Investment & Performance Analysis of Social Investment Bank Ltd.

ORGANIZATION Social Investment Bank Limited

2.1 BANK PROFILE
Social Investment Bank Ltd. (SIBL) became operational on 22nd November,1995 under the Company Act 1994 with a clear manifesto to demonstrate the operational meanings of participatory economy, banking and financial activities as an integrated part of an Islamic code of life. It is an alternative concept of Islamic Banking with a unique human face approach to credit and Banking based on interest free economics and financial transactions and income generating program for the millions of the urban and rural poor and a profitable investment option for the rich to invest, earn and live in a better society with greater security and peace at the operational level. Social Investment Bank an interest-free Shariah bank in Bangladesh is indeed a concept of 21ST century participatory banking model. SIBL is operating three-sector Banking, such as, Formal, Non-Formal and Voluntary sector. In the Formal sector, it works as an Islamic Participatory Commercial Bank on the basis of profit and loss sharing. In the Non-formal sector it works with the poor non-corporate sector dealing with informal finance and credit package that is intended to empower the real poor families and create local income opportunities and discourage internal migration i.e., Non-Formal Sector focuses at Family Empowerment Micro-Credit program. Micro-Enterprise and SMEs Financing. In the Voluntary Sector, the bank provides support for social benefit organizations-by way of mobilizing funds, social services at the target sector. Notable instruments are CASH WAQF CERTIFICATES Management of WAQF & MOSQUE properties. SIBL started its operation as a second generation Islamic Bank in close cooperation & assistance of some renowned personalities of the Islamic world. The inherent concept and credence of Working Together for a Caring Society is always held high. To carry on this commitment, the manpower of this Bank is imbued with the highest degree of Chapter Two The Company 5

Investment & Performance Analysis of Social Investment Bank Ltd. enthusiasm, zeal and vigor for serving the clients and people, at large , in the years to come. SIBL is beginning a new era of Islamic Banking having social, ethical and moral dimension in each of its activities ranging from credit to construction, trading to transport, farming to fishing, manufacturing to mining and so on.

2.2 OVERALL SCENARIO OF THE BANK

The performance of Social Investment Bank Ltd. for the year 2007 was specially featured by lowering the Classified Investment to 4.93%, increase of client deposit by reducing the Bank deposits. The management of the Bank was more conscious in proper assets liability management. Moreover, it was able to find some well known corporate business houses and individual of the country as its business partner. As a result, investment growth in the year was higher than the 2006.SIBL has been able to build up a capital base of TK. 1870.94 mill. As on 31st December. It is worthwhile to mention that one of the major causes of listing SIBL as a problem Bank was the failure of the Bank to maintain required Capital Adequacy ratio at 10% over risk-weighted assets due to faster growth of assets. In order to maintain the ratio, the Board of Directors recommended to issue 1:1 Right Share at par as per approval of Securities & Exchange Commission (SEC) and the Bank collected additional amount of TK. 534.56 mill. From the existing shareholders. As a result, the Bank safely maintained its capital adequacy at the end of 2007 leaving a capital surplus of TK. 124.84 million.

2.3 MISSION
High quality financial services with the latest technology. Fast, accurate and satisfactory customer service. Balanced & sustainable growth strategy. Optimum Return on shareholders equity. Introducing innovative Islamic banking products. Attract and retain high quality human resource. Chapter Two The Company 6

Investment & Performance Analysis of Social Investment Bank Ltd. 2.4 VISION Social Investment Bank Limited started its journey with the concept of 21 st Century Islamic Participatory three sector banking models: 1. Formal SectorCommercial banking with latest technology; Empowering real poor families and create local income opportunities. Providing support for social benefit organizations- by way of

mobilizing funds and social services.

2. Non- formal sector- Family empowerment Micro-credit & Micro- enterprise program and 3. Voluntary Sector- Social capital mobilization through CASH WAQF and others. Finally Reduction of poverty Level is our vision , which is a prime object as

stated in Memorandum of Association of the bank with the commitment working Together For a caring Society.

2.5 BRANCH NETWORK

The Branch network of the Social Investment Bank Limited is not quite strong. With an age of thirteen years the bank is now having a network of 24 branches across Bangladesh and 674 employees as on 31 December, 2007. These branches are situated at various strategically important commercial and industrial locations in the country. Among these branches, 12 branches are in Dhaka, 3 branches in Chittagong, 2 branches in Narayangonj, 1 branch in Sylhet, 2 branches in Sirajgonj, and 1 branch each at the areas of Sylhet, Khulna, Bogra, Rajshahi. The above branch network is expected to be sufficient to maintain required growth rate of the bank.

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Investment & Performance Analysis of Social Investment Bank Ltd.

2.6 BANKING ACTIVITIES

Formal Banking Sector

Investment Banking

Foreign Ex. Trade

Deposit Scheme 1. Mudaraba Monthly Profit Deposit Scheme 2. Hajj Deposit Scheme 3. Mudaraba Millionaire Scheme 4. Mudaraba Special Savings (Pension) Scheme 5. Mudaraba Term Savings Scheme Based on Monthly Deposit 6. Mudaraba Education Savings Scheme 7. Mudaraba Bashastan (House) Savings Scheme

Deposit A/C

Other Operations

1. Bai-Muazzal 2. HPSM 3. Mudaraba 4. Musharaka 5. Special Investment

1. Export Finance 2. Import Finance 3. Foreign Remittance 4. SWIFT

1. AWCD 1. AWCD 2. MSD 2. MSD 3. MTD 3. MTD 4. MND 4. MND

Non-Formal Banking Sector

Micro-Investment Scheme

Micro-Enterprise Investment Scheme

Joint Scheme

ILO, UNICEF

Development & Rehabilitation Scheme

Voluntary Banking Sector

Cash Waqf Scheme

Mosque Waqf Property Development Scheme

Ancillary Services

Locker Service

Utility Bill Service

Guarantee Issue

Consultancy

E-Age Banking

Any Branch Banking

ATM (Debit Card)

Online Banking

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Investment & Performance Analysis of Social Investment Bank Ltd.

2.7 Highlights on the overall activities of the Bank for the year 2007 and 2006.
Table: 1

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