UCB vows to be more united, more competent
Monday, 29 November 2010
FE Report
United Commercial Bank Ltd (UCB) is set to successfully achieve the business targets of 2010 after fulfilling the same in 2008 and 2009.
"With our concerted efforts and contribution from all level of employees in spite of the fall-out effect of the global economic meltdown and stiff market competition, we are going to complete another successful year," M Shahjahan Bhuiyan, managing director of the bank told The Financial Express in an interview recently.
He said during the immediate past two and a half years, the Bank has registered commendable growth in key business segments.
"With the opening up of economy and privatization in early 1983, UCB was one of the first generation private sector commercial banks, among handful of others that came into existence. The performance of UCB as a first generation bank, over the years, may be adjudged as praiseworthy in spite of the absence of adequate regulatory framework and suitable business model in the early days of privatization. Earlier, the Bank may have committed few mistakes and encountered some operational setbacks; nevertheless, in recent time the Bank has successfully overcome those problems and has come to a commendable position of today," Mr Bhuiyan said.
Mr Bhuiyan, one of the senior most banking professionals of the country said banking business of today has become more complex and is filled with uncertainties, changes and challenges due to newer dimension of national and global business and the economy at large.
"In order to deal with these complexities and challenges we need adequate preparedness. We are proud to say that UCB is successfully facing these challenges through capacity building at the group and individual level by development of skill, efficiency and up-gradation of performance ability in keeping up with the transformation in the banking Industry."
"The New Management of the Bank having clear focus of the critical challenges that lies ahead has been continuously predicting the changes in the global as well as national economic cycles and making required adjustments in business strategies. Thus, a new success story was unfolded from July'2008 spearheaded by strong and effective leadership, direction and guidance of me," Mr Bhuiyan asserted.
There was slow growth of all business parameters up to the period of June, 2008 and then a sharp rise began in all business parameters from July, 2008 and beyond.
"We have achieved operating profit of Tk. 3.91billion up to October, 2010, registering a whopping growth of operating profit of 165 per cent from June, 2008 to October, 2010.
A whopping 113.00% growth in deposit and 99.00% growth in loans and advances were recorded during the period July, 2008 to October, 2010.
"Almost all the renowned business houses are now doing business with UCB which was possible due to our customer- friendly business policy and prompt decision making process. We have also developed business relationship with some renowned exchange houses abroad for increasing inward remittances," Mr Shahjahan said.
In the wake of increasing demand of investors who are already operating in the Export Processing Zones (EPZs) as well as to attract and cater to the needs of future potential foreign investors in the EPZs by providing efficient and most modern banking services, UCB commenced operation of its first Offshore Banking Unit (OBU) at Corporate Branch, Dhaka from November 1 last.
"In the perspective of Bangladesh, there is an immense opportunity of Off-Shore Banking for UCB with its proven capacity and capability in international trade," the UCB MD said.
On holding the pending AGMs, he said the Bank has successfully overcome all the barriers for holding all pending AGMs & EGMs after a long time which gave the shareholders and investors of the bank a new lease of confidence.
Paid-up capital of the Bank jumped to BDT 2,909.95 million in 2010 from BDT 299.20 million. Authorized Capital of the Bank also increased to BDT 8,000.00 million.
Due to restriction imposed on holding of AGM by Honorable Court, the Bank was unable to increase the paid-up capital.
With successful holding of the pending AGMs, increase of capital fund including paid-up capital has been adjusted to Bank. Recently, the Board of Directors of the Bank has decided to increase capital by issuing 1:1 Right Share (1 right share against 1 ordinary share) with an issue price of BDT 150 each. After right issue total capital fund of the Bank will be BDT 13,170.00 million (approx).
Other than change in business performance, there were major changes in Bank's operation through introduction of new policies and amendment of existing policies.
"We have introduced policy and guidelines in every aspect of banking activities including initiatives to ensure sustainable and profitable business growth through development, acquisition and retention of potential human resources and high yielding customers by institutionalizing relationship banking across the Bank through building a team of dedicated, efficient and professional workforce; harnessing their core competence with good business practices, decipher market oscillations and exploit latent opportunities to remain ahead of others," he said.
UCB in recent years has opened 18(eighteen) new branches and 7(seven) more are going to be opened very soon within only two years time frame, refurbishment of branches, offering better premises and amiable environment to customers inducted good number of executives and officers in different levels and areas to widen our banking reach, implemented sound credit management practices, introduced cluster management concept and have been able to motivate employees to work with ownership and commitment to deliver their best support to business expansion in pursuit of accomplishment of corporate goal.
We have already explored, initiated and launched value-added services in addition to core banking operations, which included among others, capital market operation, cash management services to large corporate customers, relationship with exchange houses as well as linkage with reputed NGOs for securing remittance business etc.
These are particularly important since profit from core banking business operations is now subject to increasing competition and decreasing profit.
Therefore, apart from interest income, the Bank is now creating fresh avenues for non-interest income such as harvesting trading income from money and capital market, generating exchange gains and booking fee-based income from whatever sources attainable.
Successful implementation of Credit Risk Management guidelines as per instruction of Bangladesh Bank which has resulted in less NPL(non-performing loans) and proper diversification of credit portfolio towards minimization of credit risks.
We have fostered the notion of relationship banking by increasing customer focus and strengthening service delivery mechanisms.
The Bank is building capacity of manpower of different tiers by enhancing level of competencies and job knowledge and uplift employees morale and loyalty by motivation and training through the best HRM practices that fully utilizes performance- based compensation scheme.
Introduction of the latest annual performance appraisal system and performance-based pay package, promotion and all service benefits which is now the best in the industry has added extra-value addition for UCB.
The Bank has achieved effective, sustainable and meaningful business diversification by reducing reliance on large loans, recovering non-performing assets, and securing larger portion of assets growth from retail and SME banking.
UCB has strengthened operational efficiency by matching maturity and prices of asset-liability base, ensuring gainful utilization of surplus fund, lowering cost of deposits by mobilization of significant volume of low/ no cost deposits and continuously cutting down of operating expenses.
The Bank is ensuring full compliance on rules and regulations in asset and liability management by establishing internal control procedures.
Besides, the present management of the Bank took whole-hearted initiatives to introduce some major policies and guidelines to bring qualitative changes in day-to-day operations as well as to facilitate the operational activities in a more professional and effective manner. Some of those policies are Internal Control & Compliance Policy, SME Financing Policy, HR Recruitment Policy, Internship Placement Policy, Credit Risk Management Policy, NPL Recovery Policy, NPL Written-Off Policy and IT Policy.
"We do strongly believe that this amazing success story has been possible because of our visionary business policy, all out effort by our executives and officers round the year. All these initiatives taken will help us to be key market player towards making our dreams comes true," the UCB MD said.
United Commercial Bank Ltd (UCB) is set to successfully achieve the business targets of 2010 after fulfilling the same in 2008 and 2009.
"With our concerted efforts and contribution from all level of employees in spite of the fall-out effect of the global economic meltdown and stiff market competition, we are going to complete another successful year," M Shahjahan Bhuiyan, managing director of the bank told The Financial Express in an interview recently.
He said during the immediate past two and a half years, the Bank has registered commendable growth in key business segments.
"With the opening up of economy and privatization in early 1983, UCB was one of the first generation private sector commercial banks, among handful of others that came into existence. The performance of UCB as a first generation bank, over the years, may be adjudged as praiseworthy in spite of the absence of adequate regulatory framework and suitable business model in the early days of privatization. Earlier, the Bank may have committed few mistakes and encountered some operational setbacks; nevertheless, in recent time the Bank has successfully overcome those problems and has come to a commendable position of today," Mr Bhuiyan said.
Mr Bhuiyan, one of the senior most banking professionals of the country said banking business of today has become more complex and is filled with uncertainties, changes and challenges due to newer dimension of national and global business and the economy at large.
"In order to deal with these complexities and challenges we need adequate preparedness. We are proud to say that UCB is successfully facing these challenges through capacity building at the group and individual level by development of skill, efficiency and up-gradation of performance ability in keeping up with the transformation in the banking Industry."
"The New Management of the Bank having clear focus of the critical challenges that lies ahead has been continuously predicting the changes in the global as well as national economic cycles and making required adjustments in business strategies. Thus, a new success story was unfolded from July'2008 spearheaded by strong and effective leadership, direction and guidance of me," Mr Bhuiyan asserted.
There was slow growth of all business parameters up to the period of June, 2008 and then a sharp rise began in all business parameters from July, 2008 and beyond.
"We have achieved operating profit of Tk. 3.91billion up to October, 2010, registering a whopping growth of operating profit of 165 per cent from June, 2008 to October, 2010.
A whopping 113.00% growth in deposit and 99.00% growth in loans and advances were recorded during the period July, 2008 to October, 2010.
"Almost all the renowned business houses are now doing business with UCB which was possible due to our customer- friendly business policy and prompt decision making process. We have also developed business relationship with some renowned exchange houses abroad for increasing inward remittances," Mr Shahjahan said.
In the wake of increasing demand of investors who are already operating in the Export Processing Zones (EPZs) as well as to attract and cater to the needs of future potential foreign investors in the EPZs by providing efficient and most modern banking services, UCB commenced operation of its first Offshore Banking Unit (OBU) at Corporate Branch, Dhaka from November 1 last.
"In the perspective of Bangladesh, there is an immense opportunity of Off-Shore Banking for UCB with its proven capacity and capability in international trade," the UCB MD said.
On holding the pending AGMs, he said the Bank has successfully overcome all the barriers for holding all pending AGMs & EGMs after a long time which gave the shareholders and investors of the bank a new lease of confidence.
Paid-up capital of the Bank jumped to BDT 2,909.95 million in 2010 from BDT 299.20 million. Authorized Capital of the Bank also increased to BDT 8,000.00 million.
Due to restriction imposed on holding of AGM by Honorable Court, the Bank was unable to increase the paid-up capital.
With successful holding of the pending AGMs, increase of capital fund including paid-up capital has been adjusted to Bank. Recently, the Board of Directors of the Bank has decided to increase capital by issuing 1:1 Right Share (1 right share against 1 ordinary share) with an issue price of BDT 150 each. After right issue total capital fund of the Bank will be BDT 13,170.00 million (approx).
Other than change in business performance, there were major changes in Bank's operation through introduction of new policies and amendment of existing policies.
"We have introduced policy and guidelines in every aspect of banking activities including initiatives to ensure sustainable and profitable business growth through development, acquisition and retention of potential human resources and high yielding customers by institutionalizing relationship banking across the Bank through building a team of dedicated, efficient and professional workforce; harnessing their core competence with good business practices, decipher market oscillations and exploit latent opportunities to remain ahead of others," he said.
UCB in recent years has opened 18(eighteen) new branches and 7(seven) more are going to be opened very soon within only two years time frame, refurbishment of branches, offering better premises and amiable environment to customers inducted good number of executives and officers in different levels and areas to widen our banking reach, implemented sound credit management practices, introduced cluster management concept and have been able to motivate employees to work with ownership and commitment to deliver their best support to business expansion in pursuit of accomplishment of corporate goal.
We have already explored, initiated and launched value-added services in addition to core banking operations, which included among others, capital market operation, cash management services to large corporate customers, relationship with exchange houses as well as linkage with reputed NGOs for securing remittance business etc.
These are particularly important since profit from core banking business operations is now subject to increasing competition and decreasing profit.
Therefore, apart from interest income, the Bank is now creating fresh avenues for non-interest income such as harvesting trading income from money and capital market, generating exchange gains and booking fee-based income from whatever sources attainable.
Successful implementation of Credit Risk Management guidelines as per instruction of Bangladesh Bank which has resulted in less NPL(non-performing loans) and proper diversification of credit portfolio towards minimization of credit risks.
We have fostered the notion of relationship banking by increasing customer focus and strengthening service delivery mechanisms.
The Bank is building capacity of manpower of different tiers by enhancing level of competencies and job knowledge and uplift employees morale and loyalty by motivation and training through the best HRM practices that fully utilizes performance- based compensation scheme.
Introduction of the latest annual performance appraisal system and performance-based pay package, promotion and all service benefits which is now the best in the industry has added extra-value addition for UCB.
The Bank has achieved effective, sustainable and meaningful business diversification by reducing reliance on large loans, recovering non-performing assets, and securing larger portion of assets growth from retail and SME banking.
UCB has strengthened operational efficiency by matching maturity and prices of asset-liability base, ensuring gainful utilization of surplus fund, lowering cost of deposits by mobilization of significant volume of low/ no cost deposits and continuously cutting down of operating expenses.
The Bank is ensuring full compliance on rules and regulations in asset and liability management by establishing internal control procedures.
Besides, the present management of the Bank took whole-hearted initiatives to introduce some major policies and guidelines to bring qualitative changes in day-to-day operations as well as to facilitate the operational activities in a more professional and effective manner. Some of those policies are Internal Control & Compliance Policy, SME Financing Policy, HR Recruitment Policy, Internship Placement Policy, Credit Risk Management Policy, NPL Recovery Policy, NPL Written-Off Policy and IT Policy.
"We do strongly believe that this amazing success story has been possible because of our visionary business policy, all out effort by our executives and officers round the year. All these initiatives taken will help us to be key market player towards making our dreams comes true," the UCB MD said.