It is a matter of honor and immense pleasure for me to be Chairman of Board of Directors of Shimanto Bank Ltd. I’m writing at this moment when the global economy and Bangladesh economy are recovering from the COVID-19 pandemic and facing the spillover effect of the Ukraine-Russia war. The past two years fetched tremendous unprecedented challenges for the world, but our people responded extraordinarily well and our performance has been buoyant. I am extremely delighted with the competence, devotion, and vigor that my colleagues across the country have demonstrated as they have ensured our customer’s true satisfaction throughout the year. On behalf of the Board, I would like to express my sincere thanks to all members of Shimanto Bank Limited for the extraordinary way they are responding to these most challenging circumstances to ensure the satisfaction of the esteemed stakeholders of the bank.
Resilience and Recovery
The purpose of Shimanto Bank Limited is to improve the financial well-being of our society, BGB, and Non-BGB customers. In this aspect, our bank has gone in the right direction throughout the financial year. As the pandemic persisted into the 2021 financial year, the Bank continued to defer repayments on loans as per the circular of Bangladesh Bank and offered a wide range of support to the customers. This helped alleviate financial pressure and uncertainty for individuals and businesses. The past year has also been notable for governments, regulators, and industry continuing to work collaboratively, implement recovery incentive packages quickly, and help minimize the impacts of the pandemic. While we prioritized supporting our customers and people during the pandemic and spillover impact of the Ukraine-Russian war, we made good growth against the planned priorities the Board and Management set, reallocating resources from underperforming parts of the business, reducing costs, and abridging the process through technology.
We are proud to say that we have accomplished our six years of journey and stepped into the seventh year amid the pandemic situation. The Board has preserved its oversight of the execution of the Bank’s strategy throughout the year and we remain poised that it will deliver sustainable shareholder value and a stronger organization for our clients, colleagues, regulators, and the communities.
Sustainable Outcomes for all Stakeholders of the Bank
The Bank recognizes that its performance on environmental and social dimensions is fundamental to delivering sustainable outcomes that balance the interests of all stakeholders. Shimanto Bank is committed to playing its part in limiting investment in environmentally harmful industries in line with the goals and policies set forth by international organizations and Bangladesh Bank. The bank also believes that by executing a well-defined strategy on financial inclusion through discovering alternative delivery channels, it can serve the unbanked population of the country successfully and proficiently. To encounter the stakeholder’s demands we are in an unceasing endeavor to develop and design products and services for our prevailing and potential clients. Shimanto Bank Limited always puts importance on customer care and has made persistent efforts to ensure the best possible services at a judicious cost.
The Board has an ongoing focus on ensuring that it has the appropriate diversity of skills, experience and strategic thinking capabilities that are required to lead the Bank. The bank is appointing new leadership in various positions/appointments to strengthen the mix of skills, knowledge, and experience relevant to the Bank’s strategic priorities. We know that it is vital we stay focused on what we can regulate and control. The Board is self-assured that there are many prospects and opportunities ahead for the bank to attain its competitive strength in comparison to other reputed banks. The Board has preserved its oversight of the execution of the Bank’s strategy throughout the year and we remain poised that it will deliver sustainable shareholder value and a stronger organization for our clients, colleagues, regulators, and the communities.
The refinement of the strategy also reflects our purpose and values, with an explicit intent for the Bank to play a significant role in the economic recovery of Bangladesh and to contribute to the nation’s transition to a digital and sustainable economy, thereby underpinning prosperity and social well-being. In aspiring to these ambitions, we recognize the importance of achieving the best balance of outcomes for all stakeholders.
The corporate governance system in Shimanto Bank is designed to ensure transparency and accountability at all levels of doing business. It also ensures that duties and responsibilities are appropriately segregated between the Board and management to provide sufficient checks and balances and flexibility for smooth business operations. The Board provides leadership and direction for the management, approves strategic and major policy decisions, and oversees management to attain predetermined goals and objectives of the Bank.
Bank’s Business Performance and Capital Position
The Bank performed well in the year 2021, with disciplined execution delivering strong outcomes, despite the impacts of the pandemic. Profit after tax was 30% lower reflecting the impact of economic conditions and outlook, resulting in an increased provision against the soared loan. The Bank earned a distributable profit of BDT 82.08 million whereas the operating profit was BDT 404.67 million up by 16.60%.
Most of the profits came from the core banking business of the Bank. The total Deposit raised to BDT 13,285.74 million by the end of 2021. Loans and advances totaled BDT 10,047.39 million from BDT 8,331.65 million in 2020 with an increase of 20.59%.
The Paid-up Capital of the Bank was at BDT 4,284.80 million as on December 31, 2021. Unlike many of our peer competitors in the financial services industry, we were well-capitalized, deposit-funded, and liquid. Our capital management framework was intended to ensure the best composition of capital in relation to business growth. Capital Adequacy Ratio as per BASEL-III was 47.27%. Return on Asset (ROA) and Return on Investment (ROI) were at 0.75% and 6.31% respectively. The year’s performance and capital position have allowed Shimanto Bank to deliver moderate returns for shareholders. The Board determined 2.22% dividend, resulting in shareholders receiving BDT 95.20 million in dividends in relation to the financial year.
Thanks & Gratitude
I am also grateful to all the regulatory agencies of the government, in particular the Bangladesh Bank, Bangladesh Securities, and Exchange Commission, and the Registrar of Joint Stock Companies and Firms for their continued support. I thank each and every customer of the bank for their unwavering trust and support. I also thank various financial institutions, banks, and correspondents for their continued support and guidance. I want to thank my colleagues on the Board for their wise counsel and guidance which has supported the strong achievements reported by the bank in 2021.
Maj Gen Shakil Ahmed, SPP, nswc, afwc, psc
Chairman, Board of Directors
Shimanto Bank Ltd
15 September 2022