General Banking and Financial Performance of UCBL (Part-4)

4.4 Foreign Remittance:

UCB has established remittance arrangement with a number of exchange houses abroad to facilitate wage earners to remit their money in Bangladesh. this bank has already been in operation with 3 Exchange Houses in U.A.E, 6 in U.K. and 1 in Qatar. The extensive branch network of the existing Exchange House have been largely helping Bangladeshi expatriates working in more than 85 countries such as

UAE, UK, Qatar, Australia, Sudan, Cyprus, K.A.A,  Oman, Jordan, Malaysia, Sweden, Spain, France, Canada, Italy, U.S.A etc. to remit their funds speedily and efficiently through online network. We have already signed agreement with ICICI Ban Ltd. India; Al Fardan Exchange Co., Al  Saad Exchange Co. in Qatar and Federal Exchange in U.A.E. Establishment of remittance arrangement with 6 Exchange Houses in U.A.E, 3 in U.K., 2 in U.S.A 7 in Qatar, 6 in Oman, 8 in Bahrain and 2 in Singapore are under process. MTB’s total foreign remittance volume stood at Tk. 5,456.71 million in 2007 compared to previous years volume of Tk. 2,671.53 million recording a growth by 104.25%. Mutual Trust Bank is exploring further avenues of

remittance from other countries such as Saudi Arabia, Malaysia, USA, Canada and Italy in near future.

4.5 Loan and Advance

Consumer Loan

In order to make a significant contribution in the living standards of the people of medium and low income category, United Commercial Bank has introduced a scheme called “Consumer Loan Scheme”. With a view to materialize the dreams of those who are unable to make one time investment from their own savings, one can now afford to buy necessary household equipments and thus improve the standard of living.

All sorts of household durables e.g. Television, Refrigerators, Computers, Air Conditioners, Video Cameras, Washing/ Drying Machines and Furniture’s are allowed under this scheme. One can buy Motorcycle too under this programme.

The collateral security is minimum and the interest rates are one of the lowest in the market. Please contact the nearest branch for details.

Any Purpose Loan

UCB Any Purpose Loan facility for any legitimate purpose. Bank would finance against gross monthly income of any credit worthy individual. To meet life style needs of the credit worthy individuals, this loan is a suitable consumer loan product.

Those who are eligible

Any credit worthy individuals like :
Salaried Persons
Doctors, architects, engineers, Chartered Accountant, Consultant and IT professionals Business person

Forms of Loans

Health Line:
Hospitalisation or other emergency medical needs
To purchase body fitness equipments

Education Line:
For higher education purposes
To purchase of computer, tuition fees or other Education expenses.

Professionals Line:
Purchase of Professional equipments.
For office renovation/decoration

Marriage line:
To meet marriage expenses for himself/herself
Marriages in the family

Travel Line:
For Honeymoon trip
For Family trip, abroad or in the country

Festival Line:
To enjoy festive period
Gift for the family / in laws / relatives

Dreams Come True line:
To purchase TV, Fridge, Furniture, Home Theatre, Motor Cycle, AC etc.
To decorate/renovate own Home/Car.

Care Line:
Loan for fulfillment of parents dream
To purchase economy car (second hand car) for the family

Loan Amount:
Minimum TK. 50,000/-.
Maximum TK.1,000, 000/-

Loan Period:
12 to 48 months for loan amount up to Tk199,999/- and
12 to 60 months for loan amount TK200,000/- and above

Home Loan Scheme

Home Loan Scheme has been introduced to facilitate people to fulfill their dream of a home of their own. It has been designed o help people to get home loans on easy terms and without any hassle.

Loan amount under this scheme is maximum Tk. 50 lac. Salaried executives, professionals, businessmen and govt. officials are eligible to avail this loan scheme.

The loan is to be repaid by monthly equal installments including interest within the period ranging from 5 years to 10 years depending on the size of loan.

Home Repair Loan

Home Repair/ Renovation Loan Scheme has been designed with a view to help the owners of house/ building/ flat to mitigate their financial need for repair/ renovation of their house/ building/ flat.

Only the genuine residential house owners will be eligible to avail the loan facilities to repair or renovate their own house/ building/ flats according to their needs.

Maximum loan under the scheme will be up to Tk. 5.00 lac commensuration the monthly income.

The loan is to be repaid by monthly equal installments including interest within maximum 60 months.

Car Loan

To own a car is everyone’s dream as well as a part of today’s living, which enhances standard and quality of life. Auto Loan scheme has been designed to help materialize your long cherished dream of a car of your own.

Purchase of new/ reconditioned cars are allowed under this scheme. Salaried executives, professionals, businessmen, govt. officials or self employed persons are eligible to avail this loan.

Loan amount under this scheme is 50% of car value but maximum of Tk. 20 lac. Please contact the nearest branch for details.

Small Business Loan

With the objective of extending financial support to small businessmen, this loan scheme has been introduced. It has been designed to get business loans on easy terms and without any hassle.

Only the genuine businessmen having entrepreneurship quality and honesty, to run and expand their business smoothly. Maximum loan under the scheme will be up to Tk. 50 lac.

No collateral security is required up to Tk. 5 lac. Caollateral security is required for loan above 5 lac.Please contact the nearest branch for details.

Doctor’s Loan

UCB Doctor’s Loan is designed to provide financial support to the doctors to meet their professional needs who are in private practice and thereby ensure better health service to the patients.

Those who are elegible
All general practitioners with MBBS degree and all specialist doctors with FCPS, MD, MS and other higher degree in the area of medicine, gynecology, pediatrics, orthopedics, eye, dental, ENT, surgery, cardiology, oncology etc and practicing in the county and who has capacity to repay bank loan.

Utilization of the Loan
The loan may be utilized for the following purposes:
To decorate the existing/new chamber.
To purchase medical equipments/instruments as required for practice.
To purchase furniture, fixture, AC and other logistic supports as required for the chamber.
To make partial payment of advance rent/possession purchase of a chamber.

Loan Amount:
The loan size may range from Tk.1.00 lac to maximum Tk.8.00 lac.

Loan Period:
The loan period may range from 01 (one) year to maximum 05 (five) years. Grace period
may be allowed up to 03 months.

4.6 Treasury Management

Conventionally, the Treasury function was confined to fund management-maintaining adequate cash balances to meet day-to-day requirements, deploying surplus funds generated in the operations, and sourcing funds to bridge occasional gaps in cash flow. In the context of a bank, the Treasury is also responsible to meet reserve requirements i.e. Cash Reserve Requirement and Statutory Liquidity Requirement. Thus Treasury function essentially is liquidity management and from an organizational point of view, Treasury was considered as a service center.

Liquidity management continues to be an important function of Treasury. However, owing to economic reforms and deregulation of markets over the last decades, the scope of Treasury has expanded considerably. Treasury has since evolved as a profit center, with its own trading and investment activity.

The Treasury   plays   an   active   role   in   Asset-Liability management and with its constant exposure to markets is well placed to advise the management of bank in internal decisions, say in product pricing and strategic investments. United Commercial Bank has set up the treasuryDepartment2004 with experienced and efficient Treasury personnel in Treasury Department. They have segregated into Treasury Front office and Back Office also prepared an overall trading poky for its treasury defining the scopes, policies, risk limits’ as well as their control mechanisms. In 2007Treasury Department, United Commercial Bank has earned Tk. 166.02 million from treasury operations.

4.7 Risk Management

Commercial banks are exposed to various risks. The management of United Commercial Bank recognizes that risk is an integral part of its business and gives full cognizance to the importance of various risks involved in the banking business.

The Board of the bank has also acknowledged that a critical factor in the bank’s continued profitability and stability is its effective risk management capabilities. So, the Board approves major policy guidelines in line with Bangladesh Bank’s instructions and instructed the management to take appropriate steps to mitigate all risks. The management has taken initiatives to structure the banking activities in line with Bangladesh Bank’s risk management guidelines and the banks own policy guidelines. The risk management of the bank covers a wide spectrum of risk issues and the 5 (five) core risk areas of banking – Credit Risk, Foreign Exchange Risk, Internal Control & Compliance Risk, Money Laundering Risk and Asset Liability Management Risk have been implemented and are being complied with. The risk areas are manned and headed by skilled and senior professionals. Details of risk management process of the bank are given at 210 of the Notes to the Financial Statements attached with this report.

4.8 SME Financing

UCB has been putting its stress on Small Enterprise Financing and Consumer Financing in line with the Prudential Regulations/ Guidelines of Bangladesh Bank. The bank’s strategy was to provide working capital and term loan to different small and medium scale manufacturers, traders and service provides that fall into SME universe.

In the year 2007 the bank invested Tk. 228.50 million in SME sector As a vision to diversify the credit portfolio as well as to minimize credit risk, the bank is now focusing more on SME sector and gradually reducing the dependence on corporate clients. With this end in view the bank has chalked out a plan to invest more funds in this sector in the year of 2008.

The bank has developed a number of loan products to meet then need of SME sector of the country. The products have been publicized in different media to

provide required information to the target clients. Both urban and rural branches of the bank are now working as designated ones for SME lending and thereby contributing to rural development. The bank has come forward in poverty alleviation by financing of NGOs through bank – linkage program.

The bank through its branch network ensures prompt service and SME Division of the bank is being equipped with skilled manpower and necessary technological support.

4.9 Investments

The total investment portfolio of the bank stood at Tk. 3,956.53 million in December 31,2007 as compared to Tk. 2,821.62 million in December 31, 2006 recording a growth of 40.22%. The investment portfolio includes treasury bills, zero coupon bonds, shares of different companies, bonds, B bonds etc. The investment is made primarily to meet SLR requirement. UCB has started investment in shares of different companies in Stock Exchange.

4.10 Correspondence banking

The objective of our correspondent banking operations is to strengthen our existing relationships with foreign banks and financial institutions around the globe as well as exploring new relationships. In addition to that, we provide assistance in marketing the products of the correspondent banks. At present UCB is maintaining relationships with 30 (thirty) foreign correspondents and the number is growing everyday. Currently the bank has 18 (eighteen) NOSTRO A/Cs with large foreign banks abroad. The bank is a “SWIFT” member and its Bank Identification Number or BIC is UCBL BDD.

List of Major Foreign Correspondent Banks:

List of Nostro Accounts (SSI)