Foreign Exchange operation of Southeast Bank

School of BusinessASIAN UNIVERSITY OF BANGLADESHASIAN UNIVERSITY OF BANGLADESH

Assignment onTopic: Foreign exchange operation on Southeast Bank

Prepared for: Md. Touhidul AlamCourse TeacherFinancial Institution

Prepared By: Md. Sadakur RahmanID: 200020127

Md. SalamID: 200020269

Kanak GhoshID: 200020

Md. Faizus SalehinID: 200020087

Md. Sajib HasanID: 200020082

BBA 9th (A)Dhanmondi CampusAsian University of Bangladesh

Date of submission: December 24, 2003

December 24, 2003

Course TeacherInternational FinanceSchool of BusinessAsian University of Bangladesh

Subject: Submission of Assignment

Dear Sir:

It is our pleasure to submit our assignment titled “ Foreign exchange operation of Southeast Bank”. In our assignment report we tried to include the basic function launched by South East Bank in Foreign Exchange operation.

We would be happy to provide further information as might be asked by you.

Sincerely Yours, Md Sadakur RahmanMd. SalamMd. Faizus SalehinMd. Sajib HasanKanak Ghosh

Executive Summery

In today’s world of volatile economy commercial banks plays a very

important role. Like any other country, the economy of Bangladesh is

also strongly influenced by the sound functioning of the commercial

bank.

Southeast Bank Limited is a scheduled commercial bank in the

private sector, which is focused on the established, and emerging

markets of Bangladesh.

In part A we have tried to include a short discussion about company’s

general information and some general functions as deposit and credit

functions.

The topic relevant function and the function of a department that has

direct impact not only in the internal economy of the country but also

to the Global economy is foreign exchange department which is

discussed in the part B.

Part AGeneral Information about

Southeast Bank

Introduction of Southeast Bank Limited

Southeast Bank Limited is a scheduled commercial bank in the

private sector, which is focused on the established and emerging

markets of Bangladesh. In Dhaka, the first branch was launched in

1995 and the bank has been growing ever since. South East bank

limited has 19 branches throughout Bangladesh and its aim is to be

the leading bank in the countries principal markets. The bank by

concentrating on the activities in its area of specialization has

achieved good market reputation with efficient customer service. The

bank also tries to fulfill its share in community responsibilities. By

such measures the bank intends to grow and increase shareholders

earning per share. South east Bank Limited pledge to maximize

customer satisfaction through services and built a trusting relationship

with customers, which has stood the test of time for the last seven

years.

Board of Director Management Executive CHAIRMAN PRESIDENT AND MANAGING DIRECTORRagib Ali Syed Abu Naser Bukhtear Ahmed

VICE CHAIRMAN DEPUTY MANAGING DIRECTORAzim Uddin Ahmed M. A. Muhith

DIRECTOR SENIOR EXECUTIVE VICE PRESIDENTMuhammad Abul Kashem Syed Imtiaz HasibYussuf Abdullah Harun Md. Mosharraf HosainMuhammed Abu Tayub Khondkar Fazle RashidJalalur Rahman Mahbubur RashidSayed Shahid Ali A. K. QureshiMostori MiaMd. Akikur Rahman EXECUTIVE VICE PRESIDENTM. A. Ahad M. M. A. MukitJusna Ara Kashem A. H. M. Wali KhanDuluma Ahmed Enamul HoqueRehana Rahman Shabbir Ahmed ImtiazRabeya Khatun Chowdhury Chowdhury Khaled SaifullahAlamgir Kabir

SENIOR VICE PRESIDENTPRESIDENT AND MANEGING DIRECTOR Mujibur RahmanSyed Abu Naser Bukhtear Ahmed Md. Ali Ahmed

Md. Mubin ul KhalequeCOMPANY SECRETARY Shahabuddin Md. jafarA. K. Qureshi A. S. M. Bulbul

VICE PREDIDENTKhandakar Fahim Uddin AhmedAhmad Tabshir ChoudhuriMd. Altafur RahmanMd. Sawkat HosainMustafizur RahmanKazi Mahmood Karim Md. Shams Tabrez

A. F. M. Shariful Islam

South East Banks’ Vision and Mission

It’s VISION

To stand out as pioneer banking institution in Bangladesh and

contribute significantly to the national economy.

It’s MISSION

High quality financial service with the help of latest technology.

Fast and accurate customers service.

Balanced growth strategy.

High standard business ethics.

Steady returns to shareholders’ equity.

Innovative banking at a competitive price.

Deep commitment to the society and the growth of national economy.

Attract and retrain human resource.

Five Years Financial Highlight At a Glance

PARTICULARS 2002 2001 2000 1999 1998

Authorized Capital 2500.00 500.00 500.00 500.00 500.00Paid up Capital 399.30 363.00 330.00 300.00 150.00Reserved Fund 571.66 394.20 235.28 145.70 85.13Equity Fund (Capital and Reserve) 970.96 757.20 565.28 445.70 235.13Deposit 16598.45 12630.25 10309.70 7512.49 5483.39Advance 13027.13 9178.03 7061.87 5051.88 3402.21Investment 2282.08 1727.44 1369.92 971.81 509.73Import Business 12817.01 12187.37 11239.14 8228.50 6852.19Export Busines 2263.45 2675.05 1319.51 704.47 353.43Gurantee Business 2502.48 1854.50 1306.24 907.18 744.92Total Income 1936.54 1748.18 1259.03 862.86 727.53Total Expenditure 1443.98 1256.05 921.70 661.02 556.87Operating Profit 492.56 492.13 337.33 201.84 170.66Net Profit after Tax and Provision 253.56 270.74 172.84 85.48 56.73Fixed Asets 48.81 36.26 71.13 78.37 85.92Total Assets 18882.48 14468.66 11710.56 8336.17 5962.71

Earning per Share (Tk.) 69.85 82.04 57.61 56.99 45.38Dividend Cash (%) Bonus Share

20%10% (10:1)

30%10% (10:1)

25%10% (10:1)

15% -20% (5:1)

Return on Equity (REO) 26.11% 36.76% 30.58% 19.18% 24.13%Return on Assets (ROA) 1.34% 1.87% 1.48% 1.03% 0.95%Non Performing Loans 1.99% 2.78% 2.95% 3.75% 4.25%Capital Adequacy Ratio 8.23% 8.77% 8.40% 9.52% 8.16%

Number of Correspondent Banks 45 40 39 34 32Number of Foreign Correspondents 295 280 269 253 238Number of Shareholders 1666 1429 1266 1129 27Number of Employees– Banking -NonBanking

488107

47996

44583

39981

36978

Number of Brunches 19 13 12 12 12

Balance Sheet as at 31st December 2002

PROPERTY AND ASSETS Dec 31, 2002 Dec 31, 2001CashIn fund and with Bangladesh Bank& Sonali Bank (Including Foreign Currency)Balance with Other Banks and Financial Institutions:In BangladeshOutside Bangladesh

Money at Call and Short NoticeInvestments:GovernmentOthers

Loans and Advances:Loans, Cash Credit % OverdraftsBills Discounted and Purchased

Fixed Assets (at cost les depreciation)Other AssetsTotal Property and Assets

LIABILITIES AND CAPITAL

Liabilities:Borrowing from Other Banking Companies,Financial Institutions, Agents etc.Deposit and Other Accounts:Current Accounts and Other Accounts etc.Bill PayableSavings Bank DepositsBearer Certificate of DepositTerm Deposit

Other LiabilitiesTotal Liabilities

Capital/ Shareholders Equity:Capital:Isued, Subscribed and Paid up:3630000 ordinary shares (3300333 ordinaryshares in year 2001) of Tk. 100.00 eachProposed Issue of Bonus Shares @ 10% (2001: @ 10%)(2001: 330000 ordinary shares of Tk 100.00 each)Proposed Cash Dividend @ 20% (2001: @ 30%)Share Premium AccountStatutory ReserveOther Reserves Surplus as per Profit and Loss Account

780198740

63925627317313320

6565785931287650000

2053815600228264029

2282079629

12643293858383837132

1302713099048805032

8000347551888247739

1255000000

976901987203944689905132231701544308

12555929783153434529981367599470

17966052468

363000000

363000007260000080812000

2958960003173191636085355

Total Shareholders EquityTotal Liability and Shareholders Equity

91642527118882477739

CONTRA ENTRIES Dec 31, 2002 Dec 31, 2001Off Balance Sheet Items:Contingent liabilitiesConstituents liabilities for acceptancesEndorsements and other obligationsLetter of CreditLetter of Guarantee

Bill for Collection-Payable in BangladeshPayable out side Bangladesh

261493651818566128024471549320

53918779144349462198268261

4669817581

Profit & Loss Account for the year ended 31st December 2002

PROPERTY AND ASSETS Dec 31, 2002 Dec 31, 2001Operating Income:Interest and Discount IncomeLes: Interest paid on Deposit BorrowingNet Interest Income

Income from InvestmentGain on sale of Investment of shareCommission, Exchange & BrokerageOther Operating IncomeGross Operating Income

Less: Operating Expense:Salary and Allowance and Providing FundRent, Taxes, Insurance, Lighting etc.Postage, Stump, Telegram & TelephoneAudit FeeLegal expensesStationary, Printing, AdvertisementDirectors’ Fees and ExpensesManaging Directors remunerationDepreciation on and repairs to Bank’s propertyOther expenseTotal Operating Expense

Net Operating Income

Non- Operating Income/(Loss)Profit before Provision

LessProvision for Unclassified Loan and AdvancesProvision for Classified Loan and AdvancesProvision for diminution in the value of SharesTotal Provision

Total Profit before TaxLess: Provision for TaxNet Profit after Tax:Retained Surplus brought forwardRetained Profit before distribution

Appropriations:Statutory ReserveProposed Cash DividendProposed Bonus SharesShare Premium account

15821857721147882613434303159

133218707-

19982920420245368

787596438

1015590168583796821871514

135000544037

1268566339269422073790

1160152855867076

296102534

491493904

1064245492558149

35332000-

2167700057009000

43554914918198600025356314928287206

281850355

86590000726000003630000047674000

14352351251040146613395088512

1133486594538427

17914771715720823

707844138

795516273978721418372055

135000156437

1105395528853311705000

1653508345730047

215911749

491932389

193872492126261

1974500070000000

15182589896825

402229436131429000270737436

3133770273871206

80446000990000003300000033138000

Amount Transferred to SBL Foundation

Retained Earning

Earning per Share

2601000245765000

36085355

69.85

-245584000

28287206

82.04

Services and Products

Services

Locker Services Yearly Charges Security DepositServicesAvailable at

Small Tk. 750

Tk. 2,500/=(refundable)for all types of lockers.

GulshanBranch

Medium Tk. 1,250 DhanmondiBranch

Large Tk. 2,000 Uttara Branch

Products

Deposit Schemes Deposit Rate (D.R.)Savings (SB) 8.00%Special Notice Deposit (STD) 5.50%Fixed Deposit30 Days 7.00%60 Days 7.50%3 Months 8.25%6 Months 8.50%1 Year 9.00%2 Years 9.50%3 Years 10.00%Note: The maturity period of BCD cannot exceed 1 (One) year and for BCDs we offer competitive rates commensurate with FDRs (Time Deposits) of respective tenors.

Besides Fixed Deposits, Savings Bank Deposit and Current Account Deposits, the Bank has introduced the following customers friendly deposit schemes:

MonthlyInstallment

Amount Builtup after 5

Amount Builtup after 10

Size (Tk.) years ( Tk.) years ( Tk.)

Pension SavingsSchemes

500.00 40000.00 108000.001000.00 80000.00 216000.00

Education SavingsSchemes

500.00 40000.00 108000.001000.00 80000.00 216000.00

Marriage SavingsSchemes

500.00 40000.00 108000.001000.00 80000.00 216000.00

Savers Benefit Deposit Scheme (SBDS)

Deposited Amount:50,000.00

TermSize of deposited amountwith interest aftercompletion of the term( Tk.)

1st Year 54,000.002nd Year 59,000.003rd Year 65,000.004th Year 72,000.005th Year 79,000.006th Year 89,000.007th Year 99,000.008th Year 1,10,000.00

Bearer Certificate of Deposits (3,6,12, month)

Loan Product Category and its Cost

LendingCategories

LendingRates (L.R.)

(Effective from01/04/1997)

Agricultural Schemes

Loan to Primary Producers

12.00%

Loan to agriculturalinput traders andfertilizers dealers/distributors

13.00%

Commercial LendingJute Trading 15.00%OthersCommercialLending

15.00%

Working CapitalJute 14.00%Other than Jute 15.00%

House Building Loan Urban Housing 15.00%

Special ProgramsP.C. Loan Schemesfor Educational andother TrainingInstitutions

15.00%

Other Loans

Educational Loan Schemes

15.00%

Consumers CreditSchemes

Small\Cottage Industry Term Loan 13.00%Large\MediumScale Industry

Term Loan 15.00%

Loan against exportJute GoodsExports

7.00%

Other Exports 7.00%

Foreign Correspondent Banks

AB International Finance Limited

ABN Armo Nank NV

AEB Finance Limited

Akbank T. A. S

American Express Bank Limited

ANZ Grindlays Bank Limited

Arab Bangladesh Limited

Banca Di Roma

Banca Nazionale Del Lavoro SpA

Banco Atlantico AS

Banco Espanol de Credito SA

Bank of Nova Scotia

Bayersche Vereinsbank AG

Citibank N.A

Commerzbank AG

Den Danske Bank AS

Den Norske Bank ASA

Dresdner Bank AG

F.van Lanschot Bankiers nv

Habib American Bank

Habib Bank AG Zurich

HBZ Finance Limited

HSBC

Hypovereins Bank CZ AS

Jordan Investment and Finance Bank

Marine Midland Bank

MashreqBank PSC

Mercants Bank of California

National Bank of Canada

Nepal Bangladesh Bank Limited

Sonali Bank, Calcutta

Standard Chartered Bank

Sevenska Handelsbanken

Swedbank

Swiss Bank Corporation

Thai Farmers Bank Public Company Limited

The Bank of Tokio- Mitsubishi Limited

U. S. Bank

UBS AG

Unibank AS

Unibank AS

Unicredito Italian SpA

Union De Banques Arabes Et Francaises

United Bank of India

Westdeutsche Landes Bank Girozentrale