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Review of Activities during 2002

Premier Bank remained focused in attaining growth objectives. Despite economic downturn in Bangladesh, the Bank has finished the year 2002 posting significant mark of growth in all areas of operation matching the expectation spelt out by the Board at the beginning of the year. Exceptional growth in Deposit and Advance was major breakthrough in 2002, which has not only produced good profit but also stretched the size and market visibility of the Bank.

Deposit
During the year 2002, Bank's Deposit climbed by 143%, the highest amongst all the Banks, reaching Tk. 5,373.75 million compared to Tk. 2,206.39 million in the preceding year. A stable part of funds raised by the Bank, viz. Term Deposit grew by a factor of 2.51 over last year and it made up 79.62% of total Deposit. This is a testimony of customers' confidence and trust.

Departing from the prevailing tradition in local market, Bank made the Savings Bank Account more attractive, by offering competitive interest on daily basis and allowing restriction-free checking facility resulting modest 6 times growth in SB Account. The feature of the account has, now, become a major marketing tool to attract household savings.

Amongst the four high yielding deposit schemes, Monthly Income Scheme attracted the customer most, were growth was about 10 times over last year. Monthly Savings Scheme, Education Savings Scheme and Special Deposit Scheme were also highly acclaimed by the Depositors.

Bank's Deposit to Advance ratio, which was above 90% in 2001, is now at comfortable level below 80% indicating better liquidity of the Bank.

Loans and Advances
Credit growth during the year was 108% which stood at Tk. 4,280.73 million against last year's Tk. 2,057.96 million. Loan to customers accounted 70.91% of total assets as against 59.67% of last year.

While growth in Loans and Advance is our major focus but under no circumstances there is any compromise on quality of advance. Our loan recovery rate remains above 99%. Total non-performing loan which was 0.64% in 2001. But it increased to 1.33% in 2002. A substantial amount relates to non-recovery of Inland Bills drawn under Irrevocable LC and accepted by Standard Bank Limited, Main Branch, Dhaka. However, in 2003 we expect full recovery of these bills discounted under irrevocable L/C.

Consistent to the objective of Government policy and diversification of loan portfolio of the Bank, we have actively engaged in business relationship with Small and Medium Enterprise (SME) in competitive and liberal terms. We have participated in trade fair organised by Federation of Bangladesh Chamber of Commerce and Industry- FBCCI- the apex trade body of the country in Sept 2002. During 2002, Premier Bank launched another campaign to popularize Special Credit Scheme for Suppliers of Accessories for Ready Made Garments which have generated a lot of enthusiasm and quite a good number of clients have already been booked. This facility in the form of Bill Discounting constitutes above 15% of total Loans and Advance.

To give special attention to growing Lease Finance business, Premier Bank has set up a separate division during the year. Consumer Credit Scheme has been allowed. In a flexible terms thereby raising its client base. We have also participated in a number of Syndicated Finance with other Banks.

Sector Wise Credit (Taka in Lac)

The lending process has been streamlined further to meet the expectation of customers and meet the challenge of competition. As a result, the time it takes to go from processing a loan request to actual drawing is shorter than before.

Trade Finance
Premier Bank maintained strong growth in Trade Finance and volume has almost doubled during the year 2002. The Bank opened Letter of Credits for import worth Tk. 7,743.10 million compared to Tk. 4028.81 million in 2001. The volume of export bills handled by the Bank was Tk. 4,039.60 million in 2002 compared to Tk. 2,129.63 million in 2001. The LC outstanding at the year end 2002 has reached Tk. 2,735.68 million compared to Tk. 988.49 million, growth by 176%.

Branch Network and Customer Service
Last year, highest numbers of branches were opened as part of network expansion plan. The Bank opened Branches at Motijheel (Dhaka), Meghna Ghat (Dhaka), Dhanmondi (Dhaka), Khatungonj (Chittagong) and Uttara (Dhaka). Out of present 12 branches, 8 branches are now authorised to handle foreign exchange business directly.
Few more branches are in the final stage to be opened in Khulna, Elephant Road (Dhaka), Savar (Dhaka), Sylhet and Barishal covering major business centers of Bangladesh. The expansion of our Head Office and a couple of Branches in Dhaka have also made working environment more pleasing to customers.

Information Technology
During the year Bank upgraded it computer Software from an older version to a new one. SWIFT has been installed in H. O. and important branches.

Correspondent Banking
The Bank has already established Correspondent Banking arrangement with the leading international banks covering important cities and counters. So far our total correspondents is 156 in 62 countries with 42 banks.

Human Resources
The total number of employee of Bank as on December 31, 2002 stood at 281 from 164 in last year. The number represents a wide pool of talents selected from different local and foreign Banks with professional expertise and fresh entrant graduated from the best Universities of our country. The Bank carried out workshop and training session throughout the year in home and abroad. All employees are highly motivated and actively share their vision and ideas for the development of the Bank. New welfare schemes for employees- Provident Fund and Gratuity- have been introduced during the year. Employees are also allowed House Building Loan at a subsidized rate of interest.

Monitoring and Inspection
During the year 2002, like previous years, Bank continued Monitoring and inspection covering all the Branches of our Bank. The Head Office Inspection Team has been strengthened and efforts are being made to increase the frequency of Inspection. Bangladesh Bank also carried out inspection at Head Office and Branches during the year.

Management
The year 2002 brought in new momentum in Management. The functions and responsibilities were redefined in all levels with focus on marketing and quick decision-making and better customer service. Head Office Management was strengthened by induction of a few seasoned Bankers and Professionals. Newly constituted Head Office Advisory Committee comprising Managing Director, Deputy Managing Directors, Advisor and Consultant jointly examines the cases thoroughly from professional perspectives before referring for decision of Executive Committee / Board. Also Premier Bank has introduced "Branch Management Committee" in all the Branches with objective to ensure smooth operation of the Branches. These two measures have brought dynamism, involvement and fast decision making both at Head Office and Branches.

Meeting of Board
Board of Directors held 6 (six) meetings during the year 2002 and 94 (ninety-four) Executive Committee meetings.

Rotation of Directors
In terms of Article 99, one-third of the directors shall retire from office at the third Annual General Meeting, all of whom are eligible for re-election.

Appointment of Auditors
Hoda Vasi Chowdhury & Co. has been appointed as Auditor in the last year and they are eligible for reappointment for the year 2003 as per policy of Bangladesh Bank.