ii) Debt securities (Subordinated Bond)
Subordinated Bond is a long term borrowing raised mainly to increase tier-ii capital. The bank has been in the final
stage of issuance of a 7-Year Non-convertible Floating Rate Subordinated Bond on the reporting date having received
required approval from BB & BSEC. However the issue proceeds were received in mid-February 2015.

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iii) Deposits and other accounts
Deposits and other accounts include non-interest bearing current deposits redeemable at call, interest bearing short-
term deposits, savings deposits and fixed deposits which are initially measured at the consideration received. These
items are subsequently measured and accounted for at the gross value of the outstanding balance in accordance with
the contractual agreements with the counter parties.
iv) Other liabilities
Other liabilities comprise items such as provision for loans and advances/ investments, provision for taxes, interest
payable on borrowing, interest suspense and accrued expenses etc. Individual item-wise liabilities are recognized as
per the guidelines of Bangladesh Bank and Bangladesh Financial Reporting Standards (BFRS).
v) Dividend payments
Interim dividend is recognized when it is paid to shareholders. Final dividend is recognized when it is approved by
the shareholders in AGM. The proposed dividend for the year 2014, therefore, has not been recognized as a liability
in the balance sheet in accordance with BAS 10 ‘Events after the Reporting Period’. Dividend payable to the Bank’s
shareholders is recognized as a liability and deducted from the shareholders’ equity in the period in which the
shareholders’ right to receive the payment is established.
vi) Provision for loans and advances
Provision for classified loans and advances is made on the basis of quarter end review by the management and
instructions contained in BRPD Circular no.14 dated 23 September 2012, BRPD Circular no.19 dated 27 December
2012 and BRPD Circular no.16 dated 18 November 2014. Details are stated in Note 13.
vii) Provision for investment in capital market
For recognition of loss suffered from investment in capital market, provision has been made on unrealized loss (gain net
off) according to DOS Circular No. 04 dated 24 November 2011 on portfolio basis.
viii) Provision for off-balance sheet exposures
In compliance with Bangladesh Bank guidelines, contingent liabilities have been disclosed under off-balance sheet
items. As per BRPD Circular no.14 dated 23 September 2012 and related earlier circulars, the Bank has been
maintaining provision @ 1% against off-balance sheet exposures.
ix) Provision for other assets
Provision for other assets is made as per the guidelines mentioned in the BRPD Circular No. 14 dated 25 June 2001 i.e.
100% provision is required on other assets which are outstanding for one year or more.
x) Provision for nostro accounts
Provision for unsettled transactions on nostro accounts is made in accordance with the guideline of Foreign Exchange
Policy Department of Bangladesh Bank, FEPD Circular no. FEPD (FEMO) / 01/2005-677 dated 13 September 2005. On
the reporting date, EBL has no unsettled transactions outstanding for more than 3 months and no provision has been
made in this regard.
xi) Provision for liabilities and accrued expenses
In compliance with BAS 37, provisions for other liabilities and accrued expenses are recognized in the financial
statements when the Bank has a legal or constructive obligation as a result of past event, it is probable that an outflow
of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
xii) Retirement/ other employment benefits
The retirement benefits accrued for the employees of the Bank during the reporting period have been accounted for
in accordance with the provisions of BAS 19 ‘Employee Benefit’. The subsidiaries of the bank are yet to operate any
retirement benefit plan/scheme. The retirement benefit schemes operated by the Bank are outlined below:
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which payments into the plan are fixed.
Subsequent payments out of the plan to retired members are based on the size of the ‘fund’ meaning contributions that
have been made into the scheme and investment returns on scheme assets. The Bank maintains one funded defined
contribution plan i.e. ‘Provident fund’ for its employees under a separate trustee board.
Provident Fund
The Bank operates a contributory provident fund for its permanent employees funded by both the employees and
the Bank equally; employees contribute 10% of basic salary and the Bank contributes an equal amount.The Bank’s
contribution is made each month and recorded under salary and allowances. This fund is managed by a separate trustee
board i.e. ‘EBL Employees Provident Fund Trust’ and any investment decision out of this fund is made separately from
that of the Bank’s funds. This fund has received approval from the National Board of Revenue on 31 July 1997.
Defined benefit plans
Defined benefit plans are post-employment benefit plans other than defined contribution plans. These plans define the
amount that retired members will receive from the plans during retirement, by reference to factors such as length of
service and salary levels.
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 FINANCIAL REPORTS 2014

Contributions are paid into the scheme based on actuarial valuation. The Bank retains an obligation to make up any
shortfall in a plan, thereby bearing the risk of the plan under-performing. The Bank maintains two funded defined benefit
plans i.e. ‘Gratuity fund’ and ‘Superannuation fund’ for its employees under two separate trustee boards.
Gratuity
The Bank operates a funded gratuity scheme approved by the National Board of Revenue with effect from 1 January
1997. The Gratuity Fund is managed separately by ‘EBL Employees Gratuity Fund Trust’ and any investment decision
out of this fund is also made by this Trust. The benefit is paid to the eligible employees i.e. who have completed
minimum 7 (seven) years of continuous service at the time of separation from the Bank. As per policy of the Bank,
eligible employees are provided with the benefit equal to the latest monthly basic salary multiplied by varied rates as per
service length.
Provision for gratuity is made monthly on the basis of actuarial valuation made once in three years, or immediately
after any major change in the salary structure that could impact provisions. Last actuarial valuation was done based on
information of September 2012. As per this valuation, from 1 October 2012 a contribution of 17.20% of basic payroll is
contributed to the fund by the Bank each year until the next actuarial review is carried out.
Superannuation fund
The Bank operates a superannuation fund approved by the National Board of Revenue with effect from 20 November
1999 and governed by the trust deed of ‘EBL Employees Superannuation Fund Trust’. As per the trust deed, benefit is
payable to the employees of the Bank as per their rank, grade and length of service with the Bank. The Bank conducted
last actuarial valuation of the fund on September 2012. As per actuary recommendation the bank has been contibuting
1.40% of total admissible benefit each year into the fund until the next actuarial valuation is done.
Workers Profit Participation Fund
Consistent with the widely accepted industry practice and in line with the Bank Company Act 1991, no provision has
been made for Workers Profit Participation Fund (WPPF).
xiii) Contingent liabilities
Contingent liabilities which include certain guarantees and letters of credit pledged as collateral are possible obligations
that arise from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not within the control of the Bank. Contingent liabilities are not recognized in the financial
statements as per BAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’. However, disclosure on contingent
liabilities have been made on the face of balance sheet under ‘Off-balance Sheet Items’ as per the guidelines of BRPD
Circular No. 14 dated 25 June 2003.
C. Share capital and reserves
i) Authorized and issued capital
The authorized capital of the bank is the maximum amount of share capital that the bank is authorized by its
Memorandum and Articles of Association to issue (allocate) among shareholders. Part of the authorized capital can (and
frequently does) remain unissued. This number can be changed by shareholders’ approval upon fulfillment of related
provisions of Companies Act 1994. The part of the authorized capital which has been issued to shareholders is referred
to as the issued share capital of the bank.
ii) Paid-up capital
The paid-up capital represents the amount of bank’s capital that has been contributed by ordinary shareholders. The
holders of ordinary shares are entitled to receive dividend as recommended by the Board and subsequently approved
by the shareholders from time to time in the Annual General Meeting (AGM).
iii) Share premium
The Share premium represents the excess amount received by the bank from its shareholders over the nominal/par
value of its share. The amount of share premium can be utilized as per the provision of Section 57 of the Companies Act
1994. Currently EBL does not have any contribution from its shareholders as share premium.
iv) Statutory reserve
In compliance with the provision of Section 24 of Bank Companies Act 1991, the bank transfers at least 20% of its profit
before tax to “Statutory Reserve Fund” each year until the sum of statutory reserve and share premium equal to the paid
up capital of the bank.
v) Asset revaluation reserve
When an asset’s carrying amount is increased as a result of revaluation, the increased amount is credited directly to
equity under the heading of assets revaluation reserve as per BAS 16 ‘Property, Plant and Equipment. The Bank also
follows the assets revaluation guidelines issued by BSEC on 18 August 2013.
vi) Reserve for Amortization/ revaluation of securities
When a Financial Asset categorized under HTM or HFT and subsequent value of the asset is increased as a result of
amortisation of assets or mark to market revaluation, the net increased amount (for HTM increase or decrease of book
value and for HFT loss to P&L but gain to revaluation reserve through P&L) is credited directly to equity under the heading
of reserve for amortization/ revaluation of securities as per Bangladesh Bank DOS circular no. 06, dated 15 July 2010.
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D. Revenue recognition
i) Interest income
Interest on unclassified loans and advances is accounted for as income on accrual basis, interest on classified loans
and advances is credited to interest suspense account with actual receipt of interest there from credited to income as
and when received as per instruction contained in BRPD 14 dated 23 September 2012, BRPD 19 dated 27 December
2012 and BRPD 16 dated 18 November 2014 of Bangladesh Bank.
ii) Fees and commission income
Fess and commission income arises on services provided by the Bank and recognized as and when received basis.
Commission charged to customers on letters of credit, letters of guarantee and acceptance are credited to income at
the time of effecting the transactions except those which are received in advance.
iii) Interest income from investments
Interest income on investments in Government and other securities, debentures and bonds is accounted for on accrual basis.
iv) Income from Exchange
Exchange income includes all gain and losses from foreign currency day to day transactions,conversions and
revaluation of Non Monetary items.
v) Dividend income
Dividend income from investments is recognized at the time when it is declared, ascertained and right to receive the
payment is established.
vi) Interest paid on borrowings and deposits
Interest paid on borrowings and deposits are calculated on 360 days basis (except for some treasury instruments which
are calculated on 364 days basis) in a year and recognized on accrual basis.
vii) Management and other expenses
Expenses incurred by the Bank are recognized on actual and accrual basis.
viii) Taxes
The expense comprises current and deferred tax. Current tax and deferred tax is recognized in profit or loss except to
the extent that it relates to a business combination or items recognized directly in equity.
a. Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially
enacted at the reporting date and any adjustment to the tax payable in respect of previous years.
Provision for current income tax of the bank has been made on taxable income @ 42.5% considering major
disallowances of expenses and concessional rates on certain incomes (0% on gain on trading of govt. securities, 10%
on capital gain (net off loss) of shares traded in secondary market and 20% on dividend income) as per Income Tax
Ordinance (ITO) 1984. Tax provision of the Group entities has been made on taxable income of subsidiaries at different
rates applicable as per the ITO 1984 and the tax authority of the country where it is incorporated.
b. Deferred tax
Deferred tax is calculated on taxable/deductible temporary differences between tax base amount and carrying amount
of assets and liabilities as required by Bangladesh Accounting Standard (BAS) 12 ‘Income Taxes’ and BRPD Circular no.
11 dated 12 December 2011.
E. Others
i) 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 BAS 1 ‘Presentation of Financial
Statements’.
ii) Offsetting
Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the
asset and settle the liability simultaneously. Advance tax paid and provision for tax of the bank is presented on net basis
as a liability item if the liability is higher than asset and as an asset item if the asset is higher than liability.
iii) Earnings per share
The Bank is required to present basic and diluted earnings per share (EPS) information for its ordinary shares as per
BAS 33 ‘Earnings per Share’. 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 ordinary shareholders and the average number of ordinary
shares outstanding for the effects of all dilutive potential ordinary shares. However, diluted earnings per share is not
required to calculate as there is no dilution possibilities during the financial year 2014.

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iv) Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial and operating decisions. Parties are also considered to be
related if they are subject to common control or common significant influence
Related party transaction is a transfer of resources, services, or obligations between related parties, regardless of
whether a price is charged as per BAS 24 ‘Related Party Disclosures’, Bangladesh Bank & BSEC guidelines. Details of
the related party transactions have been disclosed in Annexure C and C1.
v) Reconciliation of books and account
Books of account in regard to inter-bank (in Bangladesh and outside Bangladesh) as well as inter-branches are
reconciled at regular intervals to keep the unreconciled balances within non-material level.
vi) Events after the reporting period
All the material events after the reporting period have been considered and appropriate adjustments/disclosures have
been made in the financial statements as per BAS 10 ‘Events after the Reporting Period’. Board’s recommendation for
dividend distribution is a common item presented in the Note-46.
vii) Operating segments
The Bank has nine reportable segments, as described below, which are the Bank’s strategic business units. The
strategic business units offer different products and services, and are managed separately based on the Bank’s
management and internal reporting structure. For each of the strategic business units, the Bank Management
Committee reviews internal management reports on at least a quarterly basis. The following summary describes the
operations in each of the Bank’s reportable segments:
Segment Name Description
Investment Banking Includes the Bank's trading, investment in equities and other capital market
activities.
Corporate Banking Includes loans, deposits and other transactions and balances with corporate
customers.
Consumer Banking Includes loans, deposits and other transactions and balances with retail customers.
Treasury Undertakes the Bank's funding and maintenance of SLR, Asset-liability management
through borrowings and placement, currency swap and investing in liquid assets
such as short-term placements and corporate and government debt securities.
SME Banking Includes loans, deposits and other transactions and balances with SME customers.
Offshore Banking Includes loans, deposits and other transactions and balances in freely convertible
currencies with eligible Corporate customers.
EBL Securities Limited Includes to buy, sell and deal in shares, stocks, debentures and other securities on
behalf of customers, doing margin lending etc.
EBL Investments Limited Established to do all kinds of merchant banking activities including issue
management, underwriting, portfolio management and other transactions.
EBL Finance (HK) Limited Formed to do trade finance and off-shore banking business in Hong Kong. The
company started its commercial operation in early 2013.
EBL Asset Management Limited Formed to carry out business on asset management, portfolio management, capital
market operation, equity investment, financial sevices i.e. corporate advisory, merger
& acquisition, corporate restructuring etc.
Information regarding the results of each reportable segment is included in Annexure - E. Performance is measured
based on segment profit before provision, as included in the internal management reports that are reviewed by the
Bank’s Management Committee. Segment profit is used to measure performance as management believes that such
information is the most relevant in evaluating the results of certain segments relative to other entities that operate within
these industries. Inter-segment pricing is determined on an arm’s length basis.
viii) Risk management and other related matters
Financial Institutions are in the business of taking risk and it is important how a bank decides on risk taking
transactions. EBL firmly believes that robust risk management is the core function that makes its business sustainable.
The risk management systems in place at the Bank are discussed below:
a) Credit Risk
Credit risk is the risk of loss that may occur from the failure of any counter party to make required payments in
accordance with agreed terms and conditions and/or deterioration of creditworthiness. Credit risk is managed through
a framework set by policies and procedures established by the Board. The responsibility is clearly segregated between
origination and approval of business transaction.
Board of Directors is the apex body for credit approval process of the Bank. However, they delegate authority to the
Managing Director & CEO or other officers of the credit risk management division. The Board also sets credit policies
to the management for setting procedures, which together has structured the credit risk management framework in the
bank. The Credit Policy Manual contains the core principles for identifying, measuring, approving, and managing credit

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 risk in the bank. The policy covers corporate, retail, small and medium enterprise exposures. Policies and procedures
together have structured and standardized credit risk management process both in obligor and portfolio level. There is
a comprehensive credit appraisal procedure that covers Industry/Business risk, management risk, financial risk, facility
structure risk, security risk, environmental risk, reputational risk, and account performance risk. The Head of Credit Risk
Management has clear responsibility for management of credit risk.
Respective relationship managers, at least once in a quarter, review credit exposures and portfolio performance.
Corporate and Medium Enterprise accounts are continuously monitored under a clearly set out ‘Early Alert’ policy.
Sign of deteriorations are well defined and broad guidelines are given in that policy for business origination units.
Early Alerts are raised for financial deterioration, management weakness, irregular repayments, breach of covenants,
eroding position in the industry, etc. If early alerts are raised, account plans are then re-evaluated; remedial actions are
agreed and monitored. Remedial action includes, but not limited to exposure reduction, security enhancement, exit of
relationship or immediate movement of our Special Asset Management Division.
The bank follows the criteria for loan classification and provisioning requirement as stipulated in the BRPD Circular
no. 14 dated 23 September 2012. Adequate provision has been kept which is stated in Note 13.4 to the financial
statements.
b) Liquidity Risk
Liquidity Risk is the potential for loss to a bank arising from either its inability to meet its obligations as they fall due
or to fund increases in assets without incurring unacceptable cost or losses. The Bank is deemed to have adequate
liquidity when it can obtain sufficient fund promptly and at a reasonable rate.
Responsibility of managing and controlling liquidity of the bank lies with Asset Liability Committee (ALCO) that meets at
least once in every month. Asset Liability Management (ALM) desk of the treasury function being primarily responsible
for management of liquidity risk closely monitors and controls liquidity requirements on a daily basis by appropriate
coordination of funding activities. A monthly projection of fund flows is reviewed in ALCO meeting regularly. On monthly
basis, ALCO monitors liquidity management by examining key ratios, maximum cumulative outflow, upcoming funding
requirement from all business units, asset-liability mismatch etc.
ALCO also monitors concentration of deposits on large institutional depositors which is volatile in nature. In addition
to these ratios, Bank prepares structural liquidity profile, maturity profile of term deposit, cash flow modeling, and
contingency funding plan on monthly basis, which are analyzed in ALCO meeting to ensure liquidity at the level
acceptable to the bank and regulators.
c) Market Risk
Risk Management Unit (RMU) is responsible for overall monitoring, control, and reporting of market risk while Treasury
Mid Office is an integral part of market risk management which independently evaluates and monitors treasury
department’s transaction from risk perspective. Overall risk parameters and exposures of the bank are monitored by
RMU and periodically reported to Bank Risk Management Committee (BRMC). Market risk can be subdivided into three
categories depending on risk factors: Interest Rate Risk, Foreign Exchange Risk, and Equity Price Risk.
d) Interest Rate Risk
Interest rate risk is the risk to earnings or capital of the bank arising from movement of interest rates. The movement of
interest rates affects bank’s reported earnings and capital by changing:
- Net interest income
- The market value of trading accounts (and other instruments accounted for by market value), and
- Other interest sensitive income and expenses.
To manage interest rate risk, ALCO regularly monitors various ratios and parameters. Bank deploys several analysis
techniques (e.g. Rate Sensitive Gap Analysis, Duration Gap Analysis) to measure interest rate risk, its impact on Net
Interest Income and takes insight about course of actions.
e) Foreign Exchange Risk
Foreign exchange risk is the risk that a Bank’s financial performance or position will be affected by fluctuations in the
exchange rates between currencies and implied volatility on foreign exchange options. Bank makes import payment
and outward remittance as its outflow, whereas it gets foreign currency inflow as export receipts and inward remittance.
Exchange rate risk arises, if, on a particular day, these inflow-outflows don’t match and bank runs its position long/short
from these customer driven activities. Bank also faces foreign exchange risk if it sources its funding in one currency by
converting fund from another currency. Currently, the Bank is facing such transaction exposure in foreign currency for its
off-shore banking unit. But these transactions exposure is always hedged.

The bank computes VaR (Value at Risk) on its foreign exchange position arising from customer driven foreign exchange
transactions at 95% confidence level on daily basis. The bank maintains various Nostro accounts in order to conduct
operations in different currencies. The management of the bank set limits for conducting Nostro account transactions.
All Nostro accounts are reconciled on monthly basis and outstanding entries are reviewed by the management for
its settlement/ adjustment. The position maintained by the bank at the end of the day is within the stipulated limit
prescribed by the Bangladesh Bank.

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f) Equity Price Risk

Equity price risk is the risk of losses caused by changes in equity prices. These losses could arise because of changes
in the value of listed shares held directly by the bank; changes in the value of listed shares held by a bank subsidiary;
changes in the value of listed shares used as collateral for loans whether the loan was made for the purpose of buying
the shares; and changes in the value of unlisted shares.
Mark to Market is the tool bank applies for making full provision against losses arisen from changes in market price of
securities. As of 31 December 2014, bank sets aside BDT 864.26 million charging its profit and loss account over the
periods to cover the differential amount between purchase price and market price of quoted securities.
g) Operational Risk
Operational Risk is defined as the risk of unexpected losses due to physical catastrophe, technical failure, and human
error in the operation of a bank; including fraud, failure of management, internal process errors and unforeseeable
external events. Operational Risk Unit under Internal Control & Compliance Division (ICCD) is primarily responsible
for risk identification, measurement, monitoring, control, and reporting of operational risk. Internal Control (audit) Unit
of ICCD also conducts risk-based audit at departmental and branch level throughout the year. Besides, there is a
committee called ‘Bank Operational Risk Committee’ (BORC) reporting to MD & CEO which plays a supervisory role.
Operational risks are analyzed through review of Departmental Control Function Check List (DCFCL). This is a self-
assessment process for detecting high risk areas and finding mitigants of those risks. These DCFCLs are then
discussed in monthly meeting of Bank Operational Risk Committee (BORC).
h) Prevention of Money Laundering and Terrorist Financing
For prevention of Money Laundering and Terrorist Financing, the bank has a comprehensive policy which is approved
by the Board of EBL. The CEO’s formal Annual Policy statement on Anti Money Laundering (AML) and combating the
financing of terrorism (CFT) is issued to ensure greater due diligence and compliance at all levels of the bank. The bank
has also formed a Central Compliance Unit (CCU) under the leadership of Chief Anti Money Laundering Compliance
officer (CAMLCO) at Head office, Branch Anti Money Laundering Compliance officer (BAMLCO) at branches, to review
and verify the transactions of accounts to make Suspicious Transactions Reports (STR), and ensure AML & CFT
compliance culture throughout the bank. Training is being conducted continuously for all the officers of the bank to
create awareness and develop the skill for ensuring KYC (Know your Clients) compliance and identifying suspicious
activities/transactions.
Ensure Due Diligence of Foreign Account Tax Compliance Act (FATCA): As per Bangladesh Bank (BB) issued a Circular
Letter (BRPD Circular Letter No. 01 dated 10/01/2014) on the issue of Foreign Account Tax Compliance Act., the bank
completed registration under IRS as a Participatory Financial Institution on May 04, 2014 and consequently IRS has
assigned a GIIN (Global Intermediary Identification Number) to EBL.
i) Information and Communication Technology Risk
EBL has a comprehensive IT Security Policy and procedures which are formally documented and endorsed by
competent authority. IT Division (hereinafter IT) has established standard Physical & Environmental Security Measures
(e.g. Locked Door, Locked rack, CCTV, AC, Fire Extinguisher, etc.) to all sensitive areas (e.g. Data Centre, Disaster
Recovery Site, Power Rooms, Server Rooms, etc.). IT has standard Logical Security Measures (e.g. Access card,
Password Protected Server, Access Log, Measuring Device Logs, Periodic Testing Results, etc.) to all core devices
(server, PC, etc.), connecting devices (switch, router, etc.), security devices (firewall, IDS, etc.), all applications (core
banking system, antivirus, firewall, VPN, utilities, etc.), databases, networks and others. IT has standard design and
practice in network connectivity, access, build-up, configuration, monitoring, maintenance and security. IT has Business
Continuity Management (BCM) to support and handle any human made or natural incident/disaster; moreover regular
backup schedule and retention avoids the risk of data loss based on the criticality of the system.
j) Internal Audit
The Bank has established an independent internal audit function with the head of internal control & compliance (ICC)
reporting directly to the chairman of audit committee. The internal audit team performs risk based audit on various
business and operational areas of the Bank on continuous basis. The audit committee and the Board regularly reviews
the internal audit reports as well as monitor progress of previous findings.
k) Prevention of fraud
Like any other banks and financial institutions, EBL is also exposed to the inherent risk of fraud and hence implemented
a number of anti fraud controls and procedures specifically designed to prevent and detect any material instances of
fraud or irregularities. As per the requirement of Bangladesh Bank regular reportings are made on self assessment of
various anti fraud controls as well as any incident of fraud and forgeries that have been identified by the Bank. Regular
staff training and awarness programmes are taken to ensure that all officers and staff of the Bank are fully aware of
various fraud risks in thier work area and prepared to deal with it.
2A 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 Information and
Services Limited (CRISL) based on the financial statements as at and for the year ended 31 December 2013. The
following ratings have been awarded:

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Particulars Periods Date of Rating Long term Short term
Entity Rating January to December 2013 18-Jun-14 AA ST-2
Entity Rating January to December 2012 30-May-13 AA ST-2
Entity Rating January to December 2011 19-Jun-12 AA ST-2
Entity Rating January to December 2010 9-Jun-11 AA ST-2
Entity Rating January to December 2009 1-Jun-10 AA ST-2
Entity Rating January to December 2008 24-May-09 AA- ST-2
2B Compliance with Bangladesh Accounting Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs)
The bank has complied the following BASs & BFRSs as adopted by ICAB during the preparation of financial statements as at
and for the year ended 31 December 2014.
Name of BASs / BFRSs BASs / BFRSs No. Status
Presentation of Financial Statements BAS 1 * Applied
Inventories BAS 2 N/A
Statement of Cash Flows BAS 7 Applied
Accounting Policies, Changes in Accounting Estimates and Errors BAS 8 Applied
Events after the Reporting Period BAS 10 Applied
Construction Contracts BAS 11 N/A
Income Taxes BAS 12 Applied
Property, Plant and Equipment BAS 16 Applied
Leases BAS 17 Applied
Revenue BAS 18 Applied
Employee Benefits BAS 19 Applied
Accounting for Government Grants and Disclosure of Government Assistance BAS 20 N/A
The Effects of Changes in Foreign Exchange Rates BAS 21 Applied
Borrowing Costs BAS 23 N/A
Related Party Disclosures BAS 24 Applied
Accounting and Reporting by Retirement Benefit Plans BAS 26 N/A
Consolidated and Separate Financial Statements BAS 27 Applied
Investments in Associates BAS 28 N/A
Interests in Joint Ventures BAS 31 N/A
Financial Instruments: Presentation BAS 32 * Applied
Earnings per share BAS 33 Applied
Interim Financial Reporting BAS 34 Applied
Impairment of Assets BAS 36 Applied
Provisions, Contingent Liabilities and Contingent Assets BAS 37 *Applied
Intangible Assets BAS 38 Applied
Financial Instruments: Recognition and Measurement BAS 39 * Applied
Investment Property BAS 40 N/A
Agriculture BAS 41 N/A
First-time Adoption of Bangladesh Financial Reporting Standards BFRS 1 N/A
Share-based Payment BFRS 2 N/A
Business Combinations BFRS 3 Applied
Insurance Contracts BFRS 4 N/A
Non-current Assets Held for Sale and Discontinued Operations BFRS 5 * Applied
Exploration for and Evaluation of Mineral Resources BFRS 6 N/A
Financial Instruments: Disclosures BFRS 7 * Applied
Operating Segments BFRS 8 Applied
Consolidated Financial Statements BFRS 10 Applied
Joint Arrangements BFRS 11 N/A
Disclosure of Interests in Other Entities BFRS 12 Applied
Fair Value Measurement BFRS 13 *Applied
* Subject to departure described in note 2.1
N/A = Not Applicable
2B.1 New Accounting Standards not yet Adopted
Although International Accounting Standard Board (IASB) has issued a new standard (IFRS 9) along with related amendments
to existing standards (IAS/ BAS 32, 39) but none of these have been adopted and/ or endorsed locally as BAS/ BFRS and as
such any possible impact could not be determined.
2C Audit Committee disclosures
Please refer to “Report of the Audit Committee” for details disclosures on Audit Committee presented in other information in the annual report.

2.10 Approval of financial statements

These financial statements were reviewed by the Audit Committee of the Board of EBL in its 69 meeting held on 25 February
2015 and was subsequently approved by the Board in its 550 meeting held on the same date.

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 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
3 Cash
Cash in hand (including foreign currencies) 3.1 1,707,006,385 1,752,685,015 1,706,937,953 1,752,660,726
Balance with Bangladesh Bank and its
agent Bank(s) (including foreign currencies) 3.2 8,594,833,742 6,428,136,805 8,594,833,742 6,428,136,805
10,301,840,127 8,180,821,820 10,301,771,695 8,180,797,531

3.1 Cash in hand (including foreign currencies)

Local currency 3.1.1 1,653,604,957 1,701,142,810 1,653,536,525 1,701,118,521

Foreign currencies 53,401,428 51,542,204 53,401,428 51,542,204
1,707,006,385 1,752,685,015 1,706,937,953 1,752,660,726
3.1.1 Local currency
With Bank 1,653,536,525 1,701,118,521 1,653,536,525 1,701,118,521
With Subsidiaries 68,432 24,289 - -
1,653,604,957 1,701,142,810 1,653,536,525 1,701,118,521

3.2 Balance with Bangladesh Bank and its agent Bank(s)

(including foreign currencies)
Bangladesh Bank
Local currency 7,690,737,165 5,974,501,836 7,690,737,165 5,974,501,836
Foreign currencies 380,840,643 98,759,262 380,840,643 98,759,262
8,071,577,807 6,073,261,099 8,071,577,807 6,073,261,099
Sonali Bank (as an agent of Bangladesh Bank)-local currency 523,255,935 354,875,706 523,255,935 354,875,706
8,594,833,742 6,428,136,805 8,594,833,742 6,428,136,805

3.a Cash Reserve Ratio (CRR):

As per section 33 of Bank Company Act -1991 (Amended upto 2013) & MPD circular No- 01 dated 23 June 2014
of Bangladesh bank (effective from 24 June 2014), all scheduled banks have to maintain a CRR of minimum 6.0%
on daily basis and 6.5% on bi-weekly basis on weekly average total demand and time liabilities (ATDTL) of the base
month which is two months back of reporting month (i.e. CRR of December 2014 is based on weekly average balance
of October 2014).

Average total demand and time liabilities (ATDTL) of October 2014

106,855,055,400 100,201,921,600
(excluding inter-bank deposit)
Required reserve (6.0% on daily basis & 6.5% on bi weekly basis of ATDTL) (5.5%
6,945,578,601 6,012,115,296
on daily basis & 6.0% on bi weekly basis in 2013).
Actual reserve held with Bangladesh Bank (In local currency)* 7,770,374,105 6,110,187,019
Excess cash reserve 824,795,504 98,071,723
*As per Bangladesh Bank statement
3.b Statutory Liquidity Ratio (SLR):
As per section 33 of Bank Company Act -1991 (amended upto 2013) & MPD circular No - 02 dated 10 December 2013
of Bangladesh bank (effective from 01 February 2014) all scheduled banks have to maintain SLR of minimum 13%
based on weekly average total demand and time liabilities (ATDTL) of the base month which is two months back of the
reporting month (i.e. SLR of December 2014 is based on weekly average balance of October 2014). EBL maintained
the minimum SLR 13% (including excess cash reserve) as per said circular as on the reporting date.
Average total demand and time liabilities (ATDTL) of
October 2014 (excluding inter-bank deposit) 106,855,055,400 100,201,921,600
Required reserve (13% of ATDTL) (19% including cash reserve in 2013) 13,891,157,202 19,038,365,104
Actual reserve held (in 2014 including excess cash reserve and in 2013 including
23,756,183,274 29,943,629,781
total cash reserve) (Note 3.c)
Surplus / (shortage) 9,865,026,072 10,905,264,677

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 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
3.c Actual reserve held
Excess Cash Reserve (note 3.c.1) 824,795,504 -
Cash held 1,706,937,953 1,796,716,726
Balance with Bangladesh Bank (local currency) * (note 3.c.1) - 6,110,187,019
Balance with Bangladesh Bank (foreign currency)* - -
TT in transit - -
Balance with Sonali Bank 523,255,935 354,875,706
Unencumbered approved securities (HFT) 11,174,581,504 11,935,560,500
Unencumbered approved securities (HTM) 9,511,612,378 9,721,289,830
Unencumbered approved securities (other eligible) 15,000,000 25,000,000
23,756,183,274 29,943,629,781
3.c.1 Balance with Bangladesh Bank (local currency) * 7,770,374,105
Less: Required Cash Reserve (6,945,578,601)
Excess Cash Reserve 824,795,504
*As per Bangladesh Bank Statement.

4 Balances with other banks and financial institutions

Balance in Bangladesh 4.1 5,811,308,229 8,432,060,955 5,349,573,125 8,012,554,438

Balance outside Bangladesh 4.2 382,916,367 2,121,282,542 1,034,533,216 2,390,509,831
6,194,224,596 10,553,343,497 6,384,106,341 10,403,064,269
4.1 Balance in Bangladesh
In Current Deposit Accounts with
Banks 444,710,368 289,005,206 75,671,043 82,668,584
Non Banking Financial Institutions - - - -
444,710,368 289,005,206 75,671,043 82,668,584
Less: Inter company elimination (6,453,091) (34,067,605) - -
438,257,277 254,937,601 75,671,043 82,668,584
In Special Notice Deposit Accounts with
Banks 96,723,433 160,685,304 33,902,082 149,885,897
Non Banking Financial Institutions - - - -
96,723,433 160,685,304 33,902,082 149,885,897
Less: Inter company elimination (62,821,351) (10,799,407) - -
33,902,082 149,885,897 33,902,082 149,885,897

In Fixed Deposit Accounts with

Banks 10,661,825,068 5,304,048,730 10,618,339,948 5,036,811,230
Non Banking Financial Institutions 3,115,663,750 7,680,000,000 3,060,000,000 7,680,000,000
13,777,488,818 12,984,048,730 13,678,339,948 12,716,811,230
Less: Inter unit/company elimination (8,438,339,948) (4,956,811,273) (8,438,339,948) (4,936,811,273)
5,339,148,870 8,027,237,457 5,240,000,000 7,779,999,957
5,811,308,229 8,432,060,955 5,349,573,125 8,012,554,438

4.1.1 Balances of subsidiaries with Banks & NBFI

With Eastern Bank Limited (eliminated as intra group balance)
EBL Securities Limited 939,399 1,929,694
EBL Investments Limited 11,567,717 28,869,714
EBL Finance (HK) Limited 5,514,243 34,067,605
EBL Asset Management Limited 51,253,083 -
69,274,442 64,867,013
Balance of subsidiaries with other Banks & NBFI
Banks 417,639,070 247,269,017
Non Banking Financial Institutions 55,663,750 172,065,000
473,302,820 419,334,017
542,577,262 484,201,030

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 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
4.2 Balance outside Bangladesh
In Deposit account (non-interest bearing) with
AB Bank Limited, Mumbai 3,663,085 17,528,763 3,663,085 17,528,763
Al-Rajhi Bank - KSA 311,565 310,967 311,565 310,967
Bank of Bhutan, Bhutan 589,068 751,886 589,068 751,886
Citibank N A, New york 72,894,201 - 72,894,201 -
Citibank NA, Mumbai - 174,247 - 174,247
Commerz Bank AG, Frankfurt, Germany 21,561,363 48,131 21,561,363 48,131
Habib American Bank, New York - 18,937,045 - 18,937,045
ICICI Bank Limited, Mumbai - 34,632,888 - 34,632,888
JP Morgan Chase Bank NA, London 21,360,811 15,338,543 21,360,811 15,338,543
JP Morgan Chase Bank NA, Sydney 4,407,325 7,539,839 4,407,325 7,539,839
JP Morgan Chase Bank, New York 31,345,359 41,899,254 31,345,359 41,899,254
JP Morgan Chase Bank, Germany 1,994,035 18,102,761 1,994,035 18,102,761
Mashreqbank, Newyork 4,202,332 30,350,998 4,202,332 30,350,998
National Commercial Bank, Jeddah, KSA 1,652,151 - 1,652,151 -
Nepal Bngladesh Bank Limited, Kathmandu 5,743,785 1,768,950 5,743,785 1,768,950
NIB Bank Limited-Karachi 21,965,587 32,992,933 21,965,587 32,992,933
Nordea Bank, Norway 1,234,525 825,270 1,234,525 825,270
Standard Chartered Bank , Colombo 2,622,572 5,028,556 2,622,572 5,028,556
Standard Chartered Bank, Frankfurt, Germany 648,379 5,721,847 648,379 5,721,847
Standard Chartered Bank, Kolkata 7,951,569 16,980,944 7,951,569 16,980,944
Standard Chartered Bank, New york 59,282,195 - 59,282,195 -
Standard Chartered Bank, Singapore 4,030,356 1,018,142 4,030,356 1,018,142
The Bank of Nova Scotia, Toronto 3,604,152 464,716 3,604,152 464,716
The Bank of Tokyo Mitshubishi, London 3,077,197 14,814,901 3,077,197 14,814,901
The Bank of Tokyo Mitshubishi, Kolkata 525,145 523,802 525,145 523,802
The Bank Toykyo Mitshubishi, Tokyo 5,196,166 1,711,517,868 5,196,166 1,711,517,868
Wachovia Bank NA 937,983 25,761,727 937,983 25,761,727
Zuercher Kantonal Bank, Zurich, Switzerland 932,573 2,282,041 932,573 2,282,041
Standard Chartered Bank, New york - OBU 3,903,300 49,714,222 3,903,300 49,714,222
Deutsche Bank AG, Frankfurt, Germany-OBU 582,196 20,591,092 582,196 20,591,092
HSBC, Hongkong (EBL Finance HK Limited) 96,697,391 45,660,211 - -
382,916,367 2,121,282,542 286,218,976 2,075,622,331
Placement by OBU (interest bearing)
EBL Finance (HK) Limited 748,314,240 314,887,500 748,314,240 314,887,500
Less: Inter company elimination (748,314,240) (314,887,500) - -
382,916,367 2,121,282,542 1,034,533,216 2,390,509,831

(For details of Foreign currency amounts and rates thereof please see "Annexure-B")

4.a Balance with other banks and financial institutions

(according to remaining maturity grouping)
Receivable
On demand 115,583,807 304,106,518 75,671,043 302,668,541
In not more than one month 3,511,108,768 2,901,226,768 3,188,435,298 2,730,395,728
In more than one months but not more than three months 1,718,383,151 5,778,010,211 2,370,000,000 5,800,000,000
In more than three months but not more than one year 849,148,870 1,570,000,000 750,000,000 1,570,000,000
In more than one year but not more than five years - - - -
In more than five years - - - -
6,194,224,596 10,553,343,497 6,384,106,341 10,403,064,269

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 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
5 Money at call and short notice
With Bank Companies - - - -

With Non Banking Financial Institutions

Bay Leasing & Investment Limited 40,000,000 - 40,000,000 -
Delta Brac Housing Finance Corporation Ltd 50,000,000 - 50,000,000 -
Investment Corporation of Bangladesh 750,000,000 - 750,000,000 -
Lanka Bangla Finance Limited 100,000,000 - 100,000,000 -
Midas Financing Ltd 50,000,000 - 50,000,000 -
Union Capital Limited 70,000,000 - 70,000,000 -
1,060,000,000 - 1,060,000,000 -
1,060,000,000 - 1,060,000,000 -

6 Investments
Government 6.1 21,224,314,333 21,659,579,849 21,224,314,333 21,659,579,849
Others 6.2 3,695,667,824 4,358,216,416 3,430,622,784 4,244,004,844
24,919,982,157 26,017,796,265 24,654,937,117 25,903,584,693

6.1 Government (Investment in govt. securities)

Treasury Bills 6.1.1 659,646,207 3,149,805,825 659,646,207 3,149,805,825
Treasury Bonds 6.1.2 20,560,845,226 16,511,699,915 20,560,845,226 16,511,699,915
Bangladesh Bank Bills - 1,995,344,608 - 1,995,344,608
Prize Bonds 3,822,900 2,729,500 3,822,900 2,729,500
21,224,314,333 21,659,579,849 21,224,314,333 21,659,579,849

6.1.1 Treasury Bills

Unencumbered
91- days treasury bills - 125,700,979 - 125,700,979
182- days treasury bills 89,769,904 309,306,247 89,769,904 309,306,247
364- days treasury bills 184,251,234 2,714,798,599 184,251,234 2,714,798,599
274,021,138 3,149,805,825 274,021,138 3,149,805,825
Encumbered (Under Assured Liquidity
Support/ALS)
91- days treasury bills 94,526,732 - 94,526,732 -
182- days treasury bills 181,681,713 - 181,681,713 -
364- days treasury bills 109,416,624 - 109,416,624 -
385,625,069 - 385,625,069 -
659,646,207 3,149,805,825 659,646,207 3,149,805,825

6.1.2 Treasury Bonds

Unencumbered
2- year Treasury bonds 158,293,153 158,169,315 158,293,153 158,169,315
5- year Treasury bonds 7,649,943,095 8,531,852,595 7,649,943,095 8,531,852,595
10- year Treasury bonds 10,291,848,210 7,356,337,851 10,291,848,210 7,356,337,851
15- year Treasury bonds 1,384,699,235 269,646,780 1,384,699,235 269,646,780
20- year Treasury bonds 927,389,051 195,693,376 927,389,051 195,693,376
20,412,172,744 16,511,699,915 20,412,172,744 16,511,699,915

Encumbered (Under Assured Liquidity Support/ALS)

2- year Treasury bonds 45,516,426 - 45,516,426 -
5- year Treasury bonds 37,144,622 - 37,144,622 -

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Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
10- year Treasury bonds - - - -
15- year Treasury bonds 36,209,688 - 36,209,688 -
20- year Treasury bonds 29,801,747 - 29,801,747 -
148,672,482 - 148,672,482 -
20,560,845,226 16,511,699,915 20,560,845,226 16,511,699,915
Disclosure on REPO and Reverse Repo transactions are in “Annexure- D”.

6.2 Others (Investment in other securities)

Debentures 6.2.1 15,000,000 25,000,000 15,000,000 25,000,000
Corporate bonds 6.2.2 80,000,000 220,000,000 80,000,000 220,000,000
Ordinary Shares (Quoted and Unquoted) 6.2.3 3,399,227,824 3,603,216,416 3,135,622,784 3,489,004,844
Preference Shares 6.2.4 1,440,000 510,000,000 - 510,000,000
Commercial Paper 6.2.5 200,000,000 - 200,000,000 -
3,695,667,824 4,358,216,416 3,430,622,784 4,244,004,844

6.2.1 Debentures
House Building Finance Corporation (HBFC) 15,000,000 25,000,000 15,000,000 25,000,000
15,000,000 25,000,000 15,000,000 25,000,000
6.2.2 Corporate bonds
Orascom Bond - 120,000,000 - 120,000,000
Trust Bank Subordinated Bond 80,000,000 100,000,000 80,000,000 100,000,000
80,000,000 220,000,000 80,000,000 220,000,000

6.2.3 Ordinary Shares (Quoted and Unquoted)

Quoted shares & Mutual Funds (MF) (sector wise)
Banks 778,934,156 753,228,084 727,710,068 750,638,150
NBFIs 487,070,361 583,388,877 431,250,295 558,756,422
Insurances 50,604,229 43,286,006 42,535,681 38,753,046
Fuel & Power 262,439,903 336,754,338 233,947,689 299,129,058
Chemicals & Pharmaceuticals 303,093,974 63,624,320 260,000,000 52,595,450
Cement & Ceramics 41,362,260 82,730,209 13,233,453 70,323,479
Engineering 20,899,606 174,870,280 19,450,469 171,878,099
Others 123,314,648 232,643,549 104,570,189 214,942,201
2,067,719,137 2,270,525,663 1,832,697,844 2,157,015,905
Mutual Funds
AB Bank First Mutual Fund 47,530,000 47,530,000 47,530,000 47,530,000
EBL First Mutual Fund 103,185,000 103,881,814 103,185,000 103,185,000
EBL NRB Mutual Fund 250,973,470 250,973,470 250,973,470 250,973,470
Exim Bank First Mutual Fund 49,435,000 49,435,000 49,435,000 49,435,000
First Bangladesh Fixed Income Fund 750,000,000 750,000,000 750,000,000 750,000,000
Green Delta Mutual Fund 10,000,000 10,000,000 10,000,000 10,000,000
IFIL Islamic Mutual Fund-1 1,784,356 - - -
LR Global BD First Mutual Fund 20,000,000 20,000,000 20,000,000 20,000,000
NCCBL Mutual Fund-1 1,097,071 - - -
NLI First Mutual Fund 1,357,439 - - -
PHP First Mutual Fund 30,005,000 30,005,000 30,005,000 30,005,000
Popular Life First Mutual Fund 10,000,000 10,000,000 10,000,000 10,000,000

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Note 2014 2013 2014 2013
Taka Taka Taka Taka
Reliance One Mutual Fund 1,772,772 - - -
SEBL First Mutual Fund 2,565,109 - - -
1,279,705,217 1,271,825,284 1,271,128,470 1,271,128,470
Total Quoted shares & MFs 3,347,424,354 3,542,350,946 3,103,826,314 3,428,144,374
Unquoted shares & MFs
Shares 51,803,470 60,865,470 31,796,470 60,860,470
Mutual Fund - - - -
51,803,470 60,865,470.0 31,796,470 60,860,470
Total 3,399,227,824 3,603,216,416 3,135,622,784 3,489,004,844

6.2.3.1 Market Value of Shares (as on 31 December)

Quoted shares & Mutual Funds (MF)
Banks 464,719,484 430,499,747 414,426,584 428,136,747
NBFIs 299,641,879 360,699,853 245,355,059 340,397,353
Insurances 28,160,997 30,085,734 22,357,497 26,055,954
Fuel & Power 182,073,932 271,413,249 157,364,239 240,642,449
Chemicals & Pharmaceuticals 349,123,929 59,322,998 306,520,000 48,622,614
Cement & Ceramics 31,806,443 78,135,934 8,581,443 66,516,194
Engineering 17,062,200 101,003,038 15,696,000 98,201,038
Others 108,663,589 150,877,465 92,237,789 134,178,896
1,481,252,453 1,482,038,019 1,262,538,611 1,382,751,246
Mutual Funds 987,928,916 1,190,262,033 980,634,316 1,189,632,033
Total 2,469,181,369 2,672,300,052 2,243,172,927 2,572,383,279

* Lock in status of Shares & Mutual Funds Trading Started Lock in period Lock in expiry
Active Fine Chemicals Limited (Placement share) 1/12/2014 3 Years 30/11/2017
EBL First Mutual Fund (Sponsor share) 19/8/2009 10 Years 18/8/2019
EBL NRB Mutual Fund (Sponsor share) 23/5/2011 10 Years 22/5/2021
First Bangladesh Fixed Income Fund (Sponsor share) 19/3/2012 10 Years 18/3/2022

10% of EBL First Mutual Fund, EBL NRB Mutual Fund & First Bangladesh Fixed Income Fund (FBFIF) shall be
locked in for 10 years from the date of commencement of trading.

6.2.4 Preference Shares

United Power Generation and Distribution Co. Ltd. 1,440,000 510,000,000 - 510,000,000
1,440,000 510,000,000 - 510,000,000

6.2.4 Commercial Paper

PRAN Agro Limited 200,000,000 - 200,000,000 -

200,000,000 - 200,000,000 -

6.a Remaining maturity grouping of investments

On demand 3,822,900 58,688,527 3,822,900 58,688,527
In not more than one month 77,037,451 2,327,106,962 77,037,451 2,212,900,390
In more than one month but not more than three months 135,246,509 1,425,951,855 135,246,509 1,425,951,855
In more than three months but not more than one year 4,236,323,224 6,988,807,025 3,971,278,184 6,988,802,025
In more than one year but not more than five years 13,121,246,696 10,862,014,802 13,121,246,696 10,862,014,802
In more than five years 7,346,305,377 4,355,227,094 7,346,305,377 4,355,227,094
24,919,982,157 26,017,796,265 24,654,937,117 25,903,584,693

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 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
7 Loans and advances
Loans, cash credits, overdrafts, etc. 7.1 112,393,132,778 94,617,143,691 111,438,313,688 94,491,939,790
Bills purchased and discounted 7.2 7,619,210,264 8,713,673,891 6,853,032,495 8,418,279,159
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949

7.1 Loans, cash credits, overdrafts etc.

Inside Bangladesh
Loans - general 97,121,407,485 77,758,246,487 95,607,383,585 77,758,246,487
Cash credit 239,437,092 177,960,444 239,437,092 177,960,444
Overdraft 15,591,493,011 17,521,264,355 15,591,493,011 16,555,732,858
112,952,337,588 95,457,471,287 111,438,313,688 94,491,939,790
Less: Inter Company Elimination (559,204,810) (840,327,596) - -
112,393,132,778 94,617,143,691 111,438,313,688 94,491,939,790
7.2 Bills purchased and discounted
Inside Bangladesh
Local bills /documents 6,760,336,733 8,298,018,874 6,760,336,733 8,298,018,874
Foreign bills /documents 858,873,530 415,655,017 92,695,762 120,260,285
7,619,210,264 8,713,673,891 6,853,032,495 8,418,279,159
7.2.1 Bills purchased and discounted
(on the basis of the residual maturity grouping)
On Demand 178,947,330 222,423,643 178,947,330 222,423,643
Within one month 1,226,817,075 1,743,627,181 1,226,817,075 1,743,627,181
In more than one month but less than three months 3,089,088,183 4,199,418,810 2,322,910,414 3,904,024,078
In more than three months but less than six months 2,668,477,602 2,548,204,256 2,668,477,602 2,548,204,256
Above six months 455,880,073 - 455,880,073 -
7,619,210,264 8,713,673,891 6,853,032,495 8,418,279,159
7.a Residual maturity grouping of loans and advances including
bills purchased & discounted
Receivable
On demand 5,177,277,240 5,680,536,917 5,177,277,240 5,680,536,917
In not more than one month 9,740,629,486 9,227,143,053 9,740,629,486 9,227,143,053
In more than one month but not more than three months 24,393,921,552 23,489,055,594 23,439,102,462 23,193,660,862
In more than three months but not more than one year 46,038,055,893 38,107,724,778 45,271,878,124 37,982,520,877
In more than one year but not more than five years 30,526,636,388 23,877,560,537 30,526,636,388 23,877,560,537
In more than five years 4,135,822,483 2,948,796,701 4,135,822,483 2,948,796,701
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949
7.b Loans and advances on the basis of significant concentration
7.b.1 Loans and advances to Directors, executives and others
Advance to Directors and their allied concerns 15,511 245,122 15,511 245,122
Advances to Managing Director & CEO 17,787,004 18,600,727 17,787,004 18,600,727
Advances to Other executives and staffs 1,531,951,324 1,219,692,890 1,531,951,324 1,219,692,890
Advances to Customers (Group wise) 101,546,201,320 84,707,930,656 99,825,204,461 84,582,726,754
Industrial Advances 16,916,387,884 17,384,348,188 16,916,387,884 17,088,953,456
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949

7.b.2 Large Loan details (Loans and Advances allowed to each customer exceeding 10% of Bank's total capital)

* Total Loans and Advances (in BDT crore) 5,728 4,657

Number of Customers 21 19
Classified amount thereon Nil Nil

*This amount represents total loans and advances (comprising funded and non funded facilities) to each customer
exceeding Tk.181.20 crore which is equivalent to 10% of total capital of the bank (i.e. Tk. 1,812.07 crore) as at 31
December 2014.
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7.b.3 Industry-wise concentration of loans and advances including bills purchased and discounted
Commercial and Trading 19,695,530,379 19,064,267,730 18,929,352,610 18,768,872,998
Construction 1,234,945,175 1,606,803,682 1,234,945,175 1,606,803,682
Sugar & Edible Oil Refinery 4,664,238,680 2,997,693,286 4,664,238,680 2,997,693,286
Crops, fisheries & livestocks 3,179,597,468 1,593,561,694 3,179,597,468 1,593,561,694
Electronics Goods 2,119,647,803 2,951,149,902 2,119,647,803 2,951,149,902
Individuals 14,945,858,900 12,470,016,714 13,991,039,809 12,344,812,812
Pharmaceuticals Industries 3,709,258,381 4,034,228,226 3,709,258,381 4,034,228,226
Readymade Garments Industry 13,263,030,040 10,700,662,042 13,263,030,040 10,700,662,042
Ship Breaking Industry 2,994,671,731 3,196,887,627 2,994,671,731 3,196,887,627
Metal & Steel Products 7,155,730,098 7,867,558,592 7,155,730,098 7,867,558,592
Transport & E-communication 7,869,586,932 6,015,253,247 7,869,586,932 6,015,253,247
Textile Mills 11,057,552,914 9,771,752,848 11,057,552,914 9,771,752,848
Power & Fuel 5,199,776,820 2,539,076,319 5,199,776,820 2,539,076,319
Rubber & Plastic Industries 3,005,132,541 2,448,017,141 3,005,132,541 2,448,017,141
Agri & Micro credit through NGO 4,375,674,725 2,734,817,711 4,375,674,725 2,734,817,711
Others 15,542,110,455 13,339,070,822 15,542,110,455 13,339,070,822
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949

7.b.4 Sector - wise concentration of loans and advances including bills purchased and discounted
Government sector - - - -
Public sector 930,772,854 350,854,464 930,772,854 350,854,464
Private sector 119,081,570,188 102,979,963,118 117,360,573,330 102,559,364,485
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949

7.b.5 Geographical location-wise concentration of loans and advances including bills purchased and discounted
Inside Bangladesh
Dhaka Division 84,709,401,728 70,246,443,909 83,754,582,638 70,121,240,004
Chittagong Division 31,369,238,717 29,904,290,132 31,369,238,717 29,904,290,132
Sylhet Division 605,952,681 498,310,254 605,952,681 498,310,254
Rajshahi Division 1,205,833,378 1,091,516,498 1,205,833,378 1,091,516,498
Khulna Division 1,175,909,743 1,160,011,346 1,175,909,743 1,160,011,346
Rangpur Division 169,728,828 134,850,715 169,728,828 134,850,715
Barisal Division 10,100,199 - 10,100,199 -
119,246,165,273 103,035,422,854 118,291,346,183 102,910,218,949
Outside Bangladesh 766,177,769 295,394,732 - -
120,012,343,042 103,330,817,581 118,291,346,183 102,910,218,949

7.b.6 Geographical location and business segment-wise concentration of loans and advances
(including bills purchased and discounted) Consumer
Corporate SME Total
(including staff)
Division
Dhaka Division 61,468,096,312 11,608,877,284 10,677,609,041 83,754,582,638
Chittagong Division 24,313,081,981 4,666,187,303 2,389,969,433 31,369,238,717
Sylhet Division - 318,934,173 287,018,507 605,952,681
Rajshahi Division 240,027,585 722,916,210 242,889,583 1,205,833,378
Khulna Division - 832,437,224 343,472,519 1,175,909,743
Rangpur Division - 125,826,827 43,902,001 169,728,828
Barisal Division - 4,269,346 5,830,853 10,100,199
86,021,205,878 18,279,448,367 13,990,691,938 118,291,346,183
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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
7.b.7 Business segment - wise concentration of loans and advances including bills purchased and discounted
Corporate 75,013,087,178 64,709,751,720 74,498,984,103 64,289,153,083
Offshore Banking Unit 11,522,221,774 9,630,175,910 11,522,221,774 9,630,175,910
SME 18,279,448,367 16,640,420,859 18,279,448,367 16,640,420,859
Consumer 13,647,847,396 11,112,175,480 12,440,953,611 11,112,175,480
Executives & Staffs 1,549,738,328 1,238,293,617 1,549,738,328 1,238,293,617
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949
7.b.8 Loans & advances
Inside Bangladesh
Continuous loan (CL-2)
Consumer Finance 5,484,067,985 4,215,160,531 4,277,174,200 4,215,160,531
Small & Medium Enterprise 5,023,320,705 4,796,949,030 5,023,320,705 4,796,949,030
Loans to BHs/MBs/SDs against Shares 477,910,672 939,401,453 477,910,672 939,401,453
Other Corporate Loans 5,800,445,683 6,907,383,968 6,052,520,378 6,782,180,063
16,785,745,045 16,858,894,982 15,830,925,955 16,733,691,077
Demand loan (CL-3)
Small & Medium Enterprise 5,764,112,229 9,210,692,135 5,764,112,229 9,210,692,135
Corporate Loans 58,210,798,612 46,219,257,798 58,210,798,612 46,219,257,798
63,974,910,841 55,429,949,933 63,974,910,841 55,429,949,933

Term loan (CL-4)

Consumer Finance (including staff, other than HF) 5,755,821,510 4,388,222,185 5,755,821,510 4,388,222,185
Housing Finance (HF) 922,603,211 943,402,141 922,603,211 943,402,141
Small & Medium Enterprise 9,830,873,950 8,700,197,049 9,830,873,950 8,700,197,049
Corporate Loans 21,961,486,263 16,700,236,128 21,961,486,263 16,700,236,128
38,470,784,934 30,732,057,503 38,470,784,934 30,732,057,503
Short term agri credit and micro credit (CL-5)
Short term agri credit 14,724,454 14,520,433 14,724,454 14,520,433
14,724,454 14,520,433 14,724,454 14,520,433
Outside Bangladesh
Loans, cash credits, overdrafts etc. 766,177,769 295,394,732 - -
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,945

7.b.9 Security/ Collateral - wise concentration of loans and advances

(including bills purchased and discounted)
Collateral of movable/immovable assets 39,375,487,747 36,364,922,578 39,375,487,747 36,364,922,578
Local banks and financial institutions guarantee 393,898,903 942,221,948 393,898,903 942,221,948
Government guarantee 930,772,854 350,854,463 930,772,854 350,854,463
Foreign bank guarantee - - - -
Export documents 449,175,272 528,512,087 449,175,272 528,512,087
Fixed deposit receipts (FDR) 5,148,617,565 5,607,455,872 5,148,617,565 5,607,455,872
FDR of other banks 68,615,894 - 68,615,894 -
Government bonds - - -
Personal guarantee 8,377,734,280 7,347,225,935 8,377,734,280 7,347,225,935
Other securities (Hypothecation charges) 65,268,040,529 52,189,624,698 63,547,043,669 51,769,026,062
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
7.b.10 Classified and unclassified loans & advances
Unclassified
Standard (Including Staff Loan) 112,462,781,215 98,732,660,802 110,767,929,209 98,333,008,225
Special Mention Accounts (SMA) 2,366,348,453 879,979,651 2,366,348,453 879,979,651
114,829,129,668 99,612,640,453 113,134,277,662 99,212,987,876
Classified
Sub-standard 885,961,479 479,766,825 885,961,479 479,766,825
Doubtful 812,256,126 193,344,322 812,256,126 193,344,322
Bad/Loss 3,484,995,770 3,045,065,982 3,458,850,916 3,024,119,925
7.b.11 5,183,213,375 3,718,177,129 5,157,068,521 3,697,231,072
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949
Percentage of Classified Loans & Advances (NPL) 4.32% 3.60% 4.36% 3.59%

7.b.10.a The above unclassified loans and advances includes certain customer accounts with an aggregate outstanding amount
of Tk 167.90 crore, which have not been reported under classification as at 31 December 2014 on the basis of stay
order from the Honorable High Court Division of the Supreme Court of Bangladesh. An aggregate amount of Tk. 13.19
crore has been kept as excess provision against those customers.

7.b.11 Movements of Classified loans and advances

Opening balance 3,718,177,129 3,070,774,476 3,697,231,072 3,070,774,476
Additions during the year 3,272,297,230 4,019,530,720 3,267,098,433 3,998,584,663
Reductions during the year (1,807,260,984) (3,372,128,067) (1,807,260,984) (3,372,128,067)
Closing balance 7.b.11.a 5,183,213,375 3,718,177,129 5,157,068,521 3,697,231,072

Measures taken for recovery of classified loans and advances:

Bank as a whole takes following steps to recover its classified Loans and Advances
i) Sending letters and reminders to customers
ii) Special assets management department is responsible for holding discussion with the clients to recover the loans
iii) disposal/encashment of security through auction
iv) Legal proceedings and settlement
v) Report to central bank
vi) Rescheduling, restructuring, waiver or W/off
vii) Negotiation and settlement with approval from competent authority.
Bank
2014 2013
Taka Mix Taka Mix
7.b.11.a Business segment - wise concentration of
Classified Loans & Advances (NPL)
Corporate 3,189,187,472 61.84% 2,422,757,948 65.53%
Offshore Banking Unit - - - -
SME 1,498,913,069 29.07% 571,891,701 15.47%
Consumer 468,967,980 9.09% 702,581,423 19.00%
5,157,068,521 100.00% 3,697,231,072 100.00%
7.b.11.b Industry- wise concentration of
Classified Loans & Advances (NPL)
Commercial and Trading 1,875,087,190 36.36% 501,238,429 13.56%
Construction - - 6,426,085 0.17%
Sugar & Edible Oil Refinery 718,921,768 13.94% 718,705,099 19.44%

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Crops, fisheries & livestocks 1,305,154 0.03% 6,901,008 0.19%

Electronics Goods - - 4,732,665 0.13%
Individuals 468,932,891 9.09% 702,581,422 19.00%
Readymade Garments Industry 952,420,301 18.47% 233,147,185 6.31%
Ship Breaking Industry 888,969,124 17.24% 768,884,012 20.80%
Metal & Steel Products - - 29,623,062 0.80%
Transport & Ecommunication 22,521,777 0.44% 2,598,277 0.07%
Textile Mills 541,029 0.01% 191,953,057 5.19%
Others 228,369,287 4.43% 530,440,771 14.35%
5,157,068,521 100.00% 3,697,231,072 100.00%

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
7.b.12 Particulars of loans and advances
i) Debts considered good in respect of
111,658,613,964 96,154,376,140 109,937,617,105 95,733,777,506
which the bank is fully secured
ii) Debts considered good for which the
bank holds no other security than the 4,281,080,536 4,237,427,146 4,281,080,536 4,237,427,146
debtor's personal security
iii) Debts considered good and secured
by the personal security of one or more
4,072,648,543 2,939,014,297 4,072,648,543 2,939,014,297
parties in addition to the personal security
of the debtors.
iv) Debts adversely classified for which no
- - - -
provision is created.
120,012,343,042 103,330,817,582 118,291,346,183 102,910,218,949
v) Debts due by directors or officers of
the bank or any of them either jointly or 1,549,738,328 1,238,538,739 1,549,738,328 1,238,538,739
severally with any other persons.
vi) Debts due by companies and firms
in which the directors of the bank
have interests as directors, partners or - - -
-
managing agent or in case of private
companies as members.
vii) Maximum total amount of advances,
including temporary advances made at
any time during the period to directors or
1,549,738,328 1,238,538,739 1,549,738,328 1,238,538,739
managers or officers of the bank or any
of them either severally or jointly with any
other persons.
viii) Maximum total amount of advances,
including temporary advances, granted
during the period to the companies or
firms in which the directors of the bank - - - -
have interests as directors, partners or
managing agents or, in case of private
companies as members .
ix) Due from other banking companies - - - -
x) Information in respect of classified
loans and advances
a) Classified loans for which interest/profit
5,183,213,375 3,718,177,129 5,157,068,521 3,697,231,072
not credited to income
(i) (Decrease)/Increase of provision (specific) - - - -
(ii) Amount of written off debt against fully
1,328,982,042 322,366,338 1,328,982,042 322,366,338
provided debts
(iii) Amount of debt recovered against the
105,720,099 110,434,318 105,720,099 110,434,318
debt which was previously written off
b) Amount of provision kept against loans
classified as bad/loss as at the Balance 1,969,497,295 1,744,445,238 1,969,497,295 1,744,445,238
Sheet date.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
c) Amount of interest creditable to the
interest suspense account 1,028,365,606 672,910,943 1,028,365,606 672,910,943
xi) Cumulative amount of written off loans
Opening Balance 2,209,119,722 1,886,753,384 2,209,119,722 1,886,753,384
Amount written off during the year 1,328,982,042 322,366,338 1,328,982,042 322,366,338
Balance of written off loans and advances 3,538,101,764 2,209,119,722 3,538,101,764 2,209,119,722

7.b.13 Cumulative amount of written off loans for which

4,845,715,780 3,354,286,616 4,845,715,780 3,354,286,616
law suits have been filed (note 7.b.14)

7.b.14 Details of cumulative amount of written off

7.b.14.1
loans including legal and other charges
Opening balance 3,354,286,616 2,961,210,884 3,354,286,616 2,961,210,884
During the year 1,491,429,164 393,075,733 1,491,429,164 393,075,733
Closing balance 4,845,715,780 3,354,286,616 4,845,715,780 3,354,286,616
7.b.14.1 Cumulative number of written off loan accounts against which suits filed
Opening balance 1,691 1,057
During the year 1,606 634
Closing balance 3,297 1,691
8 Fixed assets including land, building, furniture and fixtures
Cost
Freehold Land and Land Development 5,178,917,918 5,177,928,478 5,178,917,918 5,177,928,478
Buildings on Freehold land 730,841,590 730,841,590 730,841,590 730,841,590
Building under construction (Corporate Head Office)* 497,621,423 379,904,613 497,621,423 379,904,613
Machinery and Equipment 651,078,351 552,527,072 646,001,743 547,945,392
Computer and Network equipment 440,135,784 370,737,255 434,842,123 366,150,351
Furniture and fixtures 362,715,810 339,350,436 352,811,163 330,678,401
Vehicles 113,749,726 110,041,599 112,407,421 108,699,294
Leased Assets (finance lease) 90,084,859 90,084,859 90,084,859 90,084,859
Software 326,629,600 220,752,558 323,707,619 217,890,577
Total Cost 8,391,775,061 7,972,168,460 8,367,235,859 7,950,123,555
Accumulated depreciation & amortization (1,295,142,370) (1,063,923,631) (1,280,360,122) (1,052,729,826)
Written Down Value at 31 December 7,096,632,691 6,908,244,830 7,086,875,736 6,897,393,729
* Building under construction represents the accumulated cost incurred for corporate head office located at Gulshan
Avenue and is classified as Fixed Assets under 'BAS 16 - Property, Plant & Equipment' assuming that future
economic benefit associated with the asset will inflow to the entity in near future. However, Depreciation of the asset
will commence from the date of its intended use.
Details of these are in Annexure-A.
9 Other assets
Income generating
Investment in subsidiary-EBL Securities Limited 9.1 - - 867,400,000 867,400,000
Investment in subsidiary-EBL Investments Limited 9.2 - - 299,999,900 299,999,900
Investment in subsidiary-EBL Finance (HK) Limited 9.3 - - 14,779,352 14,779,352
Investment in subsidiary-EBL Asset Management Limited 9.4 - 49,999,900 -
DSE Membership 9.5 553,800,000 553,800,000 - -
CSE Membership 9.6 201,500,000 201,500,000 - -
Non-Income generating
Receivable from subsidiaries 9.7 - - 50,935,416 5,612,917
Other assets of subsidiaries 9.8 36,503,227 17,300,375 - -
Stock of stationeries 13,005,088 14,532,435 13,005,088 14,532,435
Stamps on hand 2,912,441 3,820,980 2,912,441 3,820,980
Advance to staff for expenses 9.9 757,052 238,491 757,052 238,491
Security deposits-govt. agencies 3,400,476 2,457,801 2,960,476 2,257,801
Interest and dividend receivables 9.10 873,179,098 755,949,181 871,072,093 758,801,887
Sundry receivables 9.11 447,611,743 230,911,676 447,611,743 230,911,676
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 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
Advance rent 321,069,492 333,964,153 319,005,678 333,964,153
Prepayments and advance to vendors 386,002,983 167,734,063 385,869,094 164,130,751
Deferred tax assets (net off liabilities) 9.12 827,052,579 698,391,343 827,052,579 698,391,343
3,666,794,180 2,980,600,498 4,153,360,814 3,394,841,686
9.1 Investment in subsidiary-EBL Securities Limited
EBL acquired its securities brokerage subsidiary fully in two phases at a total cost of BDT 479.90 million and injected
afterwards BDT 387.50 million as fresh capital.

9.2 Investment in subsidiary-EBL Investments Limited

This fully owned subsidiary of EBL was incorporated on 30 December 2009 with an initial authorized capital of BDT
1,000 million and paid up capital of BDT 300 million. It was awarded merchant banking license by BSEC on January
2013 and ever since started its full fledged merchant banking operations.

9.3 Investment in subsidiary-EBL Finance (HK) Limited

EBL Finance (HK) Limited, the first fully owned foreign subsidiary of EBL, was incorporated on 28 November 2011
with an initial authorized capital of HKD 1.41 million (equivalent to BDT 14.78 million). This subsidiary commenced its
full fledged operations in Hongkong from early 2013.

9.4 Investment in subsidiary-EBL Asset Management Limited

This is another fully owned subsidiary of EBL was incorporated on 09 January 2011 with an initial authorized capital
of BDT 250 million. Its initial paid up capital of BDT 50 million was fully subscribed in 2014, and is waiting to get
required license from BSEC to start full fledged operations.

9.5 Valuation of DSE Membership of EBL Securities Limited

While assessing value of EBL Securities Ltd. in 2010, the independent valuer (a professional accounting firm)
determined the fair value of DSE membership only taking book value of all other assets and liabilities. While acquiring
the rest 40% shares in 2012 based on valuation done by ACNABIN, Chartered Accountants, the Bank considered
only 40% of fair value/market value of DSE membership i.e. BDT 344.40 million (instead of full value of BDT 861
million as of 30 June 2011) and thereby avoided booking any revaluation gain of 60% shares acquired earlier.

9.6 EBL Securities Limited acquired CSE Membership at a cost of BDT 201.50 million in 2012 and started its trading
operation in 2013.
9.a Demutualization of DSE and CSE Membership
As per the Scheme of Demutualization of both DSE and CSE in accordance with the Exchange Demutualization Act 2013 (the
“Scheme”), the Company being the initial shareholders of DSE and CSE, is entitled to receive the following numbers of shares:

Membership No of Shares Face Value Total Value

Dhaka Stock Exchange Limited 7,215,106 10 72,151,060
Chittagong Stock Exchange Limited 4,287,330 10 42,873,300
Total number and value of shares 11,502,436 10 115,024,360
The Scheme is not yet fully completed and these shares are also currently not traded. Hence the actual fair value is not
readily ascertainable. However management expects the fair value to be similar or higher than the current fair value.
Once further clarification about the Scheme and related factors are available a determination of fair value required
adjustments including impairment assessment, if any, can be made at that time.

9.7 Receivable from Subsidiaries

EBL Securities Limited 47,347,678 3,312,400
EBL Investments Limited - -
EBL Finance (HK) Limited 3,320,809 2,300,517
EBL Asset Management Limited 266,930 -
50,935,416 5,612,917

9.8 Other assets of subsidiaries

Accounts receivable 41,832,574 17,375,604
Deferred revenue expenses 86,194 242,814
41,918,768 17,618,418
Less: Inter company elimination (5,415,541) (318,043)
36,503,227 17,300,375

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 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
9.9 Advance to staff for expenses
Due for
Less than three months 534,387 238,491 534,387 238,491
More than three months but less than six months 166,165 - 166,165 -
More than six months but less than nine months 56,500 - 56,500 -
More than nine months but less than twelve months - - - -
More than twelve months - - - -
757,052 238,491 757,052 238,491
9.10 Interest and dividend receivables
Interest Receivables 873,819,188 750,484,891 870,130,248 750,484,891
Interest Receivable - OBU 12,993,161 5,976,971 12,993,161 5,976,971
Dividend Receivables 1,261,200 8,570,833 - 8,570,833
888,073,549 765,032,695 883,123,409 765,032,695
Less: Inter unit/company elimination (14,894,451) (9,083,513) (12,051,316) (6,230,807)
873,179,098 755,949,181 871,072,093 758,801,887

9.11 Sundry receivables

Receivable from BB for Sanchaypatra and WEDB 145,781,759 29,545,579 145,781,759 29,545,579
Excise duty receivable from customers 74,676,003 55,902,869 74,676,003 55,902,869
Counter party receivable for REPO 10,309,182 29,243,341 10,309,182 29,243,341
NRB Remittance - 5,792,923 - 5,792,923
Suspense account - 5,266,159 - 5,266,159
Recoverable expenses 2,598,501 11,308,604 2,598,501 11,308,604
Other receivables 214,246,298 93,852,202 214,246,298 93,852,202
447,611,743 230,911,676 447,611,743 230,911,676

9.12 Deferred tax assets (net off liabilities)

Deferred tax assets 9.12.a 865,763,076 720,872,694 865,763,076 720,872,694
Deferred tax liabilities 9.12.b 38,710,497 22,481,351 38,710,497 22,481,351
827,052,579 698,391,343 827,052,579 698,391,343

Deferred tax assets/(liabilities) have been recognised and measured as per BAS-12: Income Taxes and BRPD
circular # 11 dated 12 December 2011.
9.12.a Deferred tax assets
Provision made against Bad/Loss loans (2011-2014) 3,320,524,515 1,916,605,967 3,320,524,515 1,916,605,967
Adjustment of corresponding provision on write off (1,283,434,923) (220,434,923) (1,283,434,923) (220,434,923)
Deductible temporary difference 2,037,089,592 1,696,171,044 2,037,089,592 1,696,171,044
Tax rate 42.50% 42.50% 42.50% 42.50%
Deferred tax assets 865,763,076 720,872,694 865,763,076 720,872,694
Opening Deferred tax assets 720,872,694 390,778,700 720,872,694 390,778,700
Deferred tax income 144,890,383 330,093,994 144,890,383 330,093,994

9.12.b Deferred tax liabilities

Carrying amount of fixed assets 1,400,549,316 1,327,666,446 1,400,549,316 1,327,666,446
Tax base of fixed assets 1,309,465,793 1,274,769,150 1,309,465,793 1,274,769,150
Taxable temporary difference 91,083,523 52,897,296 91,083,523 52,897,296
Tax rate 42.50% 42.50% 42.50% 42.50%
Deferred tax liabilities 38,710,497 22,481,351 38,710,497 22,481,351
Opening deferred tax liabilities 22,481,351 14,291,710 22,481,351 14,291,710
Deferred tax expense 16,229,147 8,189,641 16,229,147 8,189,641

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
10 Non-banking assets
The Bank was awarded absolute ownership on few mortgaged properties through the verdict of honorable court
under section 33(7) of the Artharin Adalat Act 2003. These were recorded as non banking assets (carrying value of
which was BDT 191,733,000 as on reporting date) as per valuation report submitted by professional valuation firm
and recording of transactions were certified by the then external auditors KPMG Rahman Rahman Huq. Value of the
assets received in addition to the loan outstanding/written off loans was kept as reserve against non banking assets.
Following are the details:
Non earning assets
Name of Parties Assets details Possession Date
M/S Safa Garments Ltd * 18 Decimal of Land, 18.01.2005 8,727,000 8,727,000 8,727,000 8,727,000
Tejgaon, Dhaka
Arshim & co 12 Katha of Land, 27.03.2007 4,200,000 4,200,000 4,200,000 4,200,000
Tejgaon, Dhaka
M/s Innovative Computer 11.25 Decimal of 07.06.2007 262,000 262,000 262,000 262,000
Ltd. Land, Dhaka
North American Computer 6.5 Decimal of 16.07.2007 31,600,000 31,600,000 31,600,000 31,600,000
Dynamics and ors. Land, Tejgaon,
Dhaka
M/S Bangla Union Steel 192.96 Decimal of 30.07.2007 57,300,000 57,300,000 57,300,000 57,300,000
Ind. Ltd. Land, Chittagong
M/s Computer Bazar 0.14 acres of Land, 21.06.2009 1,696,000 1,696,000 1,696,000 1,696,000
Network Sabujbagh, Dhaka
Stec Fashions Ltd. 28.03 Decimal of 26.01.2009 2,321,000 2,321,000 2,321,000 2,321,000
land, Mirpur, Dhaka
Royals Paper Store 106.50 Decimal of 21.05.2009 7,727,000 7,727,000 7,727,000 7,727,000
Land, Dhaka
Sabbir Ahmed 6 Decimal of Land, 10.05.2007 600,000 600,000 600,000 600,000
Mirpur, Dhaka
M/s. Tri Angle Trading 0.33 Acres of Land, 26.04.2007 6,600,000 6,600,000 6,600,000 6,600,000
Associates Savar, Dhaka
M/S Unicorn Bangladesh 16.5 Decimal of 22.11.2007 15,000,000 15,000,000 15,000,000 15,000,000
Ltd. Land, Dhaka
HM Yunus 1.84 Acres of Land, 06.02.2008 55,700,000 55,700,000 55,700,000 55,700,000
Gazipur
191,733,000 191,733,000 191,733,000 191,733,000

*After expiry of initial 7 years period of holding allowed by Bank Company Act 1991 (amended upto 2013) the Bank
was allowed for extension of 1 year (till 17.01.2013) by Bangladesh Bank (BB). After expiry of 1 year extended period,
the Bank again applied to BB for extension but BB advised the Bank to ensure taking absolute possession and
dispose the property as soon as possible (asap). EBL has taken effective measure to dispose the property asap.

** Except the above, time extension has been taken from BB for rest of the properties, whose initial period of holding
has exceeded 7 years on 31-12-2014. The Bank has kept full provision in excess of reserve against NBA against the
book value of all the properties to avoid any further loss on impairment in future due to complexity in taking absolute
possession and/or selling the same.

11 Borrowings from other banks, financial institutions and agents

Borrowing inside Bangladesh 11.1 22,302,653,587 8,420,239,834 21,461,916,145 8,420,239,834
Borrowing outside Bangladesh 11.2 4,558,720,905 5,659,640,566 4,558,720,905 5,659,640,566
26,861,374,492 14,079,880,398 26,020,637,050 14,079,880,398
11.1 Borrowing inside Bangladesh
Demand Borrowing:
Banks 11,088,922,061 5,777,138,869 9,658,339,948 4,936,811,273
Non Banking Financial Institutions - - - -
11,088,922,061 5,777,138,869 9,658,339,948 4,936,811,273
Less: Inter unit/company elimination (9,028,184,619) (5,777,138,869) (8,438,339,948) (4,936,811,273)
2,060,737,442 - 1,220,000,000 -

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
Term Borrowing:
Banks 10,886,417,240 692,648,143 10,129,241,000 376,343,750
Non Banking Financial Institutions - - - -
10,886,417,240 692,648,143 10,129,241,000 376,343,750
Less: Inter unit/company elimination (757,176,240) (316,304,393) - -
10,129,241,000 376,343,750 10,129,241,000 376,343,750
Other borrowings
From Bangladesh Bank & others
Investment Promotion & Financing Facility (IPFF) 422,888,560 503,906,012 422,888,560 503,906,012
Export Development Fund (EDF) 5,442,977,156 3,856,131,560 5,442,977,156 3,856,131,560
Refinancing for Agrobased Industries 1,035,563,199 1,165,008,600 1,035,563,199 1,165,008,600
Refinancing Agribusiness - Revolving 1,678,127,231 1,993,763,912 1,678,127,231 1,993,763,912
Second Crop Diversification Project 1,019,369,000 515,086,000 1,019,369,000 515,086,000
SME Foundation 30,000,000 10,000,000 30,000,000 10,000,000
Repo with BBK against ALS (Assured Liquidity Support) 483,750,000 - 483,750,000 -
10,112,675,145 8,043,896,084 10,112,675,145 8,043,896,084
22,302,653,587 8,420,239,834 21,461,916,145 8,420,239,834
11.2 Borrowing from outside Bangladesh
In non-interest bearing with
Standard Chartered Bank, New york - 28,770,154 - 28,770,154
Citibank N A, New york - 95,592,430 - 95,592,430
HSBC, New York 1,219,323 2,948,078 1,219,323 2,948,078
ICICI Bank Ltd, Mumbai 1,210,454 - 1,210,454 -
Habib American Bank, NY 2,341,255 - 2,341,255 -
National Commercial Bank, Jeddah, KSA - 21,742 - 21,742
Deutsche Trust Company Americas, New York 17,687,070 12,058,160 17,687,070 12,058,160
22,458,102 139,390,566 22,458,102 139,390,566
Other borrowing by OBU
In interest bearing with
Asian Development Bank 41,924,711 - 41,924,711 -
Banca Ubae Spa, Spain - 388,750,000 - 388,750,000
Deutsche Investitions-und
2,494,380,800 1,244,000,000 2,494,380,800 1,244,000,000
Entwicklungsgesellschaft MBH (DEG)
International Finance Corporation (IFC) - 2,332,500,000 - 2,332,500,000
FMO, Netherland 1,247,190,400 1,555,000,000 1,247,190,400 1,555,000,000
United Bank Limited, Dubai 752,766,891 - 752,766,891 -
4,536,262,803 5,520,250,000 4,536,262,803 5,520,250,000
4,558,720,905 5,659,640,566 4,558,720,905 5,659,640,566

11.a Remaining maturity grouping of Borrowings - (including OBU)

Payable
On demand 2,633,435,000 247,052,275 2,633,435,000 247,052,275
In not more than one month 9,650,596,142 1,153,293,093 9,650,596,142 1,153,293,093
In more than one month but not more than three months 4,021,623,167 4,409,892,760 3,180,885,725 4,409,892,760
In more than three months but not more than one year 8,182,954,972 6,046,957,206 8,182,954,972 6,046,957,206
In more than one year but not more than five years 997,420,485 1,109,192,331 997,420,485 1,109,192,331
In more than five years 1,375,344,726 1,113,492,734 1,375,344,726 1,113,492,734
26,861,374,492 14,079,880,398 26,020,637,050 14,079,880,398

12 Deposits and other accounts

Current deposits and other accounts, etc. 12.1 10,307,565,783 9,860,812,866 10,314,018,874 9,894,881,567
Bills payable 12.2 1,034,027,209 789,543,484 1,034,027,209 789,543,484
Savings bank deposits 12.3 23,982,033,088 16,923,994,211 23,982,033,088 16,923,994,211
Fixed deposits 12.4 81,398,775,594 89,462,490,607 81,461,596,944 89,493,288,918
Bearer certificates of deposits 12.5 - - - -
116,722,401,675 117,036,841,168 116,791,676,116 117,101,708,180

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka

12.1 Current deposits and other accounts

Current deposits 12.1.1 4,979,909,704 4,624,020,832 4,986,362,795 4,658,089,533
Deposit margin on facilities (LC, LG, Acceptance etc.) 3,920,186,721 3,640,356,218 3,920,186,721 3,640,356,218
Matured Deposits - 200,000 - 200,000
Sundry Deposits (Matured BCD, TD Redemption) 493,134 33,038,242 493,134 33,038,242
Interest Accrued on Deposits 1,332,828,949 1,545,840,628 1,332,828,949 1,545,840,628
Current deposit-offshore banking unit 74,147,276 17,356,946 74,147,276 17,356,946
10,307,565,783 9,860,812,866 10,314,018,874 9,894,881,567

12.1.1 Current deposits

Local Currency 4,550,245,654 4,088,778,537 4,550,245,654 4,088,778,537
Foreign Currency 436,117,141 569,310,996 436,117,141 569,310,996
4,986,362,795 4,658,089,533 4,986,362,795 4,658,089,533
Less: Inter unit/company elimination (6,453,091) (34,068,701) - -
4,979,909,704 4,624,020,832 4,986,362,795 4,658,089,533

12.2 Bills payable

Local currency 729,105,102 784,529,183 729,105,102 784,529,183
Foreign currency 304,922,107 5,014,301 304,922,107 5,014,301
1,034,027,209 789,543,484 1,034,027,209 789,543,484

12.3 Savings bank deposits

Transactional Deposit Accounts:
EBL saving deposits account 4,014,615,600 3,969,396,799 4,014,615,600 3,969,396,799
High performance deposit account - retail 5,317,999,386 5,126,404,193 5,317,999,386 5,126,404,193
EBL campus account 55,869,728 43,023,598 55,869,728 43,023,598
EBL interesting account 1,680,971,333 1,649,940,005 1,680,971,333 1,649,940,005
Salary account deposits 550,456,936 309,317,668 550,456,936 309,317,668
EBL Savings Plus account 846,857,824 1,020,913,492 846,857,824 1,020,913,492
EBL Sonchoy account 86,362,337 59,718,753 86,362,337 59,718,753
EBL Paribar account 976,950,219 703,542,939 976,950,219 703,542,939
EBL Global account 104,224,137 90,200,649 104,224,137 90,200,649
EBL Global GBP account 13,544,794 8,686,713 13,544,794 8,686,713
EBL RFCD account 103,446,709 82,569,786 103,446,709 82,569,786
EBL Junior account 406,620,098 212,656,343 406,620,098 212,656,343
EBL Easy account 18,437,424 3,030,125 18,437,424 3,030,125
EBL Agri Saver 359 143 359 143
EBL Smart Womens Savings 481,427,410 83,815,454 481,427,410 83,815,454
EBL Classic Savings 178,122,575 68,433,504 178,122,575 68,433,504
EBL Premium Savings 3,404,253,770 269,505,506 3,404,253,770 269,505,506
EBL 50 Plus Savings 315,772,899 50,647,066 315,772,899 50,647,066
EBL Power Savings 563,678,003 101,202,452 563,678,003 101,202,452
EBL Max Saver 941,655,072 156,745,851 941,655,072 156,745,851
EBL Platinum Plus Savings 17,474,992 - 17,474,992 -
Unclaimed savings deposit 153,485 1,861,586 153,485 1,861,586
20,078,895,090 14,011,612,625 20,078,895,090 14,011,612,625
Scheme Deposits:
EBL Confidence account 2,775,544,945 2,262,135,766 2,775,544,945 2,262,135,766
EBL Secure account 192,389,940 353,928,828 192,389,940 353,928,828
EBL Child Future Plan account 195,206,952 94,049,715 195,206,952 94,049,715
EBL Millionaire Scheme 548,912,021 83,162,019 548,912,021 83,162,019
SME Equity Builder account 191,084,142 119,105,258 191,084,142 119,105,258
3,903,137,998 2,912,381,586 3,903,137,998 2,912,381,586
23,982,033,088 16,923,994,211 23,982,033,088 16,923,994,211

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 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
12.4 Fixed deposits
Special notice deposits (SND) account 20,949,041,369 31,561,726,862 20,949,041,369 31,561,726,862
Term deposits account 60,299,934,604 57,581,111,546 60,299,934,604 57,581,111,546
RFCD account 3,043,795 2,214,528 3,043,795 2,214,528
NFCD account 209,577,176 348,235,982 209,577,176 348,235,982
81,461,596,944 89,493,288,918 81,461,596,944 89,493,288,918
Less: Inter unit/company elimination (62,821,350) (30,798,311) - -
81,398,775,594 89,462,490,607 81,461,596,944 89,493,288,918
12.5 Issuance of Bearer Certificate of Deposits (BCD) was stopped as per BRPD circular No. 09 dated 20 October 2002.
Unclaimed balance of BCD over 10 years was surrendered to Bangladesh Bank in the year 2014.
12.a Deposits from banks-inside Bangladesh 12.a.1 882,148,921 1,188,456,427 882,148,921 1,188,456,427
Other than banks 115,840,252,754 115,848,384,741 115,909,527,195 115,913,251,753
116,722,401,675 117,036,841,168 116,791,676,116 117,101,708,180
12.a.1 Deposits from banks
In current deposit account with
NRB Bank Limited 1,313,797 - 1,313,797 -
In special notice deposit accounts with
Janata Bank Limited 43,411 42,998 43,411 42,998
Meghna Bank Limited 1,512,504 6,526,216 1,512,504 6,526,216
Mercantile Bank Limited - 21,390 - 21,390
Midland Bank Limited 12,990,319 - 12,990,319 -
Modhumoti Bank Limited 527,951,426 - 527,951,426 -
National Bank Limited 154,173 149,785 154,173 149,785
NRB Bank Limited 85,718,932 1,173,141,631 85,718,932 1,173,141,631
NRB Commercial Bank Limited 940,177 4,294,876 940,177 4,294,876
One Bank Limited 3,973,154 3,828,204 3,973,154 3,828,204
Southeast Bank Limited 29,730 445,397 29,730 445,397
SBAC Bank Limited 247,516,351 - 247,516,351 -
Standard Bank Limited 4,946 5,929 4,946 5,929
882,148,921 1,188,456,427 882,148,921 1,188,456,427
12.b Deposits on the basis of significant concentration
12.b.1 Sector - wise concentration of Deposits and other accounts
Government sector 748,688,134 874,959,460 748,688,134 874,959,460
Other public sector 7,349,194,115 11,407,834,768 7,349,194,115 11,407,834,768
Private sector 108,624,519,425 104,754,046,940 108,693,793,866 104,818,913,952
116,722,401,675 117,036,841,168 116,791,676,116 117,101,708,180
12.b.2 Business segment - wise concentration of Deposits and other accounts
Corporate 32,432,290,258 47,675,671,083 32,501,564,699 47,740,538,096
Offshore Banking Unit 74,147,276 17,356,946 74,147,276 17,356,946
SME 7,955,287,706 6,544,420,656 7,955,287,706 6,544,420,656
Consumer 75,226,649,225 62,009,848,999 75,226,649,225 62,009,848,999
Others- Bills Payables 1,034,027,209 789,543,484 1,034,027,209 789,543,484
116,722,401,675 117,036,841,168 116,791,676,116 117,101,708,180

12.c Residual maturity grouping of Deposits

From banks
On demand - - - -
Within one month 882,148,921 1,188,456,427 882,148,921 1,188,456,427
In more than one month but less than six months - - - -
In more than six months but less than one year - - - -
In more than one year but within five years - - - -
In more than five years but within ten years - - - -
882,148,921 1,188,456,427 882,148,921 1,188,456,427

222
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
From other than banks
On demand 793,634,105 920,829,160 793,634,105 920,829,160
Within one month 13,493,589,285 18,121,613,991 13,500,042,376 18,129,486,243
In more than one month but less than six months 21,826,134,512 21,916,380,831 21,888,955,862 21,920,889,761
In more than six months but less than one year 34,792,488,809 31,048,493,222 34,792,488,809 31,061,280,943
In more than one year but within five years 43,127,861,080 41,971,544,262 43,127,861,080 42,011,242,371
In more than five years but within ten years 1,806,544,962 1,869,523,275 1,806,544,962 1,869,523,275
115,840,252,754 115,848,384,741 115,909,527,194 115,913,251,753
116,722,401,675 117,036,841,168 116,791,676,116 117,101,708,180
Unclaimed deposit aging 10 years or more 401,379 704,844 401,379 704,844
13 Other liabilities
Privileged creditors 13.1 286,783,691 326,317,939 286,783,691 326,317,939
Acquirer liabilities 13.2 260,271,782 140,446,893 260,271,782 140,446,893
Sundry creditors 63,096,228 117,905,676 63,096,228 117,905,676
Security deposit 57,290,130 62,609,562 57,290,130 62,609,562
Current tax liability/(assets) 13.3 1,075,823,159 1,480,961,079 1,070,435,914 1,475,061,768
Provision for loans and advances- other than Offshore 13.4 4,226,658,845 3,476,553,016 4,200,513,991 3,476,553,016
Provision for loans and advances - Offshore 124,242,089 97,013,933 124,242,089 97,013,933
Interest suspense account 13.5 1,096,173,580 702,662,220 1,028,365,606 672,910,943
Provision for other assets 13.6 23,579,799 47,853,113 23,579,802 47,856,113
Provision for loss on revaluation of shares (net) 13.7 881,850,659 874,335,895 864,261,060 860,046,096
Advance interest/commission received 13,882,264 20,378,400 11,203,244 20,378,400
Expenses payable 319,283,096 317,020,422 319,283,096 317,020,422
Interest payable on borrowing including Offshore 13.8 172,093,093 105,847,548 161,341,205 105,847,548
Inter branch and inter system accounts 69,199 40,703 69,199 40,703
Advance export proceeds 325,458,711 356,956,828 325,458,711 356,956,828
Miscellaneous payable 13.9 428,770,570 172,581,260 428,770,570 172,581,260
Other liabilities of subsidiaries 13.10 269,898,020 188,330,801 - -
9,625,224,915 8,487,815,290 9,224,966,318 8,249,547,102
13.1 Privileged creditors (payable to government)
Tax deducted at source (TDS) 109,774,008 175,791,724 109,774,008 175,791,724
VAT deducted at source (VDS) 37,478,587 35,016,205 37,478,587 35,016,205
Excise duty deducted from customer accounts 139,531,097 115,510,011 139,531,097 115,510,011
286,783,691 326,317,939 286,783,691 326,317,939
13.2 Acquirer liabilities
These liabilities are of temporary nature arisen from debit and credit card transactions. Transactions are settled
next day with relevant parties and reconciled monthly. Major balance includes ‘Acquirer Cash’ which is a liability to
relevant parties arisen due to withdrawal of cash by EBL cardholders from Q-Cash/VISA ATMs (Not owned by EBL):

Prepaid card liability 13,563,274 12,333,364 13,563,274 12,333,364

Travel card liability 22,726,509 17,035,102 22,726,509 17,035,102
Credit card liability 32,139,936 30,824,266 32,139,936 30,824,266
Acquirer cash and other liabilities 191,842,063 80,254,161 191,842,063 80,254,161
260,271,782 140,446,893 260,271,782 140,446,893
13.3 Current tax liability/(assets)
Provision for tax
Opening balance 2,942,064,258 2,589,515,621 2,896,503,576 2,556,953,823
Settlement/adjustments for previous years (2,528,026,889) (2,273,937,989) (2,477,409,255) (2,250,237,736)
Provision for tax made during the year 13.3.1 2,040,275,595 2,626,486,626 1,995,209,737 2,589,787,489
2,454,312,964 2,942,064,258 2,414,304,058 2,896,503,576
Balance of income tax paid
Opening balance 1,461,103,179 1,222,515,168 1,421,441,808 1,207,497,126
Settlement/adjustments for previous years (2,522,661,625) (2,259,433,709) (2,477,409,255) (2,250,237,736)
Paid during the year 13.3.2 2,440,048,251 2,498,021,720 2,399,835,591 2,464,182,418
1,378,489,806 1,461,103,179 1,343,868,144 1,421,441,808
1,075,823,159 1,480,961,079 1,070,435,914 1,475,061,768

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
13.3.1 Provision for tax made during the year 13.3.1.a 2,040,275,595 2,626,486,626 1,995,209,737 2,589,787,489
2,040,275,595 2,626,486,626 1,995,209,737 2,589,787,489

13.3.1.a Income tax expenses/Provision for tax

Current tax expenses
Current year 2,040,206,385 2,556,925,675 1,995,209,737 2,525,924,753
Adjustment for prior year 69,210 69,560,951 - 63,862,736
Total income tax expenses 2,040,275,595 2,626,486,626 1,995,209,737 2,589,787,489

13.3.2 Income tax paid during the year

Withholding tax deducted at source 142,958,887 143,612,157 110,611,014 127,932,097
Advance tax paid in cash 2,297,089,364 2,354,409,563 2,289,224,577 2,336,250,321
Advance income tax paid 2,440,048,251 2,498,021,720 2,399,835,591 2,464,182,418

2014 2013
% Taka % Taka
13.3.3 Reconciliation of effective tax (Bank only)
Profit before income tax as per profit and loss account 3,973,060,233 4,835,746,967

Income Tax as per applicable tax rate 42.5% 1,688,550,576 42.5% 2,070,540,840
Factors affecting the tax charge for current year
Non deductible expenses 12.49% 496,038,879 11.02% 533,042,961
Tax exempt income -3.65% (145,150,773) -0.84% (40,847,278)
Tax savings from reduced tax rates from dividend -0.68% (27,058,930) -0.39% (18,951,391)
Tax savings from reduced tax rates from capital gain -0.43% (17,170,014) -0.37% (17,860,362)
Adjustment for previous year - - 1.32% 63,862,718
Total income tax expenses 50.22% 1,995,209,737 53.24% 2,589,787,489

13.4 Provision for loans and advances - other than Offshore

A) Specific provision against loans and advances
Opening balance 1,950,187,709 1,387,320,825 1,929,241,652 1,387,320,825
Fully provided debt written off during the year (1,166,090,518) (274,781,701) (1,166,090,518) (274,781,701)
Recovery from loans previously written off 105,720,099 110,434,318 105,720,099 110,434,318
Specific provision for the year 13.4.1 1,545,409,655 727,217,267 1,540,210,858 706,268,210
Provision released or no longer required - - - -
Provision held at the end of the year 2,435,226,945 1,950,190,709 2,409,082,091 1,929,241,652
Required provision 2,303,326,945 1,932,990,709 2,277,182,091 1,912,041,652
Surplus/ (Shortage) 131,900,000 17,200,000 131,900,000 17,200,000

Provision against margin loan (with negative equity) of EBLSL included in the specific provision of the Group.
B) General provision against unclassified loans and advances
Opening balance 998,975,858 982,329,576 998,975,858 982,329,576
Provision made during the year for loans and advances 13.4.1 188,885,578 16,646,282 188,885,578 16,646,282
Provision held at the end of the year 1,187,861,436 998,975,858 1,187,861,436 998,975,858
Required provision 1,187,861,436 998,602,451 1,187,861,436 998,602,451
Surplus/ (Shortage) - 373,406 - 373,406

C) General provision against contingent assets (1%)

Opening balance 548,335,507 487,512,168 548,335,507 487,512,168
Provision during the year for contingent assets 55,234,958 60,823,339 55,234,958 60,823,339
Provision held at the end of the year 603,570,465 548,335,507 603,570,465 548,335,507
Required provision 603,570,465 548,335,507 603,570,465 548,335,507
Surplus/ (Shortage) - - - -

Total (A+B+C) 4,226,658,845 3,497,502,073 4,200,513,991 3,476,553,016

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 FINANCIAL REPORTS 2014

13.4.1 Provision for loans and advances charged during the year Figures are in Taka
Bank 2014 2013
Main
OBU Total Total
Operation
General Provision for UC loans & advances 188,885,578 18,592,656 207,478,234 23,440,953
General Provision for Contingent liabilities 55,234,958 8,269,969 63,504,927 60,707,633
General Provision charged during the year 244,120,536 26,862,625 270,983,161 84,148,586
Specific Provision 1,645,930,957 - 1,645,930,957 816,702,528
Recovery from loans previously written off - - (105,720,099) (110,434,318)
Specific Provision (net) charged during the year 1,645,930,957 - 1,540,210,858 706,268,210
Total Provision for loans and advances
1,890,051,493 26,862,625 1,811,194,019 790,416,796
charged during the year

13.4.2 Calculation of provision for loans and advances Figures are in Taka

Interest Eligible Base for Required Actual Surplus /

Nature Outstanding
suspense securities provision provision provision (Shortage)
Standard 109,218,217,423 307,406,954 - 108,747,010,574 1,273,792,959 1,273,792,959 -
SMA 2,366,321,913 119,444,019 - 2,366,321,913 29,290,695 29,290,695 -
SS 885,961,479 143,129,630 184,471,033 616,422,305 123,232,105 153,208,105 29,976,000
DF 812,256,126 77,721,080 219,232,858 572,753,436 286,376,718 286,376,718 -
BL 3,458,850,915 380,663,924 1,426,000,492 1,803,473,268 1,867,573,295 1,969,497,295 101,924,000
Staff loan 1,549,738,328 - - - - - -
Total Loans (Bank) 118,291,346,183 1,028,365,608 1,829,704,383 114,105,981,495 3,580,265,771 3,712,165,771 131,900,000
Contingent liabilities 61,259,030,810 - - 61,259,030,810 612,590,308 612,590,308 -
Total 179,550,376,993 1,028,365,608 1,829,704,383 175,365,012,306 4,192,856,080 4,324,756,080 131,900,000
Less: Provision for unclassified loans and advances - OBU 124,242,089 124,242,089 -
Provision for loans and advances (excluding OBU) 4,068,613,991 4,200,513,991 131,900,000

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
13.5 Interest suspense account
Opening balance 702,662,220 665,254,434 672,910,943 665,254,434
Amount transferred during the year 1,104,303,343 846,649,435 1,066,246,646 816,898,158
Amount recovered during the year (551,241,850) (761,838,170) (551,241,850) (761,838,170)
Amount written off during the year (159,550,132) (47,403,479) (159,550,132) (47,403,479)
Balance at the end of the year 1,096,173,580 702,662,220 1,028,365,606 672,910,943

Interest suspense of EBLSL against margin loan (with negative equity) is included in Interest suspense of the Group.

13.6 Provision for other assets

Opening balance 47,853,113 21,463,790 47,856,113 21,463,790
Provision made/(released) during the year (7,856,235) 26,389,323 (13,055,032) 26,392,323
Adjustment made during the year (16,417,079) - (11,221,279) -
23,579,799 47,853,113 23,579,802 47,856,113

13.7 Provision for revaluation of shares

Opening balance 874,335,895 724,346,229 860,046,096 724,346,229
Provision made/(released) during the year 7,514,765 149,989,666 4,214,965 135,699,867
881,850,659 874,335,895 864,261,060 860,046,096
Provision has been kept on unrealized loss (gain net off) according to DOS Circular No. 4 dated 24 November 2011.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
13.8 Interest Payable on Borrowing
Interest payable on Borrowing 138,912,159 85,898,168 128,160,271 85,898,168
Interest payable on Borrowing-Offshore 48,075,385 29,032,894 45,232,250 26,180,188
186,987,545 114,931,062 173,392,522 112,078,356
Less: Inter unit/company elimination (14,894,451) (9,083,513) (12,051,316) (6,230,807)
172,093,093 105,847,548 161,341,205 105,847,548

13.09 Miscellaneous payable

Sale of savings certificate and WEDB 41,330,000 22,852,092 41,330,000 22,852,092
Unclaimed instruments 2,229,474 2,279,574 2,229,474 2,279,574
Other liabilities 385,211,096 147,449,594 385,211,096 147,449,594
428,770,570 172,581,260 428,770,570 172,581,260

13.10 Other liabilities of subsidiaries

Accounts payable 276,854,873 185,685,814
Liabilities for expenses 18,754,745 8,575,947
Bank overdraft 489,844,671 840,327,596
785,454,289 1,034,589,357

Less: Intra group outstanding balances

Rent & others (5,724,139) (5,612,917)
Share trading account (50,627,320) (318,043)
Bank overdraft (net off cheque in transit) (459,204,810) (840,327,596)
(515,556,269) (846,258,556)
Net other liabilities 269,898,020 188,330,801

As per our book (GL) As per their book (statement)

Debit (USD) Credit (USD) Debit (USD) Credit (USD)
13.a Nostro Reconciliation
Up to three months 1,222,990 2,172,925 959,847 7,066,282
More than three months but less than six months - 100 - -
More than six months but less than nine months - - - -
More than nine months but less than twelve months - - - -
More than twelve months - - - -
Total 1,222,990 2,173,025 959,847 7,066,282

The Bank is not required to keep provision on the unreconciled debit balance as at balance sheet date as there was
no debit entry aging more than three months.

14 Share Capital
A) Authorized capital
1,200,000,000 ordinary shares of Tk 10 each 12,000,000,000 12,000,000,000 12,000,000,000 12,000,000,000

B) Issued, subscribed and fully paid up capital

2014 (Nos.) 2013 (Nos.)
Issued against cash 129,345,000 129,345,000 1,293,450,000 1,293,450,000 1,293,450,000 1,293,450,000
Issued as bonus share 481,834,785 481,834,785 4,818,347,850 4,818,347,850 4,818,347,850 4,818,347,850
611,179,785 611,179,785 6,111,797,850 6,111,797,850 6,111,797,850 6,111,797,850

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 FINANCIAL REPORTS 2014

14.1 Slab wise list as on 31 December 2014

In terms of the clause (cha) of the Memorandum of Association and Article # 4 of the Articles of Association
of the Bank and clause 4 of BCCI Reconstruction Scheme 1992, the Authorised Capital of the Bank was Tk
12,000,000,000 divided into 1,200,000,000 ordinary shares of Tk 10 each. The issued, subscribed and fully paid up
capital of the bank is Tk 6,111,797,850 divided into 611,179,785 ordinary shares of Tk 10 each. Subject to above
conditions the break up of issued, subscribed and paid up capital of Tk 6,111,797,850 as on 31 December 2014 is
as follows:
Percentage of group wise share holdings:
2014 2013
Shareholders' group No. of shares (%) of share Taka No of Shares (%) of share Taka
holding holding
Directors 192,923,886 31.57% 1,929,238,860 192,923,886 31.57% 1,929,238,860
General Public 348,032,336 56.94% 3,480,323,360 348,023,246 56.94% 3,480,232,460
Financial Institutions 70,223,563 11.49% 702,235,630 70,232,653 11.49% 702,326,530
Total 611,179,785 100.00% 6,111,797,850 611,179,785 100.00% 6,111,797,850
Status of shareholding (shares of EBL) as on 31 December 2014 by CEO, CFO, Head of Internal Control and
Compliance, Company Secretary and top five salaried executives is shown in the following table:
CEO, CS, CFO & HoICC and their spouses & minor children.
No. of shares
Name Designation
(EBL) held
Ali Reza Iftekhar (with his spouse & minor children) Managing Director & CEO 146,893
Safiar Rahman (with his spouse & minor children) SEVP & Company Secretary -
Akhtar Kamal Talukder (with his spouse & minor children) DMD - Operations & ICC 24,940
Masudul Hoque Sardar (with his spouse & minor children) VP & Head of Finance -

Executives (Top five salaried executives other than CEO, CS, CFO & HoICC)
Hassan O. Rashid DMD - Corporate & Treasury 200,000
Abul Moqsud DMD & CRO -
Sami Karim SEVP & Head of Special Asset -
Management
S M Akhtaruzzaman Chowdhury SEVP & Head of Operations -
Md. Abdul Hakim EVP & Unit Head, Corporate -
Banking Unit- 02
Shares held by any shareholder to the extent of 10% or more. Nil
A range wise distribution schedule of the above shares is given below as required by the regulation 37 of the Listing
Regulations of Dhaka Stock Exchange Limited:
No. of (%) of
Range No. of shares
shareholders shareholding
001-500 8,977 1,435,614 0.23%
501-5,000 4,699 7,546,906 1.23%
5,001-10,000 480 3,484,043 0.57%
10,001-20,000 256 2,617,488 0.43%
20,001-30,000 106 3,528,544 0.58%
30,001-40,000 56 1,919,834 0.31%
40,001-50,000 47 2,122,042 0.35%
50,001-100,000 94 6,812,008 1.11%
100,001-1,000,000 203 67,014,542 10.96%
1,000,001 and above 71 514,698,764 84.21%
Total 14,989 611,179,785 100.00%

227
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
14.2 Capital adequacy ratio (BASEL II)
Tier – I (Core capital)
Paid up capital 6,111,797,850 6,111,797,850 6,111,797,850 6,111,797,850
Statutory reserve 6,111,797,850 5,362,423,626 6,111,797,850 5,362,423,626
General reserve 130,000,000 130,000,000 130,000,000 130,000,000
Dividend equalization reserve 356,040,000 356,040,000 356,040,000 356,040,000
Retained earnings 1,386,921,555 1,392,342,034 1,248,124,832 1,284,904,684
Non controlling interest - - - -
14,096,557,255 13,352,603,509 13,957,760,532 13,245,166,159
Tier –II (Supplementary capital)
General provision against UC loans and contingent assets 1,915,673,962 1,644,325,298 1,915,673,962 1,644,325,298
Revaluation Reserve for Securities up to 50% 402,595,260 29,986,046 402,595,260 29,986,046
Assets Revaluation Reserves up to 50% 1,844,747,775 1,844,747,775 1,844,747,775 1,844,747,775
4,163,016,997 3,519,059,119 4,163,016,997 3,519,059,119
Tier –III (Additional Supplementary capital) - - - -
A. Total capital 18,259,574,252 16,871,662,628 18,120,777,529 16,764,225,278
B. Total risk weighted assets 138,546,528,751 140,480,991,676 137,037,467,258 140,278,788,379
C. Required capital based on risk weighted assets (10% on B ) 13,854,652,875 14,048,099,168 13,703,746,726 14,027,878,838
D. Surplus/(deficiency) [A - C] 4,404,921,377 2,823,563,460 4,417,030,803 2,736,346,440
Capital adequacy ratio
Minimum requirement Consolidated Bank (Solo)
2014 2013 2014 2013 2014 2013
On core capital 5% 5% 10.17% 9.50% 10.19% 9.44%
On supplementary capital Not specified Not specified 3.01% 2.51% 3.03% 2.51%
On additional
Not specified Not specified - - - -
supplementary capital
On total capital 10% 10% 13.18% 12.01% 13.22% 11.95%

Consolidated Bank
Note 2014 2013 2014 2013
Taka Taka Taka Taka
15 Statutory Reserve
Opening balance 5,362,423,625 4,395,274,232 5,362,423,625 4,395,274,232
Transferred from profit during the year 749,374,225 967,149,393 749,374,225 967,149,393
Closing balance 6,111,797,850 5,362,423,626 6,111,797,850 5,362,423,625

16 Dividend equalization reserve

As per BRPD Circular No. 18 dated 20 October 2002, Banks are required to transfer an equal amount of money (the
amount that exceeds 20% cash dividend) to Dividend Equalization Account while paying cash dividend in excess of
20% which will be treated as `Core Capital’ of the Bank.

17 Excess of reserve against pre-take over loss-BCCI

Reserve against Pre-takover loss 17.1 1,554,759,750 1,554,759,750 1,554,759,750 1,554,759,750
Pre-takeover loss 17.2 (968,228,719) (973,078,718) (968,228,719) (973,078,718)
586,531,031 581,681,032 586,531,031 581,681,032

17.1 Reserve against Pre-takeover loss-BCCI

This represents the amount deducted from depositors and other accounts of customers of erstwhile BCCI branches
in Bangladesh under clause 11(3) of the Scheme. In accordance with clause 14 of the Scheme, a review was carried
out of the recovery made against the BCCI assets in 1997 and it was concluded that no repayment of the deductions
need to be made to the depositors of BCCI as per the Scheme. As the Bank is no longer required to repay the
deposits, it therefore, has been shown as reserve against pre take over loss (Note-17.2).

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
17.2 Pre-take over loss- BCCI
It represents the difference between BCCI assets and liabilities (excluding reserve) with assets in the higher side as on
the reporting date.
Opening balance (973,078,719) (952,794,813) (973,078,719) (952,794,813)
Recovery/(adjustment) during the year 4,850,000 (20,283,906) 4,850,000 (20,283,906)
Closing balance (968,228,719) (973,078,719) (968,228,719) (973,078,719)
18 Assets revaluation reserve
Opening balance 3,689,495,550 3,689,495,550 3,689,495,550 3,689,495,550
Addition during the year - - - -
Closing balance 3,689,495,550 3,689,495,550 3,689,495,550 3,689,495,550
This revaluation reserve is related to lands only. Hence, no deferred tax has been recognized due to the fact that taxes
paid at the time of land registration are final discharge of related tax liability.
19 Reserve for amortization of treasury securities (HTM)
Opening balance 827,635 98,740 827,635 98,740
Addition during the year 1,249,187 728,895 1,249,187 728,895
Adjustment made during the year - - - -
Closing balance 2,076,822 827,635 2,076,822 827,635
As per instruction/circular of Bangladesh Bank vide DOS circular Letter No 05 dated 26 May 2008 and subsequent
clarifications on 28 January 2009.
20 Reserve for revaluation of treasury securities (HFT)
Opening balance 59,972,091 13,754,631 59,972,091 13,754,631
Addition during the year 1,046,158,347 219,437,165 1,046,158,347 219,437,165
Adjustment made during the year (300,939,917) (173,219,705) (300,939,917) (173,219,705)
Closing balance 805,190,521 59,972,091 805,190,521 59,972,091

As per instruction/circular of Bangladesh Bank vide DOS circular Letter No 05 dated 26 May 2008 and subsequent
clarifications on 28 January 2009.

21 General Reserve
Opening balance 130,000,000 160,000,000 130,000,000 160,000,000
Transferred to Retained Earnings - (30,000,000) - (30,000,000)
Closing balance 130,000,000 130,000,000 130,000,000 130,000,000

22 Reserve against Non-banking assets

Opening balance 178,971,165 204,427,796 178,971,165 204,427,796
Adjustment made during the year - (25,456,631) - (25,456,631)
Closing balance 178,971,165 178,971,165 178,971,165 178,971,165

23 Foreign currency translation difference: [gain/(loss)]

Assets and liabilities of OBU and EBL Finance (HK) Ltd. have been presented into Taka (which is functional currency
of the Bank) using year end standard mid rate of exchange of the Bank @ USD 1 = BDT 77.9494 and HKD 1= BDT
10.1771. Yearly incomes and expenses are translated using monthly average exchange rate (USD 1= BDT 77.6120 &
HKD 1 =BDT 10.0679). The net cumulative result of the exchange differenes has been presented separately as equity
component as per BAS 21 (para 39).

24 Retained Earnings
Opening balance 2,087,507,793 1,722,111,302 1,980,070,442 1,581,904,575
Profit for the year 2,137,871,102 2,535,094,458 2,041,511,733 2,528,863,832
Transfer to statutory reserve (749,374,225) (967,149,393) (749,374,225) (967,149,393)
Transfer from General Reserve - 30,000,000 - 30,000,000
Cash Dividend (1,222,359,570) (1,222,359,570) (1,222,359,570) (1,222,359,570)
FX adjustment for transferring OBU Profit (960,471) (10,189,003) (960,471) (10,189,003)
Dividend received from subsidiaries - - 65,000,000 39,000,000
Closing balance 2,252,684,630 2,087,507,793 2,113,887,906 1,980,070,442

229
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
25 Contingent liabilities
Acceptance and endorsements 25.1 29,802,563,348 26,827,594,612 29,802,563,348 26,827,594,612
Letters of guarantee 25.2 9,974,191,339 12,515,097,423 9,974,191,339 12,515,097,423
Irrevocable letters of credit 25.3 16,329,554,466 15,562,071,032 16,329,554,466 15,562,071,032
Bills for collection 25.4 5,152,721,657 5,110,318,372 5,152,721,657 5,110,318,372
61,259,030,810 60,015,081,437 61,259,030,810 60,015,081,437
25.1 Acceptance and endorsements
Acceptances 7,130,279,410 8,513,585,832 7,130,279,410 8,513,585,832
Acceptances-(ULC-Cash) 22,147,877,530 18,297,887,144 22,147,877,530 18,297,887,144
29,278,156,940 26,811,472,976 29,278,156,940 26,811,472,976
Acceptances-Offshore Banking Unit 524,406,408 16,121,636 524,406,408 16,121,636
29,802,563,348 26,827,594,612 29,802,563,348 26,827,594,612
25.2 Letters of guarantees
Directors 192,900 192,900 192,900 192,900
Government 472,692,727 471,496,327 472,692,727 471,496,327
Banks and other financial institutions 3,514,552,822 4,180,310,717 3,514,552,822 4,180,310,717
Others (Customers etc.) 5,986,752,891 7,863,097,479 5,986,752,891 7,863,097,479
9,974,191,339 12,515,097,423 9,974,191,339 12,515,097,423
Letter of guarantee-Offshore Banking Unit - - - -
9,974,191,339 12,515,097,423 9,974,191,339 12,515,097,423

25.2.1 A case was filed by Eastern Bank Limited, successor of BCCI Overseas Limited against National Bank Ltd (NBL)
for issuing guarantee at Artha Rin Adalat - 3, Dhaka, which has been decreed against NBL on 04 January 2004 for
Tk 27,366,450 plus interest @ 18% p.a. amounting to Tk 45,565,139 from 01 October 1994 to 31 December 2003
making an aggregate amount of Tk 72,931,589. Against the decreed amount, NBL has made an appeal against the
order which has been dismissed on 14 July 2014 in favor of EBL by the Honorable High Court, Dhaka. Before filing
the appeal NBL had paid Tk 13,683,225 to the court being 50% of the principal decreed amount.
25.3 Irrevocable letters of credit
Letters of credit (LC)- Cash sight 2,892,539,053 3,524,404,110 2,892,539,053 3,524,404,110
Letters of credit (LC)- Cash Usance 7,939,978,572 7,035,251,168 7,939,978,572 7,035,251,168
Letters of credit (LC)- Back to Back 5,121,404,889 4,947,325,031 5,121,404,889 4,947,325,031
15,953,922,513 15,506,980,309 15,953,922,513 15,506,980,309
Letter of credit-Offshore Banking Unit 375,631,952 55,090,723 375,631,952 55,090,723
16,329,554,466 15,562,071,032 16,329,554,466 15,562,071,032
25.4 Bills for collection
Local Documentary Bills Purchased (LDBC) 2,648,439,318 2,525,412,218 2,648,439,318 2,525,412,218
Foreign Documentary Bills Purchased (FDBC) 2,214,424,334 2,140,536,966 2,214,424,334 2,140,536,966
Margin on Bills Purchase 287,912,037 444,369,188 287,912,037 444,369,188
5,150,775,689 5,110,318,372 5,150,775,689 5,110,318,372
Bills for collection- Offshore Banking Unit 1,945,968 - 1,945,968 -
5,152,721,657 5,110,318,372 5,152,721,657 5,110,318,372
26 Interest income
Interest on advances 12,077,925,838 13,405,739,995 11,904,127,714 13,245,321,775
Interest on money at call and short notice 67,818,078 91,782,626 67,818,078 91,782,626
Interest on placement with other banks and 608,461,123 992,502,514 577,696,375 992,502,514
Financial Institutions
Interest on foreign currency balances 162,527,038 77,393,390 162,527,038 77,393,390
Interest income-offshore 668,833,923 486,172,006 648,375,658 479,764,766
13,585,566,000 15,053,590,531 13,360,544,863 14,886,765,071
Less: Elimination of inter unit/company transactions (299,532,073) (194,134,663) (200,575,227) (79,608,182)
13,286,033,926 14,859,455,868 13,159,969,636 14,807,156,889

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 FINANCIAL REPORTS 2014

Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka

27 Interest paid on deposits and borrowings

Interest on deposits 27.01 7,823,081,339 8,601,567,611 7,823,081,339 8,601,567,611
Interest on borrowings from Banks & FIs 27.02 689,104,720 726,860,264 555,703,428 627,584,341
Interest on borrowings from BB 27.03 561,852,792 466,181,326 561,852,792 466,181,326
Interest on Margin 505,803 3,301,360 505,803 3,301,360
Interest paid on deposits and borrowings-offshore 423,107,578 299,435,586 410,243,916 296,571,556
9,497,652,233 10,097,346,147 9,351,387,279 9,995,206,194
Less: Elimination of inter unit/company transactions (299,532,073) (194,134,663) (200,575,227) (79,608,182)
9,198,120,160 9,903,211,484 9,150,812,052 9,915,598,012
27.01 Interest on deposits
Interest on Savings Deposits 1,183,322,195 844,041,627 1,183,322,195 844,041,627
Interest on Short Notice Deposits 1,086,450,905 2,010,637,822 1,086,450,905 2,010,637,822
Interest on Term Deposits 5,553,308,238 5,746,888,162 5,553,308,238 5,746,888,162
7,823,081,339 8,601,567,611 7,823,081,339 8,601,567,611
27.02 Interest on borrowings from Banks & FIs
Interest on demand borrowing 340,992,019 499,744,474 207,590,727 400,468,551
Interest on term borrowing 348,112,701 227,115,790 348,112,701 227,115,790
689,104,720 726,860,264 555,703,428 627,584,341
27.03 Interest on borrowings from BB & others
Repo with BB & others 310,574,216 86,118,397 310,574,216 86,118,397
Repo with BB against ALS 4,963,201 88,193,630 4,963,201 88,193,630
Borrowings under IPFF 36,754,959 66,960,459 36,754,959 66,960,459
Borrowings under EDF 56,976,003 74,276,472 56,976,003 74,276,472
Refinancing for Agrobased Industries 38,182,797 42,764,222 38,182,797 42,764,222
Refinancing Agribusiness - Revolving 90,924,308 97,976,544 90,924,308 97,976,544
Second Crop Diversification Project 23,021,750 9,458,270 23,021,750 9,458,270
SME Foundation 455,558 433,332 455,558 433,332
561,852,792 466,181,326 561,852,792 466,181,326

28 Income from Investments

Dividend on shares
Ordinary shares 46,099,130 38,555,570 42,161,240 36,657,570
Preference shares 13,100,674 8,570,833 13,100,674 8,570,833
59,199,803 47,126,403 55,261,913 45,228,403
Interim dividend from Subsidiaries - - 65,000,000 39,000,000
Interest on reverse REPO 19,840,893 50,720,176 19,840,893 50,720,176
Interest on debentures & commercial paper 4,277,778 188,973 4,277,778 188,973
Interest on corporate bonds 18,128,177 30,977,600 18,128,177 30,977,600
Interest on treasury bonds 2,854,106,816 1,672,908,556 2,854,106,816 1,672,908,556
Interest on treasury/bangladesh bank bills 113,161,535 440,317,062 113,161,535 440,317,062
Gain from trading in govt. securities 341,531,231 96,111,242 341,531,231 96,111,242
(Loss) on revaluation of treasury securities (HFT)* (180,845,369) (359,558,704) (180,845,369) (359,558,704)
Gain (net off loss) on quoted shares 78,462,541 65,161,062 52,830,813 54,954,959
3,307,863,405 2,043,952,370 3,343,293,787 2,070,848,267

*As per instruction/circular of Bangladesh Bank Bide DOS circular Letter No 05 dated 26 May 2008 and subsequent
clarifications on 28 January 2009.

231
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
29 Commission, exchange and brokerage
Fees, commission and charges 1,853,188,576 1,790,422,931 1,846,801,132 1,787,160,193
Exchange gain net off exchange losses 737,238,462 558,301,841 736,314,481 557,867,362
Brokerage 94,352,739 64,510,586 - -
Commission, exchange and brokerage-offshore 85,676,775 18,448,007 48,638,393 12,289,760
2,770,456,552 2,431,683,365 2,631,754,006 2,357,317,315

30 Other operating income

Rebate earnings 50,354,632 54,618,412 50,354,632 54,618,412
Postage charges recovered 12,563,167 14,848,291 12,563,167 14,848,291
Swift & Telex charges 45,063,780 49,637,473 45,063,780 49,637,473
Service charges related to trade operations 4,554,196 7,026,274 4,554,196 7,026,274
Locker rent 12,522,075 11,377,105 12,522,075 11,377,105
Gain on sale of fixed assets 2,124,570 388,082 2,124,570 388,082
Other earnings 19,038,811 10,915,811 18,816,367 10,572,002
Other operating income-offshore 3,983,104 1,181,101 3,983,104 1,181,101
150,204,334 149,992,549 149,981,889 149,648,740

Commission, fees and charges received against export and export related services are VAT exempted as per service
code S056 of SRO 188-AIN/2012/646-MUSHAK, dated 07 June 2012.

31 Salary and allowances

Basic salary 713,339,652 619,418,136 697,892,826 603,657,903
Other salary & allowances 1,204,321,318 961,863,321 1,175,258,655 947,622,332
Festival bonus 121,058,614 97,975,100 121,058,614 97,975,100
Performance bonus 185,835,846 143,106,206 179,000,000 139,000,000
Bank's contribution to provident fund 65,738,794 56,454,832 65,738,794 56,454,832
Contribution to gratuity fund 31.1 121,745,137 105,313,974 121,745,137 105,313,974
Contribution to superannuation fund 31.2 13,484,800 13,484,798 13,484,800 13,484,798
2,425,524,161 1,997,616,366 2,374,178,826 1,963,508,938

31.1 Contribution to gratuity fund

Provision to gratuity fund was made as per actuarial valuation report of the fund as on 30 September 2012. Valuation
was carried out on ‘Projected unit credit method’as recommended by Bangladesh Accounting Standard (BAS) 19
‘Employee Benefits’. Under this method the valuation was done considering both ‘future service cost’ which an
employee shall obtain in normal course of service and ‘past service cost’ which is the difference between assets
built up from past contributions and accrued liabilities (i.e. benefits earned by members as a result of service as of
valuation date).

Finally, actuary recommended that with effect from 1 October 2012 a contribution of at least 17.20% of basic payroll
is contributed into the fund each year until the next actuarial review is done. The Bank is maintaining recommended
provision from above mentioned date.
32.1.a Contribution to Gratuity fund during the year
Basic payroll for the full year 2014 707,820,568
Required contribution during the year
121,745,137
(17.20% on basic payroll)
Maintained during the year 121,745,137
Surplus/(Deficit) -

31.2 Contribution to superannuation fund

Provision to superannuation fund was made as per actuarial valuation report of the fund as on 30 September 2012.
Valuation was carried out on ‘Projected unit credit method’ as recommended by Bangladesh Accounting Standard
(BAS) 19 ‘Employee Benefits’. Under this method the valuation was done considering both ‘future service cost’
which an employee shall obtain in normal course of service and ‘past service cost’ which is the difference between
assets built up from past contributions and acrued liabilities (i.e. benefits earned by members as a result of service
as of valuation date).

232
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
The actuary recommended a contribution of at least 1.40% of total admissible benefits into the fund until the next
actuarial investigation is carried out.

31.2.a Contribution to Superannuation fund during the year

Total Admissible benefits as per
963,200,000
actuarial valuation
Required contribution during the year
13,484,800
(1.40% on admissible benefits)
Maintained during the year 13,484,800
Surplus/(Deficit) -

32 Rent, taxes, insurance, utilities etc.

Rents, rates and taxes - Premises & Equipment 374,991,222 288,907,747 361,961,246 275,918,280
Insurance premium 83,468,470 79,925,202 83,443,732 79,888,924
Utilities (except telecommunication) 92,242,616 68,863,942 90,586,005 67,430,744
550,702,308 437,696,891 535,990,983 423,237,948

33 Legal & professional expenses

Legal & professional expenses 30,052,524 31,651,385 29,786,585 31,533,885
Other legal expenses 27,072,616 19,307,546 27,072,616 19,307,546
57,125,140 50,958,931 56,859,201 50,841,431

34 Postage, stamp, telecommunication etc.

Telephone - office 33,380,562 25,940,927 33,203,396 25,786,450
Network link, Internet, DR and swift charges 61,643,714 54,793,984 59,429,553 52,506,732
Postage & courier charges 24,415,395 25,267,597 20,211,977 23,944,223
Stamp & court fees 10,814,293 556,090 10,810,609 547,445
130,253,964 106,558,597 123,655,535 102,784,849

35 Stationery, printing, advertisement, etc.

Printing and stationery 86,998,710 77,981,156 85,884,751 77,369,319
Publicity and advertisement 163,044,128 156,279,089 162,754,196 155,975,026
250,042,837 234,260,245 248,638,946 233,344,345

36 Managing Director's salary and allowances

Basic salary 9,927,742 8,632,645 9,927,742 8,632,645
Allowances 4,380,000 4,182,420 4,380,000 4,182,420
Bonus 2,680,000 2,477,600 2,680,000 2,477,600
Bank's contribution to provident fund 992,774 863,265 992,774 863,265
17,980,516 16,155,930 17,980,516 16,155,930

37 Directors' fees & expenses

Meeting attendance fees 1,391,000 1,211,000 1,313,000 1,130,000
Other expenses 2,319,300 1,872,587 2,319,300 1,872,587
3,710,300 3,083,587 3,632,300 3,002,587

Each director of bank is paid for Tk. 5,000/- per board meeting and per committee meeting.

38 Audit Fees
Statutory audit fees for the year 1,241,377 873,609 400,000 400,000
VAT on audit fees (15%) 90,310 78,000 60,000 60,000
1,331,687 951,609 460,000 460,000

233
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
39 Repairs, maintenance and depreciation
Depreciation: ( Annexure 'A')
Buildings 18,271,044 15,478,968 18,271,044 15,478,968
Machinery and equipment 95,189,151 96,808,758 94,542,357 96,205,726
Computer and network equipment 50,077,153 49,108,037 49,006,923 48,292,175
Vehicles 12,355,989 14,362,338 12,154,644 14,160,992
Furniture and fixtures & leased assets 34,783,277 32,471,739 33,096,940 30,966,395
Software 30,553,343 25,961,840 30,119,547 25,598,419
241,229,956 234,191,680 237,191,454 230,702,675
Repairs, maintenance & spare parts
Machinery & equipments 50,136,730 60,970,081 49,904,639 59,756,192
Vehicles 6,109,971 5,014,032 6,109,971 5,014,032
Furniture and fixtures 10,384,842 19,056,494 10,384,842 19,056,494
Rented premises- general 45,590,555 38,774,670 43,925,208 38,378,211
Rented premises-electricity & lighting 16,370,378 16,826,691 16,370,378 16,826,691
Software maintenance 60,795,929 66,720,176 60,314,016 66,504,298
189,388,405 207,362,144 187,009,054 205,535,918
430,618,361 441,553,824 424,200,508 436,238,593

40 Other expenses
Card expenses 172,588,250 107,815,950 172,588,250 107,815,950
Business travelling & conveyance 62,319,361 51,670,451 61,808,547 51,375,019
Bank charges 9,463,786 13,988,670 9,107,304 13,857,547
Donation 24,442,210 6,147,525 24,412,006 6,147,525
Fees and subscriptions 3,761,594 3,973,241 3,622,899 3,589,344
Recruitment and training expenses 20,872,147 17,588,935 20,532,328 17,525,935
Entertainment & recreation 76,736,777 65,094,976 75,518,503 64,436,345
Office securities 116,390,447 106,906,035 115,810,847 106,324,373
Sales & collection commision (DST, Agency, Dealers) 45,121,308 42,161,667 43,571,214 42,161,667
Collection and contact point verification expense 9,274,960 10,487,769 9,274,960 10,487,769
Expense for EBL Subordinated Bond 2,960,000 - 2,960,000 -
AGM expenses 4,723,567 4,798,594 4,723,567 4,798,594
Miscellaneous w/off & Loss on sale of FA 242,580 - - -
Other operating expenses (uniform, freight, periodicals etc.) 29,297,599 23,033,009 29,245,841 23,022,469
Other expenses of subsidiaries 40.1 10,616,187 11,948,206 - -
588,810,773 465,615,029 573,176,266 451,542,538
40.1 Other expenses of subsidiaries
Petty expenses 18,937 265,546
CDBL Charges 489,707 42,310
Registration & renewal 370,982 217,131
Guarantee premium 1,725,000 1,725,000
Laga & Howla Charge 7,124,648 5,042,710
Deferred revenue expenses (written off) 156,620 206,620
Bad Debts - 2,438,477
Preliminary expenses 137,705 1,438,379
Other adminastration expenses 592,588 572,033
10,616,187 11,948,206

41 Other provision
Provision against other assets 13.6 (7,856,235) 47,338,380 (13,055,032) 26,392,323
Loss on revaluation of shares 13.7 7,514,765 149,989,751 4,214,965 135,699,952
(341,470) 197,328,131 (8,840,067) 162,092,275

234
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
42 Deferred tax income (net)
Deferred tax income 9.12.a 144,890,383 330,093,994 144,890,383 330,093,994
Deferred tax expense 9.12.b 16,229,147 8,189,641 16,229,147 8,189,641
128,661,236 321,904,353 128,661,236 321,904,353

43 Earnings per share

Earnings per share (EPS) has been computed by dividing the profit after tax (PAT) by the weighted average number
of ordinary shares outstanding as on 31 December 2014 as per BAS- 33 ‘Earnings Per Share’. Diluted earning per
share was not required to calculate as there were no dilution possibilities during the year.

Net profit attributable to the shareholders of EBL 2,137,871,104 2,535,094,458 2,106,511,733 2,567,863,831
Weighted average number of shares 611,179,785 611,179,785 611,179,785 611,179,785
Earnings per share (EPS) 3.50 4.15 3.45 4.20

44 Changes in other assets

Opening Balance:
DSE Membership 553,800,000 553,800,000 - -
CSE Membership 201,500,000 201,500,000 - -
Receivable from subsidiaries - - 5,612,917 47,097,400
Other assets of subsidiaries 17,300,375 34,299,423 - -
Stock of stationeries 14,532,435 16,148,228 14,532,435 16,148,228
Stamps on hand 3,820,980 1,734,226 3,820,980 1,734,226
Advance to staff for expenses 238,491 489,000 238,491 489,000
Suspense account 5,266,159 5,120,648 5,266,159 5,120,648
Security deposits-govt. agencies 2,457,801 2,257,801 2,257,801 2,257,801
Interest and dividend receivables 755,949,181 473,930,637 758,801,887 473,930,637
Sundry receivables 225,645,517 108,604,461 225,645,517 108,604,461
Advance rent 333,964,153 300,001,498 333,964,153 300,001,498
Prepayments and advance to vendors 167,734,063 269,946,879 164,130,751 262,706,223
Deferred tax assets 698,391,343 376,486,990 698,391,343 376,486,990
Bangladesh Bank clearing account - 22,788,981 - 22,788,981
Prepaid expenses- OBU - 10,990,449 - 10,990,449
2,980,600,498 2,378,099,221 2,212,662,434 1,628,356,541
Closing Balance:
DSE Membership 553,800,000 553,800,000 - -
CSE Membership 201,500,000 201,500,000 - -
Receivable from subsidiaries - - 50,935,416 5,612,917
Other assets of subsidiaries 36,503,227 17,300,375 - -
Stock of stationeries 13,005,088 14,532,435 13,005,088 14,532,435
Stamps on hand 2,912,441 3,820,980 2,912,441 3,820,980
Advance to staff for expenses 757,052 238,491 757,052 238,491
Suspense account - 5,266,159 - 5,266,159
Security deposits-govt. agencies 3,400,476 2,457,801 2,960,476 2,257,801
Interest and dividend receivables 873,179,098 755,949,181 871,072,093 758,801,887
Sundry receivables 447,611,743 225,645,517 447,611,743 225,645,517
Advance rent 321,069,492 333,964,153 319,005,678 333,964,153
Prepayments and advance to vendors 386,002,983 167,734,063 385,869,094 164,130,751
Deferred tax assets 827,052,579 698,391,343 827,052,579 698,391,343
3,666,794,180 2,980,600,498 2,921,181,662 2,212,662,434
Adjustment for other non cash items 112,270,206 245,125,087 112,270,206 245,125,087
Net cash changes in other assets (573,923,476) (357,376,190) (596,249,022) (339,180,805)

235
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Consolidated Bank
2014 2013 2014 2013
Taka Taka Taka Taka
45 Changes in other liabilities
Opening balances
Privileged creditors 326,317,939 313,858,624 326,317,939 313,858,624
Acquirer liabilities 140,446,893 110,425,213 140,446,893 110,425,213
Sundry creditors 117,905,676 158,912,998 117,905,676 158,912,998
Security deposit 62,609,562 18,256,912 62,609,562 18,256,912
Current tax liability/(assets) 1,480,961,079 1,367,000,453 1,475,061,768 1,349,456,697
Provision for loans and advances (except OBU) 3,476,553,016 2,857,162,569 3,476,553,016 2,857,162,569
Provision for loans and advances (OBU) 97,013,933 92,805,394 97,013,933 92,805,394
Interest suspense account 702,662,220 665,254,434 672,910,943 665,254,434
Provision for other assets 47,853,113 21,463,790 47,856,113 21,463,790
Provision for loss on revaluation of shares (net) 874,335,895 724,346,229 860,046,096 724,346,229
Advance interest/commission received 20,378,400 30,902,907 20,378,400 30,902,907
Expenses payable 317,020,422 223,545,831 317,020,422 223,545,831
Interest payable on borrowing including Offshore 105,847,548 131,683,819 105,847,548 131,683,819
Inter branch and inter system accounts 40,703 266,802 40,703 266,802
Advance export proceeds 356,956,829 235,510,785 356,956,829 235,510,785
Miscellaneous payable 172,581,260 166,100,345 172,581,260 166,100,345
Other liabilities of subsidiaries 188,330,801 84,431,504 - -
8,487,815,290 7,201,928,608 8,249,547,103 7,099,953,348
Closing balances
Privileged creditors 286,783,691 326,317,939 286,783,691 326,317,939
Acquirer liabilities 260,271,782 140,446,893 260,271,782 140,446,893
Sundry creditors 63,096,228 117,905,676 63,096,228 117,905,676
Security deposit 57,290,130 62,609,562 57,290,130 62,609,562
Current tax liability/(assets) 1,075,823,159 1,480,961,079 1,070,435,914 1,475,061,768
Provision for loans and advances (except OBU) 4,226,658,845 3,476,553,016 4,200,513,991 3,476,553,016
Provision for loans and advances (OBU) 124,242,089 97,013,933 124,242,089 97,013,933
Interest suspense account 1,096,173,580 702,662,220 1,028,365,606 672,910,943
Provision for other assets 23,579,799 47,853,113 23,579,802 47,856,113
Provision for loss on revaluation of shares (net) 881,850,659 874,335,895 864,261,060 860,046,096
Advance interest/commission received 13,882,264 20,378,400 11,203,244 20,378,400
Expenses payable 319,283,096 317,020,422 319,283,096 317,020,422
Interest payable on borrowing including Offshore 172,093,093 105,847,548 161,341,205 105,847,548
Inter branch and inter system accounts 69,199 40,703 69,199 40,703
Advance export proceeds 325,458,711 356,956,829 325,458,711 356,956,829
Miscellaneous payable 428,770,570 172,581,260 428,770,570 172,581,260
Other liabilities of subsidiaries 269,898,020 188,330,801 - -
9,625,224,914 8,487,815,290 9,224,966,318 8,249,547,103
Adjustment for other non cash items (98,093,156) (40,557,073) (84,675,487) (40,065,463)
Net cash changes in other liabilities 1,039,316,468 1,245,329,609 890,743,728 1,109,528,292

46 Events after the reporting period

The Board of Directors of Eastern Bank Limited in 550 th Board Meeting held on 25 February 2015 recommended Cash
Dividend @ 20% on the holding of shares i.e. (Tk. 2 against each shares of Tk. 10) on the record date (11 March 2015)
for the year 2014. The amount of recommended cash dividend is Tk. 1,222,359,570.

236
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Annexure-A
Eastern Bank Limited
Schedule of Fixed Assets
As at 31 December 2014
Figures are in Taka
Cost Accumulated Depreciation & Amortization
Net book
Balance On Balance value at 31
Particulars Balance on Additions Disposals Balance on
Revaluation at 31 Charge for disposals at 31 December
01 January during the during the 01 January
Reserve December the year during the December 2014
2014 year year 2014
2014 year 2014
Tangible assets:
Land 5,177,928,478 - 989,440 - 5,178,917,918 - - - - 5,178,917,918
Building 730,841,590 - - - 730,841,590 32,420,970 18,271,044 - 50,692,014 680,149,576
Building under construction 379,904,613 - 117,716,810 - 497,621,423 - - - - 497,621,423
Machinery and Equipment 547,945,392 - 101,949,138 (3,892,787) 646,001,743 388,021,990 94,542,357 (3,892,737) 478,671,610 167,330,133
Computer and Network Equipment 366,150,351 - 68,841,142 (149,370) 434,842,123 255,416,522 49,006,923 (27,717) 304,395,727 130,446,395
Vehicles 108,699,294 - 7,782,062 (4,073,935) 112,407,421 73,281,348 12,154,644 (4,073,933) 81,362,059 31,045,362
Furniture and fixtures & Leased
420,763,260 - 23,699,572 (1,566,810) 442,896,022 245,192,657 33,096,940 (1,566,771) 276,722,826 166,173,196
Assets under Finance Lease

EASTERN BANK LIMITED

Intangible assets:
Software 217,890,577 - 105,817,042 - 323,707,619 58,396,339 30,119,547 - 88,515,886 235,191,733

237
At 31 December 2014 7,950,123,554 - 426,795,206 (9,682,902) 8,367,235,859 1,052,729,826 237,191,454 (9,561,158) 1,280,360,122 7,086,875,736

As at 31 December 2013
Cost Accumulated Depreciation & Amortization
Net book
On Balance value at 31
Particulars Balance on Additions Disposals Balance at Balance on
Revaluation Charge for disposals at 31 December
01 January during the during the 31 December 01 January
Reserve the year during the December 2013
2013 year year 2013 2013

ANNUAL REPORT 2014

year 2013
Tangible assets:
Land 4,636,946,781 540,981,697 - 5,177,928,478 - - - - 5,177,928,478
Building 462,801,908 - 268,039,682 - 730,841,590 16,942,002 15,478,968 - 32,420,970 698,420,620
Building under construction 201,326,929 - 178,577,684 - 379,904,613 - - - - 379,904,613
Machinery and Equipment 479,640,206 - 70,482,109 (2,176,923) 547,945,392 293,993,108 96,205,726 (2,176,844) 388,021,990 159,923,402
Computer and Network Equipment 323,986,704 - 49,714,665 (7,551,018) 366,150,351 214,675,262 48,292,175 (7,550,916) 255,416,522 110,733,829
Vehicles 105,243,946 - 3,513,848 (58,500) 108,699,294 59,178,855 14,160,992 (58,499) 73,281,348 35,417,946
Furniture and fixtures & Leased Assets
393,338,526 - 27,764,144 (339,410) 420,763,260 214,552,838 30,966,395 (326,576) 245,192,657 175,570,603
under Finance Lease
Intangible assets:
Software 198,441,734 - 19,448,843 - 217,890,577 32,797,920 25,598,419 - 58,396,339 159,494,238
At 31 December 2013 6,801,726,734 - 1,158,522,672 (10,125,851) 7,950,123,555 832,139,986 230,702,675 (10,112,835) 1,052,729,826 6,897,393,729
FINANCIAL REPORTS 2014
 Annexure-A1
Eastern Bank Limited
Schedule of Fixed Assets Disposals
As at 31 December 2014 Figures are in Taka

Sales
Net Buyer/
Accumulated Value/ Tax & Gain/ Mode of
Date Particulars Cost book Highest
depreciation Insurance VAT (Loss) Disposal
value bidder
claim
Toyota Estima Kabir
Open
6/5/2014 Microbus DM- 973,935 973,934 1 604,950 49,950 554,999 Ahmed
Tender
CHA-54-0428 Barbhuiya
Lost
Computer (HP
19/6/2014 107,870 10,427 97,443 112,000 - 14,557 - (Insurance
Compaq)
covered)
Machinery & Open M/S Farid
24/8/2014 2,760,387 2,760,352 35 289,786 26,080 263,671
Equipment Tender Enterprise
M/S
Furniture & Open
24/8/2014 2,699,210 2,699,156 54 253,196 22,788 230,354 Brother
Equipment Tender
Enterprise
Hyundai Santa
Open Md. Nurul
21/10/2014 Fe Jeep DM- 3,100,000 3,099,999 1 1,146,680 94,680 1,051,999
Tender Islam
GHA-11-9442
Notebook: Lost
21/10/2014 Toshiba 41,500 17,290 24,210 33,200 - 8,990 - (Insurance
(Model: C840) covered)
Total 9,682,902 9,561,158 121,744 2,439,812 193,498 2,124,570

Annexure-B
Eastern Bank Limited and its subsidiaries
Balance with other Banks and Financial Institutions (Consolidated)
As at 31 December 2014
Outside Bangladesh - (note-4.2)
2014 2013
Currency Amount Amount
Name of Banks and FIs Conversion Amount in Conversion Amount in
Name in Foreign in Foreign
rate BDT rate BDT
Currency Currency

In demand deposit account (non interest bearing) with :

AB Bank Limited, Mumbai USD 46,993 77.95 3,663,085 225,450 77.75 17,528,763
Al-Rajhi Bank, KSA SAR 15,000 20.77 311,565 15,000 20.73 310,967
Bank of Bhutan, Bhutan USD 7,557 77.95 589,068 9,671 77.75 751,886
Citibank N. A., Mumbai USD - - - 115,657 1.51 174,247
Citibank N. A., Newyork USD 935,148 77.95 72,894,201 - - -
Commerz Bank AG, Frankfurt, Germany EURO 227,604 94.73 21,561,363 451 106.83 48,131
Deutsche Bank AG, Frankfurt, Germany-OBU EURO 6,146 94.73 582,196 264,837 77.75 20,591,092
Habib American Bank, Newyork USD - - - 243,563 77.75 18,937,045
HSBC, Hongkong-HKD (EBL Finance HK Limited) HKD 2,325,093 10.18 23,662,700 298,200 10.08 3,005,081
HSBC, Hongkong-USD (EBL Finance HK Limited) USD 936,950 77.95 73,034,691 548,619 77.75 42,655,130
ICICI Bank Mumbai USD - - 445,439 77.75 34,632,888
JP Morgan Chase Bank, Germany EUR 21,049 94.73 1,994,035 169,456 106.83 18,102,761
JP Morgan Chase Bank N.A., London GBP 176,637 120.93 21,360,811 119,745 128.09 15,338,543
JP Morgan Chase Bank N.A., NY USD 402,124 77.95 31,345,359 538,897 77.75 41,899,254

238
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

2014 2013
Currency Amount Amount
Name of Banks and FIs Conversion Amount in Conversion Amount in
Name in Foreign in Foreign
rate BDT rate BDT
Currency Currency

JP Morgan Chase Bank NA, Sydney AUD 69,503 63.41 4,407,325 109,391 68.93 7,539,839
Mashreqbank, Newyork USD 53,911 77.95 4,202,332 390,367 77.75 30,350,998
National Commercial Bank, KSA SAR 79,541 20.77 1,652,151 - - -
Nepal Bangladesh Bank Ltd., Kathmandu USD 73,686 77.95 5,743,785 22,752 77.75 1,768,950
NIB Bank Limited, Karachi USD 281,793 77.95 21,965,587 424,346 77.75 32,992,933
Nordea Bank, Norway NOK 118,227 10.44 1,234,525 65,226 12.65 825,270
Standard Chartered Bank, Newyork - OBU USD 50,075 77.95 3,903,300 639,411 77.75 49,714,222
Standard Chartered Bank, Colombo USD 33,645 77.95 2,622,572 64,676 77.75 5,028,556
Standard Chartered Bank, Frankfurt EURO 6,844 94.73 648,379 53,561 106.83 5,721,847
Standard Chartered Bank, Kolkata USD 102,009 77.95 7,951,569 218,404 77.75 16,980,944
Standard Chartered Bank, Newyork USD 760,522 77.95 59,282,195 - - -
Standard Chartered Bank, Singapore SGD 68,395 58.93 4,030,356 16,615 61.28 1,018,142
The Bank of Nova Scotia, Toronto CAD 53,838 66.94 3,604,152 6,401 72.60 464,716
The Bank of Tokyo Mitshubishi, Kolkata USD 6,737 77.95 525,145 6,737 77.75 523,802
The Bank of Tokyo Mitshubishi, London GBP 25,446 120.93 3,077,197 115,657 128.09 14,814,901
The Bank Toykyo Mitshubishi, Tokyo JPY 8,043,600 0.65 5,196,166 2,315,051,898 0.74 1,711,517,868
Wachovia Bank NA USD 12,033 77.95 937,983 331,341 77.75 25,761,727
Zurcher Kantonal Bank, Zurich, Switzerland CHF 11,843 78.74 932,573 26,169 87.20 2,282,041
Total 382,916,367 2,121,282,542

Annexure-B1
Eastern Bank Limited and its subsidiaries
Borrowing from Banks and Financial Institutions (Consolidated)
As at 31 December 2014

Outside Bangladesh - (note-11.2)

2014 2013
Currency Amount Amount
Name of Banks and FIs Conversion Amount in Conversion Amount in
Name in Foreign in Foreign
rate BDT rate BDT
Currency Currency

Asian Development Bank USD 537,845 77.95 41,924,711 - - -

Banca Ubae Spa, Spain USD - - - 5,000,000 77.75 388,750,000
Citibank N A, Newyork USD - - - 1,229,485 77.75 95,592,430
Deutsche Trust Company Americas, Newyork USD 226,905 77.95 17,687,070 155,089 77.75 12,058,160
Deutsche Investitions-und
USD 32,000,000 77.95 2,494,380,800 16,000,000 77.75 1,244,000,000
Entwicklungsgesellschaft MBH (DEG)
FMO Netherland USD 16,000,000 77.95 247,190,400 20,000,000 77.75 1,555,000,000
HSBC, Newyork USD 15,643 77.95 1,219,323 37,917 77.75 2,948,078
Habib American Bank, NY USD 30,036 77.95 2,341,255 - - -
ICICI Bank Ltd., Mumbai USD 15,529 77.95 1,210,454 - - -
International Finance Corporation (IFC) USD - - - 30,000,000 77.75 2,332,500,000
National Commercial Bank, Jeddah, KSA SAR - - - 1,049 20.73 21,742
Standard Chartered Bank, Newyork USD - - - 370,034 77.75 28,770,154
United Bank Limited, Dubai USD 9,657,122 77.95 752,766,891 - - -
Total 4,558,720,905 28,791,896

239
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Annexure-C

Related party disclosures

Two parties are considered to be related if one party has the ability, directly or indirectly, to control the other party
or exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered to be related if they are subject to common control or common significant influence Related party
informations are given below.
I) Directors' interest in different entities

Name of the firms/companies in Percentage

Status which directors of the bank are of holding/
Name of Directors with the interested as proprietor, partner, Status interest
Bank director, managing agent, guarantor, in the
employee etc. concern
M. Ghaziul Haque Chairman Andes Limited Chairman 14.03%
MGH Logistics Pvt. Ltd Chairman 5.00%
MGH Holdings Ltd. Chairman 20.00%
MGH Global Airlines Ltd. (BD Port
Chairman 1.02%
management ser. Ltd.)
Peninsular Shipping Services Ltd. Chairman 20.00%
MGH Restaurants Pvt. Ltd. Chairman 5.00%
Aquamarine Distributions Ltd. Chairman 1.00%
Galileo Bangladesh Ltd. Chairman 20.00%
Renaissance Aviation Services Ltd. Chairman 25.00%
One World Aviation Services Ltd. Chairman 20.00%
RAS Holdings Ltd. Chairman 5.00%
ITSA- Total Logistics Ltd. Chairman 3.33%
Transmarine Logistics Ltd. Chairman 25.00%
Total Transportation Ltd. Chairman 0.01%
Tricom Global Logistics Ltd. Chairman 10.00%
Global Freight Ltd. Chairman 0.20%
International Brands Ltd. Chairman 0.01%
Integrated Transportation Services Ltd. Chairman 0.50%
Emirates Shipping Lines Bangladesh Ltd. Chairman 51.22%
Radio Foorti Ltd. Chairman 5.00%
Portlink Logistics Centre Ltd. Chairman 0.02%
Mir Nasir Hossain (Representing Director Mir Technologies Ltd. Chairman 20.00%
Mir Holdings Ltd.) Mir Communications Ltd. Chairman 40.00%
Mir Energy Ltd. Chairman 40.00%
Global Fair Communications Ltd. Chairman 40.00%
Mir Akther Hossain Ltd. MD 18.00%
Mir Ceramic Ltd. MD 87.77%
Mir Telecom Ltd. MD 20.00%
Mir Holdings Ltd. MD 50.00%
Mir Pharmaceuticals Ltd. MD 50.00%
MIR LPG Ltd. MD 40.00%
Bangla Telecom Ltd. MD 40.00%
Coloasia Ltd. MD 40.00%
BTS Communications (BD) Ltd. MD 40.00%
Agrani Insurance Co. Ltd. Shareholder 3.72%
Fair Trading Proprietorship 100.00%
Jupiter Technology Proprietorship 100.00%
A. M. Shaukat Ali Director Engineering Consultants & Associates Ltd. Chairman 20.00%
Samorita Hospital Limited Director 3.10%

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Name of the firms/companies in Percentage

Status which directors of the bank are of holding/
Name of Directors with the interested as proprietor, partner, Status interest
Bank director, managing agent, guarantor, in the
employee etc. concern
Md. Showkat Ali Chowdhury Director Need Fashion Wear & Textile Ltd. Chairman 35.00%
(Representing Namreen Chittagong Oxygen Pvt. Ltd. Chairman 20.00%
Enterprise Ltd.) Finlay (International) Ltd. Chairman 81.00%
KAPS Bangladesh Ltd. Chairman 12.50%
J F (Bangladesh) Ltd. Chairman 81.00%
Port Link Housing Ltd. Chairman 50.00%
Finlay Properties Ltd. Chairman 55.00%
Legend Properties Development Ltd. MD 50.00%
Z.N. Enterprise Ltd. MD 50.00%
Namreen Enterprise Ltd. MD 50.00%
ABC Steel Enterprise Ltd. MD 80.00%
S.L. Steels Ltd. MD 50.00%
Port Link Logistics Centre Ltd. Director 25.00%
South Asia Securities Ltd. Director 7.10%
Peninsula Housing & Development Ltd. Director 36.00%
Consolidated Tea & Plantation Ltd. Director 6.25%
Consolidated Tea & Lands Co. (BD) Ltd. Director 6.25%
Baraoora (Sylhet) Tea Co.(BD) Ltd. Director 6.25%
Eastern Industries Ltd. Director 25.00%
Bay Hill Hotel and Ressorts Ltd. Director 40.00%
M/S Chittagong Properties Managing Partner 50.00%
S.N. Corporation Partner 50.00%
Salina Ali (Representing Borak Director Unique Group of Companies Ltd. Chairperson 10.00%
Real Estate Pvt. Ltd.) Unique Hotel and Resorts Ltd. Chairperson 5.45%
Borak Real Estate (Pvt.) Ltd. Chairperson 12.00%
Unique Ceramic Industries Pvt. Ltd. Chairperson 7.50%
Borak Travels Ltd. Chairperson 50.00%
Unique Eastern Pvt. Ltd. Chairperson 10.42%
Unique Vocational Training Center Ltd. Chairperson 12.00%
Borak Shipping Ltd. Chairperson 7.50%
Unique Property Development Ltd. Chairperson 12.00%
Unique Share Management Ltd. MD 20.00%
Unique Shakti Ltd. MD 20.00%
Crescent Commercial Centre Ltd. MD 20.00%
Anis Ahmed (Representing Director MGH Logistics Pvt. Ltd. MD 95.00%
Aquamarine Distributions Ltd.) MGH Holdings Ltd. MD 80.00%
MGH Global Airlines Ltd. (BD Port
MD 2.08%
management ser. Ltd.)
Peninsular Shipping Services Ltd. MD 79.98%
MGH Restaurants Pvt. Ltd. MD 95.00%
Aquamarine Distributions Ltd. MD 99.00%
Galileo Bangladesh Ltd. MD 80.00%
Renaissance Aviation Services Ltd. MD 60.00%
One World Aviation Ltd. MD 66.67%
RAS Holidays Ltd. MD 95.00%
ITSA-Total Logistics Ltd. MD 96.66%
Transmarine Logistics Ltd. MD 74.99%
Total Transportation Ltd. MD 99.98%
Tricon Global Logistics Ltd. MD 79.98%

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Name of the firms/companies in Percentage
Status which directors of the bank are of holding/
Name of Directors with the interested as proprietor, partner, Status interest
Bank director, managing agent, guarantor, in the
employee etc. concern
Global Freight Ltd. MD 96.86%
International Brands Ltd. MD 99.53%
Integrated Transportation Services Ltd. MD 99.50%
Emirates Shipping Lines Bangladesh Ltd. MD 78.05%
Radio Foorti Ltd. MD 95.00%
Portlink Housing Ltd. MD 50.00%
Portlink Logistics Centre Ltd. MD 49.98%
Anglo MGH Energy (BD) Ltd. MD 95.00%
DC Bypass Ltd. MD 90.00%
Meah Mohammed Abdur Director Ancient Steamship Company Ltd. MD 78.00%
Rahim (Independent Director) Hudig and Meah (BD) Ltd. MD 51.00%
Mufakkharul Islam Khasru
(Representing Namreen Director Finlay Properties Ltd. MD 15.00%
Enterprise Ltd.)
Ormaan Rafay Nizam
Director National Brokers Ltd. Shareholder 15.37%
(Independent Director)
Gazi Md. Shakhawat Hossain
(Representing M/s Purnima Director M/s Purnima Construction Pvt. Ltd. MD 0.099%
Construction Pvt. Ltd.)
Representative
Bay Hill Hotel & Resorts Ltd. 40.00%
Chairman
Representative
Unique Hotel and Resorts Ltd. 7.46%
Director
General Electric Company (BD) Ltd. Director 0.00%
International Leasing and Financial Representing
Ali Reza Iftekhar MD & CEO Director
Services Ltd. EBL
EBL Investments Ltd. Director 0.000033%
EBL Securities Ltd. Director 0.00025%
Representing
EBL Finance (HK) Ltd. Director
EBL
EBL Asset Management Ltd. Director 0.0002%
Representing
The Bangladesh Rating Agency Ltd. Director
EBL

ii) Significant contracts where Bank is a party & wherein Directors have interest: Nil

iii) Shares issued to Directors and Executives without consideration or exercisable at discount : Nil

iv) Related Party Transactions : Please see Annexure -C1

v) Lending Policies to Related Parties : Related parties are allowed Loans and Advances as per General Loan Policy of the Bank.

vi) Business other than Banking business with any related concern of the Directors as per Section-18(2)
of the Bank Companies Act 1991: Nil

vii) Investments in the Securities of Directors and their related concern : Nil.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Annexure-C1
Related Party Transactions

Related party transaction is a transfer of resources, services, or obligations between related parties, regardless of
whether a price is charged as per BAS 24.The Bank in normal course of business had transactions with other entities
that fall within the definition of ‘Related Party’ as contained in Bangladesh Accounting Standards (BAS)-24 (Related
party disclosures) and as defined in the BRPD circular #14, issued by Bangladesh Bank on 25 June 2003.

1 The significant Related party transactions during the year were as follows:
1.a Advance facilities:
Nature of Transactions
Interest of the Outstanding Outstanding
Name of the Representing Nature of Sanctioned Amount
Directors with as at 01- as at 31-12-
organization Directors Facilities Amount Debit Credit Overdue
the borrowing 01-2014 2014
firm / individual
Md. Showkat Ali
Z. N. Enterprise Chowdhury
Ltd. LG-
Representing
MD Performance 193,100 192,900 - - 192,900
Customer ID- Director
Bond-SME
100397 Eastern Bank
Ltd.
Asif Mahmood

Tech Valley Ex Director,

Solutions Limited Represented Secured
Acquamarine Overdraft - 9,500,000 1,181 - - 1,181
Customer ID- Distributions Ltd SME
1111077
Eastern Bank
Ltd.
Unique Enterprise LG-
Mohd. Noor Ali
Customer ID- Performance 787,360 787,360 - - 787,360
Ex-Chairman Bond-SME
100711

1.b Credit card facilities: Figures are in Taka

Outstanding as Outstanding as
Representing Directors Nature of interest with EBL Approved limit
at 01-01-2014 at 31-12-2014
A.M. Shaukat Ali Director 500,000 - 15,511
Mir Nasir Hossain Representing Director 500,000 - (105)
Md. Showkat Ali Chowdhury Represent ing Director 250,000 - -
Mohd. Noor Ali Ex Chairman 500,000 - 130,397

2) Transactions relating to procurement of goods and services: Figures are in Taka

Amount of Outstanding
Name of the Company/ Related Directors
Nature of transactions transaction made as at
Person of EBL
during 2014 31-12-2014
Techvalley Solutions
Asif Mahmood* Maintenance cost of UPS 276,700 -
Limited
Purchase of network equipments
Techvalley Networks
Asif Mahmood* & oracle licensing for CMS project 47,728,427 -
Limited
for cards
Tech Valley Distributions TQR code machine supply for
Asif Mahmood* 1,450,000 -
Limited Branches
ADN Telecom Limited Asif Mahmood* Monthly internet connectivity bills 851,506 -
Purchase of POS machine,
ADN Technologies
Asif Mahmood* software license and AMC for 27,207,301 -
Limited
contact center solution (AVAYA)

243
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Amount of Outstanding
Name of the Company/ Related Directors
Nature of transactions transaction made as at
Person of EBL
during 2014 31-12-2014
Project license & system
Advanced Technology
Asif Mahmood* implementation of Card 32,179,376 -
Computers Limited
Management System (CMS)
Monthly recurring charge for EBL
Coloasia Ltd. Mir Nasir Hossain 1,700,800 -
Data Center at Jessore
BTS Communications
Mir Nasir Hossain Monthly internet connectivity bills 3,304,240 -
(BD) Ltd.
Security Deposit against lease
Unique Hotel and
Salina Ali rent agreement for ATM booth at - 438,900
Resorts Ltd.
The Westin, Gulshan, Dhaka.
Lease rent agreement for ATM
Unique Hotel and
Salina Ali booth at The Westin, Gulshan, 225,000 -
Resorts Ltd.
Dhaka.
Md. Showkat Ali Md. Showkat Ali Advance rent for EBL DST Sales
- 1,620,000
Chowdhury Chowdhury office at Dhanmondi, Dhaka
Md. Showkat Ali Md. Showkat Ali Rental payment for EBL DST
2,400,000 -
Chowdhury Chowdhury Sales office at Dhanmondi, Dhaka
Md. Showkat Ali Advance rent for EBL Station
Tashmia Ambarin - 4,989,600
Chowdhury Road Branch, Chittagong
Md. Showkat Ali Rental payment for EBL Station
Tashmia Ambarin 4,158,000 -
Chowdhury Road Branch, Chittagong
Md. Showkat Ali Rental payment for EBL Godown
Tashmia Ambarin 554,400 -
Chowdhury at Station Road, Chittagong
* Mr. Asif Mahmood resigned from the office of the Director of EBL Board with effect from 22 September 2014.

3 Transaction with subsidiaries:

3.a Balance of subsidiaries with Eastern Bank Limited: Figures are in Taka

Name of Subsidiaries Nature of Account Balance as at 31-12-2014

Special Notice Deposit (SND) 939,399
EBL Securities Limited
Overdraft Account (459,204,810)
EBL Investments Limited Special Notice Deposit (SND) 11,567,717
EBL Finance (HK) Limited Nostro Account 5,514,243
EBL Asset Management Limited Special Notice Deposit (SND) 51,253,083

3.b Others with subsidiaries : Figures are in Taka

Name of Subsidiaries Nature of transaction Balance as at 31-12-2014

Advance rent receivable 2,136,400
EBL Securities Limited
In share trading account 45,211,278
Receivable against expense 3,320,809
EBL Finance (HK) Limited
Short Term Finance 748,314,240
EBL Asset Management Limited Receivable against expense 266,930

4 Compensation of key management personnel: Refer to note no. 36

244
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Annexure-D

a. Disclosure regarding outstanding REPO as on 31 December 2014 Figures are in Taka

Amount (Cash Con 1st Leg
Sl Counterparty name Agreement date Reversal Date
cash consideration)

1 Agrani Bank Limited 30/12/2014 1/1/2015 2,151,106,536

2 Sonali Bank Limited 30/12/2014 1/1/2015 1,244,815,489
3 Rupali Bank Limited 30/12/2014 1/1/2015 2,850,809,086
4 Janata Bank Limited 30/12/2014 1/1/2015 757,238,126
5 IFIC Bank Limited 30/12/2014 1/1/2015 452,452,090
6 The City Bank Limited 29/12/2014 5/1/2015 1,087,118,300
8,543,539,626

Disclosure regarding outstanding Reverse REPO as on 31 December 2014

Amount (Cash Con 1st Leg

Sl Counterparty name Agreement date Reversal Date
cash consideration)
International Leasing &
1 29/12/2014 1/1/2015 174,902,213
Financial Services Ltd (ILFSL)
2 Midland Bank Limited 30/12/2014 1/1/2015 200,388,326

375,290,540

b. Disclosure regarding overall transaction of REPO and reverse REPO.

Min Outstanding Max Outstanding Daily average outstanding
Particulars
during the year during the year during the year
Securities sold under REPO
With Bangladesh Bank 79,900,000 525,240,000 70,457,945
With other Banks & Financial Institutions 253,534,444 14,824,158,232 4,272,864,768
Securities purchased under Reverese REPO
With Bangladesh Bank 500,000,000 1,700,000,000 15,342,466
With other Banks & Financial Institutions 128,727,979 1,821,122,284 224,950,653

245
EASTERN BANK LIMITED ANNUAL REPORT 2014
 Annexure-E
Eastern Bank Limited and its subsidiaries
Business segmental profit and loss account
For the period ended 31December 2014 Figures are in Million Taka
Eastern Bank Limited Subsidiaries
Particulars Consolidated
Corporate Consumer SME Treasury Common OBU Solo EBLSL EBLIL EBLFHKL EBLAML Elimination
Interest income 7,305 1,903 2,650 808 46 448 13,160 170 33 20 1 (99) 13,286
Interest expense 1,846 5,706 518 561 - 210 8,840 133 - 13 - (99) 8,888
NII before FTP 5,459 (3,803) 2,132 247 46 238 4,320 36 33 8 1 4,398
FTP on deposits, liability & 1,886 6,274 1,749 (11,245) 1,337 - - - - - - - -
equity
FTP on loans (6,049) (734) (2,640) 9,468 (46) - - - - - - - -
Net FTP (4,163) 5,541 (891) (1,777) 1,291 - - - - - - - -
NII After FTP 1,297 1,738 1,241 (1,529) 1,337 238 4,320 36 33 8 1 4,399
Investment income before 276 2,744 - 3,020 11 - - (65) 2,966
FTP
FTP on investments (11) - - 24 - 13 - - - - - 13
Investment income after FTP 265 - - 2,768 - - 3,033 11 - - - 2,979

EASTERN BANK LIMITED

Fees, commission and 913 809 125 - - 49 1,896 98 19 38 - 2,050
brokerage

246
FX Income 331 18 18 368 - 736 - - - - - 736
Other operating income - 144 - - 2 4 150 - 3 - - - 153
Total operating income 2,806 2,709 1,384 1,607 1,339 291 10,135 145 55 45 1 10,316
Allocated Expenses 1,123 2,437 527 52 201 19 4,361 55 14 28 0.31 - 4,456
Profit before provisions 1,682 272 857 1,555 1,138 271 5,774 90 41 17 1 (65) 5,860
Fund transfer pricing (FTP):
FTP on loans, deposits, liabilities & equities has been calculated on average balances as per FTP policy which was formally established on 2010 for the purpose of segment

ANNUAL REPORT 2014

reporting.
Segment assets and liabilities
The necessary information regarding assets and liabilities of operating segments (excluding subsidiaries) are not seperable and individually identifiable for segment. And so the
assets and liabilities of the respective segments have not been presented here.
 FINANCIAL REPORTS 2014

Annexure - F
Eastern Bank Limited
Highlights on the overall activities
Sl No Particulars 2014 2013
1 Paid up capital Taka 6,111,797,850 6,111,797,850
2 Total capital (Tier-I & II) Taka 18,120,777,529 16,764,225,278
3 Surplus/(shortage) capital Taka 4,417,030,803 2,736,346,440
4 Total assets Taka 172,124,130,886 157,881,633,857
5 Total deposits Taka 116,791,676,116 117,101,708,180
6 Total loans and advances Taka 118,291,346,183 102,910,218,949
7 Total contingent liabilities Taka 61,259,030,810 60,015,081,438
8 Loans to deposits ratio (total loans/total deposits) % 101.28 87.88
9 % of classified loans against total loans and advances % 4.36 3.59
10 Profit after tax and provisions Taka 2,106,511,733 2,567,863,832
11 Loans classified during the year (Gross) Taka 3,267,098,433 3,998,584,663
12 Provision held against classified loans Taka 2,409,082,091 1,929,241,652
13 Surplus of provision Taka 131,900,001 17,573,406
14 Cost of fund (interest expense/average borrowing and deposits) % 6.68 8.67
15 Interest bearing assets Taka 146,689,053,938 133,056,842,652
16 Non-interest bearing assets Taka 25,435,076,948 24,824,791,205
17 Return on assets (PAT/average assets) % 1.28 1.68
18 Income from investments Taka 3,343,293,787 2,070,848,267
19 Return on investment or ROI (PAT/average equity, long term
% 2.34 3.27
borrowings and deposits)
20 Earnings per share (PAT/weighted average number of shares) Taka 3.45 4.20
21 Operating profit per share (Operating profit/ weighted average
Taka 9.45 9.47
number of shares)
22 Price earning ratio Times 7.89 6.93

247
EASTERN BANK LIMITED ANNUAL REPORT 2014
Independent Auditor’s Report
to the shareholders of Eastern Bank Limited
We have audited the accompanying financial statements of the Offshore Banking Unit (the ‘Unit’) Bangladesh of Eastern
Bank Limited (the Bank) which comprise the balance sheet as at 31 December 2014, profit and loss accounts and cash flow
statements for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements of the Unit that give a true and
fair view in accordance with Bangladesh Financial Reporting Standards (BFRS) as explained in Note 2 and for such internal
control as management determines is necessary to enable the preparation financial statements of the Unit that are free from
material misstatement, whether due to fraud or error. The Bank Company Act 1991 and the local central bank (Bangladesh
Bank) Regulations require the Management to ensure effective internal audit, internal control and risk management functions of
the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and
report to Bangladesh Bank on instances of fraud and forgeries.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements of the Unit are free from
material misstatement.
An audit involves performing procedures to o btain audit evidence about the amounts and disclosures in the financial
statements of the Unit. The procedures selected depend on our judgment, including the assessment of the risks of material
misstatement of the financial statements of the Unit, whether due to fraud or error. In making those risk assessments,
we consider internal control relevant to the entity’s preparation of financial statements of the Unit that give a true and fair
view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements of the Unit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements of the Unit give a true and fair view of the financial position of the Unit as at 31
December 2014, and of its financial performance and cash flows for the year then ended in accordance with Bangladesh
Financial Reporting Standards (BFRS) as explained in Note 2.
Report on Other Legal and Regulatory Requirements
In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act 1991 and the rules
and regulations issued by Bangladesh Bank, we also report that:
(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for
the purpose of our audit and made due verification thereof;
(ii) to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s Responsibility
section in forming the above opinion on the financial statements of the Unit and considering the reports of the
Management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the
Management’s Responsibility for the Financial Statements and Internal Control:
(a) internal audit, internal control and risk management arrangements of the Bank as disclosed in Note 2 to the financial
statements of the Bank 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 Unit and its related entities;
(iii) in our opinion, proper books of account as required by law have been kept by the Unit so far as it appeared from our
examination of those books;
(iv) the balance sheet and profit and loss account of the Unit together with the annexed notes dealt with by the report are in
agreement with the books of account and returns;
(v) the expenditures incurred was for the purpose of the Bank’s business;
(vi) the financial statements of the Unit have been drawn up in conformity with prevailing rules, regulations and accounting
standards as well as related guidance issued by Bangladesh Bank;
(vii) adequate provisions have been made for advance and other assets which are in our opinion, doubtful of recovery;
(viii) the information and explanations required by us have been received and found satisfactory; and
(ix) we have reviewed over 80% of the risk weighted assets of the Unit and we have spent around 660 person hours during
the audit

Dhaka, 25 February 2015 Hoda Vasi Chowdhury & Co

Chartered Accountants
248
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Eastern Bank Limited

Offshore Banking Unit, Bangladesh
Balance Sheet
As at 31 December 2014

2014 2013
Notes
USD Taka USD Taka

PROPERTY AND ASSETS

Cash
In hand (including foreign currencies) - - - -
With Bangladesh Bank (including foreign currencies) - - - -
- - - -

Balance with other Banks and FIs

(on current and other accounts) 3
In Bangladesh 14,983,707 1,167,970,970 5,638,649 438,404,960
Outside Bangladesh 9,657,544 752,799,736 4,954,248 385,192,814
24,641,251 1,920,770,706 10,592,897 823,597,774

Money at call and short notice - - - -

Investment - - - -

Loans and Advances: 4

Loans, cash credits, overdrafts etc. 4.1 81,252,718 6,333,600,585 34,930,869 2,715,875,055
Bills discounted and purchased 4.2 66,563,966 5,188,621,190 88,929,915 6,914,300,855
147,816,683 11,522,221,774 123,860,783 9,630,175,910

Fixed Assets - - - -

Other Assets 5 284,187 22,152,225 76,874 5,976,971

Non Banking Assets - - - -

TOTAL ASSETS 172,742,121 13,465,144,705 134,530,555 10,459,750,654

CAPITAL AND LIABILITIES

Borrowing from other banks,
financial institutions and agents 6
Bangladesh Bank - - - -

Other Banks and FIs

Demand Borrowing 6.1 93,270,365 7,270,368,977 57,857,316 4,498,406,313
Term Borrowing 6.2 73,194,968 5,705,503,803 72,625,000 5,646,593,750
166,465,332 12,975,872,780 130,482,316 10,145,000,064
166,465,332 12,975,872,780 130,482,316 10,145,000,064

Deposits and other accounts 7

Current deposits and other accounts 7.1 951,223 74,147,276 223,240 17,356,946
Term deposits 7.2 - - - -
951,223 74,147,276 223,240 17,356,946

Other Liabilities 8 2,175,908 169,610,723 1,584,638 123,205,628

TOTAL LIABILITIES 169,592,464 13,219,630,779 132,290,195 10,285,562,638

249
EASTERN BANK LIMITED ANNUAL REPORT 2014
Eastern Bank Limited
Offshore Banking Unit, Bangladesh
Balance Sheet
As at 31 December 2014

2014 2013
Notes
USD Taka USD Taka

CAPITAL/SHAREHOLDERS' EQUITY

Share capital- Paid up capital - - - -

Foreign currency translation difference 9 - 1,062,706 - (781,213)
Profit and loss account- retained earnings 15 3,149,657 244,451,219 2,240,360 174,969,231
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 172,742,121 13,465,144,705 134,530,555 10,459,750,655

OFF BALANCE SHEET ITEMS:

Contingent liabilities:
Acceptance and endorsements 6,727,523 524,406,408 207,352 16,121,636
Letter of guarantee - Banks - - - -
Letter of guarantee - Others - - - -
Bills for collection 24,965 1,945,968 - -
Irrevocable letters of credit 4,818,920 375,631,952 708,562 55,090,723
Other Commitments - - - -
11,571,407 901,984,328 915,915 71,212,358

The annexed notes 1 to 20 form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Chartered Accountants

250
EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Eastern Bank Limited

Offshore Banking Unit, Bangladesh
Profit and Loss Account
For the year ended 31 December 2014

2014 2013
Notes
USD Taka USD Taka

Interest income 10 8,354,065 648,375,658 6,143,057 479,764,766

Interest paid on deposits and borrowings 11 5,285,831 410,243,916 3,797,394 296,571,556
Net interest income 3,068,234 238,131,742 2,345,663 183,193,210
Commission, exchange and brokerage 12 626,687 48,638,393 157,362 12,289,760
Other operating Income 13 51,321 3,983,104 15,123 1,181,101
Total operating income 3,746,241 290,753,238 2,518,148 196,664,071

Operating expenses 14 250,469 19,439,388 192,268 15,015,875

Profit before provision 3,495,772 271,313,849 2,325,880 181,648,196
Less : Provision for unclassified Loans and Advances 15 346,114 26,862,630 85,520 6,678,965
(Including provision for off Balance Sheet items)
Profit before income tax 3,149,658 244,451,219 2,240,360 174,969,231
Less: Provision for income tax - - - -
Net Profit/(loss) after tax 3,149,658 244,451,219 2,240,360 174,969,231
Balance of Profit brought forward from previous year - - - -
Retained Earnings carried forward 16 3,149,658 244,451,219 2,240,360 174,969,231

The annexed notes 1 to 20 form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Eastern Bank Limited
Offshore Banking Unit, Bangladesh
Cash Flow Statement
For the year ended 31 December 2014

2014 2013
Notes
USD Taka USD Taka
A) Cash flow from operating activities
Interest received 8,686,631 674,009,919 6,794,106 534,795,110
Interest paid (5,042,277) (391,191,854) (3,914,581) (306,636,023)
Commission, exchange and brokerage 17 626,687 48,638,393 157,362 12,289,760
Received from other operating activities 18 51,321 3,983,104 15,123 1,181,101
Paid for operating expenses 19 (250,469) (19,439,388) (192,268) (15,015,875)
Operating profit before changes in
4,071,892 316,000,173 2,859,742 226,614,073
operating assets and liabilities
(Increase)/decrease in operating assets:
Loan and advances to customers (24,288,466) (1,917,680,125) (9,323,757) (487,449,900)
Other Assets (207,313) (16,175,254) 60,765 5,013,479
Increase/(decrease) in operating liabilities:
Foreign currency translation difference - - - -
Deposits from Banks - - - -
Customers' deposits and other accounts 484,428 37,738,268 329,292 26,532,228
Other liabilities 245,155 19,542,465 (118,260) (12,620,854)
(23,766,195) (1,876,574,646) (9,051,960) (468,525,047)
Net cash flow from operating activities (19,694,303) (1,560,574,473) (6,192,218) (241,910,974)

B) Cash flow from investing activities - - - -

C) Cash flow from financing activities
Borrowing from other banks, financial
35,983,016 2,830,872,717 3,094,048 (26,940,365)
institutions and agents
Net profit transferred to main operations 16 (2,240,360) (174,969,231) (2,695,138) (220,625,304)
Net cash from financing activities 33,742,656 2,655,903,486 398,910 (247,565,669)
D) Net (decrease) / increase in cash (A+B+C) 14,048,353 1,095,329,013 (5,793,307) (489,476,643)
E) Effects of exchange rate changes on
- 1,843,920 - 4,637,630
cash and cash equivalents
F) Opening cash and cash-equivalents 10,592,897 823,597,774 16,386,204 1,308,436,787
G) Closing cash and cash equivalent (D+E+F) 24,641,251 1,920,770,706 10,592,897 823,597,774
Closing cash and cash equivalents 20
Cash in hand (including foreign currencies) - - - -
Balances with Bangladesh Bank and its
- - - -
agent bank (s)
Balances with other Banks and Financial
24,641,251 1,920,770,706 10,592,897 823,597,774
Institutions (Annexure A)
Money at call and short notice - - - -
Prize bonds - - - -
24,641,251 1,920,770,706 10,592,897 823,597,774
The annexed notes 1 to 20 form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

Dhaka, 25 February 2015

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Eastern Bank Limited
Offshore Banking Unit, Bangladesh
Statement of Liquidity in USD & BDT
(Maturity analysis of assets and liabilities)
As at 31 December 2014

Maturity within 1 Maturity within 1 to 3 Maturity within 3 to 12 Maturity within 1 to 5

Maturity over 5 years Total Amount
Particulars month months months years
USD BDT USD BDT USD BDT USD BDT USD BDT USD BDT
ASSETS

Cash in hand - - - - - - - - - - - -

Balance with other banks and

financial institutions 24,641,251 1,920,770,706 - - - - - - - - 24,641,251 1,920,770,706

Money at call and short notice - - - - - - - - - - - -

Investment in Treasury Bills & others

EASTERN BANK LIMITED

- - - - - - - - - - - -

Loans & advances to 9,121,289 710,998,972 22,974,463 1,790,845,623 45,650,687 3,558,443,693 60,198,751 4,692,456,499 9,871,493 769,476,988 147,816,683 11,522,221,774
customers

253
Fixed assets - - - - - - - - - - - -

Other assets - - 166,687 12,993,161 117,500 9,159,064 - - - - 284,187 22,152,225

Non-banking assets - - - - - - - - - - - -

Total Assets 33,762,539 2,631,769,678 23,141,149 1,803,838,784 45,768,188 3,567,602,757 60,198,751 4,692,456,499 9,871,493 769,476,988 172,742,120 13,465,144,705

ANNUAL REPORT 2014

LIABILITIES

Borrowings from other banks & 103,808,210 8,091,787,689 5,000,000 389,747,000 57,657,122 4,494,338,091 - - - - 166,465,332 12,975,872,780
financial institutions

Deposits & other accounts 212,829 16,589,873 215,591 16,805,172 453,686 35,364,539 69,118 5,387,692 - - 951,223 74,147,276

Other liabilities 1,644 128,122 580,383 45,240,513 - - - - 1,593,881 124,242,089 2,175,908 169,610,723

Total Liabilities 104,022,682 8,108,505,684 5,795,974 451,792,685 58,110,808 4,529,702,631 69,118 5,387,692 1,593,881 124,242,089 169,592,463 13,219,630,779
Net liquidity gap (70,260,143) (5,476,736,006) 17,345,175 1,352,046,099 (12,342,621) (962,099,874) 60,129,633 4,687,068,808 8,277,612 645,234,899 3,149,657 245,513,926
Cumulative liquidity gap (70,260,143) (5,476,736,006) (52,914,968) (4,124,689,906) (65,257,588) (5,086,789,780) (5,127,955) (399,720,973) 3,149,657 245,513,926 - -
FINANCIAL REPORTS 2014
Eastern Bank Limited
Offshore Banking Unit
Notes to the Financial Statements
As at and for the year ended 31 December 2014

1 Nature of business
Offshore banking Unit (“the Unit”) is a separate business unit of Eastern Bank Limited (“the Bank”), governed under
the Rules and Guidelines of Bangladesh Bank. The Bank obtained the Offshore Banking Unit permission vide letter no.
BRPD(p)744/(89)/2004-303 dated 25 January 2004. The Bank commenced the operation of its Offshore Banking Unit
from 19 May 2004 and its office is located at 10, Dilkusha C/A (2nd floor) Dhaka.
2 Significant accounting policies and basis of preparations
Basis of preparation
2.1 Statement of compliance
The financial statements of the Unit as at and for the year ended 31 December 2014 have been prepared under the
historical cost convention and in accordance with Bangladesh Financial Reporting Standards (BFRSs), the “First
Schedule” (section 38) of the Bank Companies Act 1991, as amended by the BRPD Circular no. 14 dated 25 June
2003, other Bangladesh Bank Circulars, the Companies Act 1994, the Securities and Exchange Rules 1987 and other
laws and rules applicable in Bangladesh. In case the requirement of provisions and Circulars issued by Bangladesh
Bank differ with those of other regulatory authorities and accounting standards, the provisions and Circulars issued by
Bangladesh Bank shall prevail.
As such the Unit has departed from those contradictory requirements of BFRSs in order to comply with the rules and
regulations of Bangladesh Bank which are disclosed below:
i) Provision on loans and advances
BFRSs: As per BAS 39 an entity should undertake impairment assessment when objective evidence of impairment
exists for financial assets that are individually significant. For financial assets which are not individually significant, the
assessment can be performed on an individual or collective (portfolio) basis.

Bangladesh Bank: As per BRPD Circular no. 14 dated 23 September 2012 and BRPD Circular no. 19 dated 27
December 2012, a general provision @ 0.25% to 5% under different categories of unclassified loans (standard/SMA
loans) should be maintained regardless of objective evidence of impairment. And specific provision for sub-standard/
doubtful/bad-loss loans should be made at 20%, 50% and 100% respectively on loans net off eligible securities (if
any). Also, a general provision @ 1% should be provided for certain off-balance sheet exposures. Such provision
policies are not specifically in line with those prescribed by BAS 39.
ii) Other comprehensive income
BFRSs: As per BAS 1 elements of Other Comprehensive Income (OCI) can be presented in a separate statement i.e.
Other Comprehensive Income or can be included in a Single Statement of Comprehensive Income.

Bangladesh Bank: The scheduled banks in Bangladesh have been using certain prescribed templates of financial
statements (including names of those financial statements) issued by Bangladesh Bank. Those templates do not
include ‘Other Comprehensive Income’nor are the elements of OCI allowed to be included in a Single Comprehensive
Income Statement (Profit & Loss Account, as per BB format). As such the bank does not prepare a separate OCI
Statement. However elements of OCI, if any, are shown in the statements of changes in equity.
iii) Financial instruments - presentation and disclosure
As per BB guidelines, in certain cases financial instruments are categorized, recognized, measured and presented
differently from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and
BAS 32 cannot be made in these financial statements.
iv) Financial guarantees
BFRSs: As per BAS 39 financial guarantees are contracts that require an entity to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value, and the
initial fair value is amortized over the life of the financial guarantee. The financial guarantee liability is subsequently
carried at the higher of this amortized amount and the present value of any expected payment when a payment under
the guarantee has become probable. Financial guarantees are prescribed to be included within other liabilities.
Bangladesh Bank: As per BRPD circular 14, 2003, financial guarantees such as L/C, L/G should be treated as off
balance sheet items. No liability is recognized for the guarantee except the cash margin.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

v) Cash and cash equivalents

BFRSs: Cash and cash equivalents items should be reported as cash item as per BAS 7.
Bangladesh Bank: Some cash and cash equivalents items such as money at call and short notice, should not be
shown as cash and cash equivalents. Money at call and short notice should be shown as face item in balance sheet
should be shown in investments.
vi) Cash flow statement
BFRSs: Cash flow statement can be prepared either in direct method or in indirect method. The presentation is
selected to present these cash flows in a manner that is most appropriate for the business or industry. The method
selected is applied consistently.
Bangladesh Bank: As per BRPD 14 dated 25 June 2003, cash flow should be a mixture of direct and indirect method.
vii) Off balance sheet items
BFRSs: No requirement of disclosure for off balance sheet items as there is no concept of off balance sheet items in
any BFRS; hence there is no requirement of disclosure of off balance sheet items.
Bangladesh Bank: As per BRPD 14 dated 25 June 2003, off balance sheet items e. g. L/C, L/G should be disclosed
separately in the face of balance sheet.
viii) Disclosure of appropriation of profit
BFRSs: There is no requirement to show appropriation of profit in the face of statement of comprehensive income.
Bangladesh Bank: As per BRPD 14 dated 25 June 2003, an appropriation of profit should be disclosed in the face of
Profit and Loss Account.
ix) Loans and advance net of provision
BFRSs: Loans and advances should be presented net of provisions.
Bangladesh Bank: As per BRPD 14 dated 25 June 2003, provision on loans and advances should be presented
separately as liability and cannot be netted off against loans and advances.
2.2 Foreign currency
Items included in the financial statements of the Unit are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The financial statements of the Unit are presented
in US Dollar (USD) and Bangladeshi Taka (BDT) where USD is the functional currency and BDT is the Unit’s
presentation currency.
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 are translated into the
presentation currency at the rate of exchange ruling at the balance sheet date.
2.3 Loans and advances
a) These are stated gross, with accumulated specific and general provisions for bad and doubtful debts being
shown under other liabilities.
b) Provision for Loans and Advances is made on the basis of period end review by the management and of
instructions contained in BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27
December 2012 and BRPD circular no. 16 dated 18 November 2014.
2.4 Revenue recognition
2.4.1 Interest income:
Interest on unclassified (including SMA) loans and advances have been accounted for as income on accrual basis.
2.4.2 Fees and commission income:
Fees and commission income arieses on services provided by the unit and recognised as and when received basis.
2.4.3 Interest paid on borrowings and deposits:
Interest paid on borrowings and deposits are calculated on 360 days in a year and accounted for on accrual basis.
2.4.4 Operating Expenses:
Expenses incurred by the unit as mentioned in 2.4.5 are recognised on actual and accrual basis.
2.4.5 Allocation of common expenses
Operaing expenses in the nature of rent, rates and taxes, salaries, management expenses, printing and stationery,
electricity, postages, stamps, telecommunication and audit fees are accounted for in Account of the Main Operation of
the Bank.
2.6 General
2.6.1 Fixed assets of this unit are appearing in the books of the main operation of the bank and depreciation is also charged
to Profit and Loss Account of the main operation of the Bank.
2.6.2 Assets and liabilities have been translated into Taka currency @ USD 1 = BDT 77.9494 (2013: BDT 77.75) which

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 represents the year-end standard mid rate of exchange (i.e. closing rate). Incomes and expenses are translated at
an average rate over the year of the transactions i.e. (USD 1= BDT 77.6120). The cumulative amount of the exchange
differenes has been presented seperately in equity until the disposal of foreign operations.
2.6.3 Certain corresponding figures in the financial statements have been reclassifed and rearranged to conform to the
current year’s presentation.
2.6.4 These financial statements of the unit cover one calender year from 1 January 2014 to 31 December 2014.

2014 2013
Notes
USD BDT USD BDT

3 Balance with other Banks and Financial Institutions

Inside Bangladesh - - - -
In interest bearing account
Term Placement
Eastern Bank Limited 14,983,707 1,167,970,970 5,638,649 438,404,960

14,983,707 1,167,970,970 5,638,649 438,404,960

Outside Bangladesh
In interest bearing account
EBL Finance (HK) Limited 9,600,000 748,314,240 4,050,000 314,887,500
9,600,000 748,314,240 4,050,000 314,887,500
In-non interest bearing account
Standard Chartered Bank Newyork- (Annexure A) 50,075 3,903,300 639,411 49,714,222
Deutsche Bank AG, Frankfurt, Germany- (Annexure A) 7,469 582,196 264,837 20,591,092
57,544 4,485,496 904,248 70,305,314
9,657,544 752,799,736 4,954,248 385,192,814
24,641,251 1,920,770,706 10,592,897 823,597,774

3.1 Balance with other banks and financial institutions (according to remaining maturity grouping)
Receivable
On demand 15,041,251 1,172,456,466 6,542,897 508,710,274
In not more than one month 9,600,000 748,314,240 4,050,000 314,887,500
In more than one month but not more than three months - - - -
In more than three months but not more than one year - - - -
In more than one year but not more than five years - - - -
In more than five years - - - -
24,641,251 1,920,770,706 10,592,897 823,597,774

4 Loans and advances

i) Loans, cash credits, overdrafts, etc. 4.1 81,252,718 6,333,600,585 34,930,869 2,715,875,055
ii) Bills discounted and purchased 4.2 66,563,966 5,188,621,190 88,929,915 6,914,300,855
147,816,683 11,522,221,774 123,860,783 9,630,175,910
4.1 Loans, Cash Credit, Overdraft etc.
Inside Bangladesh :
Loans 77,084,948 6,008,725,432 33,675,217 2,618,248,095
Cash Credit - - - -
Overdraft 4,167,770 324,875,153 1,255,652 97,626,961
81,252,718 6,333,600,585 34,930,869 2,715,875,055
Outside Bangladesh :
Loans - - - -
Cash Credit - - - -
Overdraft - - - -
- - - -
81,252,718 6,333,600,585 34,930,869 2,715,875,055

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

2014 2013
Notes
USD BDT USD BDT

4.2 Bills Discounted and Purchased

Inside Bangladesh:
Bills Discounted /Financed 66,563,966 5,188,621,190 88,929,915 6,914,300,855
LDBP/FDBP - - - -
66,563,966 5,188,621,190 88,929,915 6,914,300,855
Outside Bangladesh:
Bills Discounted /Financed - - - -
LDBP/FDBP - - - -
- - - -
66,563,966 5,188,621,190 88,929,915 6,914,300,855

4.a Maturity grouping of loans and advances including bills discounted and purchased
Payable on demand 161,191 12,564,773 947,526 73,670,143
Less than three months 31,934,560 2,489,279,821 60,912,131 4,735,918,222
More than three months but less than one year 45,650,687 3,558,443,693 32,868,210 2,555,503,366
More than one year but less than five years 60,198,751 4,692,456,499 28,885,036 2,245,811,562
More than five years 9,871,493 769,476,988 247,879 19,272,617
147,816,683 11,522,221,774 123,860,783 9,630,175,910

4.b Maturity analysis of bills purchased and discounted

Payable on demand 149,259 11,634,653 916,090 71,225,963
Less than three months 28,635,193 2,232,096,085 59,135,086 4,597,752,938
More than three months but less than one year 37,779,514 2,944,890,451 28,878,739 2,245,321,954
More than one year but less than five years - - - -
66,563,966 5,188,621,190 88,929,915 6,914,300,855

4.a.1 Loans and Advances to Directors, Executive and Others

Advance to Directors and their allied - - - -
concerns(including Ex-Directors)
Advances to CEO & Managing Director - - - -
Advances to Other executives and staffs - - - -
Advances to Customers (Group wise) - - - -
Industrial Advances 147,816,683 11,522,221,774 123,860,783 9,630,175,910
147,816,683 11,522,221,774 123,860,783 9,630,175,910

4.a.2 Industry-wise Concentration of loans and advances

Crops, fisheries and livestocks 6,110,078 476,276,921 2,762,675 214,797,948
Edible oil refinery - - 3,274,802 254,615,866
Electronics goods 10,142,041 790,565,989 6,560,060 510,044,671
Power, Gas & Oil 1,304,975 101,722,028 299,812 23,310,413
Transport & E-communication 18,662,564 1,454,735,672 13,385,562 1,040,727,434
Readymade garments 35,480,300 2,765,668,079 16,068,621 1,249,335,321
Commerce and Trading 6,459,655 503,526,201 718,594 55,870,720
Sugar Industry - - 108,578 8,441,947
Cement Industry 17,869,716 1,392,933,618 3,306,878 257,109,735
Foods & Beverage 7,102,978 553,672,898 21,335,951 1,658,870,170
Polymer 12,283,360 957,480,563 14,138,495 1,099,267,974
Textile & Spinning mills 17,003,118 1,325,382,855 29,341,297 2,281,285,841
Ship Breaking Industry - - - -
Industries for Steel products 703,666 54,850,332 3,378,129 262,649,559
Pharmaceutical Industries 4,613,557 359,624,035 5,377,527 418,102,748
Others 10,080,675 785,782,583 3,803,801 295,745,564
147,816,683 11,522,221,774 123,860,783 9,630,175,910

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 2014 2013
Notes
USD BDT USD BDT

4.a.3 Geographical location-wise concentration of Loans and advances

Inside Bangladesh:
Dhaka Division 127,159,950 9,912,041,793 121,388,186 9,437,931,446
Chittagong Division 20,656,733 1,610,179,981 2,472,598 192,244,464
Khulna Division - - - -
Rajshahi Division - - - -
Barishal Division - - - -
Sylhet Division - - - -
Rangpur Division - - - -
Outside Bangladesh: - - - -
147,816,683 11,522,221,774 123,860,783 9,630,175,910

4.c Classified, unclassified, doubtful and bad loans and advances

Unclassified:
Standard 147,816,683 11,522,221,774 123,860,783 9,630,175,910
Special mention account - - - -
Classified:
Sub-standard - - - -
Doubtful - - - -
Bad/loss - - - -
147,816,683 11,522,221,774 123,860,783 9,630,175,910

4.d i) Debt considered good in respect of

147,816,683 11,522,221,774 123,860,783 9,630,175,910
which the bank is fully secured
ii) Debt considered good for which the
bank holds no other security than the - - - -
debtor’s personal security
iii) Debts considered good and secured
by the personal security of one
- - - -
or more parties in addition to the
personal security of the debtors
iv) Debts considered doubtful or bad,
- - - -
not provided for
147,816,683 11,522,221,774 123,860,783 9,630,175,910
v) Debts taken by directors or
executives or any of them taken
- - - -
jointly or separately with other
persons
vi) Debts due by directors or officers
of the bank or any of them either
severally or jointly with any other
person and debts due by companies
- - - -
or firms in which the directors,
partners or managing agent or in
the case of private companies as
members

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

2014 2013
Notes
USD BDT USD BDT

vii) Maximum total amount of advances,

including temporary advances made
at any time during the period to
directors or managers or officers - - - -
of the bank or any of them either
severally or jointly with any other
persons
viii) Maximum total amount of advances,
including temporary advance granted
during the period to the companies
or firms in which the directors of
- - - -
the bank are interested as directors,
partners or managing agents or,
in case of private companies as
members
ix) Due from other banking companies - - - -
x) Classified loans and advances on
which no interest is credited to - - - -
income

5 Other Assets
Prepayments 117,500 9,159,064 - -
Interest Receivable on Term Placement 166,687 12,993,161 76,874 5,976,971
284,187 22,152,225 76,874 5,976,971

6 Borrowings from other banks, financial institutions and agents

Demand Borrowings 6.1 93,270,365 7,270,368,977 57,857,316 4,498,406,313
Term Borrowings 6.2 73,194,968 5,705,503,803 72,625,000 5,646,593,750
166,465,332 12,975,872,780 130,482,316 10,145,000,063

6.1 Demand Borrowings

In non interest bearing account with
Standard Chartered Bank, Newyork - - - -
In interest bearing account with - - - -
Eastern Bank Limited (DBU) 93,270,365 7,270,368,977 57,857,316 4,498,406,313
93,270,365 7,270,368,977 57,857,316 4,498,406,313

6.2 Term Borrowings

Borrowing inside Bangladesh
Basic Bank Limited 10,000,000 779,494,000 625,000 48,593,750
The City Bank Ltd. - - 1,000,000 77,750,000
Dutch Bangla Bank Ltd 5,000,000 389,747,000 - -
15,000,000 1,169,241,000 1,625,000 126,343,750
Borrowing outside Bangladesh
Asian Development Bank 537,845 41,924,711 - -
Banca Ubae Spa - - 5,000,000 388,750,000
Deutsche Investitions-Und - - - -
Entwicklungsgesellschaft Mbh 32,000,000 2,494,380,800 16,000,000 1,244,000,000
FMO Netherland 16,000,000 1,247,190,400 20,000,000 1,555,000,000
International Finance Corporation - - 30,000,000 2,332,500,000
United Bank Limited, Dubai 9,657,122 752,766,891 - -
58,194,968 4,536,262,803 71,000,000 5,520,250,000
73,194,968 5,705,503,803 72,625,000 5,646,593,750

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 2014 2013
Notes
USD BDT USD BDT

6.1.a Classification based on type of security

Secured - - - -
Unsecured 166,465,332 12,975,872,780 130,482,316 10,145,000,063
166,465,332 12,975,872,780 130,482,316 10,145,000,063

6.a Maturity grouping of borrowings from other banks, financial institutions and agents
Payable within one month 103,808,210 8,091,787,689 59,307,316 4,611,143,813
More than one month but less than three months 5,000,000 389,747,000 30,000,000 2,332,500,000
More than three months but less than one year 57,657,122 4,494,338,091 41,175,000 3,201,356,250
More than one year but less than five years - - - -
166,465,332 12,975,872,780 130,482,316 10,145,000,063

7 Deposits and other accounts

Current deposits and other accounts 7.1 951,223 74,147,276 223,240 17,356,946
Term deposits 7.2 - - - -
951,223 74,147,276 223,240 17,356,946

7.1 Current deposits and other accounts

Current account 96,627 7,532,011 49,836 3,874,785
Other Accounts 7.1.a 854,596 66,615,265 173,404 13,482,161
951,223 74,147,276 223,240 17,356,946

7.1.a Other Accounts

Interest Payable on deposit - - - -
Margin on Facility 854,596 66,615,265 173,404 13,482,161
854,596 66,615,265 173,404 13,482,161

7.2 Term deposits

Special notice deposit- SND - - - -
Term deposit - BB - - - -
- - - -

7.a Maturity grouping of deposits and other accounts

Payable on demand 1,507 117,499 777 60,447
Payable within one month 211,321 16,472,373 89,177 6,933,478
More than one month but less than three months 215,591 16,805,172 97,638 7,591,365
More than three months but less than one year 453,686 35,364,539 35,648 2,771,656
More than one year but less than five years 69,118 5,387,692 - -
951,223 74,147,276 223,240 17,356,946

8 Other liabilities
Provision for taxation 8.1 - - - -
Provision for unclassified Loans and advances 1,593,631 124,242,089 1,247,768 97,013,933
(Including provision for off Balance Sheet items) - - - -
Interest payable on Borrowing 580,277 45,232,250 336,723 26,180,188
Privileged Creditors 1,644 128,122 - -
Sundry Creditors 106 8,263 148 11,507
2,175,658 169,610,723 1,584,638 123,205,628
8.1 Provision for tax of the unit is accounted for in the book of Eastern Bank Limited.
8.a Maturity grouping of other liabilities
Payable on demand 1,644 128,122 336,723 26,180,188
More than one month but less than three months 580,383 45,240,513 148 11,507
More than three months but less than one year - - - -

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2014 2013
Notes
USD BDT USD BDT

More than one year but less than five years - - - -

More than five years 1,593,881 124,242,089 1,247,768 97,013,933
2,175,908 169,610,723 1,584,638 123,205,628

9 Foreign currency translation difference

The foreign currency translation difference is a net result of exchange differrence of year end standard mid rate and
monthly average of standard mid rate arising from translation of functional currency to presentation currecy. Assets
and liabilities of OBU have been presented into Taka (which is functional currency of the Bank) using year end standard
mid rate of exchange of the Bank i.e. USD 1 = BDT 77.9494 (2013: BDT 77.75) and incomes and expenses are
translated using monthly average of standard mid rate of exchange (USD 1= BDT 77.6120).
10 Interest income
Interest on Advances 7,675,486 595,709,806 5,996,376 468,309,155
Interest on Money at Call and Short Notice - - - -
Interest on Placement with other Banks 678,579 52,665,852 146,681 11,455,611
8,354,065 648,375,658 6,143,057 479,764,766

11 Interest paid on deposits and borrowings

Interest on Deposits - - - -
Interest on Borrowings 5,285,831 410,243,916 3,797,394 296,571,556
Interest on Margin - - - -
5,285,831 410,243,916 3,797,394 296,571,556

12 Commission, exchange and brokerage

Fees & Commission 636,155 49,373,290 144,903 11,316,743
Exchange gain/(loss) net off exchange gains* (9,469) (734,897) 12,459 973,017
Brokerage - - - -
626,687 48,638,393 157,362 12,289,760

*The net result of exchange differeces arising from day to day transactions & revaluation of monetary items are
recognized in profit and loss account as per BAS 21 (The Effect of changes in Foreign Exchange Rates).
13 Other Operating Income
Service charges, SWIFT charges etc. 51,321 3,983,104 15,123 1,181,101
51,321 3,983,104 15,123 1,181,101

14 Operating Expenses
Account Maintenance & Processing fees 249,610 19,372,701 191,717 14,972,885
Other charges 859 66,687 550 42,990
250,469 19,439,388 192,268 15,015,875

15 Provision for Loans and Advances

General Provision 346,115 26,862,630 85,520 6,678,965
Specific Provision - - -
346,115 26,862,630 85,520 6,678,965

16 Profit and loss account - retained earnings

Opening balance 2,240,360 174,969,231 2,695,138 220,625,304
Add: Profit during the year 3,149,658 244,451,219 2,240,360 174,969,231
5,390,017 419,420,450 4,935,498 395,594,535
Less: Transferred to Main ops during the year (2,240,360) (174,969,231) (2,695,138) (220,625,304)
Closing balance 3,149,657 244,451,219 2,240,360 174,969,231

17 Cash received from commission, exchange and brokerage

Commission, exchange and brokerage 626,687 48,638,393 157,362 12,289,760
626,687 48,638,393 157,362 12,289,760

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 2014 2013
Notes
USD BDT USD BDT

18 Cash received from other operating activities

Service charges, SWIFT charges etc. 51,321 3,983,104 15,123 1,181,101
51,321 3,983,104 15,123 1,181,101

19 Paid for operating expenses

Operating expenses (250,469) (19,439,388) (192,268) (15,015,875)
(250,469) (19,439,388) (192,268) (15,015,875)

20 Cash and cash equivalent

Balance with other banks & FIs 24,641,251 1,920,770,706 10,592,897 823,597,774
Money at call and short notice - - - -
24,641,251 1,920,770,706 10,592,897 823,597,774

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 FINANCIAL REPORTS 2014

FINANCIAL REPORTS OF THE

SUBSIDIARIES

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Auditor’s Report
to the shareholders of EBL Securities Limited

We have audited the accompanying Financial Statements of EBL Securities Ltd. which comprise the Statement of Financial
Position as at 31st December 2014 and the Statement of Comprehensive Income, Statement of Changes in Equity and
Statement of Cash Flows for the period than ended and a summary of significant accounting policies and other explanatory
information on that date.
Management Responsibility for the Financial Statements:
Management is responsible for the preparation of these financial statements that gives a true and fair view in accordance
with Bangladesh Financial Reporting Standards (BFRS), the Company Act 1994, the Securities and Exchange Commission
(Amendment) Act, 2012 and other applicable laws and regulations. This responsibility includes designing, implementing and
maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from
material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditor’s Responsibility:
Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted
our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors’ judgment including the assessment of the risk of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as, evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion:
In our opinion, the financial statements present fairly in all material respect, the financial position of EBL Securities Ltd. as
at 31st December 2014 and of its financial performance and its cash flows for the period then ended in accordance with
Bangladesh Financial Reporting Standards (BFRSs) and comply with the Company Act 1994, the Securities and Exchange
Commission (Amendment) Act. 2012 and other applicable rules and regulations.
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 purposes of our audit and made due verification thereof;
ii. in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our
examination of those books; and
iii. the statement of financial position and statement of comprehensive income dealt with the report are in agreement with the
books of accounts and returns.

Dhaka, 29 January, 2015 Khan Wahab Shafique Rahman & Co.

Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

EBL Securities Limited

Statement of Financial Position
As at 31st December 2014

31.12.2014 31.12.2013
Notes
Taka Taka

ASSETS
A. Non-Current Assets:
Fixed Assets less Accumulated Depreciation 04 7,427,003 7,926,011
Deferred Revenue Expenses less Written off 05 86,194 242,814
Membership of DSE & CSE at Cost 06 201,506,000 201,506,000
209,019,197 209,674,825

B. Current Assets:
Advances, Deposits & Prepayments 07 1,547,889 2,189,553
Advance Income Tax 08 28,315,602 23,754,859
Accounts Receivable 09 1,403,064,979 972,621,104
Investments 10 194,651,274 68,803,199
Cash & Cash Equivalent 11 363,526,535 174,209,614
1,991,106,279 1,241,578,329

Total Assets (A+B) 2,200,125,476 1,451,253,154

EQUITY & LIABILITIES

C. Share Holders Equity:

Share Capital 12 400,000,000 400,000,000
Retained Earnings 13 29,984,277 11,660,842
429,984,277 411,660,842

D. Non-Current Liabilities - -

E. Current Liabilities:
Accounts Payable 14 192,709,853 103,051,343
Borrowings from Bank & others 15 1,430,582,113 840,327,596
Liabilities for Expenses 16 11,352,764 5,505,685
Other Liabilities 17 105,553,369 64,481,284
Provision for Tax 18 29,943,099 26,226,403
1,770,141,199 1,039,592,312

Total Liabilities (C+D+E) 2,200,125,476 1,451,253,154

The annexed notes form an integral part of the financial statements

Managing Director Di t
Director Ch i
Chairman

Signed in terms of our annexed report of even date

Khan Wahab Shafique Rahman & Co.

Dhaka, January 29, 2015 Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL Securities Limited
Statement of Comprehensive Income
For the year ended 31st December 2014

2014 2013
Notes
Taka Taka

A. Revenue:
Commission Earning 19 98,092,749 67,155,825
Income from Investment 20 10,861,930 6,866,080
Other Operating Income 21 169,944,943 127,166,756
278,899,622 201,188,661

B. Expenses:
Direct Expenses 22 7,124,648 5,042,064
Office & Administrative Expenses 23 46,148,338 37,573,757
Financial Expenses 24 135,260,252 101,030,642
188,533,238 143,646,463

C. Operating Profit Before Tax (A-B) 90,366,384 57,542,198

Provision for (loss)/released on margin (5,198,797) (20,946,057)
Provision released/(made) on revaluation of shares 25 1,007,409 (10,471,550)
Profit Before Tax 86,174,996 26,124,591
Income Tax Expenses 26 32,851,561 26,109,819
Net Profit After Tax 53,323,435 14,772

The attached notes form an integral part of the financial statements.

Managing
i DiDirector
t Director
Di t Chairman
C

Signed in terms of our annexed report of even date.

Khan Wahab Shafique Rahman & Co.

Dhaka, January 29, 2015 Chartered Accountants

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 FINANCIAL REPORTS 2014

EBL Securities Limited

Statement of Cash Flows
For the year ended 31 December 2014

2014 2013
Taka Taka

Cash Flows from Operating Activities:

Net Profit/(Loss) after Provision for Tax 53,323,435 14,772
Depreciation 2,687,758 2,750,176
Amortization 306,296 -
Written off- Deferred Revenue Expenses 156,620 156,620
loss on sales of assets 242,580 -
Net Profit/(Loss) after Depreciation 56,716,689 2,921,568
Changes in Working Capital:
(Increase)/Decrease in Advances, Deposits & Pre-payments 641,664 1,902,865
(Increase)/Decrease in Advance Income Tax (4,560,743) (14,373,092)
(Increase)/Decrease in Receivable (430,443,875) (193,492,431)
(Increase)/Decrease in Investment & Securities (125,848,075) (68,781,276)
Increase/(Decrease) in Payable 89,658,510 26,187,306
Increase/(Decrease) in Bank Overdraft 590,254,517 185,441,113
Increase/(Decrease) in Liabilities for Expenses 5,847,079 (2,421,922)
Increase/(Decrease) in Other Liabilities 41,072,085 19,992,883
Increase/(Decrease) Interim Dividend Paid (35,000,000) -
Increase/(Decrease) in Provision for Tax 3,716,696 3,018,828
135,337,858 (42,525,726)
A. Net Cash provided from/ (used in) Operating Activities: 192,054,547 (39,604,158)
Cash Flows from Investing Activities:
Sale/Disposal of assets 215,600 -
Fixed Assets Purchased (2,953,224) (1,130,604)-

B. Net Cash provided from/ (used in) Investing Activities (2,737,624) (1,130,604)
Cash Flows from Financing Activities:
Increase/(Decrease) in Paid-up Capital - 100,000,000
C. Net Cash provided from/ (used in) Financing Activities - 100,000,000
Net increase / (decrease) in Cash during the Year (A+B+C) 189,316,923 59,265,238
Add: Opening Cash & Cash Equivalent 174,209,614 114,944,377
Closing Cash & Cash Equivalent* 363,526,535 174,209,614
Closing Cash & Cash Equivalent*
Cash in Hand 902 10,903
Cash with other Banks 363,525,633 174,198,711
363,526,535 174,209,614
The annexed notes form an integral part of the financial statements

Managing Director Di
Director Chairman

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EBL Securities Limited
Changes In Shareholders Equity
For the year ended 31 December 2014
Figures are in Taka
Particulars Paid up Capital Retained Earnings Total

Balance as on January 01, 2014 400,000,000 11,660,842 411,660,842

Add: Net Surplus/ (Deficit) for the year - 53,323,435 53,323,435
Interim Dividend - (35,000,000) (35,000,000)
Balance as on December 31, 2014 400,000,000 29,984,277 429,984,277

For the year ended December 31 2013

Figures are in Taka
Particulars Paid up Capital Retained Earnings Total

Balance as on January 01, 2013 300,000,000 11,646,071 311,646,071

Add: Net Surplus/ (Deficit) for the year 100,000,000 14,772 100,014,772
Balance as on December 31, 2013 400,000,000 11,660,842 411,660,842

Managing Director Director Chairman

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 FINANCIAL REPORTS 2014

EBL Securities Limited

Notes to the Financial Statements
As at and for the year ended 31 December, 2014
01.00 Reporting Entity:
01.01 Domicile and legal status of the company:
EBL Securities Ltd. is one of the leading brokerage houses domiciled in Bangladesh which has been constituted
by changing the name of LRK Securities Limited, limited by shares incorporated under the Companies Act 1994
incorporation no. C-32161 (1282)/97.
EBL Securities Limited is the TREC holder (Trading Right Entitlement Certificate) of both Dhaka Stock Exchange (DSE)
and Chittagong Stock Exchange (CSE) bearing certificate no. 026 and 021 dated 03 November 2013 and 28 October
2013 respectively (Previous membership no. 026 and 021 of DSE and CSE respectively).
01.02 Nature of business activities:
The principal activities of the company during the year were to buy, sell, deal and invest in shares, stocks, debentures
and other securities, to become member of stock exchange in Bangladesh and/ or elsewhere and undertake all the
functions of a Stock Exchange Member.
02.00 Basis of Preparation:
02.01 Statement of compliance:
The financial statements are prepared on the historical cost basis and therefore, did not take into consideration the
effect of inflation. The financial statements have been prepared and the disclosures of information have been made in
accordance with the companies Act, 1994, the Securities and Exchange Rules, 1987, the listing Rules of Dhaka Stock
Exchange, Guidelines from Bangladesh Bank, Bangladesh Accounting Standards (BAS) and Bangladesh Financial
Reporting Standards (BFRS) and other applicable laws and regulations.
02.02 Other regulatory compliances:
The company is also required to comply with the following major laws and regulations in addition to the Companies
Act, 1994 where applicable:
The Income Tax Ordinance 1984
The Income Tax Rules 1984
The Value Added Tax Act 1991
The Value Added Tax Rules 1991
EBL Securities Ltd. also registered with the Bangladesh Securities and Exchange Commission (BSEC) to act as Stock
Dealer for carrying its own investment in the capital market. It also extends margin loan to its clients against their
margin for investment in the listed securities. The required margin level is monitored daily and pursuant to established
guidelines, customers are required to deposit additional margin to reduce the position, where necessary.
EBL Securities Ltd. encompasses a wide range of services having registered with the Securities and Exchange
Commission to act as “custody participant” of Central Depository of Bangladesh Limited (CDBL).
02.03 Basis of accounting:
The financial statements except for cash flow information have been prepared on accrual basis of accounting.
02.04 Use of estimates and assumptions:
Preparation of financial statements requires management to make judgments, estimates and assumptions that affect
the reported amount of assets and liabilities, income and expenses. These financial statements contained information
about the assumptions it made about the future and other major sources of estimation uncertainty at the end of the
reporting period that have a significant risk of resulting in a material adjustment to the carrying amount of assets,
liabilities, income and expenses within the next financial year.
In accordance with the guidelines as prescribed by BAS 37: Provisions, Contingent Liabilities and Contingent Assets.
Provisions are recognized in the flowing situation:
- When the company has an obligation as a result of past events,
- When it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
and
- Reliable estimates can be made of the amount of the obligation.
02.05 Consistency:
In accordance with the BFRS framework for the presentation of financial statements together with BAS 1 and BAS 8,
EBL Securities applies the accounting disclosure principles consistently from one period to the next. Where selecting
and applying new accounting policies, changes in accounting policies applied, corrections of errors, the amounts
involved are accounted for and retrospectively accordance with the requirement of BAS 8. We however, have applied
the same accounting principles in 2014 as in financial statements for 2013.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
03.00 Significant Accounting Policies:
The accounting polices set out below have been applied consistently to all periods presented in these financial
statements:
03.01 Fixed assets and depreciation:
These are measured at cost less accumulated deprecation. Cost includes expenditures that are directly attributable
to the acquisition of the property, plant and equipment. Full month’s depreciation has been charged on additions
irrespective of date when the related assets are put into use and no depreciation is charged for the month of disposal.
Depreciation is providing at the following rates on straight-line basis in accordance with BAS 16 over the periods
appropriate to the estimated useful lives of the different types of assets:
Furniture & Fixture 15.00%
Television & Multimedia 20.00%
Computer & Accessories 20.00%
Generator 15.00%
Office Equipment 15.00%
Office Decoration 15.00%
Car Vehicles 15.00%
03.02 Intangible assets and amortization:
Intangible assets are recognized if it is probable that future economic benefits that are attributable to the asset will
flow to the company and the cost of the asset can be measured reliably in accordance with BAS 38: Intangible Assets.
Accordingly, these assets are stated in the Statement of Financial Position at cost less accumulated amortization.
Subsequent expenditure on intangible assets is capitalized only when it increases the future economic benefits
embodied in the specific assets to which is relates. All other expenditure is recognized as incurred.
03.03 Impairment:
Financial assets:
A financial asset is assessed at each reporting date to determine whether there is any objective once that it is
impaired. A financial asset is considered to be impaired if objective once indicates that one or more have occurred
indicating a negative effect on the estimated future cash flows from the asset. However, no such condition that might
be suggestive of a heightened risk of impairments of assets existed at the reporting date.
Non financial assets:
The carrying amounts of non-financial assets are reviewed at each reporting date to determine whether there is any
indication of impairment. An impairment loss is recognized in Statement of Comprehensive Income if the carrying
amount of an asset exceeds its estimated recoverable amount. However, no such condition that might be suggestive
of a heightened risk of impairment of assets existed at the reporting date.
03.04 Cash and cash equivalents:
Considering the provisions of BAS-1 and BAS-7, cash on hand and bank deposits, which were held and available for
use of the company without any restriction have been stated as cash and cash equivalent.
The net cash flow from operating activities is determined by adjusting profit for the period under indirect method as
per BAS-7 “Cash Flow Statement”.
03.05 Accounts receivable:
Trade receivables are stated at nominal values as reduced by the appropriate allowances for estimated doubtful
amounts. No such receivables are accounted for if the loans are classified as bad and loss. Receivables include the
margin loan provided to the clients in which interest is charged. Such interest is not recognized as income until it is
realized from the respective client account.
03.06 Margin loan:
EBL Securities Ltd. extends margin loan to the portfolio investors at an agreed ratio (between investors deposit and
loan amount) of purchased securities against the respective investor account. The investors are to maintain the margin
as per set rules and regulations. The margin is monitored on daily basis as it changes due to change in market price
of shares. If the margin falls below the minimum requirement, the investors are required to deposit additional fund to
maintain margin as per rules otherwise the securities are sold to bring the margin to the required level.
03.07 Investment in securities:
Investments in listed securities are recognized at cost. Quarterly impairment test is carried out by comparing cost
with market price. In case of diminution of market value compared to cost, provision is made on portfolio basis but no
unrealized gain is booked when market value exceeds cost.
03.08 Payables:
Trade and other payables are stated at their nominal values.
03.09 Due from/to related party:
Due from/to related party is stated at their nominal values.
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 FINANCIAL REPORTS 2014

03.10 Accrued expenses and other liabilities:

Liabilities are recognized for the goods and services received, whether paid or not for those goods and services.
Payables are not interest bearing and are stated at their nominal values.
03.11 Bank overdraft:
Eastern Bank Limited has sanctioned EBL Securities Ltd. credit facilities of BDT 650.00 million out of which BDT
500.00 million and 150.00 million is against overdraft and letter of guarantee respectively letter reference No #
MS/1314/2014 dated June 30, 2014.
NRB Bank Ltd. has sanctioned credit facilities of BDT 250.00 million as overdraft vide letter reference # NRBBL/CRM/
ESL/SA (C) 2014/020 dated June 05, 2014.
The Farmers Bank Ltd. has sanctioned credit facilities of BDT 200.00 million as overdraft vide letter reference # FBL/
MTJ/2014/1074 dated June 03, 2014.
Midland Bank Ltd. has sanctioned credit facilities of BDT 300.00 million as overdraft vide letter reference # MDBL/PB/
CREDIT/2014/2098 dated August 03, 2014.
SIBL Bank Ltd. has sanctioned credit facilities of BDT 50.00 & 30.00 million as overdraft vide letter reference # SIBL/
FEB/INV/2014/6022 dated September 8, 2014 & letter reference # SIBL/FEB/INV/2014/6333 dated September 17,
2014 respectively.
Loan has been taken from EBL Investments Ltd. amounting to BDT 100.00 million through an agreement dated
November 13, 2014 at an interest rate of 13.00% p.a.
EBL Securities Ltd. facilitates the fund to its clients as margin loan. Interest costs are recognized in the Statement of
Comprehensive Income in the period in which they are incurred.
03.12 Provisions:
Provision is recognized in the Statement of Financial Position when the company has a legal and constructive
obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate thereof can be made.
03.13 Revenue recognition:
Revenue, which comprises of brokerage commission, service charges and capital gain, is recognized in accordance
with Bangladesh Accounting Standard (BAS) 18: Revenue Recognition.
03.14 Income from margin loan:
Income from margin loan is recognized on accrual basis. Such income is calculated considering daily margin loan
balance of the respective customers. Income is recognized on quarterly rest.
03.15 Dividend income:
Dividend income from ordinary shares is recognized when the shareholders’ legal rights to receive payments have
been established i.e. during the period in which dividend is declared in the Annual General Meeting. Dividend declared
but not received is recognized as deemed dividend.
03.16 Gain/loss on sale of securities:
Capital gain/loss on disposal of securities listed in the stock exchange is recorded on realized basis i.e. only when
securities are sold in the market.
03.17 Suspense interest account:
Suspense interest account is created against interest income from negative equity customers. Since the negative
equity customers are temporarily unable to repay their debt, interest income accrued from those negative equity
clients during the year 2014 have been transferred into the suspense interest account.
03.18 Income tax expenses:
Income tax expenses comprise current and deferred tax. Income tax expense is recognized in the Statement of
Comprehensive Income except to the extent that it relates to items recognized directly in equity, in which case it is
recognized in equity.
03.19 Particulars of employees:
The number of employees engaged by the company during the year and part thereof was 52 (42 in 2013) and all the
staffs of the company are drawing salary and allowances above Tk 60,000 per annum.
03.20 Events after the Reporting Period:
There are no such events after the reporting period existed at the end of the reporting period.
03.21 Currency:
The amounts in the Financial Statements have been rounded off to the nearest integer in Bangladeshi Taka.
03.22 General:
Previous year’s figures have been re-arranged/re-classified, where consider necessary to conform to current year’s
presentation.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Auditor’s Report
to the shareholders of EBL Investments Limited

We have audited the accompanying financial statements of EBL Investments Limited (the “Company”), which comprise the
Statement of Financial Position (Balance Sheet) as at 31 December 2014, related Statement of Comprehensive Income,
Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of significant
accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
Bangladesh Accounting standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994 and
other applicable laws and regulations. This responsibility includes: designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due
to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable
in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s
internal control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements prepared in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh
Accounting Reporting Standards (BFRS), give a true and fair view of the state of the companies affairs as at 31 December 2014
and of the results of its operations for the year ended and comply with the companies Act 1994, the Bangladesh Securities and
Exchange Rules 1987 and other applicable laws and regulations.
Further to our opinion in the above paragraph, we state 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) in our opinion, proper books of account as required by law have been kept by the Company, so far as it appeared from
our examination of those books;
(iii) the Company’s statement of financial position and statement of comprehensive income dealt with by the report are in
agreement with the books of account and returns; and
(iv) the expenditure incurred was for the purposes of the Company’s business.

Dhaka, 16th February 2015 Hoda Vasi Chowdhury & Co.

Chartered Accountants

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 FINANCIAL REPORTS 2014

EBL Investments Limited

Statement of Financial Position
As at 31st December 2014

2014 2013
Notes
Taka Taka

PROPERTY AND ASSETS

Non Current Assets:

Property, Plant & Equipment 3 340,625 319,687
Intangible Assets 4 660,875 788,375
Furniture & Fixtures 5 31,360 -
Advances, Deposit & Prepayments 6 148,822,016 770,903
149,854,876 1,878,965

Current Assets:
Accounts Receivable 7 9,120,320 7,276,618
Advance Income tax 8 6,165,589 15,906,512
Investments 9 69,673,766 45,408,373
Cash & Cash Equivalent 10 110,717,971 276,107,447
195,677,645 344,698,950
TOTAL ASSETS 345,532,521 346,577,915

EQUITY AND LIABILITIES

Shareholders' Equity
Paid up capital 11 300,000,000 300,000,000
Retained earnings 12 15,276,518 19,105,122
Total Shareholders' Equity 315,276,518 319,105,122

Non Current Liabilities 13 - -

Current Liabilities
Accounts Payable 14 12,818,703 3,752,772
Provision for tax 15 8,309,654 19,334,278
Provision for diminution in value of investments 16 8,125,458 3,818,249
Provision for Expenses 17 191,015 58,150
Other liabilities 18 811,174 509,345
30,256,003 27,472,793
TOTAL EQUITY AND LIABILITIES 345,532,521 346,577,915
The annexed notes 1 to 28 form an integral part of these financial statements.

Chairman Director Managing Director

Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Dhaka, 16th February 2015 Chartered Accountants

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EBL Investments Limited
Statement of Comprehensive Income
For the year ended 31st December 2014

2014 2013
Particulars Notes
Taka Taka

Operating Income

Fees & commission 19 2,686,894 617,499

Income from Investment 20 18,701,915 5,238,023
Interest income 21 33,441,442 33,595,272
Total operating income 54,830,251 39,450,794

Operating Expense

Administrative Expenses 22 13,672,962 9,038,947

Financial Expenses 23 205,797 65,812
Total operating expense 13,878,760 9,104,759
Profit/(Loss) before Provision 40,951,492 30,346,035
Expenses/Provision for diminution in value of investments 24 4,307,209 3,818,249
Profit/(Loss) before Provision for tax 36,644,283 26,527,786
Provision for income tax 25 10,472,887 10,589,318
Net profit after tax 26,171,396 15,938,468

Earning per share 26 8.72 5.31

The annexed notes 1 to 28 form an integral part of these financial statements.

Chairman
Ch i Director Managing Director

Signed as per our annexed report of same date

Hoda Vasi Chowdhury and Co.

Dhaka, 16th February 2015 Chartered Accountants

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 FINANCIAL REPORTS 2014

EBL Investments Limited

Cash Flow Statement
For the year ended 31st December 2014

2014 2013
Particulars
Taka Taka

A. Cash flows from operating activities

Interest income 33,441,442 33,595,272
Other income 21,388,809 5,855,522
Paid for operating expenses (13,878,760) (9,104,759)
Income tax paid - (609,261)
Depreciation and Amortization 204,842 90,687
Audit fees paid - (57,500)
Operating cash flows before changing in operating assets/liabilities 41,156,334 29,769,961
Increase/ Decrease in operating Assets/ Liabilities
Accounts receivable (1,843,702) (7,276,618)
Advance Income Tax (11,756,588) (10,270,238)
Investment in Securities (23,543,393) (45,403,373)
Investment in IPO (2,000) (5,000)
Investment in Placement of share (720,000) -
Margin Loan (48,051,113) (570,903)
Loan to EBLSL (100,000,000) -
Other liabilities 434,694 567,495
Accounts payable 9,065,931 3,752,772
Net cash flow from operating activities (135,259,836) (29,435,904)

B. Cash flows from investing activities

Fixed Assets (129,640) (1,398,750)
Net cash flow from investing activities (129,640) (1,398,750)
C. Cash flows from financing activities
Cash Dividend (30,000,000) (39,000,000)
Net cash flow from financing activities (30,000,000) (39,000,000)
D. Net increase/(decrease) in cash and cash equivalents (A+B+C) (165,389,476) (69,834,654)
E. Opening cash and cash equivalents 276,107,447 345,942,101
F. Closing cash and cash equivalents 110,717,971 276,107,447

Closing cash and cash equivalents represents

Cash in hand 1,385 233
Balances with other banks and financial institutions 110,716,586 276,107,214
110,717,971 276,107,447

The annexed notes 1 to 28 form an integral part of these financial statements.

Chairman Director Managing Director

Dhaka, 16th February 2015

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EBL Investments Limited
Statement of Changes in Equity
For the year ended 31st December 2014

Retained
Share capital Total
earnings
Taka Taka Taka

Balance as at 1st January 2014 300,000,000 19,105,122 319,105,122

Net profit during the period - 26,171,396 26,171,396

Interim dividend paid - (30,000,000) (30,000,000)
- - -
Balance as at 31st December 2014 300,000,000 15,276,518 315,276,518

Balance as at 31st December 2013 300,000,000 19,105,122 319,105,122

The annexed notes 1 to 28 form an integral part of these financial statements.

Chairman Director Managing Director

Dhaka, 16th February 2015

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 FINANCIAL REPORTS 2014

EBL Investments Limited

Notes to the Financial Statements
As at and for the year ended 31st December 2014

1. Legal status and nature of the Company

EBL Investments Limited (here-in-after referred to as “EBL Investments Limited (EBLIL)” or “the Company”) was
incorporated in Bangladesh with the Registrar of Joint Stock Companies and Firms (RJSCF) vide registration no. C
81417/09 dated 30 December 2009 as a Private Limited Company under the Companies Act, 1994 and obtained
required marchant banking license from BSEC in 27th January,2013. This Company is a fully owned subsidiary of
Eastern Bank Limited. EBLIL is well equipped with skilled human resources and business set up to start full fledged
operations from July,2013.
EBLIL has started full pledge merchant banking operation during early second half of 2013. The activities of the
Company include services broadly classified as fees and commission based and fund based services, such as
underwriting of securities, issue management, portfolio management, corporate advisory services etc.
2. Significant accounting policies and basis of preparations:
2.1 Statement of compliance
The financial statements of the Company as at and for the period ended 31st December 2014 have been prepared in
accordance with Bangladesh Financial Reporting Standards (BFRS), Companies Act 1994 and other laws and rules
applicable in Bangladesh.
2.2 Basis of measurement
The financial statements are prepared on historical cost convention.
2.3 Basis of accounting
The financial statements except for cash flow information have been prepared on accrual basis of accounting.
2.4 Use of estimates and judgments
The preparation of the financial statements requires management to use 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 and in any future periods affected. However, no such
revisions to accounting estimates took place during the reporting period.
2.5 Reporting period
The financial statements of the Company covers a period from 1st January 2014 to 31st December 2014 and is
followed consistently.
2.6 Functional and presentation currency and level of precision
The financial statements are presented in Bangladesh Taka (BDT), which is the Company’s functional currency. All
financial information has been rounded off to the nearest Taka.
2.7 Property, plant and equipment
Recognition and measurement
Assets are recognised initially at cost and subsequently at cost less accumulated depreciation in compliance with
BAS 16, “Property Plant and Equipment”. The cost of acquisition of an asset comprises its purchase price and any
direct cost for bringing the assets to its working condition for its intended use. Expenditure 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. Software and all up gradation/enhancement are generally charged off as revenue expenditure
unless they bring similar significant additional benefits.
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 costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of an 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
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed and if a component has a useful life that is different from the remainder of that asset, that component is
depreciated separately.
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EASTERN BANK LIMITED ANNUAL REPORT 2014
 Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each components
of an item of property, plant and equipment. Depreciation is charged at the following rates starting from the month of
acquisition of assets:
Category of assets Rate of depreciation
Building 2.50%
Furniture and fixtures 10%
Machineries and equipments 20%
Vehicle 20%
Computer and Accessories 20%
No depreciation is charged in the month of disposal.
Disposal of fixed assets
Gains and losses on disposal of an item of property plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of the property plant and equipment disposed off and is recognised net with
other income in profit and loss account.
2.8 Intangible assets
Intangible assets are initially recognised at cost including any directly attributable cost. Intangible assets that have
finite useful lives are measured at cost less accumulated amortisation @ 15% and accumulated impairment losses.
Intangible assets include software, integrated systems along with related hardware.
2.9 Books of accounts
The Company maintains its books of accounts in electronic form through Mbank software.
2.10 Cash and cash equivalent and cash flow statement
Considering the provisions of BAS-1 and BAS-7, cash in hand and bank deposits, which were held and available for
use of the Company without any restriction have been stated as cash and cash equivalent.
The net cash flow from operating activities is determined for the period under direct method as per BAS-7 “Cash Flow
Statement”.
2.11 Risk and uncertainty for use of estimates (provisions)
The preparation of financial statements in conformity with Bangladesh Accounting Standards requires management to
make estimates and assumptions that affect the reported amounts of revenue and expenses, assets and liabilities and
disclosure requirements for contingent assets and liabilities during and at the date of the financial statements. Due to
inherent uncertainty involved in making estimates, actual result reported could differ from those estimates.
In accordance with the guidelines as prescribed by BAS 37, Provisions, Contingent Liabilities and Contingent Assets,
provisions are recognised in the following situations:
- When the company has an obligation as a result of past events;
- When it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation; and
- Reliable estimate can be made of the amount of the operation.
A provision is recognised if, as a result of past event, the company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The unwinding of the
discount is recognised as finance costs.
2.12 Revenue Recognition
As per BAS-18, “Revenue” is recognised when it is probable that the economic benefits associated with the
transaction will flow to the Company and the amount of revenue and the cost incurred or to be incurred in respect of
the transaction can be measured reliably.
2.12.1 Fees and Commission income arises on services rendered by the company and recognized on and accrual basis.
2.12.2 Interest income is accounted on accrual basis.
2.13 Income and expenditures
Income and expenditures are recognised on accrual basis. Income is only recognised if its realisation is reasonably
certain.
2.14 General
Certain corresponding figures have been rearranged/reclassified to conform to the current year’s presentation adopted
in these financial statements.

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 FINANCIAL REPORTS 2014

EBL Finance (HK) Limited

Report of the Directors

The directors present their report together with the audited financial statements for the year ended 31 December 2014.

Principal activities
The principal activity of the Company is engaged in money lending business.

Results
The results of the Company for the year ended 31 December 2014 and the state of affairs of the Company at that date are set
out on pages 5 and 6.
The directors do not recommend the payment of a dividend.

Property, plant and equipment

Movements in property, plant and equipment during the year are set out in note 8 to the financial statements.

Directors
The directors during the year and up to the date of this report were:-

Eastern Bank Limited

IFTEKHAR Ali Reza Md (Appointed on 3 September 2014)

In accordance with the Company’s Articles of Association, all directors are not subject to rotation or retirement at the annual
general meeting and are therefore continue in office.

Directors’ interests in contracts

Save as disclosed in note 13 to the financial statements, no other contract of significance to which the Company or its holding
company was a party and in which a director of the Company had a material interest subsisted at the end of the year or at any
time during the year.

Directors’ rights to acquire shares and debentures

At no time during the year was the Company or its holding company a party to any arrangement to enable the directors of the
Company to acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate.

Management contracts
No contract concerning the management and administration of the whole or any substantial part of the business of the
Company was entered into or existed during the year.

Other matters
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial
statements which would render any amount stated in the financial statements misleading.

Auditor
The financial statements have been audited by Kingston C.P.A. Limited who retire and, being eligible, offer themselves for re-
appointment.

By Order of the Board

Chairman/Director
Hong Kong, 30 January 2015

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Independent Auditor’s Report
to the shareholders of EBL Finance (HK) Limited
(Incorporated in Hong Kong with limited liability)

We have audited the financial statements of EBL Finance (HK) Limited (the Company) which comprise the balance sheet as
at 31 December 2014, and the income statement, statement of changes in equity and cash flow statement for the year then
ended, and a summary of significant accounting policies and other explanatory information.
Directors’ Responsibility for the Financial Statements
The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with Hong
Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the Hong Kong
Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit solely to you, as a body, in
accordance with section 141 of the 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. We conducted our audit in accordance with Hong Kong
Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the state of the Company’s affairs as at 31 December 2014,
and of its profit and cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have
been properly prepared in accordance with the Hong Kong Companies Ordinance.

Kingston C.P.A. Limited

Certified Public Accountants, Hong Kong
Auditor, Tony K.Y. Ng; P.C. No. P01792
30 January 2015

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 FINANCIAL REPORTS 2014

EBL Finance (HK) Limited

Balance Sheet 31 December 2014
31.12.2014 31.12.2013
Notes
HK$ HK$

ASSETS AND LIABILITIES

Non-current assets
Property, plant and equipment 8 127,451 180,307
Current assets
Bills financed 9 74,936,546 28,840,895
Other receivables 347,943 471,699
Deposits and prepayments 158,180 140,300
Cash and bank balances 10,049,796 7,912,851
85,492,465 37,365,745
Current liabilities
Accrual and other payables 925,448 555,733
Temporary receipts 7,481,907 4,892,901
Receipt in advance 263,240 -
Amounts due to a holding company 10 360,730 260,898
Loan from a holding company 11 74,400,000 31,387,500
Provision for taxation 135,000 -
83,566,325 37,097,032
Net current assets 1,926,140 268,713
Net assets 2,053,591 449,020

EQUITY
Capital and reserves
Share capital
Issued and fully paid -
1,410,000 ordinary shares 1,410,000 1,410,000

Retained profits/(accumulated losses) 643,591 (960,980)

Total equity 2,053,591 449,020

Approved and authorised for issue by the board of directors on 30 January 2015

On behalf of the Board

Director Director
Di t

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

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL Finance (HK) Limited
Income Statement
Year ended 31 December 2014

Year ended Period from

Particulars Notes 31.12.2014 28.11.2011 to
HK$ 31.12.2013

Turnover 4 5,710,888 1,241,968

Cost of sales (1,277,691) (283,080)
Gross profit 4,433,197 958,888
Other revenues and net gains or losses 4 91,775 42,944
Operating expenses (2,785,401) (1,962,812)
Operating profit/(loss) 5 1,739,571 (960,980)
Finance costs - -
Profit/(loss) before taxation 1,739,571 (960,980)
Income tax
Provision for the year 6 (135,000) -
Profit/(loss) for the year/period 1,604,571 (960,980)
Accumulated losses brought forward (960,980) -
Retained profits/(accumulated losses) carried forward 643,591 (960,980)

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

EBL Finance (HK) Limited

Statement of Changes In Equity
Year ended 31 December 2014

Retained profits/
Share capital Total
(accumulated losses)
HK$ HK$
HK$

Issuance of share capital 1,410,000 - 1,410,000

Net loss for the period - (960,980) (960,980)

Balance at 31 December 2013 1,410,000 (960,980) 449,020

Net profit for the year - 1,604,571 1,604,571

Balance at 31 December 2014 1,410,000 643,591 2,053,591

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

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EBL Finance (HK) Limited

Cash Flow Statement
Year ended 31 December 2014

Period from
Year ended
28.11.2011 to
Particulars 31.12.2014
31.12.2013
HK$
HK$

Operating activities
Profit/(loss) before taxation 1,739,571 (960,980)
Adjustment for:
Interest expense 1,277,691 283,080
Depreciation 83,395 64,062
Operating cash flows before working capital changes 3,100,657 (613,838)
Increase in bills financed (46,095,651) (28,840,895)
Decrease/(increase) in other receivables 123,756 (471,699)
Increase in deposits and prepayments (17,880) (140,300)
Increase in accruals and other payables 369,715 555,733
Increase in temporary receipts 2,589,006 4,892,901
Increase in amounts due to a holding company 99,832 260,898
Increase in receipts in advance 263,240 -
Increase in loan from a holding company 43,012,500 31,387,500

Cash generated from operations 3,445,175 7,030,300

Interest paid (1,277,691) (283,080)
Net cash generated from operating activities 2,167,484 6,747,220
Net cash used in from investing activities
Payments to acquire property, plant and equipment (30,539) (244,369)

Net cash generated from financing activities

Proceeds from issue of share capital - 1,410,000

Net increase in cash and cash equivalents 2,136,945 7,912,851

Cash and cash equivalents at beginning of year/period 7,912,851 -

Cash and cash equivalents at end of year/period 10,049,796 7,912,851

Analysis of cash and cash equivalents at end of year/period

Cash and bank balances 10,049,796 7,912,851

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL Finance (HK) Limited
Notes to the Financial Statements 31 December 2014
1. Organisation And Operations
The Company is a private company incorporated in Hong Kong with limited liability. The address of its registered office is
Unit 1201, 12th Floor, Albion Plaza, 2-6 Granville Road, Tsimshatsui, Hong Kong.
During the year, the Company engaged in money lending business.
2. Application Of New And Revised Hong Kong Financial Reporting Standards
The financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards
(“HKFRSs”), accounting principles generally accepted in Hong Kong and the requirements of the Hong Kong Companies
Ordinance.
The Company has not early applied the following new standards, amendments or interpretations that have been issued
and relevant to the Company but are not yet mandatory effective. The directors of the Company anticipate that the
application of these standards, amendments or interpretations will have no material impact on the results and the financial
position of the Company.
HKAS 19 (2011)(Amendment) Defined Benefits Plans: Employee Contributions 1
Annual Improvements Project Annual Improvements to HKFRSs 2010 - 2012 Cycle 1
Annual Improvements Project Annual Improvements to HKFRSs 2011 - 2013 Cycle 1
HKFRS 9 Financial Instruments 3
HKFRS 15 Revenue from Contracts with Customers 2
1 Effective for annual periods beginning on or after 1 July 2014.
2 Effective for annual periods beginning on or after 1 January 2017.
3 No mandatory effective date has been decided yet but entities may choose to apply HKFRS 9 immediately.
3. Principal Accounting Policies
(a) Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention, as modified by the available-for-
sale financial assets, financial assets and financial liabilities at fair value through profit or loss.
The financial statements have also been prepared under the accrual basis of accounting.
(b) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided to write off the cost of items of property, plant and equipment over their estimated useful
lives and after taking into account of their estimated residual value, using the straight-line method. Assets held under
finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter,
the term of the relevant lease.
The useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. The principal annual rates are
as follows:-
Machineries and equipments 20% - 33.33%
Furniture and fixtures 20%
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in
the income statement in the year in which the item is derecognised.
(c) Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the
relevant lease.
(d) Impairment losses
At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible 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. An impairment loss is recognised as an expense immediately.

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 FINANCIAL REPORTS 2014

Principal Accounting Policies (Cont’d)

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 years. A reversal of an
impairment loss is recognised as income immediately.
(e) Cash and cash equivalents
Cash and cash equivalents include cash in hand, short-term deposits held at banks, other short-term highly liquid
investments with original maturities of three months or less.
(f) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustment to tax payable in respect of previous year.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax base used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
(g) Bills financed and other receivables
Bills financed and other receivables are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less provision for impairment. A provision for impairment of bills financed
and other 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 receivables. The amount of the provision is the difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.
The amount of the provision is recognised in the income statement.
(h) Other payables
Other payables are recognised initially at fair value and subsequently stated at amortised cost. The difference between
the proceeds and the amount payable is recognised over the period of the payable using the effective interest method.
(i) Foreign currencies
(i) Functional and presentation currency
Items included in the Company’s financial statements are measured using the currency of the primary economic
environment in which it operates (the “functional currency”). These financial statements are presented in Hong Kong
dollar, which is the Company’s functional and presentation currency.
(ii) Transactions, assets and liabilities
Transactions in foreign currencies are translated at the approximate rates ruling on the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated at the approximate rates ruling on the
balance sheet date. Exchange differences are dealt with through the income statement.
(j) Employee retirement benefits
Costs of employee retirement benefits are recognised as an expense in the year in which they are incurred.
(k) Related parties
Two parties are considered to be related if one party has the ability, directly or indirectly, to control the other party
or exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered to be related if they are subject to common control or common significant influence.
(l) Revenue recognition
(i) Interest income is recognised on a time proportion basis.
(ii) Fees, commission and charges on letter of credit are recognised when the services are provided.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
4. Turnover, other revenues and net gains or losses
Turnover represents interest income on bills financed; fees, commission and charges on letter of credit.
Revenues recognised during the year/period are as follows:-
Period from
Year ended
28.11.2011 to
31.12.2014
31.12.2013
HK$
HK$

Turnover
Interest income on bills financed 2,032,029 633,289
Fees, commission and charges on letter of credit 3,678,859 608,679
5,710,888 1,241,968

Other revenues and net gains or losses

Net exchange gain 91,775 42,944

Total revenues 5,802,663 1,284,912

5. Operating Profit/(Loss)
Operating profit/(loss) is stated after charging:-

Auditor’s remuneration 63,500 35,000

Depreciation 83,395 64,062
Operating lease charges 448,320 640,084
Preliminary expenses - 9,130
Retirement benefit costs 21,750 8,250
Salaries and wages 1,506,902 718,443
6. Taxation
(a) Hong Kong taxation represents the amount provided at the rate of 16.5% (2013: Nil) on the estimated assessable
profits for the year after application of available tax losses brought forward.
(b) No provision for deferred taxation has been made in the financial statements as there are no material deductible and
taxable temporary differences needed to be accounted for in the year.
7. Directors’ Emoluments
During the year ended 31 December 2014 and period ended 31 December 2013, no amounts have been paid in respect
of directors’ emoluments, directors’ or past directors’ pensions or for any compensation to directors or past directors in
respect of loss of office.
8. Property, Plant And Equipment
Machineries Furniture
Total
and equipments and fixtures
HK$
HK$ HK$
COST
At 1 January 2014 63,730 180,639 244,369
Additions 16,039 14,500 30,539
At 31 December 2014 79,769 195,139 274,908

ACCUMULATED DEPRECIATION
At 1 January 2014 11,276 52,786 64,062
Provided for the year 26,102 57,293 83,395

At 31 December 2014 37,378 110,079 147,457

CARRYING AMOUNTS
At 31 December 2014 42,391 85,060 127,451

At 31 December 2013 52,454 127,853 180,307

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

9. Bills Financed
The following is the aging analysis of bills financed at the balance sheet date:-
31. 12. 2014 31. 12. 2013
HK$ HK$

0-3 months 67,983,975 23,133,001

4-6 months 6,952,571 5,707,894
7-9 months - -
10-12 months - -
Over 12 months - -
74,936,546 28,840,895

10. Amounts Due to a Holding Company

The amounts are unsecured, interest-free and with no fixed term of repayment.

11. Loan from a Holding Company

The amounts are unsecured with 2% interest rate per annum and repayable within one year.

12. Commitments under Operating Lease

At 31 December 2014, total future minimum lease payments under non-cancellable operating leases are payable as follows:-
Land and building
31.12.2014 31.12.2013
HK$ HK$
Within 1 year 472,800 174,930
After 1 year but within 5 years 200,940 -
Over 5 years - -
673,740 174,930

13. Related party transactions

During the year, the Company had the following transaction with a related party in the normal course of business:-

Period from
Year ended
Type of transaction Related party 28.11.2011 to
31.12.2014
31.12.2013
HK$ HK$

Interest expense Holding company 1,277,691 283,080

14. Financial Risk Management

The Company is exposed to various kinds of risks in its operation and financial instruments. The Company’s risk
management objectives and policies mainly focus on minimising the potential adverse effects of these risks on the
Company by closely monitoring the individual exposure as follows:-
(a) Market risk
(i) Currency risk
(1) The Company receives its interest income and service fee, mainly in US dollar, that exposes itself to foreign currency risk
arising from such transactions and the resulting payables and receivables. The Company closely and continuously monitors
the exposure as follows:-
HK dollar is pegged to US dollar, there is no significant exposure expected on US dollar transactions and balances.
(2) Sensitivity analysis
As the net exposure of the Company to foreign currency is relatively small, change in foreign currency exchange rate will
have no material impact on the financial performance of the Company.
(ii) Interest rate risk
The Company’s exposure on interest rate risk is mainly on its interest bearing borrowings. In order to manage the
interest rate risk, the Company will repay the corresponding borrowing when it has surplus fund.
(iii) Price risk
There is no significant price risk as the Company does not have any investment that are traded in an active market.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
(b) Credit risk
The major exposure to credit risk of the Company’s financial assets, which comprise bills financed, other receivables,
deposits and prepayments and cash and bank balances, arises from the default of the counterparties, with a maximum
exposure equal to the carrying amount of these financial assets in the balance sheet.
(c) Liquidity risk
The Company manages its funds conservatively. The shareholders of the Company would provide sufficient fund to meet
continuous operational need.
The maturity profile of all financial liabilities of the Company as at the balance sheet date is as follows:-
31.12.2014 31.12.2013
HK$ HK$
Due and payable
0-3 months 14,203,825 10,359,532
4-6 months 55,025,000 3,487,500
7-9 months - 8,525,000
10-12 months 14,337,500 14,725,000
Over 12 months - -
Total current liabilities 83,566,325 37,097,032
(d) Fair value
The Company’s financial instruments are carried at amounts not materially different from their fair values as at 31
December 2014.
15. Immediate And Ultimate Holding Company
The directors regard Eastern Bank Limited, a company incorporated in Bangladesh, as being the immediate and ultimate
holding company.
16. Comparative Figures
Last period’s figures in the income statement cover a period more than one year and are therefore not directly comparable
to the current year’s figures.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

Auditors’ Report
to the shareholders of EBL Asset Management Limited
We have audited the accompanying financial statements of EBL Asset Management Limited which comprise the Statement of
Financial Position as at 31st December 2014, and the Statement of Comprehensive Income, Statement of Changes in Equity
and the Statement of Cash Flows for the period then ended, and a summary of significant accounting policies and other
explanatory information.
Management’s Responsibility for the Financial Statements:
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
Bangladesh Financial Reporting Standards (BFRS), 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.
Auditors’ Responsibility:
Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted
our audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
Scope:
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion:
In our opinion, the annexed financial statements present fairly, in all material respect, the financial position of EBL Asset
Management Limited as at 31st December 2014, and its financial performance and its cash flows for the period then ended
in accordance with Bangladesh Financial Reporting Standards (BFRS) and complied with the Companies Act 1994 and other
applicable rules and regulations.
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) In our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our
examination of those books; and
iii) The statement of financial position and the statement of comprehensive income dealt with by the report are in agreement
with the books of account and returns.

Khan Wahab Shafique Rahman & Co.

Dhaka, February 04, 2015 Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL Asset Management Limited
Statement of Financial Position
As at 31st December 2014

Amount
Notes
(In Taka)

PROPERTY AND ASSETS:

Non-Current Asstes:

Preliminary Expenses -

Current Assets: 51,393,553

Advance Income tax (withholding tax) 3.00 140,470
Cash & Cash Equivalent 4.00 51,253,083

TOTAL ASSETS 51,393,553

EQUITY AND LIABILITIES:

Shareholders' Equity:
Paid up capital 5.00 50,000,000
Retained earnings 6.00 709,880
Total Shareholders' Equity 50,709,880

Current Liabilities: 683,673

Accounts Payable 7.00 266,930
Provision for Audit Fee 8.00 34,500
Provision for tax 9.00 382,243

TOTAL EQUITY AND LIABILITIES 51,393,553

The annexed notes 1 to 16 form an integral part of these financial statements.

Chairman Managing Director Director

Di t

Subject to our separate report of even date

Khan Wahab Shafique Rahman & Co.

Dhaka, February 04, 2015 Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

EBL Asset Management Limited

Statement of Comprehensive Income
For the period from 9 January 2011 to 31 December 2014

Amount (In Taka)

Particulars Notes 09.01.11 to
31.12.14
Non Operating Income

Interest income 10.00 1,404,703

Total non operating income 1,404,703

Non Operating Expense

BSEC Approval Fee 10,000

Trade License renewal fee 58,850
Priliminary Expenses (written off) 11.00 137,705
Financial Expenses 12.00 11,150
Audit fee expenses 13.00 94,875
Total Non operating expense 312,580
Profit/(Loss) before Provision for tax 1,092,123
Less: Provision for tax for the period 382,243
Net profit after tax 709,880

Earning per share 14.00 1.42

The annexed notes 1 to 16 form an integral part of these financial statements.

Chairman Managing Director Director

Subject to our separate report of even date

Khan Wahab Shafique Rahman & Co.

Dhaka, February 04, 2015 Chartered Accountants

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL Asset Management Limited
Statement of Changes in Equity
For the period from 09 January 2011 to 31 December 2014

Retained
Share capital Closing Balance
earnings
Taka Taka Taka

Balance as at 9 January 2011 - - -

Share Money Deposit 50,000,000 - 50,000,000
Net profit during the period - 709,880 709,880

Balance as at 31 December 2014 50,000,000 709,880 50,709,880

Chairman Managing Director Director

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 FINANCIAL REPORTS 2014

EBL Asset Management Limited

Cash Flow Statement
For the period from 09 January 2011 to 31 December 2014

Amount in
Particulars
Taka

A. Cash flows from operating activities:

Paid for operating expenses (11,150)

Income tax paid (140,470)
Net cash flow from operating activities (151,620)

B. Cash flows from investing activities: -

C. Cash flows from financing activities:

Interest income 1,404,703

Increase/(decrease) in share capital 50,000,000
51,404,703

D. Net increase/(decrease) in cash and cash equivalents (A+B+C) 51,253,083

E. Opening cash and cash equivalents -

F. Closing cash and cash equivalents 51,253,083

Closing cash and cash equivalents represents

Cash in hand -
Balances with other banks and financial institutions 51,253,083

Closing balance 51,253,083

Chairman Managing Director Director

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EASTERN BANK LIMITED ANNUAL REPORT 2014
EBL Asset Management Limited
Notes to the Financial Statements
As at and for the period from 09 January 2011 to 31 December 2014

1.00 Background Information:

1.01 Establishment and Status of EBL Asset Management Limited:
EBL Asset Management Limited was incorporated in Bangladesh with the Registrar of Joint Stock Companies
(RJSC) vide registration No. C-89481/11 dated 9th January, 2011 under the Companies Act, 1994 as a Private
Company limited by shares and is under process to get license from Bangladesh Securities and Exchange
Commission (BSEC) for full fledged asset management operation. It is a subsidiary company of Eastern Bank
Limited. EBL holds all the shares of the company except 1 share which is held by one individual. The registered
office of the company is situated in Bangladesh.
1.02 Objective:
The main objectives of the company is to carry on the business of Asset Management, Portfolio Management,
Capital Market Operation, other financial services including Corporate Advisory Services, Mergers & Acquisition,
Equity Investment, Corporate Restructuring, Financial & Socio-Economic Consultancy, Corporate Research & Project
Studies, Privatization and other related services in Bangladesh and overseas.
2.00 Significant Accounting Policies:
2.01 Basis of Presentation of Financial Statements:
The financial statements of the company have been prepared applying accrual basis of accounting under historical
cost convention.
2.02 Commercial Operation:
Commercial operation of the Company has not been started during the period under audit. The company earned non
operating income from bank interest, therefore comprehensive income statement has been prepared.
2.03 Component of Financial Statements:
According to International Accounting Standard (IAS-1), as adopted by ICAB as BAS-1 ‘presention of financial
statements’ the complete set of financial statements includes the following components:
i) Statement of Financial Position
ii) Statement of Comprehensive Income
iii) Statement of Changes in Equity
iv) Statement of Cash Flow
v) Notes comprising a summary of significant accounting policies and other explanatory information.
2.04 Statement of Cash Flows:
Cash Flows Statement is prepared in accordance with BAS-7.
2.05 Cash & Cash Equivalent:
Cash and cash equivalent includes cash at bank which is held and is available for use by the company without any
restriction.
2.06 Provision for Tax:
Provision for income tax has been calculated @ 35% on Profit Before Tax (PBT).
2.07 Preliminary Expenses:
Preliminary expenses represent the expenses relating to company formation and initial legal expenses and has been
amortized during this period.
2.08 Revenue Recognition:
As per BAS-18, “Revenue” is recognized when it is probable that the economic benefits associated with the
transaction will flow to the company and the amount of revenue and the cost incurred on to be incurred in respect of
the transaction can be measured reliably.
2.09 Reporting Period:
The financial statements of the company cover from 9th January 2011 to 31st December 2014.
2.10 General
The figures appearing in these Financial Statements have been rounded off to the nearest taka.

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EASTERN BANK LIMITED ANNUAL REPORT 2014
BRANCH NETWORK

Dhaka Moghbazar Branch Narayanganj SME/Agri Branch

Principal Branch Shafi Complex, 1/A West Moghbazar, New 34, ASP Bhaban, Mahim Ganguly Road,
Jiban Bima Bhaban, 10 Dilkusha C/A, Dhaka 1000 Circular Road, Ramna, Dhaka. Tanbazar, Narayanganj.
Tel: 02 9558392, 9565696, 9571262 Tel: 02 9361756, 9360115, Fax: 02 9348570 Tel: 02 7644480, 7644048, Fax: 02 7644077
Fax: 02 7160747. Email: [email protected] Email: [email protected] Email: [email protected]
Motijheel Branch English Road Branch Tangail Branch
88 Motijheel C/A, Dhaka 68, Shahid Sayed Nazrul Islam Sarani “Rahman Center” (1st floor),
Tel: 02 9559655, 9565073-4. Fax: 02 9565074 (1st & 2nd floor), North South Road, 55 Victoria Road, Tangail
Email: [email protected] Dhaka-1100 Tel: 092162437, 092162438, 092162439
Gulshan Branch Tel: 02 7125269, 7116019 Email: [email protected]
Concord Richmond, 68 Gulshan Avenue, Email: [email protected] Mymensingh SME/Agri Branch
Plot 8A Block, CES (F) Gulshan 1, Dhaka Chawk Mughultuly Branch “Hamida Market”, 45 Choto bazaar,
Tel: 02 9897703, 9897594, 8827254, 8827101-2 150 Chawk Mughultuly (1st Floor), Dhaka Kotwaly, Mymensingh
Fax: 02 9897703. Email: [email protected] Tel: 02 7314364, 7314369 Tel: 09163831, 09163861, 09163841
Gulshan North Branch Email: [email protected] Email: [email protected]
Kalpana House, 169, Gulshan Avenue, Narayangonj Branch Bhairab SME/Agri Branch
Gulshan-2, Dhaka 64 BB Road (Islam Plaza), Narayangonj House-0161, Kalibari Road, Bhairab Bazar,
Tel: 9896073, 9896038, 9896316, 9896316 Tel: 02 7648557-58 Kishorgonj, Bhairab
Fax: 02 9896316 Email: [email protected] Tel: 09424 72307, 09424 72308, Fax: 09424
Bashundhara Branch Keraniganj Branch 72309, Email: [email protected]
Plot-15, Block-A, Bashundhara R/A, Jahanara Plaza, Bondh Dakpara, Zinzira, Dohar Branch
Badda, Dhaka-1219 Keraniganj, Dhaka Ashraf Ali Chowdhury Plaza,
Tel: 8845391, 8845392, Fax: 8845390 Tel: 02 7762236-7 83, College Road, Joypara,
Email: [email protected] Email: [email protected] Dohar, Dhaka
Banani Branch Board Bazar Branch Tel: 06223-56211, 06223-56209, 06223-56208
“Skylark Mark84” House # 84, Road # 11, Omar Ali Plaza, House 1, Block C, Board Email: [email protected]
Block-D, Banani, Dhaka, Banani Model Town, Bazar, Gazipur Faridpur Branch
Gulshan, Dhaka - 1213 Tel: 02 9293895-6 Golpukur Dream Shopping Complex
Tel: Phone: 9862669, 9862572,9860476 Email: [email protected] 7/216, Mujib Road, Faridpur
Fax: 9862903 Savar Branch Tel: 0631-67218, 0631-67219, 0631-67220
Email: [email protected] E/3, Tala Bagh, Thana Road, Savar, Dhaka Email: [email protected]
Uttara Branch Tel: 02 7744757-8 Fax: 02 7744759 Progoti Sarani Branch
Plot 1A, Road 4, Sector 4, Uttara Model Satmosjid Road Branch Azahar Comfort Complex, 130/A,
Town, Dhaka 48, Satmosjid Road (Ground floor of Progoti Sarani,
Tel: 02 8915136, 8919051, 8950470, OLYMPIA Chinese Middle Badda, Gulshan, Dhaka
7911128 Restaurant) Dhanmondi, Tel: 8826796, 8825357, 8824963
Fax: 02 8918859 Email: [email protected] Tel: 02 9144603 Fax: 02 9144604 Email: [email protected]
Mirpur Branch Banasree Branch Azimpur Branch
House # 17, Main Road # 3, Block-A, Plot No C-10 (1st Floor & ATM at GF), Tulip Feroza Dream, 104, Azimpur Road,
Section-11, Mirpur, Dhaka-1216 Block-C, Eastern Housing Banasree Project, Hazaribagh, Dhaka
Tel: 02 -9008115, 9010478 Banasree Rampura, Dhaka. Tel: 9660483, 9612004, 9612005
Email: [email protected] Tel: 02 7287991, 7286266 Email: [email protected]
Shyamoli Branch Uttara Garib-E-Newaz Branch Madhabdi SME/Agri Branch
Plot 16-A/5, Ring Road, Block F, Plot No-15 (1st floor), Garib-E-Newaz 242/1, Algi Road, Madhabdi Bazar,
Mohammadpur Housing Estate, Dhaka 1207 Avenue, Sector-11, Parkashipur, Madhabdi, Narshindi
Tel: 02 8116015, 9132497, 9133165 Uttara, Dhaka-1230 Tel: 9446995, 9446978, 9446993
Email: [email protected] Tel: 02 8915457, 8915447 Email: [email protected]
Dhanmondi Branch Email: [email protected] DEPZ Branch
House 21, Road 8, Dhanmondi R/A, Nawabgonj Branch Mazid Tower, Baipail, Dhamshona, Ashulia,
Dhaka-1205 Hossain Plaza, Kolakopa Union Parishad, Dhaka, Tel: 02 7790926, Fax: 02 7790927
Tel: 02 9126141, 9114145, 9146235 281 Nawabgonj, Dhaka-1320 Email: [email protected]
Email: [email protected] Tel: 0622556264, 0622556266, 0622556265 Dakshinkhan Branch
Sonargaon Road Branch Email: [email protected] Golam Sharif Market, 250/A, Ashkona,
‘A H N Tower (1st Floor), 13 & 15 Bir Uttam C Keraniganj SME/Agri Branch Dakshinkhan,
R Datta Road ‘Green Tower’, Aganagar Union Parishad, Uttara, Dhaka
(Sonargaon Road), Banglamotor, Dhaka South Keraniganj, Dhaka Tel: 01714075356, 01819132494,
Tel: 02 8613225, 8619866 Tel: 02 7763725, 7763726,7763727 01775828814
Email: [email protected] Email: [email protected] Email: [email protected]
Shantinagar Branch Mirpur Dar-Us-salam Road Branch Wari Branch
Iris Noorjehan (1st Floor) Plot no. 104, Chand plaza, 10 Dar-Us- Salam Road, 40/1 Rankin Street, Wari, Dhaka
Kakrail Road Mirpur-01, Dhaka-1216 Tel: 02 7112175, 02 7110137, Fax: 02
Ramna, Dhaka Tel: 02 9003465 Fax: 02 9003449 7110949
Tel: 02 8300012, 02 8300013, 02 8300028, Email: [email protected] Email: [email protected]
02 8300029, Fax: 8300053
Email: [email protected]

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EASTERN BANK LIMITED ANNUAL REPORT 2014
Jashimuddin Road Branch Halishahar Branch Chouhatta Branch
Giant Business Tower, Level 2, Plot 3 & 3/A, House-1, Road-1, Block-L, Halishahar Firoz Centre,
Sector 3, Uttara, Dhaka Housing Estate, Halishahar, Chittagong. 891/KA, Chouhatta, Sylhet
Tel: 028961486, 028961481, 028961472 Tel: 031 2513895, 031 2513896-7 Tel: 0821-717545, 723242, 721386 Fax:
Email: [email protected] Email: [email protected] 0821 717545
Ponchoboti Branch Sirajuddowla Road Branch Email: [email protected]
101 & 102 ponchobotir more (1st floor), 94 Sirajuddowla Road, Dewan Bazar, Bishwanath Branch
Fatullah, Narayangonj Chandanpura, Chittagong Khurshid Ali Shopping Complex
Tel: +88-02-7672837, 7672853, Tel: 031 2865261-4 Notun Bazar, Bishwanath, Sylhet-3100
Mograpara, Narayanganj Branch CEPZ Chittagong Branch Tel: 08224 56005
Bhuiyan Plaza, Mograpara, Sonargaon 1279/A Saleh Complex, CEPZ Gate, Email: [email protected]
Narayanganj Bandar, Chittagong Moulvi Bazar Branch
Tel: 7656031, 7656036, 7656064 Tel: 031 742195, 031 742196, 031 742197 26, Sylhet Trunk Road (1st Floor),
Email: [email protected] Moulvi Bazar-3200
Chittagong Tel: 0861 52034 , 0861 52226
Lohagara Chittagong Branch
Agrabad Branch/SME Center M. K. Shopping Complex (1st Floor), Email: [email protected]
33 Agrabad C/A, Chittagong Bottoli, Main Road, Lohagara, Chittagong Brahmanbaria Branch
Tel: 031-720755-9 Fax: 031 710262 Tel: 0303 456681, 0303 456682 Abil Mia Plaza, 106, T.A. Road,
Email: [email protected] Fax: 0303 456682 Brahmanbaria
New Market Branch Email: [email protected] Tel: 01194493940, 01715073206,
904/731, H S S Road (New Market More), Hathazari Chittagong Branch 01743438386
Alkaran, Kotwali, Chittagong-4000 Haji Sultan Market, Hathazari Bus Stand, Email: [email protected]
Tel: 031-621898, 620519, 636986 Hathazari, Chittagong Fenchuganj Branch
Email: [email protected] Tel: 031-2601956, 031-2601957, Tuta Mia Mansion, Fenchuganj Bazar
Khatunganj Branch Fax: 031-2601958 Fenchuganj, Sylhet
173 Khatunganj Badsha Market, Email: [email protected] Tel: 08226-56411, 08226-56412, 08226-56413
Chittagong Comilla SME/Agri Branch Email: [email protected]
Tel: 031 621316, 630229, 635153 Chowdhury Plaza, 195, Jail Road,
Fax: 031 638743 Khulna
Jhawtala, Comilla
Email: [email protected] Tel: 08172778, 08172779, 08172479, Khulna Branch/SME Center
O. R. Nizam Road Branch 08172679, 08172478 Tayamun Centre & Properties
Avenue Centre, 787 CDA Avenue, Email: [email protected] 181, Khan A. Sabur Road, Khulna
Chittagong Tel: 041 723506, 721069, 720041-2, 723418
Nazirhat Branch
Tel: 031-617082, 617083, 2853251, Fax: 041 721740
Zaria Community Centre,
2857073-5, Fax: 031 617083 Email: [email protected]
(Adjacent to Dorbar Gate)
Email: [email protected] Nazirhat, Fatickchari, Chittagong Fulbarigate Branch
Jubilee Road Branch/SME Center Tel: 044 3800 0504-5 Altaf Plaza, Jogipole, Khan Jahan Ali, Khulna
Mannan Bhaban, 156 Nur Ahmed Sarak, Ext: 101, 017 1310 7217 Tel: 041-775080, 775082
Jubilee Road, Chittagong Email: [email protected] Email: [email protected]
Tel: 031 614442, 031 621480, 2858471 Bhatiari Branch Jessore Branch
Fax: 031 615594. Email: [email protected] Sajeda Bhaban(Ground Floor, 1st & 2nd 25/A R.N. Road (1st Floor), Jessore
Chandgaon Branch floor)”, beside H.Akbar Ali Road, Tel: 0421-68842-3, 0421-64533
House-16, Road-01, Block-A, Bhatiari,Chittagong Email: [email protected]
Chandgaon R/A, Chittagong–4212 Tel: 044 38000567, 044 38000568 Rajshahi
Tel: 031 2571204, 2571205, 2572704 Email: [email protected]
Email: [email protected] Rajshahi Branch
Mehdibagh Branch Doinik Barta Complex (Ground Floor)
Panchlaish Branch Epic Emdad Heights, 38 Chatteshwari Circle, Alupotti, Natore Road, Rajshahi-6000
Al-Hakim Plaza Mehdibagh, Chittagong Tel: 0721 772372, 772356 Fax 9721 772356
14, Panchlaish R/A, Chittagong-4203 Tel: 031 2869451 - 2, Fax 031 2869453 Email: [email protected]
Tel: 031 2552691, 031-2553556 Email: [email protected]
Fax: 031 2552692 Bogra Branch
Maijdee Branch 1020/1092, Satani Mega Centre, Sherpur
Email: [email protected] Alif Plaza, Main Road, Maijdee, Noakhali Road
Raozan Branch Tel: 0321 71115, 0321 71116, Bogra 5800
Bharetoshowri Market, Kaptai Road Fax 880 0321 71137 Tel: 051 78373, 78887 , 69932
Noapara, Raozan, Chittagong-4346 Email: [email protected] Email: [email protected]
Tel: 031 2571207 Jamal Khan Branch
Email: [email protected] CPDL AM Majesta (1st Floor), Rangpur
Choumuhani Branch 84, Jamal Khan Road, Chittagong Rangpur Branch
“Kiron Imperial” (GF, 1st and 2nd Floor), Tel : 031-2866603-04 ,Fax-88 031-2866605 House-11, Road-1, Dhap Jail Road, Rangpur
1460 Karimpur Road, Choumuhoni, Tel: 052155289, 052155290, 052155291
Dohazari Branch
Begumgonj, Noakhali Phone: 0321 56497, Email: [email protected]
Hazari Tower (1st Floor), Dohazari,
0321 56495, 0321 56496 Chandanaish, Chittagong Barisal
Cox’s Bazar Branch Tel : 09666777325 Barisal Branch
10 Hotel Motel Zone, Kolatali Road, Bishnu Priya Bhaban, Holding No- 0451-000,
Cox’s Bazar Sylhet Road-69, Barisal Sadar Road, Barisal
Tel: 0341-51295-7 Email: [email protected] Upasahar Branch Tel: 0431-2177644,0431-2177643
Feni SME/Agri Branch 504, Gas Bhaban (GF) Email: [email protected]
“Kazi Alamgir Center”, 26 S.S.K Road, Feni Mehdi Bagh, Sylhet
Tel: 0331 73562, 0331 73563, 0331 73564 Tel: 0821 719573, 719584 Fax: 0821 719584
Email: [email protected] Email: [email protected]

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EASTERN BANK LIMITED ANNUAL REPORT 2014
CORRESPONDENT BANK NETWORK

ALGERIA Citibank N.A. COTE D’IVOIRE

ALGIERS PORTO ALEGRE Citibank N.A.
Citibank NA Algeria Banco Do Estado Do Rio Grande Do Sul S/A Standard Chartered Bank
ARGENTINA CAMEROON DENMARK
BUOENS AIRES DOUALA COPENHAGEN
Deutsche Bank SA Citibank N.A. Citibank International Plc
AUSTRALIA Standard Chartered Bank Cameroon S.A. Danske Bank As
MELBOURNE CANADA Sydbank A/S
Citibank Na TORONTO Nordea Bank
SYDNEY Bank of Nova Scotia Handelsbanken Midtbank
JP Morgan Chase Bank N.A. Citibank NA, HSBC Bank Canada DUBAI
HSBC Bank Australia ICICI Bank Canada Emirates National Bank of Dubai Sae
The Bank of Tokyo Mitsubishi Ufj Ltd Bank of Montreal NA EGYPT
Commonwealth Bank of Australia Sydney CHINA CAIRO
Citibank NA BEIJING Citibank Cairo
AUSTRIA Bank of China Housing And Development Bank
VIENNA Bank of Montreal (China) co. Ltd. Beijing, China Mashreq Bank
Kathrein Und Co Privatgeschaeftsbank Bank of Tokyo-Mitsubishi Ufj (China), Ltd FINLAND
Aktiengesellschaft Deutsche Bank AG HELSINKI
The Bank of Tokyo Mitsubishi Ufj Ltd. Woori Bank (China) Limited Citibank International Plc
Citibank International Plc JP Morgan Chase Bank NA, Beijing, China Nordea Bank Plc
Deutsche Bank Aktiengesellschaft China Construction Bank Corporation Beijing, China Svenskahandelsbanken
Raiffeisen Landesbank Neideroesterreich-Wien Ag Industrial and Commercial Bank of China Limited, China Pohjola Bank Plc
Raiffeisen Zentralbank Oesterreich Ag Commerzbank AG Beijing China Skandinaviskaenskildabanken
Bank Austria Creditanstalt Ag, GUANGZHOU FRANCE
BREGENZ Bank of China PARIS
Raiffeisen Landesbank Vorarlberg JP Morgan Chase Bank (China) Attijariwafa Bank Europe, Paris, France
EISENSTADT Bank of Nova Scotia BNP Paribas S.A.
Raiffeisen Landesbank Burgenland Rgmbh SHANGHAI The Bank Of Tokyo-Mitsubishi Limited
GRAZ Bank of Montreal (china) co. Ltd. Shanghai, China HSBC. Ccf
Raiffeisenlandesbank Steiermark Axis Bank Ltd., Shanghai, China Citibank International Plc
INNSBRUCK Industrial and Commercial Bank of China Limited, China Credit Mutuel (Holding Bfcm)
Raiffeisen-Landesbank Tirol Aktiengesellschaft Australia & New Zealand Banking Group Ltd. Credit Industriel Et Commercial
KLAGENFURT Bank of Tokyo-Mitsubishi ufj (china), ltd. (Shanghai Banque Federative Du Credit Mutuel
Raiffeisenlandesbank Kaernten, Reg. Branch) Commerzbank AG
Gen.M.B.H. JP Morgan Chase Bank N.A. Deutsche Bank AG
LINZ Citi Bank, N.A.shanghai br. China. ING Bank (France) S.A.
Raiffeisenlandesbank Oberoesterreich Reg. Commerzbank AG National Bank of Pakistan
Gen.M.B.H. Bank of Chongging, China Union De Banques Arabes Et Francaises
BAHRAIN Deutsche Bank (China) Co. Ltd. Shanghai, China GABON
MANAMA HSBC Bank (China) Company Limited LIBREVILLE
ALUBAF Arab International Bank B.S.C. (C), The Bank Of New York Mellon, Shanghai Branch Citibank N.A.
Manama, Bahrain Jiangsu Jiangyin Rural Commercial Bank GAMBIA
Citibank NA Bahrain Mizuho Corporate Bank (China),Ltd BANJUL
Standard Chartered Bank Standard Chartered Bank. Standard Chartered Bank
Arab Investment Company Zhejiang Pinghu Rural Cooperative Bank Shanghai, China GERMANY
The Bank of Tokyo Mitsubishi UFJ Ltd Bank Of Communications FRANKFURT AM MAIN
BMI Bank BSC (C) SHENZHEN Raiffeisenlandesbank Oberosterreich Akteiengesellschat
United Bank Ltd Bank of Tokyo-Mitsubishi Ufj (China), Ltd. American Express Bank Gmbh
ICICI Bank Limited TIANJIN J.P.Morgan AG
BELGIUM Bank of Tokyo-Mitsubishi Ufj (China), Ltd. Citigroup Global Markets Deutschland AG Und Co Kgaa
BRUSSELS Sumitomo Mitsui Banking Corporation Commerzbank AG
ABN AMRO Bank NV DALIAN Deutsche Bank AG
Citibank International PLC Bank of Tokyo Mitsubishi Ltd. SEB Ag Seb Merchant Banking
The Bank of Tokyo Mitsubishi UFJ Ltd JINING ING Bank
ING Bank Belgium Bank Of Jining Co Ltd Jining China SCB, Germany
Commerzbank AG, Belgium NANHAI MUENCHEN
BNP Paribas S.A. Belgium Nanhai Rural Credit Union Deutsche Bank AG
Deutsche Bank AG ZHEJIANG Bayerische Hypo-und Vereins Bank AG.- Hypovereinsbank
ICICI Bank UK PLC Zhejiang Shaoxing Country Rural Cooperative Bank MAINZ
KBC Bank NV CAYMAN ISLANDS Deutsche Bank AG
State Bank of India Commerzbank AG BERLIN
BHUTAN CONGO Berliner Volksbank AG
PHUNTSHOLING Citibank Congo Commerzbank AG
Bank of Bhutan CYPRUS Deutsche Bank AG
THIMPU NICOSIA (LEFKOSIA) CHEMNITZ
Bhutan National Bank Ltd. Bank of Cyprus Ltd. Deutsche Bank AG
BRAZIL CZECH REPUBLIC DRESDEN
BRUSSELS PRAGUE Deutsche Bank AG
Banco Citibank SA Ceskoslovenskaobchodni Banka AS DUESSELDORF
SAO PAULO Citibank AS Bank of Tokyo-Mitsubishi UFJ, Ltd.
Deutsche Bank SA Unicredit Bank HSBC

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EASTERN BANK LIMITED ANNUAL REPORT 2014
WGZ Bank AG IDBI Bank Ltd., India Commerzbank AG
Deutsche Bank AG Sociate Generale India Branch Hongkong And Shanghai Banking Corp. Ltd.
Landesbank Hessen-Thueringen Girozentrale Kotak Mahindra Bank Limited Mumbai India Mizuho Corporate Bank Ltd.
HUMBURG DELHI Wells Fargo Bank N.A.
Joh. Berenberg,Gossler Und Co.Kg Bank Of Tokyo-Mitsubishi Ufj (China), Ltd Standard Chartered Bank
Commerz Bank, Humbrug, Germany Standard Chartered Bank Sumitomo Mitsui Banking Corpn.
Deutsche Bank AG CALCUTTA UBAF-Union De Banques Arabes Et Francaises
HANNOVER Sonali Bank The Bank Of Nova Scotia, Tokyo Branch
Deutsche Bank AG Standard Chartered Bank Australia & New Zealand Banking Group Ltd.
STUTTGART Chennai (Madras) JP Morgan Chase Bank
Landesbank Baden-Wuerttemberg Bank Of Tokyo Mitsubishi Ltd. Deutsche Bank Ag, (Tokyo Branch) Tokyo, Japan
GREECE Standard Chartered Bank KENYA
ATHENS INDONESIA NAIROBI
Citibank International PLC JAKARTA Citibank NA,
GHANA Bank Mandiri (Persero), Pt. Dubai Bank Kenya Ltd
Standard Chartered Bank Bank Central Asia KOREA
HONG KONG Citibank NA SEOUL
HONG KONG Hongkong And Shanghai Banking Corp Ltd. Bank of Tokyo Mitsubishi Ltdjp Morgan Chase Bank N.A.
Banca Intesa S.P.A. Standard Chartered Bank JP Morgan Chase Bank N.A.Kookmin Bank
Bank Of America, N.A. Hong Kong Bank Negara Indonesia-Pt(Persero) Jakarta, Indonesia Citibank NA
Bank Of Tokyo-Mitsubishi Ufj, Ltd., JP Morgan Chase Bank N.A. Jakarta,Indonesia Kookmin Bank
JP Morgan Chase Bank Deutsche Bank A.G., Jakarta, Indonesia Hongkong & Shanghai Banking Corp. Ltd.
Citibank (Hong Kong) Limited Bank Mega Pt, Indonesia Woori Bank
Commerzbank AG Bank of Tokyo Mitsubishi Ltd. Industrial Bank of Korea
Bank One NA IRELAND Bank of New York
Svenska Handelsbanken AB DUBLIN Korea Exchange Bank
HBZ Finance Limited Citibank N.A. Ireland Wells Fargo Bank N.A.
Hongkong And Shanghai Banking Corp Ltd. Bank of America, N.A Standard Chartered Bank
ICICI Bank Limited ITALY UBAF-Union De Banques Arabes Et Francaises
Bank Of New York MILAN Deutsche Bank Ag, Korea
Mizuho Corporate Bank Ltd. Banca Intesa Spa PUSAN
Mashreqbank Psc., Hong Kong Branch Intesa Bci S.P.A. Pusan Bank
Bank of Nova Scotia Bank of Tokyo Mitsubishi Ltd. KUWAIT
Wells Fargo Bank N.A. Banca Popolare Di Milano S.C.A.R.L. KUWAIT CITY
Standard Chartered Bank Banca Populare Friuladria Spa Citibank NA Kuwait
Sumitomo Mitsui Banking Corp Citibank NA Commercial Bank of Kuwait
UBAF (Hong Kong) Limited Commerzbank AG LEBANON
Industrial And Commercial Bank Of China (Asia) Ltd. ING Bank N.V. BEIRUT
Wing Hang Bank Ltd. Banca Popolare Di Marostica Citibank NA Beirut
Axis Bank Ltd. Unicredito Italiano Spa LATVIA
Sumitomo Mitsui Banking Corp. Hong Kong Unicredito Italiano, Italy Nordea Bank Finland Plc Latvia Branch
Deutsche Bank AG. Hong Kong Credito Emiliano S.P.A. Reggio Nell Emilla, Italy MACAU
Westpac Banking Corporation, Hong Kong Banca Delle Marche Spa, Marche, Italy MACAU
Toronto Dominion Hong Kong Banca Antonveneta Spa Padova, Italy Hong Kong and Shanghai Banking Corp
Habib Finance Intl.Limited, Hong Kong Banca Popolare Di Sondrio, Italy MALAYSIA
Australia & New Zealand Banking Group Ltd. Unione Di Banche Italiane Scpa (Ubi KUALA LAMPUR
Unicredit Bank AG, Hong Kong Banca),Italy JP Morgan Chase Bank Berhad
EBL Finance (HK) Limited Deutsche Bank S.P.A. ABN AMRO Bank Berhad
Commonwealth Bank Of Australia, Hong Kong Cassa Di Risparmio Di Ravenna S.P.A. Italy CIMB Bank Berhad
AB International Finance Ltd. Hkg Banca Monte Dei Paschi Di Siena Spa, Italy Citi Bank Na Kualalumpur, Malysaia
ICICI Bank Limited, Hong Kong Cassa Di Risparmio Di Carrara Spa, Italy Deutsche Bank (Malaysia) Berhad
HUNGARY Credito Valtenllinese Soc Coop. Italy HSBC, Kualalumpur
BUDAPEST Banca Passadore Ec, Italy May Bank
CIB Bank Ltd Cassa Di Risparmio Delta Spezia Spa, Italy RHB Bank Berhad
Citibank Europe PLC Cassa Di Risparmio Di Parma E Placenza Spa, Italy Standard Chartered Bank
Deutsche Bank AG PADOVA Bank Of Tokyo Mitsubishi UFJ
INDIA Banca Antonveneta Spa Malayan Banking Berhad (May Bank)
MUMBAI PORDENONE Sumitomo Mitsui Banking Corpn. Malaysia
Arab Banglaesh Bank Limited Banca Popolare Friuladria Spa Berhad
Axis Bank Ltd.(Former Uti Bank Ltd),Mumbai, India VERONA MALDIVES
Bank Of America N.A. Banco Populare Soc Coop.Italy MALI
Bank Of Tokyo Mitsubishi Ltd. Banco Popolare Di Verona E Novara Scrl Hongkong and Shanghai Banking Corporation Limited,
Citibank NA ROME MALTA
Deutsche Bank AG Banca Nazionale Del Lavoro S.P.A. ST. JULIAN’S
Federal Bank Limited Banca Ubae Spa Roma Italy FIMBANK PLC
Hongkong And Shanghai Banking Corp. Ltd. TERAMO MAURITIUS
ICICI Bank Limited Tercas-Cassa Di Risparmio Della Provincia Di PORT LOUIS
Mashreq Bank Teramo S.P.A. Deutsche Bank (Mauritius) Ltd
Bank Of Nova Scotia Ivory Coast MAURITIUS
Punjab National Bank ABIDJAN Mauritius Commercial Bank Ltd.
Standard Chartered Bank Citibank N.A. MOROCCO
Syndicate Bank Addis Ababa CASABLANCA
Tamilnad Mercantile Bank Ltd. Standard Chartered Bank Citibank Maghreb
Union Bank Of India JAPAN MONACO
United Bank Of India TOKYO Citibank International Plc
JP Morgan Chase Bank N.A.Mumbai, India Bank Of Tokyo Mitsubishi Ltd. NEPAL
HDFC Bank Limited, India Bayerische Hypo-Und Vereinsbank AG KATHMANDU
Indusind Bank Ltd. India Chiba Kogyo Bank Ltd. Nepal Bangladesh Bank Ltd
Yes Bank Ltd., Mumbai, India Citibank NA Standard Chartered Bank

298
EASTERN BANK LIMITED ANNUAL REPORT 2014
 CORRESPONDENT BANK NETWORK

NETHERLANDS Deutsche Bank MADRID

AMSTERDAM SAUDI ARABIA Intesa BCI S.P.A.
ING Bank NV JEDDAH Intesa BCI S.P.A.
ABN Amro Bank NV National Commercial Bank, H.O.Jeddah, Bank Of America N.A.
Commerz Bank AG S.Arabia Bank Of Tokyo Mitsubishi Ltd.
Citibank International PLC State Bank of India, Jeddah Banco De Sabadell S.A.
The Bank of Tokyo Mitsubishi UFJ Ltd RIYADH Confederacion Espanola De Cajas De Ahorros
Deutsche Bank A.G. Amsterdam SAMBA Financial Group Citibank International PLC
BREDA Bank Muscat Caja Laboral Popular, Coop. De Credito (Caja Laboral)
ING Bank NV Deutsche Bank Ag Afina Gestion Sgiic SA
ROTTERDAM Saudi Hollandi Bank Commerzbank AG
ABN AMRO Bank NV National Bank Of Pakistan Fortis Bank, S.A., Sucursal En Espana
UTRECHT Emirates NBD PJSC Lloyds Tsb Bank PLC
RABO Bank Nederland SAN MARINO Westlb AG Madrid Branch
NEW ZEALAND DOGNA Deutsche Bank Sociedad Anonima
AUCKLAND Banca Agricola CommercialeIstituto Bancario Espanola,Barcelona
Citibank NA Sammarinse Spa Caixa D’estalvis De Catalunya Tarragona I
NIGERIA SENEGAL Manresa, Spain
LAGOS DAKAR SRILANKA
Citibank NA Citibank NA COLOMBO
NORWAY SIERRA LEONE Citibank NA
OSLO FREETOWN ICICI Bank Limited
SWED Bank, Norway Standard Chartered Bank Mashreq Bank
Nordea Bank NorgeaSA SINGAPORE Standard Chartered Bank
Skandinaviska Enskilda Banken SINGAPORE CITY Deutsche Bank A.G.,
Handelsbanken ABN AMRO Bank N.V. Commercial Bank of Ceylon Plc, Sri Lanka
DNB Nor Bank ASA American Express Bank Ltd. People’s Bank, Sri Lanka
Citibank International PLC Australia & New Zealand Banking Group Ltd. SWEDEN
OMAN Intesa Bci S.P.A. STOCKHOLM
MUSCAT Bank of America N.A. Citibank International PLC
HSBC Bank Middle East Ltd Bank of Tokyo Mitsubishi Ltd. DNB Nor Bank
Bank Muscat Bayerische Hypo-Und Vereinsbank Ag (Bhv) Skandinaviska Enskilda Banken
PAKISTAN Jpmorgan Chase Bank N.A. Svenska Handelsbanken
KARACHI Citibank NA Nordea Bank Sweden AB
Bank Of Tokyo Mitsubishi Ltd. Commerzbank AG Swedbank
Citibank NA Credit Lyonnais HSBC Bank PLC
NDLC LIFC Bank Ltd Deutsche Bank AG MALMO
Standard Chartered Bank DNB Nor Bank Asa Skandinaviska Enskilda Banken
Habib Metropolitan Bank Limited Skandinaviska Enskilda Banken AB Svenska Handelsbanken
Arif Habib Rupali Bank Ltd Meespierson Asia Ltd. Nordea Bank AB
United Bank Ltd Fortis Bank S.A. / N.V. GOTEBORG
Deutsche Bank AG Svenska Handelsbanken Skandinaviska Enskilda Banken
Bank Alfalah Limited Hongkong And Shanghai Banking Corp. Ltd. Svenska Handelsbanken
Habib Bank Ltd Woori Bank Nordea Bank AB
Bank Al Habib Ltd ICICI Bank Limited Swedbank (Foreningssparbanken AB
Meezan Bank Limited ING Bank N.V. SWITZERLAND
Bankislami Pakistan Limited Bank of New York GENEVA
PHILLIPINES Malayan Banking Berhad ABN AMRO Bank
MANILA Mizuho Corporate Bank Ltd. American Express Bank (Switzerland) S.A.
Asian Development Bank Nordea Bank Finland PLC Credit Agricole (Suisse) Sa
Citibank NA Bank Of Nova Scotia ING Bank (Switzerland) Ltd.
Standard Chartered Bank Rabobank, Singapore Branch Banque Cantonale De Geneve
Deutsche Bank AG RZB-Austria Singapore Branch Banque De Commerce Et De Placements S.A.
Bank of Tokyo-Mitsubishi UFJ, Ltd Standard Chartered Bank BNP Paribas (Suisse) SA
POLAND Sumitomo Mitsui Banking Corp. BSI SA
WARSZAWA UBAF-Union De Banques Arabes Et Francaises ZURICH
Raiffeisen Bank Polska S.A. Axis Bank Ltd (Former Uti Bank Ltd), Singapore ABN AMRO Bank
PORTUGAL ICICI Bank Limited, Singapore ABN AMRO Bank
LISBON State Bank Of India, Singapore ABN AMRO Bank
Banco Atlantico, S.A. ABN AMRO Bank N.V. Singapore INTESABCI Bank (SUISSE)
Banco BPI SA Oversea-Chinese Banking Corp.Ltd Citibank NA
Citibank International PLC United Overseas Bank Limited, Singapore Credit Suisse
Deutsche Bank Banco Santander Sa, Singapore Habib Bank AG Zurich
Banif-Banco Internacional Standard Chartered Bank (Singapore) Limited Zuercher Kantonakbank
Banco Espirito Santo SA Habib Bank, Singapore United Bank AG, Zurich, Switzerland
QATAR Emirates NBD Pjsc, Singapore Deutsche Bank AG Zurich Branch Zurich
DOHA DBS Bank Ltd. Singapore Switzerland
Mashreq Bank SLOVAKIA LAUSANNE
HSBC Bank Middle East Limited BRATISLAVA Banque Cantonale Vaudoise
United Bank Limited Citibank Europe Plc, YVERDON-LES-BAINS
ROMANIA SOLOMON ISLAND UBS AG
BUCHAREST HONIARA BASLE
Citibank Europe PLC Australia & New Zealand Banking Group Ltd. ABN AMRO Bank
RUSSIA SOUTH AFRICA BERNE
MOSCOW JOHANNESBERG ABN AMRO Bank
Banca Intesa Zao Moscow Citibank NA LUGANO
Citibank NA Commerzbank AG ABN AMRO Bank
Commerzbank Eurasija Sao First National Bank PRAGUE
Sao Westdeutsche Landesbank Vostok SPAIN Deutsche Bank AG

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EASTERN BANK LIMITED ANNUAL REPORT 2014
TAIWAN FUJAIRAH Standard Chartered Bank
TAIPEI National Bank of Fujairah Sumitomo Mitsui Banking Corporation
Bank of America N.A. UGANDA Westlb AG
Bank of Tokyo Mitsubishi Ltd. Citibank Uganda Limited Wells Fargo Bank N.A.
JP Morgan Chase Bank N.A. UKRAINE ICICI Bank Limited, New York, Usa
Citibank NA KIEV National Bank of Pakistan, Ny, U.S.A.
Chinatrust Commercial Bank Credit Dnepr Bank, Dnipropetrovsk, Ukraine Bank of Oklahoma N.A.
Far Eastern International Bank Deutsche Bank AG City National Bank USA
Hongkong And Shanghai Banking Corp. Ltd. Citibank NA United Bank Limited
Bank of New York UK Amsouth Bank
Bank of Nova Scotia LONDON Keybank National Association
Wells Fargo Bank N.A. Banca Intesa S.P.A. National City Bank Cleveland
Standard Chartered Bank Bank Mandiri (Europe) Ltd National City Bank
Citibank Taiwan Limited Taipei, Taiwan Bank of America N.A. Union Planters Bank N.A. Usa
Deutsche Bank A.G. Taipei Branch Bank of Tokyo Mitsubishi Ltd. Banco De Sabadell, Miami Agency
Taichung Commercial Bank Limited, Taiwan Banco De Sabadell S.A. Bank Boston International
Australia & New Zealand Banking Group Ltd. Sonali Bank (Uk) U.S. Bank
Confederacion Espanola De Cajas De Ahorros U.S. Bank Trust
TANZANIA JP Morgan Chase Bank N.A. Bank of The West
DARES SALAM Citibank NA Sovereign Bank
Citibank Tanzania Ltd Commerzbank AG LOS ANGELES, CA
THAILAND Deutsche Bank AG Intesabci S.P.A.
BANGKOK DNB Nor Bank Asa Bank of Tokyo Mitsubishi Ltd.
Bank of Ayudhya Public Company Limited Habib Bank AG Zurich Cathay Bank
Bharat Overseas Bank Ltd. Woori Bank Woori Bank
Bangkok Bank Public Company Ltd. ICICI Bank Uk Limited Mizuho Corporate Bank Ltd.
Bank of America N.A. ING Bank N.V. Wells Fargo Bank N.A.
Bank of Tokyo Mitsubishi Ltd. Bank of New York Standard Chartered Bank Los Angeles
Citibank NA Lloyds TSB Bank Plc TULSA,OK
Export Import Bank Of Thailand Mizuho Corporate Bank Ltd. Bank of Oklahoma NA
Hongkong & Shanghai Banking Corp Ltd. Mashreq Bank Psc SAN FRANCISCO
Kasikornbank Public Company Limited Nordea Bank Finland Plc London Branch Bank of America, N.A
Mizuho Corporate Bank Ltd. NEDbank Ltd Bank of Tokyo-Mitsubishi Ufj, Ltd
Standard Chartered Bank National Westminster Bank Plc Wells Fargo Bank, N.A.
Sumitomo Mitsui Banking Corpn. Wells Fargo Bank N.A. MINNEAPOLIS,MN
JP Morgan Chase Bank N.A.Bangkok,Thailand Raiffeisen Zentralbank Ag London Branch U.S. Bank
Deutsche Bank A.G. Bangkok Branch Standard Chartered Bank WASHINGTON
Thai Bank Public Company Limited Sumitomo Mitsui Banking Corporation Europe Ltd. International Bank for Reconstruction &
TUNISIA Banco Popolare Di Verona E Novara Scrl Development (IBRD)
TUNIS Westlb AG London Branch International Finance Corporation
Citibank NA ABN AMRO Bank N.V. BOSTON
TURKEY American Express Bank Ltd. Fleet National Bank
ISTANBUL Habib-Uk Plc. London CALIFORNIA
Albaraka Turk Participation Bank Unicredit Bank Ag (Hypoundvereinsbank) London Silicon Valley Bank, California, USA
Citibank NATurkiye Merkez Subesi HSBC Bank Plc., London, Uk CHARLOTTE,NC
HSBC Bank A.S. Bank Of Beirut (Uk) Limited, Uk Wells Fargo Bank N.A.
Fortis Bank A.S. Istanbul Turkey Intesa Sanpaolo Spa, London, Uk CHICAGO, IL
Turkiye Garanti Bankasi As Istanbul, Turkey ANZ Bank, Uk ABN AMRO Bank N.V.
ING Bank A.S. Istanbul, Turkey Crown Agents Bank Limited London, U.K. Bank of America N.A.
Deutsche Bank Istanbul Istanbul, Turkey Exim Exchange Company (Uk) Limited Lasalle National Bank
Ak Bank Tas, Turkey Emirates Nbd Pjsc, U.K. Bank of Montreal, Chicago,
Kuveyt Turk Katilim Bankasi A.S. Turkey Habib-Uk Plc. London UZBEKISTAN
Aktif Yatirim Bankasi A.S. Turkey URUGUAY TASHKENT
Denizbank A.S. Istanbul, Turkey MONTEVIDEO National Bank for Foreign Economic Activity of
Sekerbank Turk A.S. Turkey Citibank NA the Republic of Uzbekistan
Finansbank As, Turkey Banco Itau VIETNAM
Citibank International Plc. Madrid USA HANOI
Banco Espirito Santo SA NEW YORK, NY Australia & New Zealand Banking Group Ltd.
UAE ABN AMRO Bank N.V. Bank of Tokyo Mitsubishi Ltd.
DUBAI Australia & New Zealand Banking Group Ltd. Citibank NA
ABU Dhabi Commercial Bank Intesabci S.P.A. Woori Bank
Intesabci S.P.A. Deutsche Bank Trust Company Americas Standard Chartered Bank
HSBC Bank Middle East Bank of America N.A. Mizuho Corporate Bank Ltd.
Mashreqbank PSC Union Bank Of California, N.A. Australia & New Zealand Banking Group Ltd.
Citibank NA Bank of Tokyo Mitsubishi Ltd. Joint Stock Commercial Bank for Investment & Dev
Emirates Bank International PJSC JP Morgan Chase Bank HO CHI MINH CITY
Habib Bank AG Zurich Citibank NA The Bank of Tokyo-Mitsubishi UFJ, Ltd. Hanoi
Emirates Islamic Bank Commerzbank AG Branch (Hanoi Branch)
Standard Chartered Bank Credit Lyonnais Hongkong & Shanghai Banking
Dubai Islamic Bank, Dubai City, UAE Deutsche Bank AG MINH CITY
Habib Bank Limited DNB Nor Bank ASA JP Morgan Chase Bank N.A. Minh City, Vietnam
Axis Bank Ltd Habib American Bank Deutsche Bank, Ho Chi Minh City
United Bank Limited, Dubai,UAE. Woori Bank Zambia
Deutsche Bank Ag, Abu Dhabi, UAE Bank of New York Citibank Zambia Ltd.
ICICI Bank Limited, Dubai Bank Leumi Usa Standard Chartered Bank Zambia Ltd
Noor Islami Bank (Noor Bank) UAE Mizuho Corporate Bank Ltd. ZIMBABWE
ABU DHABI HSBC Bank Usa Standard Chartered Bank Zimbabwe Limited
Deutsche Bank AG, Abu Dhabi, UAE Mashreqbank Psc., New York Branch
Noor Islami Bank (Noor Bank) UAE Nordea Bank Finland Plc, New York Branch

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ABBREVIATIONS
ABB Association of Bankers, Bangladesh ICAAP Internal Capital Adequacy Assessment Process
AC Audit Committee ICCD Internal Control & Compliance Division
ADC Alternative Distribution Channel IFC International Finance Corporation
ALCO Asset Liability Committee IT Information Technology
ALS Assured Liquidity Support IAS International Accounting Standard
ATM Automated Teller Machine IPO Initial Public Offering
BACH Bangladesh Automated Clearing House IVR Interactive Voice Response
BAS Bangladesh Accounting Standard LAPS Loan Application Processing System
BB Bangladesh Bank (Central Bank of Bangladesh) LC Letter of Credit
BFRS Bangladesh Financial Reporting Standard MANCOM Management Committee
BORC Bank Operational Risk Committee MCR Minimum Capital Requirement
BRMC Bank Risk Management Committee MD&A Management Discussion & Analysis
BRPD Banking Regulation and Policy Department MFIs Micro Finance Institutions
(of Bangladesh Bank) MICR Magnetic Ink Character Recognition
CAR Capital Adequacy Ratio MOR Monthly Operation Report
CMU Cash Management Unit NBFI Non-bank Financial Institution
CP Commercial Paper NII Net Interest Income
CSU Customer Support Unit NPL Non Performing Loan (Classified Loan)
CRR Cash Reserve Ratio NCBs Nationalized Commercial Banks
CRGM Credit Risk Grading Matrix NRB Non Resident Business
CSR Corporate Social Responsibility OBU Offshore Banking Unit
CDBL Central Depository Bangladesh Limited OCI Other Comprehensive Income
CDCS Certified Documentary Credit Specialist PCBs Private Commercial Banks
CRISL Credit Rating Information and Services Ltd. PC Purchase Committee
DCFCL Departmental Control Function Check List PD Probability of Default
DEPZ Dhaka Export Processing Zone POS Point of Sale
DR Disaster Recovery PPG Product Program Guidelines
EBL Eastern Bank Limited PRI Prime Risk Indicator
EBLAML EBL Asset Management Limited QMS Quality Management System
EBLIL EBL Investments Limited RBCA Risk Based Capital Adequacy
EBLSL EBL Securities Limited RBIA Risk Based Internal Audit
EC Executive Committee RFCD Resident Foreign Currency Deposit
ECAI External Credit Assessment Institution RWA Risk Weighted Assets
EFT Electronic Fund Transfer RMG Readymade Garments
EMI Equal Monthly Installment ROA Return on Assets (excluding contingent items)
EPZ Export Processing Zone ROE Return on Equity
E&S Risk Environmental and Social Risk SAMD Special Asset Management Division
ETP Effluent Treatment Plant SFU Structured Finance Unit
FD Fixed Deposit SAFA South Asian Federation of Accountants
FTP Fund Transfer Pricing SME Small and Medium Enterprise
FY Fiscal Year (July to June) SLR Statutory Liquidity Ratio
GDP Gross Domestic Product STP Straight Through Processing
GOB Government of Bangladesh SRP Supervisory Review Process (Pillar II of Basel II)
GTFP Global Trade Finance Program TFP Trade Finance Program
HFT Held for Trading TREC Trading Right Entitlement Certificate
HRD Human Resources Division UBS Universal Banking System (Core Banking Solution)
ICAB Institute of Chartered Accountants of Bangladesh. WACRG Weighted Average Credit Risk Grade

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EASTERN BANK LIMITED ANNUAL REPORT 2014
 EASTERN BANK LIMITED
HEAD OFFICE
JIBAN BIMA BHABAN
10, DILKUSHA COMMERCIAL AREA
DHAKA-1000.

NOTICE OF THE 23RD ANNUAL GENERAL MEETING

NOTICE is hereby given to all the Members of Eastern Bank Limited (EBL) that the 23rd Annual General Meeting (AGM)
of the Company will be held on Tuesday 31 March 2015 at 10.30 A.M. at Unique Trade Centre (UTC), Convention Hall
(Level-5), 8 Panthapath, Kawran Bazar, Dhaka-1215 to transact the following Agenda:
AGENDA
1. To receive, consider and adopt the Profit & Loss Account of the Company for the year ended 31 December 2014 and
the Balance Sheet as at that date together with the Reports of the Auditors and the Directors thereon.
2. To declare the Dividend for the year ended 31 December 2014 as recommended by the Board of Directors.
3. To elect Directors.
4. To appoint the Auditors of the Company for the term until the next Annual General Meeting and to fix their
remuneration.

By order of the Board of Directors

Dated, Dhaka
1 March 2015
Safiar Rahman, FCS
SEVP & Company Secretary

NOTES:

 The Board of Directors recommended for payment of 20% (Twenty Percent) Cash Dividend on the profit of the Bank
as at the close of business on 31 December 2014.

 The ‘Record Date’ in lieu of Book Closure will be on Wednesday, 11 March 2015. The Shareholders whose names
would appear in the Register of Members of the Company and/or in the Depository on the ‘Record Date’ (11 March
2015) will be eligible to attend the 23rd AGM and entitled to Cash Dividend as mentioned above.
 A Member eligible to attend the Annual General Meeting is entitled to appoint a Proxy to attend and vote on his/her
behalf. The Proxy may not be a Member of the Company. Forms of Proxy, duly stamped, must be deposited at the
Registered Office of the Company at least 48 hours before the time fixed for the Meeting.
 Annual Report, Attendance Slip and Proxy Form along with the Notice are being sent to all the Members by Post/
Courier Service. The Members may also collect the Proxy Form from the Registered Office of the Company.

 No Gift/Gift Coupon/Food Box etc. to be distributed at the 23rd AGM, in compliance with the Bangladesh
Securities and Exchange Commission’s (BSEC) Circular No. SEC/CMRRCD/2009-193/154 dated 24 October 2013.

 Hon’ble Members are requested to update their respective BO Accounts with 12 Digits Taxpayer’s Identification
Number (e-TIN) through Depository Participant (DP) latest by 10 March 2015, failing which Income Tax at
Source will be deducted from payable Dividend @ 15% (Fifteen Percent) instead of @ 10% (Ten Percent) as per
amended section 54 of IT Ordinance 1984.

 Hon’ble Members are also requested to update their respective Bank Account Number, Address, Cell No. and
e-mail Address through Depository Participant (DP) latest by 10 March 2015.
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