annual report

Welfare through 2015

Diversification
Towards facilitating balanced and sustainable development, welfare has
been in the core of Islamic financial services. Ensuring economic well
being and a reasonably comfortable living for all are among the priorities
of shariah based banking. Following the divine guidance- wealth should
not rotate only among the riches of you, Islami Bank Bangladesh Limited
strives for mass welfare through diversification of finance in terms of
size, sector geographical location and social cause. For more than
three decades, IBBL has been offering need based, socially beneficial
and development focused financial services. Upholding the spirit of
Maqasid Al- Shariah in financial arena, IBBL has been persistently
working on maximizing welfare and freeing humanity from economic
miseries. Serving the people at all strata through inclusive banking and
graduating of the entrepreneurs remain our corporate commitment. Like
a welfare-tree, the bank has expanded its service-horizon especially for
the unbanked population and deprived people of the country.
REGISTERED OFFICE: Islami Bank Bangladesh Limited, Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh,
GPO Box No.233; Phone : PABX (88-02) 9563040, 9560099, 9567161, 9567162; Mobile : 88-01711-435638, 88-01711-435639,
FAX : 88-02-9564532, 9568634; SWIFT : IBBLBDDH, e-mail : [email protected]; Website : www.islamibankbd.com
 THE MESSAGE FROM THE
HOLY QURAN

O you who believe! Eat not up your property among

yourselves unjustly except it be a trade amongst you, by
mutual consent. And do not kill yourselves (nor kill one
another). Surely, Allah is Most Merciful to you.
(Surah An-Nisa : 29)

And give to the kindred his due and to the Miskin (poor)
and to the wayfarer. But spend not wastefully (your wealth)
in the manner of a spendthrift. Verily, spendthrifts are
brothers of the Shayatin (devils), and the Shaitan (Devil -
Satan) is ever ungrateful to his Lord.
(Surah Al-Isra : 26-27)

And seek not mischief in the land. Verily, Allah likes not
the Mufsidun (those who commit great crimes and sins,
oppressors, tyrants, mischief-makers, corrupts).
(Surah Al-Qasas : 77)
 GUIDANCE FROM THE
HADITH

Abu Saeed narrated that the Prophet ( ) said: The

truthful, trustworthy merchant is with the Prophets, the
truthful, and the martyrs.
(Jameh at-Tirmidhi)

Abu Hurairah (May Allah be pleased with him) reported :

The Prophet ( ) said, Whoever takes the
money of the people with the intention of repaying it, Allah
will repay it on his behalf, and whoever takes it in order to
spoil it, then Allah will spoil it.
(Sahih al-Bukhari)

It was narrated from Abu Hurairah (May Allah be pleased

with him) that : The Messenger of Allah ( ) said: The
Muslim is the one from whose tongue and hand of the
people are safe, and the believer is the one from whom the
peoples lives and wealth are safe. (Sunan an-Nasai)
CONTENTS
Vision 6 Performance Analysis
Mission 7 Stakeholders Information 142
Strategic Objectives 8 Graphical Presentation 146
Core Values & Commitments 9 Segment Information 148
Code of Conduct and Ethical Principles 10 Horizontal & Vertical Analysis 149
Awards & Recognitions 11 Profitability, Dividends, Performance and Liquidity Ratios 150
Forward Looking Statement 13 Statement of Value Added 151
Chairmans Message 14 Financial Calendar 155
Managing Directors Review 16 Financial Highlights 156
Milestones 20 Five Years Performance 157
Sponsors 21 Media Highlights 159
Corporate Structure Publications 160
Corporate Information 22 Success Story 161
Corporate Structure 23 Report of the Shariah Supervisory Committee 171
Board and its Committees 24 Audit Committee Report 172
Shariah Supervisory Committee 25 Financial Statements
Management Committee 26 Independent Auditors Report 175
Senior Executives 27 Consolidated Financial Statements
Directors Profile 28 Consolidated Balance Sheet 178
Corporate Governance Consolidated Profit and Loss Account 180
Corporate Governance Report 32 Consolidated Cash Flow Statement 181
CEO and CFOs Declaration to the Board 50 Consolidated Statement of Changes in Equity 182
Certificate on Compliance of Corporate Governance 51 Financial Statements - IBBL
Compliance Status of BSEC Guidelines 52 Balance Sheet 184
Directors Report 57 Profit and Loss Account 186
- Profile of IBBL 60 Cash Flow Statement 187
- Business Review 63 Statement of Changes in Equity 188
Risk Management 85 Liquidity Statement 190
Market Disclosure of Basel III 95 Notes to the Consolidated Financial Statements 191
ICT & Automation 114 Financial Statements - OBU 250
Green Banking 119 Financial Statements - IBSL 257
CSR Report 123 Financial Statements - IBCML 278
Management Report and Commentary Standard Disclosure Index 288
Management Report and Analysis 130 Banks Network 291
Products and Services 134 Glossary of Terms 293
Alternative Delivery Services 137 Notice of 33 AGM
rd
294
Publicity, Public Relations and Publications 139 Proxy Form & Attendance Slip 295

5
Islami Bank Bangladesh Limited Annual Report 2015
 ISION
Our vision is to always strive to achieve superior financial
performance, be considered a leading Islami Bank by reputation
and performance.

Our goal is to establish and maintain modern banking techniques,

to ensure soundness and development of the financial system
based on Islamic Principles and to become a strong and efficient
organization with highly motivated professionals, working for
the benefit of people, based on accountability, transparency and
integrity to ensure stability of the financial systems.

We will try to encourage savings in the form of direct investment.

We will also try to encourage investment particularly in projects,
which are more likely to lead to higher employment.

6
Islami Bank Bangladesh Limited Annual Report 2015
 ISSION
To establish Islamic Banking through introduction of a welfare oriented
banking system and also ensure equity and justice in all economic
activities, achieve balanced growth and equitable development
through diversified investment operations particularly in the priority
sectors and less developed areas of the country.

To encourage the socio-economic development and financial services

to the low-income community particularly in the rural areas.

7
Islami Bank Bangladesh Limited Annual Report 2015
 TRATEGIC OBJECTIVES
Welfare oriented banking
Customers satisfaction
Be excellent in serving the cause of least developed community and area
Achieve global standard
Emerge as a healthier & stronger bank at the top of the banking sector and continue to
maintain stable positions in ratings.
Build and consolidate corporate culture
Ensure Corporate Social Responsibilities (CSR) through all activities
Promote green banking culture and ecological balance
Provide impeccable and progressively better customer services using latest technologies
Ensure diversification of investment by sector, size, economic purpose & geographical
location and expand need based Retail and SME and Micro financing
Invest in the thrust and priority sectors of the economy
Establish a set of managerial succession and adopt technological changes to ensure
development of an Islamic Bank as a stable financial institution
Pay more importance in human resources as well as financial capital
Strive hard to become a company of choice & develop talent in a performance-driven
culture
Ensure lucrative career path, attractive facilities and excellent working environment
Train and develop human resources continuously and provide adequate logistics to satisfy
customers need
Ensure zero tolerance on negligence in compliance with both Shariah and regulatory
guidelines
Motivate team members to take the ownership of every job

8
Islami Bank Bangladesh Limited Annual Report 2015
 ORE VALUES
Trust in Almighty Allah
Adherence to the spirit of Islamic Shariah
Highest standard of Honesty & Integrity
Transparency & Accountability
Welfare Banking
Equity and Justice
Environmental Consciousness
Respect for all
Discipline & Cooperation

COMMITMENTS
Shariah directives
Regulators
Shareholders
Society
Customers
Employees
Stakeholders and
Environment

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Islami Bank Bangladesh Limited Annual Report 2015
 CODE OF CONDUCT AND
ETHICAL PRINCIPLES
Shariah foundation of ethics Adhering to the shariah and implementing its principles

Accountability to Almighty Allah Ensuring justice and fairness

Righteousness and making ones work perfect Adopting the good and articulating the truth

Allah-fearing conduct in all activities Transparency in statements

Piety Rules of conduct towards shareholders, managers and fellow

employees
Integrity
Developing the work through innovative and creative ideas
Principle of vicegerency on the Earth
Respecting the working hours of the institution
Sincerity
Getting acquainted with the directives
Principles of personal ethics
Safeguarding the institutions assets and facilities
Faith-driven conduct
Refraining from doing anything detriment to the organiza-
Trustworthiness tional interest
Legitimacy Rules of conduct towards those who deal with the institution
and related parties
Objectivity
Being keen to meet the needs of those who deal with the
Professional competence and diligence
institution
Rules of ethical conduct Giving rights to those who are entitled to them justly
Self-motivated rules influencing job performance Preserving confidential information
Allah-fearing state of mind Being serious in ones behavior and actions

10
Islami Bank Bangladesh Limited Annual Report 2015
 Awards & Recognitions

ICMAB NRB Recognition Award SAFA Intl. Conference Banking Fair Sponsor
Best Corporate Award 2015 2015 Award 2015 Award 2015
(GOLD AWARD)

Entrepreneur Award BCL Runner-up Small Enterpreneur

2015 Award 2015 Central Shariah Award Friendly Bank of the
year-2014

Better Bangladesh International Expatriate Dhaka International Trade Financial Branding

Foundation Award 2014 Day Award 2014 Fair Award-2014 Award 2014

11
Islami Bank Bangladesh Limited Annual Report 2015
AWARDS & RECOGNITIONS
South Asian Federation of Accountants (SAFA)
SAFA awarded IBBL the 1st Position both under Private Sector Banks (including Co-operative Banks) in the best-presented annual
reports and SAARC Anniversary Award for Corporate Governance Disclosures for the year 2012 and Certificate of Merit under
Private Sector Banks (including Co-operative Banks) in the best-presented annual reports for the year 2013.
Institute of Chartered Accountants of Bangladesh (ICAB)
ICAB conferred IBBL the 3rd position under Private Sector Banks (including Co-operative Banks) in the best-presented annual
reports for the year 2014. ICAB also conferred IBBL with the 1st position both under private sector banks (including Co-operative
Banks) in the best-presented annual reports and SAARC Anniversary Award for Corporate Governance Disclosures for the year 2012.
Institute of Cost and Management Accountants of Bangladesh (ICMAB)
ICMAB glorified IBBL with the ICMAB National Best Corporate Award 2014, 2013, 2012, 2011, 2010 (1st Position amongst the
Private Commercial Banks in Islamic Operation).
The Banker
IBBL, being only Bank in Bangladesh, entered into the Worlds Top 1,000 Banks list in 2012. IBBL has made Bangladesh proud of
being among the best 1000 banks in the world, ranked by 'The Banker, UKs premier financial magazine. This prestigious ranking
is a clear testimony to IBBLs stability and strength and its leadership in financial sector of Bangladesh. Position in terms of key
indicators in 2015:
70th in Performance (Profits on capital)
250th in Return on Asset (ROA)
791st in Soundness (Capital Assets Ratio)
785th in Size (Assets base) and
954th in Strength of Tier 1 capital.

Global Finance
The Global Finance, a reputed USA-based Financial Magazine, adjudged IBBL as the best Islamic Financial Institution of Bangladesh
for the years 2008, 2009, 2010, 2011 & 2013.
Bangladesh Bank and SME Foundation
Bangladesh Bank and SME Foundation jointly conferred the prestigious award - the best Small Entrepreneur Friendly Bank of the
Year in 2014 to IBBL considering its contribution to SME financing.
Other Recognitions
Gold medal as Branding Bangladesh Award for its outstanding performance in remittance services last year by Centre for
Non-Resident Bangladeshi in 2014.
Financial Branding Award by Centre for Non Resident Bangladeshis for its outstanding contribution to the Financial Branding
of Bangladesh in abroad in 2014.
Best Brand Award from Bangladesh Brand Forum in 2014.
Best Pavilion Prize of month long Dhaka International Trade Fair - 2014.
Bangladesh Sports Press Association conferred IBBL the best patron award for its outstanding contribution to the countrys
sports sector in 2014.
IBBL was awarded the 1st prize among the participating banks in Remittance Fair on the occasion of International Migrants
Day 2013
Western Union honored IBBL with an incentive amount of USD $90,088 as the best category performance to achieve the
target of 3,00,000 transactions fixed for the year 2013.
IBBL was ranked by Banladesh Bank among top ten banks in Bangladesh for Green banking in 2012 and 1st position in
Climate Risk Fund Utilization activities.
IBBL has received one prestigious award from VISA International for Outstanding Achievements in Debit Portfolio Growth
for the year 2015.

12
Islami Bank Bangladesh Limited Annual Report 2015
 Forward Looking
STATEMENT
The statements are managements outlook on future events. Potential impact on IBBLs liquidity and/or costs of
These statements are based on current plans, future estimates funding as a result of external factors, such as mar-
and projections. All forward-looking statements are, by nature, ket disruptions
subject to risks and uncertainties, many of which are beyond Changes in corporate tax structure and VAT on bank-
control. ing service
We have included in this report certain forward-looking Changes in trade, monetary and fiscal policies and
statements with respect to our financial position, operating laws
results and business development. We use words such as Changes in international prices of essentials, which
will, may, expect, try, strive, and similar expressions to identify may result to volatility in Foreign Exchange Market
forward-looking statements. We believe that the expectations
reflected in these forward-looking statements are reasonable Volatility in the money market
but we can give no assurance that those expectations will Occurrence of natural or man-made disasters or
prove to have been correct, and you are cautioned not to place calamities or conflicts, including any effect of such
undue reliance on such statements. Readers are cautioned disasters
that a number of factors could cause actual results to differ, in Changes in investor sentiment or consumer spending
some instances materially, from those anticipated or implied in or savings behavior
any forward-looking statements. These factors include, among Potential impact on IBBLs businesses, business
others: policies, reputation, financial condition or results of
Changes in national economic, political and financial operations from the extensive legal and regulatory
conditions proceedings, investigations and inquiries
Changes in the governments adjustments and Usefulness of IBBLs risk management and mitigation
regulatory policies, and regulatory issues processes and strategies
Securities and capital markets behavior, including Potential impact on IBBL from continually evolving
changes in market liquidity and volatility cyber-security and other technological risks and
Global economic downturn or disruption, including a attacks, including additional costs, reputational
significant decline in global trade volumes damage
Global embargo/unrest in Middle-east countries
affecting flow of remittances and trade

13
Islami Bank Bangladesh Limited Annual Report 2015
Chairmans Message
In the name of Allah, the Most Beneficent, the Most Merciful, Peace be glorious milestone of 10 million (One Crore) plus customer base. IBBL
upon our Prophet Mohammed, His Companions and Relatives. registered moderate growth in foreign exchange business. The Bank
handled export business of Tk. 224,236 million, with almost 10%
Respected Shareholders, market share. On the other hand, the Bank handled import business of
Tk. 343,668 million, with 8.42% growth, which is more than 11% of total
Assalamu Alaikum Wa Rahmatullah.
import of the country. The Banks total wage earners remittance stood
It is of immense pleasure for me to present before you the Annual Tk. 321,066 million with 26.88% market share. I congratulate the IBBL
Report of your beloved Bank along with the Audited Financial family for successfully steering the Bank towards its optimum height.
Statements for the year ended on 31 December 2015, a milestone year
with good achievement on multiple fronts. On behalf of the Board of Partnering National Development
Directors and myself, I would like to express my heartfelt gratitude and
IBBL has been providing unflinching services to the industrialization
sincere thanks to all of you for your continuous support and guidance
of the country especially in the import substitute and export-oriented
to navigate our beloved institution on the right direction overcoming ones. The Bank deployed 45% of its total investment in more than
all challenges in last three decades. 4000 industries. IBBL holds 25% market share in spinning and 21% in
Alhamdulillah, as contained in the report, like-wise the preceding iron & steel sector besides functioning in almost all areas of national
years, the bank continued to deliver consistent financial performance development. IBBL is one of the major financiers in SME sector which
in core banking activities. We could uphold our number-one position in channeled around 43% of its investment in 2015 contributing 16% of
the banking of Bangladesh and kept winning the peoples confidence. the countrys finance in SME. Millions of people were employed directly
and indirectly through IBBL financed industries, SMEs and Rural
IBBL, the only Bank form Bangladesh in The Top 1000 Global Banks
projects during the last 33 years. About 14% of Banks investment is
has continued upgrading its position to 954th in ranking. This testifies in agriculture and agro-based industries which is highest among the
our continuous endeavor to maximize the value of stakeholders PCBs. IBBL has been contributing significantly to entrepreneurship
alongside working for the community as a whole. development by different schemes of its financing. Investment
through Rural Development Scheme (RDS) at bottom level, to SME
Consistent Growth in Financial Indices and then to large industries level shows planned graduation towards
In pursuit of excellence, IBBL continues to set new benchmarks for entrepreneurs development.
itself and for the industry. The Return on Equity (ROE) and Return on The Bank works to uphold the dignity of the nation by contributing
Asset (ROA) recorded at 6.28% and 0.44% while Earning per Share more in the socio-economic and human development initiatives of the
(EPS) stood at Tk. 1.88. Total assets of the Bank rose to Tk. 859,201.05 country. We are the 2nd largest corporate taxpayer of the country. The
million showing a growth of 12.28% over the previous year. At the collective contribution to the National Exchequer from inception up to
end of the year banks Deposit & Investment stood at Tk. 615,359.21 December 2015 was Tk.89,042 million of which, Tk.17,392 million was
million and 530,194.50 million respectively. This year, IBBL has reached made in 2015 alone.

14
Islami Bank Bangladesh Limited Annual Report 2015
 Chairmans Message

Serving the deprived segment responsibility for all. In keeping with this ideology, we have both
spawned and sponsored a succession of social initiatives which entail
Financial inclusion is the institutional forte of Islamic banking. IBBL such diverse activities particularly supporting education, reducing
shows remarkable contribution in inclusion of the poor and unbanked poverty, giving standard healthcare service, supporting national and
population to the Banking umbrella across the country. IBBL has international sports events and ensuring environment friendly society
many social programmers for the greater benefit of humanity for the greater benefit of present and future generations. An amount
towards fulfilling noble mission of implementing Maqasid-al-Shariah. of Tk.4,327.13 million for more than 1 crore 38 lac beneficiaries has
With a view to creating access to finance for all, particularly the been spent so far which includes Tk.800.45 million for 1,472,959
underprivileged, we have programs like the Rural Development beneficiaries in 2015.
Scheme (RDS) since 1995 which is now spreaded over 19 thousand
villages changing lives of more than one million marginal people Recognition
majority of which are women. Many awards and recognition have come our way as we traversed our
journey in pursuit of excellence. We have achieved prestigious ranking
Adhering Corporate Governance and Transparency of top 1000 banks in the world with 954th rank in 2015 which was
IBBL has been consistently making efforts in adopting best governance 970th in previous year. For outstanding contribution to the foreign
practices that are critical to ensure optimum returns and satisfaction remittance services of Bangladesh, IBBL has been awarded prestigious
accruing to all its stakeholders. The interest of all stakeholders is Gold Medal for several times. We stood highest position in performance
given paramount importance while taking commercial decisions. The category among the South East Asian banks. We have been awarded
corporate governance system is designed to ensure transparency numerous times by apex organizations like SAFA, ICAB, ICMAB and
and accountability at all levels. Good governance, risk management respected media like Business Asia, Global Finance, the Industry etc.
practices, compliance and ethical values have always been among Looking Forward
our corporate goals. We are sincerely committed to comply with
the guidelines, instructions and policies of all regulatory authorities We believe that it is the dedication, professionalism and desire to
including Bangladesh Bank, concerned ministries, BSEC, DSE, and CSE. achieve an honored position that drives the IBBL to succeed in this
All banking transactions are also well recorded, verified and audited by challenging environment. In spite of the above, we look forward to
internal and statutory auditors including Bangladesh Bank and Shariah achieving larger targets and strengthening our position in the coming
Supervisory Committee. Strict adherence to Shariah principles is the years. We are confident that our innovative and creative management
core strategy of our banking, which, Insha Allah, will continue. team will tide over the challenges successfully in coming days and
take the Bank to a new height of success. We strongly believe that
Towards Global Standard Compliance Culture our personalized customer service with existing and new products
with the support of our state of the art IT platform, efficient and
In a business environment where reputational threats lurk around every productive resources and high standard of corporate governance
corner, a strong culture of ethics and compliance is the foundation practice will bring sustained growth that will maximize value for all the
of a robust risk management program. At IBBL, we are committed to stakeholders in coming years.
observing the highest standards of integrity and compliance in our work.
We believe in a set of clear values that, among other things, emphasizes Our Gratefulness
the organizations commitment to legal and regulatory compliance, We are grateful to Allah (SWT) for His blessings in our endeavor to the
integrity, and business ethics. Executive leadership and senior cause of establishing Islamic Banking in this region. I wish to thank
managers across IBBL encourage employees and business partners to my colleagues on the Board of Directors and members of the Shariah
behave legally and ethically, and in accordance with compliance and Supervisory Committee, for their judicious guidance and support in
policy requirements.As a part of our global compliance initiatives, we charting the road map of the Institution for continuous growth and
have in the meantime appointed Kroll, the globally reputed Organization profitability, thereby steering it to greater heights. I am also thankful
for AML and Risk Management Consultancy to review the AML Control to each and every shareholder of IBBL for reposing their confidence
Environment of IBBL. Accuity, the global screening solution, has also and support to the Companys management. I would like to offer my
been employed to help us increase operational efficiency and minimize sincere thanks and gratitude to Bangladesh Bank and other regulatory
the cost of sanctions and compliance. authorities for their support and guidance. I would also like to thank
our external auditors for carrying out the auditing task professionally
Eco-friendly Banking and advising us on the compliance as per practice of IFRS and
Since inception Eco-friendly banking has been inbuilt in the corporate BFRS. In the end, we once again express our sincere thanks to all the
philosophy of IBBL. Our green banking activities are aiming at creating members of IBBL family for their uncompromising loyalty, relentless
long-term resilient and sustainable economic, sustainable and hard work and dynamic team spirit to take the Bank forward.
environmental value. To lower carbon footprint in our in-house banking At last we would like to offer our whole hearted commitment that
operation, we use state-of-the-art technology to provide various we are accountable to Almighty Allah (SWT) and answerable to our
banking services. While financing mainstream business, we prefer stakeholders and to the people of our beloved country. I am pleased to
Effluent Treatment Plant(ETP) projects, brick manufacturing projects take this opportunity to invite you to our 2016 Annual General Meeting
using Hybrid Hoffman Kiln (HHK) technology etc. Bangladesh Bank and looking forward to seeing you there.
recognized IBBL as one of the Top Ten Private Commercial Banks for
the contribution to green banking activities throughout the country. May Allah grant us success in our entire endeavor. Ameen.

Model of Corporate Social Responsibility

Socio-economic welfare is imbibed in IBBLs corporate philosophy and
organizational culture. As one of the biggest Islamic Banks of the world,
we believe that Islami Bank Bangladesh Limited has responsibility to
its stakeholders as well as to the communities in which we work and Engr. Mustafa Anwar
live. Our commitment is built on a deeply ingrained sense of social
Chairman

15
Islami Bank Bangladesh Limited Annual Report 2015
Managing Director & CEOs Round up

Assalamu alaikum wa rahmatullahi wa barkatuhu. maximizing welfare & eliminating evils in financial operations.
I feel pleasure and privileged to present a short review on
the key performances and achievements of Islami Bank Global and National Economic Scenario
Bangladesh Limited (IBBL) for the year 2015. Looking back, the The growth of global economy fell short of expectations in
last one third of a century have been nothing less than a saga 2015, slowing down to 2.4 per cent from 2.8 in 2014. The global
replete with milestones of numerous events and achievements banking sectors remained fragile with major Banks facing
something even beyond the expectation which have moulded a push of regulatory changes and the shift towards more
IBBLs goals and shaped its welfare mission. stringent capital requirements under Basel III. A number of
Welfare banking has been a priority in IBBL since its inception. global leading banks were fined for manipulating the foreign
Our corporate logo is studded with pioneer in welfare exchange market.
Banking. IBBL runs its activities not merely for maximizing Bangladesh economy
profit but for increasing welfare. demonstrated little uptrend Getting the status of a lower
Our deposit-investment policy Implementing the in 2015 with steady GDP middle income country was a
milestone achievement
and schemes are designed in Maqasid-al-Shariah growth, controlled inflation,
such way as to ensure welfare. rising forex reserve and higher
Committed to distributive justice of Islam, IBBL strives on than expected agricultural production. However, the economy
how we can maximize the mass welfare. We try to establish suffered from political uncertainties and lack of business
need based banking in place of greed based conventional confidence affecting private investments.
financial system.
Despite overcoming an initial setback stemming from political
IBBL is a welfare tree expanding its roots deep in the soil of this turmoil in the first quarter of the year, countrys economic
land with a mission of working for the millions towards freeing activities navigated through a sluggish ambience in 2015.
them from all the chains of oppression & sufferings and for Inflation was on a downturn trend caused by declining global
maximizing welfare & eliminating evils in the light of maqasid- commodity market and no major internal shocks. Getting the
al-shariah. The previous year has been of special significance status of a lower middle income country was a milestone
in our mission of implementing the Maqasid-al-Shariah- achievement of Bangladesh economy last year.

16
Islami Bank Bangladesh Limited Annual Report 2015
 Managing Directors Review

Bangladesh economy also witnessed an inflationary pressure Tk. 144 million at the year end in 1983 increased to stand at
on BDT against dollar during the last part of 2015. Excessive Tk. 615,780 million in the 33rd year end i.e. 31.12.2015. IBBL
liquidity with the banks appeared as constant detriment in deposit has grown above industry average in last 33 years.
maintaining a balanced investment-deposit mix throughout In last 5 years alone we could mobilize Tk. 375,708 million as
the year. additional deposit. The bank has been able to maintain a wide
deposit base as it mainly comprises of small and medium size
2015 was a remarkable year for both global and countrys
deposits.
Islamic Banking. The potential for Islamic banking to sustain
by way of achieving wider geographical expansion and global
market penetration is promising, as several new and niche Investment
markets are undertaking steps to enable Shariah compliant Over the last 33 years, Islami Bank Bangladesh Limited
financial services in their jurisdictions. has been working for socio-economic development of the
Persistent growth of Islamic banking practices is that current country. IBBL runs its activities not merely for maximizing
assets of more than 500 Islamic financial institutions grew to 2 profit but for increasing welfare. IBBL got diversified
trillion U.S. dollars. It is assumed that the amount will exceed 5 exposure from agriculture to
industry, retail to corporate Not merely for maximizing
trillion U.S. dollars in the next five years. profit but for increasing
and microfinance to SME.
According to Standard & Poors, presently Islamic banking has The investment portfolio has welfare
more than 38 million customers across the globe of which, 13 grown several-fold showing
million being 35 per cent are in Bangladesh. IBBL, the biggest spectacular growth. IBBLs investment totaling Tk. 56 million
Shariah-based Bank in Bangladesh, alone represents 30% of in 1983 have grown manifold to stand Tk. 531,813 million in
the global Islamic Banking customers. 2015. The investment portfolio of the bank is well diversified
in terms of size, sector, economic purpose and geographical
Financial Performance locations to achieve maqasid-e-shariah.
Islamic banks assign precedence to universal welfare,
inclusive growth and equitable distribution of resources in Diversification of Investment
their entire activities to attain In 33 years of its inception, the investment of IBBL has
Maqasid of Islamic banking. Precedence to universal fared better in terms of consolidation and diversification.
Despite deficit and slow welfare, inclusive growth and Since 2008, we have put special focus on diversification
recovery in global economy equitable distribution
under 4-point commitment campaign. In 2015, exposure of
and subsequent volatility in top 100 clients is reduced and exposure upto 100 million
the country economy, IBBL maintained its leading position in is increased. Percentage of
the banking sector and could manage to achieve reasonable top 100 clients to general
outcomes in all the business areas. Fared better in terms of
investment decreased to consolidation & diversification
The total assets of the Bank amounted to Tk. 859,201.05 million 41.45% as against 45.77% in
as on December 31, 2015 registering 12.28% increase over 2014. The share was 60.28%
previous year. Equity base of the Bank has increased to stand in 2009. Percentage of SME investment to our general
at Tk. 47,199.61 million at year end 2015 against Tk.46,622.62 investment stood at 43% in the year end of 2015 against 38%
million of the previous year. However, low growth of general in 2014. The share was only 17% in 2002. Percentage of Rural
investment and non-investment income coupled with surplus investment to total investment stood at 17.47% in 2015 as
liquidity and nonperforming investment resulted in operating against 15.92% in 2014. The share was only 7.70% in 2008.
profit at Tk. 14,348 million. Profit after tax of the Bank was Tk. RDS share in total investment rose to 3.91% against 3.63% in
3,029 million during 2015 and Earnings Per Share (EPS) was 2014 with 20% growth. The share was 1.50% in 2007.
Tk. 1.88 in 2015 compared to Tk. 2.48 of the previous year.
Notwithstanding, we could consolidate our financial strength Financial Inclusion
through maintaining adequacy in capital.
Financial inclusion is inherent in IBBLs core value, ethical
policy and objectives. We are persistently trying to design
Deposit diversified products and services to facilitate welfare.
Since inception, IBBL has been working for resource Presently, our products and
mobilization through offering all types of deposit products to services include from farmers Financial inclusion is inherent
facilitate mass welfare. Deposit products of IBBL are entirely accounts, students accounts, in IBBLs core value
inclusivity driven and welfare oriented. The total deposit of industry workers account

17
Islami Bank Bangladesh Limited Annual Report 2015
Managing Directors Review

to different array of products like Hajj, Mohar and Waqf Appropriate logistics has been provided to conduct off-site
accounts. IBBL entered into the coveted 10 million (One audit to enable the Muraqibs to check violation and ensure
Crore) plus customer base last year holding 14% share in the transparency in shariah compliance. Awareness for total
countrys Banking customer base. Shariah compliance among
the entire workforce and Compliance to Shariah
On the deployment side, we have diversified schemes to meet clients have been emphasized principles has always been
specific needs of different income groups. We have taken many throughout the year. In our foundation
initiatives to reach the unbanked people and poorest segments 2015, Shariah Supervisory
in the most remote areas especially through our RDS program. Committee approved a new mode of Investment namely
IBBL contributes 50 percent of the global Islamic microcredit. Service Ijara or Ijara-al-Khidmah opening avenue for
introducing a number of new products like event management,
medical treatment and education finance.
International Trade
The foreign exchange business of the bank has been a success Information Technology
story. The bank made phenomenal growth in last 33 years in The operational procedure of Islamic bank is unique in nature
international trade operations. It gained substantial market with its in-built Shariah based modes and mechanism. As
share in Import, Export & Remittance growing up manifold the traditional software is inadequate to cater to this unique
since its inception. need, IBBL took up a challenging step of running its own IT
IBBL started foreign exchange Industry leader in import, platform by in-house developed solutions. We have been
business with Tk. 10.80 million export & remittance staying dedicated to the goal
in import, Tk. 63.70 million in of delivering excellent banking Unique IT platform to provide
export and Tk. 443.80 million in remittance. After thirty three services through continuous customer friendly solutions
years, the import, export and remittances of IBBL rose to Tk. improvements in Shariah-
343,668 million, Tk. 224,236 million and Tk. 321,066 million compliant technological platform. We have emphasized on
respectively. automation of our backend systems. We exert best efforts on
automation in order to provide prompt services to the valued
In 2015, the share of import & export rose to 11.13% & to 9.70% customers developing procedures and reducing manual
in banking industry. We stayed focused as a prime remittance operations. Upgraded IT platform, customer friendly services
earning bank of the country and further diversified remittance and digitization works have been strengthened in the year 2015.
landscape in the untapped vicinity around the globe. Our
remittance registered 4.26% growth against country growth
of 2.59% over corresponding period. 81 % of IBBL remittance Alternative Delivery Channel
comprises of less thanTk.50,000 which depicts its commitment In last three decades, IBBL had been catering to the growing
to serve low income NRBs throughout the world. consumer needs through continuous improvements in its
Alternative Delivery Services. With a view to dispensing quick
and flawless banking services to the millions of customer,
Human Capital Development IBBL introduced ATM/Visa Debit Card, Khidmah Credit
IBBl put highest importance on total Human Development Card, Hajj Card, Travel Card,
while widening the outlook of every employee and developing Remittance Card, IDM (Islami Catering to the growing
professionalism. IBBL has already brought in qualitative Bank Deposit Machine). Running needs of the consumers
changes in the training programs the entire operation with in-house
covering maximum employees Emphasizing on IT platform with state of the art technology and services, IBBL
of Bank, arranging professional professionalism & has been offering On-line banking, i-Banking, SMS Banking,
development program for capacity building phone banking and mobile banking services. Presently, IBBL
deserving groups, outside has got a network of 487 own and 6000 shared ATM booths
training at home & abroad with best results, encouraging across the country.
international standard professional degrees (CDCS, CAMS,
CISA & Diplomas), Recruiting & attracting talented young
stars and from cross disciplines at various public & private
Environment-Friendly Banking
higher institutions are the beauty of human forces of IBBL. IBBL has been emphasizing on social, ethical and
environmentally responsible approaches to business activity.
Shariah Compliance Since inception of the Bank,
IBBL has pursued the spirit of Emphasizing on
Strict adherence and compliance to Shariah principles environmentally responsible
has always been the foundation of our banking. Shariah Green Banking. In 2015, we
approaches
Secretariat has been strengthened with required manpower. spent a substantial amount in

18
Islami Bank Bangladesh Limited Annual Report 2015
 Managing Directors Review

the areas of green finance, climate risk fund, and marketing, Commercial Banks (Islamic operation) category. Central
training and capacity building related to green financing. Shariah Board for Islamic Banks of Bangladesh (CSBIB)
We are always striving to pursue industry best practices for conferred IBBL- Islami Banking Award in 2015. Bangladesh
converting IBBL into a fully green bank. Bank and SME Foundation jointly conferred the best Small
Entrepreneur Friendly Bank of the Year award in 2015. Our
bank received Financial Branding Award by Centre for Non-
R & D Activities Resident Bangladeshis for its outstanding contribution to the
In an attempt to bring excellence in Islamic Banking knowledge, Financial Branding of Bangladesh abroad in 2015.
devise Shariah compliant innovative products and services
with due focus on Maqasid-al-Shariah, IBBL established Focus for 2016
separate Research & Development Division in 2011. Being
the 1st Shariah based Bank in the region and market leader We optimize IBBL a great bank in 2021 when Bangladesh
in banking sector of the country; we felt to have a competent celebrates its Golden Jubilee of independence and then
R&D setup to infuse dynamism in in the year 2033 when IBBL reaches its 50th anniversary
growing Islamic banking sector. In Excellence in knowledge aiming to be the safest, efficient and compliant Bank. We
& product innovation cherish to make IBBL a great bank through spreading welfare
2015, Research and Development
Division conducted a number of everywhere in the light of Maqasid al-Shariah. Our main
studies on key indicators of the Bank, worked on developing focus in 2016 shall be to adopt
new products, provided support for capacity building and a strategy to build up capacity Being the safest, efficient &
development of human resources as well as contributed by strengthening total human complaint Bank
towards Islami banking literacy, networking with different development initiative, optimum
international research institutions. deployment of investable funds, ensuring better customer
service and beefing up the overall risk management system
of the bank. We shall be trying to make the bank more
Corporate Social Responsibility focused on diversification of investment by size, sector and
Committed to the core value, IBBL has always been geographical location. We shall emphasize on diversifying our
pioneering in CSR. IBBL has earned the reputation of being delivery channels and introduction of tailor made innovative
a welfare oriented bank through its dynamic CSR activities. shariah complaint products to satisfy the expectation
IBBL has already established its image as the leading Bank needs of the stakeholders. Our efforts shall continue for
in CSR through participating in various national events. enhancing brand image in remittance through quality service,
Since inception, IBBL has been exploring potential sectors for widening investment and
concentrating on value added CSR Concentrating on value foreign exchange portfolio. We shall endeavor in developing
activities particularly supporting added CSR activities entrepreneurs having adherence to shariah banking, upgrading
education, reducing poverty, IT infrastructure and offering high-tech products.
giving standard healthcare service and ensuring environment
friendly society for the greater benefit of present and future Concluding words
generations. In 2015, IBBL spent around Tk.800 million
with accumulated spending of Tk.4327 million during last We are thankful to our valued clients, business partners,
3 decades benefitting more than 13.80 million people in the patrons, well wishers from home and abroad for their
mentioned sectors. confidence and trust which has always been a great source
of our strength and inspiration. We conclude expressing our
sincere gratitude to Bangladesh Bank for
Awards and Accolades providing us with valuable guidance and Our gratitude
IBBL has been upholding the tenet of Maqasid al-Shariah continuous support. We are also grateful
in all its operations for last three decades. We work for to the Board of Directors for their unstinted support, visionary
establishing equity and justice, not for reward and recognition. role and continuous encouragement. We thank high spirited
Nevertheless, IBBL has been awarded in its historic journey Team IBBL for their dedication, unbending commitment
for keeping up with performance par excellence. IBBL was and renewed vigor that positioned IBBL as one of the best
ranked as one of the top 1000 institutions in the country and a proud member of 1000 Global
world Banks by The Banker, Brightening countrys Banks club. Let us pray to Allah to give us vision, courage and
UKs premier financial magazine Global image strength to win over challenges in the years to come.
in 2012. Our position rose to
970th in 2014 and 954th in 2015 ranking. The Institute of
Chartered Accountants of Bangladesh (ICAB) awarded IBBL
15th ICAB National Award in Private Sector Banks category
for Best Presented Annual Reports 2014. The Institute of
Cost and Management Accountants of Bangladesh (ICMAB) Mohammad Abdul Mannan
awarded the ICMAB Best Corporate AWARD-2014 in Private Managing Director & CEO

19
Islami Bank Bangladesh Limited Annual Report 2015
MILESTONES
Incorporation : 13.03.1983
Certificate of Commencement of Business : 27.03.1983
Inauguration of 1st Branch : 30.03.1983
Formal Inauguration : 12.08.1983
Formation of Shariah Council : 01.05.1983
Formation of Sadakah Tahbil as a CSR Wing : 04.07.1983
Listing in Dhaka Stock Exchange Limited : 02.07.1985
Initial Public Offer (IPO)
Subscription Opened : 30.06.1985
Subscription Closing : 14.07.1985
1st Rights Share Issue
Subscription Opened : 10.07.1989
Subscription Closed : 31.12.1989
Listing in Chittagong Stock Exchange Limited : 07.03.1996
Opening of 100th Branch : 12.06.1997
Joining/Agreement with CDBL : 29.12.2004
In-house Core Banking Software : 02.04.2005
Issuance of Mudaraba Perpetual Bond (MPB) : 25.11.2007
1st Position of IBBL in Inward Remittance since : 31.12.2007
Commencement of Brokerage House : 01.01.2008
Opening of 200th Branch : 21.06.2009
Formation of Subsidiary Companies
Islami Bank Securities Limited (IBSL) : 22.03.2010
Islami Bank Capital Management Limited (IBCML) : 01.04.2010
IBBL Exchange Singapore Pte. Ltd. : 13.07.2009
Opening of 250th Branch : 15.12.2010
Launching of Offshore Banking Unit : 04.01.2011
100% Online Banking : 07.01.2011
Exclusive Sponsor for Beautification of Dhaka City
on the Occasion of Cricket World Cup 2011 : 17.02.2011
Launching of iBanking : 16.12.2011
Agreement with Bangladesh Cricket Board (BCB) for becoming
Franchisee in Bangladesh Cricket League (BCL) : 18.10.2012
Inauguration of mCash service : 27.12.2012
Launching of Call Center : 27.12.2012
Agreement with Grameen Shakti for installation of Bio-gas Plants : 30.12.2012
IBBL has entered into the Worlds Top 1,000 Banks list since : 31.12.2012
Witnessed Tk. 500,000 Million Deposit : 14.04.2014
Launching of Shariah based Credit CardIslami Bank Khidmah Card : 27.05.2014
4000 VISA logo ATMs covering all over the country : 31.06.2014
Launching of IBBL Travel Card : 16.10.2014
Opening of 400th Own ATM Booth : 31.10.2014
Recipient of SAFA Best Presented Annual Report Awards (1st Position)
and SAARC Anniversary Awards for Corporate Governance Disclosures 2012 : 03.05.2014
Opening of 300th Branch : 09.09.2015

20
Islami Bank Bangladesh Limited Annual Report 2015
SPONSORS
Local Foreign
Mohammad Abdur Razzaque Laskar (Deceased) Islamic Development Bank, Jeddah, KSA
Mofizur Rahman (Deceased) Kuwait Finance House (KSC), Safat, Kuwait
Barrister Tamizul Haque Jordan Islamic Bank, Amman, Jordan
Mohammad Younus (Deceased)
Islamic Investment and Exchange Corporation,Doha, Qatar
Mohammad Shafiuddin Dewan (Deceased)
Bahrain Islamic Bank, Manama, Bahrain
Mohammad Bashiruddin (Deceased)
Islamic Banking System International Holding SA, Luxembourg
Mohammad Hussain (Deceased)
Nashiruddin Ahmed (Deceased) Al-Rajhi Company for Currency Exchange and Commerce,
Riyadh, KSA
Mohammad Mosharraf Hossain (Deceased) (Present name: Al-Rajhi Company for Industry & Trade)
Mohammad Malek Minar (Deceased)
Sheikh Ahmed Salah Jamjoom, KSA (Deceased)
Zakiuddin Ahmed
Sheikh Fouad Abdul Hameed Al-Khateeb KSA (Deceased)
M.A. Rasheed Chowdhury
Dubai Islamic Bank, Dubai, UAE
Engr. Mustafa Anwar
Prof. Mohammad Abdullah The Public Institution for Social Security, Safat, Kuwait
Serajuddowla (Deceased) Ministry of Awqaf & Islamic Affairs, Kuwait
(Present name: Kuwait Awqaf Public Foundation, Kuwait)
The Ibn Sina Trust
Bangladesh Islamic Centre Ministry of Justice Kuwait, Department of Minors Affairs,
Kuwait
Islamic Economics Research Bureau (Present name: The Public Authority for Minors Affairs,
Mohammad Nuruzzaman (Deceased) Kuwait)
Abul Quasem
A.K. Fazlul Haque (Deceased)
Engr. Muhammad Dawood Khan
Baitush Sharaf Foundation Ltd.

21
Islami Bank Bangladesh Limited Annual Report 2015
 CORPORATE INFORMATION
Name of the Company : Islami Bank Bangladesh Limited
Legal Status : Public Limited Company
Company Registration No. : C10589 Dated March 13, 1983
485
Bangladesh Bank License No. : BL/DA/4290/83
eTIN : 376764873732
VAT Registration No./BIN No. : 19011032134
Line of Business : Banking
Total Branch : 304
SME/Agriculture Branch : 30
Zone : 14
AD Branch : 57
Offshore banking Unit : 03
ATM Booth : Own-487, Shared-6000
Instant Deposit Machine (IDM) : 51
Employees : 13,622
Directors : 12
Sponsors : 36
Shareholders : 47,909
MPB holders : 21,601
Local Shareholders : 36.82%
Foreign Shareholders : 63.18%
Foreign Correspondents : 665
Chairman : Engr. Mustafa Anwar
Vice Chairmen : 1. Yousif Abdullah Al-Rajhi, KSA
2. Professor NRM Borhan Uddin, Ph.d
Managing Director : Mohammad Abdul Mannan
Company Secretary : Abu Reza Md. Yeahia
Head of Internal Control & Compliance : Md. Habibur Rahman Bhuiyan, FCA
Chief Financial Officer : Mohammed Shahid Ullah, CIB, CDCS, ACA
Credit Rating Agency : Credit Rating Information and Services Ltd.
Subsidiary Companies : 1. Islami Bank Securities Limited
2. Islami Bank Capital Management Limited
Statutory Auditors : 1. M/s. Syful Shamsul Alam & Co.
Chartered Accountants
2. M/s. Aziz Halim Khair Choudhury
Chartered Accountants
3. M/s. Howladar Yunus & Co.
Chartered Accountants
Tax Advisor : M/S. K.M. Hasan & Co.
Chartered Accountants
Registered Office : 40, Dilkusha C/A, Dhaka-1000, Bangladesh
Phone : PABX (88-02) 9563040, 9567161, 9567162
Mobile : 88-01711435638, 88-01711435639
FAX : 88-029564532, 9568634
SWIFT : IBBLBDDH
E-mail : [email protected]
Website : www.islamibankbd.com

22
Islami Bank Bangladesh Limited Annual Report 2015
CORPORATE STRUCTURE

23
Islami Bank Bangladesh Limited Annual Report 2015
BOARD AND ITS COMMITTEES
Board of Directors Ex-Officio Director
Mohammad Abdul Mannan
Chairman
Managing Director & CEO
Engr. Mustafa Anwar
Repr. of The Ibn Sina Trust Company Secretary
Abu Reza Md. Yeahia
Vice Chairmen
Executive Vice President
Yousif Abdullah Al-Rajhi, KSA
Professor NRM Borhan Uddin, Executive Committee
Ph.D (Independent Director) Chairman
Directors Engr. Md. Eskander Ali Khan
Engr. Md. Eskander Ali Khan Members
Repr. of Al-Rajhi Co. for Industry & Trade, KSA Md. Abul Hossain
Engr. Naser Ahmad Al Khudhar Abul Hasnat Golam Mohiuddin
Repr. of Kuwait Awqaf Public Foundation, Safat, Kuwait. Humayun Bokhteyar, FCA

Dr. Areef Suleman Audit Committee

Repr. of Islamic Development Bank, Jeddah, KSA Chairman
Md. Abul Hossain Professor NRM Borhan Uddin, Ph.D.
Repr. of Investment Corporation of Bangladesh Members
Dr. Abdulhameed Fouad Al-Khateeb Dr. Areef Suleman
Repr. of Arabsas Travel & Tourist Agency, KSA Barrister Mohammed Belayet Hossain
Abul Hasnat Golam Mohiuddin
Risk Management Committee
Repr. of Al-Rajhi Co. for Industry & Trade, K.S.A.
Chairman
Independent Directors
Humayun Bokhteyar, FCA
Professor NRM Borhan Uddin, Ph. D
Prof. Dr. A.K.M. Sadrul Islam (tenure expired on 28.12.2015) Members
Dr. Areef Suleman
Barrister Mohammed Belayet Hossain (tenure expired on 28.12.2015)
Humayun Bokhteyar, FCA Prof. Dr. A.K.M. Sadrul Islam
Barrister Mohammed Belayet Hossain

24
Islami Bank Bangladesh Limited Annual Report 2015
SHARIAH SUPERVISORY COMMITTEE
Chairman Moulana Abdus Shaheed Naseem
President
Sheikh Moulana Mohammad Qutubuddin
Bangladesh Quran Shikkha Society
Chairman
Baitush Sharaf Anjuman-E-Ittehad Bangladesh Dr. Hasan Mohd. Moinuddin

Vice Chairman Associate Professor

Deptt. of Islamic Studies
Mufti Sayed Ahmad
International Islamic University Chittagong
Head Mufti
Al Jamiatus Siddikiah Darul Ulum Professor Dr. A. S. M. Toriqul Islam
(Madrasah-e-Furfura Sharif), Darussalam, Dhaka Deptt. of Dawah & Islamic Studies
Islamic University, Kushtia
Member Secretary
Professor Dr. Abu Bakr Rafique Dr. Mohammad Abdus Samad
Pro-Vice Chancellor Associate Professor & Head
International Islamic University, Chittagong Deptt. of Arabic Language & Literature
International Islamic University Chittagong
Members
Principal Mohammad Serajul Islam Dr. Mohammad Monzur-E-Elahi
Ex-Principal Asstt. Professor
Madrasha-E-Mesbahul Ulum, Dhaka National University

Abdur Raquib Moulana Mohiuddin Rabbani

Ex-Executive President Muhaddith, Foizul Ulum Madrasa, Dhaka
Islami Bank Bangladesh Limited Principal, Darul Quran Madrasa Savar, Dhaka.
Mufti Shamsuddin (Zia)
Mufti, Muhaddis & Head of Academic Affairs
Al Jameatul Islamiah, Patia, Chittagong

25
Islami Bank Bangladesh Limited Annual Report 2015
MANAGEMENT COMMITTEE
Chairman
Mohammad Abdul Mannan
Managing Director & CEO

Members

Muhammad Abul Bashar Md. Shamsuzzaman

Deputy Managing Director Deputy Managing Director

Md. Habibur Rahman Bhuiyan, FCA Md. Shafiqur Rahman

Deputy Managing Director Executive Vice President

Md. Mahbub-ul-Alam Mohammad Ali

Deputy Managing Director Executive Vice President

Abu Reza Mohd. Yeahia

Rafi Ahmed Begh
Executive Vice President & Company Secretary
Deputy Managing Director
Mohammed Shahid Ullah, ACA, CIB, CDCS
Abdus Sadeque Bhuiyan
Executive Vice President & CFO
Deputy Managing Director

26
Islami Bank Bangladesh Limited Annual Report 2015
SENIOR EXECUTIVES
Managing Director & CEO Md. Mostafizur Rahman Siddiquee Md. Abdus Sobhan
Mohammad Abdul Mannan Md. Faizul Kabir A.K.M. Shahidul Hoque Khandaker
Deputy Managing Directors Md. Giasuddin Ahmed Md. Mahbub-a-Alam
Muhammad Abul Bashar Md. Saleh Iqbal A.K.M. Kawsar Alam
Md. Habibur Rahman Bhuiyan, FCA Md. Abdul Quddus Mir Rahmat Ullah
Md. Mahbub-ul-Alam A.H.M. Latif Uddin Chowdhury Abul Faiz Muhammad Kamaluddin
Rafi Ahmed Begh Mohammad Rokan Uddin Farid Ahmad
Abdus Sadeque Bhuiyan Md. Siddiqur Rahman Md. Manjurul Islam
Md. Shamsuzzaman K.M. Munirul Alam Al-Mamoon Md. Akhtar Hossain
Executive Vice Presidents Zafar Alam Shahid Uddin Ahmed
Md. Abdul Jabbar Mohammad Jamal Uddin Mazumder Abul Kalam Md. Saifullah
Md. Shafiqur Rahman Mohammed Shahid Ullah, ACA, CIB, CDCS Md. Mizanur Rahman Mizi
Md. Kabir Hossain Senior Vice President Sikder Md. Shehabuddin
Md. Nazrul Islam Khan Dr. Md. Mizanur Rahman Md. Rafiqul Islam
Md. Shamsul Huda Md. Shahidur Rahman Mahmudur Rahman
Md. Obaidul Haque Md. Nizamul Hoque A.K.M. Abu Siddiqui
Mohammed Monirul Moula Md. Nayer Azam A.T.M. Shahidul Haque
Asheque Ahmad Jebal Ahmed Ali Md. Anisul Haque
Dr. Mahmood Ahmed Rana Mohammad Raihan Md. Farid Uddin
Md. Mohon Miah Engr. Md. Moiz Uddin Muhammad Nurul Hoq
A. A.M. Habibur Rahman Md. Khalequzzaman Mohammad Sirajul Alam
Shafiqul Mawla Abu Sayed Md. Idris Md. Maksudur Rahman
Mohammad Amirul Islam A.K.M. Payer Ahmed Md. Shahidul Islam
Mohammad Ali Dr. Muhammad Kamaluddin (Jasim) Muhammad Golam Rabbani
Md. Kawsar-ul-Alam Md. Qaisar Ali Jamal Uddin
Abu Naser Mohammed Nazmul Bari Salim Anwar Md. Ashraf Ali
Md. Mosharraf Hossain Md. Abdus Salam A.S.M. Rezaul Karim
Md. Shahidullah Mizanur Rahman Bashir Ahamed
Taher Ahmed Md. Osman Gani Muhammad Qamrul Bari Imami
Md. Yeanur Rahman Md. Mahboob Alam A.K.M. Shafiar Rahman
Mohammod Ullah Abu Noman Md. Siddiqur Rahman Md. Shafiul Azam
Abu Reza Md. Yeahia Md. Habibur Rahman Md. Abu Sufian
Md. Altaf Hossain Md. Abdullah Md. Ruhul Amin
Md. Omar Faruk Khan Md. Aminur Rahman Md. Shamsuddoha
Md. Motiar Rahman Md. Shamsul Haque Dr. Md. Nurul Islam
Mohammad Jalal Uddin Akbar Mohammad Sayeed Ullah
Kazi Kamrul Islam Dr. Muhammad Solaiman

27
Islami Bank Bangladesh Limited Annual Report 2015
 DIRECTORS PROFILE
Engr. Mustafa Anwar is Founder Sponsor and currently the Chairman, Board of Directors of
Islami Bank Bangladesh Limited. He represents the Ibn Sina Trust as Director in the Board
of the Bank. He is also the Vice Chairman of Bangladesh Association of Banks (BAB) and
Chairman of Islamic Banks Consultative Forum (IBCF).

Engr. Mustafa Anwar is the Chairman & Managing Director of Birds Group, a large business
conglomerate in the RMG sector of Bangladesh. He was Chairman & Advisor of several
standing Committees of BGMEA.

Engr. Mustafa Anwar completed his graduation in Civil Engineering from Bangladesh University
Engr. Mustafa Anwar
Chairman
of Engineering & Technology (BUET) in early 1964 and began his career as an engineer of
Bangladesh Water Development Board (BWDB). He is engaged in various social, educational
and cultural organizations of the country.

Yousif Abdullah Al-Rajhi is a Vice Chairman of the Board of Directors of the Bank. He
completed his graduation in Business Administration majoring in Economics & Political
Science from King Saud University, KSA. in 1986. Then he obtained MA degree in
Development Administration from Western Michigan University, USA in 1991. He also
completed Internal Auditor Course, Change Management & Leadership Course and Speed
Reading and Development Round Attendance Certificate Course.

Mr. Yousif is General Manager-cum CEO of Al-Rajhi Company for Industry and Trade,
KSA with 28 years of work exposure including banking career with Al-Rajhi Banking and
Investment Corporation. He visited various eastern and western countries of the world and
Yousif Abdullah Al-Rajhi participated in many international seminars, symposia and conferences.
Vice Chairman

Professor NRM Borhan Uddin earned Ph.D. in Management from SIT, New Jersy, USA. He
also received his MBA & MS degree from the USA. At present, he is the Vice Chancellor of
City University. He has been the Independent Director of Islami Bank Bangladesh Limited
since July 24, 2010. He is the Vice Chairman of the Board and Chairman of Audit Committee
of the Bank.

Prof. NRM Borhan Uddin

Ph.D, Independent Director
and Vice Chairman

28
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Profile

Engr. Md. Eskander Ali Khan represents Al-Rajhi Company for Industry & Trade, KSA. as
Director of Islami Bank Bangladesh Ltd. He is the Chairman of the Executive Committee
of the Bank. He is a well-known business person in Real Estate & Poultry Hatchery and
Tourism Sector in Bangladesh. He completed his graduation in Electrical Engineering from
Bangladesh University of Engineering and Technology (BUET) in 1969. He was a Senior
Electric Planning Engineer in the Ministry of Electricity & Water under the Government of
UAE from 1976 to 1994. He has 47 years experience as electrical engineer and as a business
man in UAE & Bangladesh. He is also the Chairman of Islami Bank Securities Ltd.

Engr. Khan is also playing a vital role in social welfare-related works. He is related with
Engr. Md. Eskander Ali Khan
founding and development of various educational institutions. He patronized to establish Director &
many renowned private hospitals for treatment of thousands of people. He is also engaged Chairman, Executive Committee
in various social, educational and cultural organizations.

Engr. Khan visited many countries of the world and participated in many international
seminars, symposiums and conferences.

Abul Hasnat Golam Mohiuddin represents Al-Rajhi Company for Industry & Trade, KSA as
Director of Islami Bank Bangladesh Ltd. He is the member of the Executive Committee of the
Bank. He completed B.A. (Hons.) and M.A in Economics from University of Dhaka. He has 15
years of working experience in the field of Govt. Service.

Ambassador Mohiuddin served in various capacities in the Foreign Diplomatic Service of

the Government of Peoples Republic of Bangladesh (e.g. Consulate-General in Sydney,
Commissioner for Consul-General in Hong Kong, Deputy Chief of Mission Embassy of
Bangladesh Washington D.C., Representative at the World Bank & IMF, Director-Economic
Affairs at the General Secretariat of the OIC, Ambassador & Alternative Permanent Abul Hasnat Golam Mohiuddin
Representative of Bangladesh to the UN and Permanent Representative of Bangladesh to Director
the UN, New York etc) from 1977 to 1991.

Ambassador Mohiuddin is currently on the Board of Directors of Institute of Hazrat

Mohammad (SAW) and look after the International Division.

Engr. Naser Ahmad Al Khudhar represents Kuwait Awqaf Public Foundation as a Director
of Islami Bank Bangladesh Ltd. He completed his B.Sc. Engineering (Civil) from Temple
University, USA in 2002. He also received his MBA degree from Kuwait Maastricht Business
School, Kuwait. He has 23 years working experiences in the field of Ministry of Work and
Public Affairs and various Department of Waqf Project in Kuwait Awqaf Public Foundation,
Kuwait. At present, he is managing the Investment Properties Portfolio efficiently as the
Supervisor of Real Estate Department in Kuwait Awqaf Public Foundation, Kuwait.

Engr. Naser has vast experience in Applied Education & Training, Commercial Towers Project Engr. Naser Ahmad
Team Member and Traditional Mosques Project Manager. Engr. Naser is also the member of Al Khudhar
Alsonah Project Consulting Team and Kuwait Engineering Society. Director

29
Islami Bank Bangladesh Limited Annual Report 2015
Directors Profile

Dr. Areef Suleman represents Islamic Development Bank (IDB), Jeddah, KSA in the Board
of Directors of Islami Bank Bangladesh Ltd. He holds PhD in Economics and Masters in
Business Leadership. Currently he is heading Strategy Development Division at the Islamic
Development Bank in Jeddah, Kingdom of Saudi Arabia.

Prior to joining the IDB, Dr. Suleman functioned as CEO of a Government Fund to foster
innovation in South Africa. He was also responsible for jointly establishing and managing
the consulting farm of South Africas premier development finance institution wherein he
Dr. Areef Suleman
managed thier consulting services on the African continent.
Director

Md. Abul Hossain is the General Manager of Investment Corporation of Bangladesh. He

completed B.Sc. (Hons.) in Statistics (with Economics and Mathematics as minor) in 1989
and M.Sc. (Masters) in Statistics in 1990 from Jahangirnagar University, Dhaka, Bangladesh.
He has 20 years of working experience in the field of Govt. Service, Software Development
Company and Specialized Financial Institution. His publications was The causes of drug
addiction and suggestion for remedial and Causes of drug addiction and suggestions for
remedy: Evidence from a micro study, Journal of statistical studies, Volume- 12, December
1992, Jahangirnagar University, Dhaka, Bangladesh. He represents Investment Corporation
Md. Abul Hossain
Director of Bangladesh in the Board of Directors of IBBL. He also represents Investment Corporation
of Bangladesh in the Board of Directors of ICB Securities Trading Co. Ltd., Aziz Pipes Limited
as Chairman & NITOL Insurance Company Limited as well as Alltex Industries Ltd. as Director.

Dr. Abdulhameed Fouad Al-Khateeb represents Arabsas Travel & Tourist Agency, KSA
as Director of Islami Bank Bangladesh Ltd. He is a Saudi National having Ph.D in Bio
Medical Engineering and Asstt. Professor of King Abdul Aziz University, Jeddah, KSA. Dr.
Abdulhameed Fouad Al-Khateeb is the founder and CEO of Technology Management &
Implementation Experts [TIME]:, a consulting firm in Saudi Arabia specialiged in Hospital &
Health Care design, Engineering, Biomedical Engineering & Technology and quality.

Dr. Abdulhameed Fouad

Al Khateeb
Director

Humayun Bokhteyar, FCA obtained Accountancy Degree from Bangladesh and Australia. He
has long senior level financial management experience with services and manufacturing
sectors in Bangladesh and Australia. He is a Chartered Accountant having exposure over
25 years. He is also an associate member of Australian Society of Certified Practicing
Accountants and Institute of Cost and Executive Accountant (ACEA) UK.

Humayun Bokhteyar is an Independent Director of Islami Bank Bangladesh Limited since

May 2014. He is the Chairman of the Risk Management Committee of the Bank. He is the
founder and Managing Partner of Public Accounting and Auditing Firm, M/s. Bokhteyar
Humayun Bokhteyar, FCA Humayun & Co., Chartered Accountants.
Independent Director

30
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Profile

Prof. Dr. A.K.M. Sadrul Islam is an Independent Director of Islami Bank Bangladesh Limited
since December 29, 2012. He completed his M.Sc. Engineering from Bangladesh University
of Engineering & Technology (BUET) in 1984 and got his Ph.D. in Mechanical Engineering
from Imperial College of Science & Technology, University of London, UK in 1988. He was
former Head and Professor of Mechanical Engineering Department of BUET and presently
a Professor of Mechanical & Chemical Engineering Department and Head of Civil &
Environmental Engineering Department of Islamic University of Technology, a subsidiary
organ of OIC. He has also attained many Scholastic Award/Fellowship like Guest Professor
at Saga University, Japan, Visiting Professor at University Technology of Malaysia, INSPIRE Prof. Dr. A.K.M. Sadrul
Exploratory Grant, UK, British Commonwealth Visiting Research Fellow at Loughborough Islam
Independent Director
University, UK.

Dr. Islam was the Chairman of Mechanical Engineering Division of Institution of Engineers,
Bangladesh (IEB) and currently the Secretary General of Bangladesh Society of Mechanical
Engineers (BSME). He is the Member of Board of Trustees of the Ibn Sina Trust (IST) and
Director of the Ibn Sina Pharmaceutical Industry Limited (IPI).

Barrister Mohammed Belayet Hossain is an Independent Director of Islami Bank Bangladesh

Limited since December 29, 2012. After obtaining LLB (Hons) and LLM degree from the
University of Chittagong, he was called to the Bar by the Honourable Society of Lincolns Inn,
London. He is a member of the Supreme Court Bar Association, Dhaka, Bangladesh.
Barrister Hossain is a regular practitioner in the Supreme Court of Bangladesh. He is
associated with various Social and Legal Organizations.
Barrister Mohammed
Belayet Hossain
Independent Director

31
Islami Bank Bangladesh Limited Annual Report 2015
CORPORATE GOVERNANCE REPORT

IBBL Chairman receives Islami Banking Award given by Central Shariah Board

C
orporate Governance structure of IBBL specifies the Board Size
rights and responsibilities among different stakeholders
of the Bank through a set of rules, policies and practices The Board consists of 12 (twelve) non-executive members
keeping focus on proper delegation, transparency and including 04 (four) Independent Directors excluding the ex-
accountability in the organization as a whole. The structure officio Managing Director. The number of Board members is
has been developed in line with the accepted Corporate within the limit set by Bank Company Act 1991 (amended
Governance practices and guidelines of Bangladesh Bank upto 2013) and BSEC notification on Corporate Governance.
and the Bangladesh Securities and Exchange Commissions
(BSEC) notifications in this regard. The Bank has attached Selection and Appointment of New Directors
utmost importance in setting up a well-defined compliance The selection and appointment of new directors and the re-
culture throughout the organization. appointment of existing Directors are being made in line with
the following obligations and duties:
Board of Directors, Chairman and the CEO 1. Frequent assessment of the size and structure of the
Board and the mix of knowledge, skills, experiences and
Policy on Appointment of Directors perceptions that may be necessary to allow the Board to
The members of the Board of Directors of IBBL are perform its functions.
appointed pursuant to the provision of Companies Act 1994, 2. Recognizing the capabilities and following the approved
Bank Company Act 1991 (Amended up to 2013), Bangladesh procedure to ascertain that an applicant designated by the
Securities and Exchange Commission (BSEC) Notifications, shareholders possesses the same.
Guidelines of Banking Regulations and Policy Department
(BRPD) of Bangladesh Bank and Memorandum & Articles of The directors are selected by the shareholders in the Annual
Association of the Bank. Independent Directors have been General Meeting. Casual vacancy, if any, are filled up by the
appointed by the Board as per regulatory requirement. The Board in accordance with the conditions mentioned in the
Board is comprised of experienced members from diverse Companies Act and Articles of Association of the Bank.
professions like business, administration, banking & finance,
accounting, general management, teaching, Shariah Retirement and Re-election of Directors
experts, Barrister, engineers and fund managers which As per Companies Act and Articles of Association of the
make the Board very effective and balanced in deciding and Bank, each year one-third of the Directors retire from office
directing various issues of the Bank. and being eligible, may offer themselves for re-election by

32
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Finance Minister hands over ICMAB Best Corporate Award to IBBL Managing Director

shareholders at the Annual General Meeting. In line with the The Audit Committee
requirement of Bank Company Act, no Director should serve
The Audit Committee of the Bank, comprising of 4 (four)
more than 3 years without seeking re-election at Annual
General Meeting. members, has been formed in compliance with Bangladesh
Bank & BSEC guidelines. The company secretary acts as the
Directors Profile and Their Representation secretary of the Committee.
in the Board of other Companies
The Risk Management Committee
Incorporated in the Directors profile In order to formulate and implement appropriate strategies
for risk assessment, its control and management, a
Formation of Board committees Risk Management Committee, comprised of 4 (four)
The Board formed an Executive Committee, an Audit members, has been formed. The Committee monitors
Committee and a Risk Management Committee. There is risk management policies & methods and reviews the risk
no committee or sub-committee of the Board other than the management process to ensure effective prevention and
above mentioned Committees. However, it has a Shariah control measures.
Supervisory Committee to look after the Shariah matters and
gives suggestions to the management on Shariah issues. Roles and responsibilities of the Risk Management
Committee:
The Executive Committee
Identification and controlling strategies of risks
n

The Executive Committee is comprised of 4 (four) members. n Formulation of organization structure

The Executive Committee is responsible to the Board of
Directors. The duties of the Executive Committee are clearly n Reviewing and resolving risk management policy
set forth in writing. The Company Secretary acts as the n Information/documents preservation and reporting
secretary of the Committee.
n Follow-up the implementation of risk management
Roles and Responsibilities of the Executive Committee policy as a whole
The Executive Committee exercises all the powers of the Non-Executive Director
Board except those specifically given to the Board by the
Bank Company Act, 1991 (Amended upto 2013) and other All the members of the Board of Directors, except the
laws and regulations. Managing Director, are non-executive directors.

33
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Independent Directors and their Independence Directors Report to Shareholders

The Board has 04 (four) Independent Directors in conformity The Directors Report of the Bank includes all statements
with the corporate governance notification and guidelines of regarding section 1.5 of Bangladesh Securities and Exchange
regulatory authorities. The Independent Directors enjoy full Commission notification No. SEC/CMRRCD/2006-158/ 134/
independence in discharging their responsibilities and they Admin/44, dated 07 August 2012 in the directors report
are well conversant in the field of business and professional prepared under section 184 of the Companies Act, 1994 (Act
areas.The independent directors have required qualifications
No. XVIII of 1994).
and corporate management/ professional experiences as
stipulated in BSEC notification as well as Bangladesh Bank
guidelines. Independence of Non-Executive Directors

Chairman is Independent of Chief Executive Officer All the members of the Board of Directors, except the
Managing Director, are non-executive directors. They are
(CEO)
independent in expressing their views and opinions. The
The Chairman is Independent of the CEO. The Chairman of directors are also independent from management and other
the Bank is elected by the directors of the Bank and the CEO relationships of the Bank that could materially affect the
is appointed by the Board of Directors upon permission from activities of the Bank. They also adhere to the corporate
Bangladesh Bank. The Board of Directors has clearly defined governance practices and guidelines.
the roles and responsibilities of the Chairman and the CEO.
Responsibilities of the Board of Directors
Responsibilities of the Chairman
The main responsibility of the Board is to ensure good
The responsibilities of the Chairman as defined in the BRPD governance in the Bank Management. The Bank Company
Circular No.11 dated 27 October, 2013 of Bangladesh Bank is Act, 1991 (amended upto 2013) gives responsibility to the
fully complied with. The Chairman of the Board of Directors Board of Directors for establishing policies for the bank,
does not personally possess the jurisdiction to apply policy for risk management, internal controls, internal audit and
making or executive authority. He does not participate in or compliance and for ensuring their implementation. Keeping
interfere into the administrative or operational and routine in view, the Board of Directors exercises business judgment
affairs of the Bank.
in good faith, in a manner that they reasonably believe to
The Chairman conducts on-site inspection of any bank be in the best interest of the Bank, while complying with
branch or financing activities under the purview of the the applicable laws and regulations, the Banks Articles of
oversight responsibilities of the Board. If needed, he calls Association and resolutions adopted by the shareholders.
for any information relating to Banks operation or ask
for investigation into any such affairs and submits such Annual Appraisal of the Boards Performance
information or investigation report to the meeting of the
Board or the Executive Committee. With the approval of the In every Board meeting, the attendance of the Directors is
Board, he takes necessary action there against in accordance registered and they actively participate in various agenda.
with the set rules through the CEO, if deems necessary. The The performance of the Board is appraised in various ways
Chairman enjoys some specific benefits from the Bank as through submission of the performance of the bank in the
stipulated in Bangladesh Bank guidelines. Board meeting periodically, preparation and monitoring
of budget variances, placing the implementation status of
Code of Conduct for the Board of Directors the Boards decisions, transacting business issues which
are within its power and placing implementation status
The Board of Directors follows a code of conduct adopted
of Bangladesh Banks observations on various issues.
to provide guidance to directors to carry out their duties
Furthermore, the performance report of the committees
in an honest, responsible and business like manner and
framed by the Board is also placed in the Board through
within the scope of their authority, as set forth in the laws
which the performance of the Board is regularly evaluated.
of the country as well as in the Memorandum and Articles of
Association of the Bank. Annual Evaluation of the CEOs Performance by the
Every Director assures annually signing a confirmation that Board
they have gone through, have complied with and will continue
The Board of IBBL has the policy of annual evaluation of
to comply with the set of codes approved by the Board of
its Managing Director & CEOs performance. Moreover, the
Directors by BSEC, by Laws and by Bangladesh Bank.
performance of the CEO is evaluated by the Board through
various reports like performance report of the Bank, taking

34
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

A meeting of the Executive Committee

status of various assignments given by the Board to the CEO Policy on Training of Directors
and the Management, Variance analysis of Budget which
includes the Key Performance Indicators (KPIs) of the Bank As per Bangladesh Bank guidelines, the directors shall make
etc. themselves fully aware of the banking laws and other related
rules and regulations for performing their duties properly.
Responsibilities and Authorities of the CEO & The policy on training of Directors includes providing training
Managing Director and updated information on all the latest policy guidelines,
circulars and Acts issued by the regulatory/legislative
The CEO & Managing Director of the Bank discharges the authorities. Sometimes special discussion sessions are
responsibilities and exercises the authorities as follows: arranged with the experts. They also attend the programs
(a) The CEO & MD ensures compliance of the Company Act organised by various professional bodies at home and abroad
& the Bank Company Act and/or other relevant laws on technical, professional and corporate governance issues.
and regulations in discharge of routine functions of the
Bank. Directors Knowledge and Expertise in Finance and
Accounting
(b) He submits information regarding regulatory guidelines
including the Bank Company Act, while presenting One of the Director in the Board is a qualified Chartered
memos before the board or the committee formed by Accountants. He is well conversant in the field of accounting
the board. and finance to provide guidance in the matters applicable
(c) He provides all information to Bangladesh Bank on the to accounting and auditing standards to ensure reliable
violation of the Bank Company Act, and/or any other financial reporting. Other Directors are also well conversant
laws, rules and regulations. in the field of business, administration and professional
areas.
(d) The recruitment and promotion of all staffs of the
Bank except those in the two tiers below him rest upon Accountability, Audit and Financial Reporting
the CEO & MD. He acts in such cases in accordance
with the approved service rules on the basis of the The Board undertakes responsibilities for preparing and
human resources policy and sanctioned manpower presenting a balanced and comprehensive assessment
planning approved by the Board. The authority relating of the Banks operations at the end of the each financial
to transfer and disciplinary measures against the year through Annual Financial Statements and Annual
employees, except those at two tiers below the CEO & Report and quarterly and half yearly announcement of
MD is delegated to him, which he applies in accordance financial performance of the bank to the Shareholders. The
with the approved service rules. Besides, under the Audit Committee of the Board assists in this respect by
purview of the human resources policy as approved scrutinizing the information to be disclosed, and to ensure
by the Board, he nominates officers for training, skill accuracy, adequacy, transparency and completeness of the
development programe etc. disclosed information.

35
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

IBBL won ICAB National award 2014

Number of Board Meetings Attendance of CFO and Company Secretary

In 2015, 21 (twenty one) Board meetings were held. A The CFO and the Company Secretary of the Bank attend
detailed disclosure showing number of Board Meetings held meetings of the Board of Directors, excluding those, which
and status of participation of the Directors is given in the involve consideration of an agenda item relating to their
later part of the report. personal matters.

Directors Report on Compliance with Best Practice Vision, Mission and Strategy
on Corporate Governance n The Vision and Mission of the Bank are approved by the
Status of compliance of corporate governance checklist is Board of Directors. These are disclosed in the annual
included in the Directors Report, which is dully certified by report, banks website and other publications.
external auditor other than Banks Statutory Auditors. n Business Objectives are focused and the areas of
business are set out to attain vision, mission and
Appointment of CFO, Head of Internal Audit and
strategic objectives.
Company Secretary
n The Strategies to achieve the Business Objectives are
The Bank appointed a Chief Financial Officer (CFO), a Head clearly set out and disclosed in the previous section of
of Internal Audit (Internal Control and Compliance) and a this annual report.
Company Secretary (CS) as per guidelines of regulatory
authorities. The Board of Directors clearly defines the roles,
responsibilities and duties of the CFO, the Head of Internal
Audit Committee
Audit and the CS. The Board approves the objectives, strategies and overall
business plan of the Bank while the Audit Committee
Role of the Company Secretary assists the Board in fulfilling oversight responsibilities.
Company Secretary is responsible for advising the Board on The Audit Committee also assist the Board in ensuring the
issues relating to corporate compliance with the relevant financial statements reflect true affairs and ensures a good
laws, rules, procedures and regulations affecting the Board monitoring system within the business. The Audit Committee
and the Bank, as well as best practices of governance. He is responsible to the Board of Directors. The roles of the Audit
is also responsible for advising the Directors regarding their Committee are clearly set forth in writing. The Company
obligations and duties to disclose their interest in securities, Secretary acts as the Secretary of the Committee. At least
disclosure of any conflict of interest in a transaction two Independent Directors are required to form the Audit
involving the Bank, prohibition on dealing in securities and Committee and at least one Independent Director is required
restrictions on disclosure of price-sensitive information. to fulfill the quorum of the Audit Committee meeting.

36
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Appointment and Composition Review and Evaluation of Quarterly Report

Audit Committee of the Bank, comprising of 4 (four) Members, The Audit Committee reviews and evaluates the quarterly
has been formed in compliance with Bangladesh Bank & the performance including the financial reports and refers the
BSEC guidelines among which 3 (three) are Independent same to the Board.
Directors. Company Secretary acts as the Secretary of the Meeting of the Audit Committee
Committee while other members of the Management attend
The Audit Committee conducted 19 meetings during the
the Committee Meeting on invitation only.
year 2015. The attendance status of the meeting is given at
Chairman of the Audit Committee page no. 47 - 48 of this Report.

The Chairman of the Audit Committee is an Independent Non- Objectives & Activities of the Audit Committee
Executive Director and he performs his duties independently.
Review of Internal Control
Terms of Reference of the Audit Committee
n The Audit Committee regularly reviews the Internal
The Audit Committee of IBBL strictly observes the Terms Control System of the Bank.
of Reference of the Committee issued by the Bangladesh n It ensures that the Internal Control Systems are well
Bank through BRPD Circular no. 11 dated 27 October 2013 conceived by all concerned and properly administered
and BSEC. As per the terms of the said Circulars, the Audit at all levels.
Committee plays a key role in finalization of the Financial
Statements of the Bank. It also reviews the Internal Control
n The Committee monitors observance of Internal Control
System of the Bank, Internal Audit Reports, External Audit Practices at regular interval.
Reports, Bangladesh Bank Inspection Reports, Shariah n The Committee also tries to evaluate whether the internal
Inspection Reports and provides necessary Policy Guidelines audit functions have been conducted independently
as required. The Committee is empowered to investigate/ from the management.
question any employee of the Bank. It can also take External
Expert Counsel, if it deems necessary. Role of the Audit Committee in Ensuring Regulatory
Compliance
Audit Committee Comprises of Non-Executive Director The Audit Committee reviews and examines the financial
All the Members of the Audit Committee are Non-Executive statements of the Bank every year to see whether all the
disclosures & information have been incorporated in the
Directors. No executive of IBBL is eligible to become a
Financial Statements properly and whether the Bank
member of the Audit Committee.
followed International Accounting Standards (IAS) and
Expertise in Finance and Accounting International Financial Reporting Standards (IFRS) adopted
as Bangladesh Accounting Standards (BAS) and Bangladesh
All the members of the Audit Committee have adequate Financial Reporting Standards (BFRS) by the Institute of
knowledge in Accounting and Finance of them, one is a Chartered Accountants of Bangladesh, requirement of the
senior fellow member of ICAB and ICSB. One of the members Banking Companies Act, the Companies Act, the Bangladesh
is the Vice-Chancellor of a Private University having Ph.D in Securities and Exchange Rules, the Dhaka and Chittagong
Management from SIT, New Jersy, USA. Another member Stock Exchange, Listing Regulations and other Laws and
of the Committee also has Ph.D in Economics & Masters in Rules applicable in Bangladesh and Standards issued by the
Business Leadership. Another member of the Committee is Accounting and Auditing Organization for Islamic Financial
a Barrister-at-Law. Institutions (AAOIFI), Manama, Bahrain, etc.

Access of the Head of Internal Control and Review of External Audit Functions
Compliance to the Audit Committee 1. Ensure Independence of External Auditors: The
Committee tries to ensure that the External Auditors
Head of Internal Control and Compliance Wing has direct perform the Audit with due independence.
access to the Audit Committee. Head of internal audit and
2. External Auditors Appointment and Reappointment:
any other officer attends the meeting of audit committee if
Every year the Audit Committee recommends
deems necessary.
Appointment/Re-appointment of External Auditors.

37
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

3. Non-Audit Work: External Auditors are not assigned Features of Internal Control, Compliance and
with any non-audit work thus does not arise any room Monitoring System
to compromise with their independence.
Internal Control and Compliance Wing (IC&CW) of IBBL is
Selection of Appropriate Accounting Policies responsible for checking compliance of Internal Control
System. Any deviation is reported to the top Management,
The issues related to selection of appropriate Accounting
Policies in line with International Accounting Standards Audit Committee and to the Board and necessary steps are
(IAS) and International Financial Reporting Standards taken to rectify the same.
(IFRS) adopted as Bangladesh Accounting Standards (BAS)
As per Bangladesh Bank Guidelines and to strengthen the
and Bangladesh Financial Reporting Standards(BFRS) by
the Institute of Chartered Accountants of Bangladesh and Control and Compliance Mechanism, the Bank has formed
other Regulatory Guidelines were discussed in the meeting Internal Control and Compliance Wing consisting of three
of Audit Committee. The Accounting Policies are annually separate Divisions:
reviewed at the time of finalization of Financial Statements. i. Audit & Inspection Division: This Division undertakes
the audit and inspection of all operating units of the
Annual and Interim Financial Releases Bank including Head Office, based on an Audit Plan,
The Audit Committee reviews the Annual and Interim duly approved by the Audit Committee of the Bank.
Financial Statements and recommends the same to the As per guidelines of Bangladesh Bank, Internal Control
Board for approval. & Compliance Wing of IBBL prepares the quarterly
Reliability on the Management Information reports on the Audit findings and places the same to
the Audit Committee and to the Board for their perusal
The Audit Committee ensures that all the information used and guidance.
for computation of financial disclosures are reliable to the
Banks Audit Teams conduct Audit & Inspection of all
extent that Management submits reliable data.
Branches/SME /Agriculture Branches/Zonal Offices,
Review Statement of Significant Related Party Wings/Divisions/Departments of Head Office. Heads of
Transactions 14 Zonal Offices also inspect the branches on quarterly
basis. Incumbent/Heads of branches also conduct their
The Audit Committee regularly reviews the statement of Self-Audit during the period on half yearly basis.
significant related party transactions, if any, and reports to
ii. Compliance Division:The Compliance Division handles
the Board, as appropriate.
the Regulatory issues of Bangladesh Bank and other
Attendance of the Chairman as well as the Members Regulatory Bodies and submits implementation status
of the Audit Committee in AGM of Regulatory issues on quarterly basis to the Audit
Committee.
The Chairman as well as all the Members of the Audit
Committee attend at the Annual General Meeting of the Bank. The Compliance Division ensures that Bank complies
Internal Control with all Regulatory requirements while conducting its
day-to-day businesses. They maintain liaison with the
Directors Responsibility to Establish and Maintain Regulatory Bodies for any Regulatory changes and
Internal Control notify the same to all concerned. The Division works for
ensuring compliance culture in the Bank.
The Board of Directors of IBBL is responsible to establish
and maintain appropriate system of Internal Control. To iii. Monitoring Division: Monitoring Division evaluates/
ensure appropriate level of Internal Control System, a assesses/monitors the operational performance of the
good number of Standard Operating Manuals and Policy branches based on the relevant Data/Audit Reports
Guidelines have been introduced in line with global best and analyzes those to assess the risk of branches and
practices and Regulatory Guidelines. Delegation of powers submits report to the Management. They help the Audit
in various business, administrative and financial areas have and Inspection Division to formulate Risk Based Audit
also been approved by the Board. and Inspection Program for the branches.

38
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

The Monitoring Division also ensures internal check at Co., Chartered Accountants, Aziz Halim Khair Chowdhury,
the time of performing certain functional areas through Chartered Accountants and Howladar Yunus & Co.,
different tools like: DCFCL (Departmental Control Chartered Accountants to audit the Financial Statements
Functions Checklist), QOR (Quarterly Operation Report) and Nostro Accounts of the Bank for the year 2015.
and IDCL (Investment Documentation Checklist)
following Bangladesh Bank Guidelines. The Audit Statutory Auditors audited 60 Branches and Head Office as
Committee periodically reviews all the issues. part of the Annual Audit Program, which covered 80% of the
Risk-Weighted Assets of the Bank.
Review of Adequacy of Internal Control System Statutory Auditors also submitted a Management Report.
The Board of Directors time to time reviews the Internal This Report was discussed in the Meeting of the Board of
Control System of the Bank and necessary guidance are Directors and sent to Bangladesh Bank as per requirement.
provided to improve the system.
Risk Management
Control Activities and Segregation of Duties
Identification of the Risks
Control mechanism is an integral part of the daily activities
of the Bank. An effective internal control system requires Risk Management Wing (RMW) has been set up as per the
that an appropriate control structure be set up, with control guidelines of Bangladesh Bank. The Wing is responsible
activities defined at every business level which is ensured in for identification and management of risks faced by the
the Bank. The control mechanism include top-level reviews, Bank. The details of internal and external risk management
appropriate activity controls for different departments or mechanism are included in Risk Management disclosures.
divisions, physical controls, checking for compliance with
exposure limits and follow-up on non-compliance, etc. Strategies Adopted to Manage and Mitigate Risk
Inspection by Bangladesh Bank Number of steps have been taken to manage and mitigate
The Bangladesh Bank conducted the Comprehensive risks of the Bank. A detail of the same is included in Risk
Inspection of IBBL, Head Office and 23 Branches in 2015. Management disclosures.
Moreover, Bangladesh Bank Inspection Team conducted
inspection on our Head Office & 88 Branches during the year Ethics and Compliance
2015 on Foreign Trade and Foreign Currency Transactions.
Core Risk areas including others i.e. Consumer Financing, IBBL gives due importance to the moral concerns in order
Small Enterprise Financing functions were also inspected by to make the right ethical decisions in every aspect of
the Bangladesh Banks Inspection Team. operations. IBBL believes that upholding the interest of the
customers, employees and regulators is very crucial for
Internal Audit sustainable growth and development of the country.
1. Audit Committee evaluates the independence status of
internal audit from management; Enforcement of corporate code of ethics requires clear
2. It reviews the internal audit activities and organizational understanding of the same and active participation by
structure to confirm removal of all hindrances/ everyone in the bank since the code spells out the expected
limitations/deficiencies; standards of behaviour and sets the ideal operating
3. The Committee assesses the efficiency and principles to be followed. Every official is encouraged at
effectiveness of the internal audit and all times to maintain high ethical standards and adequate
4. It also assesses the consideration of management on internal control measures to guard against the occurance of
observations/recommendations given by the internal any unethical practices and irregularities.
auditors after any irregularities detected by them.
Statement of Ethics and Values
External Audit
IBBL has adopted the Core Values, Commitments and Code
In the 32nd, Annual General Meeting held on June 13, of Conduct, Ethical Principles and the likes which have been
2015, the Shareholders appointed Syful Shamsul Alam & clearly spelled out in the earlier section of the report.

39
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Communication of Statement of Ethics and actual or potential conflict of interest must be reported to
Business Practices the Management as soon as it is recognized for immediate
solution of the same.
The Code of Conduct/Ethics and Business Practices are The Company has distinctive procedures to know the
approved by the Board of Directors and is circulated for information as to whether a Director has an actual or
acknowledgement and meticulous compliance of all potential conflict of interest. Under these procedures,
employees. members of the Board are required:

Boards Statement on Ethics and Compliance

n Act in good faith and not to act contrary to the interest
of the company;
The Board of Directors of IBBL is committed to introduce n Not to use power for an improper purpose;
high level of code of conduct and ethical principles. It also n To avoid conflicts of interest;
monitors strict compliance of the same. n To retain discretion;

Effective Anti Corruption and Anti-Fraud Program Whistle Blowing Policy

IBBL arranges anti fraud and anti corruption program as per Some organic structures have been evolved to fulfil the
the guidelines of regulatory authorities to prevent to help purpose of the whistle blowing policy of IBBL aiming to
the occurance of any fraud & corruption and all tiers of the promote the transperancy as well as to serve as a channel
employees are being constantly trained on the issues. of corporate fraud risk management. The system enables an
employee, who has a legitimate concern on an existing or
Integrity potential wrong-doing, to raise the issues and bring the same
to the notice of competent authority. Central Complaint Cell
The Directors alongwith the employees of the Bank always: has been established and a vigilance team has also been
formed to protect the fraud and error. Risk Management
n Discharge their duties in good faith in order to win the Wing (RMW) also acts as the whistleblower at IBBL.
trust & confidence of the customers;
Remuneration Committee
n Value the maintenance of long-term friendly
relationships with the customers, local communities and Committee Charter
shareholders. Bangladesh Bank guidelines do not permit to form a separate
committee of Board on remuneration. As such, IBBL does
National Integrity Strategy not have such committee. However, the Board of Directors
The government has formulated National Integrity time to time reviews and evaluates the remuneration paid to
Strategy to bring about good-governance in the state, its all level of employees, directors and others.
institutions as well as in every walks of the society with a
view to establishing a happy, prosperous and corruption free Composition
country. In line with the governments decision & guidelines The remuneration is decided by the Board of Directors where
of Bangladesh Bank regarding the matter, the management
all the members are non-executive directors. The Managing
of Islami Bank Bangladesh Limited has formed an ethical
committee, fixed focal point and drawn an exhaustive Director, Deputy Managing Directors, Head of Human
action plan to develop the efficiency & ethical standard of Resources, CFO and other related officials work on the issue
manpower, ensure effective compliance of existing laws, as per guidance of the Board.
strengthen e-governance, review the reward & recognition
policy for good performers, launch extensive awareness Policies on Remuneration
program among the stakeholders toward materializing the
vision of this initiative. Key policies decide the remuneration of directors, senior
management and employees include market trend, inflation,
Conflict of Interest job requirement, position in other banks in the same area
The Bank does not condone any form of conflict of interest etc. The detailed remuneration policy of the Bank is also
be it personal, financial or familial interest that can in any described in Market Disclosure of Basel-III.
way keep the individual refrain from acting in the best
interests of the company or may compromise the interest
Meetings on Remuneration Issues
of the same, its shareholders as well as the clients. All the Several meetings of the executives and related Board
employees are required to refrain from any activity, which meetings were held to finalize some benefits paid to the
may result in any conflict or potential conflict of interest. Any employees during the year 2015.

40
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Executive Development Program

Remuneration of Directors, Chairman, Managing a value driven organization, IBBL considers its employees
Director and Senior Executives as the most precious capital of the organization that play
the vital role in materializing the mission, vision, goals and
Honorarium paid to the Directors and others for attending objectives of the bank.
meetings are as follows:
Human Resources Development
Board Meeting Tk.8,000.00 Development and management of human resources is
vital to ensure sustainable growth and development of an
Shariah Supervisory Committee Meeting Tk. 5,000.00
organization. This approach is a framework for helping the
Executive Committee / Other Committee MeetingTk.8,000.00 employees to develop their personal and organizational
knowledge, skills and abilities by means of extensive
As per the directive of Bangladesh Bank, IBBL has provided improvement process covering systematic training,
only the following facilities to the Directors: motivation, coaching, counseling, mentoring and the likes.

n The Chairman of the Board of Directors is provided with Succession Planning

an office and a car.
Efficient succession planning is an integral part of efficient
n Managing Director is paid salaries and allowances as employee management and IBBL possesses a sound
per approval of the Board and Bangladesh Bank which is succession plan to carefully avoid the problems of leadership
separately disclosed in the Financial Statements. vacuum under any circumstances.
n The senior management is remunerated as per standard
pay structure of the bank being approved by the Board of
Merit Based Hiring
Directors. Hiring of committed, dedicated and meritorious human
resources is the integral part to run the organization smoothly
The bank has fully complied with Bangladesh Bank and efficiently. IBBL generally recruits heterogeneous work
circular and instruction in this regard. forces having diversified academic background and make
the same homogeneous through extensive development
Human Capital process. The recruitment policy has duly been approved by
the Board, which is being followed meticulously to ensure
Human Capital is the set of skills which an employee acquires recruitment & placement of right person for right position.
on the job, through training and experience, and which In order to make the organization more vibrant & effective,
increase that employees value in the marketplace. Being additional 246 employees have been recruited so far in 2015.

41
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Performance Appraisal System for the year and know what kind of contribution is expected
of them as individuals in order to achieve these.
IBBL follows a well-structured performance appraisal system
(commonly known as ACR) for evaluating the performance Grievance Management and Counseling
of the employees. Introduction of a daily basis job-based All the employees reserve the right to lodge any complaint
Automated Performance Evaluation (APE) process is under both internally and externally and the Human Resources
trial operation. Division ensures full confidentiality of the same. The
complaints so lodged are handled by the Vigilance Squad
Promotion, Reward & Motivation of the Bank with professional approach. In addition, a 24-
IBBL follows structured human resources policy in awarding hour hotline number is available to lodge any irregularities at
promotion, reward and recognition to its employees. In any time, which are accordingly redirected to the respective
2015, IBBL awarded promotion to the eligible employees department for necessary action.
keeping in view the quality of their respective job delivery
Banks Contribution towards the Staff
and performance.
IBBL is pledge bound to treat all the employees with dignity
Training and Development and respect. The bank strives to maintain a comfortable
The training is not for the trainings sake rather it is imparted working environment, irrespective of individual differences.
with the objective to ensure balanced improvement of its A high quality and competent human resource is essential to
employees professional knowledge & skill, tempered by ensure sustainable growth and development of any business
elevated ethical spirit and enthusiasm. IBBL always strives for entity, which can only be achieved by means of improving the
excellence in improving the ethical and professional standard skill, knowledge and productivity of the employees. The bank
of its employees. IBBL provides training to its employees leaves no stone unturned in developing its human resources
throughout the year in its own training institute as well as in
in all respects to materialize the cherished goals & objectives.
various training providing institutes at home and abroad.
Healthcare, Safety Standards and Modern
Career and Development
Working Environment
The people of IBBL are the part of a culture of integrity and IBBL is the pioneer of welfare banking in the country which
leadership, in which they always play an active role. They constantly endeavors to do something for the prosperity
form a community wherein people are potential and talents and well-being of the citizens as well as of its employees.
are cultivated with the aim of establishing lifelong careers. A good number of welfare programs aiming to employee-
The potential and talented employees are trained and welfare, healthcare, safety standards & working environment
fostered, with the goal to develop future leaders. covering the followings are there in IBBL:
Leadership is certainly among the strongest elements
fostered by IBBL seeking to demonstrate leadership both in Fringe Benefit Schemes
the industry as well as in the society where it operates. In n Non-refundable financial assistance from Employees
order to sustain this element of leadership, strong emphasis Benevolent Fund
is placed on developing the employees through inhouse n Non-refundable financial grant from banks fund
training programmes as well as by supporting educational n Staff House Building investment facilities
opportunities outside IBBL. n Staff Household Durables Scheme
As a forward-looking enterprise, IBBL strives to continusly n Quard against Provident Fund
stimulate its employees to uphold the state of the art
technology in their respective fields. In order to inspire trust
n Quard against Benevolent Fund
and create added customer value, great emphasis is placed n Leave encashment
on maintaining employees knowledge and skills through n Burial expenses
training, development and informative feedback. As in
previous years, IBBL placed great emphasis on the training n Recreation program
of its managers for developing of their leadership qualities. n Honorarium for passing Banking Diploma examination
Moreover, the annual meeting with the employees plays a n Awarding of scholarships to help educate the
vital role in making sure that the strategy and objectives
meritorious wards of the employees
for each year are clearly communicated and executed. It
is significantly important that those who drive companys n Awarding of cash prize and certificate of merit to the
success are fully informed of its vision, strategy, and focus meritorious wards of bank employees

42
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

n Awarding of prize against essay competition Human Resources Accounting

n House rent allowance
Human resource accounting is the process of identifying
n Conveyance allowance and measuring the data about human resources and
n Medical allowance to each employee communicating the information to the interested parties.
Human Resource Division is also involved in Human
Doctors service for the employees
resources accounting to transform the employees into
n

n Car Investment Scheme the human assets or human capital that provide
n Car maintenance allowance future benefits. Towards implementing human resource
accounting standard, IBBL adopts transparent disclosure
n House maintenance allowance practices regarding its human resources.
n Mobile phone allowance
Total Workforce by Age Distribution
n Utilities allowances
n In order to provide highly sophisticated and encouraging 78% of manpower are aged below 40 years which signifies
working environment, all the IBBL offices including head that IBBL is in young, energetic and competent hands.
office and branches are equipped with modern facilities Age Group Female Male Total
with air-conditioning and generator for power back up.
Below 30 249 1,764 2,013
n All IBBL offices including head office and branches are
30-40 299 7,991 8,290
equipped with fire fighting material and have multiple
exit points for emergency exit. 41-50 20 2,325 2,345
Above 50 - 596 596
IBBL- A Family Total 568 12,676 13,244

The Bank consolidated the One-Bank One-Family concept Training Programs

since its inception and sought to create a working culture
Sl. Particulars No. of Persons
that sufficiently motivates the staff. The banks goal is to No. Programs
make it the best place to work in by creating a congenial, 1 IBTRA 199 8,636
healthy, caring and productive environment for all levels 2 BIBM 140 468
of staff. Feedback has been obtained from the line 3 BBTA 48 84
managers with a view to enhancing the work environment 4 Overseas / Foreign Training 22 70
and to providing prompt and appropriate welfare services. 5 Wing/Division other than IBTRA 10 649
Management always try to care the family members of its 6 Other Institute 60 177
employees through various socio cultural activities. Total 479 10,084

Human Resource Strength Integrated Reporting

Category 2015 2014 Sl. No. Particulars 2015 2014

1 Total Employee 13,622 13,574
Executive 447 436
2 Number of employee received training 10,084 8821
Officer 8,229 8,160 3 Total number of training 479 436
Sub-Staff 2,074 2,078 4 Average training per employee 0.74 .65
Sub total 10,750 10,674 5 Number of fresh graduates recruited 50 272
as Probationary Officer
Rural Development Scheme (RDS) 2,494 2,532 6. Number of fresh graduates recruited 134 370
Others (Temporary) 378 368 as Assistant Officer
Total Manpower 13,622 13,574 7. Number of fresh graduates recruited - 151
as Field Officer, RDS
Total Branch 304 294
8. Number of fresh recruited as - 35
Per Branch Employee (including RDS & 45 46 Messenger-cum-Guard Grade-II
others) 9. Number of fresh recruited as Security 28 35
Per Branch Employee 35 36 Guard Grade-II
(Excluding RDS & others) 10. Number of fresh recruited as - 4
Electrician Grade-II

43
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Internship program for students of different Universities

Employee Productivity Communication to Shareholders & Stakeholders

(In million Taka)
Policy on Communication with Shareholders and
Sl. No. Particulars 2015 2014
Stakeholders
1 Total deposit per employee 70.93 64.69 IBBL follows specific policy to facilitate effective
2 Total investment per employee 72.57 63.69 communication with the shareholders and stakeholders.
The Bank maintains communication with the Shareholders,
3 Total income per employee 6.52 6.91
Bondholders and other related stakeholders. Shareholders
4 Total expenses per employee 4.86 4.99 and others may contact at any time for any sort of
5 Profit before provision per employee 1.65 1.92 information and query. IBBL provides updated information in
its website for all the stakeholders of the Bank.
6 Profit before taxes per employee 1.02 1.16
7 Salary and allowances per employee 1.02 0.76 Policy on Ensuring Participation of Shareholders at AGM
The figures are for mainstream only In order to make the AGM more participatory, IBBL declares
the date of AGM well ahead of time, circulate Annual Reports
Corporate Structure and other documents in time, arrange AGM in a well-known
place & convenient time. Shareholders are allowed to speak
Corporate Structure of IBBL is shown at page no. 23 in the AGM freely to give their valuable suggestions.
Global Reporting Initiative (GRI)
Environmental and Social Obligations
The Global Reporting Initiative (GRI) is a non-profit
organization that promotes economic, environmental Policies and Practices on Social and Environmental
Responsibility
and social sustainability. GRI provides all companies and
organizations with a comprehensive sustainability-reporting The issue of climatic change is being addressed seriously
all over the world. It is identified that Bangladesh being a
framework that is widely used around the world. In line
southern delta, is under serious threat of natural disaster.
with the above, Islami Bank Bangladesh Ltd. has started
A detailed discussion regarding environment and social
to incorporate the components of standard disclosures
obligation of IBBL is included in the Corporate Social
in annual report in the broad areas of Profile Disclosure, Responsibilities Report.
Management Approach, Performance Indicators and Labor
Practices as stipulated in the Content Index of Financial Specific Policies undertaken by the Bank
Service Sector Supplement. Although IBBL is yet to initiate IBBL, being a responsible corporation, has taken some
the formal disclosure, it complies with most of the disclosure initiatives in this regard, which has been presented in Green
requirements as stated in the Index. Banking & CSR sections of this Report.

44
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Contribution to Environment and Society Management Committee is the main body of Management
and decision making in the Bank. Besides, there are
A natural and clean environment, economical use of
ALCO and Risk Management Coordination Committee for
resources and respect for peoples health and safety etc. are
designated functions and responsibilities. Above all, the
getting increasingly important. In accordance with this, IBBL
is continuously working towards reducing consumption rules, regulations, guidelines, directions and policies as
of energy, elimination of use of hazardous substances applicable for the Banking business and operations govern
from its processes and minimizing waste generation. The the Bank.
emphasis is on minimizing paper transactions to the extent
possible. One of the key targets for financing manufacturing Management Committee
companies is to reduce their carbon footprint. Management Committee, the apex management body of the
The focus is on developing environmental portfolio. IBBL is Bank, is comprised of 15 (fifteen) top-level executives having
financing as demonstrated its responsibility as a socially long experiences and sound knowledge in Islamic banking.
responsible corporate. IBBL is committed to doing better for The Committee is headed by the Managing Director & CEO
its clients, investors, employees and communities through a of the Bank. The Committee exerts financial, administrative
focused approach to corporate responsibility. and business discretionary powers delegated by the Board
and is responsible for implementation of the policies
Investors Friendly Information and guidelines approved by the Board. The Management
IBBLs share is a very reliable choice to the investors due Committee scrutinizes the issues thoroughly before placing
to its strong fundamentals in the area of capital adequacy, those to the Executive Committee, Audit Committee, Risk
profitability, liquidity and market leadership driven by Management Committee and the Board. The Management
an experienced top Management and dedicated human Committee critically evaluates the performance of the Bank
resource base. Besides, the return on IBBLs share is and adopts strategic action plan to achieve various targets
excellent. IBBL ranked 70th position among the top 1000
set by the Board of Directors.
banks around the globe in terms of profit on capital.

The Bank has also reputation for Shariah based banking Delegation of Power
management. There is very little fluctuation in the Islami Management Committee of the Bank has been empowered
Banks share price and no rumor is observed in the Islami with appropriate administrative, financial and business
Banks share. Therefore, Investors rely greatly on this share. decision-making authorities whereas the Board of Directors
Goldman Sachs, the leading wealth management institution of and its committees are entrusted with formulation of
the world, has chosen share of IBBL in their portfolio GSN-11 standard policies and procedures. Besides, various Manuals,
as the best share in Bangladesh. Therefore, the company has policies and guidelines are approved by the Board from time
invested a good amount of their investible fund in IBBL share. to time with defined delegation of authority.

In addition, the leading wealth management institutions of Asset-Liability Committee (ALCO)

the world have chosen the share of IBBL in their portfolio. 31
The Asset & Liability Committee (ALCO) is constituted with
Foreign Companies have purchased significant shares of the
the senior management of the bank and headed by the
Bank. Among them, JP Morgan Chase Bank of Luxembourg Managing Director & CEO. The Committee meets at least
has already purchased more than 4% shares of total Paid-up once in a month to review economic, market status, outlook
Capital of the Bank solely. and liquidity position of the bank. ALCO also assesses
pricing of assets and liabilities, maturity wise grouping of
Management Review & Responsibility assets and liabilities, Liquidity Contingency Funding Plan in
Managing Director acts as the Chief Executive Officer order to manage the Balance Sheet Risk in a prudent way,
(CEO) of the Bank. Bank has approved Organizational Transfer Pricing, Liquidity Coverage Ratio (LCR), Net Stable
Funding Ratio (NSFR) etc.
Structure (Organogram) with clear functional separation
and segregation of processing/functioning (Front and Back Supervisory Review Process (SRP) Team
office) authorities. This ensures core risk management
practice and compliance across the Bank. Banks functions As per the revised process document of Bangladesh Bank
and plans also consider various regulatory limits and for SRP-SREP Dialogue on ICAAP under 2nd Pillar of
Basel - III, the Bank has reconstituted the SRP Team with
restrictions to be risk compliant. 10 (ten) members headed by the Managing Director. The

45
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Team works under a specific Terms of Reference (ToR) Company, the Bank has complied with all the instructions
being approved by the Board. The Team is responsible for including formation of Board of Directors, Independent
preparation of ICAAP document assessing all the risks and director, information regarding directors, responsibilities of
capital charge thereagainst before placing the same to the the Board of Directors, formation of committees from the
Risk Management Committee and Board for approval and Board of Directors and training of the Directors. The Bank
onward submission to Bangladesh Bank. The team also is also compliant with the BRPD Circular Letter No.18 dated
formulates strategies for mitigating the risks. October 27, 2013.

Meeting of Shariah Supervisory Committee Directors Responsibility in Respect of Audited

Financial Statements
In the year 2015, 12 (twelve) meetings of Shari`ah
Supervisory Committee and 8 (eight) meetings of Shari`ah The Board of Directors ensures that financial statements
Sub-Committee were held. Members of Shari`ah Supervisory give a true and fair view of the Banks state of affairs, results,
Committee attended 10 (ten) seminars as discussant on changes in equity and cash flows of 2015. In preparing the
the occasion of opening new Branches and participated in
financial statements, the Bank uses appropriate accounting
Business Development Meetings arranged by several Zones
policies, supported by reasonable as well as prudent
and Head Office and 24 Shari`ah Awareness Programs
judgments and estimates to ensure that all applicable
arranged by the Head Office and different Zones.
accounting standards have been followed at the time of
Shariah Inspection preparing the financial statements.

As part of major responsibilities of the Committee, it also Relationship of Board of Directors with the Auditors
conducted Shari`ah inspections in 294 branches through
Muraqibs during 2015 to ensure that the Shari`ah principles The Board has established transparent and appropriate
are implemented and complied with, or, on the contrary, to relationships with its external auditors through the Audit
detect if there is any deviation or lapse that has taken place Committee. The external auditors have an obligation to
in the branches of the bank. bring any significant lapses/irregularities in the banks
system of internal control and compliance to the attention
Regulatory Compliance
of Management, Audit Committee and the Board.
Bank has meticulously been following related guidelines
including submission of Quarterly, Half-yearly and Yearly Relationship of Directors with the Shareholders and
financial statements and other statutory reports. Any significant Investors
development in the business is forth-with disclosed in the form
The Board recognizes the importance of timely and proper
of price sensitive declarations adhering proper rules/guidelines/
dissemination of information with regard to the Banks
directives. Bank also ensures submission of returns to regulatory
performance and other issues affecting the interests of the
bodies in full compliance of the requirements and appropriate
shareholders, investors and the general public. One of the
disclosures ensuring transparency and accountability. Board of
Directors ensures adequate disclosures for the shareholders most important means of communication to the Shareholders
and the other stakeholders. is the Annual Report, which contains comprehensive and
sufficient details about the financial results, performance
Compliance Status of Bangladesh Bank Circulars and other important activities of the Bank.
The Bank has fully complied with Bangladesh Bank circulars,
Credit Rating of the Bank
instructions and guidelines regarding Corporate Governance.
The Bank is governed by the Bangladesh Banks rules and IBBL is continuously maintaining the highest credit rating
regulation on various issues of banking operation. As per among the private sector banks of the country. The description
BRPD Circular Letter No.11 dated October 27, 2013 regarding of latest credit rating of the bank is delineated below:
Formation & Responsibilities of Board of Directors of a Bank

46
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Rating Company Particulars Long-term Short-term Rating Base

Credit Rating Information Surveillance Rating AA+ ST-1 Audited Financial Statements upto 31 December
and Services Limited (High Safety)* (Highest Grade)** 2014 and other prevailing factors upto date of
(CRISL) Rating. The Rating is valid up to June 20, 2016 for
long term
* Bank rated in this category is adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicates
a corporate entity with a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time
because of economic conditions
** Highest certainty of timely payment. Short-term liquidity including internal fund generation is very strong and access to alternative sources
of funds is outstanding. Safety is almost risk free like Government short-term obligations
Date of Declaration of Rating: June 21, 2015
Outlook: Stable (The bank will be able to maintain its good fundamentals in future. CRISL does not foresee any volatility in the operation
of the bank within the rating validity period)

IBBL obtained the AA+ rating in consideration of the following good fundamentals such as:
yy Good capital adequacy
yy Sound liquidity
yy Considerable improvement in non-funded business
yy Strong market position
yy Good corporate governance
yy Experienced top management
yy Wide operational network

Directors Attendance in the Board, Executive Committee, Audit Committee and Risk
Management Committee Meeting
(During the year 2014)
Name of the Directors Position Board Executive Committee Audit Committee Risk Management
Sl. Committee
No Eligible Attended Eligible Attended Eligible Attended Eligible Attended
to Attend to Attend to Attend to Attend
Jb. Abu Nasser Muhammad Abduz Chairman 7 0
1
Zaher
2 Engr. Mustafa Anwar Chairman 14 14
Vice
3 Jb. Yousif Abdullah Al-Rajhi 21 2
Chairman
Vice
4 Engr. Mustafa Anwar 7 7 7 7
Chairman
5 Jb. Abdullah Abdul Aziz Al-Rajhi Director 7 -

6 Dr. Areef Suleman Director 21 10 19 6

Jb. Mohammad Abdullah Al Director
7 7 3 20 -
Jalahma
8 Jb. Salahuddin Ahmed Director 7 1 7 1
9 Dr. Abdulhameed Fouad Al-Khateeb Director 21 8 25 -
10 Engr. Md. Eskander Ali Khan Director 21 21 55 55
11 Engr. Naser Ahmed Al-Khudar Director 14 6

47
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Name of the Directors Position Board Executive Committee Audit Committee Risk Management
Sl. Committee
No Eligible Attended Eligible Attended Eligible Attended Eligible Attended
to Attend to Attend to Attend to Attend
12 A.H.G., Mohiuddin Director 14 8 31 14
13 Jb. Md. Abul Hossain Director 21 19 55 52
Independent
14 Jb. Md. Abdus Salam, FCA, FCS 15 14 18 16 4 4
Director
Independent
15 Jb. Humayun Bokhteyar, ACPA, FCA 21 20 55 54 2 2
Director
Independent
16 Professor NRM Borhan Uddin Ph.D 21 18 19 18
Director
Independent
17 Prof. Dr. A.K.M. Sadrul Islam 21 17 14 12
Director
Barrister Mohammed Belayet Independent
18 21 21 19 18 14 13
Hossain Director

Statement of Shares held by Directors & their Spouses and Minor Children
(As on 31.12.2015)
Sl. Percentage of total Paid-
Name of the Director Status No. of Shares
No up Capital of IBBL
1 2 3 4 5
The Ibn Sina Trust Chairman 36,077,391 2.2408%
01. Repr. by Engr. Mustafa Anwar
Engr. Mustafa Anwar Self 422,6332 0.2625%
Yousif Abdullah Al-Rajhi, K.S.A. Vice-Chairman
S/O- Abdullah Abdul Aziz Al-Rajhi who is holding of 122,106,875 7.5843%
02. 7.58% shares of the total Paid-up Capital of the Bank.
Yousif Abdullah Al-Rajhi, , K.S.A. Self 99,935 0.0062%
Al-Rajhi Co. for Industry & Trade, K.S.A. Director
Repr. by Engr. Md. Eskander Ali Khan
159,981,628 9.9368%
03. Al-Rajhi Co. for Industry & Trade, K.S.A.
& Director
Repr. by Abul Hasnat Golam Mohiuddin
04.
Engr. Md. Eskander Ali Khan Self 1,235,534 0.0767%
Shahanara Begum & Engr. Md. Eskander Ali Khan Joint Account 33,880 0.0021%
Kuwait Awaqaf Public Foundation, Kuwait Director 69,348,836 4.3074%
05.
Repr. by Engr. Nasser Ahmad Al Khudhar
Islamic Development Bank, K.S.A. Director 120,788,585 7.5024%
05.
Repr. by Dr. Areef Suleman
07. Investment Corporation of Bangladesh Director 40,422,217 2.5107%
Repr. by Md. Abul Hossain
Arabsas Travel & Tourist Agency, K.S.A. Director 160,996,668 9.9999%
Repr. by Dr. Abdulhameed Fouad Al-Khateeb
Dr. Abdulhameed Fouad Al-Khateeb Self 9,194,231 0.5711%
08. Linah Mahmoud H. Naseef Wife of Dr. Abdulhameed 4,253 0.0003%
Fouad Al-Khateeb
Mrs. Mona Barakeh Wife of Dr. Abdulhameed 3,400 0.0002%
Fouad Al-Khateeb
09. Humayun Bokhteyar, FCA Independent Director 0 0.0000%

48
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Sl. Percentage of total Paid-

Name of the Director Status No. of Shares
No up Capital of IBBL
1 2 3 4 5
Professor NRM Borhan Uddin, Ph.D Independent Director & Vice 0 0.0000%
10.
Chairman
11. Prof. Dr. A.K.M. Sadrul Islam Independent Director 0 0.0000%
12. Barrister Mohammed Belayet Hossain Independent Director 0 0.0000%
Mohammad Abdul Mannan Managing Director & CEO 334,783 0.0208%
13. Mrs. Maksuda Begum Wife of Mohammad Abdul 81,951 0.0051%
Mannan

Statement of Shares held by CEO, Company Secretary, CFO, Head of Internal Audit and
their Spouses and Minor Children (as on 31.12.2015)

Sl. Name Status No. of Percentage of total Paid-

No. Shares up Capital of IBBL

01. Mohammad Abdul Mannan Managing Director & Chief Executive Officer (CEO) 334,783 0.0208%

Mrs. Maksuda Begum W/O. Mohammad Abdul Mannan, 81,951 0.0051%

Managing Director & CEO

02. Abu Reza Md. Yeahia Executive Vice President & Company Secretary 603 0.0000%

Mrs. Shahinoor Akther W/O. Abu Reza Md. Yeahia, Executive Vice 0 0.0000%
President & Company Secretary

03. Md. Habibur Rahman Bhuiyan, FCA Deputy Managing Director & Head of Internal 70 0.0000%
Control & Compliance Wing (ICCW)

Mrs. Tahmina Rahman W/O. Md. Habibur Rahman Bhuiyan, 58 0.0000%

Deputy Managing Director & Head of ICCW

04. Mohammed Shahid Ullah, ACA, CIB, Executive Vice President & 3960 0.0000%
CDCS Chief Financial Officer (CFO)

Mrs. Farida Yesmin Chowdhury W/O. Mohammed Shahid Ullah, ACA, CIB, CDCS 0 0.0000%
Executive Vice President & CFO

Statement of Shares held by 5 (five) Salaried Employees other than the Directors, CEO,
Company Secretary, CFO, Head of Internal Audit (ICCW) (as on 31.12.2015)

Sl. Name Designation No. of Shares Percentage of total Paid-up

No. Capital of IBBL

01 Md. Mahbub-ul-Alam Deputy Managing Director, IW 2,363 0.0001%

02 Rafi Ahmed Begh Deputy Managing Director, RIW 0 0.0000%

03 Abdus Sadeque Bhuiyan Deputy Managing Director, IBW 18,250 0.0011%

04 Md. Shamsuzzaman Deputy Managing Director, ICTW 55,485 0.0034%

05 Md. Shamsul Huda Executive Vice President, Shariah Secretariat 2,048 0.0001%

49
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

19 April, 2016

Board of Directors
Islami Bank Bangladesh Bank
Islami Bank Tower
40, Dilkusha C/A
Dhaka-1000

Subject : CEO and CFOs Declaration to the Board

In accordance with the notification of Bangladesh Securities and Exchange Commission No. SEC/
CMRRCD/2006-158/134/Admin/44 dated 07 August 2012, we declare that for the financial year ended on 31st
December, 2015:

i) We have reviewed the financial statements for the year and that to the best of our Knowledge and belief;

a) These statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;

b) These statements together present a true and fair view of the companys affairs and are in compliance
with existing accounting standards and applicable laws;

ii) There are, to the best of our knowledge and belief, no transactions entered into by the Bank during the year
which are fraudulent, illegal or violating the Banks code of conduct.

Mohammad Abdul Mannan Mohammed Shahid Ullah, ACA, CIB, CDCS
Managing Director & CEO Chief Financial Officer

50
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

A member firm of
mgi KHAN WAHAB SHAFIQUE RAHMAN & CO.
BUSINESS SOLUTIONS CHARTERED ACCOUNTANTS Rupali Bima Bhaban (5th Floor),
WORDL WIDE
Partners: 7, Rajuk Avenue,
S.M. Shafique FCA Motijheel, Dhaka-1000
Mujibur Rahman FCA Tel : 9565136, 9551663,
Md. Abu Sina FCA Fax : 880-02-9551821
E-mail : [email protected]
Md. Anisur Rahman FCA Web : www.kwsrbd.com

Certificate on Compliance of Conditions of Corporate Governance

To the Shareholders of Islami Bank Bangladesh Limited

We have examined the status of compliance of condition of Corporate Governance issued by the Bangladesh Securities and
Exchange Commission (BSEC) vide its notification no. SEC/CMRRCD/2006-158/134/Admin/44 dated 7 August 2012 in regard to
Islami Bank Bangladesh Ltd. (the Bank) for the year ended December 31, 2015.

The compliance with the said of conditions of Corporate Governance and reporting the status thereof is the responsibility of the
management of the Bank. Our responsibility is to provide a certificate about whether the Bank is in compliance with the said
conditions of Corporate Governance based on our examination.

Our examination has been made for the purpose of issuing this certificate was limited to the procedures including implementation
thereof as adopted by the Bank for ensuring the compliance of the conditions of Corporate Governance and correct reporting of
the status of the compliance on the attached statement on the basis of evidence gathered and representation received. It is neither
an audit nor an expression of opinion on the financial statements of the Bank.

To the best of our information and according to the explanations given to us, we certify that Islami Bank Bangladesh Limited has
complied with the conditions of Corporate Governance stipulated in the above-mentioned BSECs notification dated 7 August 2012.

Dhaka, Dated Md. Anisur Rahman FCA

April 17, 2016 Partner
ICAB Enrollment No. 350
Khan Wahab Shafique Rahman & Co.

Chartered Accountants

51
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Report on Compliance of BSECs Notifiction for Corporate Governance

(Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012)
Compliance status
Condition
Title Complied Not Remarks
No.
Complied
1 2 3 4 5
1 Board of Directors
1.1 Boards size: Board members shall not be less than 5 (five) and more than 20 (twenty)
1.2 Independent Director
1.2(i) At least one-fifth (1/5) of the total number of directors in the companys board shall be
independent directors.
1.2(ii) For the purpose of this clause independent director means a director:
1.2(ii)a) Independent Directors do not hold any share or holds less than one percent (1%) shares
of the total paid-up capital.
1.2(ii)b) Independent Directors are not connected with the companys Sponsor or Director or
shareholder who holds one percent (1%) or more shares.
1.2(ii)c) Independent Directors do not have any other relationship, whether pecuniary or otherwise,
with the company or its subsidiary/associated companies;
1.2(ii)d) Independent Directors are not a member, director or officer of any stock exchange;
1.2(ii)e) Independent Directors are not a Shareholder, Directors or Officers of any member of stock
exchange or an intermediary of the capital market;
1.2(ii)f) Independent Directors are not the partners or executives during the preceding 3 (three)
years of the concerned companys statutory audit firm;
1.2(ii)g They are not the Independent Directors in more than 3 (three) listed companies;
1.2(ii)h They are not been convicted by a court of competent jurisdiction as a defaulter in payment
of any loan to a bank or a Non-Bank Financial Institution (NBFI);
1.2(ii)i) They have not been convicted for a criminal offence involving moral turpitude.
1.2(iii) The independent director(s) shall be appointed by the board of directors and approved by
the shareholders in the Annual General Meeting (AGM).
1.2(iv) The post of independent director(s) cannot remain vacant for more than 90 (ninety) days.
1.2(v) The Board shall lay down a code of conduct of all Board members and annual compliance
of the code to be recorded.
1.2(vi) The tenure of office of an independent director shall be for a period of 3 (three) years,
which may be extended for 1 (one) term only.
1.3 Qualification of Independent Director (ID)
1.3(i) Independent Director shall be knowledgeable individual with integrity
1.3(ii) The Independent Director must have at least 12 (twelve) years of corporate management/
professional experiences.
1.3(iii) In special cases, the above qualifications may be relaxed subject to prior approval of the
N/A
Commission.
1.4 Separate Chairman and CEO and their clearly defined roles and responsibilities.
1.5 Directors Report to Shareholders
1.5(i) Industry outlook and possible future developments in the industry.
1.5(ii) Segment-wise or product-wise performance.

52
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Compliance status
Condition
Title Complied Not Remarks
No.
Complied
1 2 3 4 5
1.5(iii) Risks and concerns
1.5(iv) A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin.
1.5(v) The Bank
does not have
Discussion on continuity of any Extra-Ordinary gain or loss.
such gains or
loss
1.5(vi) Basis for related party transactions- a statement of all related party transactions should
be disclosed in the annual report.
1.5(vii) Utilization of proceeds from public issues, rights issues and/or through any others
N/A
instruments.
1.5(viii) An explanation if the financial results deteriorate after the company goes for Initial Public
N/A
Offering (IPO), Repeat Public Offering (RPO), Rights Offer, Direct Listing, etc.
1.5(ix) If significant variance occurs between Quarterly Financial performance and Annual
Financial Statements the management shall explain about the variance on their Annual N/A
Report.
1.5(x) Remuneration to directors including independent directors.
1.5(xi) The financial statements prepared by the management of the issuer company present
fairly its state of affairs, the result of its operations, cash flows and changes in equity.
1.5(xii) Proper books of account of the issuer company have been maintained.
1.5(xiii) Appropriate accounting policies have been consistently applied in preparation of the
financial statements and that the accounting estimates are based on reasonable and
prudent judgment.
1.5(xiv) International Accounting Standards (IAS)/Bangladesh Accounting Standards (BAS)/
International Financial Reporting Standards (IFRS)/Bangladesh Financial Reporting
Standards (BFRS), as applicable in Bangladesh, have been followed in preparation of the
financial statements and any departure there-from has been adequately disclosed.
1.5(xv) The system of internal control is sound in design and has been effectively implemented
and monitored.
1.5(xvi) There are no significant doubts upon the issuer companys ability to continue as a going
concern. If the issuer company is not considered to be a going concern, the fact along
with reasons thereof should be disclosed.
1.5(xvii) Significant deviations from the last years operating results of the issuer company shall be
N/A
highlighted and the reasons thereof should be explained.
1.5(xviii) Key operating and financial data of at least preceding 5 (five) years shall be summarized.
1.5(xix) If the issuer company has not declared dividend (cash or stock) for the year, the reasons
N/A
thereof shall be given.
1.5(xx) The number of Board meetings held during the year and attendance by each director shall
be disclosed.
1.5(xxi) The pattern of shareholding shall be reported to disclose the aggregate number of
shares (along with name wise details where stated below) held by:
1.5(xxi)a) Parent/Subsidiary/Associated Companies and other related parties (name wise details);
1.5(xxi)b) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of
Internal Audit and their spouses and minor children (name wise details);
1.5(xxi)c) Executives (top five salaried employees of the company other than stated in 1.5 (xxi)b);

53
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Compliance status
Condition
Title Complied Not Remarks
No.
Complied
1 2 3 4 5
1.5(xxi)d) Shareholders holding ten percent (10%) or more votes interest in the company (name
N/A
wise details).
1.5(xxii) In case of the appointment/re-appointment of a director the company shall disclose
the following information to the shareholders:
1.5(xxii)a) a brief resume of the director;
1.5(xxii)b) nature of his/her expertise in specific functional areas;
1.5(xxii)c) names of companies in which the person also holds the directorship and the membership
of committees of the board.
2. Chief Financial Officer (CFO), Head of Internal Audit & Company Secretary
2.1 Appointment of CFO, Head of Internal Audit and Company Secretary and their clearly
defined roles, responsibilities and duties.
2.2 Attendance of CFO and the Company Secretary at Board of Directors meeting.
3. Audit Committee
3. (i) The company shall have an Audit Committee as a sub-committee of the Board of Directors.
3. (ii) The Audit Committee shall assist the Board of Directors in ensuring that the financial
statements reflect true and fair view of the state of affairs of the company and in ensuring
a good monitoring system within the business.
3. (iii) The Audit Committee shall be responsible to the Board of Directors. The duties of the
Audit Committee shall be clearly set forth in writing.
3.1 Constitution of the Audit Committee
3.1(i) The Audit Committee shall be composed of at least 3 (three) members.
3.1(ii) Constitution of Audit Committee with Board Members including one independent director.
All members of the audit committee should be financially literate and at least 1(one)
3.1(iii) member shall have accounting or related financial management experience.
3.1(iv) Filling of Casual Vacancy in Committee N/A
3.1(v) The Company Secretary shall act as the secretary of the Committee.
3.1(vi) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one)
independent director.
3.2 Chairman of the Audit Committee
3.2(i) Chairman of the Audit Committee shall be an independent director.
3.2(ii) Chairman of the Audit Committee shall remain present in the Annual General Meeting
(AGM).
3.3 Role of Audit Committee
3.3(i) Oversee the financial reporting process.
3.3(ii) Monitor choice of accounting policies and principles.
3.3(iii) Monitor Internal Control Risk management process.
3.3(iv) Oversee hiring and performance of external auditors.
3.3(v) Review along with the management, the annual financial statements before submission
to the board for approval.
3.3(vi) Review along with the management, the quarterly and half yearly financial statements
before submission to the board for approval.

54
Islami Bank Bangladesh Limited Annual Report 2015
 Corporate Governance Report

Compliance status
Condition
Title Complied Not Remarks
No.
Complied
1 2 3 4 5
3.3(vii) Review the adequacy of internal audit function.
3.3(viii) Review statement of significant related party transactions submitted by the management.
3.3(ix) Review Management Letters/ Letter of Internal Control weakness issued by statutory
auditors.
3.3(x) When money is raised through Initial Public Offering (IPO)/Repeat Public Offering
(RPO)/Rights Issue the company shall disclose to the Audit Committee about the uses/
applications of funds by major category (capital expenditure, sales and marketing N/A
expenses, working capital, etc), on a quarterly basis, as a part of their quarterly declaration
of financial results.
3.4 Reporting of the Audit Committee
3.4.1 Reporting to the Board of Directos
3.4.1(i) The Audit Committee shall report on its activities to the Board of Directors.
3.4.1 (ii) The Audit Committee shall immediately report of to the Board of Directors on the following
findings, if any:
3.4.1(ii)a) report on conflicts of interests; No such
events
happened,
thus not
reported
3.4.1(ii)b) suspected or presumed fraud or irregularity or material defect in the internal control One farud has
system; been detected
during the
year and
properly
reported.
3.4.1(ii)c) suspected infringement of laws, including securities related laws, rules and regulations; No such
3.4.1(ii)d) any other matter which shall be disclosed to the Board of Directors immediately. events
happened,
3.4.2 Reporting of anything having material financial impact to the Commission. thus not
reported
3.5 Reporting to the Shareholders and General Investors Matter
relating to
condition
No. 3.4.1 (ii)
(b) has been
disclosed
in financial
statements
4. External/Statutory Auditors
4.(i) Appraisal or valuation services or fairness opinions.
4.(ii) Financial information systems design and implementation.
4.(iii) Book-keeping or other services related to the accounting records or financial statements.
4.(iv) Broker-dealer services.
4.(v) Actuarial services.
4.(vi) Internal audit services.
4.(vii) Any other service that the Audit Committee determines.

55
Islami Bank Bangladesh Limited Annual Report 2015
Corporate Governance Report

Compliance status
Condition
Title Complied Not Remarks
No.
Complied
1 2 3 4 5
4.(viii) No partner or employees of the external audit firms shall possess any share of the
company they audit at least during the tenure of their audit assignment of that company.
4.(ix) Audit / certification services on compliance of corporate governance as required under
clause (i) of condition No.7
5. Subsidiary Company
5.(i) Provisions relating to the composition of the Board of Directors of the holding company
shall be made applicable to the composition of the Board of Directors of the subsidiary
company.
5.(ii) At least 1 (one) independent director on the Board of Directors of the holding company
shall be a director on the Board of Directors of the subsidiary company.
5.(iii) The minutes of the Board meeting of the subsidiary company shall be placed for review at
the following Board meeting of the holding company.
5.(iv) The minutes of the respective Board meeting of the holding company shall state that they
have reviewed the affairs of the subsidiary company as well.
5.(v) The Audit Committee of the holding company shall also review the financial statements,
in particular the investments made by the subsidiary company.
6. Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
6.(i) They have reviewed financial statements for the year and that to the best of their
knowledge and belief :-
6.(i)a) These statements do not contain any materially untrue statement or omit any material
fact or contain statements that might be misleading;
6.(i)b) These statements together present a true and fair view of the companys affairs and are
in compliance with existing accounting standards and applicable laws.
6.(ii) There are, to the best of knowledge and belief, no transactions entered into by the
company during the year which are fraudulent, illegal or violation of the companys code
of conduct.
7. Reporting and Compliance of Corporate Governance
7 (i) The company shall obtain a certificate from a practicing Professional Accountant/
Secretary (Chartered Accountant/Cost and Management Accountant/Chartered
Secretary) regarding compliance of conditions of Corporate Governance Guidelines of the
Commission and shall send the same to the shareholders along with the Annual Report
on a yearly basis.

Explanation: Chartered Accountant means Chartered Accountant as defined in the

Bangladesh Chartered Accountants Order, 1973 (Presidents Order No.2 of 1973); Cost &
Management Accountant means Cost & Management Accountant as defined in the Cost
& Management Accountants Ordinance, 1977 (Ordinance No. LIII of 1977); Chartered
Secretary means Chartered Secretary as defined in the Chartered Secretaries Act, 2010
(Act No.25 of 2010)
7 (ii) The directors of the company shall state, in accordance with the Annexure attached, in
the directors report whether the company has complied with these conditions.

56
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

DIRECTORS REPORT

32nd Annual General Meeting

The Board of Directors takes the opportunity to welcome you economic growth dipped below 7 percent for the first time
all in the 33rd Annual General Meeting of the Bank and have since the global financial crisis, hurt partly by cooling
the pleasure to place the Annual Report before you along investment, raising pressure to further cut interest rates and
with the Auditors Report and Audited Financial Statements pushing down commodity prices resulting from reducing
of the Bank for the year ended December 31, 2015. This global consumption. The central bankers around the world
part of the annual report contains a brief overview of the also forced to keep their monetary policy loose as lower oil
world economy, Bangladesh economy and banking industry prices depressed inflation figures. The IMF admitted Chinas
scenario etc. yuan into SDR fuelling demand for Chinas currency and for
renminbi-denominated assets.
Global Economy & Banking
The global oil market, already suffering a supply glut, has
The global economy has witnessed another challenging been anticipating the arrival of Iranian crude for months, and
year in 2015 against the backdrop of a diverse range of now that sanctions against its nuclear program have been
macroeconomic and political factors affecting the financial lifted, Iran is free to sell more of its oil into a market already
sector. Americas economy struggled to make slow progress. oversupplied by 1.5 million barrels or more a day. West Texas
The Federal Reserve hiked interest rates by a quarter of a
Intermediate crude fell to $30 per barrel recently.
percentage point for the first time in nearly a decade. The
hike signals that the US economy had largely overcome the Having remained immune during global financial crisis due
wounds of the 2007-2009 financial crisis. Fears of a Greek to its asset backed portfolio, Islamic finance asset stood
exit from the euro area worried markets in middle of the around $2 trillion in 2015. Nearly 80% of that is entrusted
year. Developing economies as a group grew at a rate of either to Islamic banks or to the Islamic units of conventional
4.3 per cent in 2015, the slowest pace since 2009. Chinas banks. The rest takes the form of sukuk (15%); Islamic

57
Islami Bank Bangladesh Limited Annual Report 2015
Directors Report

investment funds (4%) and Takaful (1%). The demand for performed better than conventional counterparts in 2015.
Islamic Finance around the globe is in increasing trend that Market share of the Islamic banks in deposit increased to 22%
encouraged many non-Muslim countries facilitating Shariah in 2015. Market share in investment also increased to 23%.
compliant products and services.
2015 was a remarkable year for both global and countrys
Islamic Banking. The potential for Islamic banking to
Bangladesh Economy & Banking
sustain by way of achieving wider geographical expansion
Bangladesh economy demonstrated little uptrend in and global market penetration is promising, as several new
2015 with steady GDP growth, controlled inflation, rising and niche markets are undertaking steps to enable Shariah
forex reserve and higher than expected agricultural compliant financial services in their jurisdictions.
production. However, the economy suffered from political
Persistent growth of Islamic banking practices is that
uncertainties and lack of business confidence affecting
current assets of more than 500 Islamic financial institutions
private investments. Despite overcoming an initial setback
grew to 2(two) trillion U.S. dollars. It is assumed that the
stemming from political turmoil in the first quarter of the
amount will exceed 5(five) trillion U.S. dollars in the next five
year, countrys economic activities navigated through a
years. Presently Islamic banking has 38 million customers
sluggish ambience in 2015. Inflation was on a downturn
across the globe of which, 13 million being 35 percent are
trend caused by low global commodity market and no
in Bangladesh alone. The biggest Shariah-based Bank in
major internal shocks. Sluggish trend in employment
Bangladesh i.e. IBBL contributes 50 percent of the global
generation was also evident in the year. Getting the status
Islamic microcredit. In Bangladesh, Islamic Banking covers
of a lower middle income country was a big achievement of
one-fifth of the countrys total banking.
Bangladesh economy last year.

The bygone year faces a lot of problem in terms of growth Islami Interbank Fund Market (IIFM)
of credit and risk management. The NPL has increased
In order to mitigate liquidity crisis of Shariah based banks
immensely coupled with excess liquidity putting the banking and financial institutions and for their better management,
industry in further challenge in terms of asset quality and Bangladesh Bank introduced Islami Interbank Fund Market
profitability. in 2012. Under this arrangement, an interested Islamic
The sector, however, experienced diversified developments financial institution can place their surplus fund overnight at
last year. The modernization of the payments system and Bangladesh Bank. Islamic banks and banks having Islamic
financial IT infrastructure, National Payment Switch (NPS), banking branches and windows may borrow from this fund
NID-based KYC and Real Time Gross Settlement (RTGS) overnight. IIFM is expected to play a critical role in the
have spawned an exponential growth in rendering financial development of Islamic Money Market in Bangladesh.
services. The sector is gradually approaching towards the
Changes in Bangladesh Government Islamic
financial deepening, inclusion and greater stability.
Investment Bond (BGIIB)
Islamic Banking The Ministry of Finance, Government of Bangladesh
introduced the BGIIB in 2004. The instrument has been
Islamic banking industry in Bangladesh comprising 8 full-
playing an important role in developing Islamic Money
fledged Islamic banks, 19 Islamic banking branches of 9 Market. The unit price of the Bond is taka 1 (one) lac. One
conventional commercial banks and 25 Islamic banking can purchase the Bond for taka 1 (one) lac or multiple
windows of 7 conventional commercial banks have been thereof having tenure of 6 (six) months, 1 (one) year or 2
performing well. Last year they also contributed to the deposit (two) years. The Bond is treated as a component of Statutory
mobilization and investments in trade, industry and other Liquidity Ratio (SLR). IBBL is actively involved in buying and
sectors including agriculture. Most of the Islamic banks have redeeming of the bond.

58
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

A part of shareholders in the 32nd Annual General Meeting

The government has brought some changes in the existing seminars and conducting training and research on Islamic
BGIIB. Now a 3-month bond worth at least Tk.100,000 will Shariah issues. Seven full-fledged Islamic Banks and thirteen
be available in the market alongside the existing 6-month Conventional Banks having Islamic Banking Branches are
bond. The issuing banks will calculate the profit or loss on the members of CSBIBB. In 2015, the Board has organized
the basis of their fixed deposit rates as per Islamic banking a number of trainings, workshops, and capacity building
programs for Islamic banking practitioners of the country.
rules instead of the earlier annual profit or loss. The third
change is that the bond will be sold through auction.
Shariah Indices
Islamic Banks Consultative Forum (IBCF) On January 20, 2014, Dhaka Stock Exchange (DSE) launched
Shariah index, which will represent share price movements
IBCF, with Islamic Banks and Conventional Banks having
of the listed companies based on Islamic Shariah. The
Islamic Banking Branches as members, was established in
broadbased index, developed for encouraging more
1995 for effective interaction, cooperation, promotion and
Shariah-based companies offer shares, is known as DSES.
furthering the cause of Islamic banking in Bangladesh. Eight The base-value of the new index is 1000. S&P Dow Jones
full-fledged Islamic Banks and six Banks having Islamic Indices served as a consultant to the Dhaka Stock Exchange
Banking Branches are the members of the IBCF. IBBL, in designing the methodologies for the DSEX Shariah Index.
being a vibrant member of IBCF, contributes significantly in
the forum. In 2015, the Forum has organized a number of On October 12, 2014, Chittagong Stock Exchange Limited
(CSE) launched CSE Shariah Index (CSI) with base point
seminars and symposia attended by Islamic scholars and
of 1,000. The index could be followed by the investors to
dignitaries from home and abroad which contributed to
track the performance of Shariah compliant securities that
building awareness among stakeholders and expansion of
form part of all listed companies on the CSE other than
Islamic banking.
mutual funds and corporate bonds. The CSI includes 63
Shariah compliant stocks from 17 broad sectors. The index
Central Shariah Board for Islamic Banks of
will also be updated every six months after reviewing the
Bangladesh (CSBIBB)
performance. Unlike shariah-based DSES of Dhaka Stock
CSBIBB was established in 2001 to offer Shariah opinion Exchange, the CSI will have access for all. CSI comprises of
and assistance to member banks in matters related to Shariah compliant stocks, representing 48.6% of the total
harmonization of Islamic banking policies and practices. It market capitalization and around 41.35% of float-adjusted
also promotes knowledge on Islamic Banking by organizing market capitalization of the CSE listed companies.

59
Islami Bank Bangladesh Limited Annual Report 2015
Directors Report

Donation to Prime Ministers Relief Fund

Profile of IBBL Unique Features

Since inception, Islami Bank Bangladesh Limited has been

g Welfare-oriented Banking: IBBL started its operation
rendering its banking services by offering diversified and to introduce a welfare-oriented banking ensuring equity
a wide range of deposit, investment & foreign exchange and justice in all of its activities. Unlike conventional
products coupled with technology based banking devices, financial institution, profit or wealth maximization has
which have successfully earned a huge clientele base. As a never been among the prime objectives of IBBL. We
true reflection of the inner urge of the people of the country extend our services to individuals of all walks of life with
and to conduct all banking & investment activities based on strong commitment in advancement and upliftment of
Islamic Shariah, IBBL unveiled a new horizon and ushered in economically backward segments.
a new ray of hope towards realizing a long cherished dream g Focus on Maqasid-al-Shariah: Most of the Islamic
of the people of Bangladesh for conducting their banking Banks focus merely on Shariah compliance issues
transactions in accordance with the spirit of Islam. IBBL, ignoring the Maqasid of Shariah. IBBL, being an
the first Shariah based bank in South-East Asia, launched exception, not only ensures Shariah compliance
on the 13th March 1983 as a public limited company, started but also focuses on Maqasid-al-Shariah in all of its
its functioning informally on 30th March 1983. The formal operational portfolios.
inauguration was made on 12th August 1983 and the first g Mass Banking: Most of the Private Commercial
branch of the Bank i.e. Local Office located at 75, Motijheel, Banks operate to address the necessities of class
Dhaka started its full fledged banking operations. As on people. But IBBL is different from this concept both
31.12.2015, after passing a long journey of continuous theoretically & practically in the sense that it addresses
success and glory in almost all business indicators, the Bank the requirement of mass people. Around 1/5th of our
is now running with Tk.16,099.91 million paid up capital manpower is engaged to serve about 3% of the total
investment under Rural Development Scheme (RDS).
and that was Tk.80.00 million at the date of establishment.
The aesthetically viewed 18-storied own building located g Need-based Banking: In line with following need
at 40, Dilkusha Commercial Area, Dhaka is the Corporate
prioritization in financing as per Islamic Shariah, IBBL
Headquarter of the Bank.
does not work to fulfil the need of few people rather

60
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

focuses on the requirement of the real needs of the Aiming to achieve a balanced development of the
common people. Thus, IBBL strives to substitute the country as well as to uplift the socio economic
Greed-based Banking through establishing Need- conditions at rural areas, IBBL has been conducting
based Banking. banking operation with highest number of rural
branches (75 branches) among all the first generation
g Special Investment Scheme: IBBL has some special private commercial banks.
investment schemes for particular group of people to
Number of Branches
address their special needs. The supervision cost of
these investments is high which makes our income 304

lesser compared with other market participants. 251

169
g Socially and Environmentally Desirable Investments:
116
IBBL, by virtue of its adherence to Shariah and its 90
commitment to ensure welfare, does not invest in socially 49
13
and environmentally undesirable projects even though
the projects seem to be financially viable and profitable.
1985 1990 1995 2000 2005 2010 2015
g Widening Network to Address Unbanked Population:
IBBL is continuously pursuing for widening its network
Subsidiary Companies
by maximizing the opening of new branches to reach
the unbanked and underserved segment of population Islami Bank Securities Limited (IBSL)
of the country. Islami Bank Securities Limited (IBSL) - a subsidiary company
of Islami Bank Bangladesh Limited (IBBL) - was incorporated
g Financial Inclusion and Sustainable Development: in March 22, 2010 as a Public Limited Company under
Since its journey, IBBL has been working relentlessly Companies Act, 1994 with the objective to carry out Business
towards overall development by ensuring financial of Stock Broker and Stock Dealer in the capital Market.
inclusion, sustainable & inclusive growth as well as The Paid-up capital of the company is Tk.2,700.00 million
socio-economic development of the country through in against of Authorized capital of Tk.5,000.00 million.
introduction of modern & welfare oriented banking IBSL is one of the largest corporate entities operating
products & services including financial literacy programs. in Bangladesh capital market and is providing complete
investment solutions to the investors since commencement
Network
of business. Operational activities of the company are being
carried out at i) Head Office: 20 Dilkusha, Dhaka ii) Head
As a Bank of the mass people, IBBL delivers its banking
Office Extension: 63 Dilkusha, Dhaka and iii) Head Office
services to the highest possible number of customers.
Extension: Nawabpur Tower, 198-202 Nawabpur Road,
IBBL is enriched with a vast banking network across the
Dhaka. IBSL mainly provides the following services:
country by setting up its branches all over the country.
Moreover, Alternative Delivery Channels (ADC) of the yy Provides Musharaka and Murabaha
Bank having 487 owned & more than 6000 shared ATM Investment modes under margin rule -1999.
booths, 51 IDM & 4 Sheba Ghars have expanded this yy Trading facilities through Dhaka Stock
network up to the doorstep of the customers. As a part Exchange and Chittagong Stock Exchange
of gradual expansion of its coverage to the important yy Competitive commission to buy and sale
commercial places both in urban & rural areas, during shares
2015 the Bank has successfully opened 10 new
yy i-Trading facilities from anywhere home
branches raising the total number of Branches to 304
from 294 of the previous year. and abroad

61
Islami Bank Bangladesh Limited Annual Report 2015
Directors Report

yy Easy IPO participation from home National Membership

yy Fund transfer through BEFTN/i-banking/ a. Bangladesh Institute of Bank Management (BIBM)
M-cash etc. b. The Institute of Bankers, Bangladesh (IBB)
yy Customer service through email/SMS/ c. Bangladesh Association of Banks(BAB)
Phone/Fax, etc. d. Bangladesh Foreign Exchange Dealers Association
yy Full service DP facilities (BAFEDA)
e. Bangladesh Association of Public Listed Companies
yy Special service for Non-Resident
(BAPLC)
Bangladeshis (NRBs)
f. Central Shariah Board for Islamic Banks in Bangladesh
Islami Bank Capital Management Limited (IBCML) (CSBIBB)
g. Islamic Banks Consultative Forum (IBCF)
IBCML was incorporated on the 01 April 2010 under the
h. Dhaka Chamber of Commerce & Industry (DCCI)
Companies Act 1994 as a Public Limited Company with
Authorized Capital of Tk. 1000.00 Million & Paid Up Capital i. Dhaka Stock Exchange Limited (DSE)
of Tk.300.00 Million divided by 3,00,000 (Three lac) shares j. Federation of Bangladesh Chambers of Commerce and
of Tk.1000/- each. Industries (FBCCI)
k. Bangladesh Chamber of Industries (BCI)
The main objectives of the company are to carry out the
business of a Merchant Banking in all its aspects including International Membership
Underwriting and / or Management of Issue, Public offer of
Accounting and Auditing Organizations for Islamic
Shares, Stocks, Debentures, Bonds etc. sale or purchase of
Financial Institutions (AAOIFI), Manama, Bahrain
Securities or transfer thereof; Fund Management for clients, and has become member of its Board of Trustees.
Managing Portfolio Investment of any person or Company
Islamic Financial Services Board (IFSB), Kuala
by making profitable Investment in various avenues etc.
Lumpur, Malaysia.
IBBL Exchange Singapore Pte. Ltd. General Council for Islamic Banks and Financial
Institutions (CIBAFI), Manama, Bahrain
IBBL Exchange Singapore Pte. Ltd. has been corporated in International Islamic Financial Market (IIFM)
Singapore, as a subsidiary of Islami Bank Bangladesh Limited Manama, Bahrain
for remittance services and things incidental thereto under International Islamic Centre for Reconciliation and
the Companies Act, CAP.50 of the Republic of Singapore. Till Arbitration (IICRA)
31 December 2015, no share capital of the subsidiary has International Chamber of Commerce Bangladesh
been paid its parent company i.e. Islami Bank Bangladesh (ICC-Bangladesh)
Limited. Therefore, the financial statement of IBBL Exchange American Chamber of Commerce in Bangladesh
Singapore Pte. Ltd. has not been consolidated with that of (AmCham)
the parent i.e. IBBL.
IBBLs Equity Investment
Offshore Banking Units
a. Central Depository Bangladesh Limited (CDBL)
The operations of Off-shore Banking Units (OBU) of the Bank b. Karmasangsthan Bank (Employment Bank)
were commenced on January 4, 2011 as per the approval c. Bangladesh Shipping Corporation (BSC)
of Bangladesh Bank. The Off-Shore Banking Units (OBU) of d. Bangladesh Aroma Tea Ltd.
the Bank are located at Head Office Complex Branch-Dhaka, e. Financial Institutions and Investors Portfolio
Uttara Branch-Dhaka and Agrabad Branch-Chittagong. Management Company Ltd.

62
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

Inauguration of Singair Branch

Business Review
IBBL successfully mobilized Tk.615,359.21 million Deposit Deposit Products
from 9,926,354 Depositors and deployed Tk.530,192.50
Any financial institution especially a Bank can hardly
million as general Investment into 728,145 accounts up to
prosper and compete with other banks effectively without
31st December 2015. In the year 2015, total income of the
multidimensional and diversified products. Keeping this
Bank was Tk.56,551.90 million and total Expenditure was
in view, IBBL has introduced 25 deposit products so far.
Tk.42,204 million showing 1.22% decrease in 2015 resulting
Historical trend of the deposit mobilization shows doubling
in pre-tax profit of Tk.13,814.46 million showing 14% growth
its deposit base in every 4 years.
in 2014 as against 17% growth in 2013. The Board of
Directors of the Bank has recommended 20% cash Dividend
to the shareholders for the year 2015.
Mobilization of Deposits
Bank of around Crore Depositors In the year 2015, total Deposit stood at TK. 615,359 million
Total number of Depositors of IBBL increased to 9,926,354 as on 31st December 2015 as against Tk.560,696 million of
in 2015 from 9,587,458 of the preceding year, registering an the preceding year registering a growth of Tk.54,663 million,
increase of 338,896 accounts in 2015, with 4% growth over 2014. i.e. 10% growth.

Account opening trend from 2010 to 2015

12000000
10000000
9926354
9538969

8000000
8538969

6000000
7031297
6004731

4000000
4939502

2000000
-
2010 2011 2012 2013 2014 2015
No of Depositors 4,939,502 6,004,731 7,031,297 8,538,969 9,538,969 9,926,354
Account in creased 348,039 1,065,229 1,026,566 1,507,672 1,000,000 338,896
Growth % 8% 22% 17% 21% 12% 4%

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Directors Report

Deposit
Sl. Final Rate (%) Growth Deposit Mix (%)
Types of Deposits Weightage (In million Taka)
No.
2015 2014 2015 2014 % 2015 2014
1 2 3 4 5 6 7 8 9 10
A Mudaraba Deposits
1 Mudaraba Savings Account (MSA) 0.62 4.26 4.90 209,573 181,663 15.36% 34.06 32.40
2 Mudaraba Term Deposits (MTDR) 179,465 170,175 5.46% 29.16 30.35
2.1 36 Months 1.10 7.20 9.47
2.2 24 Months 1.07 7.00 9.26
2.3 12 Months 1.05 6.80 8.98
2.4 06 Months 1.03 6.67 8.48
2.5 03 Months 1.00 6.42 7.98
2.6 01 Month 0.82 5.17 6.30
3 Mudaraba Special Savings (Pension) Scheme (MSS) 101,258 93,253 8.58% 16.46 16.63
3.1 10 years Term 1.25 8.44 9.64
3.2 5 years Term 1.10 7.42 8.51
4 Mudaraba Monthly Profit Deposits Scheme(MMPDS) 22,100 21,789 1.43% 3.59 3.89
4.1 5 years Term 1.18 8.54 10.08
4.2 3 years Term 1.10 7.75 9.64
5 Mudaraba Savings Bond (MSB) 16,601 16,821 -1.31% 2.70 3.00
5.1 8 years Term 1.25 8.34 9.68
5.2 5 years Term 1.12 7.55 8.85
6 Mudaraba Special Notice Deposits (MSND) 0.50 3.08 3.70 7,636 6,072 25.76% 1.24 1.08
7 Mudaraba Hajj Savings (MHS) 2,153 1,851 16.32% 0.35 0.33
7.1 Above 10 years Term 1.30 8.83 10.23
7.2 Upto 10 years Term 1.25 8.43 9.64
8 Mudaraba NRB Savings Bond 962 858 12.12% 0.16 0.15
8.1 10 years Term 1.30 8.64 10.18
8.2 5 years Term 1.15 7.80 8.81
9 Mudaraba Farmers Savings (MFS) 0.75 5.03 5.8 917 815 12.52% 0.15 0.15
10 Mudaraba Waqf Cash Deposit (MWCD) 1.35 9.33 10.63 634 533 18.95% 0.10 0.10
11 Mudaraba Muhor Savings (MMS) 463 430 7.67% 0.08 0.08
11.1 10 years Term 1.25 8.44 9.64
11.2 5 years Term 1.10 7.42 8.51
12 Students Mudaraba Savings (SMSA) 0.62 4.26 4.90 874 651 34.25% 0.14 0.12
13 Mudaraba Upahar Deposit Shceme (MUDS) 0.62 4.26 4.90 9 13 -30.77% 0.00 0.00
14 Mudaraba mCash Deposit Scheme 0.50 3.08 3.70 27 33 -18.18% 0.00 0.01
15 Mudaraba Foreign Currency Deposits (MFCDA) 0.75 1.52 1.66 10,281 7,727 33.05% 1.67 1.38
16 Mudaraba Perpetual Bond (MPB) 1.25 8.34 11.18 0.00% -
B Cost Free Deposits
17 Al Wadeeah Current Account (AWCA) 28,326 26,277 7.80% 4.60 4.69
18 Bills Payable 5,091 3,650 39.49% 0.83 0.65
19 Cost Free Foreign Currency Deposits 8,460 6844 23.61% 1.37 1.22
20 Other Cost Free Deposits 20,529 21,241 -3.35% 3.34 3.79
Total 615,359 560,696 9.75% 100.00 100.00

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 Directors Report

Weightage, Rate, Growth & Mix of Mudaraba Muhor Savings

The Bank introduced this account to facilitate performing to
Deposit by Product pay muhorana for a husband to his wife. Any competent person
even before his marriage or husband in the name of his wife
may open this account on monthly installment basis for an
Deposit Mix amount of as low as Taka 500/- to as high as of Taka 5,000/- for
a period either of 5 or 10 years.
3% 1% 3%
Students Mudaraba Savings
4%
34%
Students of any educational institute is eligible to open Students
Mudaraba Savings Account. Initial deposit of this account is
10% Mudaraba Savings Deposits Tk.100/- and profit is given on balance of Tk.100/-. No charge
Mudaraba Special SavingsDeposits
Mudaraba Term Deposits
is applicable on this account except excise duty and tax as
Current & Contingency per govt. policy. The account may be continued as Mudaraba
Mudaraba Savings Bond Savings Account in their own name when the student becomes
29% Mudaraba Monthly Profit Deposit
Mudaraba Special Notice Deposits
adult. The Bank has attracted 20,044 new Students Savings
16%
Others Account in 2015.
Mudaraba Farmers Savings
This product is designed to reach the unbanked people
especially farmers. Only a genuine Farmer can open this
Welfare Oriented Special Deposit Products account by initial deposit of Tk.10/- only. Farmers, Association
or Co-operative society of farmers, shall be eligible to open
Mudaraba Waqf Cash Deposit
Mudaraba Farmers Savings Account (MFSA). This MFSA may
IBBL plays a leading role in introducing this unique product, also be opened by the father/mother/legal guardian (farmer) in
the objectives of which is purely for the welfare of the society. favor of a minor. The Bank has attracted 11,043 new Farmers
Mudaraba Waqf Cash Deposit account may be opened at a time Savings Account in 2015.
with a minimum deposit of Tk.1,000/- and the subsequent deposit Mudaraba NRB Savings Bond
shall be made by installments in thousand Taka or in multiple of
thousand Taka. Profit of this account is utilized for social and Only the Non-Resident Bangladeshis aged 18 years and above
human welfare as per instruction of the account holders. During is eligible to open Mudaraba NRB Savings Bond Account in
2015, the Bank has opened 1,033 new Mudaraba Waqf Cash single or joint names. Service charge, account closing fee and
Deposit Account totaling 26,140 Accounts up to 2015. account maintenance fee is not applicable for this account.
As per clients demand, maximum 90% quard may be allowed
Mudaraba Hajj Savings against total outstanding balance in this account.
Any Muslim intending to perform Hajj may open Hajj Savings Mudaraba Upohar Deposit Scheme:
Account. The Account may be opened from the 25 alternatives
based on duration ranging from 1 year to 25 years for building In our country, on many occasions like Marriage Ceremony, Aqiqa,
up savings by monthly installments considering the capacity Sunnate Khatna, even during Eid festival people offer Upohar in
and ease of the account holder. The Bank has attracted 3,673 cash or in other form. The common practice of giving Upohar/
new Mudaraba Hajj Savings Account during 2015. Gift to the bride/bridegroom or other recipients can comfortably
be served by Mudaraba Upohar Deposit Scheme. Any individual
Mudaraba Special Savings (Pension) Scheme may purchase Upohar Cheque of Tk.500, Tk.1000 & Tk.5000
In this Mudaraba Special Savings (Pension) Scheme, a person denomination initially under this scheme from any branch of
obtains the opportunity to build up savings by small monthly IBBL as well as can encash the same from any branch of IBBL.
installments for getting an attractive amount at the end of a Mudaraba Industry Employees Savings:
specified term or a monthly amount for a specific period on
In order to improve the life standards of the employees/workers
the expiry of the 5 years or 10 years term. The Account can be
of RMG, Leather and Footwear sector, IBBL has launched
opened for any amount in multiple of hundred taka. In 2015, the Mudaraba Industry Employees Saving (MIES) Account with
Bank has opened 277,088 Mudaraba Special Savings Account. an initial deposit of Tk.100/-. No charge is applicable on this
Mudaraba Monthly Profit Deposit Scheme account except excise duty and tax as per govt. policy. ATM/
VISA Debit Card and Cheque are available against these
Any individual may open account under this scheme, depositing
accounts as per usual norms.
a minimum amount of Taka 1,00,000/- and multiples thereof at
a time, for 3 years or 5 years. Monthly provisional profit is given Account for Street Children & Working Children:
to the account just after completion of one month from the
date of opening of the account. The profit amount is adjusted As a part of better financial inclusion and to ensure financial
on completion of each accounting year after declaration of final services for all, IBBL has already taken initiatives to introduce
rate of profit. account for Street Children & Working Children.

65
Islami Bank Bangladesh Limited Annual Report 2015
Directors Report

General Investments on 31.12.2014 showing an increase of Tk. 66,719 million, i.e.

14.40% growth. The growth was affected due to the overall
Total General Investment of the Bank increased to Tk. economic scenario prevailing throughout 2015. The trend of
530,194 million as on 31.12.2015 from Tk.463,475 million as investment shows near doubling of the figure in 5 years.

Trend of General Investment

600,000
500,000
400,000
300,000
200,000
100,000 2011 2012 2013 2014 2015
General Inv. 305,841 372,921 403,195 463,475 530,194
Increase/Decrease 42,615 67,080 30,274 60,281 66,719
Inv. Growth 16.19% 21.93% 8.12% 14.95% 14.40%

Sector-wise Investment
(In million Taka)
2014 2013
Sector % to Total % to Total
Amount Amount
Investment Investment
Industrial (Excluding SME) 172,591 32.55% 155,432 33.54%
Commercial 36,854 6.95% 42,352 9.14%
Real Estate 41,778 7.88% 37,680 8.13%
Agriculture (including investment in Fertilizer and Agriculture
10,638 2.01% 11,354 2.45%
Implements)
Transport 6,820 1.29% 6,435 1.39%
SME 229,864 43.35% 181,918 39.25%
Others 31,649 5.97% 28,304 6.11%
Total 530,194 100% 463,475 100%

Mode-wise Investment
(In million Taka)
2014 2013
Mode % to Total % to Total
Amount Amount
Investment Investment
Bai-murabaha 331,239 62.48% 281,556 60.75%
HPSM 123,856 23.36% 109,941 23.72%
Bai Muajjal 34,818 6.57% 15,443 3.33%
Bill Purchased & Negotiation 15,004 2.83% 30,424 6.56%
Quard 14,564 2.75% 15,478 3.34%
Bai- Salam 5,320 1.00% 4,808 1.04%
Mudaraba 5,000 0.94% 3,000 0.65%
Musharaka 393 0.07% 2,825 0.61%
Total 530,194 100% 463,475 100%

The Five Year Business Plan (20122016) of the bank is under implementation. The investment plan has been formulated keeping
in view the national economic priorities and diversification of the Investment portfolios by size, sector, geographical area, economic
purpose, securities, administrative division and Bangladesh Bank sector code.

66
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

Spinning Industry

Investment in Industrial Sector far. Besides, 106 industries among hospital, clinic and
pathological centers have been established by the bank
Industrial development of the country falls under the finance of Tk. 1,381 million.
priority areas of IBBL. The Bank has considerable amount
of investment in the industrial sector. Total investment for Housing
Project Finance together with Working Capital stood at
Tk. 271,211 million as on 31st December 2015 as against IBBL has extended investment facility to 19,005 clients by
Tk.234,797 million as on 31st December 2014.The Bank has disbursing Tk. 37,025 million at individual level and Tk. 4,753
deployed 51.15% of its total investment in industrial sector million to 116 developer companies which is 7.88% to total
out of which export oriented textile and garment industries Investment. At the close of 2015 outstanding in Housing
take a share of 39.4% to total industry.
investment was Tk. 37,680 million which was 8.13% of total
Garments Investment.

IBBL ventured in financing garment industries in the early Agro-Based Industries

stage of the Industry. The bank also financed in the backward
linkage industries. It is mentioning here that, most of the For qualitative improvement of agricultural sector and
leading export-oriented garment industries of the country procurement of logistics including raw materials for the
initially started their business taking small size investment agro-based industry, IBBL extended finance to ventures like
from IBBL. Gradually they have developed their industries Automatic Rice Mills, Flour Mills, Edible Oil Mills, Jute Mills,
into a large one. Fishery, Poultry & Dairy, Salt, Sugar, Food and Beverage, Cold
Storage, Fertilizer, Oil and Electricity from Rice Bran etc. IBBL
Textile financed 1553 agro-based industries against which present
balance of investment is Tk. 59,183 million.
A good number of spinning mills, weaving mills, dyeing/
finishing mills of textile sector have been set-up with IBBL Electricity & Power
Investment. Most of these mills are set-up with brand new
state of the art machines. This contributes immensely 17 power plants have been financed by IBBL so far to the
toward value addition in RMG. tune of Tk. 4,123 million. The bank has also financed Tk.
4,168 million for the production of electric instruments.
Pharmaceuticals & Health Care Moreover, 1047 clients availed an investment of Tk. 2,812
To boost the pharmaceutical industry, the bank invested million for purchasing and procuring electronics goods.
Tk. 4,658 million in this sector among 22 beneficiaries so Apart from power plants and electrical goods, we are also

67
Islami Bank Bangladesh Limited Annual Report 2015
Directors Report

Steel Manufacturing Industry

working on solar power and an investment scheme under unprivileged, unbanked SME entrepreneurs and continues to
the name and style Solar Panel Investment Scheme has provide financial support to them.
been introduced.
By way of illustration, in 2015, IBBL disbursed SME
Transport investment of Tk.264,630 million, 6% more than the
previous year. During the year, approximately 9,500 new
To develop the transport sector, IBBL has disbursed SME borrowers were added to the portfolio. IBBL is holding
substantial amount of investment in road, water and air highest position in financing SMEs among the Banks/FIs
transport to 1,180 clients and there against present balance in the country having 15% market share (on the basis of
of investment is Tk. 6,820 million that is the highest amongst outstanding position). At present SME Investment of IBBL
all nationalized and private commercial bank of Bangladesh, creates about more than 8 lac employment in the country.
and the proportion is 1.29% of the banks investment. To expand the unexplored SME Market, IBBL is continuously
Besides, IBBL financed 75 Filling/CNG stations against improving efficiency standards.
present balance of investment of Tk. 503 million.
For developing women entrepreneurs IBBL has increased the
Information Technology ceiling of Women Entrepreneurs Investment Scheme up to
Tk.4.00 million with low rate of return i.e. only 10% and they are
IBBL has so far extended finance amounting to Tk. 378 enjoying collateral free investment facility up to Tk.0.50 million.
million to 18 clients for producing and procuring hardware Present outstanding under women entrepreneurs investment is
& software. IBBL is also working on developing new Tk 1,630 million among nearly 2 (two) thousand clients. In 2015,
entrepreneurs with innovative ideas to go for big investments IBBL has disbursed investment of Tk 928 million to the Women
in this sector. Entrepreneurs achieving 92% of annual target of Tk1,010
million.
SME Investments
The previously neglected Small and Medium Enterprises IBBL has given importance in Cluster Approach Method for
(SME) sector plays a significant role in generating growth developing SMEs and has disbursed Tk. 1,830million in 40
and creating employment in a country. The traditional clusters among 3,670 clients in the year 2015..
Banks were not keen to provide any investment to this Besides, IBBL provides various Non-Financial Services (NFS)
sector. At a time when it was almost impossible for the to the SMEs. IBBL participates/sponsors in various meetings,
SME entrepreneurs to get investment from the banking seminars, symposiums, fairs for developing SMEs. During
sector in Bangladesh, IBBL stepped forward to help those

68
Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

Pharmaceutical Industry

this year IBBL participated: SME exposure of IBBL Vs PCBs as on 31.12.2015

1. SME Women-Banker Exchange of Views and Open Credit

Disbursement Program at Coxsbazar. IBBL
264,630
2. Launching Ceremony of Iam SME of Bangladesh, a Other
34%

MSME association at Krishibid Institution, Farmgate, PCBs

518,950
Dhaka. 66%

3. International Conference on Development of SMEs in

Bangladesh: Sharing Asian Experience, organized by
South East University.
SME Exposure of IBBL Vs National exposure as on 31.12.2015
4. Banker-Entrepreneur Views Exchange and Open Credit
Disbursement Program among the inhabitants of
recently abolished enclaves. IBBL
264630
National
5. Women Entrepreneur Development Unit Summit-2015 exposure
23%

at Jamalpur as a lead bank. other than

IBBL
894070
6. Banking Fair Bangladesh 2015 at Bangla Academy, Dhaka. 77%

Year wise SME Investment

250,000 232,080

200,000 173,660
201,127
Welfare Oriented Investment Schemes
149,214
In addition to the usual investment operations, IBBL has 11
In million Taka

150,000
108,670
Special Investment Schemes for different groups of people.
The schemes as part of banks welfare mission aim at fulfilling
100,000 78,456
finance needs of different segments of people particularly
49,337
50,000 34,154 the under privileged downtrodden and neglected section
19,831 22,614
of population of the country. To improve the living standard
0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
of these people some welfare oriented special investment
schemes as under have been undertaken:

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Islami Bank Bangladesh Limited Annual Report 2015
Directors Report

Auto Rice Mill

Scheme-wise Investment (In million Taka)

Sl. No. Name of Scheme 2015 2014 2013 2012 2011
i. Rural Development Scheme (RDS) 20,799 17380 13731 10390 7072
ii. House-hold Durables Scheme 1,545 1392 1048 955 1070
iii. Investment Scheme for Doctors 58 55 37 32 14
iv. Transport Investment Scheme 7,207 6832 7057 6887 6707
v. Car Investment Scheme 124 69 75 113 152
Small Business Investment Scheme
vi. 4,094 3817 3202 2774 2348
(SBIS)
vii. Micro-Industries Investment Scheme 54 22 29 36 38
Agricultural Implements Investment
viii. 2,929 882 337 278 210
Scheme
ix. Housing Investment Scheme 166 209 261 316 367
x. Housing Investment Program (HIP) 23,250 20780 15903 15660 12485
Palli Griha Nirman Beniyog Prakalpa
xi. 3,260 2717 2059 1483 903
(PGNBP)
Sub-total 63,487 54156 43739 43739 31366
Total Investment 530,194 463475 406817 406817 305841
% to total Investment 11.97% 11.68% 10.75% 10.75% 10.26%
Outstanding against welfare oriented investment schemes over the last five years increased from 10.26% to 11.97% of General
Investment.

Household Durable Investment Scheme

Low-income people in diverse profession with limited income are benefited by this scheme. They can purchase household
requirement like Refrigerator, TV, Motor-cycle, Furniture, Ornaments, Computer etc. through investments under this financing
scheme.

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Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

Housing Investment Program Rural Housing Investment Scheme

Housing Investment plays a vital role in improving standard To extend housing facility to the rural people living within
of living, empowering the middle-income and lower-income 10 kilometers area of an IBBL branch a scheme named
groups and thereby promoting equitable growth in the society. Palli Griha Nirman Beniyog Prakalpa has been introduced.
The Scheme not only caters to fulfilling one of the basic needs Service holders at public, semi-public or autonomous
i.e. shelter but also has significant impact on the lives of the institutions, non-resident Bangladeshis and businesspersons
dwellers in terms of skills enhancement, income generation, are preferred for this investment.
increased security, health, self-confidence and human dignity.
Women Entrepreneurs Investment Scheme
Transport Investment Scheme Islami Bank has always given priority to developing the
IBBL has introduced Transport Investment Scheme to women entrepreneurs. Under Women Entrepreneurs
improve the existing transportation problem and to ensure Investment Scheme (WEIS) IBBL offers lower rate of return
speedy economic growth and development of the country, i.e. 12% only and collateral free investment up to 0.50 million
particularly through expansion of trade, commerce and with some other flexible terms & conditions to the women
industry. entrepreneurs. Up to December 2015, IBBL disbursed Tk.
6,751 million favoring the women entrepreneurs.
Car Investment Scheme
IBBL has designed the scheme for the mid and high NRB Investment Scheme
ranking officials of the government and semi-government IBBL has launched NRB Entrepreneurs Scheme for
organizations, corporations, executives and directors of big promoting investment among non-resident Bangladeshi
business houses and companies and for persons of different and for encouraging them to remit money through banking
channel. Expatriates aged between 18 to 60 years or their
professionals groups on easy payment terms and conditions.
family members who maintain accounts with IBBL for
Investment Scheme for Doctors remitting money are eligible for the investment.
The scheme has been offered for fresh medical graduates Khidmah Card:
intending to set up medical centers. IBBL comes forward Khidmah Card is a Shariah Compliant Credit Card,
with finance to help procure medical equipments or to set introduced by Islami Bank Bangladesh Limited to cope with
up diagnostic laboratory, pharmacy, clinic etc. the present market demand of the people. Basically, it is
fully a service-oriented new product of IBBL which makes
Small Business Investment Scheme our everyday buying and selling easy with reducing the risk
To give a boost to the small businesspersons and of carrying physical cash.
entrepreneurs, the Bank has launched the scheme and it is It is mentionable that one can use it locally/internationally to
contributing a lot to generate income and employment as meet up their needs in the form of buying goods/products/
well as to develop the standard of life of different segment items/commodities through Point of Sale (POS) as well as
of low-income people. The Bank provides different types of withdrawal of cash currency from ATM Booth all over the world.
agricultural instruments, equipments for operating small
trade and finance, small shop, light transport, machinery for
Micro-Investment Activities
small and cottage industry etc. under this scheme. Islami Bank Bangladesh Limited launched its microfinance
program for the rural poor under the name and style of Rural
Agricultural Implements Investment Scheme Development Scheme (RDS) in the year 1995 to address
the needs of investment of the agriculture and rural sector.
The Bank has introduced this scheme keeping in view the
This is to create opportunity for employment generation and
people-orientation and welfare objectives of the Bank. Under raising income of the rural people with a view to fight against
the scheme, power tillers, power pumps, shallow tube-wells, poverty. In the meantime, 227 branches of the Bank have
thresher machines etc. are provided on easy terms to the been operating RDS activities in 64 districts of the country.
unemployed rural youths for self-employment and to farmers The Bank launched another microfinance program namely
to help them augment production in the agriculture sector. Urban Poor Development Scheme (UPDS) in May 2012
for extending micro-investment facilities among the urban
Micro-Industries Investment Scheme poor. At present, the Scheme is being operated through
Micro Industries investment Scheme aims at creating a 24 urban branches under Dhaka, Chittagong & Sylhet
wider base for industries and to encourage establishment metropolitan cities. Through both the Schemes, IBBL could
of micro-industries in different areas of the country by bring more than one million poor outreach of rural and urban
the potential entrepreneurs and to diversify the Banks areas under banking services present enrolment of whom
is 947,305. Performance under the Schemes are shown
investment portfolio.
hereunder at a glance.

71
Islami Bank Bangladesh Limited Annual Report 2015
Directors Report

Insecticide Processing Industry Power Plants

Performance of Micro-Investment
The detailed performance of both the Schemes are mentioned below:
(In million Taka)

Sl. Particular RDS UPDS Total

01 No. of Branch 227 24 251

02 No. of Employees 2,366 103 2,469

03 No. of Member 923,250 24,055 947,305

04 No. of Client (members availing investment) 553,098 16,722 569,820

05 Total disbursement during the year 29,023.84 900.20 29,924.04

06 Investment Outstanding 20,074.20 724.62 20,798.82

07 Overdue 96.62 12.92 109.54

08 Savings 6,779.50 111.18 6,890.67

Inclusion At present, 947,305 members are enjoying financial services

The eligible segment of people are enrolled as members in under 28,822 centres in 18,615 villages. It may be mentioned
the selected villages/areas in groups under different centres. here that ratio of male & female members are 21:79.

Expansion of RDS & UPDS in the last 5 years is shown in the following table

Particular 2011 2012 Growth 2013 Growth 2014 Growth 2015 Growth

1 2 3 4 5 6 7 8 10 11

No. of village 12,857 15,371 20% 17,104 11% 18,086 6% 18,615 3%

No. of Centre 22,206 24,623 11% 26,887 9% 27,874 4% 28,822 3%

No. of Member 608,703 733,520 21% 836,227 14% 911,470 9% 947,305 4%

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Islami Bank Bangladesh Limited Annual Report 2015
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Ceramics Industry Small clients see change in life through fisheries

Trend of Membership under RDS & UPDS

100,000
911,470 947,305
800,000 836,227
733,520
600,000
608,703
400,000

200,000

0 2011 2012 2013 2014 2015

Savings Program
The members are made entry by opening a Savings Account with RDS comprising a five members group. There after, they have
to deposit a compulsory savings for minimum Tk.30/- in RDS and Tk.50/-in UPDS. There is also a provision for them to open MSS-
RDS account with minimum Tk.100/-. Entire deposits have a perpetual nature. Because, as usual transactions are not allowed
with those. It may also be treated as class one security against the investment availed the members. Total savings of RDS & UPDS
members was Tk. 6,890.67 million as on 31-12-2015.

Deposit in the last 5 years

(Amount in million Taka)

Type of Deposit 2011 2012 Growth 2013 Growth 2014 Growth 2015 Growth

MSA-RDS 2,204.89 2,895.05 31% 3,750.86 30% 4,572.49 22% 5,273.42 15%

MSS-RDS 133.95 427.47 - 780.60 83% 951.55 22% 1,617.25 70%

Total Savings 2,340.45 3,322.52 42% 4,531.46 36% 5,524.04 22% 6,890.67 25%

Investment Program clients and newly inducted local micro-entrepreneurs). We

also extend Quard-al-hasana to the eligible RDS clients for
Types of Investment Products setting up tube-well, sanitary latrine. Quard-al-hasana is also
02 (two) types of investment facilities are being provided to extended for rehabilitation purposes on account of natural
the beneficiaries namely (a) Micro-investment (collateral-free and social disasters up to Tk.10,000/- .and rehabilitation of
investment maximum Tk.75,000/- for the RDS members) and the hardcore poor who are not the member of RDS under
(b) Micro-enterprise Investment (Investment with collateral welfare activities up to Tk.5,000/-
security maximum Tk.500,000/- for the graduated micro-

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Islami Bank Bangladesh Limited Annual Report 2015
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Nursery Refrigerator Manufacturing Industry

3.2 Growth of the Client

A comparative position of growth of client under micro-investment (MI) and micro-enterprise investment (MEI) of the schemes in
the last 5 years is shown in the following table:
(Amount in million Taka)
Sl. Particular 2011 2012 Growth 2013 Growth 2014 Growth 2015 Growth

01 MI client 343,304 421,703 23% 472,146 12% 506,303 7% 500,216 (1%)

02 MEI client 39,015 53,063 36% 60,089 13% 39,891 (51%) 69,604 74%

03 Total Client 382,319 474,766 24% 532,235 12% 546,194 10% 569,820 4%

Trend of Client under RDS & UPDS

600,000
569,820
532,235 546,194
474,766
400,000 382,3019

200,000

0
2011 2012 2013 2014 2015

* It may be mentioned that the highest ceiling of micro investment is Tk.75,000/-. Therefore, a total of 24,207 micro-enterprise
clients, who were availing investment below Tk.75,000/-, are now being reported under micro-investment.

Growth of Investment of growth of investment under micro-investment (MI) and

micro-enterprise investment (MEI) of the schemes is shown
Cumulative disbursement among the beneficiaries was
in the following table:
Tk.130,445.12 million up to December-2015 out of which
outstanding is Tk. 20,798.82 million. A comparative position

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Islami Bank Bangladesh Limited Annual Report 2015
 Directors Report

(Amount in million taka)

Sl. Particular 2011 2012 Growth 2013 Growth 2014 Growth 2015 Growth

01 Micro Investment (MI) 4,234.18 6,036.74 43% 7,956.89 32% 10,254.76 29% 11,781.60 15%

02 M E Investment (MEI) 2,837.85 4,353.97 53% 5,774.03 33% 7,125.20 23% 9,017.21 27%

03 Total Outstanding 7,072.03 10,390.71 47% 13,730.92 32% 17,379.96 27% 20,798.82 20%

04 Rate of Recovery 99.58% 99.72% -- 99.70% -- 99.50% -- 99.47% --

Trend of investment under RDS & UPDS

25,000.00
20,798.82
20,000.00
17,379.96
13,730.92
15,000.00
10,390.71
10,000.00 7,072.03

5000.00

0
2011 2012 2013 2014 2015

3.4 Sector-wise Investment Sector-wise Investment

Investments under RDS are extended especially in the

Crops
agriculture sector. However, a significant investment has 24%
Livestock
also been extended in different income generating off- Fisheries
farm activities, rural housing & transport. It is viewed that 39% Agricultural
Equipments
42% investment was extended in different sub-sectors of
11% Nursery & others
agriculture, 19% in rural housing & transport and 39% in Rural Transport
different off-farm activities. Rural Housing
4%
15% 1% 2% Off-farm Activities
4%

Graduation Program The clients who can lead their lives with the income
of their own sources maintaining minimum social
Criteria for the graduation of Clients: standard.

Under the Scheme micro investment clients are being cared The clients who hold the capacity of entrepreneurship.
to be developed gradually. Apart from investment, they are
Taking up some steps like introducing Rural Housing
provided with capacity building training, counselling and
other logistics. We assess the graduated clients considering Investment, increasing the ceiling of MEIS the growth of
the following criteria: graduation noticeably increased in the Year 2015. Year wise
The clients who have availed highest ceiling of Graduated clients mentioned below (cumulative):
investment under RDS fixed from time to time having
sufficient collateral security, are transferred to MEIS.

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Sl. Particulars 2011 2012 2013 2014 2015

1 Graduated clients who transferred to MEIS from RDS after availing 8,482 9,618 17,719 27,128 43,604
maximum ceiling under RDS.
Total 8,482 9,618 17,719 27,128 43,604

5. Non-financial (welfare) Programs under the Schemes

Since Poverty alleviation needs a combination of financial and non-financial programs. In this perspective, different non-financial
welfare services have been extended under the Schemes from the year 2012 to the areas of (1) Education, (2) Training, (3) Health,
(4) Relief & Rehabilitation and (5) Environment.
Performance of welfare activities at a glance during the Year 2015
(Amount in million Taka)
Sl. Program During 2015 Cumulative
Beneficiary Amount Beneficiary Amount
1 Education 42,983 57.94 127,509 179.37
2 Training 169,217 26.87 422,222 56.47
3 Health 48,612 66.97 151,624 175.83
4 Relief & Rehabilitation 4,093 30.59 14,750 82.09
5 Environment 757,556 *20.92 722,376 42.06
Amount Quard disbursed 7,007 41.39 14,980 80.36
Grand Total 1,022,461 203.29 2,161,150 535.82
Grand total without Quard 1,015,454 161.90 2,146,170 455.46
*Plantation program has been accomplished in the Year 2015 with the amount of Tk.20.92 million from Business Development
Expenses of the bank in lieu of Welfare Budget.
Details of the Programs are mentioned below:

5.1 Education Program

Under Education Program there are three types of activities like (1) Scholarship (for the children of the beneficiaries secured GPA-5
in the SSC & HSC examination), (2) Academic Award (to the meritorious children of the members from class I to class IX) and (3)
Establishment of pre-primary school, maqtab & adult education centre in the project areas.

Activities under Education Program during the year 2015

Activities Number Beneficiary Amount in million Tk.
a. Scholarship 2 803 17.82
b. Academic Award 2 24,192 15.97
c. Pre-School/maqtab 691 17,988 24.15
Total 695 42,983 57.94

5.2 Training Program

There are three types of training activities under the Program like (a) Skill Development Training (b) Self-employment Training and (c)
Centre Leaders Training. Activities under Training Program during the year 2015 at a glance are shown in the following table:

Activities Number Beneficiary Amount in million Tk.

a. Leadership Training (Get-together) 123 29,808 12.70
b. Skill Development Training 2,625 139,176 13.06
c. Self-employment Training 1 233 1.11
Total 2,749 169,217 26.87

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IBBL developed entreprenurship in handloom

5.3 Health Program

Under Health Program, there are four types of activities like (1) Installation of Tube-well & Sanitary Latrine, (2) Conducting medical
camps (general, eye & circumcision), (3) Medical Assistance and (4) Assistance to Mother & Neonatal. Activities under Health
Program during the year -2015 at a glance are shown in the following table:
(In million Taka)
Activities Number Beneficiary Amount in million (Tk.)
a. Water & Sanitation:
i. Quard for tube-well 1 3,661 25.51
ii. Quard for sanitary latrine 1 1,839 8.41
Sub-total 2 5,500 33.92
b. Medical Assistance:
i. General medical camp 115 18,508 3.41
ii. Eye Camp 27 2,897 0.72
iii. Circumcision Camp 18 453 0.56
iv. Cash assistance 1 1,164 8.04
Sub-total 161 23,022 12.73
c. Gift to the newborn baby: 1 20,090 20.32
Total 164 48,612 66.97

5.4 Relief & Rehabilitation Program dues, (b) Relief & Donations and (c) Rehabilitation Quard.
Activities under Relief & Rehabilitation Program during the
Under the program, 3 types of assistance are being provided year 2015 at a glance are shown in the following table:
to the poor and distressed members like (a) Waiver of Banks

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(In million Taka)

Activities Beneficiary Amount in million Tk.
a. Financial Asst. For distressed cliients 1,215 15.67
b. Quard for Rehabilitation:
i. Of the distressed members 128 0.73
ii. Of the hardcore poor 1,379 6.74
Sub-total 1,507 7.47
c. Relief & Donations:
i. For Marriage purpose 723 4.61
ii. For Burial purpose 540 1.42
iii. For Disaster relief 108 1.42
Sub-total 1,371 7.45
Total 4,093 30.59

5.5 Environment
The Bank has been observing Plantation Program during the rainy season almost every year since 2003. Each of the RDS members
have provided with one sapling free of cost and encouraged to implant two others by their own. Since 2003, the Bank has distributed
about 4,917,578 saplings. This year we have distributed 757,556 fruit saplings among the RDS members and different educational
institution in the working areas with the cost of Tk.20.91 million.

Agricultural Investment of IBBL

Islami Bank Bangladesh Limited has been giving due importance on agricultural/rural investment from its inception. To make it
more convenient, four investment schemes like Agricultural Implements Investment Scheme (AIIS), Rural Development Scheme
(RDS), Micro Enterprise Investment Scheme (MEIS) and Solar Panel Investment Scheme (SPIS) have been introduced in 1992,
1995, 2005 & 2011 respectively.

The Bank has disbursed Tk. 12,707 (achievement 155%) million in agriculture sector against its target of Tk. 8,200.00 million
among 182,940 farmers/investment clients in the year 2015. Besides, under the special program of Bangladesh Bank (investment
in cultivation of pulse, oil seed, spices & maize at subsidized rate of profit 4%), IBBL has already disbursed Tk. 10.16 million against
targeted amount of Tk. 10 million.

Financial Year wise Comparative position of Agricultural Investment

(Amount in million Taka)
Fiscal Year Target Disbursement % of Achievement
National IBBL National IBBL National IBBL
2009-2010 115000 8800 111170 8410 97% 96%
2010-2011 126174 9500 121844 10210 97% 107%
2011-2012 138000 10000 131320 11703 95% 117%
2012-2013 141,300 7,250 146,670 13,074 104% 180%
2013-2014 145,950 7,550 160,368 13,199 110% 175%
2014-2015 155,500 7,900 159,785 9,716 103% 123%

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Sector-wise disbursement under Agricultural facilities are allowed in a manner so that credit expansion
Investment of IBBL in 2015 goes on ensuring optimum asset quality. Investment
facilities are extended to customers who comply banks
norms and principles.
Sector wise disbursement in the year 2015 (in million)
Non-performing Investment
Others
Storage
(302) 2%
(485) 4% IBBLs position was better than national non-performing
Investment position. Classified Investment as on 31.12.2015
Poverty
Alleviation
Crops
(3081)
was 4.22% of total investment.
(2,974) 24% 24%

Agricultural
NPI in IBBL
Implement Fisheries (In million Taka)
(138) 1% (2,323)
18%
SL Particulars 2015 2014
Livectock
(3,404) 27% NO.

1. NPI (NPL) Ratio at IBBL 4.22% 4.92%

Disbursement
Sector 2. Industry Average of NPL 8.79% 9.69%
(amount in million Tk.)
Crops 3,081 3. Required Provision 23,254.28 18,108.22
Fisheries 2,323 4. Provision Maintained 23,255.00 18,108.40
Livestock 3,404
5. Provision Maintained Ratio 100% 100%
Agricultural Implement 138
Poverty Alleviation 2,974 International Business (Import/ Export/
Storage 302 Remittance)
Others 485 IBBL continues to strive for greater contribution in the
countrys international Business. Total international business
Total 12,707
reached to Tk. 888,970.00 million in 2015 with a growth of
5% over 2014. 4 (four) new Branches were added in 2015 to
Asset Quality
the fleet of Authorized Dealer (AD) branches handling Import,
IBBL continues to maintain strong asset quality despite Export and Remittance business. The comparative figures of
many odds in macroeconomic fundamentals. Investment international business (2014-2015) are shown below:

(In million Taka)

2014 2015 % of growth in 2015
Particulars over 2014
Amount % of Total Amount % of total

Import 316,975 38% 343,668 39% 8%

Export 222,753 26% 224,236 25% 1%

Remittance 307,961 36% 321,066 36% 4%

Total 847,689 100.00 888,970 100.00 5%

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Garments Industry, the lifeline of national economy

Import Import 2011-2015

400000
Import business stood at Tk. 343,668.00 million at the end of 350000
300000
December, 2015 with 8% growth over 2014 while the growth 250000
in number of Letter of Credit was 14% i.e. 76,897 as against 200000
150000
67,274 in 2014. 5 (five) years import performance (2011-2015) 100000
50000
is shown in the chart. 0
1 2 3 4 5
-50000
Share 9.56% 10.01% 9.83% 9.77% 11.03%
Growth 22% -6% 0% 11% 8%
Volume 301207 284587 285900 316975 343668
Year 2011 2012 2013 2014 2015

Export Export 2011-2015

250000
Export business touched the figure of Tk. 224,236.00 million 200000
at the end of the year, 2015 with 1% growth over 2014 while 150000
number of export documents handled was 71,919 as against 100000
65,225 in 2014 with 10% growth. 5 (five) years export business 50000
of the Bank (2011-2015) is shown in the chart. 0 1 2 3 4 5
Share 10.41% 10.70% 10.17% 10.09% 9.70%
Growth 20% 11% 4% 9% 1%
Volume 178244 197095 205269 222753 224236
Year 2011 2012 2013 2014 2015

Remittance Remittance 2011-2015

From 2011 to 2015 Remittance Business rose from Tk. 350000
236,607.00 million to Tk. 321,066.00 million. Growth in 2015 300000
250000
was 4% over the corresponding period against country growth 200000
of 2.59%. Market share of remittance of IBBL at the end of 2015 150000
100000
stood at 26.88%. 50000
0
1 2 3 4 5
-50000
Share 26.07% 27.70% 26.67% 25.53% 26.88%
Growth 10% 27% -5% 7% 4%
Volume 236607 300915 286956 307691 321066
Year 2011 2012 2013 2014 2015

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Off-shore Banking

31.12.2014 31.12.2015
Growth Over
Sl Nature of Business No. of Million Million No. of Million Million 2014
issue USD Taka issue USD Taka

1 Investment/Placement - 195.37 15200 - 371.52 29164 92%

2 Operating profit - 8.44 652 - 10.75 835 28%

3 Murabaha Transaction 954 158 12324 1329 280 21840 77%

4 HPSM Transaction - - - 152 59.58 4647 -

5 Import: UPAS & HPSM 1438 498.61 38839 2338 618 48201 29%

6 UPAS Disbursement 1925 337 26272 2628 481 37518 43%

7 UPAS Adjustment 1793 346 26614 2262 366 28548 7.27%

Import basket
Fig. in million Tk.
2014 2015
Sl. No. Items Growth
Amount % of Total Amount % of Total
1 Raw cotton, Yarn, Fabrics & Accessories 108588 34% 111040 32% 2%
2 Capital Machinery 17516 6% 19692 6% 12%
3 Fertilizer 24292 8% 13048 4% (46%)
4 Iron, Steel & base Metal 4274 1% 13370 4% 213%
5 Wheat 7317 2% 10870 3% 49%
6 Rice 10595 3% 9648 3% (9%)
7 Sugar 5669 2% 11167 3% 97%
8 Onion 5130 2% 11222 3% 119%
9 Chemicals 8047 3% 9921 3% 23%
10 Edible Oil (Crude, refined) 2794 1% 9672 3% 246%
11 Coal 2653 1% 6651 2% 151%
12 Other Machinery 7800 2% 6594 2% (15%)
13 Scrap Vessel 4003 1% 2094 1% (48%)
14 Motor Vehicles 3748 1% 2029 1% (46%)
15 Others 104549 33% 106650 31% 2%
Total 316975 100% 343668 100% 8%

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Export basket
Fig. in million Tk.
2014 2015
Sl. No. Items Growth
Amount % of Total Amount % of Total
1 Garments & Textiles 174259 78% 171524 76% (2%)
2 Frozen Foods & Vegetables 3762 2% 3897 2% 4%
3 Jute & Jute Goods 10857 5% 12321 5% 13%
4 Leather 830 0% 1177 1% 42%
5 Tea 0 0% 0 0% 0%
6 Chemicals 318 0% 0 0% (100%)
7 Others 32727 15% 35318 16% 8%
Total 222753 100% 224237 100% 1%

Centralized Trade Processing Center (CPC)

IBBL pioneered in centralizing its trade business in 2015. The centre which is totally paperless and the first of its kind among
local Banks have enabled the Bank to increase its trade handling capacity to a great extent. The centre has required expertise in
the form of Certified Documentary Credit Specialists that gives ease to ensure all regulatory compliance and quality of service as
depicted in the following table:

Central Trade Processing 2011-15

2011 2012 2013 2014 2015
Name of the
SL 2010 Growth Growth Growth Growth Growth
Product No. No. No No. No.
(%) (%) (%) (%) (%)
1 Cash LC 3761 10594 182 23358 120 29672 27 35045 18 41334 18
2 BB LC 1161 9863 750 16771 70 19903 19 21982 10 24668 12
3 Amendment 1467 5920 304 12666 114 15278 21 17064 12 20896 20
4 Scrutiny 178 2203 1138 6833 210 9342 37 11185 20 15364 37
5 Cash Bills
1764 10356 487 25006 141 29802 19 37077 24 44367 20
Payment
6 Acceptance 44 4805 10820 16627 246 22186 33 24494 10 27166 11
7 BB Bills
41 4894 11837 14544 197 18037 24 21445 19 22051 3
Payment
8 Export Bills &
120 9051 7443 32675 261 38970 19 38879 (0.23) 53019 36
Others
9 Total 8536 57686 576 148480 157 183190 23 207171 13 248865 20

Remittance Country shares 2.47 1.47

0.4
0.28 0.96
6.67 0.19 Remittance Country shares
Significant share of remittance of IBBL has been originating
8.63
from K.S.A which was 34.80 percent in 2015. Other major 34.8 KSA
UAE
remittance source countries in 2015 were UAE, Malaysia, USA, Malaysia
USA
Oman, Kuwait, & Bahrain with contribution of 14.94%, 11.14%, 7.9 Kuwait
Oman
10.15%, 8.63%, 7.90% and 6.67% respectively. Bahrain
UK
Singapore
10 Korea
Italy
Qatar
11.14 14.94 Other

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IBBL was awarded Gold Medal for Outstanding Contribution in Foreign Remittance Services

Centralized Remittance Service hub

The leading market share of the Bank in Foreign remittance is attributed to capacity building through central remittance service
hub at Head office, which started operation in 2008 and quality of service at Branch level in addition to the confidence of the
customers. The hub can centrally process NRB account opening applications received from aboard. A separate strong customer
service department is also working there for instant support to the expatriates. It has developed a database of expatriates and
beneficiaries to reach the customers by a Click. This allows the central remittance service hub to handle huge quantum of
remittance to the satisfaction of the remitters as shown in the table:

Remittance product basket

Fig. in million Tk.
Sl Particulars 2014 2015 Growth Growth %
1 Central Account Credit 136,623.70 141,068.00 4,444.30 3.25
2 Spot Cash/ Online transfer/ Flash remit 149,162.00 153,570.00 4,408.00 2.96
3 BEFTN 22,175.40 26,428.00 4,252.60 19.18
4 Total number of transactions 8.17 8.39 0.22 2.69
5 Amount 307,961.00 321,066.00 13,105.00 4.26

Relationships abroad:
28 New Correspondent Banking Relationship was established in 2015 (5 correspondents, 23 RMA with global Banks). Apart from
this 17 remittance arrangements have been established with Banks and exchanges houses in 2015 taking the tally to 136.
The table shows the relationship status of the Bank with Foreign Banks:

Nostro Nostro Accounts Nostro Accounts RMA (Relationship RMA Countries Banks with
Accounts stands in 2015 in currencies Management 2015 with RMA RMA
till 2014 Application) 2014

41 46 12 597 531 71 241

Correspondent Banks & Exchange Houses visiting IBBL

In 2015, 86 foreign correspondents, 12 International agencies and 25 exchange houses/banks visited IBBL to explore business.
Major foreign banks include Rabo Bank, Netherland, SCB, Mashreq, Commerz AG, ICICI, Axis India, UBAE Italy, Habib AG Zurich
Switzerland. Major agencies were IFC, World Bank Group, Islamic Corporation for the Development of the Private Sector (ICD) of

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Islami Bank Bangladesh Limited Annual Report 2015
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IDB Group, IDB. Major exchange houses/banks were Bank Al in all aspects of operations during the year 2015. The Board
Jazira KSA, Bank Al Bilad KSA, Money Gram Payment System extends thanks to the Ministry of Finance, the Bangladesh
USA, UAE Exchange UAE, Al Fardan Ex. UAE and others. Bank, Bangladesh Securities and Exchange Commission,
Dhaka Stock Exchange Limited, Chittagong Stock Exchange
Remittance Marketing: Limited, National Board of Revenue, Registrar of Joint Stock
Companies, Statutory Auditors and the Government Agencies
IBBL Delegations Visits abroad for providing necessary assistance, guidance, support and
co-operation at various stages of operations of the Bank.
IBBL delegates visited 43 Banks & Exchange Houses in With deep sense of gratitude, the Board also keeps on record
2015 to extend correspondence relationship and enhance the excellent co-operation, exchange of views and constant
remittance partnerships. The major Banks & Exchange support of the Islamic Development Bank (IDB), other national
Houses which visited IBBL are Mashreq Bank, Standard and overseas Islamic Banks and Financial Institutions.
Chartered Bank, Habib Bank, National Bank of Pakistan in
NY, State Bank of India, AB Bank, ICICI Bank, Al Rajhi Bank, The Board appreciates the support and co-operation received
Bank al Bilad, Arab National Bank, Bank al Jazira, Money from overseas correspondents of the bank all over the world.
Gram Payment System USA, UAE Exchange Australia, The Board particularly likes to record its appreciation for
Xpress Money Australia, IME SDN Berhad Malaysia, the Shariah Supervisory Committee whose guidance has
Transfast Remittance LLC USA, Prabhu Money Transfer USA enabled the bank to conduct its business complying Islamic
and others Principles. The Board of Directors also extends the best
compliments to all of its valued Shareholders, Depositors,
Remittance Promotional Programs Investment Clients, Print and Electronic Media and other
stakeholders and well-wishers and expresses thanks and
In 2015, a number of marketing initiatives were taken in gratitude to them for their valuable support and confidence
2015 with a view to boosting up remittance from different reposed on the bank..
exchange houses. On the occasion of Bangla Nobo Borsho, Finally, the Board would like to express its great appreciation
a month long promotional program was arranged by IBBL & and thanks to all the officials and staff of the Bank for their
MoneyGram, USA jointly. On the occasion of Eid- ul- Fitr, a 21 untiring efforts, leadership and dedication for bringing about
day long promotional program was jointly arranged by IBBL a better performance of the Bank during the year under report.
& Transfast Remittance LLC, USA. On the occasion of Ei-ul-
Azha, an 18 day long promotional program was arranged by In conclusion, notwithstanding the fact that Islamic banks
IBBL & Xpress Money, UAE jointly. IBBL sponsored a 45 day have been able to shield themselves from the spillover impact
of the global economic recession, no one can predict the
long promotional program arranged by UAE Exchange Centre
extent to which the Islamic finances principles will serve to
LLC, UAE. Some other programs like Free Medical Camp,
protect it from the looming financial crisis. Whilst some have
Remittance Fair and participation in NRB conferences both
pointed out that it is already knotted with the mainstream
home and abroad were also taken up. finance whereby its future is as risky as any other part of the
global financial industry, experts in Islamic finance believe
Representatives Deputed Abroad that their way of carrying out finance-related activities has
shielded them from the global credit crisis and hence, the
We have been deputing officials of our bank in different model stands on its own merit. London, Singapore, Paris
exchange houses/banks abroad for remittance mobilization. and Hongkong the financial heartthrob of the world, are
At present, 31(thirty one) Representatives are working in four competing with each other to become centre of excellence
countries. 5 (five) more officials were deputed to different in Islamic finance. Reputed banks like Standard Chartered,
countries in 2015. HSBC and Citi Bank have already set up Islamic banking
subsidiaries that are flourishing.
Corporate Governance May Allah, the most Merciful bestow on us courage,
dedication, patience and fortitude to serve the cause of
The Bank makes sure that the guidelines and regulations Islam and also of Bangladesh and run the bank as per the
issued by Bangladesh Bank and Bangladesh Securities and vision and mission put forth earlier and tenets of Islamic
Exchange Commissiion are properly followed. Details have Shariah. Ameen.
been presented in the earlier pages of this Annual Report
under the title Corporate Governance.
Vote of Thanks
Dated, Dhaka (Engr. Mustafa Anwar)
The Board of Directors expresses its deepest gratitude to the
April 19, 2016 Chairman
Almighty Allah for enabling the bank to achieve steady progress

84
Islami Bank Bangladesh Limited Annual Report 2015
 Risk Management

RISK MANAGEMENT

Meeting of the Risk Management Committee

Risk Management Framework and Procedure g The Bank continues to adopt a holistic and integrated
approach to risk management and, therefore, brings all
Integral to its business, IBBL takes on various types of risk, the risks together.
most important of which are credit risk, market risk, liquidity
risk and operational risk. The identification, measurement, g Risk management is governed by well-defined policies
monitoring and management of risks remain a key focus that are clearly communicated across the Bank.
area for the Bank. Sound Risk Management and balancing
risk-reward trade-offs are critical to the Banks success.
g Risk management is a shared responsibility. Therefore,
Business and revenue growth are therefore to be weighed
the Bank aims to build a shared perspective on risks
in the context of the risks implicit in the Banks business
that is grounded in consensus.
strategy. The Board of IBBL endorses the risk strategy and
approves the risk policies. The Risk Management Committee
g Risk-related issues are taken into consideration in all
(RMC) of the Board supervises implementation of the risk
business decisions. The Bank shall continue to strive
strategy. It guides the development of policies, procedures
to maintain a conservative balance between risk and
and systems for managing risk. The Committee periodically
reward considerations.
reviews risk level and direction, portfolio composition, status
of impaired credits as well as limits for treasury operations.
g Risks are reported openly and fully to the appropriate
Risk Management Philosophy levels once these are identified.

Like other Banks IBBL is also undertaking risks but as a g Risk officers work as allies and thought partners to
shariah based bank, its risks are mainly mitigated observing other stakeholders within and outside the Bank, and are
shariah rules and regulations. Again it has its own risk guided in the exercise of their powers by a deep sense
management philosophy for giving proper attention to of responsibility, professionalism and respect for other
risk management. The key elements of the Banks risk parties.
management philosophy are as under:
All subsidiaries are guided by the principles enshrined

g
g The Bank considers sound risk management to be the
in the risk management policies of the Bank.
foundation of a stable financial institution.

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Islami Bank Bangladesh Limited Annual Report 2015
Risk Management

Risk Management Objectives Three Lines of Defense

IBBL has clear risk management objectives and a well- 1st Line of Defense 2nd Line of 3rd Line of
established strategy to address them, through core risk and Defense Defense
capital adequacy related risk management processes and
Day to day Risk Risk Oversight Independent
encompasses all the activities that affect its risk profile. At a
Management & Policy & Assurance
strategic level, our risk management objectives are to: Management Control Methodology
g Identify the Banks significant risks, assess the same, Business Units Boards Risk Audit
taking appropriate mitigating steps to ensure optimum Management Committee
and sustainable profitability; Committee
Support Functions Chief Risk Internal Audit
Formulate the Banks risk appetite and ensure that Officer
g

business profile and plans are consistent with it;

Risk External
g Optimize risk/return decisions by taking them as closely Management Audit
as possible to the business, while establishing strong Wing
and independent review and challenge structures; Operational Risk Supervision
Management of Regulators
g Ensure that business growth plans are properly Committee
supported by effective risk infrastructure;
Responsibility and accountability for risk management
g Manage risk profile to ensure that specific financial remain at all levels within the Bank, from the Board, down
through the organization to each business manager, support
deliverables remain possible under a range of adverse
functions and risk owner.
business conditions; and
Risk Management Framework
g Help executives to improve the control and co-
ordination of risk taking across the business. Risk Management
Committee of the
Board

Risk Management Culture Managing Director

Risk Management
Co-ordination
g The Board and the Management promote a responsible Committee Head of Risk
Management
approach to risk. Wing

g The responsibility of risk management is fully vested in Inv. Risk Foreign ICC Risk ICT Risk Money Laund.
the Board of Directors, which in turn delegates this to Mgt.
Cmt.
Exch. Risk
Mgt. Cmt.
ALCO Mgt.
Committee
Mgt.
Committee
Risk Mgt.
Cmt.

senior management;
Supervisory Stress Testing Basel
g The risk management officials enjoy the sufficient Review Process
Team
Committee Implementation
Committee

professional independence and stature;

g The Bank pays close attention to both quantifiable and Boards Oversight on Risk Management
unquantifiable risks; The Board is responsible for approving risk appetite which
is the level of risk the Bank chooses to take in pursuit of its
g The Banks management ensures that risk and risk business objectives. It oversees the management of the
management awareness is enshrined throughout the most significant risks through the regular review of risk
Bank; and exposures and key controls.
IBBL has its Boards Risk Management Committee (RMC) in
The Bank avoids any business where the associated compliance with Bank Company Act as well as BRPD circuler.
g

risks cannot be objectively assessed or managed. The Committee monitors the Banks risk profile against the

86
Islami Bank Bangladesh Limited Annual Report 2015
 Risk Management

agreed appetite. Where actual performance differs from g Securing and maintaining adequate loss coverage at
expectations, the actions are being taken by management the most reasonable cost;
and reviewed to ensure that the RMC is comfortable with
g Adopting proper financial protection measures
them and guides the Management for taking pragmatic
through risk transfer, risk avoidance, and risk retention
steps. The Specific Roles of the Committee are as under:
programs;
g Approval of Risk Identification and Mitigation g Determining the most cost effective way to construct,
Techniques; refurbish, or improve the loss protection system of any facility
leased, rented, purchased, or constructed by the Bank;
g Preparation of Organizational Structure;
g Managing claims for insured and uninsured losses; and
g Review of Risk Management Policy and Approval;
g Participating on all contract negotiations involving
g Maintaining Information and Reporting System; insurance, indemnity, or other pure risk assumptions or
provisions prior to the execution of the contracts.
g Supervising the overall risk management policy and
implementation of the same; Risk Management Process
g Miscellaneous issues like submission of the decisions The Risk Management process is then segregated into
and recommendations of the Committee before the five steps: establishing the context, risk identification,
board quarterly, compliance of the instructions of the risk analysis, risk evaluation and risk treatment. From
Regulatory Authorities from time to time, evaluation the each steps of the risk management process, there is
report of the internal and external audit reports etc. sufficient option for communication, consultation, reporting,
monitoring and review system.
Role of the Risk Management Function

In line with Bangladesh Bank risk management guidelines,

IBBL restructured its risk management process, oversee
of which in management level is being made by Risk
Management Wing. The specific roles of the Risk
Management Wing are as under:
g Designing banks overall risk management strategy;
g Developing and overseeing implementation of stress
tests;
g Developing, testing, and observing use of models for
measuring and monitoring risk;
g Informing the board and All Risk Committees about the
appetite for risk across the Bank;
g Communicating views of the board and senior
management throughout the Bank; Core Risk Management
g Independently monitoring limits, in addition to the IBBL exclusively manages 6 (six) core risks and has designed
monitoring that is done by business units; and implemented its own Risk Management Guidelines in
accordance with the guidelines prescribed by the Central
Establishing risk management policies and procedures;
Bank and formed 6 core risk management committees
g

g Formulating guidelines on the handling of all property which conduct meeting periodically. The major concerns of
and liability claims involving the organization; the committees are as under:
g Developing and implementing loss prevention/loss a) Investment Risk Management Committee supervises and
retention programs; monitors investment concentration, investment risk grading,
corporate clients rating, non performing investment,
Identifying and quantifying Banks exposures to residual risk against investment, provision against classified
g

material loss; investment, investment mix, asset quality etc.

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Islami Bank Bangladesh Limited Annual Report 2015
Risk Management

b) Foreign Exchange Risk Management Committee Supervisory Review Process Team in each Bank. IBBL has
oversees foreign exchange risk, treasury, net open formed such a committee which is headed by the Honble
position, import & export business, dealing room Managing Director of the Bank.
operations and anti-money laundering aspects in foreign
exchange transactions and remittance etc. c) Stress Testing Committee
The Central Bank also instructed the banks to conduct
c) Information & Communication Technology Risk
periodical stress testing on some statistical simulations
Management Committee monitors and supervises the
risks related to data security, physical security, network assuming different risk aspects of the Bank. Here in, all the
security, disaster recovery, fraud, forgery, system failure potential stresses are given on the capital base of the Bank
and business continuity etc. in order to foresee the total risks and strengthen the Banks
capital. In order to perform this task, IBBL has formed a
d) Money Laundering Risk Management Committee looks committee namely Stress Testing Committee.
after the money laundering activities, STR, CTR, KYC and
TP related compliances. The committee also supervises Relationship with Risk Management & Other Units
and monitors the entire transactional activities of the
Bank including money laundering aspects involved with Boards RMC

foreign exchange transactions.

MD & CEO
Enquiries
Analys
e) Internal Control and Compliance Risk Management Business Units Reporting Regulators
Reporting Risk
Committee is recognized to assess and mitigate the risk Management
related to compliance with regulatory requirements, set Enquiries
Wing Risk
Summarv Rating
Auditors
rules of the Bank, internal checking system, lapses, fraud, Reporting
Agencies

forgeries, violations of the set rules etc. RMCC

Report RWA
Stress Testing Basel Impl.
f) Asset Liability Committee (ALCO) to look after the asset- Committee Recommend Committees

Recommend
ICAAP

Report &
liability risk, liquidity risk, Investment Deposit Ratio (IDR),
deposit mix, investment mix, gap analysis etc. under Financial
Administration
Budget
Analysis
Operations
Core Risk
direct guidance of CEO. Division Capital Allocation Committees
Reporting

Basel Accord Implementation

Risk Management Wing (RMW) is directly involved with the
Banking industry in Bangladesh is highly regulated. Central total risk management process of the Bank. The major job of
Bank of the country is very much aware to keep the capital RMW is to integrate the risk issues, bank-wide risk monitoring
of individual Bank as per international standard and for this and reporting. Other units provide relevant data to RMW and
reason, Bangladesh Bank issued guidelines on risk based it makes recommendation on capital allocation, budgeting
capital adequacy (RBCA) for Banks and separate Supervisory and pricing, portfolio structuring, liquidity management,
Review Guidelines. Again BB has issued guidelines for Basel setting risk appetite, compliance culture etc. based on the
III which is being to be implemented from 2015 to 2019. To risk reports and Risk Management Papers (RMPs).
implement Basel III guidelines, we have formed committee
as under: Risk Management Meeting
a) Basel unit b) Supervisory Review Process Team, and c) The Management Committee of the Bank has also formed a
Stress Testing Committee. strong Risk Management Co-ordination Committee (RMCC)
comprising heads of all the risk taking organs of the Bank
a) Basel Unit along with working tem which is arranged and organized by Risk Management Wing.
As per Bangladesh Bank instruction, Basel Unit along with a The committee sits at least once in a month or more when
working tem has been formed to implement the action plan necessary. In the meeting of RMCC, all the existing/identified
of Basel Accord in the Bank. and foreseeable/potential risks issues are discussed and
make recommendations to the concerned risk taking organs
b) Supervisory Review Process Team to address, measure and take the required steps to mitigate
Banks also face some other risks which varies from the risk factors. All the meeting minutes along with all
country to country, business to business. Hence, banks are the Risk Management Papers (RMPs) are reported to the
somewhat independent to identify and assess the additional Department of Off-site Supervision of Bangladesh Bank on
risks and hence are advised by Bangladesh Bank to form a quarterly basis.

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Islami Bank Bangladesh Limited Annual Report 2015
 Risk Management

Risk Management Disclosures g Continuous review and monitoring of the top 200
Investment clients;
Risk Appetite
g Continuous review and monitoring of the top 200
The Banks risk appetite is established by the Board of classified and investment clients and top 50 legal
Directors The Banks appetite for risk is governed by the issues;
following:
g Review of pricing;
g high-quality risk assets as measured by ratio of non-
Upgrading the position of loss Branches
performing investments to total investments and
g

maximum average internal risk rating of the investment g Finalization of Green Banking Policy of IBBL.
portfolio;
Priorities for 2016
g a diverse investment portfolio to ensure that there
are no undue concentration concerns taking into g Increasing capital adequacy ratio and maintaining
consideration the business unit, business sector, adequate capital base for adopting Basel-III Capital
country at risk and asset portfolio tenor; Accord;
g losses due to operational risk to be constantly g Improving Asset Quality and thus profitability, ROA,
monitored and to be lower than industry averages; ROE and protecting the interest of the stakeholders;
g financial and prudential ratios to be pegged at levels g Restructuring and diversification of the investment
more conservative than regulatory requirements portfolio;
Investment to Deposit Ratio (IDR), Capital Adequacy,
Optimization of gap and duration gap between
Deposit Concentration etc.; and
g

assets and liabilities;

g the Bank strives to minimize the independent indicators
Maintaining optimum liquidity and maintaining
of excessive risk appetite like overdue audit queries,
g

adverse publicity and fines & regulatory penalties: Liquidity Coverage Ratio (LCR) and Net Stable
Funding Ration (NSFR) at the optimum level;
The Bank does not compromise its reputation through
Reducing RWA through portfolio restructuring,
unethical, illegal, unprofessional conduct or violation of the
g

commandments of Islam and the Bank has a zero appetite optimum rating of corporate and SME Investment
for association with disreputable individuals, entities and clients and improving the ratio of RWA and total
activities. assets;
Reducing Shariah compliance risk to the optimum
Key Initiatives in 2015
g

level;
g Review of all the Risk Management Policies;
Implementation of Core Risk Management Guidelines
g Review of Investment Manual;
Bangladesh Bank conducts inspection on implementation of
Key Risk Indicators of all core risk areas;
the core risk guidelines of the bank each year. Lastly, conducted
g

g Risk Assessment Methodology and Evaluation of inspection based on the accounts as on 30.06.2014 and
the core risk areas; mentioned their observations in the respective reports. IBBL,
being the compliant Bank, has immediately taken effective
g Review of Internal Capital Adequacy Process initiatives to ensure implementation of all the observations
Document; of the central bank and meanwhile implemented most of
g Fraud Risk Management Policy; the observations and have communicated to the competent
authority of the central bank well ahead of the deadline.
g Policy for Deferred Letter of Credit;
Risk Management and Capital Requirement
g Guidelines for Obtaining Collateral Security from
Investment Clients; Investment Risk Management
g Terms of Reference (ToR) for all the risk Investment risk concerned with the possibility of financial
Committees; losses due to counterparties inability or unwillingness to

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Islami Bank Bangladesh Limited Annual Report 2015
Risk Management

make contractually-agreed-upon payments. In the most Investment Processing and Approval Structure
radical scenario of deterioration in credit quality, this inability
or unwillingness becomes a default event. Analyses of IBBL, being the largest investment portfolio-dealing bank
banking industry data indicate that the share of risk weighted of the country amongst the private sector banks has
assets (RWA) assigned to credit risk was 85 percent of the specific policies in place for inducting, dealing, processing,
total RWA. In perspective of IBBL, investment risk exposure sanctioning, handling overdue and non-performing
is 89.74%. As such, investment risk is key factor of IBBLs
risk management for determination of capital requirement, investments of the Bank. The Board of Directors of the Bank
profitability, liquidity and many other risk elements. delegates sanctioning power from the Board to the Branch
Incumbent. The investment approval procedure is being
Investment Risk Management Policy
followed in accordance with the approved policy of the Bank.
IBBLs Investment Risk Management Policy is approved by the
Banks Board of Directors, which plays a central and strategic In every approval units i.e. at the Branch, Zone and Head
role in managing daily business activities. The policy defines Office level, there is Investment Appraisal Committee which
the principles encompassing client selection, due diligence, mainly appraise and recommend the proposals.
early alert reporting, tolerable levels of concentration risk and
portfolio monitoring, in line with the Banks risk appetite. The Investment Portfolio and Risk Weighted Assets
approach is to avoid large investment risk on a counterparty
or portfolio level by applying stringent standards combined Islami Bank Bangladesh Limited follows the standardized
with sound collateralisation where feasible. The policy is approach for assessing investment risk and the Risk Based
reviewed regularly by the Board of Directors and updated Capital Adequacy Guideline prescribed by Bangladesh Bank.
throughout the year to ensure consistency with the Banks According to the aforesaid guideline, the risk weight categories
business strategy. A monthly Investment Risk Management are 0%, 20%, 40%, 50%, 60%, 75%, 80%, 100%, 125% and 150%.
Committee meeting chaired by the Head of Investment Wing
Risk weight wise exposure of the Bank is as under:
drives policy decisions and implementation plans.

It is evident from the graph that around 72% of the exposure

of the Bank lies under the Risk weight category of 50% or
below, as a result, the ratio of total RWA to Total Assets is
only 58% which is one of the significant strength of IBBL.

Portfolio wise Exposure

(In crore Taka)
Particulars 2015 2014 Incr/Decr
Total Assets 72,582.11 65,242.20
Total RWA 41,033.23 37,574.27 3158.96
Efficiency in RWA 56.53% 58.05%
Total Eligible Capital 4,784.53 4856.99 (72.46)%
CAR 11.66% 12.83% (1.17)%
Outstanding against Corporate (on balance sheet + off-balance sheet) 31,908.18 31,225.28 682.90
RWA against Corporate (On + Off balance sheet) 19,634.25 18,872.87 761.38
Efficiency in Corp RWA 61.53% 60.44% 1.09%
Unrated Corporate 2,917.62 2,805.91 111.71
RWA (Unrated) 3,674.02 3,507.39 139.63
Efficiency** 125% 125% -

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Islami Bank Bangladesh Limited Annual Report 2015
 Risk Management

Particulars 2015 2014 Incr/Decr

Outstanding (Past due) 1,868.18 2,329.50 (461.32)
RWA (Past Due) 1,321.28 2,712.99 (1391.71)
Efficiency in RWA (Past Due) 70.73% 116.46% -
Others Assets 4,009.96 2,804.19 1,205.77
RWA against Others Assets 3,043.78 1,924.02 1,119.76
Efficiency in RWA 75.91% 68.61% 7.30%
** The risk weight for unrated investment clients is fixed at 125% by RBCA guideline of BB.

Capital Requirement against Investment Risk Supervisory Review Process

88.97% of the total Risk Weighted Assets (RWA) is against IBBL is committed for continuous improvement of Banks
the Investment Risk Exposure. Amongst Tk. 33,8690 million internal procedure for assessing the specific risk situation,
of RWA, 95% arises from the on Balance Sheet Exposure ongoing adjustment and further development of new methods
and the rest Tk. 26,374.93 million i.e. 7% of RWA arises of risk management and internal control, covering external
from the Off Balance Sheet Exposure. Thus the total RWA factors as well as risk areas which are not taken into account or
Tk. 410,332.28 million against which Minimum Capital partially taken into account while calculating Minimum Capital
Requirement is Tk. 410,333.23 million (10% of the RWA). Requirements, quantifying the risks under pillar 2 of Basel-II,
stress testing, Internal Capital Adequacy Assessment process
Market Risk (ICAAP), setting capital targets that are commensurate
with the Banks risk profile and control environment etc. For
IBBL adopted Standardized Approach and follows the Risk adequate supervision of capital functions and risks, Bank
Based Capital Adequacy Guidelines issued by Bangladesh has formed a Supervisory Review Process Team (SRPT) as
Bank for assessing the Market Risk. There are four stipulated in Bangladesh Banks guidelines.
components from which Market Risks are evolved. The
components are as under: Internal Capital Adequacy Assessment Process (ICAAP)
Interest Rate Related Instruments In 2013, IBBL revised its own ICAAP document as directed by
Equities Bangladesh Bank which is duly approved by the competent
Foreign Exchange Position Board of the Bank. In accordance with the document,
IBBL identified, assessed the risk areas which the bank
Commodity Risk
faces in its day to day business and calculated capital
Being the Shariah based Bank, IBBL does not deal with charge thereagainst. In accordance with approved ICAAP
any interest related instruments and purchases goods/ document, IBBL conducts rigorus review on its risk exposure
commodities from the seller and simultaneously sell the and allocates the required capital for the same which are
same to the ultimate buyer. IBBL does not hold the goods/ annually being reported to the Central Bank.
commodities as owner of the same at any stage. As such,
IBBL has no exposure under these components. The Stress Testing
Market Risk Exposure of IBBL has been shown in the Basel IBBL conducts periodical stress tests and assesses stress
Disclosure part of this report. on the capital both giving individual and combined shocks
on different aspects. In case of giving individual shocks
Operational Risks deterioration of performing investment, increase of NPIs
due to default of top large borrowers, negative shift in
Operational Risk is the potential loss arising from breakdown NPI categories, decrease in FSV of collaterals, profit rate,
in Banks systems & procedures and corporate governance foreign currency appreciation, equity shocks are considered.
practices that results in human error, fraud, failure, damage Combined shocks increases, FSV of the collateral decreases,
of reputation, delay to perform or compromise of the Banks NPIs increases, negative shift in NPI categories, profit rates,
interest by employees. foreign currency appreciation.
IBBL follows Basic Indicator Approach for assessing the Stress Testing results of all the quarters of 2015 reflect that
Operational Risks. Under this approach, average of the Gross the Capital to Risk-Weighted Asset Ratio (CRAR) of IBBL
Incomes of last three years is taken as the determinant for remains above 10% for both individual and combined shock
operational Risks. The gross income of 2012 and 2013, 2014 at minor and moderate level. But at major level combined
were Tk. 25072 million Tk. 25706 million and 29,114.42 shock, the CAR reduces by 1% from the optimum level which
million with average of Tk. 26,631.05 million. Therefore, is unlikely to happen in reality and indicates that IBBL has
the capital charge against Operational Risk is Tk. 3,994.66 strong shock absorbing capacity due to its asset quality and
million (15% of the average Gross Income). capital strength.

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Islami Bank Bangladesh Limited Annual Report 2015
Risk Management

Investment Concentration Risk also concentrated its exposures in some specific regions
though these regions are economically important. But IBBL
It is known that the Economy of Bangladesh is not well has the scope to come out from such concentration gradually
distributed and IBBL is functioning under this economy. having a structural perspective plan. A comparative analysis
As such, IBBL has to run its activities in accordance with of sectoral and regional distribution of investments by IBBL
the supply and demand rule of the Economy. IBBL is now is as under:
exposed to some of the specific sectors highly which is
inviting concentration risk. On the other hand, the Bank has

Sectoral Distribution Geographical Distribution

of Investment
1%
10% 1% 2% 3%
9%
Industry
50% Transport 7% 58%

Housing
29% Dhaka
Trade
Chittagong
Kuwait
Rajshahi
Other Khulna
Rangpur
8% 20%
Sylhet
2%
Barishal

IBBL has the scope to diversify its investment portfolio in more potential sectors & areas and distribution of the risk factors.

Asset-Liability Risk management reviews the ALM Manual and its components
regularly.
To deal with Balance Sheet risk, IBBL has a dedicated
committee, called the Asset Liability Committee (ALCO) Liquidity Risk
comprising of the senior officials of the bank to make
important decisions related to the Balance Sheet, Liquidity IBBL is running in a mixed economy where both interest
& Profit Rate risks of the Bank. based and Shariah based transactions are taken place at
the same time. But Shariah based money market is yet to
The ALCO generally meets at least once in every month and be flourished and is under development process. Being the
reviews liquidity requirement, the maturity of Assets and Shariah based bank, it cannot lend or borrow money from
Liabilities, Deposit and Investment pricing strategy/transfer the conventional money market. As such, IBBL has to remain
pricing, Sensitivity of Assets and Liabilities, key Management always concern and vigilant regarding liquidity risk. IBBL
Indicators and the Liquidity Contingency Plan of the Bank. continuously monitor the liquidity ratios and periodically
In every ALCO meeting, the key points of the discussion are conducts GAP and Duration GAP analysis. As on 31.12.2015,
minuted and the action points are highlighted to ensure the key liquidity ratios are as under:
implementation. As a part of regulatory requirement, the
Name of the Ratio Standard Ratio IBBLs Scenario
Cash Reserve Ratio (CRR) 6.50% 7.12%
Statutory Liquidity Ratio (SLR) 5.50% 18.50%
Investment Deposit Ratio (IDR) <90% 83.59%

Foreign Exchange Risk Management

Foreign Exchange risk is defined as the potential change in earnings arising due to change in market price. The foreign exchange
risks of the Bank are measured, monitored and addressed by Treasury Division through Front Office (Dealing Room), Back Office
and Mid Office. The Foreign Exchange Risks are minimized through proper market analysis, fixation of different market related

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Islami Bank Bangladesh Limited Annual Report 2015
 Risk Management

risk limits (Daylight, Overnight, Stop loss per deal, stop loss Financing. Anti Money Laundering Compliance Units are
limit per day, off premises dealing limit &amp; Management also functioning under the leadership of the Branch Anti-
action trigger) &amp; counter party credit limits set by the Money Laundering Compliance Officer (BAMLCO) and Zonal
Management and by ensuring adherence to the limits by the Anti-Money Laundering Compliance Officer at Branches
Treasury Front Office (Dealing Room). and Zonal Offices respectively, who independently review
Treasury Front Office (Dealing Room) independently performs the transactions of the accounts to verify Suspicious
the deals and the Treasury Back Office is responsible for Transaction Report (STR).
verification of the Deals and passing of their entries in the IBBL has introduced uniform Account Opening Forms, KYC
books of accounts. All foreign exchange transactions are (Know Your Customer) profile, and TP (Transaction Profile)
revalued at weighted average exchange rate as provided and CTR (Cash Transactions Report) in the bank as per
by Bangladesh Bank at the end of each month. All Nostro instruction of Bangladesh Bank. To establish fruitful Anti
accounts are reconciled regularly and outstanding entries Money Laundering drive at Branch level, IBBL introduced
are reviewed by the management for their settlement. The ALM rating systems through self-assessment report
Open Position is maintained at the end of day within the & independent testing procedure as per instruction of
stipulated limit as fixed by the Bangladesh Bank. Bangladesh Bank.
Internal Control and Compliance Risk Management Global Standard of Compliance on AML & CFT
IBBL organizes its management through Internal Control IBBL is persistent in compliance to the Global standard of
& Compliance Wing consisting of three Divisions namely AML & CFT issues. This is because the ML & TF issues have
(i) Audit & Inspection Division (ii) Compliance Division, and become the most threatening to all the financial institutions
(iii) Monitoring Division to develop sound, sustainable and of the globe. The ML & TF Risks are considered as one of
secured growth of the Bank. the key risk indicators while maintaining international
The Audit Committee of the Board subsequently reviews relationship. To be the global compliant, meanwhile the
the lapses identified by the Audit & Inspection Division, Bank outsourced Kroll, one of the leading AML consultant
Bangladesh Bank and other regulators. Subsequently throughout the globe to conduct gap analysis and
appropriate actions are taken as per decisions of the said remediation of the Bank.
Committee for protecting the Banks interest. Thus Internal Information & Communication Technology Risk
Control & Compliance (ICC) system of IBBL always plays Management
active role in mitigating operational risk and contributes in
The Bank has adequately addressed Information &
the process of being a well compliant Bank.
Communication Technology (ICT) Risk Management which
Money Laundering Risk Management ensures ICT security functions and operations in a more
effective manner. It is an in-depth exercise and continual
TIn order to ensure the best corporate governance practices process. The ICT Risk Management exercise mainly include
and aiming at protecting the Bank and its Employees, minimizing financial and image loss to the institution in
Shareholders, Management and Customers, IBBL is all events such as natural disasters, technological failure,
committed to comply with all the applicable Rules of the Anti human errors etc. The Bank uses own developed Core
Money Laundering Act, Anti-Terrorism Act. For mitigating Banking Software to perform all types of transactions
risks the Bank has formed Central Compliance Unit (CCU) including Local/Online/Internet in a secured way. To take
under the leadership of the Chief Anti Money Laundering care of its core banking system, a separate security module
Compliance Officer (CAMLCO) at Anti Money Laundering has been incorporated in the software which manages
Department, Branches Control Division in Head Office. An different roles for different users. All financial transactions
independent CCU of the Bank is performing supervisory can be tracked for future audit purposes. The Bank uses
and monitoring activities for the event of the aforesaid Central Data Centre travelling through network uses
programs on Anti-Money Laundering and Anti Terrorism encryption and decryption mechanism.

93
Islami Bank Bangladesh Limited Annual Report 2015
Risk Management

Preparedness in Implementation of Basel-III a) Fiduciary Risk: Where Mudarabah Depositors funds

are commingled with the Banks own funds, the bank
Bangladesh Bank vide BRPD Circular No. 18 dated December shall ensure that the bases for asset, revenue, expense
21, 2014 issued Guidelines on Risk Based Capital Adequacy and profit allocations are established, applied and
(Revised Regulatory Capital Framework for Banks in line reported in a manner consistent with the Banks fiduciary
with Basel-III) wherein a roadmap for implementing Basel-III responsibilities.
framework is mentioned which is as under:
b) Displaced Commercial Risk: Banks may be under market
Phases of Basel-III Implementation pressure to pay a return that exceeds the rate that
has been earned on assets financed by the Mudaraba
depositors when the return on assets is under performing
15.00% as compared with the competitors rates. In such case,
0.625% 1.25% 1.875% 2.50%
10.00% banks may decide to waive their rights to part or its entire
4.50% 4.50% 4.00% 4.00% 4.00%
1.00% 1.00% 1.50% 1.50% 1.50% mudarib share of profits in order to satisfy and retain its
5.00%
4.50% 4.50% 4.50% 4.50% 4.50% fund providers and dissuade them from withdrawing their
0.00% funds.
2015 2016 2017 2018 2019
Asset liability management committee (ALCO) of IBBL
CET-1 Capital Additional T-1 Capital T-2 Capital Capital Conservation Buffer
regularly meets to assess the fiduciary risk, rate of return
risk and displaced commercial risk if any in IBBL, and
According to guidelines on Basel-III, the minimum recommends mitigating and encountering the above risks.
requirement for tier-1 capital will be 6% which is to be built
by 2019 but presently IBBL possesses 9.25% tier-I capital c) Shariah Compliance Risk: IBBL is always stringent about
which is much higher than the required ratio. compliance Shariah rules in all of its operations. Since
IBBL is performing in the mixed economic system (i.e
Including capital conservation buffer of 2.5% which is to be Islamic and Interest Based economy), Shariah compliance
built from 2016 to 2019, the common equity tier-I capital is the one of the vital factors particularly for IBBL. The
requirement is 7% still IBBL is above the requirement as on independent Shariah Board keeps keen observations on
2014. the day to day transactions of the Bank and they declare
Including countercyclical buffer of 2.5% which is to be built doubtful transactions as suspended.
from 2016 and onward, still IBBL is above the requirement
d) Liquidity Risk for lack of non-structured Islamic
of common equity tier-I capital.
Financial Market: Since, Islamic Financial Market in
The total Minimum capital requirement as per Basel-III is Bangladesh is not strong enough and there is inadequate
12.50% including capital conservation buffer where IBBLs Islamic financial instruments, IBBL has limited scope for
capital adequacy as on December 2014 is 13.09%. placement of fund with the desired return from the market
Therefore, in the context of capital adequacy for implementation at the time of surplus liquidity and similarly limited scope
of basel-III, IBBL is in a secured position. Moreover, around in receiving fund complying shariah rules at the time
95% of the corporate clients are rated by ECAIs and the rating of liquidity crisis. However, during the long 31 years of
efficiency is around 60% in terms of outstanding exposure and banking operations, IBBL did not face any liquidity crisis
risk weight. since it remains vigilant enough to address the issue.

Specific Risk for Islamic Banking

Being the Shariah based bank, IBBL may also face the following
specific risks due to its operations in addition to the usual
risks. IBBL remains always vigilant, stringent and proactive to
address and mitigate the risks:

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Islami Bank Bangladesh Limited Annual Report 2015
 Disclosure on Risk Based Capital Basel III

DISCLOSURE ON RISK BASED CAPITAL BASEL III

Executive Development Programme on BASEL III implementation

The purpose of Market Discipline in Basel III is to establish more transparent and more disciplined financial market so that
stakeholders can assess the position of a Bank regarding holding of assets and to identify the risks relating to the assets and
capital adequacy to meet probable loss of assets. For the said purpose, this Disclosures on Risk Based Capital (Basel III) is made
as per Bangladesh Banks Guideline.

Scope of Application
Qualitative Disclosures
a) The name of the top corporate entity in the group Islami Bank Bangladesh Limited
to which this guidelines applies:
b) An outline of differences in the basis of The Consolidated Financial Statements of the bank include the financial
consolidation for accounting and regulatory statements of (i) Islami Bank Bangladesh Limited (including Off-Shore
purposes, with a brief description of the entities Banking Units (OBUs). (ii) Islami Bank Securities Limited (iii) Islami Bank
within the group Capital Management Limited
(i) that are fully consolidated; (ii) that are given A brief description of the Bank (Main Operation) and its subsidiaries are
a deduction treatment; and (iii) that are neither given below:
consolidated nor deducted (e.g. where the
Islami Bank Bangladesh Limited
investment is risk - weighted).
Islami Bank Bangladesh Limited was incorporated on March 13, 1983 as a
Public Limited Company (Banking Company) with limited liability under the
Companies Act 1994 as interest free Islamic Shariah based commercial
bank and commenced its operation on March 30, 1983 with the permission
of Bangladesh Bank. The authorized and paid up capital of the bank
respectively stood at Tk.200,000 million and Tk. 16,099.91 million as on
December 31, 2015. Presently the Bank is operating its business through
Head Office having 304 Branches (including 30 SME/ Agriculture Branches)
and 487 own ATM booths all over Bangladesh. The shares of the Bank
are listed with both the Stock Exchanges of the country, i.e. Dhaka Stock
Exchange Limited and Chittagong Stock Exchange Limited.

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Islami Bank Bangladesh Limited Annual Report 2015
Disclosure on Risk Based Capital Basel III

Subsidiary Companies
i) Islami Bank Capital Management Limited (IBCML)
IBCML is a fully owned subsidiary of IBBL. IBCML was established in
April 2010 under the Companies Act 1994 as a Public Limited Company
with Authorized Capital of Tk.1,000.00 million & Paid-Up Capital of
Tk.300.00 million. The Company was established as per Bangladesh
Bank Letter No. BRPD(R-1)717/2010-47 dated 07 February 2010. The
registered Office of IBCML is located at 20, Dilkusha C/A in Dhaka,
Bangladesh.
ii) Islami Bank Securities Limited (IBSL)
IBSL is also a fully owned subsidiary of IBBL. IBSL was incorporated
in March 2010 as a Public Limited Company under Companies Act,
1994 with the objectives to carry out business of Stock Broker &
Dealer in the capital market. The authorized and paid up capital of the
company stood at Tk.5,000 million and Tk.2,700 million respectively as
on December 31, 2015. The overall increase of activities in Brokerage
operation plays an important role in the improvement of capital market
of the country and enhances earning capability of IBBL through
corporate declaration.
Off-shore Banking Unit (OBU)
Off-shore Banking Unit is a separate business unit governed by the
applicable rules & regulations and guidelines of Bangladesh Bank. IBBL
got permission to operate Off Shore Banking unit in its 3 Branches under
International Banking Wing.
c) Any restrictions, or other major impediments, on Not Applicable.
transfer of funds or regulatory capital within the
group
Quantitative Disclosures
d) The aggregate amount of capital surplus capital Not Applicable.
of insurance subsidieries included in the capital of
the consolidated group.
Capital Structure
Qualitative Disclosures
a) Summary information on the terms and As per the guidelines of Bangladesh Bank, CET-1 Capital of IBBL consists
conditions of the main features of all capital of (i) Fully Paid-up Capital, (ii) Statutory Reserve, (iii) General Reserve (iv)
instruments, especially in the case of capital Non-Repayable Share Premium Account (v) Retained Earnings (vi) Dividend
instruments eligible for inclusion in CET1, Equalization Account and (vii) Minority Interest in Subsidiaries (viii) Non-
Additional Tier 1 or Tier 2 Cumulative irredeemable Preference Share.
Additional Tier 1 consists of Subordinated Debt (Mudaraba Perpetual Bond)
(up to max. 1.5% of the Total RWA or 88.89% of CET1, whichever is higher).
Tier-2 Capital consists of applicable amount of (i) General Provision
(against Un-classied Investments, Off-Balance Sheet exposure & Off-Shore
Banking Units)(Limited to maximum 1.25% of RWA of Credit Risk)(ii) Assets
Revaluation Reserves up to 40%, (iii) Revaluation Reserve for Securities up
to 40% and (iv) Revaluation Reserve for equity instruments up to 8% (v) All
Other Preference Shares.

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Quantitative Disclosures
b) The Amount of Tier 1 Capital, with break-up
As on December 31,2015 (In
Particulars million Taka)

Solo Consolidated

A. Tier-I (Going Concern Capital) Common Equity Tier-1(CET)

I Fully paid-up Capital 16,099.91 16,099.91

Ii Statutory Reserve 16,099.91 16,099.91

Iii Non-repayable Share Premium account 1.99 1.99

Iv General Reserve 196.06 196.06

V Retained Earnings 3,219.98 3,312.95

Vi Minority interest in Subsidiaries .06

Vii Divident Eqilization Account 32.00 32.00

Viii Acturial gain/ Loss

Ix Any others( if approved by the Bangladesh Bank)

(A)Sub-Total (Common Equity Tier 1 Capital A (i to ix) 35,649.85 35,742.88

B. Additional Tier 1 Capital

(i) Instrumensts issued by the Banks that meet the quialfying criteria for 3,000.00 3,000.00
AT1(Mudaraba Perpetual Bond)

(ii) Non-cumulative Irredemable Preference Share 0.00 0.0

(B) Sub-Total (Additional Tier-1 Capital) (i to ii) 3,000.00 3,000.00

C Total Tier 1 Capital (Going Concern Capital) (A+B) 38,649.85 38,742.88

D. Tier 2 Capital (Going Concern Capital)

General Provision (against Un-classied Investments, Off-Balance Sheet exposure

(i) & Off-Shore Banking Units & limited to 1.25% of Risk Wighted Assets for Credit 4,563.29 4,540.05
Risk

(ii) Assets Revaluation Reserves up to 40% 4,599.59 4,599.59

(ii) Revaluation Reserve for Securities up to 40% 32.60 32.60

(D) Total Tier 2 Capital 9,195.48 9,172.23

c) Other deductions from capital

d) Total Eligible Capital (C+D) 47,845.33 47,915.11

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Capital Adequacy
Qualitative Disclosures
a) A summary discussion of the Banks approach The Bank has adopted Standardized Approach (SA) to computation of capital
to assess the adequacy of its capital to support charge for investment risk and market risk, and Basic Indicator Approach
current and future activities. (BIA) for operational risk. Assessment of capital adequacy is carried out
in conjunction with the capital adequacy reporting to Bangladesh Bank.
The Bank has maintained Capital to Risk Weighted Assets Ratio (CRAR) at
11.72% & 11.66% on the basis of Consolidated and Solo respectively as
against the minimum regulatory requirement of 10%. Tier-I capital to Risk
Weighted Assets Ratio under Consolidated basis is 9.48% and Solo basis
is 9.42% as against the minimum regulatory requirement of 5.50%. The
Banks policy is to manage and maintain strong Capital to Risk Weighted
Assets Ratio (CRAR) through investing high rating grade investment clients.
The Bank maintains adequate capital that is sufficient to absorb all material
risks associated with the Bank. The Bank also ensures that the levels of
capital comply with regulatory requirements and satisfy the external rating
agencies and other all stakeholders including depositors.

Quantitative Disclosures
As on December 31, 2015
Particulars (In million Taka)
Solo Consolidated
b) Capital requirements for Investment (Credit) Risk: 365063.65 363203.78
c) Capital requirements for Market Risk 5,322.05 5,322.05
d) Capital requirements for Operational Risk 39,946.58 40,182.07
e) Total Capital Requirement 410,332.28 408,707.90
f) Capital Conservation Buffer N/A N/A
Capital Adequacy Ratio:
Total CRAR 11.66% 11.72%
CET1 CRAR 8.69% 8.75%
Tier-I CRAR 9.42% 9.48%
Tier-II CRAR 2.24% 2.24%
g) Avilable Capital under Piller 2 Requirment
Investment (Credit) Risk
Qualitative Disclosures
a) The General Qualitative disclosure requirement with respect to credit risk, including:
i) Definitions of past due and impaired (for - As per Bangladesh Bank guidelines, any Investment if not repaid within the
accounting purposes): fixed expiry date will be treated as Past Due/ Overdue.
Bangladesh Bank issued Circulars from time to time for strengthening Investment
(Credit) discipline and brings provisioning. All Investments/ loans &advances
will be grouped into four (4) categories for the purpose of classification, namely
(a) Continuous Investment/Loan (b) Demand Investment/Loan (c) Fixed Term
Investment/Loan & (d) Short-term Agricultural & Micro Investment.
The above Investment (Credit) are classified as follows:

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Continuous and Demand Investment/ loan are classified as:

Sub-standard if it is past due/over due for 03(three) months or beyond
but less than 06 months;
Doubtful if it is past due/over due for 06 (six) months or beyond but less
than 09 (nine) months;
Bad/Loss if it is past due/over due for 09 months or beyond from the date
of expiry or claim by the bank or from the date of creation of forced loan.
Fixed Term Investment (Loans), which are repayable by installment(s) are
classified as: -
a) In case of any installment(s) or part of installment(s) of a Fixed Term Loan
amounting upto Tk.10.00 Lacs is not repaid within the due date, the amount
of unpaid installment(s) will be termed as past due or over due installment.
In case of such types of Fixed Term Loans:
Sub-standard if the amount of past due Installment is equal to or
more than the amount of installment(s) due within 06 (six) months,
the entire Investment (loan) will be classified as Sub-standard;
Doubtful if the amount of past due installment is equal to or more
than the amount of installment(s) due within 09 (nine) months, the
entire Investment (loan) will be classified as Doubtful;
Bad/Loss if the amount of defaulted installment is equal to or more
than the amount of installment(s) due within 12 (twelve) months, the
entire Investment/loan will be classified as Bad/Loss.
b) In case of any installment(s) or part of installment(s) of a Fixed Term Loan
amounting more than Tk.10.00 Lacs is not repaid within the due date, the
amount of unpaid installment(s) will be termed as past due or over due
installment. In case of such types of Fixed Term Loans:
Sub-standard if the amount of past due Installment is equal to or
more than the amount of installment(s) due within 03 (three) months,
the entire Investment (loan) will be classified as Sub-standard;
Doubtful if the amount of past due installment is equal to or more
than the amount of installment(s) due within 06 (six) months, the
entire Investment (loan) will be classified as Doubtful;
Bad/Loss if the amount of defaulted installment is equal to or more
than the amount of installment(s) due within 09 (nine) months, the
entire Investment/loan will be classified as Bad/Loss.

Short-term Agricultural and Micro-Investment are classified as:

If not repaid within the due date as stipulated in the Investment (loan)
agreement. If the said irregular status continues, the Investment (credit)
will be classified as Substandard after a period of 12 months, as Doubtful
after a period of 36 months and as Bad/Loss after a period of 60 months
from the stipulated due date as per Investment (loan) agreement.
A continuous Investment, Demand or a Term Investment which will remain
overdue for a period of 02 (two) months or more will be put into the Special
Mention Account (SMA).
The Bank follows the specific and general provision for investment/ loan on
the basis of Bangladesh bank Guidelines issued from time to time.

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ii) Description of approaches followed The rate of provision are given below:
for specific and general allowances a) General Provision: The Bank maintains General Provision in the following way :
and statistical method;
(1) @ 0.25% against all unclassified loans of Small and Medium Enterprise (SME)
as defined by the SME & Special Programmes Department of Bangladesh Bank
from time to time and @ 1% against all unclassified Investments (other than
Investments/loans under Consumer Financing, Loans to Brokerage House,
Merchant Banks, Stock dealers etc., Special Mention Account as well as SME
Financing.)
(2) @ 5% on the unclassified amount for Consumer Financing whereas it has to
be maintained @ 2% on the unclassified amount for (i) Housing Finance and
(ii) Investments/Loans for Professionals to set up business under Consumer
Financing Scheme.
(3) @ 2% on the unclassified amount for Investments/Loans to Brokerage House,
Merchant Banks, Stock dealers, etc.
(4) @ 5% on the outstanding amount of Investments/loans kept in the Special
Mention Account.
(5) @1% on the off-balance sheet exposures. (Provision will be on the total exposure
and amount of cash margin or value of eligible collateral will not be deducted
while computing Off-balance sheet exposure.)
b) Specific Provision: Banks will maintain provision at the following rates in respect
of classified Continuous, Demand and Fixed Term Investments/Loans:
(1) Sub-standard : 20%
(2) Doubtful : 50%
(3) Bad/Loss : 100%
c) Provision for Short-term Agricultural and Micro-Investments:
(1) Unclassified and SMA @2.50%
(2) Sub-standard and Doubtful @ 5%
(3) Bad/Loss : 100%

iii) Decision of the Banks Investment The Bank has put in place a well-structured Investment/Credit Risk Management
(Credit) Risk Management Policy; Policy known as Investment Risk Manual approved by the Board. The Policy document
defines organization structure, role and responsibilities and, the processes whereby
the Investment (Credit) Risks carried by the Bank can be identified, quantified and
managed within the framework that the Bank considers consistent with its mandate
and risk tolerance.
Authorities are properly delegated ensuring check and balance in investment
operation at every stage i.e. screening, assessing risk, identification, management
and mitigation of investment risk as well as monitoring, supervision and recovery
of investments with provision for Early Warning System and Grading of Investment
clients as Blue, Green, Grey, Yellow, Red and Brick Red.
Bank has framed Investment Policy, Investment (Credit) Assessment & Risk
Grading, Approval Authority, Internal Audit Approval Process, Investment (Credit)
Administration, Investment (Credit) Monitoring, Investment (Credit) Recovery etc.
which forms integral part in monitoring of Investment (Credit) Risk in the Bank. Status
of investments is regularly reported to the Board /Executive Committee of the Bank

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Quantitative Disclosures
b) Total gross Investment/ Total gross Investment/ Credit risk exposures broken down by major types of
Credit risk exposures broken Investment exposure of the Bank are as under:
down by major types of
Investment exposure.
Particulars As on December 31,
2015 (In million Taka)
Bai Murabaha 288,774.51
Bai - Muajjal 33,658.17
Hire Purchase under Shirkatul Melk 122,009.07
Bai- Murabaha Import Bills 4,729.98
Baim FC Bills 8,728.14
Musharaka 393.46
Mudaraba Investment 5,000.02
Bai Salam 5,320.26
Murabaha Foreign Currency Investment 9,955.16
Quard 14,564.66
Investment in Khidmah Card 64.68
Overseas Investment (outside in Bangladesh) 591.18
Bills Purchased and Discounted 36,405.20
Total 530,194.50

c) Geographical Distribution of Geographical Distribution of exposures, broken down in significant areas by major
exposures, broken down in types of Investment/ credit exposure of the Bank are as under:
significant areas by major
types of credit exposure. Particulars As on December 31,
2015 (In million Taka)
In Rural Areas 29,298.05
In Urban Areas 500,305.27
Outside Bangladesh 591.18
Total 530,194.50

Division wise distribution of Investment/ credit exposure of the Bank are as under:
Name of Division As on December 31,
2015 (In million Taka)
Dhaka Division 307,919.34
Chittagong Division 95,124.36
Khulna Division 35,988.17
Rajshahi Division 48,310.44
Barisal Division 7,985.16
Sylhet Division 11,187.46
Rangpur Division 15,964.13
Mymensingh Division 7,715.44
Total 530,194.50

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d) Industry or counterparty type Industry or counterparty type distribution of exposures, broken down by major types of
distribution of exposures, investment/credit exposure of the bank are as under:
broken down by major
types of investment/ credit
exposure.
Particulars As on December 31,
2015 (In million Taka)
Economic purpose wise Investment
Investment to Directors 308.48
Investment to CEO & Sr Executives 996.27
Trade & Commerce 153,812.67
Real Estate 41,788.24
Transport 6,820.44
Agriculture (including fertilizer & agriculture implements) 14,756.79
Industrial investment* 271,210.90
Others 40,500.71
Total 530,194.50
*Industrial Investment
Textile- Spinning, Weaving & Dyeing 84,858.58
Steel, Re-Rolling & Engineering 23,120.28
Agro-based Industry 68,751.56
Garments & Garments Accessories 22,004.02
Food & Beverage 16,217.89
Cements Industry 4,642.24
Pharmaceuticals 4,657.51
Poultry, Poultry Feed & Hatchery 1,021.51
Sanitary Wares 7.33
Chemicals, Toiletries & Petroleum 7,457.08
Printing & Packaging 1,455.36
Power (Electricity) 4,123.48
Ceramic & Bricks 3,088.66
Health care ( Hospital & Others) 1,381.03
Plastic Industries 3,004.82
Petrol Pump & CNG Filling Station 503.13
Information Technology 377.75
Hotel & Restaurant 87.68
Other Industries 24,450.99
Total 271,210.90

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e) Residual contractual maturity Particulars As on December 31, 2015

breakdown of the whole (In million Taka)
portfolio, broken down by Repayable on Demand -
major types of investment/
credit exposure. Upto 1 month 71,762.61
Over 1 month but not more than 3 month 82,939.46
Over 3 months but not more than 1 year 137,251.32
Over 1 year but not more than 5 years 1,06,267.16
More than 5 years 95,568.75
Total 493,789.30

f) By major industry or counterparty type

i) Amount of impaired Investment/ loans and if available, past due investment/ loans provided separately
The amount of classified/ past due investment of the bank is as under:
Particulars As on December 31, 2015
(In million Taka)
Past Due
Special Mention Account (SMA) 17,561.44
Sub Standard 1,839.66
Doubtful 2,392.06
Bad & loss 18,309.52
Total 40,102.68

ii) Specific and General Provision

Specific and General Provisions were made on the amount of classified and unclassified investments/ loans, Off- balance Sheet
exposure of the bank according to Bangladesh Bank guidelines.
Particulars As on December 31, 2015
(In million Taka)
Unclassified Investment 507,653.26
Classified Investment 22,541.24
Off Balance Sheet Exposure 133,379.93
Total 663,574.43

iii) Charges for specific allowances and charge - offs during the period
During the period the specific and general provision were made on the amount of classified investment, Un classified Investment
and Off Balance sheet exposures.
Particulars As on December 31, 2015
(In million Taka)
Provision on Unclassified Investment 544.23
Provision on Classified Investment 4,643.48
Provision on Off Balance Sheet Exposure 205.60
Total 5,393.31
* Provision for Classified investment includes provision made against subjective judgement

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g) Gross Non Performing Assets (NPAs)

i) Movement of Non Performing Assets (NPAs)
Particulars As on December 31, 2015
(In million Taka)
Opening Balance 22,807.24
Additions 32,034.53
Reductions 32,300.53
Closing Balance 22,541.24

ii) Movement of specific provisions for NPAs

Particulars As on December 31, 2015
(In million Taka)
Opening Balance 13,354.72
Recovery amount previously written off 39.91
Provisions made during the period 4,643.48
Fully provided Investment write-off (286.62)
Closing Balance 17,751.49
* Provision made during the period includes provision made against subjective judgement
Equities: Disclosures for Banking Book Positions

Qualitative disclosures
a) The general qualitative disclosures requirement with respect to equity risk, including:

Differentiation between holdings on Investment in equity securities are broadly categorized into two parts:
which capital gains are expected and those i) Quoted Securities (common or preference share & mutual fund) that are
taken under other objectives including for traded in the secondary market (Trading Book Assets).
relationship and strategic reasons; and
ii) Unquoted securities are categorized as banking book equity exposures
which are further sub-divided into two groups: unquoted securities which
are invested without any expectation that these will be quoted in near future
i.e. held to maturity (HTM). And securities those are acquired under private
placement or IPO and are going to be traded in the secondary market after
completing required formalities. Unquoted securities are valued at cost.

Discussion of important policies The primary objective is to investment in equity securities for the purpose of
covering the valuation and accounting of capital gain by selling them in future or held for dividend income. Dividends
equity holdings in the banking book. This received from these equity securities are accounted for as and when received
includes the accounting techniques and and right to receive when established. Both Quoted and Un-Quoted equity
valuation methodologies used, including securities are valued at cost and necessary provisions are maintained if the
key assumptions and practices affecting prices fall below the cost price.
valuation as well as signicant changes in
As per Bangladesh Bank guidelines, the HFT equity securities are revaluated
these practices.
once in each week using marking to market concept and HTM equity securities
are amortized once a year according to Bangladesh bank guideline.
The HTM equity securities are also revaluated if any, are reclassified to HFT
category with the approval of Board of Directors.

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Quantitative Disclosures As on December 31, 2015

(In million Taka)

Solo Consolidated
Particulars

a) Value disclosed in the balance sheet of investments, as well as the fair value of
those investments, for quoted securities a comparison to publicly quoted share 66.48 66.48
values where the share price is materially different from fair value.

The cumulative realized gains (losses) arising from sales and liquidations in - -
b) the reporting period.

c) Total unrealized gains (losses). 46.48 46.48

d) Total latent revaluation gains (losses) - -

Any amounts of the above included in Tier 2 capital. - -

e) Capital requirements broken down by appropriate equity groupings, consistent with the banks methodology, as well as
the aggregate amounts and the type of equity investments subject to any supervisory provisions regarding regulatory
capital requirements.

Specific Market Risk 6.65 6.65

General Market Risk 6.65 6.65

Profit Rate Risk in the Banking Book

Qualitative Disclosures

a) The general qualitative disclosure requirement Profit rate risk is the risk where changes in market profit rates might
including the nature of Profit Rate Risk in the adversely affect bank's financial condition. Changes in profit rates affect
Banking Book (PRRBB) and key assumptions, both the current earnings (earnings perspective) as well as the net worth
including assumptions regarding investment of the bank (economic value perspective). Re-pricing risk is often the
prepayments and behavior of non-maturity most apparent source of profit rate risk for a bank and is often gauged by
deposits, and frequency of PRRBB measurement. comparing the volume of a banks assets that mature or re-price within a
given time period with the volume of liabilities that do so.

The short term impact of changes in profit rates is on the banks Net
Investment Income (NII). In a longer term, changes in profit rates impact
the cash flows on the assets, liabilities and off-balance sheet items, giving
rise to a risk to the net worth of the bank arising out of all re-pricing
mismatches and other profit rate sensitive position.

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Quantlitative Disclosures

As on December 31, 2015 ) (In million Taka)

b) The increase Particulars 1-90 days Over 3 Months Over 6 Months Over 9 Months
(decline) in to 6 Months to 9 9 Months to 12 Months
earnings or
economic value Rate Sensitive Assets 146,500 76,020 204,670 157,590
(or relevant
measure used Rate Sensitive Liabilities 139,210 71,900 193,580 148,400
by management)
for upward and GAP 7,290 4,120 11,090 9,190
downward rate
shocks according Cumulative Gap 7,290 11,410 22,500 31,690
to managements
method for
Adjusted profit rate changes (PRC) 1% 1% 1% 1%
measuring PRRBB,
broken down
by currency (as Quarterly earnings impact (Cum. Gap*PRC) 1,822.50 1,030.00 2,772.50 2,297.50
relevant)
Accumulate earning impact to date 1,072.50 2,852.50 5,625.00 7,922.50

Market Risk

Qualitative disclosures
a) i)Views of BOD on The Board approves all policies related to market risk, sets limits and reviews compliance on
trading / investment a regular basis. The objective is to provide cost effective funding to finance asset growth and
activities trade related transactions.

Standardized rule based approach has been used to measure the Market risk. The total
capital requirement in respect of market risk is the aggregate capital requirement calculated
ii) Methods used to
for each of the risk sub-categories. For each risk category minimum capital requirement
measure Market risk
is measured in terms of two separately calculated capital charges for "specific risk" and
"general market risk".

The Treasury Division manages market risk covering liquidity, profit rate and foreign exchange
risks with oversight from Asset-Liability Management Committee (ALCO) comprising senior
executives of the Bank. ALCO is chaired by the Managing Director. ALCO meets at least once

iii) Market Risk in a month.

Management system There are approved limits for credit deposit ratio, liquid assets to total assets ratio, maturity
mismatch, commitments for both on-balance sheet and off-balance sheet items and
borrowing from money market and foreign exchange position. The limits are monitored and
enforced on a regular basis to protect the market risks. The exchange rate of the Bank is
monitored regularly and the prevailing market condition, exchange rate, foreign exchange
iv) Policies and processes position and transactions are reviewed to mitigate foreign exchange risks.
for mitigating market risk

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Quantitative Disclosures
The Capital Requirements for As on December 31, 2015
(In million Taka)
Solo Consolidated

Profit (Interest) rate risk -

Equity position risk 13.30 13.30

518.91
Foreign exchange risk 518.91
Commodity risk. -
Total Capital Requirement 532.21 532.21
Operational Risk

Qualitative Disclosures

a) i) Views of BOD on system to reduce Operational risk is the risk of loss or harm resulting from inadequate or failure
Operational Risk of internal processes, people and systems or from external events. Capability
to carry out a large number of transactions effectively and accurately while
complying with applicable laws and regulations constitutes operational risk
management activities of the bank.
The policy for operational risks including internal control & compliance risk is
approved by the Board taking into account relevant guidelines of Bangladesh
Bank. Audit Committee of the Board directly oversees the activities of Internal
Control & Compliance to protect against all operational risk.
IBBL has a policy to provide competitive package and best working environment
to attract and retain the most talented people available in the industry. IBBL's
strong brand image plays an important role in employee motivation. As a result,
ii) Performance gap of executives there is no significant performance gap.
and staffs
-No potential external events are expected to expose the Bank to significant
operational risk.
- The policy for operational risks including internal control & compliance risk is
iii) Potential external events approved by the Board taking into account relevant guidelines of Bangladesh
Bank. Policy guidelines on Risk Based Internal Audit (RBIA) system is in operation.
As per RBIA branches are rated according to their risk grading/ scoring audit
iv) Policies and processes for procedure and required frequent audit to the Branches are operated by the Audit
mitigating operational risk Division. In addition, there is a Vigilance Cell established in the bank to reinforce
operational risk management of the Bank and to minimize the same. Bank's
anti money laundering activities are headed by (Chief Anti Money Laundering
Compliance Officer) CAMLCO and their activities are devoted to protect against
all money laundering and terrorist finance related activities. Apart from that,
there is adequate check & balance at every stage of operation, authorities are
properly segregated and there is at least dual control on every transaction to
protect against operational risk.

v) Approach to calculating capital - Basic Indicator Approach is being used for calculating capital charge for
charge for operational risk operational risk as of the reporting date.

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Quantitative Disclosures
As per the risk based Capital Adequacy Framework, the capital charge for operational risk is equal to 15% of average positive
annual Gross Income of the previous three years:
In line with the above, the Bank has adopted the Basic Indicator Approach for computing capital to operation risk.
Capital Requirement As on December 31, 2015
(Figure in Million Tk.)

Solo Consolidated

Operational Risk 39,946.58 40,182.06

Liquidity Risk
Qualitative Disclosure

i. Views of BOD on system to reduce The Board approves the strategy and significant policies related to the
liquidity risk management of liquidity. In IBBL, the BOD guides on the level of appetite for
liquidity risk and overall liquidity risk profile through reviewing various report and
ensure necessary steps taken by management to identify, measure, monitor and
control liquidity risk.
An important aspect of measuring liquidity is making assumptions about
ii. Methods used to measure Liquidity Risk future funding needs. Although certain cash inflows and outflows can be easily
calculated or predicted, bank also makes assumptions about future liquidity
needs, both for short-terms and long terms. One important factor to consider is
the critical role a banks reputation plays in its ability to access funds readily and
at reasonable terms.
Several key liquidity risk indicators have been identified for monitoring the
liquidity position on regular basis.These are: Statutory Liquidity Requirement
(SLR), Cash Reserve Ratio (CRR),Investment to Deposit Raito(ADR) Maximum
Cumulative Outflow (MCO), Medium Term Funding Ratio (MTFR) ,Liquid Asset
to Total Deposit Ratio, Liquid Asset to Short Term Liabilities, Liquidity Coverage
Ratio (LCR) , Net Stable Funding Ratio(NSFR).
In order to develop comprehensive liquidity risk management framework,
Contingency Funding Plan (CFP) has been developed which is a set of policies
and procedures that serves as a blueprint for the bank to meet its funding needs
iiii. LiquidityRisk management system in a timely manner and at a reasonable cost.
For day-to-day liquidity risk management, CFP ensures that the bank is well
prepared to respond to an unexpected problem. In this sense, a CFP is an
extension of ongoing liquidity management and formalizes the objectives of
liquidity management by ensuring:
A reasonable amount of liquid assets are maintained; Measurement and
projection of funding requirements during various scenarios; and Management
of access to funding sources.
CFP also provides directions for plausible actions in distress and emergency
situations. In case of a sudden liquidity stress, it is important for the bank to
handle the same in an efficient and organized way to meet its obligations to the
stakeholders. Since such a situation requires a spontaneous action, CFP will put
the bank in better position by addressing the liquidity problem more efficiently
and effectively. CFP ensures that bank management and key staff are ready to
respond to any distress situation.

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iv) Policies and processes for mitigating Maturity ladder of cash inflows and outflows is an effective tool to determine
Liquidity Risk banks cash position. A maturity ladder estimates a banks cash inflows and
outflows and thus net deficit or surplus (GAP) both on a day to day basis and over
a series of specified time periods can be estimated. A bucket wise (e.g. call, 2-7
days, 1 month, 1-3 months, 3-12 months, 1-5 years, over 5 years) maturity profile
of assets and liabilities is prepared to understand mismatch in every bucket. A
structural maturity ladder or profile is prepared periodically following guidelines
of the Bangladesh Bank DOS circular no. 02 dated March 29, 2011.

Quantitative Disclosure
As on December 31 2015
(In million taka)
Capital Requirement for Solo Consolidated
Liquidity Coverage Ratio (LCR) 188.56% 188.56%
Net Stable Funding Ratio (NSFR) 127.37% 127.37%
Stock of High Quality Liquid Assets (HQLA) 151,578 1,51,578
Total net cash outflows over the next 30 calendar days 80,387 80,387
Available amount of Stable Funding 649,680 649,680
Required amount of Stable Funding 510,060 510,060

Leverage Risk
Qualitative Disclosure

i. Views of BOD on system to reduce The Board approves all policies related to Leverage Ratio. In order to avoid
excessive leverage building-up excessive on-and off-balance sheet leverage in the banking system,
a simple, transparent, non-risk based leverage ratio has been introduced to
constrain leverage in the banking sector.

ii. Policies and processes for mitigating There are approved limits for maintaining Regulatory Liquidity Indicators (RLIs)
excessive on and off-balance sheet which will ensure asset quality and strong capital base. To achieve non-risk
leverage based regulatory leverage ratio We have taken the following steps:
Constrain leverage to mitigate the risk of the destabilizing deleveraging
process which can damage the financial system and the economy;
Introducing additional safeguards against model risk and measurement
error by supplementing the risk-based measure with simple, transparent,
independent measure of risk.

iii. Approach for calculating exposure A minimum Tier 1 Leverage ratio of 3% has been prescribed both at solo and
consolidated level. IBBL has been maintaining leverage ratio.The calculation at
each quarter end submitted to BB considering the following:

1. Capital Measure: The capital measure for the leverage ratio will be based on
the new definition of Tier 1 capital as specified in Chapter 3 of Guidelines
on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for
banks in line with Basel III)

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Disclosure on Risk Based Capital Basel III

iii. Approach for calculating exposure 2. Exposure Measure:

General Measurement Principles: The exposure measure for the leverage
ratio will generally follow the accounting measure of exposure. In order to
measure the exposure consistently with financial accounts, the following
will be applied by the bank:
i. On balance sheet, non-derivative exposure will be net of specific
provisions and valuation adjustment.
ii. Physical of financial collateral, guarantee of credit risk mitigation
purchased in not allowed reducing on-balance sheet exposure.
iii. Netting of loans and deposits is not allowed.

On-Balance Sheet Items: Bank includes item using their accounting balance
sheet for the purposes of leverage ratio. In addition, the exposure measure
has been included the treatments of Securities Financing Transactions e.g.
repo, reverse repo and derivatives etc.)

Off-Balance sheet Item: Bank has calculated the off-balance sheet (OBS)
items by applying a uniform 100% Credit Conservation Factor (CCF). For
unconditionally cancellable commitments without prior notice, a CCF of 1%
is applied.

As on December 31 2015
(In million taka)
Capital Requirement for Solo Consolidated
Leverage Ratio 5.12% 5.13%
On balance sheet exposure 708,069.63 708,016.63
Off balance sheet exposure 47,402.51 47,402.51
Total exposure 755,472.14 755,419.14

Remunaretion

Qualitative Disclosures

a) Name, composition and mandate of the Board of Directors of the Bank is actually the main body to oversee the
main body overseeing remuneration. remuneration. The Board, however, generally suggest the management to place
External consultants whose advice has proposal for revision of remuneration from time to time.
been sought, the body by which they were Generally, no advice with regard to the remuneration process of the bank from
commissioned, and in what areas of the any external consultant is sought whatsoever and therefore no commission to
remuneration process. this effect is paid to any agencies.
A description of the scope of the banks
The bank does not have any foreign subsidiary; rather it has branches as well
remuneration policy (eg by regions,
as zonal offices throughout the country. The remuneration policy follows
business lines), including the extent
uniform rule and does not change due to the employees working at diversified
to which it is applicable to foreign
geographical locations.
subsidiaries and branches.
A description of the types of employees Any group of the employees has not been categorized as the material risk taker
considered as material risk takers and as as well as senior managers; rather the risks in different areas of operations of
senior managers, including the number of the bank are taken by the employees concerned as a team.
employees in each group.

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 Disclosure on Risk Based Capital Basel III

b) An overview of the key featureand The remuneration system of the bank has been designed to ensure optimum
objectives of remuneration policy. level of fairness in reward to the service of the employees in such a way so that
they can satisfactorily manage the basic expenses concerning their household
as well as get sufficient future benefits on attaining the superannuation. The key
features of the remuneration system are as under:

Whether the remuneration committee In consideration of the nature of works/responsibilities fixed remuneration
reviewed the firms remuneration policy has been established for the employees of a particular grade. However, the
during the past year, and if so, an overview fixed remuneration differs from grade to grade and generally changes with the
of any changes that were made. promotion/demotion to the higher/lower grades. The components of the fixed
remuneration are basic pay, house rent, medical as well as conveyance allowances
etc. The basic pay is increased at a fixed rate every year towards adjustment of
the inflation. Employees may have additional remuneration by means of getting
special increment, promotion for their extraordinary performance.

Remuneration concerning the future benefits of the employees is paid in the

form of Gratuity, Provident Fund and Superannuation Fund. The amount of such
remuneration varies in terms of grade, basic pay as well as service length.

Variable remuneration is paid to the employees in the form of Incentive Bonus on

the basis of the performance resulting satisfactory annual profit of the bank. The
overall performance of the employees is considered as the team performance
A discussion of how the bank ensures without categorizing any Identified Staff as Risk Takers and Incentive Bonus is
that risk and compliance employees allowed to them in proportion to their respective basic pay.
are remunerated independently The remuneration of the bank was not reviewed by the Board of Directors last year
of the businesses they oversee. and consequently no change whatsoever has taken place in the remuneration
Remuneration policy is based on attracting, process
retaining and motivating the employees
to ensure that they perform in the best No segment of the employess has been categorized as the risk and compliance
interests of the bank and its shareholders employess and therefore no scope is there to seperatly remunerate such type
by growing and developing the business. of comployess for their overssing the business

a) An overview of the key risks that Bsically, the fixed remuneration process is being practiced and in some cases
the bank takes into account when the adjustment of the losses, so incurred by the bank due to the employees
implementing remuneration measures. non-compliance of different rules & regulations is compensated from the fixed
remuneration as well as deferred future benefits of the employees concerned
through claw back process as a means of adjustment of the current and future
risk.
An overview of the nature and type of The risk of non-adherence to regulatory compliances as well as violations of
the key measures used to take account different rules and procedures causing significant losses from the side of the
of these risks, including risks difficult to employees is taken into consideration while implementing the remuneration
measure measures.

A discussion of the ways in which these To avert the risks, the provisions with regard to partial payment of basic pay as
measures affect measuers well as non-disbursement of incentive bonuses and future benefits, claw back
process from the monthly remunerations etc. are there.

Various disciplinary measures ranging from the issuance of censure to

dismissal from the service for committing the irregularities is there and such
measures significantly affect the remuneration process.

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Disclosure on Risk Based Capital Basel III

A discussion of how the nature and type of Over the past years, due to committing various types of violations, remuneration
these measures has changed over the past of the individual employees has been changed but no change affecting the
year and reasons for the change , as well remuneration system has taken place.
as the impact of changes on remunaretion

d) An overview of the main oparetion The individual performance measurement metrics affecting the remuneration
mertrices for the bank , top level business is strictly followed. Overall performance of the employees is considered as the
lines and indiduals team result.

Variable remuneration in the form of Incentive Bonus is allowed to them in

proportion to their respective basic pay which generally varies in relation with
the profit. However, employees may get accelerated promotion for extraordinary
performance as well as may be awarded demotion for committing violations that
has a link with the remuneration process.

In the case of weak performance of the employees, considering the performance

as the team result, the incentive bonus may not be allowed or may be allowed
less. In some cases the employees committing lapses and incurring financial
losses, are not allowed the incentive bonus.

d) A dicsussion of banks policy on deferrel To ensure long-term retention of the employees remuneration concerning
and vesting of variable remunaretiomn and future benefits has been designed which includes Gratuity, Provident Fund, and
if, the fraction of variable remunaretion that Superannuation Fund etc.
is deffered across employess or groups of
emloyess, a description of the factors that
determine the fraction and their relative
importance.

A discussion of the banks policy nad As per the prevailing practice, the incentive bonus, as variable remuneration, is
criteria for adjusting deffered remuration to be completely paid to the eligible employees and any fraction thereof is not
before vesting and (if permitted by national deferred with regard to the determination of their relative performance. Once the
law) after vesting throuth clawback incentive bonus, as variable remuneration, is paid it cannot refunded through
arrangements. claw back arrangement.

g) An overview of the forms of variable No different form with regard to payment of variable remuneration is there. The
remunaretion affere(i.e. cash, share and remuneration of the employees is paid in the form of cash.
share-linked instrument and other forms)

A discussion of the use of the different Not Applicable.

forms of variable remuretion and , if
the mix of different forms of variable
remuretion differes across employess
or groups of employes) adiscriction the
factors that determine the mix and their
relative importance.

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 Disclosure on Risk Based Capital Basel III

Qualitative Disclosures

g) Number of meeting held by the main body Not Applicable.

overseeing remuretion during the financial tear and
remuretion paid to its member

h)Number of employess received a variable Not Applicable.

remnaretion award during the financial year .

Number and total amount of guaranteed bonuses 5 (Five) Basic Pay as incentive bonus amounting Tk. 1,517 million has
awarered during the fianacial year. been paid.

Number and total amount of sign-on awards made Not Applicable.

during the fianacial year

Number and total amount of servance payment made Not Applicable.

during the year.

i)Total amount of outstanding deffered remunaretion Not applicable

, split into cash,shares and share linked instruments
and other form.

Total amount of deffered remunaretion paid out in the Not applicable

financial year.

j)Breakdown of amount of remuneration awars for Not applicable

the financial year
-Fixed and variable
-derreded and non-deffered
-different forms used(Cash, Share and share
linked instrument)

k)Total amount of outstanding deferred remuneration Not applicable

and retained remuneration exposed to ex post explicit
and/or Implicit adjustments.

Total amount of reductions during the financial year Not applicable

due to ex post explicit adjustments.

Total amount of reductions during the financial year Not applicable

due to exposit implicit adjustments.

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Islami Bank Bangladesh Limited Annual Report 2015
ICT & AUTOMATION

IBBL has always been a front-runner in using new technologies secure database management system, ORACLE. All banking
and innovative services to make banking easier & simpler. modules have been fully integrated in eIBS including three
In addition, it has been taken Initiatives to make the Bank major modules: General Banking (GB), Investment, and
totally IT driven and targeted to achieve full automation. Foreign Exchange. Each module is running at all branches
The Bank has established online connectivity to its all and integrated with each other.
branches having dual connectivity at all branches, which
An advanced version of RDS/UPDS module of eIBS has also
is the largest network amongst all Banks in Bangladesh.
been developed by Banks own manpower and implemented
IBBLs data center is the largest in the Banking sector of the
in all RDS branches of the Bank.
country. Establishment of own ATM network of the Bank and
introduction of different cards like, Salary card, travel card, Any Branch Banking
VISA debit card, Remittance Card and Khidmah Credit Card
and existing ATM (debit) Card make the services of the bank Presently IBBL possesses the largest online banking network
more attractive to the customer. All types of Electronic Fund in the country. All branches are under on-line connectivity via
Transfer (EFT) and Alternative Payment Systems i.e. ATM, dual connectivity using Fiber Optics and Radio Link where
IDM, POS, SMS and Internet Banking, mobile banking, phone Any Branch Banking facilities to the clients are being
banking are already incorporated in out long list of services. provided. Both the revenue and number of transactions of
Some service like POS (Point of Sale)is in the waiting list, online banking of IBBL have showed positive growth over the
which will be incorporated into our long list of services very past year. For example, more than 1,00,000 transactions per
soon. All Branches including SME/Krishi Branches of IBBL day are being performed with volume of approx. Tk. 1000
have sophisticated IT systems equipped with state of the art cores using on line remote deposits and withdrawals. About
IT components used in the Banking sector. two core ten lacs transaction is committed by IBBL any
branch banking module in 2015.
eIBS (Electronic Integrated Banking System) Equipping IBBL workforce
IBBL boasts to be the only Bank in Bangladesh possessing We have achieved the vision of one man one computer
own developed Centralized Core Banking System, eIBS, for all employees. For now, all working forces (AOG-III and
which is based on open source technologies and most above) of the Bank are availing Computer. We have already

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Islami Bank Bangladesh Limited Annual Report 2015
 ICT & Automation

set up more than seven hundred IP Phones and twenty-five SMS Banking
Video Phones. We will provide more than five hundred IP
Through SMS push service, remitters and beneficiaries
Phones in next year. We have already provided email and
of the Foreign Remittance can automatically receive a
internet facility to most of the officials and executives. We
message in their mobile phones once the amount is credited
have plan for providing Email and internet facility for the
in their accounts. From the teller if any account transacted
rest of officers gradually. Last year ICTW has arranged more
BDT Fifty thousand or above an SMS is sending to clients
than fifty IT related training and workshop for the employee
registered mobile via IBBL SMS PUSH services. Through
of IBBL where more than three thousand employees
SMS push-pull service, clients can see their latest balance
were attended and the productivity of the employee has
information and last three transactions in their mobiles
tremendously improved due to these programs.
from anywhere in the world at any time by sending SMS to
ATM and IDM Services 6969 (for local clients) +8801714006969 (for international
clients)). At present more than 2.15 millions clients have
From 2001, IBBL started providing ATM service to its been registered in SMS Banking and on an average 22,000
customers from 55 branches through a consortium of requests are being received per day. About 7.5 million SMS
9 financial organizations using a 3rd party ATM service push pull notification has processed by IBBL SMS system in
provider. And from 2009, the Bank is operating its own ATM the year 2015.
network where till December 2015; we have installed 487
ATM booths and 51 IDM (cash deposit machine) across the We have integrated with Grameenphone SMS Gateway for
whole country. Also we are in the process of purchasing new SMS Banking services through PUSH-PULL concept. Under
170 units of ATMs 75 IDM for 2016. this service, we are earning Tk. 1.00 for each SMS to IBBL
SMS Gateway 16259.
Now, total about 2.40 Million no. of ATM and VISA debit
cardholders are using IBBLs own 487 ATMs and 6000 shared Internet banking (iBanking)
ATM. More than 15.2 million transactions has committed
Through iBanking-valued clients of IBBL and Foreign
from IBBL ATM & SWITCH Network in 2015. At present, on an
Remittance exchange Houses can check account details
average daily 70%-75% transactions are performing through
at IBBLs Web Portal (https://ibblportal.islamibankbd.com).
IBBL ATM Network where per day transaction amount is less
So far, nearly 0.15 million clients have registered for taking
than Tk 50,001.00 instead of cash transactions performed
the Internet Banking services. IBBL iBanking clients can
by IBBL branch network.
transfer up to 0.5 million taka daily from one account to
IBBL has received one prestigious award from VISA other accounts of any branches of IBBL by himself without
International for Outstanding Achievements in Debit any interaction of banks. IBBL clients can also enjoy mobile
Portfolio Growth for the year 2015. top up services, post paid bill payments, utility bill payment
The other deliverables of the projects are POS (Point Of etc. by iBanking services. About 16.5 lacs transactions
Sale), EMV (Europay, MasterCard and Visa, a global standard amounting 1360 crore taka are handled by IBBL iBanking
for inter-operation of integrated circuit cards) and Card system in year 2014. IBBL online Money transfer system is
eCommerce & Card payment gateway which are in the using by the exchange houses for sending spot/instant cash
pipeline of the operation. and direct IBBL customer account credited from abroad.
IBBL employees use this for payout the spot/instant cash.
Different Card Services About 18 lacs transaction amounting of 5700 crore taka is
committed by IBBL online money transfer system in the year
IBBL is providing following different card services to the 2015. At present 89 exchange house are directly connected
customers : with the system IBBL online money transfer system.
1. IBBL Proprietary Card (for local use) We have integrated with Grameenphone bill payment
2. VISA Debit Card (for local ATM, merchant payment & services for providing following bills through IBBL Internet
e-Commerce) Banking & mCash:
3. Khidmah Credit Card (for local, merchant payment, 1. PDB Chittagong
e-Commerce & international)
2. PDB Sylhet
4. Remittance Card (for local use)
5. Hajj Prepaid Card (for pilgrim purpose at Saudi Arabia) 3. PDB Rangpur
6. Business Prepaid Card (for local use) 4. DPDC
7. Travelers Card etc. (for international use) 5. DESCO

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Islami Bank Bangladesh Limited Annual Report 2015
ICT & Automation

6. Titas 7. iTransfer (Fund Transfer)

7. KGDCL 8. iTransfer-EFT (Transfer To Other Bank)
8. KGDCL 9. iRecharge (Mobile Airtime Top Up for all TELCOs)
9. Bakhrabad Gas Systems Ltd. 10. Wimax Recharge (Banglalion & Qubee)
10. JGSL 11. Utility Bill Payment (DESCO & DESA)
11. CWASA 12. Khidmah Credit Card - Bill Pay

Internet Banking Services 13. Account No Withdrawal

1. View Accounts & Statement Checking 14. Manage Cheque (Issue Cheque Requisition & Stop
Cheque Payment)
2. Search FTT Message
15. iPaySafe Payment Gateway Service (Our customers
3. Search FDD Payment can place orders on around 500+ e-commerce sites and
4. Transaction Summary make the payment through iPaySafe(https://ipaysafe.
islamibankbd.com)
5. Clearing Instrument Status
16. VISA Instant Payment Transfer fund to any VISA card
6. Outstanding Liability Position issued locally.

e-commerce sites:
There are many sites of e-commerce. From them the following are most popular.

Aarong www.aarong.com
Ajkerdeal www.ajkerdeal.com
Akhoni www.akhoni.com
amarbill.com http://www.amarbill.com
Bangladesh Institute of Professional Studies bips.org.bd
Bdhaat www.bdhaat.com
Bdjobs www.bdjobs.com
BDSmartPay https://bdsmartpay.com/
bdtickets.com https://bdtickets.com/
Bibah BD bibahabd.com
bijoy.net http://www.bijoy.net
Billdao www.billdao.com
biponee.com http://www.biponee.com
Daraz.com.bd https://www.daraz.com.bd
Diamond World diamondworldltd.com
Easy www.easy.com.bd
esho.com http://www.esho.com
HungryNaki
http://www.hungrynaki.com/
Novoair

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Islami Bank Bangladesh Limited Annual Report 2015
 ICT & Automation

https://www.flynovoair.com/
pizzaroma http://www.pizzaroma.com.bd/
Qubee qubee.sslwireless.com
Regent Airlines onlinebooking.flyregent.com
Shohoz www.shohoz.com
ShurjoMukhi Ltd https://paypoint.shurjorajjo.com.bd
Us Bangla http://www.us-banglaairlines.com/

IBBL Contact center Mobile Banking and External Market. Thus IBBL Management
can observe the business trend, growth and performance of the
IBBL has established contact Center to provide smart, bank, can get any business analytics at any moment from the
appropriate, state of the art support services to the clients, Central MIS which enabled us to provide current information to
Branches, and Head Office simultaneously. Dialing 16259 or the bodies like Ministries, Bangladesh Bank, World Bank, IFC,
from abroad (+880)-2-8331090 anyone can enjoy IBBL phone IMF, and ADB etc.
banking or agent base services round the clock. Till now
over 25 millions callers availed customer service from IBBL IBBL also built a strong Branch MIS like GBMIS, INVMIS,
Contact Center from 1st January 2013. Average growth rate FEXMIS for the branches which contains Branch Accounts,
of IVR, Landed, and Handled calls are 146%, 191% and 109% Daily Transactions, Remittances, General Ledger (GL) related
respectively till 08th December 2015 than that of 2013. information for the monitoring of Branch Incumbent and as
well as branch users.
Mobile Banking Services (mCash)
Bangladesh Bank Automated Clearing House
IBBL has implemented full scale mobile financial services
(mCash) like cash in/out, fund transfer, mobile airtime recharge, Clearing of instruments on the same day is now being possible
utility bills payment, salary and tuition fee payment etc. to its due to implementation of BACH. In-house developed software
customers. Through it, IBBL intends to bring a revolution in used by IBBL in this purpose. About 25 lacs inward and outward
banking trends and to bring the un-banked population under clearing instruments with the value of Tk. 88320 crore are
the umbrella of Islamic Banking. IBBL mCash system is cleared by IBBL BACPS system during the year 2015.
integrated with ROBI, BanglaLink, AirTel and Grameen Phone
Mobile network and integration with TeleTalk is in process BEFTN (Bangladesh Electronic Fund Transfer Network)
of completion. By this time Customer can enjoy the mCash
IBBL has been one of the few banks to develop own BEFTN
services more than twenty-five IBBL appointed agent outlet
system. As per guidelines of Bangladesh Bank, IBBL customer
and 61000 agent of mobiCash all over the country. We have
able to offer electronic fund transfers to and from to third
targeted to include some corporate institutions for automation
bank via BEFTN system in addition to its conventional banking
of their payment mechanism.
channels. About 1.5 million transactions amounting of tk.7,663
On-line Data Centre (DC) and Disaster Recovery Site Crore are handled by our EFT system during the year 2015.

IBBL has the countrys largest Data Centre in the Banking sector Centralization of the Core Banking System (CBS)
running on ORACLE EXA data solution in DC, HOT DR &DR site.
Our CBS (eIBS) and its associated systems are centralizedthat
IBBL has also completed setting up of Disaster Recovery Site
is why all services and supports can be provided from a single
(DRS) as per the guideline of Bangladesh Bank as a replication
operational point. Implementation of BACH, BEFTN, Call Center
of our existing Data Center. Full-fledged operations of the DRS
etc. are parts of the centralized approach. They all ensure
are now going on.
services on fast track and enable to deliver more innovative
Management Information System (MIS) ones in electronic and alternate delivery channels (Cards, SMS
Banking, iBanking, Mobile Banking, etc.). Centralization of IBBL
IBBL has built a strong Central MIS for the Bank. It now contains branched has improved the customer services tremendously
any Branch Level, Zone Level, Central Level data and information and reduced the operating cost and ensuring more security and
and also contains information of ATM, iBanking, SMS Banking, regulatory compliance.

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ICT & Automation

IBBL website RTGS (Real Time Gross Settlement):

IBBL has brought drastically changes in IBBL website (http:// RTGS (Real Time Gross Settlement) is an electronic inter-
islamibankbd.com). At present IBBL website is more dynamic, bank settlement system where transfer of funds or securities
informative, and secured. Updated Information related to IBBL takes place from one bank to another on a real time and on
and Islami banking (public information) is now available at IBBL gross basis. Settlement in real time means transaction is not
subjected to any waiting period. Gross Settlement means the
web site.
transaction is settled in central banks account on one to one
Green Banking basis without netting with any other transactions.

IBBL has taken initiative to migrate IBBL in compliance with The RTGS system will reduce credit risk, settlement risk etc. and
full-fledged Green banking operation. To achieve the milestone will make the inter-bank transactions faster at lowest possible
cost. Subsequently, liquidity management and customer
of green banking, we have started the re-engineering process
services of the banks will be improved.
our system and mode of operation.
Bangladesh Bank started live operation of RTGS from
CIPPS (Centralized Investment Proposal Processing 29th October, 2015. IBBL are prepared including Hardware
System): procurement, software development etc. to execute RTGS
operation inline of Bangladesh Banks schedule and already
The Centralized Investment Proposal Processing System
started RTGS transaction from day one.
(CIPPS) is to automate the life cycle of an investment proposal
and to maintain limit information of the customer. Branch eIBS-RDS Module
maker can initiate the proposal with all information and
Development of eIBS-RDS Centralized Module was completed
documents. Then an authorizer will authorize the proposal.
on August, 2015. Data conversion from distributed Module
After authorization, respective authority will check and approve to Central Module is continuing and 100% Branches will be
the proposal. After approving, the authorized user can finalize converted within January, 2016.
the sanction letter and create a limit profile for the customer.
This system maintains all fields of branch appraisal and user CSR (Corporate Social Responsibility) Automation
can generate appraisal report. A user can generate the XML file
Automation process of CSR activities has been taken by ICTW.
and send to the branch to import in eIBS. Branch user cannot Development of eIBS-CSR Module will be completed within
add/or modify the limit. January, 2016 and will be operated live within February, 2016.

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Islami Bank Bangladesh Limited Annual Report 2015
 Green Banking

GREEN BANKING

Green Banking is a process practiced by the banks to make Environmental Risk Management
the earth environmentally appeasing and safe habitable for
all of the species on the earth. A Green Bank considers all The Bank has incorporated Environmental and Climate
the social and environmental/ecological factors in its normal Change Risk Management as part of the existing investment
banking operations with an aim to protect the environment risk assessment methodology integrating environmental
and conserve natural resources. risks in the checklists,
Green Banking involve a wide variety of activities which Direct green investment:
demand the firm pledge of the workforce of an organization
to carry out every activity taking the environment into Direct Green Investment means investment to the
account. businesses to procure/purchase/set up Green Products,
establish Green Industry and transform existing traditional
Areas of Green Banking ones to environment friendly ones.
General banking Indirect green investment:
The Bank uses the state-of-the art technology to provide Indirect Green Investment means working capital investment
various banking services on E-commerce platform. The to environment friendly plants /industry/products to carry
products are i-Banking, Phone banking, Visa Debit Card, out their businesses.
Khidma Credit Card, mCash, Call centre and so on .
The total disbursement in green investment in 2015 and
Green Investment 2014 were Tk. 78,000.09 million and Tk. 54,751.12 million
respectively i.e. 42.46% growth in 2015. The following chart
Green Investment implies investment that helps recover
presents a brief disbursement scenario of green investments
the environmental degradations, prevent deterioration of
of the Bank for the year 2014 and 2015:
the environment and are not harmful to the environment.
Green Investment includes both Direct and Indirect Green
Investment.

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Islami Bank Bangladesh Limited Annual Report 2015
Green Banking

Green Investment Climate Risk Fund Utilization

80

(Amount In million Taka )

(Amount In million Taka )

80000 70
70000 60
60000 50
50000 40
40000 30
30000 20
20000
10000 10
0 0
-10000
2014 2015 Groth G. Direct Investment Prime Earthq uake Flood Blanket Profit Spons oring Tree
in % G. Indirect Investment Ministers victims of distribution Forgone a participant Plantat ion
Relief
3595.1 2550.29 -29.06 Relief for Clim
G. Direct Investment Fund
Nepal

Indirect Investment 51156.02 75449.8 47.49 2014 10.00 0.00 35.31 73.49 3.93 0 20.53
2015 20.00 14.14 67.39 58.08 2.81 0.25 20

Environmental Risk Management (ERM)

The chart shows that the Bank increased its Climate related
The Bank, in its business decision, considers Environmental CSR activities in 2015 in relation to the year 2014. It is to
Risk Management alongside the Investment Risk be noted that the Bank sponsored Tk. 0.25 million for a
Management system and carries Environmental Risk Rating Bangladeshi Reporter who participated in the World Climate
(EnvRR) of the investment proposals within the following Summit-2015 in Paris.
applicable investment limits/thresholds:
Green Training and Capacity Building
1. For Small and Medium Enterprises (SMEs), financing
> BDT 2.5 million Green banking training and capacity building for the
employees in the form of (a) Green Events like seminars,
2. For Corporate, financing > BDT10 million and symposiums, discussion meetings etc. are arranged by
3. For real estate financing > BDT10 million. all the operational units, and (b) Academic training and
workshops on green banking, environmental & social risk
In 2015, 2,286 number of investment projects were rated management were arranged by IBTRA and HRD.

out of 2,628 applicable investments where as in 2014, 2031 Green Training and Capacity Building
number of investment projects were rated out of 2,757
(Amount In million Taka )

8000
7000
6000
applicable investments. 5000
4000
3000
2000
Climate Risk Fund (CRF) 1000
0 No of No of No of Expenses 2014
training employee customer in million
programs participants
participants Tk. 2015
CRF as a part of CSR is used under Environment 2014
2015
288
353
7405
6581
3771
3841
2.91
3.35
Friendly Banking for the activities related to prevention
of environmental pollution and degradation, mitigation The following chart presents a brief scenario of green
and adaptation of climate change issues, reduction of banking training and capacity building for the year 2014
carbon emission rate, disaster management (prevention & and 2015. In 2015, the Bank increased its green training and
rehabilitation) etc. capacity building activities in relation to 2014.

The fund may be used as donation as well as investment Green Marketing and Awareness Development
at reduced rate of return (Rate of return is less than the
weighted average cost of fund) for the climate change For the marketing of the Banks green products and to create
vulnerable people. awareness development amongst the clients and public on
environmental issues, the following steps were undertaken:
The total CRF utilization of 2015 and 2014 were Tk. 182.67
million and Tk. 122.57 million respectively, i.e. 49.03% a. Motivation: Clients were motivated for making
growth in 2015. The percentage of CRF in 2015 in relation their products, productions & packaging process
to the total CSR activities was 31.65%. It is to be mentioned environment friendly.
that, as per Bangladesh Bank requirement, the Bank is to Advertisements: Advertisements were given in both
allocate minimum 10.0% of its annual CSR budget as CRF print and electronic media on green banking products/
which is also treated as a part of banks CSR. issues.
The following chart presents a brief scenario of uses of Publications: The Bank published various publications
climate risk fund for the year 2014 and 2015: exclusively on green banking products and issues.
Public Events: The Bank arranged events publicly on

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Islami Bank Bangladesh Limited Annual Report 2015
 Green Banking

Plantation by IBBL

green banking.
Utility Consumptions
Green Marketing & Awareness development 300
(Amount In million Taka )

250

100 200
(Amount In million Taka )

150
100
50
50 0
-50
Water Paper Electricity Gas Fuel
2014
0 2014 12.32 169.69 255.79 2.73 50.60 2015
2014 2015 Groth Green marketing 2015 12.93 175.17 251.30 5.96 42.29 Growth in%
in % and awareness Growth in % 4.95 3.23 -1.75 118.32 -16.42
Green marketing
development
and awareness 18.00 35.68 98.22
development

Waste Management

The chart shows the Banks vigorous efforts for green marketing The Bank emphasizes in waste minimization of its resources
and awareness development programs and relevant expenses. and centrally collects its e-wastes and other solid wastes
The growth in 2015 of Green marketing and awareness from every operational unit and disposes centrally through
development programs was 98.22% over 2014.
auction. In 2015, the Bank earned Tk.2.40 million from sale
In-house Environmental Management of its e-wastes.

The Bank manages its in-house activities in environment Renewable Energy

friendly ways to reduce its own carbon footprint by
exercising the direction of the Holy Quran And do not spend The Bank has strong commitment to use renewable energy
wastefully. Do not be a spendthrift because the spendthrifts resources in its operations and as such installed solar panels
are the brethren of Satan and Satan has been ungrateful to at Head Office and 34 of its branches.
his Lord. Surah Bani Israil-26-27. Different areas of in-house
environment management are given below: Green Travel

Utility consumptions: IBBL always encourages its employees to undertake Green

Responsible usage of utilities is a primary commitment of travel for personal as well as business travel and has the
the Bank. The following chart gives the clear picture. arrangements of hybrid autos and car pooling system.

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Islami Bank Bangladesh Limited Annual Report 2015
Green Banking

Ethical Banking The quarterly segmented budgets of various areas of green

banking show that Indirect Green Investments have the
The Bank aims to run in such a way that does not have any
largest budget followed by Direct Green Investment. The
negative impact on either society or the environment. The
principles of the Bank based on Islamic Shariah have a direct Green Training has the smallest allocation, i.e. only Tk. 1.12
impact on how it invests and utilizes its resources. It does million.
not finance enterprises that deal in morally questionable
businesses. Priorities for 2016
The Bank will pursue all the relevant areas of green banking
The Bank attempts to maximize social welfare, reduce any
type of environmental degradation and hazards through its with the special focus on the following areas of Green
operational activities and protect the nature. Moreover, the Initiatives in 2016:
Banks core principle is the protection of resources for the
future generation. 5.0% of total disbursed funded investments in Direct
Green Investments.
Green Targets, Strategic Plan and Budget
Expansion of i-Banking and ADC products coverage.
The Green banking requires annual targets, strategic plan
and budget at the relevant activities duly approved by the Use of Video Conferencing instead of physical
competent authority. movement.
Targets : Each year the Bank is required to determine a set
Lesser paper use and use of on net communication.
of yearly green targets.

Strategic plan: It includes required means of materializing E-tendering and E-recruitment.

the actions, supervision, monitoring, evaluating the
Careful use of paper, water, electricity, gas and other
achievement, training/ awareness development (with
numbers and nature) and promotion programs. materials to reduce own carbon footprint as well as
cost.
Budget : Necessary budget for pursuing the strategic plan
and the targets will also be drawn.
Green Banking or Environment friendly banking assures
The green banking budget for the year 2016 covering the sustainable growth of the institutions and the country. It
related areas of green banking activities of the Bank is contributes quality avenues of the banking. The Bank by its
presented in the chart.
morale exercises the environment friendly banking from its
Green Banking Budget, 2016 very inception. Nowadays it gained a new shape of budget,
20,000.00
target and disclosure based on national and international
Amount in million Tk.

18,000.00
16,000.00
14,000.00
demand. We are to go to the optimum level in the formal
12.000.00
8,000.00
6.000.00
manner. The green banking concepts and its practices are
4,000.00
2,000.00 Qtr - 1 to be internalized by the all workforce. So, it is now become
0.00 Qtr - 2
Direct G.
Investment
Indirect
G.
Climate
risk fund
Green Green
training marketing Qtr - 3 imperatives for us to realize and implement the green
Investment Qtr - 4 banking practices to protect the image of the institution as
well as to remain compliant of the regulatory guidance.
Qtr - 1 2,726.00 17,596.00 30.00 0.28 54.00
Qtr- 2 2,901.00 16,587.00 30.00 0.28 55.50
Qtr- 3 2,986.00 17,657.00 30.00 0.28 53.50
Qtr- 4 2,881.00 18,266.00 30.00 0.28 64.00

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Islami Bank Bangladesh Limited Annual Report 2015
 CSR Report

CSR REPORT

Proyash, a school for the autistic children in Jessore run by Bangladesh Army

As a responsible corporate citizen and one of the biggest Islamic the Sadaqah Tahbil into a full fledged foundation since May 20,
Bank of the world, we believe that Islami Bank Bangladesh Limited 1991. Further to its activities under IBF, IBBL established Corporate
(IBBL) has a responsibility to our stakeholders as well as to the Social Affairs Department (CSAD) under Operations Wing on 16th
communities in which we work and live. Our commitment is built July 2009 in compliance with the instruction of the Central Bank.
on a deeply ingrained sense of social responsibility among our
The Triple Bottom Line
stakeholders, employees, customers alike and that we grow
stronger by serving the communities, improving business The CSR program of IBBL aims at the welfare and well-being of the
practices and individual lives around us. people of the earth, the planet itself and all its stakeholders. Keeping
that in view this reports focuses on triple bottom line: People, Planet
Why CSR? and Profit. The purpose of this Corporate Social Responsibility
CSR is seen as a concept in which companies voluntarily integrate Report (CSR) is to provide an account in a single document of
social and environmental concerns into their business operations IBBLs overall contribution to sustainable development.
and into the interaction with their stakeholders. As a matter of
fact, over the last few decades, corporations in the developed PEOPLE
economics have moved to Social Responsibility Approach from
classical Profit Maximizing Approach where businesses are not We try to increase the welfare of our employees and the
only responsible to its stakeholders but also to the society as a communities in which we live and work.
whole in a broader inclusive sense. The idea of being a socially
Our Commitment to Employees
responsible company means doing more than complying with the
legal and regulatory requirments. Our people are our capital no matter what their title or job
function. We strive to make IBBL a great place to work and build
CSR: is the built-in mechanism of IBBL
a career. Our employees describe the workplace as collaborative
In order to popularize the concept of Islamic Banking, IBBL has and collegial, where the views of all employees are taken into
started its charitable activities since inception through creation of consideration. We possesses value-driven culture, where good
``Sadaqah Tahbil``. Thereafter, it was done through IBF converting ideas are recognized regardless of the level of the employees.

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Islami Bank Bangladesh Limited Annual Report 2015
CSR Report

Donation for Nepal earthquake victims

Comprehensive Training and Development Shapes Human Rights

Our Success
To develop professional knowledge, skill and attitude of the The Bank is very much conscious about human rights at
employees, the Bank established its own training academy every level of its operations. We do not employ workers
Islami Bank Training & Research Academy (IBTRA) where under the legal minimum age, prohibit the use of forced
training courses are conducted round the year. Employees labour, respect employees rights to join or not to join a
are encouraged to complete Diploma in Islamic Banking labour union, respect the principles of collective bargaining,
from IBTRA and JAIBB & DAIBB from Institute of Bankers provide healthy & safe work place. The Bank does not make
Bangladesh by allocating points for both the diploma in any discrimination on the basis of age, gender, race or socio-
promotion criteria. Besides, each of the employees is given economic background. It limits work to standard accepted
cash incentive for completing diplomas. IBBL has largest hours and denounces any sort of abuse of its workforce
CDCS in the country (more than half of total CDCS) which whatsoever.
makes the Bank a world valued Bank.
Our Commitment to Communities
Remuneration and Benefits
IBBL is committed to being a responsible corporate citizen.
The Bank has developed a comprehensive pay-scale for the
We make grants and support volunteerism in all our
employees, the ratio of the highest and lowest level in the pay-scale
communities around the country. We take several initiatives
has been maintained at 12:1 (DMD:MCG). To meet the housing
in individual and organizational level for development of
need and to ensure comfortable life, employees are provided with
the community especially the less fortunate segments of
investment at a discounted rate under SHBIS and SHDS. The
the community. We support: (1) Education, (2) Health, (3)
executives of the Bank are provided with car either from bank
Humanitarian & Disaster Relief and (4) Sports, arts & culture.
management or under Car Scheme for the Employees of the Bank.

An amount ofTk. 4327.13 million for 13,804,358 beneficiaries

Apart from regular pay packages, IBBL has policies for its employees
was spent by IBBL from 1983- 2015 in these areas. Out of
to make their life secured during the superannuation period. Under
which Tk. 800.45 million for 1,472,959 beneficiaries was
the policies, Contributory Provident Fund, Superannuation Fund
contributed in 2015.
and Gratuity Fund have been developed.

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Islami Bank Bangladesh Limited Annual Report 2015
 CSR Report

Donation to Bangladesh Handball Federation

Humanitarian & Disaster

Year Education Health Health Sports Arts, Literature & Culture Environment Others Total
Relief
Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary
1983-2009 217.61 452,291 285.34 265,197 873.62 6,055,481 60.83 413,622 68.75 187,107 - - 61.31 56,674 1,567.46 7,430,372
2010 64.06 158,760 67.8 98,787 64.11 721,160 12.00 2 11.22 41,964 7.36 15,240 11.87 655 238.42 1,036,568
2011 21.79 32,928 56.17 128,925 25.78 128,556 248.75 636 7.15 643 0.48 3 50.55 118,115 410.67 409,806
2012 87.93 597,866 83.8 3,014 39.75 19,230 1.61 144 8.24 11 12.48 493,822 75.38 34,438 309.19 1,148,525
2013 140.10 254,078 135.26 7,756 71.50 95,255 78.97 7 5.86 21 22.94 592,722 21.79 768 476.42 950,607
2014 190.16 498,768 161.34 7,928 89.47 125,079 40.2 5 15.21 17 21.12 723,673 7.02 51 524.52 1,355,521
2015 323.90 606,320 175.24 8,930 226.04 99,469 26.60 6 5.12 643 21.42 757,558 22.11 33 800.43 1,472,959
Total 1,045.55 2,601,011 964.95 520,537 1,390.27 7,244,230 468.96 414,422 121.55 230,406 85.80 2,583,018 250.03 210,734 4,327.11 13,804,358

Education Support to the disable children

From the very beginning, IBBL engaged with promotion of PROYASH is an institute run under the patronization of
education sector of the country. IBBL spent an amount of Bangladesh Army for the well-being of children with special
Tk. 964.95 million for 520,537 beneficiaries from 1983-2015
needs and disability. Considering the disabled children as
for this purpose.
asset of the society, the Bank stands beside the authority of
Scholarship Program Proyash for fulfillment of their need.

IBBL has been providing scholarship to the very poor 2300

students (1500 in HSC and 800 in Graduation level) securing Health Program
GPA 5 in SSC & HSC examinations under its direct Scholarship
program. The Scholarship is provided to the students @ Tk. Health care is a basic need of all societies. But people are
2,000/- per month for 2 years for HSC level with Tk. 3,000/- facing here a perilous situation due to hazardous Medicare
at a time for purchasing Books per year. Tk. 4,500/- (Urban) system of the country. Considering this, IBBL takes several
& Tk. 3,000/- (Rural) per month for Graduation level for 3 to initiatives in individual and organizational level for developing
5 years for Graduation level. health sector of Bangladesh. IBBL spent an amount of Tk.
1,390.27 million for 7,244,230 beneficiaries from 1983-2015
In addition, scholarship is allowed to 400 meritorious but
poor students in different educational institutions. for this purpose.

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Islami Bank Bangladesh Limited Annual Report 2015
CSR Report

Donation to Anjuman Mufidul Islam

Humanitarian and Disaster Relief Tohfa-e-Ramadan

Disasters can strike anywhere. No country, rich or poor, is A unique step taken by IBBL for fasting people of the country
immune from risks of accidents and disasters causing named Tohfa-e-Ramadan. Under this Program we provided
deaths and injuries, destruction and damage to properties food items to 42,110 poor and religious scholars families
and assets; disrupting economic activities and livelihoods of amounting of Tk. 70.82 million during last Ramadan.
individuals and households.
Sports, Arts & Cultural Program
Over the year, people of this land are fighting with poverty
and many other natural disasters. Being a corporate citizen Sports, Arts & cultural programs make a nation physically
of the country, IBBL always stands beside the distressed and mentally sound and healthy. Engaging with this type of
humanity. By devising special deposit products, extending works young people could be able to avoid many bad things,
financial inclusion and providing financial assistance, as like taking drugs, involving forbidden underworld parties,
the Bank discharges its responsibilities towards the poor hijacking money from innocent people etc. This is why IBBL
and less fortunate segments of the society. Disaster relief sponsors various sports & cultural events every year. IBBL
program includes winter cloths distribution, Donation to encourages sports and cultural activities of its employees.
PMs relief fund, distribution of Tohfa-e-Ramadan, sacrificial An amount of Tk. 590.51 million was spent by IBBL from
1983-2015 for this purpose.
meat distribution, rehabilitation program etc. An amount of
Tk.1,045.55 million for 2,601,011 vulnerable persons was
PLANET
spent by IBBL from 1983-2015.
Environmentalism at IBBL
Winter cloth distribution program The main theme of environmental responsibility is to protect
the environment from destruction with a view to keeping it
IBBL always stand beside the cold effected people of the healthy for future generation. Recently, the issue of climatic
country. We have distributed more than 0.30 million worm change is being considered seriously all over the world. It is
cloths amounting of Tk. 78.03 million all over the country identified that Bangladesh being a nation in southern delta
during 2015. is under serious threat of natural disaster. IBBL contributed

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Islami Bank Bangladesh Limited Annual Report 2015
 CSR Report

Donation for CCTV in Dhaka City

an amount of Tk. 85.80 million for 2,583,018 beneficiaries comfortable working environment along with other required
from 1983- 2015. facilities.

We try to reduce our impact on the planet. We took initiatives Economic Development
to reduce carbon emission through installation of solar
panels, introducing measures for saving electricity, water, Sustainability encompasses within itself apart from
gas and fuel, encouraging double-sided printing, use of environmental protection, the idea of human beings having
scrap/one-side-used papers for note pad etc. We are strict what they need to survive and thrive. In a country like ours,
to installation of biomass processing plants, waste recycling economic development projects are crucial to give people
plants and Effluent Treatment Plants (ETPs) in our financed a chance for a better wage, one that provides food, shelter,
projects. We also educate and encourage our employees to clothing and perhaps even more. IBBL as a policy prioritizes
be sensitive to the environment both inside and outside of the labor intensive and import substitute projects to improve
the office. the economic wellbeing of the common messes.

Environmental Policy Statement Workforce Development

IBBL is committed to doing its part to protect and care Workforce development is one route to prosperity for
for the environment in it operations. This commitment individuals in the world. A healthy planet needs people,
is demonstrated by the continuous development and young and old, who are trained for work that pays a livable
implementation of practical and effective corporate policies wage for them to provide for themselves and their families.
and programs that support more efficient use of natural
IBBL has so far established institutes like Medical College,
resources and reduce the impact of our businesses on the
Health Technology Institute, Nursing Training Institute,
environment.
English medium school, Bangla medium school and girls
Bank premises are taken with adequate space and interior madrasha one each and 6 Technical Institutes under its
decorations are made to keep the office environment healthy Foundation management to contribute for workforce
and work-friendly. Female employees are also provided with development of the country.

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CSR Report

Microfinance are given shelter, education, training and employment

opportunities there.
In the developing world, the path to prosperity can be
challenging and can require a different approach than just job PROFIT
training. IBBL believes in the power of microfinance small We seek to make our country more prosperous through
loans made to individuals to start or expand their businesses the development of the financial system based on Islamic
to lift people out of poverty and to give them a better life. principles and become the Global Leader in Islamic Banking.
IBBL started its microfinance operation through Rural
Commitment to the Shareholders
Development Scheme (RDS) since 1995. So far, out of
304 branches, 227 carry out RDS activities in 64 districts In the backdrop of volatile global and socio-economic
of the country. The Bank launched another micro-finance scenerio as well as regulatory changes, Islami Bank
scheme for urban poor in 2012 in the name of Urban Poor Bangladesh Limited made excellent performances in
Development Scheme (UPDS) on pilot basis under its 24 different areas of business. Although nowhere in our vision
urban branches. These two schemes enable IBBL to achieve and mission statement profit maximization came as a
financial inclusion of poor women of rural & urban areas. priority issue, profitability has become the logical outcome of
our performance. From the investors perspective, the IBBLs
Financing in SME Sectors stock always give high yield to its shareholders.

SME is considered as the engine of growth in any economy Commitment to the Customers
which generates a huge employment relative to big IBBL considers the customers as partners and develop long-
industries. Therefore, SME is essentially required to be term sustainable relationships with them different need
flourished in the country like Bangladesh. Keeping this in based welfare oriented investment schemes contribute
view, the Bank, from its inception, has been encouraging to the well-being of the customers. To encourage financial
investment in SMEs. To expedite SME investment, the Bank inclusion, customers can open a saving account with Tk.
has opened 30 SME & Agriculture Branches especially in the 500/-, a current account with Tk. 1,000/- and a special
rural areas of the country. savings scheme (pension scheme) with minimum monthly
installment of Tk. 100/- only. The rural poor are allowed to
Contributing for Women Empowerment maintain savings account by depositing weekly installment
of Tk. 10/- only under Banks Rural Development Scheme.
Keeping in view the prevailing conditions of the women in
the society, IBBL takes various programs for empowering the The most important contribution of the Bank is the creation
women through awareness building, training, financing etc. of huge employment opportunities in its financed projects
as well as in its own organization. At present more than
The introduction of the deposit scheme namely Mudaraba 13,000 inspired people are serving in IBBL and millions in
Mohor Deposit Scheme is a recognition to the womens its financed projects Through its wide-range network of
right and husbands are now coming forward to fulfilling their 304 branches and utilizing mobile phone technology, IBBL
serves a huge number of rural families by channeling foreign
religious obligation to pay Mohor. Rural under privileged
remittance. The customers of the Bank have by now been
women are organized under Rural Development Scheme extended online ATM services. The Bank has already started
and encouraged to make savings at least Tk. 10/- per week Web Portal, SMS Banking and Spot Cash services.
with the Bank. The Bank deviced an investment Scheme
exclusively for the women namely Investment Scheme for Practicing Good Corporate Governance
the Women Entrepreneurs. We follow a structured and transparent corporate
governance culture where roles, duties and scope of policy
Distressed women rehabilitation centre level & management level are well defined and the same are
The bank has established a rehabilitation centre for the followed meticulously to make the organization thriving one
distressed women namely Islami Bank Distressed Women and moving towards its goal.
Rehabilitation Centre. Distressed and destitute women

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Islami Bank Bangladesh Limited Annual Report 2015
 CSR Report

Service rules governs the employee compliance with laws and regulations, confidentiality,
Every employee of the Bank is expected to adhere to the fair dealings, antitrust and competition, bribery and anti-
service rules (code of Business conduct) of IBBLno corruption, marketing and sponsorships, among other
exceptions. The service rule guides everything that we do. topics. Violations of the service rules are taken seriously
It governs the behavior of employee and includes corporate and processes are in place to address alleged violations
policies on employee relations, ethical business practices, confidentially and systematically.

Sector wise CSR expenditure Position of IBBL in Banking

(Amount in million Taka)

Sector 2011 2012 2013 2014

Banking IBBL % of IBBL Banking IBBL % of Banking IBBL % of Banking IBBL % of

Sector Sector IBBL Sector IBBL Sector IBBL

Humanitarian & 188.03 21.79 12 788.37 87.93 11 1385.83 140.10 10 949.47 190.16 20
Disaster Relief

Education 612.48 56.17 9 983.69 83.80 9 1295.18 135.26 10 1508.00 161.34 11

Health 520.42 25.78 5 435.43 39.75 9 481.68 71.50 15 1383.70 89.47 6

Sports 359.07 248.75 69 183.85 1.61 1 384.02 78.97 21 207.37 40.2 19

Art & Culture 171.52 7.15 4 213.31 8.24 4 124.75 5.86 5 407.11 15.21 4

Environment 138.07 0.48 1 140.23 12.48 9 106.59 22.94 22 164.55 21.12 13

Others 198.73 50.55 25 301.81 75.38 25 693.41 21.79 3 485.24 7.02 1

Total 2,188.33 410.67 19 3,046.69 309.19 10 4471.49 476.42 11 5105.46 524.52 10

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Islami Bank Bangladesh Limited Annual Report 2015
MANAGEMENT REPORT AND ANALYSIS

Business Development Conference

Business and Financial Overview over 2014. In 2015, the Bank secured 8.23% market share
of investment, Investments in corporate, SME, agriculture,
In spite of having volatile global & national economic situation housing, transportation, rural and urban development are
and regulatory changes in 2015, Islami Bank Bangladesh major sectors stated as below:
Limited was able to show consistent performance in most of
the business areas. It was possible because of the grace of Corporate Investment
Al-mighty Allah, Banks massive induction of new customers,
modernization of payment system, strengthened bank Investment products of IBBL are fundamentally welfare
customers relationship, enhanced service quality apart from oriented and inclusivity-driven to fit to the requirements
complying banking regulations and Shariah rules. of Shariah. Shariah objectives, while financing under
different modes, are met through diversification of
Profit before Tax investment by size, sector, economic purpose and
geographical location. The investment policy of the Bank
In 2015, the Bank earned highest operating profit in the has completely stirred integrating the latest concepts of
countrys banking sector. The profit before tax of the Bank inclusive growth, green finance and sustainable growth
was Tk. 8,855 million during 2015. However, comprising towards achieving Maqasid-al-Shariah. Investment
of the income of two subsidiaries of IBBL that is IBSL and products of IBBL include general investment, trade finance
IBCML, the consolidated profit before tax in 2015 was Tk. for domestic and international transactions, project finance
9,046 million. and syndication services, and treasury operations.
Deposit Micro, Small and Medium Sector Investment
At the end of 2015, deposit of the Bank reached to Tk. MSMEs account for 30% of GDP, 40% of employment,
615,359.21 million with an increase of Tk.54,663 million 80% of industrial jobs and 25% of the total labour force in
registering growth 10% over previous year. In 2015, IBBLs Bangladesh. In 2015, IBBLs SME exposure was 15% of the
market share in deposit stood at 8.46%. total national SME financing. IBBLs SME contributes over
42% in the total investment of the Bank. The Bank was
General Investment involved in general and women entrepreneurs development
Total investment of the Bank stood at Tk. 530,194 million in particular by providing training, counseling and other
with an increase of Tk.66,719 million registering 14% growth facilities to them in 2015. IBBL sponsored and participated

130
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Islami
IslamiBank
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 Management Report And Analysis

in various programs like road-shows, fairs, seminars, were taken to integrate IBBL with NPS (National Payment
symposiums for the development of MSME sector. System) network of Bangladesh Bank for facilitating
access of customers to all banks ATM booths. In 2013,
Agriculture & Agro based Investment IBBL launched VISA debit card for POS and other related
Investment in Agriculture and Agro based sector stood at TK. transactions facilities of the customers. Other ICT based
59,183 million. Allocation in this sector as on December 31, products includes online banking, e-banking, mCash, ATM,
2015 is 11.16% of the total investment. SMS banking, Call Center, Phone Banking, e-recruitment, etc.
Thus the Bank is facilitating its 9.5 million customers as well
Rural & Urban Poor Development Investment as helping to keep ecological balance. IBBL has launched
The performance of both RDS (Rural Development Scheme) Hajj prepaid debit card in 2013 to fulfill instant cash need of
and UPDS (Urban Poor Development Scheme) is improving the pilgrims. The Bank has launched VISA based Khidmah
systematically and gradually. In 2015, RDS investment Credit in the year 2014.
reached to 5.47% of total investment with 50.27% growth
whereas UPDS investment stood at 0.17% of the total Investors Capital Management
investment. By the end of 2015 the operation of RDS was
spread to 18,615 villages with 947,305 members through IBBL always strives to give high Return on Equity (ROE) to
28,822 centers. Besides, 24 branches under Dhaka, shareholders through prudential business decision while
Chittagong and Sylhet metropolitan cities implemented deploying their capital. The Bank has also implemented
the Urban Poor Development Scheme (UPDS) in 2015 to the Revised Guidelines on Risk Based Capital Adequacy
alleviate poverty. for Banks as designed in Basel II. It is also in process of
implementing Basel III although it is a Basel III complied
Housing Investment Bank now with its Tire 1 capital. The Bank maintained Capital
to Risk-weighted Asset Ratio (CRAR) above minimum
The housing investment of the Bank stood at Tk. 37,025
requirement (10.00%) throughout 2015 and it stood 11.66%
million marking 6.98% of total general investment in 2015.
(consolidated) as on December 31, 2015.
Transportation Investment
Operations and Compliance
Transport Investment of the Bank in 2015 became Tk. 6,820
The Bank adheres to the highest standards of risk
million which is 1.29% of the total general investment. management and compliance throughout 2015. The
Foreign Exchange Business compliance policies of the Bank are formulated following
the standards and policies of national and international
Total foreign exchange business of the Bank stood at Tk. regulatory and non-regulatory bodies. In 2015 the Bank
888,970 million and marked 5% growth over 2015. The properly adopted the regulatory guidelines like Money
external sector performance on three major indicators of Laundering Prevention Act, Anti-Terrorist Act etc. to prevent
IBBL in 2015 is noted below: fraud and forgery.
Import: Import business of the Bank in 2015 stood at
Financial Inclusion
Tk. 343,668 million marking growth of 8% with market
share of 11.13%. IBBL kept continuity of sustainable financial inclusion
throughout 2015. Welfare and inclusivity oriented deposit
Export: In 2015, the export business of the Bank was products such as Muhor, Cash Waqf, Hajj, Farmers etc. of
Tk. 224,236 with market share of 9.70%. the Bank highly partake to the development of economic
Wage Earners Remittance: In 2015, the Banks total empowerment of less privileged people of the society. In
2015, the Bank also reached to the unbanked people through
wage earners remittance stood at Tk. 321,066 million
various special programs and was able to open 29,789
making 26.88% market share.
Farmer accounts, 44,748 Student accounts, 4,627 Mohor
In addition to the above areas, treasury, dealing room etc. accounts and 3,012 Cash Waqf accounts.
are the integral parts of the foreign business of the Bank.
Green Banking
Information and Communication Technology The Bank used to emphasize on social, ethical and
Since 2009 IBBL has been operating its own ATM network environmentally responsible approaches to business
with 487 ATM booths now and above 6,000 shared ATMs and activities. Keeping in view the spirit of Green Banking,
IBBL opened a Green Banking Department under its Risk
has planned to setup more 200 ATM booths throughout the
Management Wing (RMW) and took effective steps in line
country by 2015. In 2015, more than 7.2 million transactions
with Central Banks directives. By now, the Bank has been
have been transmitted through IBBL ATM. Necessary steps
able to reduce paper use substantially through automation

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Management Report And Analysis

Donation for warm clothes to Bangladesh Red Crescent Soceity

and simplification of its procedures. and plans designed to achieve these objectives, and then
allocating resources to implement the plans. Being a welfare
CSR Activities oriented bank, IBBL always strives for highest standards of
IBBL through its various CSR programs is contributing equity and distributive justice in the field of all economic
significantly to develop socio-economic condition of activities. The performance of the entity is linked with the
Bangladesh. The Bank spent around Tk. 524.52 million Managements objectives and strategies in the following
as CSR expenditure in various sectors such as disaster manner:
management, education, health, sports, art & culture and Welfare is a condition of having good health, comfortable
environment etc. in 2015. IBBL brought a new dimension living and pleasant working conditions. Hence, it can be said
to its CSR operations since 2013 donating Tk.150 million that welfare services are those which ensure conditions
to Proyash, an institute run under the patronization of of having good health, comfortable living and working
Bangladesh Army dedicated to the wellbeing of children conditions, which are generally ones basic needs. Islam
with special needs and disability. Thus, IBBL has been views work as the primary means of earning and acquiring
exerting CSR in areas of basic needs such as education income and wealth. As such, IBBL has earned reputation to
and healthcare, particularly for the underprivileged section ensure welfare oriented banking services through its welfare
of population in our society. IBBL has made a number of oriented Special Investment Schemes, Cash Waqf Deposit,
successful cases over time through its CSR engagements. dynamic Corporate Social Responsibility, Mobilization of
Zakah etc.
Relationship between the entities performance with
the managements objectives and strategies Financial inclusion has emerged as a tool to achieve
Managements objectives are consciously directed toward inclusive growth for poverty reduction since 2005, a year that
that effective and efficient achievement of organizational the UN has declared International Microcredit Year. Studies
objectives. On the other hand, managements strategy indicate that a positive correlation exists between financial
involves formulation and implementation of the major goals development and economic growth. Current development
and initiatives taken by a companys top management on theories suggest that greater financial inclusion can have a
behalf of owners, based on consideration of resources and positive impact on the lives of the poor. IBBL based on its
an assessment of the internal and external environments Rural and Urban Poor Development Schemes as a successful
in which the organization competes. Management strategy model has a share of more than 50% of the world Islamic
provides overall direction to the enterprise and involves microfinance. Welfare and inclusivity oriented deposit
specifying the organizations objectives, developing policies products such as Muhor, Cash Waqf, Hajj, Farmers etc. of

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 Management Report And Analysis

the Bank highly partake to the development of economic Challenges in 2015

empowerment of less privileged people of the society.
Banking sector in Bangladesh has come across another
Our efforts continued during the whole year under review turbulent year facing many odds and pitfalls in the
to further diversify investment portfolio by size, sector, macroeconomic fundamentals. The major challenges faced
economic purpose & geographical location. Alhamdulillah, by the banking industry were sluggish Investment (credit)
we see positive shift in our investment portfolio in reducing growth, increasing trend of non-performing investment
concentration in big clients. Investment share of top 100 (credit) resulting to higher provisioning requirements
clients to general investment decreased. Percentage of and surplus liquidity. The cumulative effects of these put
investment up to Tk.100 million to general investment pressure on the profitability of the banking sector as a
increased. SME investment & rural investment to our general whole. Being an integral part of the banking industry, IBBL
investment also increased. had to face the challenges. Despite all the challenges, IBBL
could close the year in a positive note.
Investment in thrust sector of the economy of our
country falls under the priority areas of IBBL. The Bank Outlook for 2016
has considerable amount of investment in the industrial The economy of Bangladesh, one of the most potential
sector. IBBL ventured in financing garment industries in emerging economies of the world, is yet to overcome the
the early stage of the Industry. The Bank also financed in persistent political instability. This uncertainty has halted the
the backward linkage industries. It is mentioning here that, confidence of the businessmen to step forward. IBBL, being
most of the leading export-oriented garment industries of one of the leading players of this economy, is committed to
the country initially started their business taking small size meeting all the needs of every family of Bangladesh. IBBL is
investment from IBBL. going to focus more on inclusivity driven sustainable financing
for becoming the Bank of Choice for all. The shortand mid-
Development of human resources is a must to ensure term strategies to achieve the desired success are as follows:
sustainable growth and advancement of an organization.
Efficient fund management through deploying surplus
This approach is a framework for helping the employees liquidity in priority sectors with particular focus on
develop their personal and organizational knowledge, small and medium enterprises.
skills and abilities by means of extensive improvement
process covering systematic training, motivation, coaching, Mobilization of low cost deposit be strengthened while
counseling, mentoring and the likes. This is also an investment diversification will be made with more focus
initiative to equip & assist the staffs to be adequately in service and infrastructure sectors.
improved to shoulder optimum workload towards efficient Competitive pricing of Asset and liability products will
accomplishment of organizational goals. be ensured.
To materialize the spirit of the above, a comprehensive as Vigorous risk management practices and a high level
well as inclusive development initiative covering various of vigilance will be maintained to keep asset quality at
dimensions is accomplished by Human Resources Division. standard level.
Apart from the traditional top-down approach of human
development, an initiative is going on to transform every
100% compliance will be ensured in all respects through
both on-site and off-site supervision.
Branch into a Center of Excellence to ensure effective
capacity building of the employees of every tiers. Implement a rigorous talent management and industry
best human resource development program.
IBBL is also committed to provide banking services that are
purely based on Islamic Shariah, transparent and efficient. New products will be developed to cater the various
It always struggles for achieving the utmost stage of needs of the client of different strata and add value to
excellence to establish a set of managerial succession and the existing products and services.
adopt technological changes to ensure the development of Automation process will be strengthened to bring more
an Islamic Bank as a stable financial institution, emerge as customers under virtual banking and upgrade services
a healthier & stronger bank at the top of the banking sector networks.
and continue to maintain stable positions in all the major
business indicators. Steps will be taken to ensure green and sustainable
growth of banking business.

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Islami Bank Bangladesh Limited Annual Report 2015
PRODUCTS & SERVICES
Deposit Products 7. Non-Resident Foreign Currency Account of Exchange
Houses/Banks
Deposit Products in Local Currency 8. Non Resident Investors Taka Account (NITA) for Foreign
1 Al-Wadeah Current Account (AWCA) port-folio Investors.
2. Mudaraba Savings Account (MSA) 9. Non-Resident Taka Account (NRTA) for Foreign Direct
3. Mudaraba Special Notice Account (MSNA) Investors.
4. Mudaraba Special Savings (Pension) Account (MSSA) 10. Foreign Currency Account for EPZ Companies (FCA-EPZ)
5. Mudaraba Term Deposit Account (MTDA)
Investment Products & Schemes
6. Mudaraba Savings Bond Account (MSBA)
7. Mudaraba NRB Savings Bond {M(NRB)SB} Investment Products
8. Mudaraba Hajj Savings Account (MHSA) 1. Bai-Murabaha
9. Mudaraba Waqf Cash Deposit Account (MWCDA) 2. Bai-Muajjal
10. Mudaraba Monthly Profit Deposit Account (MMPDA) 3. Bai-Istijrar
11. Mudaraba Muhar Savings Deposit Account (MMSDA)
4. Bai-Salam
12. Students Mudaraba Savings Account (SMSA)
5. Bai-Salam (Pre-shipment)
13. Mudaraba Farmers Saving Account (MFSA)
6. Bai-Istisna
14. Mudaraba Upohar Deposit Scheme (MUDS)
15. Mudaraba Industry Employees Saving Account (MIESA) 7. Mudaraba

Deposit products in Foreign Currency 8. Musharaka

9. Musharaka Documentary Bill (MDB) Inland
1. Mudaraba Foreign Currency Account (MFCA)
10. Musharaka Documentary Bill (MDB) in Foreign Currency
2. Mudaraba Exporters Retention Quota Account (MERQ)
11. Musharaka Investment in Potato Storage
3. Foreign Currency Account (FCA)
12. Hire Purchase under Shirkatul Melk (HPSM)
4. Foreign Currency Account (ERQ)
13. Murabaha Post Import (MPI)
5. Foreign Currency Account of EPZ Enterprise
14. Murabaha Import Bills (MIB)
6. Resident Foreign Currency Deposit Account (RFCD)

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Islami Bank Bangladesh Limited Annual Report 2015
 Products and Services

15. Murabaha Import LC 8. Post-Shipment Financing (Bai-as-Sarf, MDB in FC)

16. Murabaha Foreign Currency Investment (MFCI) under EDF 9. Project Finance (HPSM investment)
17. Murabaha Foreign Currency Investment (MFCI) under
Balance of MFCD A/C Remittance Services
18. Bai-Muajjal Back to Back Bills Foreign Remittance Services
19. Bai-as-Sarf (Foreign Documentary Bill: FDB) Central Crediting Account
Payment of 3rd Bank Remittance through TT & PO
20. Bai-as-Sarf (Foreign Currency Cheques/Drafts: FCD)
Payment of Spot Cash Remittances
Welfare-oriented Investment Schemes Centrally NRB Accounts Opening
SMS Notification
1. Household Durable Scheme (HDS) SMS Push Pull Service
2. Housing Investment Scheme (HIS) Maintenance of NRD & NRT Account
3. Real Estate Investment Program (REIP) Inward remittance
4. Transport Investment Scheme (TIS) Electronic Fund Transfer
5. Car Investment Scheme (CIS) Spot Cash
6. Investment Scheme for Doctors (ISD)
Application for Programming Interface
7. Small Business Investment Scheme (SBIS)
Encashment of cash Foreign Currency
8. Agriculture Implements Investment Scheme (AIIS)
Collection of F.C. Cheques /Drafts
9. Rural Development Scheme (RDS)
Payment of Foreign TT & DD (FTT & FDD)
10. Micro Enterprise Investment Scheme(MEIS)
11. Urban Poor Development Scheme (UPDS) Outward Remittance
Travel purpose
12. Micro Industries Investment Scheme(MIIS)
Study purpose (Student File)
13. Women Entrepreneurs Investment Scheme
Medical purpose
14. Palli Griha Nirman Beniyog Prakalpa
Issuance of Foreign TT & DD (FTT & FDD)
15. NRB Entrepreneurs Investment Scheme (NEIS) Selling/Issuance of Foreign Currency note
16. Solar Panel Investment Scheme(SPIS) Travel Pre-paid Card
Commercial Remittance
Offshore Banking Unit (OBU) Products
Different Private Remittance
Depsoit Products
1. Al-Wadeah Current Account (FCA)
Treasury Activities
2. Mudaraba Savings Account (MFCA) Dealing Room Operations
Foreign Exchange Operations
Investment Products Money Market Operations
1. Bill Financing under Mudaraba Documentary Bills
(Mura-UPAS) against Usnace import Bills Money Market Operations
2. Bill Financing under Mudaraba Documentary Bills Placement to other Islami bank & Financial Institutions.
(HPSM-UPAS) against Usnace import Bills Bangladesh Government Islamic Investment Bond
3. Bill Financing under Mudaraba Investment for MDB in (BGIIB)
FC against Inland Export Bills Islamic Interbank Fund Market (IIFM)
4. Import Financing
Technology Based Services
5. Export Financing
6. Short term Murabaha Any Branch Banking Services
7. Pre-Shipment Financing(Bai-Salam in FC) Largest countrywide online banking facilities

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Islami Bank Bangladesh Limited Annual Report 2015
Products and Services

Lowest fees for online deposit across the country SWIFT

Charge Free for depositing Tk.1,00,000/- within Automated Clearing
Divisional City IBBL Call Center
Any branch cash deposit Phone Banking
Quickest fund transfer Point of Sale (POS)
Charge free for Investment recovery/disbursement. e-Recruitment procedure
Dissemination of information through Web-site
Cash Service
487 Own ATM Booths and above 6,000 shared ATM Upcoming Services
Booths. Upcoming debit facility from POS with Biometric option
51 IDM (Islami Bank Deposit Machine)
4 Sheba Ghars (Islami Bank Electronic Booth) Full-fledged corporate banking module
Connectivity with NPSB & VISA network Full fledge corporate banking module
24 hour support service for ATM Centralized Investment Proposal Processing System
ATM card
Remittance Card Services through Islami Bank Foundation
Business Expenses Card 1. Islami Bank Hospitals
Hajj card service
2. Islami Bank Medical College, Rajshahi
Visa Debit Card
Travel card 3. Islami Bank Community Hospitals
Khidmah Credit Card 4. Islami Bank Nursing Training Institute
iPaySafe e-Commerce Payment Gateway 5. Islami Bank Institute of Health Technology
Corporate Services 6. Islami Bank Homeopathic Clinics
7. Monorom: Islami Bank Crafts & Fashion
Corporate Salary Payment
8. Islami Bank Institute of Technology
Free/reduced charges of ATM
9. Islami Bank International School and College
Standing Instruction facility for depositing MSS & Hajj
A/c 10. Islami Bank Model School
Existing BEFTN facilities through Bangladesh Bank 11. Islami Bank Mohila Madrasah
Existing BACPS service through Bangladesh Bank 12. Bangladesh Cultural Centre
Existing RTGS service through Bangladesh Bank 13. Distressed Women Rehabilitation Centre
Crediting salary instantly throughout the Country
Training Services
Centralized Investment Proposal Processing System
(CIPPS) International: Officials of Foreign Banks on Islamic
Centralized foreign trade processing system Banking

Other Value Added Services National: Training of own manpower & others on Islamic
Payment Order (PO) Banking
Demand Draft (DD)
Diploma in Islami Banking
Telegraphic Transfer (TT)
Locker Islami Bank Training & Research Academy (IBTRA) is
Quard against TDR launched a professional Banking Diploma Course in the name
Quard against MSS as Diploma in Islamic Banking (DIB) for the professionals
Counseling working in the Bank & financial industry who want to get
IBBL Web portal facility knowledge about Islamic Banking.
Letter of Credit
Back to Back Letter of Credit
Bank Guarantee
Foreign Bank Guarantee
Export Bills Collection
Substitute Cash Assistance

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Islami Bank Bangladesh Limited Annual Report 2015
 ALTERNATIVE DELIVERY SERVICES

IBBL opens first service center this year

Modern technology in Banking has made our life easy and Phone Banking
enjoyable. As the biggest commercial Bank in the country, Islami
By using Phone banking, the customers can enjoy baking
Bank Bangladesh Limited has introduced a number of technology
services round the clock. Major features are::
based products through various Alternative Delivery Channels
(ADC) to render quick, easy and personalised banking services Balance Inquiry;
to customers. Through using these products and services, the Mini Statement;
customers can avail necessary banking facilities round the clock. Fund transfer;
The ADC facilities of the bank are furnished below:
Mobile Phone Recharge;
VISA Debit Card Utility Bill Payment;
To save the customers from hazards of carrying cash money and
TPIN Request;
to ensure availability of cash in need, the bank has introduced Cheque Book Requisition;
VISA supported debit card. The customers can withdraw cash Stop Payment;
money up to fifty thousand from all VISA and Omnibus ATM booths
throughout the country by using this card. Major features are:
Remittance Services and many more.
No issuance fee (free of charge for the 1st year); i-Banking
24 hour Cash withdrawal from ATM booth; To enjoy banking services by a finger click, the Bank is providing
internet banking services to the customers. Major features of
Alternative to cash for shopping through POS;
i-Banking are:
Mini Statement;
Anytime banking from anywhere of the world;
Utility Bill Payment;
Account Balance Inquiry;
Fund Transfer;
Mini Statement;
Hotel and Hospital booking, Bus, Train and Airplane
Ticketing;
i-transfer (Fund transfer) at the lowest fees;
Connectivity with VISA & NPSB Network;
i-transfer EFT (Fund transfer to other bank);
e-commerce facilities over internet;
i-recharge (Mobile recharge) completely free of charge;
Exclusive discount on the purchase at Superstores,
Utility Bill Payment;
Megamalls & Super shop etc. Wimax bill payment/recharge;

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Islami Bank Bangladesh Limited Annual Report 2015
Alternative Delivery Services

Instrument/Challan/Sales Proceed number can be viewed; Lowest charge;

Status of clearing instruments; First Supplementary Card free;
Foreign remittance status; Card Cheque facility/Cash Withdrawal facility up to 50%
Payment of Khidmah Credit Card Bill; of the limit;
VISA instant payment; Exclusive discount on the purchase at superstores,
Manage Cheque (issue cheque requisition & stop megamall, super shops.
payment of cheque); Islami Bank Deposit Machine (IDM)
Cost Sheet of Foreign Exchange bills. With a view to ensuring modern banking facilities for the
SMS Banking customers, IBBL has introduced IDM through which a
customer is facilitated to deposit any amount of cash in
The customers can avail this facility after registration of their accounts any time without going to bank premises physically.
mobile number through push/pull service. Major features of The service is especially beneficial for the businessmen. The
SMS banking are:
salient features of IDM are as follows:
Free SMS Banking;
24x7 hours service;
Balance inquiry;
Cash depositing in any account of any branch of IBBL;
Mini Statement;
Depositing Cheque, Payment Order, Dividend Warrant
Push/Pull service by SMS from mobile; etc;
SMS push services. Immediate receipt;
Transaction alert for Cash Withdrawal, ATM Withdrawal, Utility bills payment;
Cash Deposit & Clearing Message.
No need to stand in long queues.
mCash
The Bank has been rendering modern technology based IBBL Call Centre: 16259
services for the mobile phone users through mCash. Major 24 hours/day, 7days/week and 365 days/year banking
features of mCash are: facilities;
Cash Deposit and Withdrawal; Availing services from all over the world;
Instant Fund Transfer; Balance Inquiry;
Remittance Service; Cheque Book Requisition;
Account Balance; Sheba Ghar
For reaching the banking services to the doorsteps of the
Mini Statement; peoples, IBBL has introduced the electronic Booth under the
Salary Payment and Receive; brand name Sheba Ghar which ultimately works as a mini
Mobile Phone Recharge; branch. All retail banking services can be performed here. The
Utility Bills Payment; major services provided through Sheba Ghar are as follows:
Corporate Payment; 24/7 hours open;
Merchant Payment; Deposit through IDM;
Tuition fee Payment; Withdrawal through ATM;
Govt. Payment. Collection of Cheque/PO/DD/Dividend Warrants;
Khidmah Credit Card Payment of utility bills;
IBBL has introduced Shariah based credit card Khidmah with a Opening of mCash Account;
view to provide credit facility for limited income people within their Balance inquiry;
ability to meet the daily demand and to develop the living standard A/c Statement;
of the people. Three categories- Platinum (Tk.200,000/-), Gold
(Tk.100,000/-) and Silver (Tk.50,000/-) are available at all branches
Investment installment receive through IDM/KIOSK;
of IBBL across the country. Major features of Khidma Credit Card are: Receiving Cheque requisition;
Shariah- Compliant Credit Card; Distribution of leaflet, brochure and AOF;
Payment of gas, electricity, WASA etc. bills; Receiving complains & suggestions from clients and
many others.
Hotel and Hospital booking, Bus, Train and Airplane
Ticketing;

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Islami Bank Bangladesh Limited Annual Report 2015
 PUBLICITY, PUBLIC RELATIONS AND PUBLICATIONS

IBBL Pavilion at Dhaka International Trade Fair 2015

Branding and Public Relations Interviews of top management of the Bank were published
in the leading national dailies, magazines and online
IBBL is engaged in promoting the image of the Bank through media on different topics. Special reports and features on
diversified communication and bridging rapport between different products, schemes and service like RDS, SME etc.
the management and its public; stakeholders, clients, and published those in newspapers, magazines and online
customers and targeted people, keeping the authority media during the year.
informed on and responsive to public opinion. A proactive
PR team has been working for augmentation the publicity of A number of promotional advertisements on different
the Bank and competes to itself and thousand others in the products, services and schemes of the Bank were designed
world with a view to keeping the Banks flag atop. In order and publicized in various media. Official advertisements in
to achieve the IBBL goal, PRD has been functioning jobs in the year were on tender notice, price sensitive information,
the manners of Publicity, Public Relations, Brand Promotion financial statement, branch opening, AGM etc. Besides,
and Publication. The major jobs PRD performed in 2015 are PRD made special advertisements and roadside publicity
highlighted bellow. on different national events like National Victory Day, Fire
Service and Civil Defence Week, Expatriate Day 2015 etc.
Publicity Two documentary videos featuring important activities of
A good number of (95) press releases and features on the Bank were produced in the year and were screened in
different events and occasion of the bank were publicized different programs.
in 2015 which got coverage as many as many 3,500 media Public Relations
reports of which 2,114 in dailies and 1,397 in online media
with an average of 37 appearance per press release. Leading Efforts continued round the year in developing relations with
dailies, TV channels, magazines and online media published notable public through diverse manners like sponsorship,
major news of the Bank with due importance. communication and motivations. IBBL sponsored TV

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Islami Bank Bangladesh Limited Annual Report 2015
Publicity, Public Relations and Publications

Central Iftar Mahfil of the Bank

news, magazine programs and occasional program Report 2015 of the Bank published in the year was greeted
like holy Ramadan and National Sirat Celebration. The pleasantly.
Bank enhanced brand image through sponsorship and
The Banks house magazine Islami Bank Porikroma has
participation in different national and international events
been published which were distributed among all employees
including Victory Day Parade, Bangladesh Premier League
and stakeholders of the Bank. RDS magazine Polli Unnayan
(cricket), and National Badminton Tournament in 2015. Barta was published in the year. Islami Banking Journal
A good number of organizations, association, agencies was published which were distributed among all employees,
and forums were also facilitated with sponsorship in their stakeholders of the Bank and reputed educational
anniversary celebrations, conference, seminar, symposium, institutions of the country. Besides seminar papers on the
convention and other programs. occasion of Ifter Mahfil and opening of new branches were
published in 2015.
The Bank participated in different fairs like Dhaka
International Trade Fair, Banking Fair, SME Fair, International Brochures and folders were printed or reprinted in 2015
Tourism Fair and Hajj Fair in the year. Billboards have been describing features and information of different services
displayed at important points of Dhaka city. and products of IBBL for clients and customers. Leaflets and
Posters were published on different occasions.
The Banks PR team conducted regular visit to media houses
especially arranging cake & flower-bouquet gifts at the Five (5) new books and booklets namely Udyokta Unnayon o
anniversaries of national dailies, television channels, radios Biniog Nirdeshika, Islami Banking: Jigyasa o Jabab, Islamic
and online media during 2015. Top elites, intellectuals, Banking in Bangladesh: Prospects and Potentials (Bangla
senior journalists and columnists were greeted with cards and English versions), Shariah Supervisory Committeer
and gift items on occasions like Eid, New Year and Bangla Siddhantaboli and Islamic Banking in the Light of Objectives
Nabobarsho. of Shariah have been published In 2015.

Publications Calendar diary and desk-calendar for the year 2016 were
designed and printed in due course. Different promotional
PRD published different publications in 2015 serving vital publications like Sehri-ifter desk schedule, festoon, greeting
information to the management, officials, employees, cards, x-stand etc on different occasions were printed and
clients, stakeholders and mass people of the country. Annual distributed.

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Islami Bank Bangladesh Limited Annual Report 2015
 EVENTS

IBBL East Zone secured Championship in the one-day IBBL sponsors to Bangladesh Open International
version of BCL 2015 Badminton Challenge Tournament

Minister for Expatriate Welfare & Overseas Employment Governor, Bangladesh Bank visits IBBL Stall at
visits IBBL Stall at International Immigrants Day Fair Panchagar for special Banking Services to defunct
exclave dwellers

IBBL participates at Asian Tourism Fair 2015 Islami Bank sponsored one of the teams in Bangladesh
Premier League (BPL)-2015 and branded the venue

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Islami Bank Bangladesh Limited Annual Report 2015
 STAKEHOLDERS INFORMATION
Distribution of Shareholding

Sl. Particulars No. of shares Percent- (Taka) No. of shares Percent- (Taka)
No. as on age as on age
31.12.2015 (%) 31.12.2014 (%)
to total to total
1 Sponsors / Directors Local 91,585,789 5.6886% 915,857,890 94,789,531 5.8876% 947,895,310
2 Foreigners :
Foreign Sponsors/Directors 838,285,575 52.0677% 8,382,855,750 844,989,115 52.4841% 8,449,891,150
Excluding Foreign Sponsors/ 178,835,969 11.1079% 1,788,359,690 237,695,347 14.7638% 2,376,953,470
Directors
Sub-total 1,017,121,544 63.1756% 10,171,215,440 1,082,684,462 67.2479% 10,826,844,620
3 Govt. of Bangladesh** 20,317 0.0013% 203,170 20,317 0.0013% 203,170
4 Institutions (Excluding Foreigners) 146,019,668 9.0696% 1,460,196,680 99,632,137 6.1883% 996,321,370
5 General Public 355,243,350 22.0649% 3,552,433,500 332,864,221 20.6749% 3,328,642,210
Total 1,609,990,668 100.00% 16,099,906,680 1,609,990,668 100.00% 16,099,906,680
Foreign: 1,017,121,544 63.1756% - 1,082,684,462 67.2479% -
Local: 592,869,124 36.8244% - 527,306,206 32.7521% -
** The shares have already been sold by the Government of Bangladesh but no transfer has been made in share register of the Bank.

Evaluation of Paid-Up-Capital
(In million Taka)
Year Particulars Increase Total
1983 Initial Capital 0.50 0.50
1983 Sponsors (56 million Foreign, 11.50 million Bangladeshi, 4 million Govt. of Bangladesh) 71.50 72.00
1985 I.P.O 8.00 80.00
1990 1st Rights/1989 (1R:1) 80.00 160.00
1996 2nd Rights/1996 (1R:1) 160.00 320.00
2001 3rd Rights/2000 (1R:1) 320.00 640.00
2003 4th Rights/2003 (2R:1) 1,280.00 1,920.00
2004 Bonus/2003 (1B:5) Stock Dividend @20% 384.00 2,304.00
2005 Bonus/2004 (1B:5) Stock Dividend @20% 460.80 2,764.80
2006 Bonus/2005 (1B:4) Stock Dividend @25% 691.20 3,456.00
2007 Bonus/2006 (1B:10) Stock Dividend @10% 345.60 3,801.60
2008 Bonus/2007 (1B:4) Stock Dividend @25% 950.40 4,752.00
2009 Bonus/2008 (3B:10) Stock Dividend @30% 1,425.60 6,177.60
2010 Bonus/2009 (1B:5) Stock Dividend @20% 1,235.52 7,413.12
2011 Bonus/2010 (35B:100) Stock Dividend @35% 2,594.59 10,007.71
2012 Bonus/2011 (1B:4) Stock Dividend @25% 2,501.93 12,509.64
2013 Bonus/2012 (17B:100) Stock Dividend @17% 2,126.64 14,636.28
2014 Bonus/2013 (10B:100) Stock Dividend @10% 1463.63 16,099.91

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Islami Bank Bangladesh Limited Annual Report 2015
 Stakeholders Information

Share Price Status in the Stock Exchanges - 2015

(In Taka)
DSE CSE
Month
Highest rate Lowest rate Average rate Highest rate Lowest rate Average rate
January 24.80 22.50 23.65 24.60 23.10 23.85
February 24.10 23.50 23.80 24.50 22.70 23.60
March 23.80 19.90 21.85 24.00 20.20 22.10
April 20.70 15.90 18.30 20.60 15.80 18.20
May 18.50 15.20 16.85 18.60 15.30 16.95
June 18.00 16.40 17.20 18.00 16.20 17.10
July 25.10 16.50 20.80 25.10 16.50 20.80
August 31.50 21.80 26.65 31.60 21.70 26.65
September 31.10 25.70 28.40 31.40 25.70 28.55
October 30.80 27.90 29.35 30.50 27.90 29.20
November 28.50 28.00 28.25 30.40 27.60 29.00
December 28.10 27.80 27.95 28.30 27.70 28.00
During 2015 31.50 15.20 23.35 31.60 15.30 23.45

Stock Details of Shares and Bonds

Sl. No. Particulars DSE CSE

1 Share Symbol ISLAMIBANK ISLAMIBANK
2 MPB Symbol IBBLPBOND IBBLPBOND
3 Company Code 11104 22008
4 Share Listing Date 02.07.1985 07.03.1996
5 MPB Listing Date 25.11.2007 25.11.2007
6 Market Category A A
7 Electronic Share Yes Yes
8 Face Value of Shares (Taka) 10 10
9 Face Value of MPBs (Taka) 1 1
10 Market Lot of Shares (Nos) 1 1
11 Market Lot of MPBs (Nos) 1 1
12 Total Shareholders 47,909 47,909
13 Total MPB Holders 21,601 21,601
14 Position in Stock Exchanges DSE-30 CSE-30
15 Closing Market Price of Share (Taka) 27.80 28.00
16 Closing Market Price of MPB (Taka) 981.50 960.50
17 Highest Price of Share (Taka) 31.50 (17.08.15) 31.60 (17.08.15)
18 Lowest Price of Share (Taka) 15.20 (05.05.15) 15.30 (05.05.15)
19 Highest Price of MPB (Taka) 999.00 (29.12.15) 1019.00 (27.08.14)
20 Lowest Price of MPB (Taka) 861.50 (27.04.15) 827.00 (27.04.15)

143
Islami Bank Bangladesh Limited Annual Report 2015
Stakeholders Information

Accessibility of Annual Report known place & convenient time to allow shareholders to
speak in the AGM freely for their valuable suggestions. Any
Annual Report 2015 and other information of the Bank may quarries relating to shareholders such as transfer of shares,
be accessed on Banks Website: www.islamibankbd.com. changes of name and addresses and payment of dividend
IBBL provides copies of Annual Report to the Bangladesh may be communicated to the following address:
Securities and Exchange Commission, Bangladesh Bank,
Dhaka Stock Exchange and Chittagong Stock Exchange for Share Department
their reference. 63, Dilkusha Commercial Area,
(5th Floor), Dhaka-1000.
Governance on Investors Relation PABX: 9551105, 9551062, 9550415;
Ext-627,624,615 Fax: 9564595
IBBL strongly committed to equitable treatment of every Mobile : 01714-003950
shareholder. The Company Secretary of Islami Bank E-mail: [email protected]
Bangladesh Limited may address queries relating to any
corporate information and published financial information. Redress of Investors Complaints
Investors Inquiries and Communication In the 32nd Annual General Meeting, some shareholders sug-
gested about different aspects of financial, development
Shareholders and others may contact at any time to Share and services of the bank. Management of the bank has tried
Department for any sort of information and query. In order address the issues with due case.
to make the AGM more participatory, it is arranged in a well-

Shareholders Suggestions and their Implementation Status

Sl.
Complaints/Suggestions Redressal
No.

01 Some shareholders suggested and also emphasized At present IBBL has its own 51 Deposit Machine (IDM) and
for massive expansion of IDMs and ATMs throughout 487 ATM. ATM & IDM will be increased gradually In Sha Allah.
the country.

02 It was urged for advancing the Bank with the increased IBBL is using latest technology in all of its operational level.
and massive use of latest state-of-the-art technologies.

03 Promotional activities to be boosted up for popularizing Customers of IBBL are increasing day by day through several
Travel Card, Khidmah Card, mCash etc. among the attractive ADC products. IBBL is working positively for
mass people. marketing & promotional activities.

04 It was requested to hold the future AGM at the Banks AGM will be arranged subject to availability of suitable Venue.
own premises or hired venue near the Head Office of We are trying our best to hold the AGM as early as possible.
the Bank. It was also pointed out that AGM should be
held much earlier

05 It was requested to the Chairman to give reply of the vital All the questions and suggestions raised in the AGM are
questions/suggestions in the AGM and also recorded recorded properly in the Minutes and the Policy Makers
the same and places those issues subsequently in of the Bank highly emphasis the suggestions given by the
various forums of the Bank for discussion and decision. shareholders.

06 It was pointed out that the profit paid on various IBBL pays profit on various mudaraba savings deposit
savings deposit accounts was low. accounts from the investment income earned through
deployment of mudaraba fund.
In the year 2014 IBBL paid 71.48% as against committed 65%
to the mudaraba depositors earned through deployment of
mudaraba fund.

144
Islami Bank Bangladesh Limited Annual Report 2015
 Stakeholders Information

07 It was requested to find out the reasons for increasing All out efforts have been taken to reduce the Classified
the classified investment of the Bank and reducing Investment of the Bank at a minimum level.
provision requirement against the same through
monitoring activities.

08 Shareholders requested for arranging periodic During 2015, 28 periodic meetings and seminars with the
meetings and seminars with the investment clients investment clients and entrepreneurs have been arranged
as well as new entrepreneurs for creating Shariah by the Bank for creating Shariah awareness and for
awareness among them. understanding the difference between interest & profit in
Shariah-based banking.

09 Shareholders suggested for giving more attention to From the very inception IBBL is giving priority in investment
the small businessmen seeking Banks investment to the small businessmen. Mentionable that, IBBL has the
and also for ensuring Insaf to all stakeholders as the highest exposure in SME with RDS & MEIS Schemes in
Bank is developing day by day. Banking Industry. Small businessmen are also enjoying
flexible Rate of Return with collateral-free investment.
Stakeholders have also the opportunity to avail investment
under the existing norms.

10 One Shareholder felt that IBBL needs to take special At present IBBL has 16(sixteen) schemes covering more or
scheme for creating future entrepreneurs from the less all trades for the new entrepreneurs who might be the
students graduated from different public and private students graduated from the different public and private
universities. universities.

11 It was urged to train up the employees of IBBL in A good number of executives/officers have attended Local/
Foreign and/or Local institutions for their capacity Foreign training course for building up their capacity and
building and skill development towards ultimate development of skills.
development of the Bank.

12 ttention was drawn on the strong Policy direction of A Generally the Salary package of the Bank is reviewed within
the Policy makers of the Bank as well as relentless two/three years time. Lastly the compensation package was
efforts of the Management & Officials for which the revised on July, 2012. The existing Salary package has been
Bank has stood on a firm footing today. It was also
requested to give higher Salary package to the officials revised with effect from January 01, 2016.
of the Bank considering inflationary effect, market
trend and industry benchmark as the officials of IBBL
are very honest, sincere, industrious and dedicated to
their beloved organization.

13 It was requested to extend various services for the Hajj Hajj Card has been introduced for using in Macca and
Pilgrims in Macca and Madina during the Hajj time. Madiana. Moreover Umbrella, Passport Bag, Stone Bag, Shoe
Bag and Hajj Guide Book have provided for the Hajj pilgrims
as gift items.

14 It was suggested for opening of 14 new Branches at 1 (One) Branch has been opened at Kalapara, Patuakhali in
different places of Patuakhali and Barisal District. 2015.

145
Islami Bank Bangladesh Limited Annual Report 2015
 GRAPHICAL PRESENTATION
Earnings Per Share (EPS) Net Assets Value (NAV) Per Share
(In Taka) (In Taka)

4.84 28.95 29.32

4.42 27.18 27.18

22.22
3.40

2.49
1.88

2011 2012 2013 2014 2015

2011 2012 2013 2014 2015

Shareholders' Fund /Equity

(Million Taka) Return on Equity (ROE)
17%

46,622 47,200
43,761 14%
39,780
11%
27,800
9%

6.28%

2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Market Capitalization
(Month end closing price of DSE in 2015) Net Prot after Tax
60000 5,338 (Million Taka)
4,841 4,949
50000

40000 3,999

30000 3,029
20000

10000

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2011 2012 2013 2014 2015

146
Islami Bank Bangladesh Limited Annual Report 2015
GRAPHICAL PRESENTATION
Deposit & Investment Import , Export & Remittance
(Million Taka) (Million Taka)

343,668
629,631

316,975

321,066
308,722
300,915
564,332

615,359

197,095

284,588
560,696

286,956
285,890
474,016
473,141

301,207
417,844
399,931

222,753
236,607

224,236
322,772

205,269
341,854

178,244
2011 2012 2013 2014 2015
2011 2012 2013 2014 2015
Deposit Investment

Total Assets Total Equity (Regulatory)

(Million Taka) ( Million Taka )
859,201

47,845
765,241

48,580
660,946

45,487
592,581

42,053
502,613

33,717

2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Gross Prot Ratio (%)

Return on Assets ROA

1.35% 52%
1.27% 49% 49%
45% 47%

0.96%

0.67%

0.44%

2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

147
Islami Bank Bangladesh Limited Annual Report 2015
 SEGMENT INFORMATION
2% 1% Sector wise Investment 6% Aria wise Investment
6%
SME
7% 43%
Industrial
8% (Excluding SME) Rural Area
Real Estate Urban Area
Commercial
94%
Other
33% Agrecultural
Transport

Operating Result (Million Taka) Group Performance (Million Taka)

3,029 3,029
8,855
8,855
Total Income Total Operating Income
56,552
Total Expenditive
27,814 Total Operating Expense
Net Prot before Tax
Net Prot before Tax
Net Prot Apter Tax
13,466
Net Prot Apter Tax

42,204

Division Wise (Investment) 5%

Division Wise (Investment)
2%
3% 2% 1%
5%
9% Dhaka 6% Dhaka
Chattgong Chattgong
7% Khulna 7% Khulna
58% Rajshahi 34%
Rajshahi
Rangpur 7%
Rangpur
Sylhet Sylhet
7%
18% Barisal Barisal
Mymensing Mymensing
28%

148
Islami Bank Bangladesh Limited Annual Report 2015
HORIZONTAL & VERTICAL ANALYSIS
Operating Performance
2011 Total Revenue
2012 Operating Prot
2013
Prot Before Tax
2014
Prot after Tax
2015

0% 20% 40% 60% 80% 100% EPS

Operating Performance
100
EPS
80
Prot after tax
60
Prot before tax
40
Operating Prot
20
Total Revenue
0 2011 2012 2013 2014 2015

Statement of Financial Position

Shareholders Fund
2011

2012 Net Current Assets

2013 Long Term Liabilities

2014 Property Plant &
2015 Wquipment

Current Liabilities
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Statement of Financial Position

100
Long Term Liabilities
80
Current Liabilities
60
Net Current Assets
40
Property Plant & Equipment
20
Shareholders Fund
0 2011 2012 2013 2014 2015

149
Islami Bank Bangladesh Limited Annual Report 2015
PROFITABILITY, DIVIDEND, PERFORMANCE AND LIQUIDITY RATIOS

Net Prot Before Tax Price Earnings Ratio

(Million Taka) (Times)
11911

12.54
12.21
11050

10532

11.24
11.27

11.17
10347

8855

2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Investment Deposti Ratio (IDR) Cost to Income Ratio

(%) (Par Taka)
86.20%
87.29%

85.18%

82.35%

0.75%
0.76%
79.88%

0.74%
0.75%
0.73%

2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Capital Adequacy Ratio

(CAR)
14.26%
13.49%
13.09%

12.83%

11.66%

2011 2012 2013 2014 2015

150
Islami Bank Bangladesh Limited Annual Report 2015
STATEMENT OF VALUE ADDED
Satement of Value Added
(In million Taka)

Particulars 2015 2014

Income from Banking Service 56,552 58,046

Less: Cost of Services 32,074 33,339

Value added by Banking Service 24,478 24,701

Non-Banking Income -

Provision for Investment & Off-Balance Sheet exposures 5,493 4,791

Total Value Added 18,985 19,916

Distribution of Value Addition

To government (income tax) 5,909 6,323

To providers of capital (dividend- cash/stock) 3,220 2,415

To employees (salaries, allowances and other benefits 8,876 8,191

Zakat 421 426

Expansion and growth

Retained by the entity (191) 1,598

Depreciation 833 768

Deferred taxation (83) 195

Total 18,985 19,916

Distribution of Value Addition 2015 Distribution of Value Addition 2014

4% 2% 2%
-1% 4%
8%

Salary & Allowances

17% 47% Income Tax paid 42%
to Government 12%
General Reserve & Salary & Allowances

Dividend Income Tax paid to Government

Retained Prot General Reserve & Dividend

Depreciation Retained Profit

Zakat Depreciation
Zakat

31% 32%

151
Islami Bank Bangladesh Limited Annual Report 2015
Statement of Value Added

INTEGRATED REPORTING
Particulars 2015 2014
Financial Inclusion
Total Customers 9926354 9,587,458
Rural Investment extended through Rural Development Scheme (RDS) (Million Taka) 20799 17,380
Number of RDS members 923250 911,470
Villages of the country covering through RDS 18615 18,086
Farmers Account (Nos.) 428538 624,934
Percentage of Rural Branch 22.61% 23.81%
Deposit per Account(Million Taka) 0.062 0.058
Investment per Account(Million Taka) 0.545 0.552
SME exposure of IBBL to Total Investment Portfolio 49.91% 42%
Spread 4.29% 4.27%
Tackling Financial Crime
Staffs completed training on Anti Money Laundering (AML) 1162 1,425
Suspicious Transaction reported to Bangladesh Bank 302 42
Promoting Sustainable finance (In million Taka)
Amount financed for installation of ETP to plants in operations 353.63 43.60
Amount financed in plants having ETP 72,473.79 34,684
Amount financed to solar panel/renewable energy plants 180.82 108
Amount financed to Bio-fertilizer plants 13.90 0.10
Amount financed to brick kilns adopted cleaner technology 2,858.92 2,257
Amount financed to other green projects 2,119.03 2,789
Total Sustainable Finance 78,000.09 39,838
Employer of Choice
Total Employee 13622 13,574
Percentage of voluntary attrition 3 20
Number of employee received training 10084 8,821
Total number of training 479 436
Percentage of employee received training 74% 65%
Number of fresh employee recruited 212 870
Protecting Environment
Number of customers eligible for Environmental Due Diligence 2,628 1,733
Number of customers appraised for Environmental Risk Rating 2,193 1,518
Low 1,653 1,155
Moderate 503 319
High 37 44
Cost of water consumed by the bank 12.93 8.52

152
Islami Bank Bangladesh Limited Annual Report 2015
 Statement of Value Added

Cost of Paper consumed by the bank 175.17 75.68

Cost of energy (electricity, fuel and gas) consumed by the bank 299.55 215.01
Percentage of bank branches connected online 100% 100%
No. of staff received training on Green Banking 6,581 5,089
Distribution of Tree Saplings 732,348 723,672
Corporate Social Responsibility
Expenditure for CSR 800.43 525
No. of Beneficiaries 1,472,959 1,355,520
Contribution to the National Exchequer 17,392 11,465

Contribution to National Exchequer

IBBL regularly pays corporate tax on time. The Bank paying excise duty, withholding tax and VAT to Govt. exchequer on time
deducting from employees salary as well as customers and vendors invoice. IBBL is the highest Corporate Taxpayer on the
Banking Sector and is the second highest among all the taxpayers including foreign taxpayers in Bangladesh.
(In million Taka)
Sl. Particulars 2015 Total up to
No. 2015
1 Corporate Tax 9,406 46,492
2 AIT on PPD 4,074 22,444
3 Tax Deducted at Sources 1,362 7,128
4 Value Added Tax (VAT) 695 3,761
5 Excise Duty 1,771 8,662
6 Income tax Payment by the Employees 84 555
7 Total 17,392 89,042

Economic Value Added Statement

(In million Taka)
Particulars 2015 2014
Shareholders equity 47,200 46,623
Add: Accumulated provision for investment (including Off B/S) 23,255 18,108
Total Invested Fund 70,455 64,731
Average Shareholders Equity 67,593 61,027
Earnings
Profit After Tax 3,029 3,999
Add: Provisions 5,493 4,791
Less: Written-off during the year (287) (1,148)
Earnings for the year 8,235 8.642
Cost of equity 6.82% 5.18%
Capital charges 4,610 3.161
Economic Value Added (EVA) 3,625 548

153
Islami Bank Bangladesh Limited Annual Report 2015
Statement of Value Added

Market Value Added Statement

Amount
Particulars Number of Shares Value per Share (Taka)
(Million Taka)
Market Value 1,609,990,668 27.80 44,757.74
Book Value 1,609,990,668 29.32 47,204.93
Market Value Added 1,609,990,668 (2,447.19)

Market Share Information

Particulars Market Share of IBBL in the Banking Sector (%)

Serial No.
2015 2014
1 Deposit 8.46% 8.68
2 General Investment 8.23% 8.91
3 Import 11.13% 9.78
4 Export 9.70% 10.07
5 Remittance 26.88% 25.53

Market Price at DSE in 2015

(In Taka)
Market Price at DSE ( in Taka)
Highest rate
Lowest rate

35

30

25

20

15

10

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Market Price at CSE in 2015

(In Taka)

Highest rate
Market Price at CSE ( in Taka)
Lowest rate
35

30

25

20

15

10

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

154
Islami Bank Bangladesh Limited Annual Report 2015
 Statement of Value Added

FINANCIAL CALENDAR
Financial Calendar-2015
Items Date

Dividend for 2014 June 16, 2015

Financial Statements for the year 2015 signed April 19, 2016

33rd Annual General Meeting to be held June 02, 2016

Dividend for 2015 proposed to be paid June 08, 2016

Interim Financial Statements

1st quarter ended March 31, 2015 (unaudited) approved by the Board of Directors
May 07, 2015

2nd quarter/Half Yearly ended June 30, 2015 (unaudited) approved by the Board of Directors July 25, 2015

3rd quarter ended September 30, 2015 (unaudited) approved by the Board of Directors October 23, 2015

4th quarter/Year ended December 31, 2015 (audited) approved by the Board of Directors April 19, 2016

Financial Calendar-2016 (Proposed)

Items Date

Financial Statements for the year 2016 will be finalized and signed March 22, 2017

34th Annual General Meeting will be held March 31, 2017

Dividend for 2016 proposed to be paid April 10, 2017

Interim Financial Statements

1st quarter ended March 31, 2015 (unaudited) will be approved by the Board of Directors May 07, 2016

2nd quarter/Half Yearly ended June 30, 2015 (unaudited) will be approved by the Board of Directors July 23, 2016

3rd quarter ended September 30, 2015 (unaudited) will be approved by the Board of Directors October 22, 2016

4th quarter/Year ended December 31,2015 (audited) will be approved by the Board of Directors February 25, 2017

155
Islami Bank Bangladesh Limited Annual Report 2015
FINANCIAL HIGHLIGHTS
Amount in Million Taka
Sl.
Particulars 2015 2014
No.

1 Paid-up capital 16,099.91 16,099.91

2 Total capital (equity) 47,845.33 48,579.67

3 Capital surplus/ (deficit) 6,812.10 10,695.59

4 Total assets (Excluding contra) 725,821.12 652,422.04

5 Total deposits 615,359.21 560,696.30

6 Total investments (excluding Investment in shares/ securities) 530,194.50 463,475.47

7 Total contingent liabilities and commitments 133,379.93 112,819.23

8 Investment deposit ratio 83.59% 79.88%

9 Percentage of classified investment against total general investments 4.25% 4.92%

10 Profit after tax & provision 3,029.08 4,013.03

11 Amount of classified investment during current year (266.00) 7,865.34

12 Provision kept against classified investments 17,751.49 13,354.72

13 Provision surplus/ (deficit) 0.72 0.18

14 Cost of fund 7.62% 8.55%

15 Profit earning assets 512,714.85 506,579.98

16 Non-profit earning assets 213,106.27 145,842.06

17 Return on investments 8.20% 9.86%

18 Return on assets 0.44% 0.67%

19 Income from investments 48,954.43 51,010.20

20 Earnings per share (Taka) 1.88 2.49

21 Net income per share (Taka) 1.88 2.49

22 Price earning ratio (Times) 12.54 11.24

23 Net Asset Value (NAV) 47,199.61 46,622.62

24 Net Asset Value (NAV) per share (Taka) 29.32 28.96

25 Net Operating Cash Flow per share (NOCFPS) (Taka) 7.20 29.52

26 Dividend Yield per share 7.19% 6.41%

27 Dividend pay out ratio per share 106.30% 60.39%

28 Dividend cover Ratio (Times) 1.69 2.75

156
Islami Bank Bangladesh Limited Annual Report 2015
FIVE YEARS PERFORMANCE
(Amount in million Taka)
Sl.
Particulars 2011 2012 2013 2014 2015
No.
Balance Sheet (Financial Position)
1 Authorized Capital 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
2 Paid up Capital 10,007.71 12,509.64 14,636.28 16,099.91 16,099.91
3 Share Premium 1.99 1.99 1.99 1.99 1.99
4 Reserve Fund 17,792.50 24,116.47 26,512.48 28,107.73 27,879.72
5 Retained Earnings 3,202.47 3,152.25 2,634.53 2,414.99 3,219.98
6 Shareholders Equity 33,716.73 39,780.35 43,760.68 46,622.62 47,199.61
7 Total Deposit 341,853.67 417,844.14 473,140.96 560,696.30 615,359.21
8 Total Investment 322,772.83 399,930.79 474,015.95 564,332.00 629,631.27
9 General Investment 305,840.56 372,920.72 403,194.80 463,475.47 530,194.50
10 Investment Deposit Ratio 89.47% 85.18% 82.35% 79.88% 83.59%
11 Total Assets (including Contra) 502,613.05 592,580.50 664,554.96 765,241.27 859,201.05
12 Total Assets (excluding Contra) 389,192.12 482,536.32 547,229.63 652,422.04 725,821.12
13 Fixed Assets 7,100.19 14,808.23 15,732.81 15,926.36 15,836.48
Capital Measures
14 Total Risk Weighted Assets (RWA) 257,564,30 311,511.60 319,215.90 378742.72 410,332.28
15 Core Capital- Tier- I 23,401.24 28,249.95 32,222.40 35,025.95 38,649.85
16 Suplementary Capital (Tier- II) 10,315.49 13,803.20 13,189.60 13,543.92 9,195.48
17 Regulatory Capital (Tier I, II & III) 33,716.73 42,053.16 45,487.38 48,569.86 47,845.33
18 Statutory Capital (Paid up Capital & Statutory 20,012.14 24,933.30 29,274.89 32,199.82 32,199.82
Reserve)
19 Equity/Capital Surplus/(Deficit) 7,960.24 10,901.96 13,599.40 10,695.59 6,812.10
20 Capital Adequacy Ratio 13.09% 13.49% 14.26% 12.83% 11.66%
Assets Quality
21 Classified Investment 8,292.32 14,212.80 14,941.90 22,807.24 22,541.24
22 Classified Investment to Total Investment 2.71% 3.81% 3.71% 4.92% 4.22%
23 Provision against Classified Investments 3,054.00 6,054.35 7,262.40 9,391.02 9,293.11
(Objective Criteria)
24 Provision against Writ Clients - - 1,775.40 3,963.70 8,458.39
25 General Provision against Unclassified Invest- 3,996.00 3,935.90 3,371.60 3,625.48 4,169.70
ment including OBU
26 General Provision on Off Balance Sheet Items 1,120.00 1,100.45 1,137.20 1,128.20 1,333.80
27 Total provision for investment including off 8,170.00 11,090.70 13,546.60 18,108.40 23,255.00
balance sheet items at the end of the year
Operating Performance (Income Statement)
28 Investment Income 32,019.53 43,672.23 48,145.46 49,109.96 48,152.28
29 Profit Paid on deposit 18,401.22 25,870.43 30,975.19 30,650.27 28,737.87
30 Net Investment Income 13,618.31 17,801.80 17,170.27 18,459.69 19,414.41

157
Islami Bank Bangladesh Limited Annual Report 2015
Five Years Performance

(In million Taka)

Sl.
Particulars 2011 2012 2013 2014 2015
No.
31 Non-Investment Income 6,381.76 6,345.56 7,972.88 8,937.07 8,399.62
32 Total Income 38,401.29 50,017.79 56,093.75 58,047.03 56,551.90
33 Administrative & other Exp. 9,652.76 8,724.65 11,039.15 12,074.13 13,466.17
34 Total Expenditure Excluding Provision 28,053.98 34,595.09 42,014.33 42,724.40 42,204.04
35 Provision made for investments & Off-balance 2,384.31 3,512.07 3,029.26 4,790.91 5,492.84
sheet items for the year
36 Total Expenditure Including Provision 28,053.98 38,107.16 45,043.59 47,515.31 47,696.88
37 Net Profit before Tax 10,347.31 11,910.65 11,074.76 10,531.71 8,855.02
38 Net Profit after Tax 4,841.45 5,338.91 4,948.58 3,999.06 3,029.08
39 Provision for Income Tax 5,515.56 6,571.74 6,101.57 6,532.65 5,825.94
Foreign Exchange Business
40 Import 301,207.00 284,588.00 285,890.00 316,975.00 343,668.00
41 Export 178,244.00 197,095.00 205,269.00 222,753.00 224,236.00
42 Remittance 236,607.00 300,915.00 286,956.00 307,961.00 321,066.00
43 Total Foreign Exchange Business 716,058.00 782,598.00 778,115.00 847,689.00 888,970.00
Distribution Network
44 Correspondent Bank 313 320 331 597 531
45 Foreign Correspondent 935 676 690 723 665
46 Shareholder 60,550 60,302 62,772 60,857 47,909
47 Employee 11,465 12,188 12,980 13,547 13,622
48 Branch *266 *276 *286 *294 *304
Shareholders Information
49 Cash Dividend 7% 8% 8% 15% 20%
50 Stock Dividend 25% 17% 10% - -
51 Net Assets Value (NAV) per Share (Taka) 27.78 27.18 29.92 28.96 29.32
52 Earning per Share (Taka) (original) 4.84 4.42 3.40 2.48 1.88
53 Earning per Share (Taka) (restated) 3.87 3.65 3.07 2.48 1.88
54 Market Value per Share (Taka) (Highest) 83.98 59.00 45.00 36.80 31.60
Efficiency Ratio
55 Gross Profit Ratio 52.08% 48.28% 44.80% 47.20% 49.18%
56 Cost of Fund 8.86% 9.32% 9.45% 8.55% 7.62%
57 Cost Income Ratio/Efficiency Ratio 0.73 0.76 0.75 0.74 0.75
58 Return on Equity (ROE) 17.42% 13.42% 11.36% 8.85% 6.28%
59 Return on Average Assets (ROA) 1.35% 1.27% 0.96% 0.67% 0.44%
60 Price Earning Ratio (Times) 11.27 12.21 12.35 11.24 12.54
61 Spread 4.03% 4.10% 3.79% 4.27% 4.29%
* Including 30 SME/Agriculture Branches

158
Islami Bank Bangladesh Limited Annual Report 2015
MEDIA HIGHLIGHTS

159
Islami Bank Bangladesh Limited Annual Report 2015
PUBLICATIONS

160
Islami Bank Bangladesh Limited Annual Report 2015
 Success Story

SUCCESS STORY

Alhaj Abdul Jabbar

SAYING NO TO POVERTY AND YES TO SELF-RELIANCE
Unflinching commitment to trade and continued practice distributors and agents. In 2014 he founded Patgrams only
of ethical values helped Alhaj Abdul Jabbar say adieu to automatic rice mill `Inshallah Auto Rice Mill & Agro Food
poverty and uncertainty in earning bread. He lay his father in Limited. Here also Islami Banks investment backed him up
grave when he was merely a student of Class-VIII in Patgram, substantially in advancing economically further. He is the
under the draught-stricken district Lalmonirhat at the Managing Director of the Mill wherefrom as many as 150
northern tip of the country. Naturally Jabbar had no option male and 50 female workers win their bread. Besides, more
than throwing himself in the harshest struggle for bare 50 male and female workers work here on daily wage basis.
survival. His education obviously had to be discontinued. His mill produces finest variety of rice sent to Dhaka for bulk
Starting a very small business with a meager capital, his sale. So his enterprise not only creates jobs, adds value to
perseverance and reputation in business circle as an honest farm produce, provide jobs at a rural setting, making worth
and pious person, led him to achieve a transformed life-style; of grain waste for recycling, processing farm produces,
his economic status is now burgeoning today. and ultimately leaving a little but potential contribution to
countrys food security. Islami Bank Patgram Branch now
Abdul Jabbar now proudly owns a husking mill (Sumon runs an investment worth Tk. 4 crore 20 lac in `Insh-Allah
Rice Mill), a trading house (Suman Traders) and a cloth and Auto Rice and other enterprises..
fashion-wear business (Seha sharee Ghar). In a bid to further
diversify his enterprise, Jabbar expanded his trade wing Entrepreneurship tends to be inclusive of future generations
that deals in fertilizer, pesticide and construction materials if properly guided. Alhaj Abdul Jabbar is raising his elder son
as well. And all that he built, ran, expanded and revamped Mohammad Rafiqul Islam Rumon to carry on the legacy of his
with the benevolent assistance of Islami Bank Bangladesh success. His guidance and inspiration helped Ramon acquire
Limited. His success not only consigned brighter fortune for the knowledge and dynamics of business administration
him and his kith and kin, it also contributed to the growth and acumen from his enterprising parentage. They are so
of small enterprises in his neighbourhood based on a grateful for the support and guidance of Islami Bank and its
new paradigm: generating employment and creation of supportive officials.
business stakeholders comprising small vendors, suppliers,

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Success Story

Mohammad Golam Nabi

DESTINY KEEPS SPLASHING IN SILVER-VIBRANCE

He was merely an account holder of Islami Bank Natore Golam Nabi needed not look back ever since. He began
Branchs inauguration day. He was also the first recipient cultivating 6 to 7 bigha water body belonging to other
of this branchs investment stake. But being an early starter owners. Today his total acreage of fish cultivation measures
Mohammad Golam Nabi (alias Nabi Bhai) embarked upon between 250 to 300 bighas a huge water body enthralled
a journey with such an ethical height that within a short with the splashing of various species of local, crossed and
time made both him and the Bank proud of an indomitable innovative varieties. Like his name, the fame of his fish began
enterprising success. to spread throughout Natore, even beyond it. The officials of
the Directorate of Fish inspected his farm and praised for his
It was 1994 and there was not much interest among indomitable initiatives. He has also received some awards
villagers in Natore for fishery cultivation. But Golam Nabi from the Government. He was sent at least to 3 countries
was somewhat determined for fish even at odds with many for sharing his experience as a successful pisciculturist. .
veterans negative suggestions. He had a small fund, a tiny
pond and the starting was with a small shoal of fries. He Besides, he has started Guava and Dragon-fruit cultivation.
sought financial support to some banks and was refused, In private initiative, he is the pioneer in Dragon-fruit
mostly for the smallness of his initiative. At that time the cultivation. His initiative has created jobs, helped to reduce
then Manager of Islami Banks Natore Branch once paid a poverty for some families and made models for many new
sudden visit to his office at Station Bazar. He discovered entrepreneurs. It was Nabis humble that Islami Bank to
prospects of business personship and enterprising spirit stand by his works. He has not forgotten his miserable past
in Golam Nabi. He agreed to sanction an investment stake or the Bank that helped get rid of his perennial misery and
of Tk. 200,000.00 and that stimulated Golam Nabi and his hardship in domestic life.
dream of becoming a self-employed person began to get
translated into reality.

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 Success Story

Abdur Rouf Khan

SWEETMEAT ENTERPRIZE THROUGH SWEATING EFFORT

The pursuit for success is always sweating and the success Bhandar. Success was in such a scale that it would not
of Abdur Rouf Khans is ironically recalled with the sharp sound an exaggeration if one finds it amazing that half of
contrast between sweat success and sweating effort. Abdur the sweets sold in Natore towns all sweet shops together
Rouf Khan of Natore grew like all other village youth in is produced by Abdur Rouf Khans Mouchak Mishtanno
poverty. Scarcely having had his SSC, Rouf had to abandon Bhandar, which stands as a shining example of a successful
study and started struggle for livelihood by selling books. enterprise that exemplifies genuine commitment to trade
But it was not at all a life worth-living with selling books. In and concern of quality.
2002 the then Manager of Islami Bank Natore Brach advised
him to open a sweet-meat shop. In those areas making When he made the start it was with a humble capital of
sweet-meats have all along been a tradition for the Hindu Tk.2 lac and only with a single worker. Today a thriving staff
sweetmeat-makers. Muslims could never conceive the idea of more than 100 work at his sweet factory that also has
of pursuing an enterprise in this traditional craft. But Abdur diversified its product range including bakery items like
Rouf was lucky in coming out as a first generation Muslim biscuit, bread, crispy fries, chanachur and many more tasty
sweetmeat maker. snacks. To feed his own need for milk, the key ingredient for
all that he produces, he has established a cattle farm of his
The Managers inspiration showed him a light of hope. But own that now breeds with as many as 100 milking cows -
the inception was indeed a banal one. He opened a shop and all these could have only been made possible with the
in Natores Nicha Bazar, on the bank of a pond nearby, by investment support of Islami Bank, which extended financial
making a makeshift thatch with a bamboo strip ground. support, whenever he so applied for.
But by the grace of Almighty that small beginning turned
out to be a burgeoning enterprise within a short time. As it He keeps the initial trust and support of Islami Bank for
appeared his one was the only sweetmeat shop of a Muslim taking off and he would like to get the Bank all along by his
and the hue and cry was irresistible, not for that, but more side. Abdur Rouf Khan is now one of the largest investment
for the craze for the quality of his sweets. Although Mouchak recipients of IBBL Natore Branch. His indebtedness to Islami
Mishtanno Bhandar by name, it was mostly known among Bank in coming out of the pangs of misery and in achieving
the local inhabitants practically as Muslim Mishtanno a huge success is mirrored in the smile upon his innocent
countenance.

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Success Story

Ayesha Begum
LITTLE BROWN DOTTED BIRDS BRING THE WIND OF CHANGE

Ayesha Begum couldnt ever imagine that the largest Bank a chance of becoming a member of Islami Banks Rural
of Bangladesh would ever extend investment support to the Development scheme. Islami Bank Madhabdi Branch got
smallest initiative like her, But it did really happen. Ayesha of adequate trustworthiness in her dealings as they granted
Kandipara village under Narshingdi Sadar upazilla couldnt her small enterprise investment through a consecutive 12
also imagine that her condition of life and living be any terms. All that she received was dedicated to raising `Koyel
better than her other neighboring rural women whom she bird farming in a large scale. Today she cages as many as
has been observing since her childhood struggling for a 2500 birds with an accumulative investment portfolio lately
basic survival, far off from dreaming affluence or wellbeing. rose to the tune of Tk.40,000. She gets a huge hatch of 1600
Today her improved life appears to be really amazing when to 1700 eggs worth an average of Tk.3000.
she looks down her memory lane. A comparatively medium-
sized family though, the acute poverty was even a scourge, The cute brown and dotted fast-breed birds cater both as a
regularly affecting peace and amity in their conjugal and culinary marvel rich in safe protein and sumptuous treats
family bond. She was rather left lurking between hope and with its small, but very nutritious eggs. Her hardship for a
despair, between health and ailment, between sustenance decent living had gone and so has her perennial agony to
and savings. Today she recalls in profound gratitude the raise her children. She tends to assign all attributes of the
support she had been desperately longing for. She raised good days of her present life to Islami Bank and those field
home chics and courtyard poultry giving her children protein staff of the Bank who, according to her, bridges between the
they badly needed. But all that were of no viable consequence fund and entrepreneurs.
or of any commercially sustainable value. In 2004, she got

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 Success Story

Meherun Begum
SWEET RICE-PUFF SWEETENS HER LOT

A life full of struggle is indeed a life worth-living. Some bubbles of dreams that would come true in her real life?
lives exhibit how miseries settle down in the memorys As a maiden entrepreneur she went ahead in obtaining a
background and the bounties of life come out on the membership of the RDS of Islami Bank. Buchhu Mia devoted
foreground of happiness. Success may be rare, but its his passion for assistance and solidarity for his wifes
profanity and celebration are not scarce. Success keeps struggle for a better life. As she dealt with a good profile for
radiating in exemplary references far beyond where timely deposition of installments, Islami Bank found it a case
the struggle takes place and the life is lived. Meherun worth - investing to the tune of even Tk.40,000 at the 15th
Begum made such an example through such struggle and term of her satisfactory transactions.
perseverance. A veiled and blotless village woman of homely
attributes lived far below the poverty line, so much so that Her only asset was the ancestral homestead. Now she owns
the remote village of Araji-Singapara under Salandar union one acre of cultivable land. The Bachhu-Meherun family now
of Thakurgaon District, could barely provide her a modest can afford to send their three children off to school. Most
livelihood. Bachhu Mia, her life partner, has all along been importantly, her factory has been expanded and is now able
a devoted share-holder of happiness and sorrow, caring for to sell her Muri-Moa to adjacent district towns as well. Her
his family. But his poor wages were far too inadequate to put satisfaction and gratefulness to Islami Bank get mirrored in
the ends together. Crop season and wages accrued from on smiling exuberance. Beyond cultivable land she has bought
farm work in itself is not an income over the year. a piece of highland near Thakurgaon-Gorea Road which is
now worth Tk.700,000.00 and abandoning her thatched hut
So she decided to share her husbands struggle for earning she now lives in a concrete constructed house. She wishes
bread. Initially, she chose yet another maiden home craft, Islami Bank come forward in extending such assistance to
making balls of sweetened rice puffs (Muri Moa). But who small entrepreneurs like her.
knew these round light foodstuffs would one day bring

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Success Story

Salma Begum
LIVING IN MARSH IS NO LONGER HARSH

Life in or around low-lying flood basin (Haor) or as we call visited their village. Salma urged the relevant officials to help
`Marsh is beyond comprehension. These huge, seemingly her husband open a grocery shop at the locality where all
endless, water bodies offer a bounty of water lilies, lotus three `Haors meet. The IBBL officials organized the grocery
and a shoal of shallow water fish like koi, shing, magur. But stuffs worth Tk.10,000 and handed them over to Salmas
sharp by contrast of its aquatics resources life in `haors husband. Ever since opening the shop Salma and family
is lived in inexplicable misery, due mainly to inaccessibility had never to look back. A series of investment portfolio from
and the fact that the land could only provide one crop (Boro) IBBL that ranged from Tk.15000 at second term Tk.20.000
as it completely remains inundated almost throughout the and at third term has changed Salma and her familys
year. Poverty, sickness, malnutrition and uncertainty are destiny. She also now maintains a savings portfolio with
unavoidable fait of the haor-people. In the harshest month Islami Bank worth Tk.5000 and deposition each month. She
before the only crop gets back to the peasants home they could not provide education to her elder four children. But as
final no alternative to take loan from NGOs at high interest the young son Al-Amin rose to Class-IX the familys affluence
and many peasants get lost the last that remains over lent him the opportunity to continue his education. This year
centuries of exploitation and misery. he was elevated to Intermediate class. He now cherishes the
desire to seek admission to Sunamganj Government College
Salma Begum is one of the hapless village women dwelling at and aspires to study with honors. The entire family, including
Aspia Nagar at Tangua, Sunamganj. Salma was fortunate to Al-Amin expresses gratefulness to Islami Bank that was
have come in touch with the RDS officials and Field workers instrumental to bringing a perceptual change.
of Islami Bank, when a team of IBBL-RDRS program had

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 Success Story

Omar Sharif
SUCCESS WITH A FLORAL ACCOLADE

From time immemorial, the fame of Modhupur has been planting, grooming and selling flowers and flower plants.
due to its abundance of pineapple plantation. But only a When he started it was really a futile inception with hardly a
few of us ever could imagine the hush and a bit hilly region handful of pot plants and a street corner to show customers
of Modhupur is characterized by its unique flora, and that his collections. At the same time he used to regularly visit
too, wild flora, grown only by natures priceless endowment. various flower and horticulture fairs and flower exhibitions
Many wild flowers grow in its uneven slopes due to the areas to gain more experience about how to grow the plants and
typically hilly landscape. These wild flowers grow without to take care for the plant until blooming. However, the main
human care along pineapple plantations, barren bushes and obstacle before him was fund to initiate with. He approached
wild orchids. These include bush-flower, pygmy, spurges, many banks and donors, but no attempt bore any fruit. Lastly
wooly daisy, mistletoe, brittle bush, dandelion, parsley, ground he was advised to visit Islami Bank Modhupur Branch. The
cherry and so many unknown even un-named wild flowers, officials concerned of Modhupur Branch extended to him
colorful weeds, vines and twinning. Omar Sharif of Kakraid, a priceless cooperation by granting an MEIS investment
Modhupur grew in Modhupur almost like a wild flower, often worth Tk.4,00,000. With the passage of time Omar Sharif
unfed, sometime uncared, exactly like these weeds. But his established three nurseries with rows of flower beds starting
love for flower and passion to become self-reliant helped him from that very small collection in a tiny road-side plant shop.
coming out of the wilderness of uncertainty. His weakness
for flower changed his total lifestyle a journey where he Omar Sharif now witnesses the sea of change in his life and
received Islami Bank with the right kind of support, for the enterprise with a sigh of relief. And according to him, all that
right cause, at the right time. His enterprise flourished like has been made possible could only have been possible with
the wild bushes with the unfurling mellows of unknown the support of Islami Bank. Sharif has another big reason of
flowers dancing with wind. satisfaction --- he works and lives with flower, the heavenly
endowment of natures goodness. He now enjoys a portfolio
He set up a flower nursery along the Modhupur- of IBBL investment under MEIS to the tune of Tk.500,000.
Mymensingh Highway near Kawraid Bazar He runs it for

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Success Story

Shiuly Begum
ALIGNING GENDER IN PRODUCTIVE MAINSTREAM

Leaving the mark of artisanship has inherently been a maiden when she persuaded her husband to get involved in her craft.
craft, bred by practice and finest by precision. All these begin Growing income and increasing volume of turnover convinced
are on the edge of handkerchief, bed- cover, wall linen blouses Shiulys husband to co-share his wifes enterprise.
or at the hems of lacy veils, dupattas (urna) and so on and so
forth. But in most cases, these maiden precision and finesse Nothing succeeds like success. A time came when she had
of craft remain within home confines, or at best for personal no longer to depend on the small diaphrame. She could then
gifts. The objects or motifs in most of the drawing are of floral afford to buy a life sized wooden table of an average sharees
forms with curly leaves or stems, or lunar dimensions with size. So her works got easier for stretching out the entire
star or any common motif where simple art sense eloquently pigment gamut onto an unbroken surface. This not only
excels. But Shiuly Begum of Boitara village in Sirajganj saved time, but further ensured design quality and screen
District Sadar has successfully turned her maiden instinct of pigment continuity. Now her boutique factory has three such
art into a burgeoning means of earning bread. She gets vivid huge screen tables and as many as 27 workers are engaged
appreciation from her clients and the sale -proceeds that now in carrying out screen print work orders on various kinds of
adequately meet her both ends for a modest and self-reliant fabric backgrounds. She can print 3 sharees in less than one
life with dignity and mental peace. and a half minute. Leaving her tin-roofed semi-constructed
home, she is now a proud owner of a concrete abode with
Her dream of having a boutique shop set in began with a small basic amenities. In addition, she has bought a patch of land
outlet adjacent to her home. The artwork she learned was measuring 5 decimals alongside the road. Shiuly now runs
simples but it required skill and precision - imprinting screen an IBBL investment portfolio worth Tk.80,000.00 and there
prints of various shades and design on fabrics. Its a work of appears a marked change in the quality and standard of life of
fabric dyeing process, where the base color or the design is her family comprising three children and her life partner. The
blocked space by space, often color upon color, rubbed on a major support, she often gratefully recalls, was from Islami
screen with the roller of each individual color. Even designs Bank that gave the boost up in my small enterprise to todays
are imprinted part by part and color upon color with the same proportion and productivity. She refers to the initial support
process with the help of a perforated screen framed by wood behind her enterprise extended by Islami Bank Bangladesh
or a flexible scale of steel angles. This is in short called `Screen Limited.
Print. Her work gained fastest momentum and a time came

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 Success Story

Azifa Begum
HER HOME GETS HUMMING OF HAPPINESS WITH DOVES

Pigeon breeding has been an art and enterprise practiced initiative brought her far-flying dream pigeons back to their
over millennia in almost every part of the world. In our real-life-abode that Azifa crafted on her thatched home roof.
country also domestication of dove and breeding them at
home dates back to antiquity. It gives the keeper or breeder Azifa Begum of village Shantinagar, under Joypurhat District
not only aesthetic satisfaction, but commercial dividend to Sadar enlisted herself as a member of Islami Bank Joypurhat
support livelihood as well. A home in rural Bangladesh is Branchs RDS in 2007. The same year she qualified herself as a
indeed rare to find, where somebody of the home doesnt recipient of an RDS investment worth Tk.8000, a portfolio that
take initiative in raising pigeons. The hobby has long been was cumulated on its fourth term to Tk.60,000. All that she
of popular appreciation, but now it fetches money of a huge cycled by the fund with, was her passionate pigeons, that now
propensity, provided that one can properly breed the pigeons, number as many as 100 of various local and foreign species,
especially the fanciful rare dove species, like Jacobins, even some rare one that are meant for dove-racing. Each
Fantails, Rollers, Tumblers, and Tipplers, Parlor Roller, Pigmy couple has its varying denomination, both in terms of specie
Pouters etc. (Locally known by species as Lokhha, Beauty, and honorarium (Dove-lovers refrain from bidding in terms
Giribaj, Giri Raj etc. of monetary value). The honorarium ranges from Tk.1500
to Tk.3000 per pair, even more, depending on their sporting
Pigeon-racing is also becoming a fanciful sport these days. performance, flying precision and luring gimmicks. Besides
The more the demand, the more attractive is the breeding. flying and sporting breed species, Azifa Begums doves like
But Azifa Begum of Joypurhat didnt know this entire those of many other fanciful breeders in Bangladesh include
pigeon proclivity. What at best I knew that it was only in general variety of pigeons that are often bred, sold and used
breeding pigeons that I could find both my satisfaction of for human consumption as meat. Azifa Begums treasure of
mind and some earning for supporting my family, now she fancy fetched her more than she could foresee--- she bought
recalls. Later, the earning preceded the fancy. She became a a patch of land measuring three decimals at the heart of
successful pigeon-breeder, a pursuit that could even satisfy Joypurhat town. All that she could have achieved has been
bank people to consider as an enterprise to reckon with or to attributable to Islami Banks Rural Development Scheme. She
be optimistic for a practical endowment. No, no help came is grateful for the cooperation extended to her in changing her
though her fancy met basic prerequisites necessary for a life and that of her entire family.
micro-investment, until an Islami Bank Rural Development

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Success Story

Abdul Hamid Mollah

RAISING DUCKS CHANGES DESTINY

The Chinese, even the ancient Greeks believed in ducks as thousand to Tk. 70 Thousand and to Tk. 1 Lac 10 thousand,
companion of fortune. It might have been a simple belief or then Tk. 3 Lac from Bai-Muajjal scheme. Now he runs an
a taboo, but for Abdul Hamid Mollah of Ullahpara, Sirjganj, investment worth Tk. 5 Lac. His farm is now capable of
raising duck has symbolized his great fortune. His Molla hatching as many as 10,000 eggs which are saleable within 4
Hatchery has become an icon of overcoming his and many weeks, worth Tk. 7 to 8 thousand. Meeting wages and all cost
villagers poverty and bringing a great esteem of earning an heads of production and utilities bills he could fairly make a
enviable livelihood. profit of more than Tk. 50 thousand each month.

A ride off 3 kilometer from Ullahpara town and leaving The happiest beneficiery of Hamid Mollah is none other than
Bhutgacha bus-stand for a little walk, one will smoothly reach his caring wife Anju Ara, who had to live a miserable life with
his hatchery at Bhutgacha village, because it is now so known their five daughters, so much so, that they made off three
to everybody there. Mollah Hatchery is equipped and has daughters wedding away even before they finished their
the expertise to hatch duck chics from 25 to 28 days. Islami school years. Now fortune has touched down their thatch,
Bank, testifies Monsur Ali, a villager and an admirer of Hamid, as it is now transformed into a constructed abode of grace
has totally changed Mollahs destiny. In 2011 Hamid began and affluence. Equally happy are the 14 members of the Duck
his journey with an investment of Tk. 20 thousand from Islami family, the dedicated workers of the farm, who now have a
Banks Rural Development Scheme (RDS). Alhamdilillah, confirnred wage to live with self - esteem and dignity, sharing
in rapid succession, he proved his portfolio of enterprising Mollahs acumen and enterprising pursuit.
capacity as his investment limit kept enhancing from Tk. 50

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Islami Bank Bangladesh Limited Annual Report 2015
 Report of the Shari`ah Supervisory Committee

During the year 2015 the Shari`ah Supervisory Committee met 12 (twelve) meetings and reviewed operational activities of the
Bank including those referred to it by the Board of Directors and the Management of the Bank and gave opinion and decisions
related to Shari`ah. The Honorable members of the Shariah Supervisory Committee attended 10 (ten) Seminars organized by
the Management of the Bank on the eve of inauguration of 10 new branches and 24 (twenty four) Shariah awareness programs
arranged by the Head Office and different Zones. Apart from this, the Muraqibs of Shari`ah Secretariat conducted Shariah
inspection at 294 branches (including 30 SME/Agriculture branches) during the period excluding 10 (ten) new branches of the
Bank opened in 2015 and submitted detailed report thereon.
The duty of the Shari`ah Supervisory Committee is to give independent opinion and necessary guidelines upon observing and
reviewing the activities of the bank and the responsibility of the Bank is to ensure that the Bank conducts its business in accordance
with the rules and principles of Islamic Shariah.
The Shariah Supervisory Committee after reviewing the Shari`ah Inspection Reports, Audited Reports i.e. Balance Sheet, Profit &
Loss Account and other financial statements of the Bank for the year 2015 and gave the following opinion:
1. Shari`ah awareness among the workforce and the Banks customers has increased due to various activities,
administrative actions, intensive supervision and cooperation including different Shari`ah awareness activities initiated
by the Board of Directors, Shari`ah Supervisory Committee and Management of the Bank. However, Banks initiatives
is to be strengthened further to achieve the real and qualitative progress in Shari`ah compliance as well as Maqasid
(objectives) of Shari`ah.
2. About 50% of Islamic microfinance around the world is singly operated by Islami Bank Bangladesh Limited. Besides, the
progress of the Bank in ensuring distributive justice through its multifarious activities including expansion of small and
medium investment, increase of investment in the rural areas and extending services to the poor and under privileged
people is satisfactory; which is a positive step towards achieving maqasid or objective of Shari`ah.
3. The agreements of investment and transactions executed by Islami Bank Bangladesh Limited during the year have been
made in accordance with the principles of Islamic Shari`ah.
4. Profit distributed to deposit accounts has been made in accordance with the principles of Islamic Shari`ah.
5. The income identified as doubtful as per principles and rules of Islamic Shari`ah has not been included in the distributable
income of the Bank.
6. The calculation of Zakat on the zakatable assets of the Bank has been made in compliance with the rules and the
principles of Islamic Shari`ah. It is pertinent to state that Islami Bank does not pay Zakat on behalf of the Depositors and
Shareholders. It is the own responsibility of the Depositors and Shareholders to pay Zakat on their deposit and shares
respectively.
7. It is necessary to provide more Shari`ah training to the employees of the Bank and arrange more Shari`ah Awareness
Programs at Branch level to make the clients aware regarding Shari`ah compliance.
8. It is necessary to be more careful in Shari`ah compliance in respect of engaging the client as buying agent to purchase
goods that are approved & specified by the Shariah supervisory committee including possession thereof by the branch.
May Allah (SWT) bestow us with the best of Tawfique in gaining His satisfaction through implementing Shariah in every sphere
of our life. Ameen.

Sheikh Moulana Mohammad Qutubuddin Professor Dr. Abu Bakr Rafique

Chairman Member Secretary

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Islami Bank Bangladesh Limited Annual Report 2015
AUDIT COMMITTEE REPORT

In compliance with the Bank Company Act 1991 (as specifically shareholders, depositors and the society as a
amended up to 2013) and Bangladesh Bank BRPD Circular whole. In this context, the Audit Committee comprising of
No. 11 dated 27 October 2013 the formal Audit Committee 04 (four) members has been appointed by the Banks Board
of IBBL has been functioning duly appointed by the of Directors. Pursuant to the instructions of the Bangladesh
Banks Board of Directors to assist the Board for ensuring Securities and Exchange Commission and the Bangladesh
the achievement of objectives of the Bank, efficiency Bank 03 (three) Independent Directors have been included
of operations and compliance with the applicable laws, in the Committee. As per Bangladesh Bank Circular, no
regulations and internal policies to make the Bank a unique, member of the Executive Committee has been included in
strong and dependable organization for all stakeholders the Audit Committee.

Composition of the Audit Committee

Sl. No. Name Status in the Board of Status in the Audit

Directors Committee
1. Professor NRM Borhan Uddin, Ph.D.*** Independent Director Chairman
2. Dr. Areef Suleman Director Member
(Representative, Islamic Development Bank, KSA)
3. Janab Md. Abdus Salam, FCA, FCS* Independent Director Member
4. Barrister Mohammed Belayet Hossain** Independent Director Member

* Janab Md. Abdus Salam, FCA, FCS resigned from the Board on 14.09.2015 which was approved by the Board of Directors on
14.10.2015 in its Emergent Meeting.
** Tenure of Barrister Mohammed Belayet Hossain expired on 28.12.2015.
*** Professor NRM Borhan Uddin, Ph.D resigned from the Bank on 07.03.2016 which was approved by the Board on 05.04.2016.
As per regulatory guidelines, Janab Abu Reza Md. Yeahia, Company Secretary of IBBL acts as the Secretary of the Audit Committee.

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Islami Bank Bangladesh Limited Annual Report 2015
 Audit Committee Report

Statement of the Audit Committee 6. Evaluated the compliance culture across the Bank.
The Audit Committee during its regular review observed that 7. Reviewed the Manual of Internal Control &
the internal controls of the Bank are okay. The committee Compliance of the bank.
also during its regular review of the external audit functions,
observed that effective co-ordination of external audit 8. Reviewed the activities of the internal audit and
function, independence of external auditors were ensured the organizational structure and ensure that no
and the external auditors findings were reviewed in order to unjustified restriction or limitation hinders the
be satisfied that appropriate actions have been taken. internal audit process and examined the efficiency
and effectiveness of internal audit functions.
Meeting of the Audit Committee 9. Examined whether the findings and
recommendations made by the internal auditors
During the year 2015, the Audit Committee of the Bank & external auditors are duly considered by the
organized 19 (nineteen) meetings Proceedings of the Audit management or not.
Committee meetings were reported timely and regularly to
the Board of Directors as well as Bangladesh Bank to comply 10. Evaluated whether the internal audit functions
the Bangladesh Bank DOS Circular Letter No. 07 dated have been conducted independently from the
24.04.2011. management.
During the period, the Committee performed, amongst 11. Reviewed the financial statements to ensure that
others, the following key functions, where applicable, to the these financial statements are in full compliance
extent it was brought before the committee: with the Acts, Rules and the Accounting Standards
(BAS/BFRS)
1. Discussed the internal and external audit reports
and advised the management to rectify all lapses 12. Evaluated the Management Information System
revealed in the reports. Additionally time to time (MIS) of the bank.
the concerned Head of Wings/Divisions/Branches
and other Officers of the Bank were invited to 13. Advised the management to complete all the
attend the meetings of the Audit Committee in documentation formalities carefully and retain
order to augment the process of regularization of each and every document properly.
lapses and irregularities.
14. Reviewed the reports on overdue, classified,
2. Discussed the Bangladesh Bank inspection reports rescheduled & written off investment and other
on the Branches and Head office and advised the non-performing assets and directed to exert all-out
management to rectify all lapses and to comply efforts to reduce non-performing assets.
with Bangladesh Banks instructions & circulars
15. Reviewed the reports on income leakage (i.e.
meticulously
unrealized commission) to increase the Banks
3. Assessed reports relating to fraud, forgery, profit & to take preventive measures for not to
deficiencies in internal control or other similar increase the income leakage.
issues detected by internal and external auditors
16. Suggested to take up the matters with concerned
and inspectors of the regulatory authority and
lawyers for early disposal of the suits for recovery
placed it before the Board after reviewing whether
of the Banks dues.
necessary corrective measures have been taken
by the management. 17. Advised the management to ensure full compliance
of regulatory issues.
4. Reviewed the Self-Assessment of Anti Fraud
Internal Control on quarterly basis for onward 18. Advised the management to ensure full shariah
submission to Bangladesh Bank in compliance compliance in all areas of business.
with DOS Circular Letter No. 17 dated 07.11.2012.
19. Suggested some measures, including hiring more
5. Approved the Audit Calendar for the year 2015 Professional Accounting, for capacity building of
under review and advised to carry out the audit the internal auditors and to further strengthen the
program meticulously. internal audit functions.

173
Islami Bank Bangladesh Limited Annual Report 2015
Audit Committee Report

20. Reviewed the stress testing procedure and Health Accounting Standards (IAS) and International Financial
of the Bank in respect of all areas of business. Reporting Standards (IFRS) adopted as Bangladesh
Accounting Standards(BAS) and Bangladesh Financial
21. Reviewed whether the laws and regulations framed Reporting Standards(BFRS) respectively by the Institute of
by the regulatory authorities (central Bank and Chartered Accountants of Bangladesh, Bank Company Act
other bodies) and internal regulations approved by 1991(as amended up to 2013), Bangladesh Bank Guidelines,
the Board are being complied with. the Companies Act 1994, the Bangladesh Securities and
Exchange Commission Rules 1987 and other laws and rules
22. Evaluated the status of large investment clients on
applicable in Bangladesh and also Standards issued by the
regular basis.
Accounting and Auditing Organization for Islamic Financial
23. Evaluated the certificate on the effectiveness of Institutions (AAOIFI), Bahrain, etc.
Internal Control Policy, Practice & Procedure of the
bank. Acknowledgement
24. Appraised the implementation status of Circulars/ The Committee expressed its profound thanks and gratitude
Circular Letters issued by Regulatory bodies to the Members of the Board, Management, Auditors and the
(Bangladesh Bank, BSEC & others). Regulatory Authorities, in particular, Bangladesh Bank and
the Bangladesh Securities and Exchange Commission for
25. Assessed the Quarterly Operations Report (QOR) their excellent support while performing its coveted duties
of all Branches on quarterly basis.
and responsibilities.
26. Reviewed the revised Human Resources Policy of
the Bank.

Statutory Auditors Appointment

The Audit Committee recommended to the Board for
appointing Statutory Auditors in the Annual General Meeting
for the year 2015.

Interim Financial Reports of 2015

The Audit Committee reviewed and recommended the
quarterly & half yearly Financial Statements to the Board and
ensured that authentic and reliable Financial Information
have been incorporated in preparing those Financial
Statements and in other interim reports.

Review of Financial Statements

The members of Audit Committee and the Board reviewed
and examined the Annual Financial Statements of the
Bank to confirm whether all the required disclosures
and information have been incorporated in the Financial
Statements and whether the Bank followed International

174
Islami Bank Bangladesh Limited Annual Report 2015
 175
Islami Bank Bangladesh Limited Annual Report 2015
 Independent Auditors Report
To the Shareholders of Islami Bank Bangladesh Limited
We have audited the accompanying consolidated financial statements of Islami Bank Bangladesh Limited and its subsidiaries
(the Group) as well as the separate financial statements of Islami Bank Bangladesh Limited (the Bank), which comprise
the consolidated and separate balance sheets as at 31 December 2015, and the consolidated and separate profit and loss
accounts, consolidated and separate statements of changes in equity and consolidated and separate cash flow statements
for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements and Internal Controls

Management is responsible for the preparation of consolidated financial statements of the Group and also separate financial
statements of the Bank that give a true and fair view in accordance with Bangladesh Financial Reporting Standards (BFRS)
as explained in note 2.1 and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements of the Group and also the separate financial statements of the Bank that are free from
material misstatement, whether due to fraud or error. The Bank Company Act, 1991 as amended and the Bangladesh Bank
regulations require the management to ensure effective internal audit, internal control and risk management functions of the
Bank. The management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and
report to Bangladesh Bank on instances of fraud and forgeries.

Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements of the Group and the separate financial
statements of the Bank based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing
(BSA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements of the Group and the separate financial statements of the
Bank are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements of the Group and separate financial statements of the Bank. The procedures selected depend on our
judgment, including the assessment of the risks of material misstatement of the consolidated financial statements of the
Group and the separate financial statements of the Bank, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entitys preparation of consolidated financial statements of the Group
and the separate financial statements of the Bank that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances but not for the purpose of expressing an opinion of the effectiveness of the entities internal
control systems. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements of the Group and also the separate financial statements of the Bank.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the consolidated financial statements of the Group and also the separate financial statements of the Bank give
a true and fair view of the consolidated financial position of the Group and the separate financial position of the Bank as at 31
December 2015, and of its consolidated and separate financial performance and its consolidated and separate cash flows for
the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRS) as explained in note 2.1.

Report on Other Legal and Regulatory Requirements

In accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Bank Company Act 1991 as amended
and the rules and regulations issued by Bangladesh Bank, we also report the following:

176
Islami Bank Bangladesh Limited Annual Report 2015
 (a) we have obtained all the information and explanation which to the best of our knowledge and belief were necessary
for the purpose of our audit and made due verification thereof;

(b) to the extent noted during the course of our audit work performed on the basis stated under the Auditors
Responsibility section in forming the above opinion on the consolidated financial statements of the Group and the
separate financial statements of the Bank and considering the reports of the management to the Bangladesh Bank
on anti-fraud internal controls and instances of fraud and forgeries as stated under the Managements Responsibility
for the Financial Statements and Internal Control:

i. internal audit, internal control and risk management arrangements of the Group and the Bank as disclosed in
note 3.31 appeared to be adequate;

ii. nothing has come to our attention regarding material instances of forgery or irregularity or administrative error
and exception or anything detrimental committed by employees of the Bank and its related entities other than
matters disclosed in note 3.31.8;

(c) financial statements of subsidiary companies of the Bank namely Islami Bank Securities Limited have been audited
by Kazi Zahir Khan& Co., Chartered Accountants and Islami Bank Capital Management Limited have been audited
by Hussain Farhad & Co., Chartered Accountants and have been properly reflected in the consolidated financial
statements;

(d) in our opinion, proper books of accounts as required by law have been kept by Islami Bank Bangladesh Limited so far
as it appeared from our examination of those books;

(e) the consolidated balance sheet and consolidated profit and loss account of the Group and the separate balance
sheet and separate profit and loss account of the Bank dealt with by the report are in agreement with the books of
account;

(f) the expenditure incurred was for the purposes of the Banks business;

(g) the consolidated financial statements of the Group and the separate financial statements of the Bank have been
drawn up in conformity with prevailing rules, regulations and Bangladesh Financial Reporting Standards as explained
in note 2.1 as well as with related guidance, circulars issued by Bangladesh Bank and decision taken in tripartite
meeting amongst Inspection Team of Bangladesh Bank, External Auditors and the Management of Islami Bank
Bangladesh Limited held on 10 April 2016 and subsequent letter no. DBI-4/42(7)/2016-722 dated 19 April 2016
issued by Bangladesh Bank.

(h) adequate provisions as explained in note 17.1 have been made for the investments, other assets and off-Balance
Sheet items which are, in our opinion, doubtful of recovery;

(i) the records and statements submitted by the branches have been properly maintained and consolidated in the
financial statements;

(j) the information and explanation required by us have been received and found satisfactory and

(k) we have reviewed over 80% of the risk weighted assets of the Bank and we have spent around 9,200 person hours
for the audit of the books and accounts of the Bank.

Syful ShamsulAlam& Co. HowladarYunus& Co.

Aziz Halim Khair Choudhury Chartered Accountants
Chartered Accountants Chartered Accountants

Date:19 April, 2016

Place: Dhaka

177
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Balance Sheet
As at 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
Taka Taka

Property and Assets

Cash in hand 7(a) 55,256,081,820 46,219,359,839
Cash in hand (including foreign currency) 7(a)(i) 8,625,867,409 7,696,844,962
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 7(a)(ii) 46,630,214,411 38,522,514,877
Balance with other banks & financial institutions 8(a) 25,644,591,295 23,615,218,198
In Bangladesh 8(a)(i) 23,974,968,279 21,205,895,651
Outside Bangladesh 8(a)(ii) 1,669,623,016 2,409,322,547
Placement with banks & other financial institutions 9.0 3,000,000,000 2,000,000,000
Investments in shares & securities 10(a) 98,397,090,217 99,677,400,553
Government 10(a)(i) 95,482,757,770 97,435,777,770
Others 10(a)(ii) 2,914,332,447 2,241,622,783
Investments 525,104,502,716 460,385,467,466
General investments etc. 11.1(a) 488,699,301,422 433,004,101,205
Bills purchased & discounted 11.2(a) 36,405,201,294 27,381,366,261
Fixed assets including premises 12(a) 15,838,557,191 15,930,479,589
Other assets 13(a) 2,527,292,915 3,751,558,076
Non - banking assets - -
Total property and assets 725,768,116,154 651,579,483,721
Liabilities and Capital
Liabilities
Placement from banks & other financial institutions 14(a) 17,766,330,139 7,657,500,743
Deposits & other accounts 15(a) 614,877,266,437 559,713,580,029
Mudaraba savings deposits 211,327,625,463 183,125,942,453
Mudaraba term deposits 179,234,913,887 169,288,934,029
Other mudaraba deposits 162,097,188,257 149,300,904,194
Al- wadeeah current and other deposit accounts 57,126,253,285 54,347,905,252
Bills payable 5,091,285,545 3,649,894,101
Mudaraba perpetual bond 16.0 3,000,000,000 3,000,000,000
Other liabilities 17(a) 42,521,807,091 34,220,763,730
Deferred tax liabilities 18(a) 310,066,332 393,276,062
Total liabilities 678,475,469,999 604,985,120,564
Capital/shareholders equity 47,292,646,155 46,594,363,157
Paid - up capital 19.0 16,099,906,680 16,099,906,680
Statutory reserve 21.0 16,099,906,680 16,099,906,680
Other reserves 22.0 11,779,818,313 12,007,818,774
Retained earnings 40(a) 3,312,951,535 2,386,670,563
Non-controlling interest 40(b) 62,947 60,460
Total liabilities & shareholders equity 725,768,116,154 651,579,483,721

178
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Balance Sheet
As at 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
Taka Taka

Off-balance sheet items

Contingent liabilities
Acceptances & endorsements - -
Letters of guarantee 23.0 10,629,688,357 8,839,985,590
Irrevocable letters of credit (including back to back bills) 115,229,781,408 99,102,373,685
Bills for collection 7,496,874,228 4,853,286,313
Other contingent liabilities 23,581,701 23,581,701
Total 133,379,925,694 112,819,227,289
Other commitments
Documentary credits, short term and trade related transactions - -
Forward assets purchased and forward deposits placed - -
Undrawn note issuance, revolving and underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total - -
Total off-balance sheet items including contingent liabilities 133,379,925,694 112,819,227,289

The annexed notes form an integral part of these financial statements.

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016

179
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Profit & Loss Account
For the year ended 31 December 2015
2015 2014
Particulars Notes
Taka Taka
Operating income
Investment income 24(a) 48,019,361,677 49,109,956,379
Profit paid on mudaraba deposits 25(a) (28,711,803,286) (30,592,937,508)
Net investment income 19,307,558,391 18,517,018,871
Income from investments in shares & securities 26(a) 815,154,861 1,847,241,058
Commission, exchange & brokerage income 27(a) 6,212,914,002 5,883,332,280
Other operating income 28(a) 1,729,427,055 1,223,373,942
Total operating income 28,065,054,309 27,470,966,151
Operating expenses
Salary & allowances 29(a) 8,884,178,676 8,197,568,114
Rent, taxes, insurances, electricity etc. 30(a) 1,147,142,738 1,000,045,580
Legal expenses 31(a) 44,189,468 16,206,043
Postage, stamps and telecommunication etc. 32(a) 43,895,740 47,306,134
Stationery, printing and advertisement etc. 33(a) 319,978,205 317,612,092
Chief executives salary & fees 34.0 8,400,000 8,400,000
Directors fees & expenses 35(a) 12,640,292 13,183,767
Shariah supervisory committees fees & expenses 36.0 3,730,249 2,562,124
Auditors fees 37(a) 2,530,000 2,344,118
Charges on investment losses - -
Depreciation and repair to banks assets 38(a) 961,943,629 866,506,137
Zakat expenses 421,312,940 425,985,241
Other expenses 39(a) 1,649,966,254 1,205,550,108
Total operating expenses 13,499,908,191 12,103,269,458
Profit/ (loss) before provision 14,565,146,118 15,367,696,693
Provision for investments & off- balance sheet exposures 17.1.4 5,393,314,666 4,670,784,729
Provision for diminution in value of investments in shares 17.2(a) 27,069,117 36,184,361
Other provisions 17.4 99,232,276 117,049,502
Total provision 5,519,616,059 4,824,018,592
Total profit/(loss) before taxes 9,045,530,059 10,543,678,101
Provision for taxation for the period 5,895,163,334 6,562,294,743
Current tax 17.7(a) 5,978,373,064 6,367,368,688
Deferred tax 18(b) (83,209,730) 194,926,055
Net profit/ (loss) after tax 3,150,366,725 3,981,383,358
Net profit after tax attributable to: 3,150,366,725 3,981,383,358
Equity holders of IBBL 3,150,364,238 3,981,381,780
Non-controlling interest 40(b) 2,487 1,578
Retained earnings from previous year 2,386,670,563 2,637,858,071
Add: Net profit after tax (attributable to equity holders of IBBL) 3,150,364,238 3,981,381,780
Profit available for appropriation 5,537,034,801 6,619,239,851
Appropriation: 5,537,034,801 6,619,239,851
Statutory reserve 21.0 - 1,461,293,053
General reserve 22.1 (190,902,736) 136,746,051
Dividend 40.0 2,414,986,002 2,634,530,184
Retained earnings 40(a) 3,312,951,535 2,386,670,563
Consolidated earnings per share 42(a) 1.96 2.47

The annexed notes form an integral part of these financial statements.

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016

180
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Cash Flow Statement
For the year ended 31 December 2015
2015 2014
Particulars Note Taka Taka
Cash flows from operating activities
Investment income 47,915,719,537 49,004,594,914
Profit paid on mudaraba deposits (29,563,685,828) (31,722,869,528)
Income/ dividend receipt from investments in shares & securities 2,063,232,961 1,870,699,544
Fees & commission receipt in cash 6,212,914,002 5,883,332,280
Recovery from written off investments 39,909,335 39,350,296
Payments to employees (8,561,139,222) (8,100,074,962)
Cash payments to suppliers (326,787,585) (326,348,124)
Income tax paid (9,203,786,715) (5,648,297,930)
Receipts from other operating activities 2,013,322,283 1,213,407,361
Payments for other operating activities (2,289,395,100) (2,594,835,403)
(i) Operating profit before changes in operating assets 8,300,303,668 9,618,958,448
Changes in operating assets and liabilities
Increase/(decrease) of statutory deposits - -
(Increase)/decrease of net trading securities - -
(Increase)/decrease of placement to other banks - -
(Increase)/decrease of investments to customers (61,629,035,250) (57,190,662,489)
(Increase)/decrease of other assets 1,189,635,579 1,013,868,776
Increase/(decrease) of placement from other banks 10,108,829,396 7,657,500,743
Increase/(decrease) of deposits from other banks 153,938,891 (193,547,298)
Increase/(decrease) of deposits received from customers 54,025,872,754 86,764,748,509
Increase/(decrease) of other liabilities account of customers - -
Increase/(decrease) of trading liabilities - -
Increase/(decrease) of other liabilities 2,075,425,298 2,872,167,220
(ii) Cash flows from operating assets and liabilities 5,924,666,668 40,924,075,461
Net cash flows from operating activities (A)=(i+ii) 14,224,970,336 50,543,033,909

Cash flows from investing activities

Proceeds from sale of securities 1,335,573,339 1,175,692,382
Payment for purchase of securities/BGIIB (117,057,781) (34,768,348,787)
Placement to Islamic Refinance Fund Account (1,000,000,000) (2,000,000,000)
Payment for purchase of securities/membership - -
Purchase/sale of property, plants & equipments (960,327,089) (941,612,274)
Purchase/sale of subsidiaries - -
Net Cash flows from investing activities (B) (741,811,531) (36,534,268,679)

Cash flows from financing activities

Receipts from issue of debt instruments - -
Payment for redemption of debt instruments - -
Receipts from issuing ordinary share/ rights share - -
Dividend paid in Cash (2,414,986,002) (1,170,902,304)
Net cash flows from financing activities (C) (2,414,986,002) (1,170,902,304)
Net increase/(decrease) in cash (A+B+C) 11,068,172,803 12,837,862,926
Add/(less): effects of exchange rate changes on cash & cash equivalent (2,077,725) 5,074,713
Add: cash & cash equivalents at beginning of the year 69,834,578,037 56,991,640,398
Cash & cash equivalents at the end of the year 45(a) 80,900,673,115 69,834,578,037

The annexed notes form an integral part of these financial statements.

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016

181
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Statement of Changes in Equity
For the year ended 31 December 2015
(Amount in Taka)
Revaluation
Share pre- Statutory General/ other Assets revalua- Retained Non-controlling
Particulars Paid-up capital reserve of Total
mium reserve reserves * tion reserve earnings interest
securities
1 2 3 4 5 6 7 8 9 10(2+3+4+5+6+7+8+9)
Balance as at 01 January 2015 16,099,906,680 1,989,633 16,099,906,680 425,357,821 11,498,971,320 81,500,000 2,386,670,563 60,460 46,594,363,157
Changes in accounting policy restated balance - - - - - - - -
Surplus/ (deficit) on account of revaluation of properties - - - - - - - -
Surplus/ (deficit) on account of revaluation of investments - - - - - (35,020,000) - - (35,020,000)
(shares & securities)
Currency translation differences - - - (2,077,725) - - - (2,077,725)
Net gain and losses not recognized in the income statement - - - - - - - - -
Net profit for the period - - - - - - 3,150,364,238 2,487 3,150,366,725

Islami Bank Bangladesh Limited

Transfer to (from) reserve - - - (190,902,736) - - 190,902,736 - -
Dividend: - - - - - - -

182
Bonus shares - - - - - - - - -
Cash dividend - - - - - - (2,414,986,002) - (2,414,986,002)
Issue of share capital - - - - - - - - -
Total shareholders equity as on 31 December 2015 16,099,906,680 1,989,633 16,099,906,680 232,377,360 11,498,971,320 46,480,000 3,312,951,535 62,947 47,292,646,155
Add: Mudaraba perpetual bond - - - - - - - 3,000,000,000
Add: General provision for unclassified investments and off- - - - 4,540,047,240 - - - - 4,540,047,240
balance sheet items (Note-2.1.3)

Annual Report 2015

Adjustment for currency translation differences - - - (4,314,759) - - - (4,314,759)
Less: Assets revaluation reserve (Note-2.1.3) - - - - (6,899,382,792) - - - (6,899,382,792)
Less: Revaluation reserve of securities (Note-2.1.3) - - - - (13,880,000) - - (13,880,000)
Total equity as on 31 December 2015 16,099,906,68 1,989,633 16,099,906,680 4,768,109,841 4,599,588,528 32,600,000 3,312,951,535 62,947 47,915,115,844

*Note : General / other reserves

Particulrs 01.01.2015 01.01.2014
General reserve 377,159,532 250,219,286
Dividend equalization account 32,000,000 32,000,000
Currency translation differences 6,392,484 1,317,771
Total 415,552,016 283,537,057
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Statement of Changes in Equity
For the year ended 31 December 2014
(Amount in Taka)
Assets Revaluation Non-
Share Statutory General/ other Retained
Particulars Paid-up capital revaluation reserve of controlling Total
premium reserve reserves * earnings
reserve securities interest
1 2 3 4 5 6 7 8 9 10(2+3+4+5+6+7+8+9)
Balance as at 01 January 2014 14,636,278,800 1,989,633 14,638,613,627 283,537,057 11,498,971,320 62,600,000 2,637,858,071 61,332 43,759,909,840
Changes in accounting policy restated balance - - - - - - - -
Surplus/ (deficit) on account of revaluation of properties - - - - - - - -
Surplus/ (deficit) on account of revaluation of investments (shares & securities) - - - - - 18,900,000 - - 18,900,000
Currency translation differences - - - 5,074,713 - - - 5,074,713
Net gain and losses not recognized in the income statement - - - - - - - - -
Net profit for the period - - - - - - 3,981,381,780 1,578 3,981,383,358
Transfer to reserve - - 1,461,293,053 136,746,051 - - (1,598,039,104) - -

Islami Bank Bangladesh Limited

Dividend: - - - - - - -
Bonus shares 1,463,627,880 - - - - - (1,463,627,880) - -
Cash dividend - - - - - - (1,170,902,304) (2,450) (1,170,904,754)

183
Issue of share capital - - - - - - - - -
Total shareholders equity as on 31 December 2014 16,099,906,680 1,989,633 16,099,906,680 425,357,821 11,498,971,320 81,500,000 2,386,670,563 60,460 46,594,363,157
Add: Mudaraba perpetual bond - - - - - - - - 3,000,000,000
Add: General provision for unclassified investments and off- balance sheet items - - - 4,753,680,000 - - - - 4,753,680,000
Adjustment for currency translation differences (6,392,484) - (6,392,484)
Less: 50.00% of assets revaluation reserve - - - - (5,749,485,660) - - - (5,749,485,660)
Less: 50.00% of revaluation reserve of securities - - - - - (40,750,000) (40,750,000)

Annual Report 2015

Total equity as on 31 December 2014 16,099,906,680 1,989,633 16,099,906,680 5,172,645,337 5,749,485,660 40,750,000 2,386,670,563 60,460 48,551,415,013

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016
 Islami Bank Bangladesh Limited
Balance Sheet
As at 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
Taka Taka

Property and Assets

Cash in hand 7.0 55,256,075,599 46,219,359,426

Cash in hand (including foreign currency) 7.1 8,625,861,188 7,696,844,549

Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 7.2 46,630,214,411 38,522,514,877

Balance with other banks & financial institutions 8.0 19,766,322,649 20,199,350,245

In Bangladesh 8(i) 18,096,699,633 17,790,027,698

Outside Bangladesh 8(ii) 1,669,623,016 2,409,322,547

Placement with banks & other financial institutions 9.0 3,000,000,000 2,000,000,000

Investments in shares & securities 10.0 99,436,769,339 100,856,528,896

Government 10.1 95,482,757,770 97,435,777,770

Others 10.2 3,954,011,569 3,420,751,126

Investments 11.0 530,194,502,716 463,475,467,466

General investments etc. 11.1 493,789,301,422 436,094,101,205

Bills purchased & discounted 11.2 36,405,201,294 27,381,366,261

Fixed assets including premises 12.0 15,836,479,066 15,926,361,916

Other assets 13.0 2,330,975,328 3,744,970,802

Non - banking assets - -

Total property and assets 725,821,124,697 652,422,038,751

Liabilities and Capital

Liabilities

Placement from banks & other financial institutions 14.0 17,766,330,139 7,657,500,743
Deposits & other accounts 15.0 615,359,210,035 560,696,300,836
Mudaraba savings deposits 15.1 211,543,849,041 183,128,708,639
Mudaraba term deposits 179,464,913,887 170,175,086,856
Other mudaraba deposits 15.2 162,098,214,256 149,346,325,824
Al- wadeeah current and other deposit accounts 15.3 57,160,947,306 54,396,285,416
Bills payable 15.4 5,091,285,545 3,649,894,101

Mudaraba perpetual bond 16.0 3,000,000,000 3,000,000,000

Other liabilities 17.0 42,185,241,832 34,052,027,094

Deferred tax liabilities 18.0 310,729,682 393,591,942

Total liabilities 678,621,511,688 605,799,420,615

Capital/ shareholders equity 47,199,613,009 46,622,618,136

Paid - up capital 19.0 16,099,906,680 16,099,906,680
Statutory reserve 21.0 16,099,906,680 16,099,906,680
Other reserves 22.0 11,779,818,313 12,007,818,774
Retained Earnings 40.0 3,219,981,336 2,414,986,002
Total liabilities & shareholders equity 725,821,124,697 652,422,038,751

184
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited
Balance Sheet
As at 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
Taka Taka

Off-balance sheet items

Contingent liabilities
Acceptances & endorsements - -
Letters of guarantee 23.0 10,629,688,357 8,839,985,590
Irrevocable letters of credit (including back to back bills) 115,229,781,408 99,102,373,685
Bills for collection 7,496,874,228 4,853,286,313
Other contingent liabilities 23,581,701 23,581,701

Total 133,379,925,694 112,819,227,289

Other commitments

Documentary credits, short term and trade related transactions - -

Forward assets purchased and forward deposits placed - -
Undrawn note issuance, revolving and underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total - -

Total off-balance sheet items including contingent liabilities 133,379,925,694 112,819,227,289

The annexed notes form an integral part of these financial statements.

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016

185
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited
Profit & Loss Account
For the year ended 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
Taka Taka
Operating income
Investment income 24.0 48,152,277,081 49,109,956,379
Profit paid on mudaraba deposits 25.0 (28,737,869,581) (30,650,270,621)
Net investment income 19,414,407,500 18,459,685,758

Income from investments in shares & securities 26.0 802,153,304 1,900,248,402

Commission, exchange & brokerage income 27.0 6,198,735,051 5,870,373,508
Other operating income 28.0 1,398,732,617 1,166,448,971
Total operating income 27,814,028,472 27,396,756,639

Operating expenses

Salary & allowances 29.0 8,867,141,438 8,183,199,841

Rent, taxes, insurances, electricity etc. 30.0 1,142,923,245 996,139,867
Legal expenses 31.0 44,189,468 16,206,043
Postage, stamps and telecommunication etc. 32.0 43,706,095 47,130,710
Stationery, printing and advertisement etc. 33.0 319,386,243 317,409,591
Chief executives salary & fees 34.0 8,400,000 8,400,000
Directors fees & expenses 35.0 12,203,292 12,787,017
Shariah supervisory committees fees & expenses 36.0 3,730,249 2,562,124
Auditors fees 37.0 2,415,000 2,229,118
Charges on investment losses - -
Depreciation and repair to banks assets 38.0 957,323,042 862,001,406
Zakat expenses 421,312,940 425,985,241
Other expenses 39.0 1,643,439,582 1,200,083,831
Total operating expenses 13,466,170,594 12,074,134,789
Profit/ (loss) before provision 14,347,857,878 15,322,621,850
Provision for investments & off- balance sheet exposures 17.1.4 5,393,314,666 4,670,784,729
Provision for diminution in value of investments in shares 17.2 294,339 3,074,883
Other provisions 17.4 99,232,276 117,049,502
Total provision 5,492,841,281 4,790,909,114

Total profit/(loss) before taxes 8,855,016,597 10,531,712,736

Provision for taxation for the period 5,825,937,997 6,518,687,630

Current tax 17.7.1 5,908,800,257 6,323,390,422

Deferred tax expense/(income) 18.0 (82,862,260) 195,297,208
Net profit/ (loss) after tax 3,029,078,600 4,013,025,106
Retained earnings from previous year 2,414,986,002 2,634,530,184
Add: Net profit after tax 3,029,078,600 4,013,025,106
Profit available for appropriation 5,444,064,602 6,647,555,290

Appropriation: 5,444,064,602 6,647,555,290

Statutory reserve 21.0 - 1,461,293,053
General reserve 22.1 (190,902,736) 136,746,051
Dividend 40.0 2,414,986,002 2,634,530,184
Retained earnings 40.0 3,219,981,336 2,414,986,002
Earnings per share (EPS) 42.0 1.88 2.49

The annexed notes form an integral part of these financial statements.

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016

186
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited
Cash Flow Statement
For the year ended 31 December 2015
2015 2014
Particulars Note
Taka Taka
Cash flows from operating activities
Investment income 48,048,634,941 49,004,594,914
Profit paid on mudaraba deposits (29,589,752,123) (31,780,202,641)
Income/ dividend receipt from investments in shares & securities 1,945,233,854 1,713,711,788
Fees & commission receipt in cash 6,198,735,051 5,870,373,508
Recovery from written off investments 39,909,335 39,350,296
Payments to employees (8,544,101,984) (8,085,706,689)
Cash payments to suppliers (326,195,623) (326,145,623)
Income tax paid (9,126,557,598) (5,597,112,182)
Receipts from other operating activities 1,682,627,845 1,166,448,971
Payments for other operating activities (2,276,437,791) (2,583,191,009)
(i) Operating profit before changes in operating assets 8,052,095,907 9,422,121,333

Changes in operating assets and liabilities

Increase/(decrease) of statutory deposits - -

(Increase)/decrease of net trading securities - -
(Increase)/decrease of placement to other banks - -
(Increase)/decrease of investments to customers (66,719,035,250) (60,280,662,489)
(Increase)/decrease of other assets 1,244,475,022 1,025,213,295
Increase/(decrease) of placement from other banks 10,108,829,396 7,657,500,743
Increase/(decrease) of deposits from other banks 153,938,891 (193,547,298)
Increase/(decrease) of deposits received from customers 54,508,970,308 87,748,893,103
Increase/(decrease) of other liabilities account of customers - -
Increase/(decrease) of trading liabilities - -
Increase/(decrease) of other liabilities 4,246,550,417 2,153,192,172
(ii) Cash flows from operating assets and liabilities 3,543,728,784 38,110,589,526
Net cash flows from operating activities (A)=(i+ii) 11,595,824,691 47,532,710,859

Cash flows from investing activities

Proceeds from sale of securities - -

Payment for purchase of securities/BGIIB 1,384,739,557 (33,626,229,928)
Placement to Islamic Refinance Fund Account (1,000,000,000) (2,000,000,000)
Payment for purchase of securities/membership - -
Purchase/sale of property, plants & equipments (959,811,944) (940,778,952)
Purchase/sale of subsidiaries - -
Net cash flows from investing activities (B) (575,072,387) (36,567,008,880)

Cash flows from financing activities

Receipts from issue of debt instruments - -

Payment for redemption of debt instruments - -
Receipts from issuing ordinary share/ rights share - -
Dividend paid in Cash (2,414,986,002) (1,170,902,304)
Net cash flows from financing activities (C) (2,414,986,002) (1,170,902,304)

Net increase/(decrease) in cash (A+B+C) 8,605,766,302 9,794,799,675

Add/(Less): effects of exchange rate changes on cash & cash equivalent (2,077,725) 5,074,713
Add: cash & cash equivalents at beginning of the year 66,418,709,671 56,618,835,283

Cash & cash equivalents at the end of the year 45.0 75,022,398,248 66,418,709,671
The annexed notes form an integral part of these financial statements.

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016

187
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited
Statement of Changes in Equity
For the year ended 31 December 2015
(Amount in Taka)
Revaluation
Share pre- General/ other Assets revalua- Retained
Particulars Paid-up capital Statutory reserve reserve of Total
mium reserves * tion reserve earnings
securities
1 2 3 4 5 6 7 8 9 (2+3+ 4+5+6+7+ 8)
Balance as at 01 January 2015 16,099,906,680 1,989,633 16,099,906,680 425,357,821 11,498,971,320 81,500,000 2,414,986,002 46,622,618,136
Changes in accounting policy restated balance
Surplus/ (deficit) on account of revaluation of properties - - - - - - -
Surplus/ (deficit) on account of revaluation of investments (shares & securities) - - - - - (35,020,000) - (35,020,000)
Currency translation differences - - - (2,077,725) - - - (2,077,725)
Net gain and losses not recognized in the income statement - - - - - - - -
Net profit for the period - - - - - 3,029,078,600 3,029,078,600
Transfer to (from) reserve - - - (190,902,736) - - 190,902,736 -

Islami Bank Bangladesh Limited

Dividend: -
Bonus shares - - - - - - - -

188
Cash dividend - - - - - - (2,414,986,002) (2,414,986,002)
Issue of share capital - - - - - - - -
Total shareholders equity as on 31 December 2015 16,099,906,680 1,989,633 16,099,906,680 232,377,360 11,498,971,320 46,480,000 3,219,981,336 47,199,613,009
Add: Mudaraba perpetual bond - - - - - - - 3,000,000,000
Add: General provision for unclassified investments and off- balance sheet
items (Note-2.1.3) - - - 4,563,295,624 - - - 4,563,295,624
Adjustment for currency translation differences - - - (4,314,759) - - - (4,314,759)

Annual Report 2015

Less: Assets revaluation reserve (Note-2.1.3) - - - - (6,899,382,792) - - (6,899,382,792)
Less: Revaluation reserve of securities (Note-2.1.3) - - - - - (13,880,000) - (13,880,000)
Total equity as on 31 December 2015 16,099,906,680 1,989,633 16,099,906,680 4,791,358,225 4,599,588,528 32,600,000 3,219,981,336 47,845,331,082

*Note : General / other reserves

Particulrs 01.01.2015 01.01.2014
General reserve 377,159,532 250,219,286
Dividend equalization account 32,000,000 32,000,000
Currency translation differences 6,392,484 1,317,771
Total 415,552,016 283,537,057
 Islami Bank Bangladesh Limited
Statement of Changes in Equity
For the year ended 31 December 2014
(Amount in Taka)
Revaluation
Share General/ other Assets revalua-
Particulars Paid-up capital Statutory reserve reserve of Retained earnings Total
premium reserves * tion reserve
securities
1 2 3 4 5 6 7 8 9 (2+3+ 4+5+6+7+ 8)
Balance as at 01 January 2014 14,636,278,800 1,989,633 14,638,613,627 283,537,057 11,498,971,320 62,600,000 2,634,530,184 43,756,520,621
Changes in accounting policy restated balance -
Surplus/ (deficit) on account of revaluation of properties - - - - - - -
Surplus/ (deficit) on account of revaluation of investments (shares & securities) - - - - - 18,900,000 - 18,900,000
Currency translation differences - - - 5,074,713 - - - 5,074,713
Net gain and losses not recognized in the income statement - - - - - - - -
Net profit for the period - - - - - 4,013,025,106 4,013,025,106
Transfer to reserve - - 1,461,293,053 136,746,051 - - (1,598,039,104) -

Islami Bank Bangladesh Limited

Dividend: -
Bonus shares 1,463,627,880 - - - - - (1,463,627,880) -

189
Cash dividend - - - - - - (1,170,902,304) (1,170,902,304)
Issue of share capital - - - - - - - -
Total shareholders equity as on 31 December 2014 16,099,906,680 1,989,633 16,099,906,680 425,357,821 11,498,971,320 81,500,000 2,414,986,002 46,622,618,136
Add: Mudaraba perpetual bond - - - - - - - 3,000,000,000
Add: General provision for unclassified investments and off- balance sheet items - - - 4,753,680,000 - - - 4,753,680,000
Adjustment for currency translation differences (6,392,484) (6,392,484)
Less: 50.00% of assets revaluation reserve - - - - (5,749,485,660) - - (5,749,485,660)

Annual Report 2015

Less: 50.00% of revaluation reserve of securities - - - - - (40,750,000) - (40,750,000)
Total equity as on 31 December 2014 16,099,906,680 1,989,633 16,099,906,680 5,172,645,337 5,749,485,660 40,750,000 2,414,986,002 48,579,669,992

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016
 Islami Bank Bangladesh Limited
Liquidity Statement
Assets & liabilities analysis
As at 31 December 2015
Particulars Up to 1 Month 1 - 3 Months 3 - 12 Months 1 - 5 years More than 5 years Total 31.12.2015 Total 31.12.2014
1 2 3 4 5 6 7=(2 + 3 + 4 + 5 + 6) 8
ASSETS
Cash in hand 11,690,714,736 - - - 43,565,360,863 55,256,075,599 46,219,359,426
Balance with other banks & financial institutions 13,471,322,649 6,125,000,000 170,000,000 - - 19,766,322,649 20,199,350,245
(Note-8.2)
Placement with Banks & other Financial Institutions - 3,000,000,000 - - - 3,000,000,000 2,000,000,000
Investments (in shares & securities) (Note-10.4) 39,338,915,569 47,860,000,000 8,450,000,000 700,000,000 3,087,853,770 99,436,769,339 100,856,528,896
General investments etc. (Note-11.1.1) 71,762,607,487 82,939,457,431 137,251,322,603 106,267,162,619 95,568,751,282 493,789,301,422 436,094,101,205
Bills purchased & discounted (Note-11.2.1) 9,450,946,060 12,690,491,610 14,263,763,624 - - 36,405,201,294 27,381,366,261
Fixed assets including premises (land & building), - - 740,411,968 2,617,898,904 12,478,168,194 15,836,479,066 15,926,361,916

Islami Bank Bangladesh Limited

furniture and fixtures (Note-12.3)
Other assets (Note-13.1) 192,736,905 1,044,334,650 572,451,812 348,686,845 172,765,116 2,330,975,328 3,744,970,802
Non - banking assets - - - - - - -

190
Total assets 145,907,243,406 153,659,283,691 161,447,950,008 109,933,748,368 154,872,899,225 725,821,124,697 652,422,038,751
LIABILITIES
Placement from banks & other financial institutions 14,363,362,996 869,506,935 2,533,460,208 - - 17,766,330,139 7,657,500,743
Deposits (Note-15.5) 109,919,107,672 125,666,183,243 144,689,435,299 105,399,714,284 129,684,769,537 615,359,210,035 560,696,300,836
Other accounts - - - - - - -
Provision & other liabilities (Note-17.9) 2,900,067,296 12,594,135,013 3,830,526,591 1,779,130,704 21,081,382,228 42,185,241,832 34,052,027,094

Annual Report 2015

Deferred tax liability/ (assets) - - - - 310,729,682 310,729,682 393,591,942
Mudaraba perpetual bond - - - - 3,000,000,000 3,000,000,000 3,000,000,000
Total liabilities 127,182,537,964 139,129,825,191 151,053,422,098 107,178,844,988 154,076,881,447 678,621,511,688 605,799,420,615
Net liquidity gap 18,724,705,442 14,529,458,501 10,394,527,910 2,754,903,380 796,017,778 47,199,613,009 46,622,618,136

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director
This is consolidated balance sheet referred to in our separate report of even date.

ziz Halim Khair Choudhury
A Syful Shamsul Alam & Co. Howladar Yunus & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
Dhaka
19 April, 2016
 Islami Bank Bangladesh Limited and its Subsidiaries
Notes to the consolidated financial statements
For the year ended 31 December 2015
1.0 The Bank and its activities

1.1 Islami Bank Bangladesh Limited (hereinafter referred to as the Bank or IBBL) was established as a Public Limited Banking
Company in Bangladesh in 1983 as the first Shariah based Scheduled Commercial Bank in the South East Asia. Naturally, its
modus operandi is substantially different from those of other conventional Commercial Banks. The Bank conducts its business
on the Shariah principles of Mudaraba, Musharaka, Bai-Murabaha, Bai-Muajjal, Hire Purchase under Shirkatul Melk, Bai-Salam
and Bai-as-Sarf etc. There is a Shariah Supervisory Committee in the Bank which ensures that the activities of the Bank are being
conducted on the precepts of Islam.
The shares of the Bank are listed with both Dhaka Stock Exchange (DSE) Limited and Chittagong Stock Exchange (CSE) Limited.
The Bank carries out its business activities through its Head Office in Dhaka, 14 Zonal Offices, 304 branches including 57
Authorised Dealer (AD) branches and 3 Off-shore Banking Units (OBUs) in Bangladesh. The Principal place of business is the
Registered Office of the Bank situated at Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh.
These financial statements as at and for the year ended 31 December 2015 include the consolidated and separate financial
statements of the Bank. The consolidated financial statements comprise the financial statements of the Bank and its subsidiaries
(mentioned in Note - 1.4, together referred to as the Companies).

1.2 Nature of business/principal activities of the Bank

1.2.1 Commercial banking services

All kinds of commercial banking services are provided by the Bank to the customers following the principles of Islamic Shariah,
the provisions of the Bank Company Act, 1991 as amended, Bangladesh Banks directives and directives of other regulatory
authorities.

1.2.2 Islamic micro-finance

Islamic micro-finance represents micro-finance and the Islamic finance industry. Under Islamic micro-finance, major focus is
given on improvement of living standard of poor people. The projects are closely monitored so that the members are really
benefited. IBBL provides this services under the umbrella of Rural Development Scheme (RDS) and Urban Poor Development
Scheme (UPDS).

1.2.3 Mobile financial services -mCash

IBBL has launched mobile financial services on 27 December 2012 under the name Islami Bank mCash as per Bangladesh
Bank approval (reference no. DCMPS/PSD/37/(W)/2012-321 dated 14 June 2012). Islami Bank mCash offers different services
through Mobile phone that include deposit and withdrawal of cash money, fund transfer from one account to another, receiving
remittance from abroad, knowing account balance and mini-statement, giving and receiving salary, mobile recharge and payment
of utility bill, merchant bill payment etc.

1.3 Off-shore banking unit (OBU)

Bangladesh Bank has approved the operation of Off-Shore Banking Unit (OBU) of Islami Bank Bangladesh Limited located
at Head Office Complex Branch- Dhaka, Uttara Branch- Dhaka and Agrabad Branch- Chittagong through letter no. BRPD (P-
3)744(111)/2010-1032 dated 28 March, 2010. The Bank commenced the operation of its Off-shore Banking Unit from 08.02.2011
at Head Office Complex Branch, Dhaka, and from 27.09.2011 at Agrabad Branch, Chittagong. Operations of OBU located at
Uttara Branch, Dhaka has not yet been started. Due to having different functional currency (Note 2.3), the operation of OBU
has been considered as foreign operation for reporting purposes and relevant financial reporting standards have been applied
accordingly (Note 3.2.2). The financial statements of the OBU are included in the separate financial statements of the Bank and
eventually in the consolidated financial statements. The sole financial statements of OBU are shown both in the currency in
which it operates (i.e. USD) and in the presentation currency of the Bank (i.e. BDT) in Annexure - E.

191
Islami Bank Bangladesh Limited Annual Report 2015
1.4 Subsidiaries of the Bank
1.4.1 Islami Bank Securities Limited (IBSL)

As per Bangladesh Securities and Exchange Commissions (BSEC) Letter No. SEC/Reg/CSE/MB/ 2009/444 dated 20.12.2009
and approval of Bangladesh Bank through Letter No. BRPD (R-1)717/2010-47 dated 07.02.2010; IBBL established a subsidiary
Company named Islami Bank Securities Limited to operate stock broker and stock dealer activities.
The share capital of Islami Bank Securities Ltd. is Tk. 2,700,000,000/- divided into 2,700,000 shares of Tk.1,000/ each out of
which share capital of IBBL is Tk.2,699,946,000/- divided into 2,699,946 shares of Tk.1,000/- each which represent 99.998% of
total share of the subsidiary Company.
IBSL was incorporated on 22.03.2010 and date of commencement of business was 23.05.2010. Required capital was transferred
to IBSL on 25.05.2010 which is operating business under the license issued by the Bangladesh Securities & Exchange Commission
(BSEC). As a stock broker, IBSL acts as an agent in the purchase and sale of Shariah approved listed securities and realizes
commission on transactions in accordance with approved commission schedule.

1.4.2 Islami Bank Capital Management Limited (IBCML)

As per Bangladesh Bank BRPD Circular No. 12 dated 14.10.2009 and approval of Bangladesh Bank through Letter No. BRPD
(R-1)717/2010-47 dated 07.02.2010, IBBL established another subsidiary Company named Islami Bank Capital Management
Limited to operate portfolio management, underwriting, issue management etc. IBCML was incorporated on 01.04.2010 and
required capital was transferred on 06.07.2010.
The share capital of Islami Bank Capital Management Ltd. is Tk.300,000,000/- divided into 300,000 shares of Tk.1,000/- each
out of which share capital of IBBL is Tk.299,993,000/- divided into 299,993 shares of Tk.1,000/- each which represent 99.998%
of total share of the subsidiary Company. Permission of Bangladesh Securities and Exchange Commission (BSEC) is yet to be
received for the core operation of IBCML.

1.4.3 IBBL Exchange Singapore Pte. Ltd.

IBBL Exchange Singapore Pte. Ltd. has been incorporated in Singapore, as a subsidiary of Islami Bank Bangladesh Limited
for remittance services and things incidental thereto under the Companies Act, CAP. 50 of the Republic of Singapore. Till 31
December 2015, no share capital of the subsidiary has been paid by its parent company i.e. Islami Bank Bangladesh Limited.
Therefore, the financial statements of IBBL Exchange Singapore Pte. Ltd. has not been consolidated with that of the parent i.e.
IBBL.

2.0 Basis of preparation

2.1 Statement of compliance

The Bank and its subsidiaries are being operated in strict compliance with the rules of Islamic Shariah. The consolidated
and separate financial statements of the Bank have been prepared basically as per provisions of the Guidelines for Islamic
Banking issued by Bangladesh Bank through BRPD Circular No. 15 dated 09.11.2009 with reference to the provisions of the
Bank Company Act, 1991 as amended and by Bangladesh Bank BRPD Circular No.14 dated 25.06.2003 & Bangladesh Banks
other circulars/instructions and in accordance with International Financial Reporting Standards (IFRSs) adopted as Bangladesh
Financial Reporting Standards (BFRSs) by the Institute of Chartered Accountants of Bangladesh (ICAB); the Companies Act,
1994; the Securities and Exchange Rules, 1987; Dhaka and Chittagong Stock Exchanges (Listing) Regulations, 2015, Financial
Reporting Act 2015 and other laws and rules applicable in Bangladesh and Standards issued by the Accounting and Auditing
Organization for Islamic Financial Institutions (AAOIFI), as a member of that organization.
In case the requirements of guidelines and circulars issued by Bangladesh Bank differ with those of other regulatory authorities
and financial reporting standards, the guidelines and circulars issued by Bangladesh Bank prevails. As such the Bank has
departed from those requirements of BFRSs in order to comply with the rules and regulations of Bangladesh Bank which are
disclosed below:

i) Provision on investments and off-balance sheet exposures

BFRS: As per BAS 39 Financial Instruments: Recognition and Measurement an entity should start the impairment assessment
by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial
assets that are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis.

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 Bangladesh Bank: As per BRPD circular No.14 dated 23 September 2012, BRPD circular No. 19 dated 27 December 2012, BRPD
circular No. 05 dated 29 May 2013 and BRPD circular No. 16 dated 18 November 2014 a general provision at 0.25% to 5% under
different categories of unclassified investments (good/standard investments) has to be maintained regardless of objective
evidence of impairment. Also provision for sub-standard, doubtful and bad & loss investments have to be provided at 20%, 50%
and 100% respectively (except short-term agricultural and micro-credits where 5% for sub-standard and doubtful investments
and 100% for bad & loss investments) depending on the duration of overdue. Again as per BRPD Circular No.14 dated 23
September 2012 and BRPD Circular No.19 dated 27 December 2012, a general provision at 1% is required to be provided for
all off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39 Financial
Instruments: Recognition and Measurement.

ii) Recognition of investment income in suspense

BFRS: Investment to customers are generally classified as loans and receivables as per BAS 39 Financial Instruments:
Recognition and Measurement and investment income is recognised through effective interest rate method over the term of
the investment. Once an investment is impaired, investment income is recognised in profit and loss account on the same basis
based on revised carrying amount.

Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once an investment is classified, investment income
on such investment are not allowed to be recognised as income, rather the corresponding amount needs to be credited to an
investment income in suspense account, which is presented as liability in the balance sheet.

iii) Investment in shares and securities

BFRS: As per requirements of BAS 39 Financial Instruments: Recognition and Measurement investment in shares and securities
generally falls either under at fair value through profit and loss account or under available for sale where any change in the
fair value (as measured in accordance with BFRS 13) at the year-end is taken to profit and loss account or revaluation reserve
respectively.

Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are
revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be
made for any loss arising from diminution in value of investment; otherwise investments are recognised at cost.

iv) Revaluation gains/losses on Government securities

BFRS: As per requirement of BAS 39 Financial Instruments: Recognition and Measurement where securities will fall under
the category of Held for Trading (HFT), any change in the fair value of held for trading assets is recognised through profit and
loss account. Securities designated as Held to Maturity (HTM) are measured at amortised cost method and interest income is
recognised through the profit and loss account.
Bangladesh Bank: HFT securities are revalued on the basis of mark to market and at year end any gains on revaluation of
securities which have not matured as at the balance sheet date are recognised in other reserves as a part of equity and any losses
on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account.
Profit on HFT securities including amortisation of discount are recognised in the profit and loss account. HTM securities which
have not matured as at the balance sheet date are amortised at the year end and gains or losses on amortisation are recognised
in other reserve as a part of equity.

v) Other comprehensive income

BFRS: As per BAS 1 Presentation of Financial Statements Other Comprehensive Income (OCI) is a component of financial
statements or the elements of OCI are to be included in a single Other Comprehensive Income statement.
Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks.
The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the
elements of Other Comprehensive Income allowed to be included in a single Other Comprehensive Income (OCI) Statement. As
such the Bank does not prepare the other comprehensive income statement. However, elements of OCI, if any, are shown in the
statements of changes in equity.

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vi) Financial instruments - presentation and disclosure

In several cases Bangladesh Bank guidelines categorise, recognise, measure and present financial instruments differently from
those prescribed in BAS 39 Financial Instruments: Recognition and Measurement. As such full disclosure and presentation
requirements of BFRS 7 Financial Instruments: Disclosures and BAS 32 Financial Instruments: Presentation cannot be made
in the financial statements.

vii) Financial guarantees

BFRS: As per BAS 39 Financial Instruments: Recognition and Measurement, financial guarantees are contracts that require
an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make
payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognised initially at
their fair value, and the initial fair value is amortised over the life of the financial guarantee. The financial guarantee liability is
subsequently carried at the higher of this amortised amount and the present value of any expected payment when a payment
under the guarantee has become probable. Financial guarantees are included within other liabilities.

Bangladesh Bank: As per BRPD 14 dated 25 June 2003, financial guarantees such as letter of credit, letter of guarantee will be
treated as off-balance sheet items. No liability is recognised for the guarantee except the cash margin.

viii) Balance with Bangladesh Bank: (Cash Reserve Requirement)

BFRS: Balance with Bangladesh Bank that are required to be kept as part of cash reserve requirement, should be treated as other
asset as it is not available for use in day to day operations as per BAS 7 Statement of Cash Flows.

Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents.

ix) Cash flow statement

BFRS: The Cash flow statement can be prepared using either the direct method or the indirect method. The presentation is
selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is
applied consistently.

Bangladesh Bank: As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, cash flow statement is to be
prepared following a mixture of direct and indirect methods.

x) Non-banking asset

BFRS: No indication of Non-banking asset is found in any BFRS.

Bangladesh Bank: As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, there must exist a face item
named Non-banking asset.

xi) Presentation of intangible asset

BFRS: An intangible asset must be identified and recognised, and the disclosure must be given as per BAS 38 Intangible Assets.
Bangladesh Bank: There is no regulation for intangible assets in BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November
2009.

xii) Off-balance sheet items

BFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement for disclosure of off-balance
sheet items on the face of the balance sheet.

Bangladesh Bank: As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, off balance sheet items (e.g.
Letter of credit, Letter of guarantee etc.) must be disclosed separately on the face of the balance sheet.

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 xiii) Investments net of provision

BFRS: Investments should be presented net of provision.

Bangladesh Bank: As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, provision on investments are
presented separately as liability and can not be netted off against investments.

xiv) Revenue

As per BAS 18 Revenue, revenue should be recognized on accrual basis but due to the unique nature of Islamic Banks, income
from investment under Mudaraba, Musharaka, Bai-Salam, Bai-as-Sarf and Ujarah modes is accounted for on realization basis as
per AAOIFI and Bangladesh Bank guidelines.

[Note 4 includes Compliance with Financial Reporting Standards as applicable in Bangladesh]

2.1.1 Authorization of the financial statements for issue

The consolidated financial statements and the separate financial statements of the Bank have been authorized for issue by the
Board of Directors on 19 April 2016.

2.1.2 Changes in accounting standards

No new International Financial Reporting Standards (IFRSs) have been adopted by The Institute of Chartered Accountants of
Bangladesh (ICAB) as Bangladesh Financial Reporting Standards (BFRSs) during the year that are effective for the first time for
the financial year 2015 that have a significant impact on the Companies and accordingly no new accounting standards have been
applied in preparing these financial statements.

2.1.3 Regulatory capital in line with Basel-III

Till December 2014, as per Revised Regulatory Capital Framework in line with Basel II, full amount of general provision for
unclassified investments and off-balance sheet items & 50% of the assets revaluation reserve and revaluation reserve of securities
were eligible as supplimentary capital. However, as per Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital
Framework for Banks in line with Basel-III), the amount of general provision for regulatory capital will be maximum 1.25% of
Risk Weighted Assets against Credit Risk and assets revaluation reserve and revaluation reserve of securities will gradually be
deducted in a transitional arrangement starting from January 2015 to December 2019 (20% each year). Accordingly regulatory
capital for the period has been calculated complying with all of these changes as per Revised Regulatory Capital Framework for
Banks in line with Basel-III.

2.1.4 Prior period adjustments

Prior period adjustments, if any, to be recognized retrospectively as per BAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors. Accordingly for the year 2014 an adjustment was made on deferred tax liabilities due to changes of Tax
base of Fixed Assets as well as mathmatical error while calculating carrying amount of Fixed assets.

Due to the above prior periods adjustment net deferred tax liabilities has been adjusted by Tk. 9,805,805/-and general reserve has
been increased by the same amount for the year 2014. Net profit after tax has been increased by Tk .13,966,499/- for the year
2014 and the effect in Earnings per Share (EPS) was of Tk.0.01 per share for the year 2014.

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following material items:
- Land is recognized at cost at the time of acquisition and subsequently measured at fair value following revaluation
model as per BAS 16 Property Plant & Equipment.
- Investments in quoted shares are revalued at the year end at market price as per Bangladesh Bank circular.

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2.3 Functional and presentation currency

The consolidated and separate financial statements of the Bank are presented in Bangladeshi Taka (Taka/Tk./BDT) which is the
functional currency of the Bank and its subsidiaries except Off-shore Banking Unit (OBU) where the functional currency is US
Dollar (USD).
All financial information presented in Taka has been rounded to the nearest integer, except otherwise indicated.

2.4 Use of estimates and judgments

The preparation of the consolidated and separate financial statements of the Bank in conformity with BFRSs require management
to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of
assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
prospectively i.e. in the period in which the estimate is revised and in any future period affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have
the most significant effect on the amounts recognized and presented in the consolidated and separate financial statements of
the Bank are included in following notes/statements:

a) Note 17.7 Current tax liabilities

b) Note 18.0 Deferred tax liabilities
c) Note 38.0 Depreciation
d) Note 17.1-17.4 Provisions for investments, diminution in value of investment in shares and other assets
e) Note 22.2 Asset revaluation reserve
f) Liquidity statement Assets & liabilities analysis

2.5 Cash flow statement

Cash Flow Statement is prepared in accordance with BAS 7 Statement of Cash Flows, and as per Guidelines for Islamic Banking
issued by Bangladesh Bank through BRPD Circular No. 15 dated 09.11.2009 and BRPD Circular No.14 dated 25.06.2003. The
Statement shows the structure of changes in cash and cash equivalents during the financial year.

2.6 Statement of changes in equity

Statement of Changes in Equity has been prepared in accordance with BAS 1 Presentation of Financial Statements, and as per
Guidelines for Islamic Banking issued by Bangladesh Bank through BRPD Circular No. 15 dated 09.11.2009 and BRPD Circular
No.14 dated 25.06.2003.

2.7 Liquidity statement

Liquidity Statement has been prepared in accordance with the residual/remaining maturity of Assets and Liabilities as on 31
December 2015 and as per Guidelines for Islamic Banking issued by Bangladesh Bank through BRPD Circular No. 15 dated
09.11.2009 and BRPD Circular No.14 dated 25.06.2003 as per the following basis:

i) Balance with other banks and financial institutions, etc are on the basis of their respective maturity term;
ii) Investments in shares & securities are on the basis of their respective maturity;
iii) General investments are on the basis of their recovery/repayment schedule;
iv) Fixed assets are on the basis of their useful lives;
v) Other assets are on the basis of their realization/amortization;
vi) Deposits and other accounts are on the basis of their maturity and payments;
vii) Provisions and other liabilities are on the basis of their adjustment/settlement;
viii) Due to perpetual in nature/maturity, Mudaraba perpetual bond (MPB) is reported under maturity more than 5 (five) years.

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2.8 Reporting period

These financial statements of the Bank and its subsidiaries cover one calendar year from 01 January 2015 to 31 December 2015.

3.0 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in the consolidated and separate
financial statements of the Bank (together referred to as financial statements) except provision for investment which have been
changed due to new circular issued by Bangladesh Bank (Note 3.16.1).
Certain comparative amounts in the financial statements have reclassified and rearranged to conform to the current years
presentation.

3.1 Basis of consolidation

3.1.1 Subsidiaries

Subsidiaries are investees controlled by the Parent. The Parent controls an investee if it is exposed to, or has rights to, variable
returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The
financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases.

3.1.2 Transactions eliminated on consolidation

Inter-company balances and transactions, and any unrealized income and expenses (except for foreign currency transaction gains
and losses) arising from inter-company transactions are eliminated in preparing consolidated financial statements. Unrealized
losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
The investments in shares of subsidiaries held by the Bank in the separate financial statements are eliminated against the
corresponding share capital of subsidiaries in the consolidated financial statements.

3.2 Foreign currency

3.2.1 Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies (Bangladeshi Taka in case of IBBL
Main Operations and US Dollar in case of OBU) at the spot exchange rates ruling at the date of transactions as per BAS 21
The Effects of Changes in Foreign Exchange Rates. Monetary assets and liabilities held in US Dollar at the reporting date are
retranslated into the functional currency in BDT at the weighted average revaluation rate of inter-bank market as determined
by Bangladesh Bank. Monetary assets and liabilities denominated in other foreign currencies at the reporting date are first
translated into US Dollar at buying rates of New York closing of the previous day and then retranslated from US Dollar into the
functional currencies in the same manner specified above.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency
that are measured based on historical cost are translated using the exchange rate at the date of the transaction.
Foreign exchange differences (rates at which transactions were initially recorded and the rate prevailing on the reporting date/
date of settlements) of the monetary items are recognized in the profit and loss.

3.2.2 Foreign operations

The assets and liabilities of foreign operations (Note - 1.3) are translated to Bangladeshi Taka at spot exchange rates prevailing at
the reporting date. The income and expenses of foreign operations are translated at spot exchange rates at the date of transactions
as long as practicable otherwise average rate of exchange has been used. Foreign currency differences arising on translation are
recognized in other comprehensive income and presented directly in the foreign currency translation reserve (translation reserve)
in equity. If the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the
foreseeable future, then foreign currency differences arising on the item form part of the net investment in the foreign operation
and are recognized in other comprehensive income and accumulated in the translation reserve within equity.

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3.3 Revenue
3.3.1 Investment income

Income from general investments is accounted for on accrual basis except for investments under Musharaka, Mudaraba, Bai-
Salam, Bai-as-Sarf and Ujarah (Khidmah Card) modes of Investment where the investment income is accounted for on realization
basis. The Bank does not charge any rent during the gestation period of investment against Hire Purchase under Shirkatul Melk
(HPSM) mode of investment but it fixes the sale price of the assets at a higher level in such a way to cover its expected rate of
return. Such income is recognized on realization basis.

Profit/Rent/Compensation accrued on Classified Investments are suspended and accounted for as per circulars issued by
Bangladesh Bank in this regard from time to time. At the time of recovery or regularization of those investments the related
income which was suspended and shown as a liability is taken as investment income as per circulars issued by Bangladesh
Bank. As a result, all the transferred amount to investment income from suspense during the year has already been included in
the investment income of the Bank.

Profit on deposits with other banks & financial institutions is accounted for on accrual basis.

3.3.1.1 Sharing of investment income

In case of investment, Mudaraba fund gets preference over cost free fund. The investment income earned through deployment
of Mudaraba Fund is shared by the Bank and the Mudaraba depositors at the pre-agreed ratio.

3.3.2 Income from investment in Bangladesh Government Islamic Investment Bond (BGIIB) & Islamic Inter-bank Fund Market (IIFM)

Profit from investment in Bangladesh Government Islamic Investment Bond (BGIIB) & Islamic Inter-bank Fund Market (IIFM) is
accounted for on accrual basis.

3.3.3 Fees, commission and exchange income

Fees, Commission and Exchange Income on services provided by the Bank are recognized as and when the related services
are rendered. Commission charged to customers on letter of credit and letter of guarantee are credited to Income at the time of
effecting the transactions.

3.3.4 Dividend income

Dividend income from investments is accounted for when the right to receive income is established.

3.4 Income tax expenses

Income tax expenses comprise current and deferred taxes. Income taxes are recognized in profit or loss except to the extent that
it relates to items recognized directly in equity, in which case it is recognized in equity.

3.4.1 Current tax

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at
the reporting date and any adjustment to the tax payable in respect of previous years. Provision for current income tax has been
made on taxable income of the Bank as per following rates:

Type of income 2015 2014

Business income 40.00% 42.50%

Dividend income 20.00% 20.00%

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3.4.2 Deferred tax

Deferred tax is recognized in compliance with BAS 12 Income Taxes and BRPD Circular no. 11 dated 12 December 2011,
providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the date of balance sheet.
Deferred tax assets and liabilities are offset as there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the
deductible temporary difference can be utilized. Deferred tax assets are reviewed at each date of balance sheet and are reduced
to the extent that it is no longer probable that the related tax benefit will be realized.

3.5 Zakat

Zakat is paid by the Bank at the rate of 2.58% (instead of 2.50% as the Bank maintains its financial statements following
Gregorian Year) and calculated on the closing balances of Share Premium, Statutory Reserve, General Reserve and Dividend
Equalization Accounts.

Zakat is charged in the Profit & Loss Account of the Bank as per Guidelines for Islamic Banking issued by Bangladesh Bank
through BRPD Circular No. 15 dated 09.11.2009.

Zakat on Paid up Capital and Deposits is not paid by the Bank, since it is the responsibility of the Shareholders and Depositors
respectively.

3.5.1 Management and other expenses

Expenses incurred by the Bank are recognized on accrual basis.

3.6 Cash and cash equivalents

Cash and cash equivalents include notes and coins in hand, balances held with Bangladesh Bank and its agent bank and highly
liquid financial assets that are subject to an insignificant risk of changes in their fair value.

3.7 Investments

Investments are stated in the Balance Sheet net off profit receivable and unearned income.
Profit Receivable the amount of unexpired portion of profit charged on murabaha investment at the time of sale of good/
services to customer/ client.
Unearned Income- the amount of unrealized portion of profit/ value addition of fixed assets under Hire Purchase Under Shirkatul
Melk (HPSM) investment for gestation period.
However, provision for investments are not net-off with investments.

3.8 Investment in shares and securities

Investment in shares and securities (other than government treasury securities) are initially measured at fair value (which is
actually the cost) and subsequently accounted for depending on their classification as either held to maturity, fair value through
profit or loss, or available for sale.

Investment in Bangladesh Government Islamic Investment Bond (BGIIB) is measured both initially and subsequently at cost,
which is also the fair value.

IBBL can not invest in interest-based government securities like T-bond, T-bill etc. So the instructions and circulars related to
accounting for those instruments are not applicable for the Bank.

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3.8.1 Held to Maturity (HTM)

Held-to-maturity investments are non-derivative assets with fixed or determinable payments and fixed maturity that the entity
has the positive intent and ability to hold to maturity, and which are not designated as at fair value through profit or loss or as
available for sale. These are measured at amortized cost at each year end by taking into account any discount or premium on
acquisition. Any increase or decrease in value of such investments is recognized in equity.

3.8.2 Held for Trading (HFT)/Fair value through profit or loss (FVTPL)

Some investment in shares and securities are designated at fair value, with fair value changes recognized immediately in profit
or loss.

3.8.3 Available-for-sale (AFS)

Available-for-sale investments are non-derivative investments that are designated as available-for-sale or are not classified
as another category of financial assets. Available-for-sale investments comprise generally equity securities. Unquoted equity
securities whose fair value cannot reliably be measured are carried at cost. All other available-for-sale investments are carried at
fair value and changes recognized in equity.
Dividend income is recognized in profit or loss when the right to receive income is established. Other fair value changes, other
than impairment losses are presented as reserve in equity.

3.8.4 Derivative investments

The Bank has no investments in any derivative instruments.

3.9 Investment in subsidiaries

Investments in subsidiaries are accounted for under cost method of accounting in the Banks Financial Statements in accordance
with BFRS 10Consolidated Financial Statements.

3.10 Fixed assets

3.10.1 Recognition and measurement

Items of fixed assets excluding land and building are measured at cost less accumulated depreciation and accumulated
impairment losses. Land and building is recognized at cost at the time of acquisition and subsequently measured at revalued
amounts which is the fair value at the time of revaluation done by independent valuer and any surplus on revaluation is shown
as equity component until the disposal of asset, as per BAS 16 Property, Plant & Equipment and Bangladesh Bank BCD Circular
Letter No. 12 & 18 dated 20 April 1993 & 15 June 1993 respectively and BRPD Circular No.10 dated 25 November 2002 &
BRPD Circular No.09 dated 31 December 2008. Deficit arising on subsequent revaluation is adjusted against the balance in the
Revaluation reserve account. Revaluation is carried out with sufficient regularity to ensure that the carrying amount of assets
does not differ materially from their fair value.

Cost includes expenditures that are directly attributable to the acquisition of assets. The cost of self-constructed assets includes
the following:
- the cost of materials and direct labour;
- any other cost directly attributable to bringing the asset to a working condition for the intended use;
- when the Companies have an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and
removing the items and restoring the site on which they are located; and
- capitalized borrowing costs.
Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment.
Any gain or loss on disposal of an item of fixed assets (calculated as the difference between the net proceeds from disposal and
the carrying amount of the item) is recognized in profit or loss.

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3.10.2 Subsequent costs

Subsequent costs is capitalized only when it is probable that the future economic benefits associated with the costs will flow to
the entity. Ongoing repairs and maintenance is expensed as incurred.

3.10.3 Depreciation

Items of fixed assets are depreciated from the date that they are installed and are ready for use, and in respect of internally
constructed assets, from the date that the asset is completed and ready for use.
Depreciation is calculated to write-off the cost/revalued amount of items of fixed assets less their estimated residual values
using either of straight-line (SLM) or reducing balance method (RBM) over their estimated useful lives and recognized in profit
and loss. Land is not depreciated.
The estimated rate of depreciation for the current and comparative years of fixed assets are as follows:

Items Method Rates

Building Reducing balance 2.50%
Furniture and fixtures -Do- 10.00%
Mechanical appliances -Do- 20.00%
Books -Do- 30.00%
Motor vehicles Straight-line 20.00%
Computers -Do- 25.00%

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

3.10.4 Intangible assets

An intangible asset is recognized if it is probable that the future economic benefits that are attributable to the asset will flow to
the entity and the cost of the assets can be measured reliably. Intangible assets is amortized using the straight line method over
the estimated useful life of 4 (four) years.

3.10.5 Capital work in progress

Fixed assets that is being under construction/acquisition is accounted for as capital work in progress until construction/
acquisition is completed and measured at cost. The work in progress is transferred to cost of that fixed assets when the
construction is completed and it becomes available for use.

3.10.6 Derecognition

An item of fixed assets is derecognized upon disposal or when no economic benefits are expected from its use or disposal. Any
gain or loss arising on derecognition of the asset is recognized in profit or loss.

3.11 Lease payments

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease.

3.12 Other assets

Other assets include all other financial assets, other income receivable, advance against expenses etc.

3.13 Non-banking assets

Non-banking assets are acquired on account of the failure of a client to repay the investment in time after receiving the decree
from the court regarding the right and title of the mortgaged property.

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3.14 Impairment of non-financial assets

The carrying amounts of the non-financial assets, other than investment property and deferred tax assets, if any are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable
amount is estimated. An impairment loss is recognized if the carrying amount of an asset or cash-generating unit (CGU) exceeds its
recoverable amount. All intangible assets having infinite useful life, if any are tested for impairment at least annually.

3.15 Deposits and other accounts

Deposit and other accounts include Al Wadeeah current deposit as well as savings, term and other Mudaraba deposits. Deposits
by customers and banks are recognized when the Bank enters into contractual agreements with the counterparties. These items
are brought to Financial Statements at the gross value of the outstanding balance.

3.15.1 Profit paid on deposits

As per Mudaraba principle, agreement between the Mudaraba depositors and the Bank, the Mudaraba depositors are entitled to
get minimum 65% of the investment income earned through deployment of Mudaraba Fund as per weightage assigned to each
type of Mudaraba deposit. In the year 2015, IBBL paid 68.82% of Investment Income earned through deployment of Mudaraba
Fund. In some Mudaraba Deposits, additional rate was allowed over the rate derived as per weightage. Mudaraba Depositors do
not share any income derived from various banking services where the their fund is not involved and any income derived from
Investing Banks Equity and other Cost Free Fund. Al-Wadeeah Depositors do not share any income of the Bank.
Profit is paid/provided to Mudaraba Deposit accounts at provisional rate on half-yearly/yearly/anniversary basis considering
overall projected growth, performance and profitability of the Bank during the year. Final Rates of profit of any accounting year are
declared after finalization of Shariah Inspection report and certifying the Investment Income of the Bank by the statutory auditors.

3.16 Provisions

Provision is recognized if, as a result of a past event, the Companies has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits would be required to settle the obligation, in
accordance with the BAS 37 Provisions, Contingent Liabilities and Contingent Assets.

3.16.1 Provision for investments and off-balance sheet exposures

Provision for Investment for the year 2015 and 2014 is made as per instruction of Bangladesh Bank through BRPD Circular No.14
dated 23 September 2012 and BRPD Circular No.19 dated 27 December 2012 and amendmends thereto . Investments have not
been classified against which order staying classification has been issued by the Honble High Court.
Provision for off-balance sheet exposures for the year 2015 and 2014 is also made as per latest instruction of Bangladesh Bank
through BRPD Circular No.14 dated 23 September 2012 and BRPD Circular No.19 dated 27 December 2012.
The rates of provision for the year 2015 and 2014 are given below:

2015 2014

Particulars Classification/Percentage (%) of provision requirement

UC SMA SS DF BL UC SMA SS DF BL

Small and Medium Enterprise (SME) Financing 0.25% 0.25% 20% 50% 100% 0.25% 0.25% 20% 50% 100%

Investment for House Building & Professional 2% 2% 20% 50% 100% 2% 2% 20% 50% 100%
Consumer
Other than House Building & Professional 5% 5% 20% 50% 100% 5% 5% 20% 50% 100%

All Other (Except Short-term Agricultural and Micro-Credits) 1% 1% 20% 50% 100% 1% 1% 20% 50% 100%

Short-term Agricultural and Micro-Credits 2.50% 5% 100% 2.50% 5% 100%

Investment to Stock Dealers & Stock Broker 2% 20% 50% 100% 2% 20% 50% 100%

Off Balance Sheet exposures 1% 1%

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3.16.2 Provision for other assets

Provision for other assets is made as per instruction of Bangladesh Bank through BRPD circular No.14 dated 25.06.2001.

3.16.3 Provision for nostro accounts

Provision for nostro accounts is to be made on the unreconciled debit balance of nostro account over more than 3 months as on
the reporting date in accordance with the guideline of Foreign Exchange Policy Department of Bangladesh Bank, FEPD Circular
no. FEPD (FEMO) / 01/2005-677 dated 13 September 2005. There was no unreconciled entries outstanding for more than 3
months and accordingly no provision has been made in this regard.

3.17 Employee benefits

The Bank provides various long-term and short-term benefits to the employees under different schemes.

3.17.1 Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions to a separate entity
and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plan are
recognized as personnel expense in profit or loss in the periods during which related services are rendered by employees. The
Bank maintains one funded defined contribution plan for its employees - Provident fund.

3.17.1.1 Provident fund

The Provident Fund is for the regular and confirmed employees who works for a minimum period of 5(five) years at IBBL and
it came into force with effect from 1st day of March 1986. The fund receives contributions @ 10% of the basic pay both from
employees and employer.

3.17.2 Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Banks net obligation in
respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior periods. The Bank has two funded defined benefit plans - Gratuity
fund and Superannuation fund.

3.17.2.1 Gratuity fund

The Gratuity Fund for the regular and confirmed employees of IBBL was established on 1st day of March 1986. The employees
who serve at least 7 (seven) years at IBBL are normally entitled to get gratuity equivalent to 1(one) months basic pay. Employees
served for minimum 12 years get 1.5 (one and a half) months basic pay and employees served for 20 years get 2 (two) months
basic pay. Adequate contributions have been made as per the recommendation of actuarial valuation report and our analysis
during the year. Actuarial valuation of the gratuity fund was conducted up to the year 2015 by professional actuary which shows
sufficient amount of surplus fund available at the valuation date.

3.17.2.2 Superannuation fund

The Fund came into force with effect from the 19 June, 2008. It was established for financial help to the members of the IBBL
Employees Superannuation Fund and their families in case of retirement, death, physical disability of employee while in service
or of any incidence of like nature acceptable to the Board of Trustees and retirement from the service. Actuarial valuation of the
superannuation fund was conducted up to the year 2015 by professional actuary which shows sufficient amount of surplus fund
available at the valuation date.

3.17.3 Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognized for the amount expected to be paid if the Companies has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

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3.17.4 Other employee benefits

Other employee benefits include which are not included in short-term employee benefits, post-employment benefits and other
termination benefits.

3.17.4.1 Benevolent fund

The Benevolent Fund for the regular and confirmed employees of the Bank was established in the year 1986. This Fund is mainly
used for payment of scholarship to the meritorious students among the children of IBBLs officers and sub-staff, to allow short
term quard/grant to meet some unexpected and specific needs of the staff of IBBL like accident, clinical treatment, marriage
ceremony of the employees and their dependents etc. The Bank contributed Tk.10.00 million to the fund during the year 2015 .

3.17.5 Workers Profit Participation Fund (WPPF)

As per Bangladesh Labour Act, 2006 as amended in 2013 all companies fall within the scope of WPPF (which includes Bank) are
required to provide 5% of its profit before charging such expense to their eligible employees within the stipulated time. The Bank
obtained opinion from its legal advisor regarding this issue which stated that the Bank is not required to make provision for WPPF
as the provision of Bangladesh Labour Act 2006 as amended contradicts with that of the Bank Company Act 1991. As such the
Bank did not make any provision during the year for WPPF.

3.18 Share capital and reserves

3.18.1 Capital

3.18.1.1 Authorized Capital

Authorized Capital is the maximum amount of share capital that the Bank is authorized to raise as per its Memorandum and
Articles of Association.

3.18.1.2 Paid-up Capital

Paid-up Capital represents total amount of shareholders capital that has been paid in full by the shareholders. Shareholders are
entitled to receive dividend as approved from time to time in the Annual General Meeting.

3.18.2 Share Premium

Share premium arose from sale of some un-subscribed Right Share for the year 1996 at above the par value and can be utilized
as per section 57 of the Companies Act, 1994.

3.18.3 Statutory reserve

As per section 24 of the Bank Company Act, 1991 as amended, at least 20% of the net profit before tax is transferred to statutory
reserve every year untill the balance of the reserve equates with the paid-up capital.

3.18.4 Assets revaluation reserve

This represents the difference between the book value and the re-valued amount of premises (Land and Building) of the Bank
as assessed by professional valuers in the year 2000, 2002, 2003, 2004, 2005, 2006, 2009 and 2012 as per guideline issued by
Bangladesh Bank, which was reviewed by the statutory auditors. This reserve is not distributable. To calculate Capital Adequacy
Ratio (CAR), 50% of the same was considered as a component of supplementary capital as per Bangladesh Bank BRPD Circular
No. 24 dated 03 August 2010 upto 2014. However, as per BRPD circular 18 dated December 21, 2014, the revaluation reserve for
fixed assets will gradually be deducted from Tier-2 capital with a phase in manner starting from 2015. Accordingly, 20% of the
revaluation reserve that qualified for Tier-2 capital has been deducted while calculating eligible capital.

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3.18.5 Revaluation reserve of securities

Investment in shares of Bangladesh Shipping Corporation is held for fulfillment of Statutory Liquidity Reserve (SLR) as per
Bangladesh Bank Letter No. BCD (P)744(23)(II)/1030 dated 08.11.1983, BRPD Circular No.15 dated 31.10.2005, DOS Circular
Letter No.10 dated 11.09.2006, BRPD Circular No.03 dated 12.03.2008 and DOS Circular Letter No.05 dated 26.05.2008. The
shares have been revalued as on 30.12.2015 on the basis of closing market price of Dhaka Stock Exchange Limited (DSE).
The surplus is credited to Revaluation Reserve on securities account (Note - 3.8.3) and 50% of the same has been taken as a
component of Supplementary Capital as per Bangladesh Bank BRPD Circular No. 24 dated 03 August 2010. and shown in the
Statement of Changes in Equity as per Bangladesh Bank guidelines upto 2014. As per BRPD circular 18 dated December 21,
2014, the revaluation reserve for securities has been deducted @20% in 2015 while calculating eligible capital.

3.18.6 Non-controlling interest

Non-controlling interest is the portion of the profit or loss and net assets of the subsidiaries of IBBL (Islami Bank Securities
Limited & Islami Bank Capital Management Limited) that is not owned by the Parent (IBBL). Non-controlling interest belongs
to other investors and is reported on the consolidated balance sheet of the parent Company (IBBL) to reflect the claim
onassetsbelonging to other, non-controlling shareholders. Also, non-controlling interest is reported on the consolidatedprofit
and loss accountas a share of profit belonging to non-controlling shareholders.

3.19 Subordinated debt-Mudaraba Perpetual Bond (MPB)

Mudaraba Perpetual Bond (MPB) was issued by the Bank under the mudaraba principles of Islamic Shariah as per approval
of Bangladesh Bank Letter No. BRPD (P-1)661/14(a)/2006-1437 dated 07.05.2006 and Bangladesh Securities and Exchange
Commission Letter No. SEC/CI/CPLC-118/2006/385 & SEC/CI/RPO-01/2007/386 both dated 10.06.2007. The Investment
Corporation of Bangladesh (ICB) is the Trustee of the MPB. The MPB is listed with Dhaka Stock Exchange Ltd. & Chittagong
Stock Exchange Ltd. and trading of the same started from 25 November 2007. It is treated as a component of Additional Tier-I
Capital (AT-I). The instrument having face value of Tk.1,000 each is subordinated to the claims of other creditors and depositors.
In the case of liquidation the subordinated debt holders would be paid just before paying to the shareholders assuming there are
assets to distribute after all other liabilities and debts have been paid. The Mudaraba Perpetual Bond (MPB) is perpetual in nature
i.e. infinite maturity. Profit paid against Mudaraba Perpetual Bond is at the final profit rate of 8 (eight) years Mudaraba Savings
Bond and an additional amount equivalent to 10.00% of the rate of dividend declared for the respective year.

3.20 Other liabilities

Other liabilities comprise items such as provision for investment, provision for taxes, profit/rent suspense, accrued expenses,
etc. Other liabilities are recognized in the balance sheet as per guidelines of Bangladesh Bank, Bangladesh Financial Reporting
Standards (BFRS) etc.

3.21 Contingent liabilities

Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly within the control of the Bank; or
Any present obligation that arises from past events but is not recognized because, it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, is considered as contingent liability.
Contingent liabilities are not recognized but disclosed in the financial statements unless possibility of an outflow of resources
embodying economic benefits is reliably estimated. Contingent assets are not recognized in the financial statements as this may
result in the recognition of income which may never be realized.

3.22 Off-balance sheet items

Off-balance sheet items are disclosed under Contingent liabilities & other commitments and required provision on Off-balance
sheet exposures have been made in accordance with Bangladesh Bank guidelines (Note 3.16.1).

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3.23 Earnings per share (EPS)

The Bank presents basic and diluted (when dilution is applicable) earnings per share (EPS) for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank with the weighted average number of
ordinary shares outstanding during the period, adjusted for the effect of change in number of shares for bonus issue, share split
and reverse split. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding, for the effects of all dilutive potential ordinary shares. However, dilution of EPS
is not applicable for these financial statements as there was no dilutive potential ordinary shares during the relevant periods.
Hence no Diluted EPS has been calculated. Consolidated basic EPS has also been calculated and presented in the same manner.

3.24 Segment reporting

An operating segment is a component of the Bank that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Banks other components. All operating
segments operating results are reviewed regularly by the Banks Management (as being the chief operating decision maker) to
make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial
information is available.
Segment results that are reported to the Management include items directly attributable to a segment as well as the items that
can be allocated on a reasonable basis. Segments which are reportable is analyzed at the end of the financial year. Comparative
information is provided for newly reportable segments but no current year information is provided for segments which are non-
reportable in current year even it was reportable in previous year as per BFRS 8 Operating Segments.
Details about segment reporting has been given at Annexure - D

3.25 Off-setting

The value of any asset or liability as shown in the balance sheet is not off-set by way of deduction from another liability or assets
unless there exist legal right thereof. Financial assets and financial liabilities are offset and the net amount is presented in the
balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a
net basis, or realize the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when
permitted under BFRS, or for gains or losses arising from a similar transactions.

3.26 Materiality and aggregation

Each material class of similar items is presented separately in the financial statements. Items of dissimilar nature or function are
presented separately unless they are immaterial as permitted by BAS 1 Presentation of Financial Statements.

3.27 Inter-branch transactions

Transactions with regard to inter-branches and units are reconciled regularly and efforts are taken to minimize the unreconciled
entries at the end of the year.

3.28 Revenue, gains, expenses & losses prohibited by Shariah

Doubtful income which is prohibited by Shariah due to lapses in compliance of Shariah principles for investment as per Shariah
Supervisory Committee report is included in the investment income of the Bank and appropriate amount of corporate tax is
provided on it accordingly on these whole amount whether realized or not. It is not distributed to either depositors or shareholders
of the Bank rather the amount net of corporate tax is transferred to an account titled Doubtful income account under other
liabilities of the Bank (Note-17.3.2). Only realized amount of doubtful income (on which corporate tax has already been paid due
to inclusion in investment income) is then expended for charitable purposes.
Bank charges compensation on overdue investments under Bai-modes. The amount of compensation is not included in
investment income rather kept separately under other liabilities (Note-17.5). However, tax on these amount has duly been
considered. Realized amount of compensation (on which corporate tax has already been provided due to inclusion in investment
income) are expended for charitable purposes.
Interest received from the balances held with foreign banks and from foreign currency clearing account with Bangladesh Bank
are not credited to income, since it is not permissible as per Shariah. These are expended for charitable purposes after payment
of corporate income tax thereon.

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3.28.1 Doubtful income account

From the year 2014, the Bank has decided to introduce a separate account after providing corporate income tax. Accordingly,
net of corporate tax amount of doubtful income has been transferred to doubtful income account as a charge in profit & loss
account under other provisions (Note 17.3.2).

3.29 Dividend payments

Final dividend is recognized when it is approved by the shareholders in Annual General Meeting (AGM). The proposed dividend for
the year 2015, therefore, has not been recognized as a liability however disclosed in the balance sheet in accordance with BAS
10 Events after the Reporting Period. Dividend payable to the Banks shareholders is recognized as a liability and deducted from
the shareholders equity in the period in which the shareholders right to receive the dividend is established.

3.30 Events after the reporting period

All material events after the reporting period that provide additional information about the Companies/Banks position at the
balance sheet date are reflected in the financial statements as per BAS 10 Events after the Reporting Period. Events after the
reporting period that are not adjusting events are disclosed in the notes when material (Note - 41).

3.31 Risk management

The Bank Company Act, 1991 as amended and the Bangladesh Bank Regulations require the Management to ensure effective
internal audit, internal control and risk management functions of the Bank. The Management is also required to make a self-
assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and
forgeries.
Department of Off-site Supervision (DOS) of Bangladesh Bank issued Circular No.-02 dated 15 February 2012 on Risk Management
Guidelines for Banks and instructed all scheduled banks operating in Bangladesh to follow this Guidelines for managing various
risks which have been complied by the Bank.
In addition, the Bank is also following relevant Bangladesh Bank guidelines on risk based capital adequacy, supervisory review
process, stress testing and managing the banking risks in other core risk areas.
The risk of a bank is defined as the possibility of losses, financial or otherwise. The Risk Management of the Bank covers 6
(six) Core Risk Areas of Banking industry i.e. Investment (Credit) Risk , Foreign Exchange Risk, Asset-Liability Management,
Prevention of Money Laundering, Internal Control & Compliance Risk and Information & Communication Technology Risk. The
risk management procedures in the core risk areas have been devised in line with the core risk management guidelines of
Bangladesh Bank. All the Risk Management Guidelines are periodically reviewed by the Bank and Bangladesh Bank periodically
inspects the implementation status of these guidelines and as per the reports of Bangladesh Bank, IBBL is well compliant in Core
Risk Management activities.
In line with instruction of Bangladesh Bank, IBBL formed a Risk Management Wing (RMW) to formulate risk assessment and
management policies, methodologies, guidelines and procedures for risk identification, risk measurement, risk monitoring,
deciding acceptable level of risk and risk controlling. Risk management function involves identification, assessing, taking
mitigating steps, preparing Risk Management Paper (RMP), conducting monthly risk management meeting, stress testing and
reporting the competent authority from time to time. It also reports to Bangladesh Bank on quarterly basis along with the RMP,
minutes of the monthly meeting and all other required supporting papers. Moreover, in compliance with the Bank Company
Act 1991 as amended, Section 15 (Kha) and BRPD Circular No. 11 dated 27 October, 2013 of Bangladesh Bank, the Bank has
constituted a Risk Management Committee comprising of 5 (five) directors from the Board to formulate risk management
policies, procedures and oversee the risk management activities of the Bank.
The prime objective of the Risk Management is that the Bank takes well calculative Business Risk Policy for safeguarding the
Banks capital, its financial resources and profitability from various risks. In this context, the Bank implemented all the guidelines
of Bangladesh Bank as under:

3.31.1 Internal Control and Compliance

Operational loss may arise from errors and frauds due to lack of internal control and compliance. With a view to overcome such
lapses and verification of asset quality, ensure quality of customer service, overall security arrangement, operational efficiency
and compliance of regulatory issues as guided through different circulars, manuals from Head Office and other regulatory
bodies. Bank organizes its management through Internal Control & Compliance Wing (ICCW) which consists of three Divisions
namely (1) Audit & Inspection Division, (2) Compliance Division and (3) Monitoring Division.

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 (1) Audit & Inspection Division

Internal Audit & Inspection Division undertakes periodical and special audit of the Branches, Divisions and Departments of Head
Office to review operational effectiveness and internal & external compliance requirements. The Bank has introduced Risk Based
Internal Audit and grading of the branches. The Audit Committee of the Board subsequently reviews the lapses identified by Audit
and Inspection Division. The Audit Committee also reviews Bangladesh Bank Inspection Reports and other issues indicated in
the guidelines prescribed by Bangladesh Bank. Necessary steps/measures are taken on the basis of observations & suggestions
of the Committee.
The Audit & Inspection Division conducts investigations against complaints received from customers, anonymous persons,
management & others and submits the reports to the competent authority. Periodical Inspection reports of Zonal Heads, Shariah
Inspections & Branch Managers self Audit are also reviewed by the Division regularly and necessary guidance and suggestions
are given with continuous follow-up there against.

(2) Compliance Division

The Compliance Division handles the regulatory issues of Bangladesh Bank as well as other regulatory bodies and submits
status report on regulatory compliance quarterly to the Audit Committee as per BRPD Circular No.12 dated 23.12.2002.

The Compliance Division ensures that the Bank complies with all regulatory requirements while conducting its day to day
business. The Compliance Division maintains liaison with the regulatory bodies for any regulatory changes and notify the same
to all concerned.

(3) Monitoring Division

This Division performs the following:

i) Assesses the risk of the functional areas of the Branches described in the Departmental Control Function Checklist (DCFCL)
and determines the frequency of Audit/Inspection of the branches based on the gravity of risks involved.
ii) Monitors the Internal Control Functions through the Quarterly Operations Report (QOR) and other mechanisms.
iii) Checks the completion/execution of Investment Documentation.

3.31.2 Foreign Exchange Risk Management

Foreign Exchange Risk is the current or prospective risk to earnings and capital arising from adverse movements in currency
exchange rates. The Bank is exposed to profit rate risk and settlement risk on account of its foreign exchange business. Foreign
Exchange business includes trading of foreign currencies relating to import, export, remittances and other ancillary services. IBBL
is dealing with a substantial volume of foreign trade and remittance business of the country which exposes the Bank to foreign
exchange risk. IBBL has adopted foreign exchange risk manual through which the foreign exchange operations are dealt with.
Foreign Exchange risks are measured and monitored by the Treasury Division. Treasury Division consists of separate Front
Office, Back Office and Mid Office. The Treasury Front Office (Dealing Room) independently performs the deals and the Treasury
Back Office is responsible for verification of the deals and passing of their entries in the books of account.
The Foreign Exchange Risk is minimized through proper market analysis, real time pricing of Foreign Exchange, fixation of
different market related limits (daylight, overnight, stop loss and management action trigger) and counter parties credit limits
set by the management and ensure adherence to the limits by the Treasury Front Office. All Foreign Exchange transactions are
revalued at weighted average exchange rate as provided by Bangladesh Bank at the end of each month. All Nostro Accounts
are reconciled regularly and outstanding entries are reviewed by the management for its settlement/recompilation. The open
position maintained by the bank at the end of the day remains within the stipulated limit prescribed by the Bangladesh Bank.

3.31.3 Investment (Credit) Risk Management

Investment (Credit) risk is one of the major risks faced by the Bank. This can be described as potential loss arising from the failure
of counter party to perform as per contractual agreement with the Bank. The failure may result from unwillingness or inability of
the counter party in discharging his / her financial obligation. Therefore, Banks Investment (Credit) risk management activities
have been designed to address all these issues. IBBL has designed its own operational manuals for each modes and products. It
has also designed its own investment risk management guideline which is compatible with the regulatory guideline and Islamic
modes of finance. There is a dedicated committee namely Investment Risk Management Committee which periodically reviews
the operational manuals and risk management guidelines and ensures compliance of the same.

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3.31.4 Asset Liability Management

The Asset Liability Committee (ALCO) of the Bank monitors balance sheet risk, liquidity risks, investment deposit ratio (IDR),
deposit mix, investment mix, gap analysis etc. under the leadership of MD & CEO of the Bank. Asset Liability Committee (ALCO)
reviews liquidity requirement of the Bank, the maturity of assets and liabilities, deposit and investment pricing strategy, sensitivity
of assets and liabilities, management indicators/ratios and the liquidity contingency plan. The primary objective of the ALCO is
Liquidity management, Fund management and Assets-Liabilities matching.The committee also monitors and averts significant
volatility in Net Investment Income (NII), investment value and exchange earnings.

3.31.5 Prevention of Money Laundering

Money Laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention
of money laundering. For mitigating the risks, the Bank has formed 05(five) members Central Compliance Unit (CCU) under the
leadership of the Chief Anti Money Laundering Compliance Officer (CAMLCO) at Head Office. Anti Money Laundering Compliance
Units are also functioning at Zonal Offices and Branches, where the transactions of the accounts are independently reviewed
to verify Suspicious Transaction Reports (STRs). A Manual for prevention of money laundering was developed and approved by
the Board of Directors. IBBL has introduced (a) Uniform Account Opening Form (AOF), (b) Know Your Customer (KYC) Profile
and (c) Transaction Profile (TP) in the Bank as per instructions of Bangladesh Bank. IBBL had already issued 6 (six) instruction
circulars and 11 (eleven) circular letters providing necessary instructions for Prevention of Money Laundering activities and also
for combating of Financial Terrorism.
Moreover, IBBL had conducted a good number of training sessions/workshops to create awareness and development of the skill
of the officials for identifying suspicious transactions. IBBL introduced a Policy Guideline to combat terrorist financing in the
light of Anti Terrorism Act (Amendment) Act, 2012 coupled with the Money Laundering Prevention Act- 2012 approved by the
Board of Directors of the Bank.
IBBL has exclusively completed the KYC procedures of Legacy Accounts (accounts opened before 30 April 2002). To establish
fruitful Anti Money Laundering drive at branch level, IBBL introduced AML Rating systems such as excellent/good/satisfactory/
marginal through self Assessment Report & Independent Testing Procedure as per instruction of Bangladesh Bank.

3.31.6 Information and Communication Technology Risk Management

The Bank has adequately addressed Information and Communication Technology (ICT) Risk Management. It is an in-depth
exercise and continual process. The (ICT) Risk Management exercise mainly includes minimizing financial and image loss to the
institution in all events such as natural disasters, technological failures, human errors etc. The Bank uses own developed Core
Banking Software to perform all types of transactions including local/ online/ internet in a secured way. To take care of its core
banking system, a separate security module has been incorporated in the software which manages different roles/privileges for
different users. All financial transactions can be tracked for future audit purposes.
The Bank uses Central Data Centre to replicate transactions in branches in case of data failure or inconsistencies. Data travelling
through network uses encryption and decryption mechanism.
In line with the Bangladesh Bank directives, the Bank has approved its own ICT policies for its operations and services. Under
these policy guidelines, a security policy has also been worked out. To abide by and adhere to what is laid down in the policy; the
implementation has been made through Active Directory Services (ADS), Password Policy, Kerberos Policy, Audit Policy, Group
Policy, User Rights, Permission Policy etc. In order to secure network resources from public network, the Bank has introduced
Virtual Private Network (VPN), Access Control List (ACL), IP filtering and TCP/UDP service blocking through router and firewall
devices. It has already centralized the administrative control to access the network, mailing system and internet. IBBL has
introduced Business Continuity Plan (BCP) for its entire network and trained the officials to cope up with any contingencies.

3.31.7 Internal audit

Internal Audit is used as an important element to ensure good governance of IBBL. Internal Audit activity of IBBL is effective and it
provides senior management with a number of important services. These include detecting and preventing fraud, testing internal
control, and monitoring compliance with own policies & procedures, applicable rules & regulations, instructions/ guidelines of
regulatory authority etc.
During the year 2014, Audit Division of Internal Control & Compliance Wing conducted inspection on most of the Branches/
Divisions of Head Office of the Bank and submitted reports presenting the findings of the audits/ inspections. Necessary control
measures and corrective actions have been taken on the suggestions or observations made in these reports. The reports or key
points of the reports have also been discussed in the meetings of the Audit Committee of the Board and necessary steps have
been taken according to the decision of the said Committee for correct functioning of Internal Controls & Compliance.

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3.31.8 Fraud and forgeries

Fraud means wrongful or criminal deception intended to result in financial or personal gain. It will never be possible to eliminate
all frauds and no system is completely fraud proof, since many fraudsters are able to bypass control systems put in place. IBBL
continuously pays attention to implement and improve the anti-fraud internal controls for prevention of fraud and forgery. IBBL
assesses /evaluates the effectiveness of its Anti-Fraud Internal Control measures on quarterly basis as per the items/ areas
mentioned in the prescribed checklist of Bangladesh Bank. During the year 2015, 1(one) incident of fraud at 1 (one) branch have
been detected by the Bank and it has duly been reported to Bangladesh Bank. The Bank has already made adequate provision
in this regard.

3.32 Credit rating report

Credit Rating Information and Services Ltd. CRISL was engaged by the Bank for the purpose of rating the Bank since 2002 as
per Bangladesh Bank BRPD Circular No.06 dated 5 July 2006. CRISL assigned AA+ rating in the long term (indicates high safety
and high credit quality) and ST-1 in the short term (highest certainty of timely repayment) to IBBL based on the financials up to
31 December 2014.

3.33 Regulatory and legal compliance

Among others, the Bank complied with the requirements of the following circular, rules and regulations:
a) The Bank Company Act, 1991 as amended
b) The Companies Act, 1994
c) BRPD Circular No. 14 dated 25.06.2003 and Guidelines for Islamic Banking issued by Bangladesh Bank through
BRPD Circular No. 15 dated 09.11.2009
d) Other circulars, rules and regulations issued by Bangladesh Bank from time to time
e) The Securities and Exchange Rules, 1987
f) The Securities and Exchange Ordinance, 1969
g) The Securities and Exchange Commission Act, 1993
h) Income Tax Ordinance, 1984
i) VAT Act, 1991
j) Standards issued by AAOIFI
k) The Stamp Act-1899
l) The Customs Act-1969
m) The Money Laundering Prevention Act, 2012
n) The Anti Terrorism (Amendment) Act, 2012 etc.

4.0 Compliance with Financial Reporting Standards as applicable in Bangladesh

The Companies/Bank complied, as per Para 12 of Securities & Exchange Rule 1987, with the following Bangladesh Accounting
Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs) as adopted by The Institute of Chartered Accoun-
tants of Bangladesh (ICAB) in preparing the financial statements of IBBL subject to departure described in note - 2.1, where we
have followed Bangladesh Bank guidelines:

Sl. No. BFRS No. BFRS Title Compliance Status

1 1 First-time adoption of International Financial Reporting Standards Not Applicable
2 2 Share-based Payment Not Applicable
3 3 Business Combinations Not Applicable
4 4 Insurance Contracts Not Applicable
5 5 Non-current Assets Held for Sale and Discontinued Operations Not Applicable
6 6 Exploration for and Evaluation of Mineral Resources Not Applicable
7 7 Financial Instruments: Disclosures Complied
8 8 Operating Segments Complied
9 10 Consolidated Financial Statements Complied
10 11 Joint Arrangements Not Applicable
11 12 Disclosure of Interests in other Entities Complied
12 13 Fair Value Measurement Complied

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Compliance with Financial Reporting Standards as applicable in Bangladesh (Contd)

Sl. No. BAS No. BAS Title Compliance Status

1 1 Presentation of Financial Statements Complied

2 2 Inventories Not Applicable

3 7 Statement of Cash Flows Complied

4 8 Accounting Policies, Changes in Accounting Estimates and Errors Complied

5 10 Events after the Reporting Period Complied

6 11 Construction Contracts Not Applicable

7 12 Income Taxes Complied

8 16 Property, Plant & Equipment Complied

9 17 Leases Complied

10 18 Revenue Complied

11 19 Employee Benefits Complied

12 20 Accounting for Government Grants and Disclosure of Government Assistance Not Applicable

13 21 The Effects of Changes in Foreign Exchange Rates Complied

14 23 Borrowing Costs Not Applicable

15 24 Related Party Disclosures Complied

16 26 Accounting and Reporting by Retirement Benefit Plans Not Applicable

17 27 Separate Financial Statements Complied

18 28 Investments in Associates and Joint Ventures Not Applicable

19 29 Financial Reporting in Hyperinflationary Economics Adopted and effective on or after 01 Jan-

uary 2015 but not applicable for the Bank

20 31 Interest in Joint Ventures Not Applicable (Replaced with IFRS/BFRS

11)

21 32 Financial Instruments: Presentation Complied

22 33 Earnings per Share Complied

23 34 Interim Financial Reporting * Complied

24 36 Impairment of Assets Complied

25 37 Provisions, Contingent Liabilities and Contingent Assets Complied

26 38 Intangible Assets Complied

27 39 Financial Instruments: Recognition and Measurement Complied

28 40 Investment Property Not Applicable

29 41 Agriculture Not Applicable

(*) Complied while the quarterly and half-yearly interim financial reports were prepared during the year as per
regulations of Bangladesh Securities and Exchange Commission (BSEC).

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5.0 Audit committee
As per Bangladesh Bank BRPD circular No.11 dated 27 October 2013, the Audit Committee was formed by the Board of Directors of the Bank
consisting of the following Board Members:

Sl. Status with the

Name of the Member Status with the Bank Educational Qualification Remarks
No. Committee
Prof. NRM Borhan B.Com (Hons), M.Com (Management) C.U. Resigned on
1 Independent Director Chairman
Uddin, Ph.D. MBA, M.S, Ph.D (USA) in Management 07.03.2016
Masters in Economics, Masters in Business
2 Dr. Areef Suleman Director Member
Leadership & Ph.D. in Economics.
Janab Md. Abdus Independent Director B.Com (Hons), M.Com (Accounting) D.U, Resigned on
3 Member
Salam, FCA, FCS Director FCA, FCS 14.09.2015
Janab Barrister
L.L.B. (Hons), L.L.M, PGDL (UK), Barrister- Tenure expired
4 Mohammed Belayet Independent Director Member
at-law on 28.12.2015
Hossain

Audit Committee of the Board met in 19 occasions in the year 2015.

6.0 Related party disclosures

As per BAS 24 Related Party Disclosures, a related party is a person or entity that is related to the entity (i.e. IBBL) that is preparing its financial
statements. Related party transaction is a transfer of resources, services, or obligations between a reporting entity and a related party, regardless
of whether a price is charged as per BAS 24.
Related Parties include the Banks Directors, key management personnel, associates, companies under common directorship etc. as per BAS 24
Related Party Disclosures. All transactions involving related parties arising in the normal course of business are conducted at arms length at
normal commercial rates on the same terms and conditions as third party transactions using valuation modes, as admissible.

6.1 Lending policy for transactions with Bank related person/related parties

Transactions with Bank related person/related parties including Directors are made as per rules and regulations of the Bank Company Act 1991
as amended and as per circulars issued by Bangladesh Bank time to time including the following general rules:
i) Terms & conditions for financial transaction with bank related person/related parties will not be easier than other persons i.e. other Investment
clients.
ii) Prior approval from the majority of Board of Directors shall be required for all financial transactions with bank related person/related parties.
iii) The Bank shall not allow funded facilities exceeding 10% of Tier -1 capital to the Bank related persons/related parties; real investment facilities
shall be considered deducting encashable securities from funded investment.

6.2 Name of the Directors along with all related Firms/ Companies/ Institutions/Parties as at 31 December 2015:

Sl. Status with the Name of the related Firms/ Companies/

Name of the Directors Remarks
No Bank Institutions/ Parties etc.
Engr. Mustafa Anwar, Representative of the Ibn Sina
1 Chairman Birds Group
Trust.
Foreign
2 Janab Yousif Abdullah Al-Rajhi Vice-Chairman Not applicable
Director
Independent
3 Prof. NRM Borhan Uddin Ph.D Vice-Chairman Not applicable
Director
Dr. Areef Suleman Representative of Islamic Foreign
4 Director Islamic Development Bank, K.S.A.
Development Bank, K.S.A. Director
Dr. Abdulhameed Fouad Al-Khateeb, Representative Foreign
5 Director Arabsas Travel & Tourist Agency, KSA.
of Arabsas Travel & Tourist Agency, KSA. Director
Janab Nasser Ahmed Al-Khudar, Representative of Foreign
6 Director Kuwait Awqaf Public Foundation, Kuwait
Kuwait Awqaf Public Foundation, Kuwait. Director
Engr. Md. Eskander Ali Khan, Representative of Al-
7 Director KEARI Limited,
Rajhi Co. for Industry & Trade, K.S.A.
Janab Md. Abul Hossain, Representative of
8 Director Investment Corporation of Bangladesh (ICB).
Investment Corporation of Bangladesh.
Janab A H G Mohiuddin, Representative of Al-Rajhi
9 Director Not applicable
Co. for Industry & Trade, K.S.A.
Independent
10 Janab Humayun Bokhteyar, FCA. Director Not applicable
Director
Ex-Officio Managing
11 Janab Mohammad Abdul Mannan Not applicable
Director Director

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6.3 Related party balances and transactions
6.3.1 Related party balances
a) Nature and type of balances and transactions of related parties (Directors) of the Bank are as follows:
Amount in Taka
Rela-
tionship
of the Outstanding
Name of the Clas- Outstanding Disbursement/ Realised
SL. Name of the Director balance
Account/ Firm/ Purpose sified balance as on charged during during the
No. Director with the as on
Trust etc. Position 01.01.2015 the year 2015 year 2015
Firm/ 31.12.2015
Trust
etc.

1 2 3 4 5 6 7 8 9 10=7+8-9

Purchase
Mem- of House,
Engr. Mustafa ber of BMRE &
1 Ibn Sina Trust UC 363,802,257 35,868,723 95,402,700 304,268,280
Anwar (Chairman) Board of Import of
Trustee Machin-
ery

Engr. Md.
Mrs. Shahanara
2 Eskander Ali Khan Husband Housing - do- 1,419,917 111,653 366,600 1,164,970
Begum
(Director)

Jb. Mohammad
Abdul Mannan
Mohammad
3 Managing Direc- Himself Housing - do- 3,114,326 167,145 234,640 3,046,831
Abdul Mannan
tor & Ex - Officio
Director

Total 368,336,500 36,147,521 96,003,940 308,480,081

(b) Other type of balances of related parties of the Bank are as follows:

SL. Name of the related parties Nature of relation- Nature of transactions Closing balance (Taka)
No. ship 31.12.2015 31.12.2014
1 Islami Bank Securities Limited (IBSL) Parent- Subsidiary Investment in Share capital by IBBL 2,699,946,000 2,699,946,000
Bank balance 446,223,578 39,970,915
MTDR balance 6,468,119 886,152,827
Quard balance 5,000,000,000 90,000,000
Profit receivable 132,915,404 11,218,112
Mudaraba investment 25,968,585 3,000,000,000
Accounts payable 90,000,000 7,023,067
Office rent payable - 67,689
2 Islami Bank Capital Management Parent- Subsidiary Investment in Share capital by IBBL 299,993,000 299,993,000
Limited (IBCML) Bank balance 1,025,999 45,421,630
Dividend payable - 104,997,550

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6.3.2 Related party transactions

Nature and type of related party transactions of the Bank during the year 2015 are as follows:

SL. Name of the related party Nature of relationship Nature of transaction 2015 (Taka)
No.
1 Islami Bank Securities Limited Parent- subsidiary Deposit to Savings account maintained with IBBL 3,895,050,422
(IBSL)
Withdraw from Savings account maintained with 3,681,593,032
IBBL
Deposit to Current account maintained with IBBL 593,837,450
Withdraw from Current account maintained with 597,865,881
IBBL
Bank charge paid to IBBL 6,454
Payment against office rent 338,445
Profit against MTDR -
Profit withdrawn against MTDR 688,108,952
Quard availed from IBBL 579,990,000
Payment against Quard 579,990,000
2 Chief Executive Officer Key management Short-term employee benefits (Salary and 2,677,225
personnel allowance)
3 Islami Bank Capital Management Parent- subsidiary Payment of interim dividend to IBBL 104,997,550
Limited (IBCML)
Profit against SND 97,710
4 Directors of the Bank Director Fees , TA/DA/hotel fare and other expenses 437,000

6.4 Other related party disclosures

1. There was no contracts of significance wherein a director has interests subsisted at any time during the year or at the end of the year.

2. Investment to related parties is effected as per requirement of section 27 of Bank Company Act, 1991 as amended up to 2013

3. Share issued to Directors and Executives without consideration or exercisable at discount is Nil.

4. Other disclosures are not applicable as required by BRPD Circular No. 14 dated 25 June, 2003 and BRPD Circular No. 15 dated 09
November, 2009.

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7.0 Cash In Hand

Cash in hand (including foreign currency) (Note. 7.1) 8,625,861,188 7,696,844,549
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) (Note. 7.2) 46,630,214,411 38,522,514,877
Total 55,256,075,599 46,219,359,426

7.1 Cash in hand (including foreign currency)

In local currency 8,608,238,737 7,647,881,565

In foreign currency 17,622,451 48,962,984
Total 8,625,861,188 7,696,844,549

7.2 Balance with Bangladesh Bank & its agent bank(s) (including foreign currency)

Balance with Bangladesh Bank (a)

In local currency 43,593,360,863 35,871,455,347
In foreign currency 716,350,967 664,220,218
Sub-total 44,309,711,830 36,535,675,565

Balance with Sonali Bank Ltd. (as agent of Bangladesh Bank) (b)
In local currency 2,320,502,581 1,986,839,312
In foreign currency - -
Sub-total 2,320,502,581 1,986,839,312
Total (a+b) 46,630,214,411 38,522,514,877

7.3 Cash Reserve Requirement (CRR) & Statutory Liquidity Ratio (SLR)

Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with the Section 25 &
33 of the Bank Company Act, 1991 as amended and the Instruction of Bangladesh Bank Order 1972, Article 36, clause (1).

7.3.1 Cash Reserve Requirement (CRR)

The Cash Reserve Requirement (CRR) of the Bank was 6.50% of average total demand and time liabilities on bi-weekly basis with a provision of
minimum 6.00% on daily basis from 24.06.2014 as per Bangladesh Bank MPD Circular No.01 dated 23 June 2014. The cash reserve maintained
by the Bank was in excess of the statutory requirement throughout the year.

Position of Cash Reserve Requirement (CRR)

Required CRR (6.50% of average total time and demand liabilities) 39,770,540,760 35,830,701,560
Actual reserve held with Bangladesh Bank in local currency (Note 7.2) * 43,565,360,863 35,843,455,347
Excess/(shortfall) 3,794,820,103 12,753,787

* Lien against TT discounting facilities of Tk. 2,80,00,000/- has not been considered as CRR.

7.3.2 Statutory Liquidity Ratio (SLR)

The requirement of Statutory Liquidity Ratio (SLR) of the Bank was 5.50% on daily basis excluding CRR wherein the excess CRR amount shall
be included while calculating SLR from 01.02.2014 as per DOS Circular No. 01 dated 19 January 2014. The reserve maintained by the Bank was
in excess of the statutory requirement throughout the year.

Position of Statutory Liquidity Ratio (SLR)

Required Reserve (5.50% of average total time and demand liabilities) 33,651,996,030 30,318,285,930
Actual reserve maintained (Note 7.3.2.1) 113,207,663,872 109,115,937,648
Excess/(shortfall) 79,555,667,842 78,797,651,718

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7.3.2.1 Components of Statutory Liquidity Ratio (SLR)
Cash in hand including foreign currency (Note- 7.1) 8,625,861,188 7,696,844,549
Excess CRR amount (Note-7.3.1) 3,794,820,103 12,753,787
Balance with Sonali Bank as Agent Bank of BB (Note-7.2.b) 2,320,502,581 1,986,839,312
Balance with Islamic Refinance Fund A/c (Note-9) 3,000,000,000 2,000,000,000
Unencumbered approved securities :
Bangladesh Shipping Corporation (Note -10) 66,480,000 101,500,000
Bangladesh Government Islamic Investment Bond (Note -10) 95,400,000,000 97,318,000,000
Total 113,207,663,872 109,115,937,648
7(a) Consolidated cash in hand

i) Cash in hand (including foreign currency)

Islami Bank Bangladesh Limited 8,625,861,188 7,696,844,549
Islami Bank Securities Limited 1,776 19
Islami Bank Capital Management Limited 4,445 394
Sub total 8,625,867,409 7,696,844,962

ii) Balance with Bangladesh Bank & its agent bank(s) (including foreign currency)
Islami Bank Bangladesh Limited 46,630,214,411 38,522,514,877
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Sub total (ii) 46,630,214,411 38,522,514,877
Total (i+ii) 55,256,081,820 46,219,359,839

8.0 Balance with other banks & financial institutions

i) In Bangladesh

In current account 491,522,785 619,469,727

OBUs balance with treasury division, IBBL (Note-2.0 _OBU) 69,053,137 69,601,591
In Mudaraba savings & MTDR account with other islamic banks / financial institutions 17,605,176,848 17,170,557,971
Sub total 18,165,752,770 17,859,629,289
Less: OBUs balance with treasury division, IBBL 69,053,137 69,601,591
Sub total (i) 18,096,699,633 17,790,027,698
ii) Outside Bangladesh (Note 8.1)
In current account 1,669,623,016 2,409,322,547
In Mudaraba savings & MTDR account with other islamic banks / financial institutions - -
Sub total (ii) 1,669,623,016 2,409,322,547
Grand total (i+ii) 19,766,322,649 20,199,350,245

8.1 Currency-wise amount and exchange rate of Balance with other banks & financial institutions outside Bangladesh

Foreign currency Amount in F.C Exchange rate 31.12.2015 31.12.2014

US Dollar (8,527,531.50) 78.5003 (669,413,781) 1,157,364,999
Great Britain Pound 4,715,136.26 116.2668 548,213,804 261,896,324
Saudi Riyal 261,412.35 20.9083 5,465,688 8,968,487
EURO 11,034,506.09 85.8008 946,769,450 602,711,894
YEN 45,567,336.00 0.6513 29,678,006 1,975,913
Canadian Dollar 67,473.18 56.5116 3,813,017 12,633,772
Swiss Franc 281,148.76 79.4779 22,345,113 16,078,647
Singapore Dollar 2,985,934.22 55.4929 165,698,149 310,734,563
Australian Dollar 40,073.64 57.1953 2,292,024 463,220
ACU Dollar 7,734,463.00 78.500 3 607,157,666 27,431,371
AED 355,753.73 21.3740 7,603,880 9,063,357
Total 1,669,623,016 2,409,322,547

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8.2 Maturity - wise classification Balance with other banks & financial institutions
Repayable on demand 8,041,322,649 4,194,350,245
With a residual maturity of
Up to 1 Month 5,430,000,000 6,800,000,000
Over 1 month but not more than 3 months 6,125,000,000 9,025,000,000
Over 3 months but not more than 1 year 170,000,000 180,000,000
Over 1 year but not more than 5 years - -
More than 5 years - -
Total 19,766,322,649 20,199,350,245
8(a) Consolidated Balance with other banks & financial institutions
i) In Bangladesh
Islami Bank Bangladesh Limited 18,096,699,633 17,790,027,698
Islami Bank Securities Limited 6,044,729,762 3,982,477,266
Islami Bank Capital Management Limited 321,544,155 413,070,405
Inter-company balances (488,005,271) (979,679,718)
Sub-total (i) 23,974,968,279 21,205,895,651

ii) Outside Bangladesh

Islami Bank Bangladesh Limited 1,669,623,016 2,409,322,547
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Sub-total (ii) 1,669,623,016 2,409,322,547
Total (i+ii) 25,644,591,295 23,615,218,198

9.0 Placement with banks & other financial institutions

Placement to OBU by Treasury Division, IBBL (Note-6.0 _OBU) 11,388,906,162 7,606,631,085
Placement to AD Branches for MDB in FC by OBU (Note-3.0 _OBU) 2,481,608,500 2,859,555,231
Placement to Islamic Refinance Fund Account (*) 3,000,000,000 2,000,000,000
16,870,514,662 12,466,186,316
Less: Placement to OBU by Treasury Division, IBBL 11,388,906,162 7,606,631,085
Less: Placement to AD Branches for MDB in FC by OBU 2,481,608,500 2,859,555,231
Total 3,000,000,000 2,000,000,000

(*) The fund is placed to Bangladesh Bank for Re-finance Scheme as per Bangladesh Bank BRPD Circular No. 13 dated 18 September 2014.

10.0 Investments in shares & securities

No. of share as Book value as at 31 Book value as at 31

Particulars Remarks
at 31 Dec. 2015 Dec. 2015 (Taka) Dec. 2014 (Taka)
10.1 Government
Bangladesh Shipping Corporation 200,000 66,480,000 101,500,000 Quoted
Karmasangsthan Bank 100,000 10,000,000 10,000,000 Un-Quoted
Central Depository Bangladesh Ltd. 2,284,721 6,277,770 6,277,770 Un-Quoted
Bangladesh Government Islamic Investment
Bond (Islamic Bond) 40 95,400,000,000 97,318,000,000 Un-Quoted
Sub total Government (10.1) 2,584,761 95,482,757,770 97,435,777,770

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Book value as
No. of share as Book value as at 31
at 31 Dec. 2015 Remarks
at 31 Dec. 2015 Dec. 2014 (Taka)
(Taka)
10.2 Other than Government

i) Subsidiary companies
Islami Bank Securities Limited 2,699,946 2,699,946,000 2,699,946,000 Un-Quoted
Islami Bank Capital Management Limited 299,993 299,993,000 299,993,000 Un-Quoted
Sub total (i) 2,999,939 2,999,939,000 2,999,939,000
ii) Others
Bangladesh Aroma Tea Ltd 1,570 157,000 157,000 De-listed
Investment in Financial Institutions & Investors Port-
folio Management Co. Ltd. 500,000 5,000,000 5,000,000 Un-Quoted
Mudaraba Subordinated Debt of First Security Islami
Bank Ltd. 800 400,000,000 400,000,000 Un-Quoted
Mudaraba Subordinated Debt Social Islami Bank Ltd. 100,000 500,000,000 - Un-Quoted
Al- Arafah Islami Bank Ltd. 206,950 2,877,182.00 385,139 Quoted
Exim Bank Ltd. 600,655 5,316,608.00 241,263 Quoted
Shahjalal Islami Bank Ltd. 140,000 1,666,949.00 193,512 Quoted
United Airways (BD) Ltd. 15,000 117,994.00 766,413 Quoted
Fareast Islami Life Insurance Co. Ltd 45,356 3,549,209.00 2,033,763 Quoted
Takaful Islami Insurance Ltd. 64,491 1,342,079.00 716,641 Quoted
Confidence Cement 34,290 3,603,750.00 1,973,817 Quoted
Premier Cement Mills Limited 16,000 1,391,207.00 2,440,893 Quoted
Meghna Petroleum Ltd. 26,000 5,648,781.00 3,423,868 Quoted
Tallu Spinning Ltd. 83,086 2,321,720.00 1,906,378 Quoted
Social Islami Bank Limited. 590,000 7,708,745.00 275,859 Quoted
Aamra Technologies Limited 20,000 544,720.00 - Quoted
Family Tex (BD) Ltd. 50,000 593,480.00 - Quoted
BEXIMCO 27,000 806,616.00 - Quoted
Square Textile Ltd. 21,500 1,585,148.00 - Quoted
First Security Islami Bank Ltd. 770,506 6,886,328.00 - Quoted
Golden Son Limited 26,000 712,244.00 - Quoted
National Feed Mills Ltd. 10,000 175,939.00 - Quoted
RAK Ceramics Ltd 10,000 690,923.00 - Quoted
Square Pharmaceuticals Ltd. 3,000 763,921.00 - Quoted
GBB Power Ltd. 10,000 170,425.00 - Quoted
Generation Next Fashions Ltd. 45,000 441,601.00 - Quoted
Meghna Cement Ltd. - - 62,155 Quoted
Apex Foods Ltd. - - 99,518 Quoted
Power Grid Company of Bangladesh Ltd. - - 161,302 Quoted
Ibn Sina Pharmaceutical Ltd - - 365,806 Quoted
Apex Tannery Ltd. - - 35,407 Quoted
Prime Textile Ltd. - - 189,272 Quoted
Summit Power Ltd - - 76,190 Quoted
AMCL(Pran) - - 108,733 Quoted
Rangpur Foundry - - 199,197 Quoted
Sub total (ii ) 3,417,204 954,072,569 420,812,126
Sub total Other than Government (i+ii) 6,417,143 3,954,011,569 3,420,751,126
Total (10.1+10.2) 9,001,904 99,436,769,339 100,856,528,896

10.3 Revaluation of shares & securities

All Shares and Securities are shown at cost price other than the Shares of Bangladesh Shipping Corporation which have been recognized at
closing market price as on 31.12.2015 of Dhaka Stock Exchange Ltd. (DSE) as per BRPD Circular No.14 dated 25.06.2003 and DOS Circular
No. - 05 dated 26 May 2008. 100% provision was made against probable losses in shares of Bangladesh Aroma Tea Ltd. and adequate provision
have been kept for diminution in value of investment in shares for all quoted shares. Changes in revaluation of shares of Bangladesh Shipping
Corporation (BSC) has been shown as revaluation reserve of securities. Provision for diminution in value of investment in shares is not netted off
with investment in shares and securities rather shown under other liabilities.

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10.4 Maturity grouping of investments in shares & securities
Repayable on demand - -
With a residual maturity of
Up to 1 Month 39,338,915,569 19,355,655,126
Over 1 month but not more than 3 months 47,860,000,000 35,460,000,000
Over 3 months but not more than 1 year 8,450,000,000 42,618,000,000
Over 1 year but not more than 5 years 700,000,000 300,000,000
More than 5 years 3,087,853,770 3,122,873,770
Total 99,436,769,339 100,856,528,896

10(a) Consolidated investments in shares & securities

i) Government
Islami Bank Bangladesh Limited 95,482,757,770 97,435,777,770
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Sub total (i) 95,482,757,770 97,435,777,770
ii) Others
Islami Bank Bangladesh Limited 3,954,011,569 3,420,751,126
Islami Bank Securities Limited 1,960,259,878 1,820,810,657
Islami Bank Capital Management Limited - -
Inter-company balances (2,999,939,000) (2,999,939,000)
Sub total (ii) 2,914,332,447 2,241,622,783
Total (i+ii) 98,397,090,217 99,677,400,553

11.0 Investments
General investments etc. (Note-11.1) 493,789,301,422 436,094,101,205
Bills purchased & discounted (Note-11.2) 36,405,201,294 27,381,366,261
Total 530,194,502,716 463,475,467,466

11.1 General investments etc.

i) In Bangladesh
Bai - Murabaha 288,774,510,219 253,916,688,852
Bai - Muajjal 33,658,172,513 29,797,755,704
Hire Purchase under Shirkatul Melk 117,326,628,306 103,940,758,328
Hire Purchase under Shirkatul Melk (HPSM in FC-OBU) 4,682,446,379 -
Bai-Murabaha Import Bills 4,729,976,498 5,861,479,708
Baim- FC Bills 8,728,142,739 9,498,987,204
Musharaka 393,465,290 484,381,392
Mudaraba investment 5,000,015,000 3,000,010,000
Bai - Salam 5,320,255,820 4,807,597,612
Murabaha Foreign Currency Investment 9,955,164,294 6,952,880,221
Quard 14,564,656,100 15,478,085,584
Investment in Khidmah Card (KC) 64,687,621 16,994,600
Sub total (i) 493,198,120,779 433,755,619,205

ii) Out side Bangladesh

Bai - Murabaha - -
Bai - Muajjal - -
Hire Purchase under Shirkatul Melk - -
Musharaka - -
Overseas Investment 591,180,643 2,338,482,000
Bai - Salam - -
Quard - -
Others - -
Sub total (ii) 591,180,643 2,338,482,000
Grand total (i+ii) 493,789,301,422 436,094,101,205

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11.1.1 Maturity-wise classification

Repayable on demand - -
With a residual maturity of
Up to 1 Month 71,762,607,487 63,378,766,515
Over 1 month but not more than 3 months 82,939,457,431 79,432,061,802
Over 3 months but not more than 1 year 137,251,322,603 107,961,949,441
Over 1 year but not more than 5 years 106,267,162,619 96,501,760,873
More than 5 years 95,568,751,282 88,819,562,574
Total 493,789,301,422 436,094,101,205

11.1(a) Consolidated general investments

Islami Bank Bangladesh Limited 493,789,301,422 436,094,101,205
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Inter-company balances (5,090,000,000) (3,090,000,000)
Total 488,699,301,422 433,004,101,205

11.2 Bills purchased & discounted

i) In Bangladesh
Musharaka Doc. Bill (MDB) 8,445,640,341 9,640,143,708
ii) Outside Bangladesh
Mudaraba Doc Bill (UPAS)-OBU 21,996,739,243 12,317,356,285
Bai- As- Sarf (FDB) 3,481,213,210 2,564,171,038
MDB in FC 2,481,608,500 2,859,695,230
Sub-total (ii) 27,959,560,953 17,741,222,553
Total (i+ii) 36,405,201,294 27,381,366,261

11.2.1 Maturity-wise classification of bills purchased & discounted

Payable within 1 month 9,450,946,060 7,108,296,384
Over 1 month but less than 3 months 12,690,491,610 9,544,931,260
Over 3 months but less than 6 months 8,240,273,562 6,197,718,873
6 months or more 6,023,490,062 4,530,419,744
Total 36,405,201,294 27,381,366,261

11.2(a) Consolidated bills purchased & discounted

Islami Bank Bangladesh Limited 36,405,201,294 27,381,366,261

Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Total 36,405,201,294 27,381,366,261

11.3 Geographical location wise classification of investments

Within Bangladesh
In rural areas 29,298,048,510 23,737,344,960
In urban areas 500,305,273,563 437,399,640,506
Sub total 529,603,322,073 461,136,985,466
Outside Bangladesh 591,180,643 2,338,482,000
Total 530,194,502,716 463,475,467,466

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11.4 Division wise classification of investments (*)

Name of the division
Dhaka division 307,919,341,503 265,677,922,516
Chittagong division 95,124,356,274 92,698,693,385
Khulna division 35,988,165,243 29,491,568,454
Rajshahi division 48,310,436,821 40,518,230,905
Barisal division 7,985,168,527 6,194,634,336
Sylhet division 11,187,462,581 9,364,320,744
Rangpur division 15,964,135,246 13,072,831,807
Mymensingh division 7,715,436,521 6,457,265,319
Total 530,194,502,716 463,475,467,466

(*) Division wise distribution was made on the basis of the location of the respective branch not on the basis of where the clients business
actually located.

11.5 Investment on the basis of significant concentration including bills purchased and discounted
Investment to directors 308,480,081 388,103,000
Investment to chief executive & other senior executives 996,273,660 932,323,000
Sector wise other investments:
Trade & commerce 153,812,673,599 129,544,045,291
Real estate 41,788,236,240 37,680,385,849
Transport 6,820,440,158 6,435,450,233
Agriculture (including fertilizer & agriculture implements) 14,756,789,711 11,131,087,642
Industrial investment (Note-11.5.1) 271,210,900,000 247,350,986,911
Others 40,500,709,267 30,013,085,540
Total 530,194,502,716 463,475,467,466

11.5.1 Classification of industrial investments

Textile- spinning, weaving & dyeing 84,858,578,411 87,159,601,548

Steel, re-rolling & engineering 23,120,281,651 17,068,455,427
Agro-based industry 68,751,550,495 49,839,002,427
Garments & garments accesso- 22,004,021,589 20,675,772,163
ries
Food & beverage 16,217,893,120 3,760,121,383
Cements industry 4,642,238,255 3,598,514,014
Pharmaceuticals 4,657,507,096 2,885,125,681
Poultry, poultry feed & hatchery 1,021,508,707 822,844,373
Sanitary wares 7,329,704 49,095,993
Chemicals, toiletries & petroleum 7,457,084,801 7,812,668,913
Printing & packaging 1,455,358,559 1,086,738,101
Power (electricity) 4,123,478,751 5,056,579,437
Ceramic & bricks 3,088,660,321 2,566,593,448
Health care ( hospital & others) 1,381,033,912 1,280,794,799
Plastic industries 3,004,821,882 573,062,291
Petrol pump & CNG filling station 503,129,882 468,972,758
Information technology 377,750,107 394,475,062
Hotel & restaurant 87,678,288 62,263,592
Other industries 24,450,994,469 42,190,305,501
Total 271,210,900,000 247,350,986,911

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11.6 Details of investment to customers group (10.00% of regulatory equity and above)

Number of clients with amount of sanctioned limit of investments exceeding 10.00% of total regulatory equity of the Bank & classified amount
thereon are given below:

Number of clients 17 15
Amount of investments 133,660,700,000 119,605,250,000
Classified amount thereon Nil Nil
Measures taken for recovery Not Applicable Not Applicable

Total regulatory capital of the Bank was Tk. 47,845.33 million as at 31 December 2015 (Tk. 48,569.86 million as on 31 December 2014).
(Taka in million)
Outstanding as on 31.12.2015
Sl. No. Name of clients Sanctioned limit 31.12.2014
Funded Non-funded Total

1 Noman Group 19,720.90 11,689.40 4,301.40 15,990.80 17,874.00

2 S. Alam Steels & Refined Sugar 13,000.00 3,760.80 9,977.50 13,738.30 8,667.22
Ind. Ltd.
3 S. Alam Vegetabel Oil Ltd. 12,000.00 3,700.50 4,104.80 7,805.30 1,944.65
4 S. Alam Super Edible Oil Ltd. 10,500.00 2,812.30 6,723.20 9,535.50 3,268.38
5 Aman Group 10,203.20 5,185.10 1,313.00 6,498.10 9,953.00
6 Farzana Group 12,000.00 7,000.00 2,292.30 9,292.30 9,771.00
7 Badsha Group 10,552.40 3,008.10 2,471.50 5,479.60 8,080.00
8 MSA Group 8,931.50 6,351.10 1,396.00 7,747.10 7,702.00
9 Delta Group 6,125.50 5,462.10 1,606.30 7,068.40 6,887.00
10 Patromax Refinary 7,595.50 4,937.40 1,223.70 6,161.10 6,291.00
11 Ananda Group 7,470.40 6,007.00 17.60 6,024.60 6,181.00
12 Mosharrof & Brothers Group 14,128.90 3,827.30 2,369.10 6,196.40 6,041.00
13 Nassa Group 7,824.10 4,044.60 2,147.40 6,192.00 5,697.00
14 BRB Group 7,639.60 3,006.10 2,237.50 5,243.60 5,619.00
15 Abul Khair Group 8,241.80 2,410.50 8,692.80 11,103.30 4,771.00
16 A B H Corporation Group 9,911.70 4,848.80 2,864.10 7,712.90 -
17 Akij Group 7,425.00 22.50 1,848.90 1,871.40 -
18 Nur-e-Madina Group - - - - 6,681.00
19 Abdul Monem Group (*) - - - - 4,177.00
Total 173,270.50 78,073.60 55,587.10 133,660.70 119,605.25

(*) As per Bangladesh Bank BRPD Circular No.04, dated 29 January 2015 Large Loan Restructuring , the Bank has restructured 01 (one) account of
large investment (loan) during the year 2015 amounting Tk. 3,000.00 million for a period of 6 (six) years with due approval from Bangladesh Bank vide
their letter No. BRPD(P-1)/661/13 (cha)/2015-6514, dated 31 August 2015.

31.12.2015 31.12.2014
11.7 Classification status - wise investments
Taka Taka
Unclassified :
i) Unclassified including staff investment 490,091,826,375 424,231,589,013
ii) Special mention account (SMA) 17,561,436,522 16,436,640,275
Total unclassified (i+ii) 507,653,262,897 440,668,229,288
Classified :
iii) Substandard 1,839,659,677 2,235,222,352
iv) Doubtful 2,392,059,142 1,513,000,505
v) Bad and Loss 18,309,521,000 19,059,015,321
Total classified (iii+iv+v) 22,541,239,819 22,807,238,178
Grand total ( i to v) 530,194,502,716 463,475,467,466

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11.8 Pledged collaterals against investments
Land & building 778,829,999,296 656,240,012,983
MTDR, securities, etc. 59,853,304,837 34,816,740,707
Share certificates 77,742,720 56,140,000
Total 838,761,046,853 691,112,893,690

11.9 Particulars of investments

i) Investments considered good in respect of which the bank is fully se-

cured 506,518,609,051 442,129,601,677
ii) Investments considered good in respect of which the Bank holds debtors personal security 64,687,621 16,994,600
iii) Investments considered good and secured by personal security of one or more persons in
addition to personal security of debtors 23,611,206,044 21,328,871,189
iv) Investments considered bad or doubtful not provided for - -
Total 530,194,502,716 463,475,467,466
v) Investments due by directors or employees of the bank or any of them either severally or
jointly with any other persons 13,504,888,279 12,086,232,123
vi) Investments due by directors or employees of the bank are interested as directors, partners,
managing agents or in the case of private companies as members 304,268,280 379,628,709
vii) Total amount of investments, including temporary investments, made any time during the
year to directors or employees of the bank or any of them either severally or jointly with any
other persons 2,377,980,283 3,756,720,608
viii) Total amount of investments, including temporary investments granted during the year to the
Companies or firms in which the directors of the bank are interested as directors, partners,
managing agents or, in the case of private companies as members - -
ix) Investments due from other banks - -
x) Classified investments:
a) Classified investments on which profit has not been charged 18,309,521,000 19,059,015,321
b) Provision for classified investments 17,751,490,000 13,354,720,000
c) Provision kept against investments classified as bad & loss 17,394,634,539 12,997,864,539
d) Amount credited to profit/ rent /compensation suspense account 7,374,932,223 4,637,284,546
xi) Particulars of written off investments
a) Cumulative amount of investment written off since inception to 31st December last year 5,578,266,485 5,318,286,468
b) Amount of investment written off during this year (*) 1,367,917,735 259,980,017
c) Total amount written Off (a + b) 6,946,184,220 5,578,266,485
d) Amount recovered against written off investment up to this year (**) 1,362,300,360 1,322,391,025
e) Amount waived against written off investment up to this year 1,252,501,797 939,801,797
f) Amount of investment written off against which suit has been filed to recover the same 4,331,382,063 3,316,073,663

(*) Out of the total amount of investment written-off during the year of 2015, Tk.7,35,08,467/- was written-off from profit/rent suspense and
Tk.58,60,10,325/- was from compensation suspense .
(**) During the year of 2015, Tk.39,909,335/- (2014 Tk.39,350,296/-) was recovered from the clients in cash.

12.0 Fixed assets (Annexure-A)

12.1 Tangible assets
Land 7,623,650,885 7,593,266,550
Building 6,511,393,644 6,317,393,834
Construction/ capital work-in-process - 197,106,998
Furniture and fixtures 891,227,778 811,688,722
Mechanical appliances 3,368,809,238 3,098,463,563
Motor vehicles 808,042,164 599,438,630
ATM 755,122,907 632,874,804
Books 6,991,819 5,875,956
Total cost of tangible assets including revaluation 19,965,238,435 19,256,109,057
Less: Accumulated depreciation 4,315,881,368 3,607,189,972
Net book value of tangible assets at the end of the year 15,649,357,067 15,648,919,085

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12.2 Intangible assets

Computer software 393,124,770 386,329,162
Total cost of intangible assets 393,124,770 386,329,162
Less: Accumulated amortization 206,002,771 108,886,331
Net book value of intangible assets at the end of the year 187,121,999 277,442,831
Total net book value at the end of the year (12.1+12.2) 15,836,479,066 15,926,361,916

12.3 Maturity-wise classification

Repayable on demand - -
With a residual maturity of
Up to 1 Month
Over 1 month but not more than 3 months - -
Over 3 months but not more than 1 year 740,411,968 744,614,312
Over 1 year but not more than 5 years 2,617,898,904 2,632,757,271
More than 5 years 12,478,168,194 12,548,990,333
Total 15,836,479,066 15,926,361,916

12.4 Revaluation of land & building

As per Bangladesh Bank BCD Circular Letter No. 12 & 18 dated April 20, 1993; June 15, 1993; BRPD Circular No.10 dated November 25, 2002;
circular No. 09 dated 31 December 2008 and circular No. 24 dated 03 August 2010, the Bank revalued its land and building by the professional
valuers for the year 2000, 2002, 2003, 2004, 2005, 2006, 2009 & 2012 respectively which was reviewed by the statutory auditors.

12(a) Consolidated fixed assets (Annexure-B)

12(a).1 Tangible assets

Islami Bank Bangladesh Limited 15,649,357,067 15,648,919,085
Islami Bank Securities Limited 2,078,125 3,757,475
Islami Bank Capital Management Limited - -
Sub-total 15,651,435,192 15,652,676,560

12(a).2 Intangible assets

Islami Bank Bangladesh Limited 187,121,999 277,442,831
Islami Bank Securities Limited - 360,198
Islami Bank Capital Management Limited - -
Sub-total 187,121,999 277,803,029
Total (12.a.1+12.a.2) 15,838,557,191 15,930,479,589

13.0 Other assets

i) Income generating other assets - -
ii)Non-income generating other assets
Stock of stationery in hand 130,750,122 119,939,381
Stamps in hand 14,184,889 12,550,769
Advance rent paid 519,531,482 525,644,682
Security deposits paid account 26,909,270 18,351,705
Suspense 397,711,546 501,345,335
Advance against expenses 35,238,134 15,430,338
Pre-paid expense-OBU 25,328,125 26,680,339
Accrued income 866,418,061 2,009,498,611
IB General account (Note - 13.3) - 119,780,146
F.C. clearing adjustment 308,908,123 358,648,429
mCash System A/c 3,026,937 6,800,258
Receivables from Seylon Bank PLC * 2,968,639 30,300,809
Sub-total (ii) 2,330,975,328 3,744,970,802
Total (i+ii) 2,330,975,328 3,744,970,802

*100% provision was made against probable losses for Receivables from Seylon Bank PLC

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13.1 Maturity-wise classification

Repayable on demand - -
With a residual maturity of
Up to 1 Month 192,736,905 309,653,248
Over 1 month but not more than 3 months 1,044,334,650 1,677,839,626
Over 3 months but not more than 1 year 572,451,812 919,707,427
Over 1 year but not more than 5 years 348,686,845 560,204,150
More than 5 years 172,765,116 277,566,351
Total 2,330,975,328 3,744,970,802

13.2 Classification status of other assets

Unclassified 2,236,758,329 3,657,138,574
Doubtful - -
Bad/ Loss 94,216,999 87,832,228
Total 2,330,975,328 3,744,970,802

13.3 IB General account

13.3.1 Un-reconciled entries of Inter branch transactions in Bangladesh
Age Number Amount in Taka Amount in Taka

Upto 3 months (*) - 119,780,146

Over 3 months but not more than 6 months - - -
Total - 119,780,146

(*) All the outstanding entries in the above mentioned IB General Account have been fully adjusted within 8 March 2015.

13.3.2 Un-reconciled entries of inter branch transactions outside Bangladesh

Age Number Amount in Taka Amount in Taka

Upto 3 months - - -
Over 3 months but not more than 6 months - - -
Total - - -

13(a) Consolidated other assets

Islami Bank Bangladesh Limited 2,330,975,328 3,744,970,802
Islami Bank Securities Limited 131,314,319 72,078,330
Islami Bank Capital Management Limited 66,563,715 50,724,606
Inter-company balances (1,560,447) (116,215,662)
Total 2,527,292,915 3,751,558,076

14.0 Placement from banks & other financial institutions

Borrowing from Abroad -OBU 7,561,291,139 6,098,512,743
Borrowing from other Banks in Bangladesh-OBU 10,205,039,000 1,558,988,000
Borrowing from Treasury Division, IBBL -OBU (Note-6.0_ OBU) 11,388,906,162 7,606,631,085
Fund obtained by AD branches from OBU for MDB in FC (Note-3.0_ OBU) 2,481,608,500 2,859,555,231
Sub total 31,636,844,801 18,123,687,059
Less: Borrowing from Treasury Division, IBBL -OBU 11,388,906,162 7,606,631,085
Less: Fund obtained by AD branches from OBU for MDB in FC 2,481,608,500 2,859,555,231
Sub total 13,870,514,662 10,466,186,316
Total 17,766,330,139 7,657,500,743

Fund obtained from OBU for investment in MDB in FC by AD branches is shown under Cover fund MDB investment under other liabilities at AD
branches whereas Fund provided to AD branches for MDB in FC is shown under Placement with banks & other financial institutions in the assets
side at OBUs balance sheet. As the items are intra-units balance, the amount was fully eliminated while preparing the financial statement of the
Bank as a whole.

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14(a) Consolidated placement from banks & other financial institutions
Islami Bank Bangladesh Limited 17,766,330,139 7,657,500,743
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Total 17,766,330,139 7,657,500,743

15.0 Deposits & other accounts

Mudaraba savings deposits (Note-15.1) 211,543,849,041 183,128,708,639
Mudaraba term deposits 179,464,913,887 170,175,086,856
Other mudaraba deposits (Note-15.2) 162,098,214,256 149,346,325,824
Al- wadeeah current and other deposit accounts (Note-15.3) 57,160,947,306 54,396,285,416
Bills payable (Note-15.4) 5,091,285,545 3,649,894,101
Total 615,359,210,035 560,696,300,836

15.1 Mudaraba Savings Deposits

Mudaraba Savings Deposits 204,546,240,363 177,206,503,531
Mudaraba Savings Deposits (RDS) 5,203,831,494 4,455,720,616
Mudaraba Savings Deposit (RDS-RIP) 448,754 448,754
Mudaraba School Student Savings A/C 874,413,275 651,387,313
Mudaraba Farmers Savings A/C 917,329,251 814,648,425
Mudaraba Industry Employee Saving A/C 1,585,904 -
Total 211,543,849,041 183,128,708,639

15.2 Other Mudaraba Deposits

Mudaraba Special Notice Deposits 7,636,182,163 6,071,880,203
Mudaraba Hajj Deposits 2,152,714,965 1,850,748,069
Mudaraba Savings Bond 16,601,157,344 16,820,776,032
Mudaraba NRB Savings Bond 962,036,031 858,190,578
Mudaraba Special Savings (Pension) Deposits 101,258,351,850 93,252,815,277
Mudaraba Monthly Profit Deposit Scheme 22,100,423,541 21,789,339,383
Mudaraba Muhor Savings 462,720,734 429,546,767
Mudaraba Waqf Cash Deposit 633,464,293 533,005,487
Mudaraba Upahar Deposit Scheme 9,155,442 12,686,900
Mudaraba FC Deposit 10,280,579,577 7,725,100,106
Mudaraba FC Deposit ERQ 1,428,316 2,237,022
Total 162,098,214,256 149,346,325,824

15.3 Al Wadeeah current & other deposits accounts

Al Wadeeah Current Deposits 27,870,331,735 26,276,899,883

Convertible Taka Account 151,708 151,708
Non Resident Investors Taka Account 49,691,327 310,807,655
Non Resident FC of Exchange House / Banks 1,478,647,399 92,350,626
Non Resident FC of Exchange House / Banks-OBU (Note-2.0 _OBU) 69,053,137 69,601,591
Non Resident Taka Account 2,486,364,599 2,165,753,354
Foreign Currency Deposit 147,558,142 227,322,404
Foreign Currency Deposit ERQ 885,221,985 753,219,113
Other FC Deposit 37,376,790 37,832,780
Foreign Currency: Security Deposit 138,157,780 108,181,538
Foreign Currency Held against Back to Back L/C 3,975,415,048 3,797,545,715
Foreign Currency held against Cash L/C 936,570,440 474,533,179
Foreign Demand Draft /TT Payable 724,461,848 631,415,387
Foreign Currency Deposit against Foreign Bank Guarantee 31,351,057 31,131,042
Resident Foreing Currency Deposit 136,752 -
Profit Payable 9,311,956,189 10,163,838,731
Remittance Card Account 1,818,877 1,473,936
Sundry Deposits (Note-15.3.1) 9,021,215,994 9,282,404,631
FC Deposit of EPZ Enterprises 37,841,878 8,042,291
Mobile Wallet A/C 26,677,758 33,381,443
Sub total 57,230,000,443 54,465,887,007
Less: Non Resident FC of Exchange House / Banks-OBU 69,053,137 69,601,591
Total 57,160,947,306 54,396,285,416

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15.3.1 Break-up of sundry deposits
Sundry creditors 181,437,671 896,843,941
Supervision charge 48,756,716 48,673,117
Security deposit L/G 801,861 1,814,160
Security money payable 112,001,121 115,811,065
Security money locker 17,491,615 14,662,095
Marginal deposit 558,926,908 670,929,112
Bank guarantee 1,853,297 7,970,052
Closed account profit 296,747,554 297,584,883
Sundry deposit others 102,140,851 118,757,267
Govt. tax & VAT 12,206,699 23,066,578
Security Deposit - Investment 3,092,698 17,343,383
Security Deposit - L/C (Wes) 2,715,728 7,582,244
Security Deposit - Foreign L/C General 6,647,642,826 6,219,958,060
Security Deposit - Bank Guarantee 875,457,445 691,224,104
Security Deposits - Foreign Bill Negotiation( FBN)/ MDB 209,422 210,422
Security Deposit - IBP 451,486 145,486
Security Deposit - Inland L/C 54,300,209 48,831,511
RDS (RIP) 91,597,806 86,519,838
Other earnings (Note-15.3.1.1) 13,384,081 14,477,313
Total 9,021,215,994 9,282,404,631

15.3.1.1 Break-up of other earnings

Opening balance 14,477,313 15,105,669
Received from B. Bank FC clearing A/c 1,181,400 1,994,335
Received from foreign correspondents/banks 212,746 252,006
Total receipt during the year 1,394,146 2,246,341
Total available balance 15,871,459 17,352,010
Less:
Income tax provision @ 40.00% 567,378 954,697
Transferred/ paid for charitable activities 1,920,000 1,920,000
Closing balance 13,384,081 14,477,313

15.4 Bills payable

P.O. payable 4,622,075,759 2,916,986,417
T.T. payable 10,572,151 18,540,133
D.D. payable 208,930,073 318,699,302
FC bills payable 5,181,274 5,181,274
BEFTN payable 80,192,868 66,657,641
Spot cash payable 164,333,420 323,829,334
Total 5,091,285,545 3,649,894,101

15.5 Maturity wise classification of deposits (other than inter-Bank deposit)

Re-payable on demand 19,915,847,913 12,674,499,013
With a residual maturity of
Re- payable within 1 month 89,527,055,946 79,719,294,943
Over 1 month but not more than 3 months 125,666,183,243 108,991,484,445
Over 3 months but within 6 months 78,658,247,711 85,303,560,053
Over 6 months but not more than 1 year 66,031,187,588 69,248,903,698
Over 1 year but not more than 5 years 105,399,714,284 95,997,641,176
Over 5 years but within 10 years 129,677,373,869 108,432,499,867
Unclaimed Deposits for 10 years or more 7,395,668 6,152,719
Sub-total 614,883,006,222 560,374,035,914

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15.6 Maturity grouping of Inter- bank deposits are as under
Re-payable on demand - -
With a residual maturity of
Re- payable within 1 month 476,203,813 322,264,922
Over 1 month but within 6 months - -
Over 6 months but not more than 1 year - -
Over 1 year but not more than 5 years - -
Over 5 years but within 10 years - -
Sub-total 476,203,813 322,264,922
Total (15.5+15.6) 615,359,210,035 560,696,300,836

15.7 Other banks deposits with IBBL

Al Wadeeah Current Deposits 115,803,218 144,716,985
Mudaraba Special Notice Deposits 27,251,121 129,129,207
Mudaraba Savings Account 333,149,474 48,418,730
Total 476,203,813 322,264,922

15.8 Sector wise break up of deposits and other accounts

Government 254,756,000 204,387,000
Other banks deposit 476,203,813 322,264,922
Other public 364,888,000 576,694,000
Foreign currency 18,674,747,012 13,919,212,012
Private 595,588,615,210 545,673,742,902
Total 615,359,210,035 560,696,300,836

15(a) Consolidated deposits & other accounts

Islami Bank Bangladesh Limited 615,359,210,035 560,696,300,836
Islami Bank Securities Limited 1,154,001 1,153,956
Islami Bank Capital Management Limited - -
Inter-company balances (483,097,599) (983,874,763)
Total 614,877,266,437 559,713,580,029

16.0 Mudaraba Perpetual Bond (Note - 3.19) 3,000,000,000 3,000,000,000

16.1 Security pledged against Mudaraba Perpetual Bond (MPB) 4,489,100,000 4,489,100,000

17.0 Other liabilities

Provision for classified & unclassified investments and off- balance sheet items (Note- 17.1) 23,255,000,000 18,108,400,000
Provision for diminution in value of investments in shares (Note - 17.2) 3,793,000 3,498,661
Other provisions (Note - 17.3) 222,606,676 194,527,027
Compensation account (Note-17.5) 560,390,533 171,936,390
Profit/ rent /compensation suspense (Note - 17.6) 7,374,932,223 4,637,284,546
Current tax (Note-17.7) 5,354,006,319 8,104,445,048
Zakat payable 1,674,580,640 1,490,415,591
Foreign correspondents charges 4,972,435 2,433,269
Incentive bonus payable 1,517,332,606 1,185,893,152
Payable against expenditure 86,280,657 85,384,738
Payable against expenditure - Incentive to Good Borrowers 150,000,000 -
Clearing adjustment 7,428,382 36,341,416
Transfer delivery adjustment 8,093 157,569
BEFTN adjustment 10,421,716 808,378
Payable to Benevolent Fund, GF & SAF 20,000,000 30,000,000
Deferred/Unearned Airtime Commission 183,800 183,800
F.C. Payable A/c IBBL Travel Card 601,815 266,176
F.C. Payable A/c IBBL Hajj Card 1,933,828 51,333
F.C. Payable A/c IBBL Credit Card 25,000 -
VAT Payable 81,361,043 -
IB General account (Note - 17.8) 1,859,383,066 -
Total 42,185,241,832 34,052,027,094

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17.1 Provision for investments including bad & doubtful investments
General provision
Unclassified investments excluding OBU 3,708,549,000 3,307,926,000
Unclassified investments -OBU 266,800,000 123,193,000
Special mention account 194,361,000 194,361,000
Sub-total (Note-17.1.1) 4,169,710,000 3,625,480,000
Off-balance sheet items (Note-17.1.2) 1,333,800,000 1,128,200,000
Sub-total (General provision) 5,503,510,000 4,753,680,000
Specific provision (Note-17.1.3)
Substandard 101,045,936 101,045,936
Doubtful 255,809,525 255,809,525
Bad and loss (*) 17,394,634,539 12,997,864,539
Sub-total (Specific provision) 17,751,490,000 13,354,720,000
Total provision held at the end of the year ** 23,255,000,000 18,108,400,000

(*) As on 31 December 2015 provision of Tk. 8,458.38 million (Tk.3,963.70 million as on 31 December 2014) against Ananda Shipyard & Slipways
Ltd., Rubaiya Vegetable Ind. Ltd. and other writ & rescheduled clients (considering qualitative judgement) is included in the specific provision (bad
and loss) of Tk.17,394.63 million (Tk.12,997.86 million as on 31 December 2014).
(**) Adequate provision for the investments, off-balance sheet items and other assets have been made as per the relevant circulars issued
by Bangladesh Bank as well as decision taken in tripartite meeting amongst Inspection Team of Bangladesh Bank, External Auditors and the
Management of Islami Bank Bangladesh Limited and subsequent Letter No. DBI-4/42(7)/2016-722 dated 19 April 2016. However, out of cases under
writ petitions, provisions have been made against cases as per the instruction of Bangladesh Bank and accrued profit on investments under writ
petitions cases have been credited to profit/rent suspense accounts instead of investment income on prudence basis.
17.1.1 General provision on unclassified investment including OBU
Provision held at the beginning of the year 3,625,480,000 3,371,600,000
Provision made/ (no longer required) during the year 544,230,000 253,880,000
Total provision held at the end of the year 4,169,710,000 3,625,480,000

17.1.2 General provision on off-balance sheet items

Provision held at the beginning of the year 1,128,200,000 1,137,200,000
Provision made/ (no longer required) during the year 205,600,000 (9,000,000)
Total provision held at the end of the year (*) 1,333,800,000 1,128,200,000
Sub-total (17.1.1+17.1.2) 5,503,510,000 4,753,680,000

17.1.3 Provision for classified investments

Provision held at the beginning of the year 13,354,720,000 9,037,800,000
Fully provided investment written off (Note-17.1.3.1) (286,624,001) (148,335,025)
Recoveries of amounts previously written off 39,909,335 39,350,296
Provision made during the year 4,643,484,666 4,425,904,729
Provision no longer required - -
Net charge to profit & loss account for classified investment 4,643,484,666 4,425,904,729
Total provision held at the end of the year 17,751,490,000 13,354,720,000
Total provision for investments (17.1.1+17.1.3) 21,921,200,000 16,980,200,000
Total provision (17.1.1+17.1.2+17.1.3) 23,255,000,000 18,108,400,000

17.1.3.1 Fully provided investment written off/waived/transferred

Written-off during the year 286,624,001 148,335,025
Total 286,624,001 148,335,025

17.1.4 Provision made for investments & off- balance sheet items for the year
Provision for classified investments 4,643,484,666 4,425,904,729
General provision on unclassified investment including OBU 544,230,000 253,880,000
General provision on off-balance sheet items 205,600,000 (9,000,000)
Total 5,393,314,666 4,670,784,729

17.1.5 Total Provision Requirement and maintained for investments including off balance sheet items at the end of year 2015
Maintained
Required Provision
Particulars of Investment Provision for 2015
for 2015 (Taka)
(Taka)
General provision on unclassified investment including OBU 4,169,700,000 4,169,710,000
Provision for classified investments 9,292,410,000 11,599,490,000
Provision for investments considering qualitative judgement 8,458,380,000 6,152,000,000
Total provision for investment 21,920,490,000 21,921,200,000
General provision on off-balance sheet items 1,333,790,000 1,333,800,000
Total provision for investment including off balance sheet items at the end of the year 23,254,280,000 23,255,000,000
Provision surplus/(deficit) for the year 2015 720,000

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17.2 Provision for diminution in value of investments in shares
Opening balance 3,498,661 423,778
Add: Provision made/(adjustment) during the year 294,339 3,074,883
Closing balance (Note-17.2.1) 3,793,000 3,498,661

17.2.1 Provision for diminution in value of investments in shares

i) Dealing securities
Quoted 3,636,000 3,341,661
Un-quoted - -
Sub-total (i) 3,636,000 3,341,661
ii) Investment securities
Quoted - -
Un-quoted 157,000 157,000
Sub-total (ii) 157,000 157,000
Total (i+ii) 3,793,000 3,498,661

17.2(a) Consolidated provision for diminution in value of investments in shares made during the year 2015 2014
Taka Taka
Islami Bank Bangladesh Limited 294,339 3,074,883
Islami Bank Securities Limited 26,774,778 33,109,478
Islami Bank Capital Management Limited - -
Total 27,069,117 36,184,361

17.3 Other provisions 31.12.2015 31.12.2014

Taka Taka
Provision for other assets (Note-17.3.1) 106,820,159 123,369,900
Provision for doubtful income account (Note-17.3.2) 115,786,517 71,157,127
Total 222,606,676 194,527,027

17.3.1 Provision for other assets

Opening balance 123,369,900 109,681,000
Add: Provision made/(adjustment) during the year (16,549,741) 13,688,900
Closing balance 106,820,159 123,369,900

17.3.2 Provision for doubtful income account

Opening balance 71,157,127 -
Add: Provision made during the year 115,786,517 103,360,602
Less: Expended for charitable purposes 71,157,127 32,203,475
Closing balance 115,786,517 71,157,127

17.4 Other provisions made for the year 2015 2014

Taka Taka
Provision for other assets (16,549,741) 13,688,900
Provision for doubtful income account 115,782,017 103,360,602
Total 99,232,276 117,049,502

17.5 Compensation account

Opening balance 171,936,390 -
Addition during the year 1,178,372,760 769,375,628
Total 1,350,309,150 769,375,628
Less: Income tax provision @ 40.00% (2015) & 42.50% (2014) 471,349,104 326,984,642
Less: expended for charitable activities 318,569,513 270,454,596
Closing balance 560,390,533 171,936,390

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17.6 Profit/ rent/ compensation suspense
Profit/ rent suspense (Note-17.6.1) 2,383,138,052 1,717,660,073
Compensation suspense (Note-17.6.2) 4,991,794,171 2,919,624,473
Total 7,374,932,223 4,637,284,546

17.6.1 Profit/ rent suspense

Balance at the beginning of the year 1,717,660,073 563,405,586
Amount transferred to suspense account during the year 2,520,733,672 2,884,720,516
Amount transferred to investment income during the year (1,781,377,665) (1,723,221,912)
Amount written-off during the year (73,508,467) (7,244,117)
Amount waived during the year (369,561) -
Balance at the end of the year 2,383,138,052 1,717,660,073

17.6.2 Compensation suspense

Balance at the beginning of the year 2,919,624,473 1,920,364,179
Amount transferred to suspense account during the year 3,314,200,483 1,635,324,839
Amount transferred to compensation income during the year (480,225,154) (387,287,567)
Amount written-off during the year (586,010,325) (111,609,013)
Amount waived during the year (175,795,306) (137,167,965)
Balance at the end of the year 4,991,794,171 2,919,624,473

17.7 Current tax liability

Balance of provision on 01 January 11,613,343,034 10,062,355,707

Add: Provision made during the year ( Note 17.7.1) 5,908,800,257 6,323,390,422
Add: Other provision made during the year 471,916,542 327,984,375
Less: Settlement for previous year 6,102,486,907 5,100,387,470
Total (a) 11,891,572,926 11,613,343,034

Advance Income Tax paid

Balance of advance tax on 01 January 3,508,897,986 3,012,173,274
Add: Payment made during the year 9,131,155,528 5,597,112,182
Less: Settlement for previous year 6,102,486,907 5,100,387,470
Total ( b) 6,537,566,607 3,508,897,986
Net balance as at 31 December (a-b) 5,354,006,319 8,104,445,048

17.7.1 Provision for current tax made during the year 2015 Taka 2014 Taka
Income tax @ 40.00% (2015) & 42.50% (2014) on taxable profit (A) 5,907,166,262 6,300,768,396
Add: Income tax @ 20% on dividend income 1,633,995 22,622,026
Add: Excess profit tax -
Less: Provision already kept - -
Estimated provision required as at 31 December, (i) 5,908,800,257 6,323,390,422

Computation of taxable profit

Profit before tax 8,855,016,597 10,531,712,736

Less: Dividend income 8,169,976 113,110,128
Profit before tax (excluding dividend income) 8,846,846,621 10,418,602,608
Add : Inadmissible expenditure 6,995,276,147 5,712,242,877
Less : Further allowable expenditure 1,074,207,112 1,305,508,083
Estimated taxable profit for the year (A) 14,767,915,656 14,825,337,402

Provision for tax for the year ended on 31.12.2015 has been made as per Income Tax Ordinance, 1984 applying prevailing rates applicable on
the net profit. Income tax assessments have been completed by the Deputy Commissioner of Taxes up to the accounting year 2013 and income
tax return has been submitted for the year 2014. The Bank filled appeals/ writ petitions against tax assessment orders of different levels of tax
authorities to the appropriate tax authorities and High Court on different disputed issues. Adequate provisions for those assessment years have
been made in the books of accounts.

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17.7.2 Reconciliation of effective tax rate

2015 2014
Particulars
% Taka % Taka
Profit before income tax as per profit and loss account 8,855,016,597 10,531,712,736
Income Tax using the domestic corporate tax rate 40.00% 3,542,006,639 42.50% 4,475,977,913
Factors affecting the tax charge for current year:
Non deductible expenses 31.60% 2,798,110,458 23.05% 2,427,703,223
Tax exempt income -4.85% (429,682,845) -5.27% (554,840,935)
Tax savings from reduced tax rates from dividend -0.02% (1,633,995) -0.24% (25,449,779)
Total income tax expenses 66.73% 5,908,800,257 60.04% 6,323,390,422

31.12.2015 31.12.2014
17.7(a) Consolidated current tax liability
Taka Taka
Islami Bank Bangladesh Limited 5,908,800,257 6,323,390,422
Islami Bank Securities Limited 58,578,966 25,368,838
Islami Bank Capital Management Limited 10,993,841 18,609,428
Total 5,978,373,064 6,367,368,688

17.8 IB General account

Un-reconciled entries of inter branch transactions in Bangladesh
Maturity Number Amount in Taka Amount in Taka

Upto 3 months (*) - 1,859,383,066 -

Over 3 months but not more than 6 months - - -
More than 6 months - - -
Total (i+ii+iii) - 1,859,383,066 -

(*) All the outstanding entries in the above mentioned IB General Account have been fully adjusted within 31 January 2016.

17.9 Maturity-wise classification of other liabilities

Repayable on demand - -
With a residual maturity of
Up to 1 Month 2,900,067,296 2,952,471,399
Over 1 month but not more than 3 months 12,594,135,013 12,821,710,542
Over 3 months but not more than 1 year 3,830,526,591 3,899,744,057
Over 1 year but not more than 5 years 1,779,130,704 1,811,279,527
More than 5 years 21,081,382,228 19,566,821,569
Total 42,185,241,832 41,052,027,094

17(a) Consolidated other liabilities

Islami Bank Bangladesh Limited 42,185,241,832 34,052,027,094
Islami Bank Securities Limited 5,371,115,471 3,214,833,187
Islami Bank Capital Management Limited 61,917,907 155,924,066
Inter-company balances (5,096,468,119) (3,202,020,617)
Total 42,521,807,091 34,220,763,730

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18.0 Deferred tax (assets)/liabilities

Deferred tax assets and liabilities have been recognised and measured in accordance with the provision of Bangladesh Accounting Standards
(BAS) 12 Income Taxes and BRPD circular No. 11 dated 12 December 2011. Calculation of deferred tax has been made on all temporary
differences between the tax base and carrying amounts for financial reporting purpose. Deferred tax assets and liabilities are attributable to the
following:

i) Deferred tax on fixed assets

Carrying amount 4,249,881,264 4,071,159,148
Tax Base 3,313,057,058 3,145,060,462
Temporary timing difference 936,824,206 926,098,686
Deferred tax (asset)/liability @ 40.00% (2015) & 42.50% (2014) 374,729,682 393,591,942
Opening balance 393,591,942 336,929,734
Deferred tax (income)/expenses (18,862,260) 56,662,208

ii) Deferred tax on provision for gratuity

Carrying amount 10,000,000 -
Tax Base - -
Temporary timing difference (10,000,000) -
Deferred tax (asset)/liability @ 40.00% (2015) & 42.50% (2014) (4,000,000) -
Opening balance - (138,635,000)
Deferred tax (income)/expenses (4,000,000) 138,635,000

iii) Deferred tax on provision for Rebate on good borrowers

Carrying amount 150,000,000 -
Tax Base - -
Temporary timing difference (150,000,000) -
Deferred tax (asset)/liability @ 40.00% (2015) & 42.50% (2014) (60,000,000) -
Opening balance - -
Deferred tax (income)/expenses (60,000,000) -
Net deferred tax (income)/expenses (i+ii) (82,862,260) 195,297,208
Net deferred tax (assets)/liabilities (i+ii) 310,729,682 393,591,942

18(a) Consolidated Deferred tax (assets)/liabilities

Islami Bank Bangladesh Limited 310,729,682 393,591,942
Islami Bank Securities Limited (663,350) (315,880)
Islami Bank Capital Management Limited - -
Total 310,066,332 393,276,062

18(b) Consolidated Deferred tax (income)/expenses for the year 2015 Taka 2014 Taka
Islami Bank Bangladesh Limited (82,862,260) 195,297,208
Islami Bank Securities Limited (347,470) (371,153)
Islami Bank Capital Management Limited - -
Total (83,209,730) 194,926,055

19.0 Share capital

19.1 Authorized capital

The authorized capital of the Bank is Tk.20,000,000,000 divided into 2,000,000,000 ordinary shares of Tk.10 each.

19.2 Paid up capital

Paid-up Capital of the Bank at the end of the year 2015 is Tk.1609,99,06,680 divided into 160,99,90,668 ordinary shares of Tk.10 each .

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19.2.1 The Paid-up Capital of the Bank is Tk.1609,99,06,680 divided into 160,99,90,668 ordinary shares of Tk.10 each fully subscribed by:

No. of Shares
31.12.2015 31.12.2014
Particulars as on 31 Dec, % of Total
Amount in Taka Amount in Taka
2015
(i) Sponsors/ promoters 929,871,364 57.756% 9,298,713,640 9,397,786,460
(ii) General public 680,098,987 42.242% 6,800,989,870 6,701,917,050
(iii) Government of the Peoples Republic of Bangladesh* 20,317 0.001% 203,170 203,170
Total 1,609,990,668 100.000% 16,099,906,680 16,099,906,680

* The shares have already been sold by the Government of Bangladesh but no transfer has yet been made in share register of the Bank.

19.2.2 Break up of share holding and percentage thereof as on 31.12.2015

No. of Total Holdings/ No.
Holdings Percentage (%)
Shareholders of Shares
Less than 500 Shares 26,933 4,150,143 0.258%
500 to 5,000 Shares 15,431 27,297,645 1.696%
5,001 to 10,000 Shares 2,278 16,384,690 1.018%
10,001 to 20,000 Shares 1,471 21,203,770 1.317%
20,001 to 30,000 Shares 547 13,319,679 0.827%
30,001 to 40,000 Shares 259 8,876,848 0.551%
40,001 to 50,000 Shares 182 8,279,693 0.514%
50,001 to 100,000 Shares 315 22,129,660 1.375%
100,001 to 1,000,000 Shares 392 112,188,233 6.968%
Over 1,000,000 Shares 101 1,376,160,307 85.476%
Total 47,909 1,609,990,668 100.00%

20.0 Capital adequacy as per Basel - III as on 31 December 2015 (Consolidated)

The Calculation of Capital Adequacy of the Bank has been done as per the revised guidelines on Guidelines of Risk based Capital Adequacy
(Revised Regulatory Capital Framework for Banks in line with Basel-III) issued by Bangladesh Bank vide BRPD Circular No. 18 dated 20.12.2014
and DOS Circular No. 02 dated 04.03.2015 Detail calculation of Capital Adequacy as per Basel-III as on December 31, 2015 is given below:

(Amount in million Taka)

31.12.2015 31.12.2014
20.1 A. Regulatory capital 31.12.2015 (Solo)
(Consolidated) (Consolidated)
Tier-1 (Going Concern Capitak) (Note-20.1.1) 38,742.88 38,649.85 38,007.50
Tier-2 (Gone Concern Capital) (Note-20.1.2) 9,172.24 9,195.48 10,543.92
Total regulatory capital 47,915.12 47,845.33 48,551.42

20.1.1 Tier-1 (Going Concern Capital)

Common Equity Tier-1(CET-1) (Note-20.1.1.1) 35,742.88 35,649.85 35,007.50
Additional Tier(AT-1) (Note-20.1.1.2) 3,000.00 3,000.00 3,000.00
Total Tier-1 (Going Concern Capital) 38,742.88 38,649.85 38,007.50

20.1.1.1 Common Equity Tier-1(CET-1)

Fully paid-up capital/capital deposited with BB 16,099.91 16,099.91 16,099.91
Statutory reserve 16,099.91 16,099.91 16,099.91
Non-repayable share premium account 1.99 1.99 1.99
General reserve 196.06 196.06 386.97
Retained earnings 3,312.95 3,219.98 2,386.67
Non-controlling interest in subsidiaries 0.06 - 0.06
Non-cumulative irredeemable preferences shares - - -
Dividend equalization account 32.00 32.00 32.00
i. Sub total 35,742.88 35,649.85 35,007.50

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(Amount in million Taka)

31.12.2015 31.12.2014
Deductions from Tier-1 (Going Concern Capital) 31.12.2015 (Solo)
(Consolidated) (Consolidated)
Book value of goodwill - - -
Shortfall in provisions required against classified assets - - -
Shortfall in provisions required against investment in shares - - -
Remaining deficit on account of revaluation of investment in securities - - -
after netting off from any other surplus on the securities.
Reciprocal crossholdings of bank capital /subordinated debt - - -
Any investment exceeding the approved limit - - -
Others (95% of the Deffered Tax Assets) - - -
ii. Sub total - - -
Total eligible CET-1 (i-ii) 35,742.88 35,649.85 35,007.50

20.1.1.2 Aditional Tier-1 Capital(AT-1)

Mudaraba Perpetual Bond 3,000.00 3,000.00 3,000.00
Total AT 1 3,000.00 3,000.00 3,000.00

20.1.2 Tier-2 (Gone Concern Capital)

General provision (unclassified investment and off balance sheet expo- 4,540.05 4,563.30 4,753.68
sure)*
Assets revaluation reserves up to 40% 4,599.59 4,599.59 5,749.49
Revaluation reserves of securities up to 40% 32.60 32.60 40.75
Revaluation reserves for equity instruments up to 8% - - -
All other preference shares - - -
Others (if any item approved by Bangladesh Bank) - - -
i. Sub total 9,172.24 9,195.48 10,543.92
ii. Deductions, if any - - -
Total Eligible Tier-2 Capital (i-ii) 9,172.24 9,195.48 10,543.92

20.2 Risk Weighted Assets (RWA) for

1. Investment (credit) risk(i+ii) 363,203.78 365,063.65 336,165.95
(i) On-balance sheet 336,829.75 338,689.62 313,692.19
(ii) Off-balance sheet 26,374.03 26,374.03 22,473.76
2. Market Risk 5,322.05 5,322.05 6,394.91
3.Operational risk 40,182.07 39,946.58 35,906.44
Total Risk Weighted Assets (1+2+3) 408,707.90 410,332.28 378,467.30

B. Total Risk Weighted Assets (RWA) (Note-20.2) 408,707.90 410,332.28 378,467.30

C. Capital to Risk Weighted Asset Ratio (CRAR) (as against required above 11.72% 11.66% 12.83%
10.00% )
D. Going Concern Capital to RWA (as against required minimum 5.50%) 9.48% 9.42% 10.04%
E.Gone Concern Capital capital to RWA 2.24% 2.24% 2.79%
F. Minimum Capital Requirement (MCR) 40,870.79 41,033.23 37,846.73
G. Surplus capital (A-F) 7,044.33 6,812.10 10,704.69

Notes
1. Subordinated Debt (Mudaraba Perpetual Bond) of Tk 3,000.00 million had qualified for Additional Tier-1 Capital under Basel-III Guidelines.
2. General Provision for SMA and off-balance sheet is limited to maximum 1.25% of RWA for credit risk as per Basel-III Guidelines
3. Revauation Reserve for Securities & equity instrument will be deducted as per Basel III guidelines. Total 40% of the Reserve has been treated for
Tier-II capital for 2015.

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21.0 Statutory reserve

Opening balance 16,099,906,680 14,638,613,627
Add: Addition made this year - 1,461,293,053
Closing balance 16,099,906,680 16,099,906,680

At least 20% of net profit before tax is to be transferred to statutory reserve account each year until the cumulative balance equal to the amount
of paid up capital account as per Section 24 of the Bank Company Act 1991 as amended. As the cumulative balance of statutory reserve is equal
to the amount of paid up capital, during the year 2015, no amount was transferred to statutory reserve.

22.0 Others reserves

General reserve (Note-22.1) 196,062,601 386,965,337
Assets revaluation reserve (Note-22.2) 11,498,971,320 11,498,971,320
Revaluation reserve of securities (Note-22.3) 46,480,000 81,500,000
Translation reserve (Note-22.4) 4,314,759 6,392,484
Share premium 1,989,633 1,989,633
Dividend equalization account 32,000,000 32,000,000
Total 11,779,818,313 12,007,818,774

22.1 General reserve

Opening balance 386,965,337 250,219,286
Add: Addition/(adjustment) made this year (190,902,736) 136,746,051
Closing balance 196,062,601 386,965,337

22.2 Assets revaluation reserve

Opening balance 11,498,971,320 11,498,971,320
Add: Addition/(adjustment) made this year - -
Closing balance 11,498,971,320 11,498,971,320

22.3 Revaluation reserve of securities

Opening balance 81,500,000 62,600,000
Add: Addition/(adjustment) made this year (35,020,000) 18,900,000
Closing balance 46,480,000 81,500,000

22.4 Translation reserve

Opening balance 6,392,484 1,317,771
Add: Addition/ (adjustment) made this year (2,077,725) 5,074,713
Closing balance 4,314,759 6,392,484

23.0 Letter of guarantee

(a) Claim against the bank which is not acknowledged as debt - -
(b) Money for which the bank is contingently liable in respect of guarantees issued favouring:
i) Directors - -
ii) Government 785,391,155 210,589,850
iii) Bank and other financial institutions 13,050,413 500,000
iv) Others 9,831,246,789 8,628,895,740
Total 10,629,688,357 8,839,985,590

24.0 Investment income 2015 2014

Taka Taka

Income from general investment (Note-24.1) 47,040,550,602 48,521,667,089

Profit on deposits with other banks & financial institutions (Note-24.2) 1,111,726,479 588,289,290
Total 48,152,277,081 49,109,956,379

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24.1 Income from general investment (*)

Bai Murabaha 28,199,166,062 29,474,302,572
Musharaka /Musharaka Documentary Bills 1,134,555,613 1,463,048,565
Bai Muajjal 4,508,076,111 4,477,450,761
Hire Purchase under Shirkatul Melk 11,484,077,879 11,755,116,774
Bai Salam 283,542,971 312,385,391
Bai -As- Sarf (FDB /FCD), IBP, MFCI and UPAS 418,225,589 285,866,022
Investment income: Off-shore Banking Unit (OBU) 816,188,135 753,497,004
Income on overseas Investment 63,802,838 -
Income on Mudaraba Investment 132,915,404 -
Sub total 47,040,550,602 48,521,667,089

(*) This amount includes any amount transferred from profit/rent/compensation suspense due to recovery or regularization of investment (i.e.
due to declassification of investment) during the year. Amount transferred from profit/rent suspense is included in the Investment income under
respective mode of investment and amount transferred from compensation suspense is included under Compensation income.

24.2 Profit on deposits with other banks & financial institutions

In Bangladesh 1,111,726,479 588,289,290
Outside Bangladesh - -
Sub total 1,111,726,479 588,289,290
Grand total (24.1+24.2) 48,152,277,081 49,109,956,379

24.3 Investment income derived from the fund deployed by

Mudaraba deposits 41,040,937,008 42,524,199,777
Other deposits/fund 7,111,340,073 6,585,756,602
Total 48,152,277,081 49,109,956,379

24(a) Consolidated investment income

Islami Bank Bangladesh Limited 48,152,277,081 49,109,956,379
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Inter-company transactions (132,915,404) -
Total 48,019,361,677 49,109,956,379

25.0 Profit paid on mudaraba deposits

Profit paid on Mudaraba Savings Deposit 6,670,013,096 6,753,174,438
Profit paid on Mudaraba Term Deposit Account 10,636,192,227 11,963,579,333
Profit paid on other Mudaraba Deposits 10,676,233,230 11,424,508,214
Profit paid on Placement (*) 483,181,028 173,608,636
Profit paid on Mudaraba Perpetual Bond (MPB) 272,250,000 335,400,000
Total 28,737,869,581 30,650,270,621

(*) Profit paid on Placement includes Tk.44,07,15,274/- for 2015 (in 2014 Tk.11,17,73,018/-) against Profit paid on Placement for Off-shore Banking
Units (OBUs).

25(a) Consolidated profit paid on mudaraba deposits

Islami Bank Bangladesh Limited 28,737,869,581 30,650,270,621
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Inter-company transactions (26,066,295) (57,333,113)
Total 28,711,803,286 30,592,937,508

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26.0 Income from investments in shares & securities

i. Inside Bangladesh
Bangladesh Government Islamic Investment Bond (BGIIB) 730,684,000 1,784,915,681
Bangladesh Shipping Corporation (BSC) 2,000,000 2,000,000
Central Depository Bangladesh Ltd. (CDBL) 5,711,802 5,711,802
Income on Share Securities Trading 2,607,222 2,222,593
Islami Bank Capital Management Limited - 104,997,550
Other Banks/companies 61,150,280 400,776
Sub total (i) 802,153,304 1,900,248,402
ii. Outside Bangladesh - -
Sub total (ii) - -
Grand total (i+ii) 802,153,304 1,900,248,402

26(a) Consolidated income from investments in shares & securities

Islami Bank Bangladesh Limited 802,153,304 1,900,248,402
Islami Bank Securities Limited 13,001,557 51,990,206
Islami Bank Capital Management Limited - -
Inter-company transactions - (104,997,550)
Total 815,154,861 1,847,241,058

27.0 Commission, exchange & brokerage income

Commission income 3,349,911,997 3,477,847,228
Exchange income (Note 27.1) 2,848,823,054 2,392,526,280
Total 6,198,735,051 5,870,373,508

27.1 Exchange income

Gross exchange gain 2,848,823,054 2,392,526,280
Less: exchange loss - -
Net exchange gain 2,848,823,054 2,392,526,280

27(a) Consolidated commission, exchange & brokerage income

Islami Bank Bangladesh Limited 6,198,735,051 5,870,373,508
Islami Bank Securities Limited 14,178,951 12,958,772
Islami Bank Capital Management Limited - -
Total 6,212,914,002 5,883,332,280

28.0 Other operating income

Rent on locker 13,103,258 11,817,153
Telephone/ trunk call charge recovered 213,437 647,733
Income from ATM 76,061,443 47,806,594
E & TA fees recovered 1,794,899 1,195,640
Income from SWIFT 164,164,575 139,851,387
Account maintenance charges realised 756,629,328 703,099,468
Service charges recovered 57,213,160 37,111,895
Service charges recovered: OBU 18,503,071 13,871,627
Income from Mobile Wallet 8,520,919 4,095,642
Rent on premises realised 2,362,544 2,538,886
Sale proceeds of tender schedule 2,797,976 2,999,500
Profit on sale of banks car 2,401,971 21,249,366
MICR cheque charge realised 10,610,890 26,932,254
Others 284,355,146 153,231,826
Total 1,398,732,617 1,166,448,971

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28(a) Consolidated other operating income

Islami Bank Bangladesh Limited 1,398,732,617 1,166,448,971
Islami Bank Securities Limited 327,259,194 61,594,225
Islami Bank Capital Management Limited 29,501,539 52,663,859
Inter Company Transactions (26,066,295) (57,333,113)
Total 1,729,427,055 1,223,373,942

29.0 Salary & allowances (*)

Basic pay 3,867,109,316 3,437,505,591
Allowances 2,315,780,593 2,396,531,797
Bonus 1,997,278,335 1,634,071,311
Contribution to provident fund 310,073,194 289,091,142
Contribution to Gratuity (**) 366,900,000 396,000,000
Contribution to benevolent fund 10,000,000 10,000,000
Contribution to superannuation fund - 20,000,000
Total 8,867,141,438 8,183,199,841

(*) The above salary & allowances includes Tk.34,32,726/- for 2015 (in 2014 Tk.36,11,290/-) against salary and allowances of Off-shore Banking
Units (OBUs).
(**) As per latest Actuarial valuation report, there was no shortfall in the fund to meet-up the related liability up to 31 December 2015.

29(a) Consolidated salary & allowances

Islami Bank Bangladesh Limited 8,867,141,438 8,183,199,841
Islami Bank Securities Limited 17,037,238 14,368,273
Islami Bank Capital Management Limited - -
Total 8,884,178,676 8,197,568,114

30.0 Rent, taxes, insurances, electricity etc.

Rent, rates and taxes 463,723,696 362,139,320
Insurance 399,285,337 343,706,938
Electricity and lighting 279,914,212 290,293,609
Total 1,142,923,245 996,139,867

30(a) Consolidated rent, taxes, insurances, electricity etc.

Islami Bank Bangladesh Limited 1,142,923,245 996,139,867
Islami Bank Securities Limited 4,219,493 3,905,713
Islami Bank Capital Management Limited - -
Total 1,147,142,738 1,000,045,580

31.0 Legal expenses

Legal charges 44,189,468 16,206,043

31(a) Consolidated legal expenses

Islami Bank Bangladesh Limited 44,189,468 16,206,043
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Total 44,189,468 16,206,043

32.0 Postage, stamps, telecommunications etc.

Telephone (*) 38,168,886 38,613,447
Postage 506,138 387,577
Fax & internet (modem) 5,016,641 8,072,366
Stamps charges 14,430 57,320
Total 43,706,095 47,130,710

(*) Telephone expenses includes Tk. NIL for 2015 (in 2014 Tk.3,010/-) against Telephone bill of Off-shore Banking Units (OBUs).

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32(a) Consolidated postage, stamps, telecommunications etc.

Islami Bank Bangladesh Limited 43,706,095 47,130,710
Islami Bank Securities Limited 189,645 175,424
Islami Bank Capital Management Limited - -
Total 43,895,740 47,306,134

33.0 Stationery, printing and advertisement etc.

Paper & table stationery 32,517,902 27,516,110
Printing and stationery (registers and forms) 126,837,389 125,352,068
Advertisement & publicity 160,030,952 164,541,413
Total 319,386,243 317,409,591

33(a) Consolidated stationery, printing and advertisement etc.

Islami Bank Bangladesh Limited 319,386,243 317,409,591
Islami Bank Securities Limited 591,962 202,501
Islami Bank Capital Management Limited - -
Total 319,978,205 317,612,092

34.0 Chief executives salary & fees

Basic pay 4,800,000 4,800,000
House rent allowance 480,000 480,000
Medical allowance 1,200,000 1,200,000
Utilities 120,000 120,000
Festival bonus 800,000 800,000
Incentive bonus 1,000,000 1,000,000
Total 8,400,000 8,400,000

35.0 Directors fees and expenses

Directors fees for attending board/ executive committee/ other committees meeting 1,607,700 2,431,100
TA/DA/hotel fare for local & foreign directors 9,542,675 8,973,833
Others 1,052,917 1,382,084
Total 12,203,292 12,787,017

35.1 Rate of fees for attending board/ executive committee/ other committees meeting

For board meeting 8,000 5,000

For executive committee/ other committees meeting 8,000 4,000

35(a) Consolidated directors fees and expenses

Islami Bank Bangladesh Limited 12,203,292 12,787,017
Islami Bank Securities Limited 437,000 396,750
Islami Bank Capital Management Limited - -
Total 12,640,292 13,183,767

36.0 Shariah supervisory committees fees & expenses

Shariah supervisory members fees for attending meeting 1,092,500 727,800
TA/DA./hotel fare 2,187,034 1,566,024
Others 450,715 268,300
Total 3,730,249 2,562,124

36.1 Rate of fees for attending shariah supervisory meeting

For shariah supervisory meeting 8,000 5,000
For sub-committee meeting 8,000 4,000

37.0 Auditors fees

Auditors fees 2,415,000 2,229,118
37(a) Consolidated auditors fees
Islami Bank Bangladesh Limited 2,415,000 2,229,118
Islami Bank Securities Limited 92,000 92,000
Islami Bank Capital Management Limited 23,000 23,000
Total 2,530,000 2,344,118

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38.0 Depreciation/amortization and repair to banks assets
i) Depreciation/amortization
Premises (building) 141,226,062 140,627,745
Furniture & fixtures 53,118,843 48,274,318
Mechanical appliances 363,551,524 360,487,678
Motor vehicles 80,453,617 57,513,847
Books 788,141 644,035
ATM 96,419,964 77,925,469
Amortization: Intangible assets 97,116,440 82,825,438
Sub total (i) 832,674,591 768,298,530
ii) Repair of banks properties/assets 124,648,451 93,702,876
Grand total (i+ii) 957,323,042 862,001,406

38(a) Consolidated depreciation and repair to banks assets

Islami Bank Bangladesh Limited 957,323,042 862,001,406
Islami Bank Securities Limited 4,620,587 4,504,731
Islami Bank Capital Management Limited - -
Total 961,943,629 866,506,137

39.0 Other expenses

TA/ DA 155,786,196 133,384,530
Repairs to rented premises 7,508,338 6,363,602
Motor car running & maintenance 101,835,692 73,004,044
Periodicals & newspapers 10,435,764 9,983,541
Entertainment Expenses 46,050,300 44,048,136
Re-imbursement expense-conveyance 80,165,307 82,598,993
Overtime 62,640,794 55,815,459
Training expenses 73,964,837 40,623,027
Meeting expenses 5,826,855 9,015,645
Bank charges (*) 8,116,149 10,222,740
Uniforms 12,806,342 12,710,324
Conveyance 12,540,185 10,968,375
Cash award 23,874,260 18,361,924
Membership fees 6,544,602 5,487,280
Staff welfare 3,220,100 5,756,822
Evening banking allowance 2,630,611 2,592,127
Computer expenses 33,278,350 33,277,076
Wages 42,773,819 41,198,959
Discomfort allowance 24,478,984 17,413,263
Air condition maintenance 1,125,744 1,693,426
WASA / gas expenses 12,929,147 12,328,537
Washing charges 11,754,780 11,257,944
Transportation charges 6,359,257 4,144,936
Reuters charges 6,007,050 6,260,715
Business development expenses 401,152,735 279,848,759
Photocopy expenses 15,813,511 16,817,513
Upkeep of office premises 18,772,305 18,478,138
Clearing house expenses 291,689 314,002
Bonus share issue expenses - 4,599,355
Rating expenses - 460,000
Band width charges 108,858,774 86,915,306
Other regulatory fees and expenses 5,000 5,000
MPB expenses 1,576,600 1,500,000
Recruitment expenses - 5,468,222
Professional fees 17,724,749 2,053,424
Loss on sale of banks fixed asset 11,137,380 176,461
Khidmah card expenses 60,000 425,064
Mobile wallet expense 11,054,922 10,732,857
BACH Expense 396,637 333,529
Other RDS expenses (Note-39.1) 63,696,647 67,540,903
NPS network transactions charges 1,986,664 113,670
VISA expenses 9,627,412 13,723,464
Maintenance of software 48,269,565 23,754,600
IBTRA- DIB Expenses 7,758,479 -
Incentive to Good Borrowers (**) 150,000,000 -
Others 22,603,050 18,312,139
Total 1,643,439,582 1,200,083,831

(*) Bank charges includes Tk. NIL for 2015 (in 2014 Tk.14,332/-) against Bank charges of Off-shore Banking Units (OBUs).

(**) A lump sum amount of Tk 150,000,000/- has been kept for Incentive to Good Borrowers as per Bangladesh Bank BRPD Circular Letter No.
03, dated 16 February 2016.

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39.1 Other RDS expenses

Risk allowance 35,033,158 37,147,498
By-cycle allowance 8,917,530 9,455,726
Motor cycle allowance 7,643,597 8,104,908
Field allowance 3,821,799 4,052,454
TA/ DA 1,273,933 1,350,818
Fuel 1,910,899 2,026,227
Stationary 3,184,832 3,377,045
Repairing 1,910,899 2,026,227
Total 63,696,647 67,540,903

39.2 Motor car running and maintenance

As on 31.12.2015 the Bank had 303 (Three hundred three) Motor Vehicles (Cars -251, Jeeps -12, Pickup-37 and Microbuses -3) . Out of 303
vehicles, 251 cars are attached with the senior executives of the Bank as per transport policy of the Bank and rest vehicles are used for
carrying cash, development works and other important works of the Bank and . A sum of Tk.101,835,692/- was incurred during the year ended on
31.12.2015 as against Tk.73,004,044/- incurred during the year 2014 for repairs, maintenance, purchase of fuel & lubricants and insurance etc.
for the motor vehicles of the Bank.

39.3 VAT related to expenditures

All the expenditures reported in this Financial Statements are inclusive of VAT except for specific items which are exempted from VAT by
appropriate authority.

39(a) Consolidated other expenses

Islami Bank Bangladesh Limited 1,643,439,582 1,200,083,831
Islami Bank Securities Limited 139,280,447 4,787,146
Islami Bank Capital Management Limited 161,629 679,131
Inter Company Transactions (132,915,404) -
Total 1,649,966,254 1,205,550,108

40.0 Retained earnings: movement of surplus in profit & loss account

Retained earnings as on 1 January 2,414,986,002 2,634,530,184
Add: Net profit after tax 3,029,078,600 4,013,025,106
Sub-total 5,444,064,602 6,647,555,290
Less:
Transfer to statutory reserve - 1,461,293,053
Transfer to/(from) general reserve (190,902,736) 136,746,051
Dividend paid (Bonus share & cash dividend) 2,414,986,002 2,634,530,184
Sub-total 2,224,083,266 4,232,569,288
Balance of retained earnings as at 31 December 3,219,981,336 2,414,986,002

40(a) Consolidated retained earnings

Retained earnings as on 1 January 2,386,670,563 2,637,858,071
Add: Net profit attributable to equity holders of IBBL 3,150,364,238 3,981,381,780
Sub-total 5,537,034,801 6,619,239,851
Less:
Transfer to statutory reserve - 1,461,293,053
Transfer to/(from) general reserve (190,902,736) 136,746,051
Dividend paid (Bonus share & cash dividend) 2,414,986,002 2,634,530,184
Sub-total 2,224,083,266 4,232,569,288
Balance of retained earnings as at 31 December 3,312,951,535 2,386,670,563

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40(b) Non-controlling interest

Share of profit
As on
Particulars or loss for the As on 31.12.2015 As on 31.12.2014
01.01.2015
year 2015
Islami Bank Securities Limited 53,276 2,059 55,335 53,276
Less: Dividend - -
Sub-total 53,276 2,059 55,335 53,276
Islami Bank Capital Management Limited 7,184 428 7,612 9,634
Less: Dividend - 2,450
Sub-total 7,184 428 7,612 7,184
Total 60,460 2,487 62,947 60,460

The share capital of Islami Bank Securities Ltd. is Tk.2700,000,000/- divided into 2,700,000 shares of Tk.1,000/ each out of which share capital of
minority is Tk.54,000/- divided into 54 shares of Tk.1,000/- each which represent 0.0020% of total share of the subsidiary Company.

The share capital of Islami Bank Capital Management Ltd. is Tk.300,000,000/- divided into 300,000 shares of Tk.1,000/ each out of which share
capital of minority is Tk.7,000/- divided into 7 shares of Tk.1,000/- each which represent 0.0023% of total share of the subsidiary Company.

41.0 Events after reporting period

The Board of Directors of the Bank in its 230th meeting held on 19 April 2016 recommended 20% Cash Dividend for the year 2015 subject to
approval of the shareholders in the ensuing 33rd Annual General Meeting to be held on 02 June 2016.

42.0 Earnings per share (EPS) 2015 2014

Taka Taka

a) Attributable profit for the year 3,029,078,600 4,013,025,106

b) Weighted average number of ordinary share during the year 1,609,990,668 1,609,990,668

Basic earnings per share (EPS) (a b) 1.88 2.49

Diluted earnings per share is not applicable since there is no possibility of dilution of shares during the year.

42(a) Consolidated earnings per share

Consolidated net profit after tax 3,150,366,725 3,981,383,358

Less: Profit attributable to non-controlling interest 2,487 1,578
Attributable profit for distribution to shareholders of IBBL 3,150,364,238 3,981,381,780
Weighted average number of ordinary share during the year 1,609,990,668 1,609,990,668

Consolidated basic earnings per share 1.96 2.47

43.0 Net asset value per share (NAV) of the Bank

a) Capital/shareholders equity for the year 47,199,613,009 46,622,618,136
b) Weighted average number of ordinary share during the year 1,609,990,668 1,609,990,668
Net asset value per share (NAV) (a b) 29.32 28.96

Net asset value per share (NAV) has been disclosed as per the Bangladesh Securities and Exchange Commissions Notification No.SEC/
CMRRCD/2009-193/Admin/03-31 dated June 1, 2009.

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44.0 Net operating cash flow per share (NOCFPS)

a) Net cash flows from operating activities 11,595,824,691 47,532,710,859
b) Weighted average number of ordinary share during the year 1,609,990,668 1,609,990,668
Net operating cash flow per share (NOCFPS) (a b) 7.20 29.52

Net operating cash flow per share (NOCFPS) has been disclosed as per the Bangladesh
Securities and Exchange Commissions Notification No.SEC/CMRRCD/2009-193/
Admin/03-31 dated June 1, 2009.

31.12.2015 31.12.2014
45.0 Reconciliation of cash and cash equivalent at the end of the year Taka Taka

Cash in hand 8,625,861,188 7,696,844,549

Balance with Bangladesh Bank and its agent banks (Sonali Bank Ltd.) 46,630,214,411 38,522,514,877
Balance with other banks and financial institutions 19,766,322,649 20,199,350,245
Total 75,022,398,248 66,418,709,671

45(a) Reconciliation of consolidated cash and cash equivalent at the end of the year
Cash in hand 8,625,867,409 7,696,844,962
Balance with Bangladesh Bank and its agent banks (Sonali Bank Ltd.) 46,630,214,411 38,522,514,877
Balance with other banks and financial institutions 25,644,591,295 23,615,218,198
Total 80,900,673,115 69,834,578,037

46.0 Operating lease payments disclosure 31.12.2015 31.12.2014

Non-cancellable operating lease rentals for the Bank are payable as follows: (In million Taka) (In million Taka)

Less than 1 year 485.00 406.00

Between 1 and 5 years 2,783.00 2,300.00
More than 5 years 5,782.00 4,740.00
Total 9,050.00 7,446.00

47.0 Currency wise exposures

Currency wise exposures are shown at Annexure-C.

Engr. Mustafa Anwar Engr. Md. Eskander Ali Khan Md. Wahiduzzaman Khandaker Mohammad Abdul Mannan
Chairman Director Director Managing Director

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 Islami Bank Bangladesh Limited
Fixed Assets Schedule
As at 31 December 2015
Annexure-A
(Amount in Taka)
Cost Depreciation/Amortization Written down value

Particulars Sale / adjust-

Balance as at Addition during Total as at Charged upto Charged during Adjustment Total as at
ment during the as at 31.12.2015 as at 31.12.2014
01.01.2015 the year 31.12.2015 01.01.2015 the year during the year 31.12.2015
year

1 2 3 4 5 (2 + 3 - 4) 6 7 8 9 (6+ 7 - 8) 10 (5 - 9) 11

A. Tangible Assets

i) Premises

Land 7,593,266,550 30,384,335 - 7,623,650,885 - - - - 7,623,650,885 7,593,266,550

Building 6,317,393,834 193,999,810 - 6,511,393,644 814,736,265 141,226,062 - 955,962,327 5,555,431,317 5,502,657,569

Islami Bank Bangladesh Limited

Construction/capital work in progress 197,106,998 - 197,106,998 - - - - - - 197,106,998

Sub total (i) 14,107,767,382 224,384,145 197,106,998 14,135,044,529 814,736,265 141,226,062 - 955,962,327 13,179,082,201 13,293,031,116

245
ii) Other fixed assets

Furniture and fixtures 811,688,722 83,676,656 4,137,600 891,227,778 333,152,971 53,118,843 2,212,183 384,059,631 507,168,147 478,535,751

Mechanical appliances 3,098,463,563 277,500,375 7,154,700 3,368,809,238 1,836,817,277 363,551,524 2,792,514 2,197,576,287 1,171,232,951 1,261,646,286

Motor vehicles 599,438,630 219,453,534 10,850,000 808,042,164 421,681,662 80,453,617 6,680,986 495,454,293 312,587,872 177,756,969

Annual Report 2015

Books 5,875,956 1,119,463 3,600 6,991,819 3,982,811 788,141 2,854 4,768,098 2,223,721 1,893,145

ATM 632,874,804 147,248,103 25,000,000 755,122,907 196,818,986 96,419,964 15,178,218 278,060,732 477,062,175 436,055,818

Sub Total (ii) 5,148,341,675 728,998,131 47,145,900 5,830,193,906 2,792,453,707 594,332,089 26,866,755 3,359,919,041 2,470,274,866 2,355,887,969

Total (i+ii) 19,256,109,057 953,382,276 244,252,898 19,965,238,435 3,607,189,972 735,558,151 26,866,755 4,315,881,368 15,649,357,067 15,648,919,085

B. Intangible assets 386,329,162 6,795,608 - 393,124,770 108,886,331 97,116,440 - 206,002,771 187,121,999 277,442,831

Total (A+B) 19,642,438,219 960,177,884 244,252,898 20,358,363,205 3,716,076,303 832,674,591 26,866,755 4,521,884,139 15,836,479,066 15,926,361,916
 Islami Bank Bangladesh Limited
Consolidated Fixed Assets Schedule
As at 31 December 2015
Annexure-B
(Amount in Taka)
Cost Depreciation/Amortization Written down value

Particulars Sale /
Balance as at Addition during Total as at Charged up to Charged during Adjustment Total as at
adjustment as at 31.12.2015 as at 31.12.2014
01.01.2015 the year 31.12.2015 01.01.2015 the year during the year 31.12.2015
during the year

1 2 3 4 5 (2 + 3 - 4) 6 7 8 9 (6+ 7 - 8) 10 (5 - 9) 11

A. Tangible Assets

i) Premises

Land 7,593,266,550 30,384,335 - 7,623,650,885 - - - - 7,623,650,885 7,593,266,550

Islami Bank Bangladesh Limited

Building 6,317,393,834 193,999,810 - 6,511,393,644 814,736,265 141,226,062 - 955,962,327 5,555,431,317 5,502,657,569

Construction/capital work in process 197,106,998 - 197,106,998 - - - - - - 197,106,998

246
Sub total (i) 14,107,767,382 224,384,145 197,106,998 14,135,044,529 814,736,265 141,226,062 - 955,962,327 13,179,082,201 13,293,031,116

ii) Other fixed assets

Furniture and fixtures 813,919,525 83,809,588 4,137,600 893,591,513 334,128,629 53,295,179 2,212,183 385,211,625 508,379,888 479,790,897

Mechanical appliances 3,103,849,578 277,876,520 7,154,700 3,374,571,398 1,840,858,776 364,405,802 2,792,514 2,202,472,064 1,172,099,334 1,262,990,802

Motor vehicles 605,234,649 219,453,534 10,850,000 813,838,183 426,319,868 81,611,429 6,680,986 501,250,311 312,587,873 178,914,782

Annual Report 2015

Books 5,875,956 1,119,463 3,600 6,991,819 3,982,811 788,141 2,854 4,768,098 2,223,721 1,893,145

ATM 632,874,804 147,248,103 25,000,000 755,122,907 196,818,986 96,419,964 15,178,218 278,060,732 477,062,175 436,055,818

Sub Total (ii) 5,161,754,512 729,507,208 47,145,900 5,844,115,820 2,802,109,070 596,520,515 26,866,755 3,371,762,830 2,472,352,991 2,359,645,444

Total (i+ii) 19,269,521,894 953,891,353 244,252,898 19,979,160,349 3,616,845,335 737,746,577 26,866,755 4,327,725,157 15,651,435,192 15,652,676,560

B. Intangible Assets 387,870,925 6,801,676 - 394,672,601 110,067,896 97,482,706 - 207,550,602 187,121,999 277,803,029

Total (A+B) 19,657,392,819 960,693,029 244,252,898 20,373,832,950 3,726,913,231 835,229,283 26,866,755 4,535,275,759 15,838,557,191 15,930,479,589
 Islami Bank Bangladesh Limited
Currency wise Exposures
As at 31 December 2015
Annexure - C
(Amount in Taka)
Taka Equivalent Taka of US Dollar Equivalent Taka of GBP Equivalent Taka of EURO Equivalent Taka of Other Currency Total Taka
ASSETS
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

1 2 3 4 5 6 7 8 9 10 11 12 13

Cash in hand 8,608,238,737 7,647,881,565 17,367,715 48,722,803 170,331 41,111 84,405 109,379 - 89,691 8,625,861,188 7,696,844,549

Balance with Bangladesh Bank & its agent bank 45,913,863,444 37,858,294,659 595,649,969 617,769,125 13,094,573 11,307,816 107,410,459 34,948,937 195,966 194,340 46,630,214,411 38,522,514,877

Balance with banks & other financial institutions 18,096,699,633 17,790,027,698 (669,413,781) 1,157,364,999 548,213,804 261,896,324 946,769,450 602,711,894 844,053,543 387,349,330 19,766,322,649 20,199,350,245

Placement with other banks & financial institutions 3,000,000,000 2,000,000,000.00 - - - - - - - - 3,000,000,000 2,000,000,000

Investments (in shares & securities) 99,436,769,339 100,856,528,896 - - - - - - - - 99,436,769,339 100,856,528,896

Islami Bank Bangladesh Limited

Investments 478,278,007,708 426,833,512,348 51,916,495,008 36,641,955,118 - - - - - - 530,194,502,716 463,475,467,466

Fixed assets including premises 15,836,479,066 15,926,361,916 - - - - - - - - 15,836,479,066 15,926,361,916

247
Other assets 2,022,067,205 3,386,322,373 308,908,123 358,648,429 - - - - - - 2,330,975,328 3,744,970,802

Non banking assets - - - - - - - - - - - -

Total assets 671,192,125,132 612,298,929,455 52,169,007,034 38,824,460,474 561,478,708 273,245,251 1,054,264,314 637,770,210 844,249,509 387,633,361 725,821,124,697 652,422,038,751

Taka Equivalent Taka of US Dollar Equivalent Taka of GBP Equivalent Taka of EURO Equivalent Taka of Other Currency Total Taka
LIABILITIES
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

Annual Report 2015

Placement from Bangladesh Bank, other banks, - - 17,766,330,139 7,657,500,743 - - - - - - 17,766,330,139 7,657,500,743
financial institutions and agents

Deposits 591,593,177,478 543,127,194,723 18,159,896,697 13,535,339,386 476,796,997 27,861,803 37,368,275 355,500,055 685,043 510,768 610,267,924,490 557,046,406,735

Bills payable 5,086,104,271 3,644,712,827 5,181,274 5,181,274 - - - - - - 5,091,285,545 3,649,894,101

Other liabilities 42,488,438,436 34,445,619,036 7,533,078 - - - - - - - 42,495,971,514 34,445,619,036

Mudaraba Perpetual Bond 3,000,000,000 3,000,000,000 - - - - - - - - 3,000,000,000 3,000,000,000

Total liabilities 642,167,720,185 584,217,526,586 35,938,941,188 21,198,021,403 476,796,997 27,861,803 37,368,275 355,500,055 685,043 510,768 678,621,511,688 605,799,420,615

Net position 29,024,404,947 28,081,402,869 16,230,065,846 17,626,439,071 84,681,711 245,383,448 1,016,896,039 282,270,155 843,564,466 387,122,593 47,199,613,009 46,622,618,136
 Islami Bank Bangladesh Limited
Consolidated segment reporting
For the year ended 31 December 2015
A. Segmental operating profit and loss
Annexure-D
Amount in Taka
Head Office
Dhaka Central Dhaka South Dhaka North Chittagong
Particulars Controlled Khulna Zone Comilla Zone Rajshahi Zone Noakhali Zone Common Consolidated
Zone Zone Zone South Zone
Branches
Investment income 7,630,841,235 7,796,398,726 3,324,781,652 5,148,512,684 2,366,789,651 1,497,173,658 4,342,081,365 4,314,761,352 1,379,912,543 11,033,263,672 48,834,516,538
Profit paid on mudaraba deposits (1,710,742,681) (2,292,541,254) (2,129,897,651) (2,889,649,837) (1,957,651,357) (2,196,159,648) (1,371,389,654) (2,617,159,843) (2,071,331,467) (9,475,279,894) (28,711,803,286)
Profit received/(paid) on IB General Account (2,380,798,654) (1,631,597,624) 1,158,734,629 962,142,534 1,123,042,975 2,336,123,542 (516,961,358) 966,881,354 2,067,261,943 (4,084,829,341) -
Net investment income 3,539,299,900 3,872,259,848 2,353,618,630 3,221,005,381 1,532,181,269 1,637,137,552 2,453,730,353 2,664,482,863 1,375,843,019 (2,526,845,563) 20,122,713,252
Commission, exchange & other income 1,138,734,256 793,631,642 410,129,576 697,958,642 350,951,354 147,978,645 315,142,681 394,487,692 151,098,734 3,542,227,835 7,942,341,057
Total operating income 4,678,034,156 4,665,891,490 2,763,748,206 3,918,964,023 1,883,132,623 1,785,116,197 2,768,873,034 3,058,970,555 1,526,941,753 1,015,382,272 28,065,054,309
Total operating expenses (474,542,651) (647,039,751) (787,521,643) (768,779,582) (761,462,843) (508,189,346) (542,013,684) (526,491,648) (446,061,389) (8,037,805,654) (13,499,908,191)

Islami Bank Bangladesh Limited

Operating Profit 4,203,491,505 4,018,851,739 1,976,226,563 3,150,184,441 1,121,669,780 1,276,926,851 2,226,859,350 2,532,478,907 1,080,880,364 (7,022,423,382) 14,565,146,118
There are 16 operating segments including subsidiaries as on 31 December 2015. Out of which only 9 are reportable as per BFRS 8 Operating Segments. Hence other non-reportable segments have been shown as under Common.

248
For the year ended 31 December 2014
Amount in Taka
Head Office
Dhaka Central Dhaka South Dhaka North Chittagong
Particulars Controlled Khulna Zone Comilla Zone Rajshahi Zone Noakhali Zone Common Consolidated
Zone Zone Zone South Zone
Branches
Investment income 7,864,341,582 8,164,272,643 3,357,034,251 5,207,671,642 2,214,698,264 1,381,198,679 3,955,241,973 5,048,351,987 1,153,183,876 12,611,202,540 50,957,197,437

Annual Report 2015

Profit paid on mudaraba deposits (1,887,603,968) (2,635,463,005) (2,288,508,458) (3,182,566,357) (2,049,353,121) (2,265,280,882) (1,504,269,560) (2,802,332,105) (2,210,472,418) (9,767,087,634) (30,592,937,508)
Profit received/(paid) on IB General Account (2,995,601,682) (2,048,341,657) 1,128,394,251 1,133,524,687 1,301,884,659 2,568,262,468 (428,021,357) 431,023,876 2,445,321,547 (3,536,446,792) -
Net investment income 2,981,135,932 3,480,467,981 2,196,920,044 3,158,629,972 1,467,229,802 1,684,180,265 2,022,951,056 2,677,043,758 1,388,033,005 (692,331,886) 20,364,259,929
Commission, exchange & other income 1,183,114,261 888,332,465 381,240,643 591,274,628 381,142,543 137,224,265 274,092,973 321,443,879 139,913,791 2,808,926,774 7,106,706,222
Total operating income 4,164,250,193 4,368,800,446 2,578,160,687 3,749,904,600 1,848,372,345 1,821,404,530 2,297,044,029 2,998,487,637 1,527,946,796 2,116,594,888 27,470,966,151
Total operating expenses (538,794,877) (695,398,051) (780,202,766) (792,734,809) (770,344,629) (511,307,729) (556,638,624) (536,198,974) (443,393,362) (6,478,255,637) (12,103,269,458)
Operating Profit 3,625,455,316 3,673,402,395 1,797,957,921 2,957,169,791 1,078,027,716 1,310,096,801 1,740,405,405 2,462,288,663 1,084,553,434 (4,361,660,749) 15,367,696,693

B. Segmental assets and liabilities

The necessary information regarding assets and liabilities of operating segments (except subsidiaries) are not separable and individually identifiable for this purpose. For this reason the assets and liabilities of the respective segments have not been
presented here.
 Islami Bank Bangladesh Limited
Financial highlights of the Bank
For the year ended 31 December 2015
Amount in Million Taka
Sl. No. Particulars 2015 2014

1 Paid-up capital 16,099.91 16,099.91

2 Total capital (equity) 47,845.33 48,579.67

3 Capital surplus/ (deficit) 6,812.10 10,695.59

4 Total assets (Excluding contra) 725,821.12 652,422.04

5 Total deposits 615,359.21 560,696.30

6 Total investments (excluding Investment in shares/ securities) 530,194.50 463,475.47

7 Total contingent liabilities and commitments 133,379.93 112,819.23

8 Investment deposit ratio 83.59% 79.88%

9 Percentage of classified investment against total general investments 4.25% 4.92%

10 Profit after tax & provision 3,029.08 4,013.03

11 Amount of classified investment during current year (266.00) 7,865.34

12 Provision kept against classified investments 17,751.49 13,354.72

13 Provision surplus/ (deficit) 0.72 0.18

14 Cost of fund 7.62% 8.55%

15 Profit earning assets 512,714.85 506,579.98

16 Non-profit earning assets 213,106.27 145,842.06

17 Return on investments 8.20% 9.86%

18 Return on assets 0.44% 0.67%

19 Income from investments 48,954.43 51,010.20

20 Earnings per share (Taka) 1.88 2.49

21 Net income per share (Taka) 1.88 2.49

22 Price earning ratio (Times) 12.54 11.24

23 Net Asset Value (NAV) 47,199.61 46,622.62

24 Net Asset Value (NAV) per share (Taka) 29.32 28.96

25 Net Operating Cash Flow per share (NOCFPS) (Taka) 7.20 29.52

26 Dividend Yield per share 7.19% 6.41%

27 Dividend pay out ratio per share 106.30% 60.39%

28 Dividend cover Ratio (Times) 1.69 2.75

249
Islami Bank Bangladesh Limited Annual Report 2015
 Annexure-E

Islami Bank Bangladesh Limited (Off-Shore Banking Unit)

Balance Sheet
As at 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
USD BD.Taka USD BD.Taka
Property and assets
Cash in hand - - - -
Cash in hand (including foreign currency) - - - -
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) - - - -

Balance with other banks & financial institutions 879,654.43 69,053,137 892,907.33 69,601,591
In Bangladesh 2.0 879,654.43 69,053,137 892,907.33 69,601,591
Outside Bangladesh - - - -

Placement with banks & other financial institutions 3.0 31,612,726.32 2,481,608,500 36,684,762.56 2,859,555,231

Investments in shares & securities - - - -

Government - - - -
Others - - - -
Investments 339,860,938.39 26,679,185,622 158,017,332.85 12,317,356,285
General investments etc. - - - -
Bills purchased & discounted 4.0 339,860,938.39 26,679,185,622 158,017,332.85 12,317,356,285
Fixed assets - - - -
Other assets 5.0 322,650.04 25,328,125 342,277.67 26,680,339
Non - banking assets - - - -
Total property and assets 372,675,969.18 29,255,175,384 195,937,280.41 15,273,193,446

Liabilities and Capital

Liabilities

Placement from banks & other financial institutions 6.0 371,402,864.71 29,155,236,301 195,821,030.41 15,264,131,828

Deposits & other accounts - - - -

Mudaraba Savings Deposits - - - -
Mudaraba Term Deposits - - - -
Other Mudaraba Deposits - - - -
Al- Wadeeah Current and other deposit accounts - - - -
Bills payable - - - -

Other liabilities 7.0 1,273,104.47 99,939,083 116,250.00 9,061,618

Deferred tax liabilities /(assets) - - - -
Total liabilities 372,675,969.18 29,255,175,384 195,937,280.41 15,273,193,446

Capital/ share-holders equity - - - -

Paid - up capital - - - -
Statutory reserve - - - -
Other /translation reserves 8.0 - 4,314,759 - 6,392,485
Retained earnings 17.0 - (4,314,759) - (6,392,485)
Total liabilities & shareholders equity 372,675,969.18 29,255,175,384 195,937,280.41 15,273,193,446

Off-balance sheet items - - - -

Contingent liabilities

Acceptances & endorsements - - - -

Letters of guarantee - - - -
Irrevocable letters of credit (including back to back bills) - - - -
Bills for collection - - - -
Other contingent liabilities - - - -
Total - - - -

Other commitments

Documentary credits, short term and trade related transactions - - - -

Forward assets purchased and forward deposits placed - - - -
Undrawn note issuance, revolving and underwriting facilities - - - -
Undrawn formal standby facilities, credit lines and other commitments - - - -
Total - - - -
Total off-balance sheet items including contingent liabilities - - - -

The annexed notes form an integral part of these financial statements.

250
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited (Off-Shore Banking Unit)
Profit & Loss Account
For the year ended 31 December 2015
31.12.2015 31.12.2014
Particulars Notes
USD BD.Taka USD BD.Taka
Operating income
Investment income 9.0 10,516,342.09 816,188,135 9,757,668.45 753,497,004
Profit paid on mudaraba deposits/placement 10.0 (5,680,820.21) (440,715,274) (1,444,438.12) (111,773,018)
Net investment income 4,835,521.88 375,472,861 8,313,230.33 641,723,986

Income from investments in shares & securities - - - -

Commission, exchange & brokerage income - - - -
Other operating income 11.0 238,421.51 18,503,071 179,765.00 13,871,627
Total operating income 5,073,943.39 393,975,932 8,492,995.33 655,595,613

Operating expenses

Salary & allowances 12.0 43,924.84 3,432,726 46,786.43 3,611,290

Rent, taxes, insurances, electricity etc. - - - -
Legal expenses - - - -
Postage, stamps and telecommunication etc. 13.0 - - 38.86 3,010
Stationery, printing and advertisement etc. - - - -
Chief executives salary & fees - - - -
Directors fees & expenses - - - -
Shariah supervisory committees fees & expenses - - - -
Auditors fees - - - -
Charges on investment losses - - - -
Depreciation and repair to banks assets - - - -
Zakat expenses - - - -
Other expenses 14.0 - - 185.00 14,332
Total operating expenses 43,924.84 3,432,726 47,010.29 3,628,632
Profit/ (loss) before provision 5,030,018.55 390,543,206 8,445,985.04 651,966,981

Provision for investments & off- balance sheet items 15.0 - - - -

Provision for diminution in value of investments in shares - - - -
Other provisions - - - -
Total provision - - - -

Total profit/(loss) before taxes 5,030,018.55 390,543,206 8,445,985.04 651,966,981

Provision for taxation for the period

Current tax 16.0 - - - -
Deferred tax 16.0 - - - -
Net profit/ (loss) after tax 5,030,018.55 390,543,206 8,445,985.04 651,966,981
Retained earnings from previous year - - - -
Less: Interim dividend paid - - - -
Add: Net profit after tax 5,030,018.55 390,543,206 8,445,985.04 651,966,981
Profit available for appropriation 5,030,018.55 390,543,206 8,445,985.04 651,966,981
Less: Appropriation 5,030,018.55 390,543,206 8,445,985.04 651,966,981
Statutory reserve - - - -
General reserve - - - -
Transferred to main operation 17.0 5,030,018.55 394,857,965 8,445,985.04 658,359,466
Retained earnings - (4,314,759) - (6,392,485)

The annexed notes form an integral part of these financial statements.

251
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited (Off-Shore Banking Unit)
Cash Flow Statement
For the year ended 31 December 2015
2015 2014
Particulars
USD BD.Taka USD BD.Taka
Cash flows from operating activities
Investment income 10,516,342.09 816,188,135 9,757,668.45 753,497,004
Profit paid on mudaraba deposits/placement (5,564,570.21) (431,653,656) (1,670,465.79) (129,391,739)
Income/ dividend receipt from investments in shares & securities - -
Fees & commission receipt in cash - - - -
Recovery from written off investments - - - -
Payments to employees (43,924.84) (3,432,726) (46,786.43) (3,611,290)
Cash payments to suppliers - - - -
Income tax paid - - - -
Receipts from other operating activities 238,421.51 18,503,071 179,765.00 13,871,627
Payments for other operating activities - - (223.86) (17,342)
i) Operating profit before changes in operating assets & liabilities 5,146,268.55 399,604,824 8,219,957.37 634,348,260

Changes in operating assets and liabilities

Increase/(decrease) of statutory deposits - - - -

(Increase)/decrease of net trading securities - - - -
(Increase)/decrease of placement to other banks 5,072,036.24 377,946,731 9,742,896.00 750,195,222
(Increase)/decrease of investments to customers (181,843,605.54) (14,361,829,337) 4,088,550.77 286,376,166
(Increase)/decrease of other assets 19,627.63 1,352,214 - -
Increase/(decrease) of placement from other banks - - - -
Increase/(decrease) of deposits from other banks - - - -
Increase/(decrease) of deposits received from customers - - - -
Increase/(decrease) of other liabilities account of customers - - - -
Increase/(decrease) of trading liabilities - - - -
Increase/(decrease) of other liabilities 1,040,604.47 81,815,847 - -
(ii) Cash flows from operating assets and liabilities (175,711,337.20) (13,900,714,545) 13,831,446.77 1,036,571,388
Net cash flows from operating activities (A)=(i+ii) (170,565,068.65) (13,501,109,721) 22,051,404.14 1,670,919,648

Cash flows from investing activities

Proceeds from sale of securities - - - -

Payment for purchase of securities/membership - - - -
Purchase/sale of property, plants & equipments - - - -
Purchase/sale of subsidiaries - - - -
Net cash flows from investing activities (B) - - - -

Cash flows from financing activities

Receipts from issue of debt instruments - - - -

Payment for redemption of debt instruments - - - -
Fund obtained from banks & other financial institutions 175,581,834.30 13,891,104,473 (12,712,511.77) (949,351,076)
Profit transferred to main operation (5,030,018.55) (394,857,965) (8,445,985.04) (658,359,466)
Net cash flows from financing activities (C) 170,551,815.75 13,496,246,508 (21,158,496.81) (1,607,710,542)

Net increase/(decrease) in cash (A+B+C) (13,252.90) (4,863,213) 892,907.33 63,209,106

Add/(less) effects of exchange rate changes on cash & cash equivalent - 4,314,759 - 6,392,485
Add:cash & cash equivalents at beginning of the year 892,907.33 69,601,591 - -
Cash & cash equivalents at the end of the year 879,654.43 69,053,137 892,907.33 69,601,591

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Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Bangladesh Limited (Off-Shore Banking Unit)
Notes to the financial statements
For the year ended 31 December 2015
1.0 Status of the Company

Off-shore Banking Units (OBU) of Islami Bank Bangladesh Ltd. governed under the rules and guidelines of Bangladesh Bank. The Bank obtained
permission from Bangladesh Bank for operating of Off-shore Banking Units located at Head Office Complex Branch, Dhaka, Agrabad Branch,
Chittagong and Uttara Branch, Dhaka vide Bangladesh Bank letter no. BRPD (P-3)744 (111)/2010-1032 dated 28 March 2010. The Bank has
Commenced the operation of its Off-shore Banking Units from 08.02.2011 at Head Office Complex Branch, Dhaka and from 27.09.2011 at Agrabad
Branch, Chittagong.

1.1 Principal activities

The principal activities of the OBU are to provide mudaraba investment against payment of import bills under UPAS (Usance Payment at Sight) to
its customers of Off-shore Banking Units in Bangladesh.

1.2 Significant accounting policies and basis of preparation of financial statements

1.2.1 Basis of accounting

The Off-shore Banking Units maintain its accounting records in USD from which accounts are prepared according to the Bank Company Act, 1991
as amended, Bangladesh Financial Reporting Standards (BFRSs) and other applicable directives issued by Bangladesh Bank. All the financial
statements relating the OBU has already been accounted for in the separate financial statements of the Bank (considering necessary adjustments
relating to intra-units transactions and balances). Along with that, this financial statements relating to OBU only is prepared and disclosed in
compliance with the requirements of Bangladesh Bank.

1.2.2 Use of estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of
accounting policies and the report amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The
figures (Taka) appearing in these Financial Statements have been rounded off to the nearest integer.

1.2.3 Foreign currency transactions

a. Foreign currency transactions

Foreign currency transactions are converted in to equivalent Taka using the ruling exchange rates on the dates of respective transactions as per
BAS-21 The Effects of changes in Foreign Exchange Rates. Foreign currency balances held in US Dollars are converted into Taka at weighted
average rate of inter-bank market as determined by Bangladesh Bank on the closing date of every month.

b. Transaction gains and losses

The resulting exchange transaction gains and losses are included in the profit and loss account.

1.2.4 Translation reserve

The activities of OBU is considered as foreign operation due to its different functional currency other than the non-OBU operation of the Bank.
As per BAS/IAS - 21, items of balance sheet of OBU has been be translated to presentation currency using closing rate and items of income and
expenditure has been translated to presentation currency using spot rate prevailing on the date of actual transaction, otherwise average rate has
been used. Due to the above translation using two rates the arising differences have been kept as translation reserve.

1.2.5 Retained earnings/Net profit transferred to main operation

As on 31 December the net income in USD/foreign currency of OBU is transferred to main operation of the Bank at exchange rate prevailing on
that date.
1.2.6 Cash flow statement

Cash flow statement has been prepared as per BRPD Circular No. 14, dated June 25, 2003 issued by the Banking Regulation and Policy
Department of Bangladesh Bank.

253
Islami Bank Bangladesh Limited Annual Report 2015
1.2.7 Reporting period

The financial statements cover from 01 January 2015 to 31 December 2015.

1.3 Assets and basis of their valuation

1.3.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins on hand, unrestricted balances held with Bangladesh Bank and highly liquid financial assets
which are subject to insignificant risk of changes in their fair value, and are used by the units management for its short-term commitments.

1.3.2 Investments
Investment of OBU are stated in the balance sheet on net basis. Profit is calculated on daily product basis but charged and account for on
realisation/cash basis.

1.4 Allocation of common expenses

Establishment expenses in the nature of rent, rates, taxes, management expenses, printing and stationery, electricity, postage, stamps,
telecommunication and audit fees etc. have not been separately accounted for in the financial statements, but staff costs (salaries and
allowances) are separately accounted for OBU.

1.5 Profit paid on mudaraba deposits/placement

OBU obtains fund under placement from abroad (different foreign Banks) and OBUs of different Banks in Bangladesh (BD) based on Mudaraba
Agreement and pays proportionate amount of investment income earned through deploying these fund as profit. In some cases OBU pays profit
at provisional rate in advance which is shown as Prepaid profit on placement under other assets.

1.6 Placement from banks & other financial institutions

Off-shore Banking Units (OBUs) of IBBL obtains fund under placement from its Head Office (Treasury Division), abroad (different foreign Banks)
and OBUs of different Banks in Bangladesh (BD) as per Bangladesh Bank Letter No.BCD(P)744(27)/1416, dated 17 December 1985.

2.0 Balance with other banks & financial institutions 31.12.2015 31.12.2014
USD BD.Taka USD BD.Taka

In Bangladesh (balance with Treasury Division) 879,654.43 69,053,137 892,907.33 69,601,591

Outside Bangladesh - - - -
Total 879,654.43 69,053,137 892,907.33 69,601,591

3.0 Placement with banks & other financial institutions

Fund provided to AD Branches for MDB in FC (*) 31,612,726.32 2,481,608,500 36,684,762.56 2,859,555,231

(*) This amount has been provided to AD branches to finance investment in MDB in FC as per the requirement of the AD branches as per
Bangladesh Bank FE Circular No. - 03 dated 04 February 2013.

31.12.2015 31.12.2014
USD BD.Taka USD BD.Taka

4.0 Investments 339,860,938.39 26,679,185,622 158,017,332.85 12,317,356,285

4.1 Bills purchased & discounted

Mudaraba Documentary Import Bills (MDIB-UPAS) (*) 280,212,167.89 21,996,739,243 158,017,332.85 12,317,356,285
Hire-Purchase under Shirkatul Meelk (HPSM in FC) 59,648,770.50 4,682,446,379 - -
Total 339,860,938.39 26,679,185,622 158,017,332.85 12,317,356,285

(*) OBU allows the facilities as per Bangladesh Bank BRPD Circular No. 28, dated 05 September 2010.

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Islami Bank Bangladesh Limited Annual Report 2015
 2015 2014
USD BD.Taka USD BD.Taka
5.0 Other assets
Prepaid profit on placement from banks & other 322,650.04 25,328,125 342,277.67 26,680,339
financial institutions
Total 322,650.04 25,328,125 342,277.67 26,680,339

6.0 Placement from banks & other financial institutions

Islami Bank Bangladesh Ltd.-main operation (Treasury 145,081,052.71 11,388,906,162 97,584,215.98 7,606,631,085
Division)
Banks in BD (OBU) 130,000,000.00 10,205,039,000 20,000,000.00 1,558,988,000
Banks (abroad) 96,321,812.00 7,561,291,139 78,236,814.43 6,098,512,743
Total 371,402,864.71 29,155,236,301 195,821,030.41 15,264,131,828

7.0 Other liabilities

Profit payable 1,202,304.47 94,381,262 116,250.00 9,061,618
Unearned Income 70,800.00 5,557,821 - -
Total 1,273,104.47 99,939,083 116,250.00 9,061,618

8.0 Translation reserve

Balance as on 1 January - 6,392,485 - 1,317,771
Addition/(adjustment) during the year - (2,077,726) - 5,074,714
Balance as at 31 December - 4,314,759 - 6,392,485

9.0 Investment income

Mudaraba documentary import bills (MDIB-UPAS) 9,514,427.62 738,458,779 8,177,416.22 631,589,277

Hire-Purchase under Shirkatul Meelk (HPSM in FC) 137,412.00 10,738,748
Placement to AD branches 864,502.47 66,990,608 1,580,252.23 121,907,727
Total 10,516,342.09 816,188,135 9,757,668.45 753,497,004

10.0 Profit paid on mudaraba deposits/placement

Profit paid on Placement from Banks (abroad) 4,011,452.17 310,844,976 1,214,438.12 93,890,518
Profit paid on Placement from Banks in BD (OBU) 1,669,368.04 129,870,298 230,000.00 17,882,500
Total 5,680,820.21 440,715,274 1,444,438.12 111,773,018

11.0 Other Income

Service charge realized (MDIB-UPAS) 225,000.00 17,462,837 178,100.00 13,742,126
Service charge realized (Placement to AD branches) 13,421.51 1,040,234 1,665.00 129,501
Total 238,421.51 18,503,071 179,765.00 13,871,627

12.0 Salary & allowances

Basic pay 18,845.45 1,472,772 19,882.79 1,534,687

Allowances 13,501.63 1,055,152 15,173.01 1,171,154

Bonus 9,693.22 757,525 9,742.35 751,980

Contribution to Provident Fund 1,884.54 147,277 1,988.28 153,469

Total 43,924.84 3,432,726 46,786.43 3,611,290

13.0 Postage, stamps and telecommunication etc.

Telephone Bill - - 38.86 3,010

14.0 Other expenses

Bank Charges - - 185.00 14,332

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Islami Bank Bangladesh Limited Annual Report 2015
15.0 Provision for investment

Provision for investment have not been separately accounted for in the financial statements of OBU. These are accounted for directly in the main
financial statements of the Bank.

16.0 Provision for tax

Provision for current and deferred tax have not been separately accounted for in the financial statements of OBU. These are accounted for
directly in the main financial statements of the Bank.

17.0 Retained earnings

2015 2014
USD BD.Taka USD BD.Taka

Retained earnings as on 1 January - (6,392,485) - (1,317,771)

Addition during the year 5,030,018.55 390,543,206 8,445,985.04 651,966,981

Effect of translation reserve - 6,392,485 - 1,317,771

Transferred to main operation 5,030,018.55 394,857,965 8,445,985.04 658,359,466

Balance as at 31 December - (4,314,759) - (6,392,485)

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 257
Islami Bank Bangladesh Limited Annual Report 2015
 Auditors Report
To the Shareholders of Islami Bank Securities Limited
We have audited the accompanying Financial Statements of Islami Bank Securities Limited, which comprises the Statement
of Financial Position as of 31 December, 2015 and the related Statement of Comprehensive Income, Statement of Changes
in Equity and Statement of Cash Flows for the year then ended and a summary of significant accounting policies and other
explanatory notes.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with
Bangladesh Accounting Standards (BASs) and Bangladesh Financial Reporting Standards (BFRSs), the Companies Act, 1994
and other applicable laws and regulations. The responsibility includes designing, implementing and maintaining internal control
relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to
fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable
in the circumstances.

Auditors Responsibility

Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our
audit in accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud and error. In making those risk assessments, we consider internal control
relevant to the entitys preparation and fair presentation of financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the entitys internal
control. An audit also includes assessing the accounting principles used and significant estimates made by the management,
as well as evaluating the overall financial statements presentation. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements, prepared in accordance with Bangladesh Accounting Standards (BASs) and Bangladesh
Financial Reporting Standards (BFRSs), give a true and fair view of the state of Companys affairs as of 31 December, 2015
and of the results of its operations and its cash flows for the year then ended and comply with the Companies Act, 1994 and
other applicable laws and regulations.

Further to our opinion in the above paragraph, we state that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary
for the purpose of our audit and made due verification thereof;
b) In our opinion, proper books of account as required by law have been kept by Islami Bank Securities Limited, so far
as it appeared from our examination of those books;
c) The Companys Statement of Financial Position and Statement of Comprehensive Income dealt with by the report are
in agreement with the books of account; and
d) The expenditure incurred was for the purposes of the Companys business.

KAZI ZAHIR KHAN & CO Dated: Dhaka

Chartered Accountants March 24, 2016

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Islami Bank Bangladesh Limited Annual Report 2015
 ISLAMI BANK SECURITIES LIMITED
Statement of Financial Position
as at 31 December 2015

Amount in Taka
Notes
2015 2014
Assets
Non-current assets 307,194,874 309,483,348
Property, plant and equipment 3 2,078,125 3,757,475
Intangible assets 4 - 360,198
Investment in TREC (Membership) 5 304,453,399 304,453,399
Preliminary expenses 6 - 108,025
Deferred revenue expenses 7 - 488,371
Deferred tax assets 8 663,350 315,880
Current assets 7,831,852,336 5,570,316,477
Cash and cash equivalents 9 497,946,166 346,324,458
Investment in securities 10 1,655,806,479 1,516,357,258
Accounts receivables 11 3,591,330 5,446,630
Advances, deposits and prepayments 12 109,885,567 54,024,522
Investment in MTDR 13 5,546,785,372 3,636,152,827
Other assets 14 17,837,422 12,010,782
Total assets 8,139,047,210 5,879,799,825

Equity and liabilities

Equity 2,766,777,738 2,663,812,682

Paid up capital 15 2,700,000,000 2,700,000,000
Retained earnings 66,777,738 (36,187,318)

Non-current liabilities 5,000,000,000 3,000,000,000

Investment from IBBL 16 5,000,000,000 3,000,000,000

Current liabilities 372,269,472 215,987,143

Accounts payables 17 146,396,355 61,158,839
Provision for income tax 18 120,243,599 61,664,633
Accrued expenses 19 14,241,553 1,705,188
Quard against MTDR 20 90,000,000 90,000,000
Other current liabilities 21 1,387,965 1,458,483
Total equity and liabilities 8,139,047,210 5,879,799,825

The annexed notes form an integral part of these Financial Statements

Engr. Md. Eskander Ali Khan Muhammad Abul Bashar A.K.M. Payer Ahammed
Chairman Director Cheif Executive Officer
As per our annexed report of even date

KAZI ZAHIR KHAN & CO.
Chartered Accountants
Dhaka
24 March, 2016

259
Islami Bank Bangladesh Limited Annual Report 2015
 ISLAMI BANK SECURITIES LIMITED
Statement of Comprehensive Income
for the year ended 31 December 2015

Amount in Taka
Notes
2015 2014
Operating income
Investment income 22 337,486,508 111,256,118
Brokerage commissions 23 14,178,951 12,958,772
Other operating income 24 2,774,243 2,328,313
Total operating income 354,439,702 126,543,203

Operating expenses
Salary and allowances 25 17,037,238 14,368,273
Rent, taxes, insurancees and electricity etc. 26 4,219,493 3,905,713
BO account maintenance expenses 2,026,800 1,570,000
Brokerage expenses 27 915,466 708,703
Postage, stamps and communication etc. 28 244,066 198,669
Stationery, printing and advertisement etc. 29 591,962 202,501
Directors fees and expenses 30 437,000 396,750
Repair and maintenances 31 1,469,499 1,206,771
CDS charges 950,236 962,971
Depreciation 32 2,188,426 2,382,016
Amortization 33 962,662 980,122
License expenses 34 288,160 160,000
Other expenses 35 2,129,960 1,298,048
Profit paid on investment of mudaraba fund 132,915,404 -
Auditors fees 92,000 92,000
Total operating expenses 166,468,372 28,432,537
Operating profit 187,971,330 98,110,666
Provision for unrealized gain/(loss) 36 (26,774,778) (33,109,478)
Profit before tax 161,196,552 65,001,187
Less: Tax expenses 58,231,496 24,997,685
Current tax 58,578,966 25,368,838
Deferred tax (347,470) (371,153)
Net profit after tax 102,965,056 40,003,502

Other comprehensive income - -

Total comprehensive income for the year 102,965,056 40,003,502

The annexed notes form an integral part of these Financial Statements

Engr. Md. Eskander Ali Khan Muhammad Abul Bashar A.K.M. Payer Ahammed
Chairman Director Cheif Executive Officer
As per our annexed report of even date

KAZI ZAHIR KHAN & CO.
Chartered Accountants
Dhaka
24 March, 2016

260
Islami Bank Bangladesh Limited Annual Report 2015
 ISLAMI BANK SECURITIES LIMITED
Statement of Changes in Equity
for the year ended 31 December 2015

Amount in Taka
Particulars Paid-up Capital Retained Earnings Total Equity
Opening balance as at 01 January 2014 2,700,000,000 (76,190,820) 2,623,809,180
Total comprehensive income for the year - 40,003,502 40,003,502
Balance as at 31 December 2014 2,700,000,000 (36,187,318) 2,663,812,682
Opening balance as at 01 January 2015 2,700,000,000 (36,187,318) 2,663,812,682
Total comprehensive income for the year - 102,965,056 102,965,056
Balance as at 31 December 2015 2,700,000,000 66,777,738 2,766,777,738

Engr. Md. Eskander Ali Khan Muhammad Abul Bashar A.K.M. Payer Ahammed
Chairman Director Cheif Executive Officer
As per our annexed report of even date

KAZI ZAHIR KHAN & CO.
Chartered Accountants
Dhaka
24 March, 2016

261
Islami Bank Bangladesh Limited Annual Report 2015
 ISLAMI BANK SECURITIES LIMITED
Statement of Cash Flows
for the year ended 31 December 2015

Amount in Taka
2015 2014
A. Cash flows from operating activities:

Net profit after tax 102,965,056 40,003,502

Adjustment for non-cash items:
Depreciation 2,188,426 2,382,016
Amortization 962,662 980,122
Provision for unrealized gain/(loss) 26,774,778 33,109,478
29,925,866 36,471,617
Cash flow before working capital changes 132,890,922 76,475,119
Changes in working capital:
Increase/(decrease) in accounts payable 85,237,516 (100,058,070)
Increase/ (decrease) in provision for income tax 58,578,966 24,307,997
Increase /(decrease) in accrued expenses 12,536,365 32,809
Increase/ (decrease) in other current liabilities (70,518) (313,600)
Increase /(decrease) in deferred tax liabilities - (55,273)
Decrease/ (increase) in other assets (5,826,640) 4,270,056
Decrease /(increase) in deferred tax assets (347,470) (315,880)
Decrease/ (increase) in advance, deposit & prepayments (55,861,045) (30,372,799)
Decrease/ (increase) in accounts receivable 1,855,300 2,943,717
96,102,474 (99,561,043)
Net cash flows from operating activities 228,993,396 (23,085,924)
B. Cash flows from investing activities:
Acquisition of fixed assets (509,077) (813,467)
Acquisition of intangible assets (6,068) (19,855)
Investments in securities (1,501,797,336) (1,142,118,859)
Sale of investment in securities 1,335,573,339 1,175,692,382
Investments in MTDR (1,910,632,545) (2,747,146,682)
Net cash used in investment activities (2,077,371,687) (2,714,406,481)
C. Cash flows from financing activities:
Investment form IBBL 2,000,000,000 3,000,000,000
Quard against MTDR - (110,000,000)
Net cash flows from financing activities 2,000,000,000 2,890,000,000
Net increase/(decrease) in cash & cash equivalents 151,621,708 152,507,595
Add: Cash & cash equivalents at the beginning of the year 346,324,458 193,816,863
Cash and cash equivalents at the end of the year 497,946,166 346,324,458

The annexed notes form an integral part of these Financial Statements.

Engr. Md. Eskander Ali Khan Muhammad Abul Bashar A.K.M. Payer Ahammed
Chairman Director Cheif Executive Officer
As per our annexed report of even date

KAZI ZAHIR KHAN & CO.
Chartered Accountants
Dhaka
24 March, 2016

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Islami Bank Bangladesh Limited Annual Report 2015
 ISLAMI BANK SECURITIES LIMITED
Notes to the Financial Statements
as at and for the year ended 31 December 2015

1.0 Status of the company

ISLAMI BANK SECURITIES LIMITED was incorporated on the March 22, 2010 under the Companies Act, 1994 as a public limited
company. It is a subsidiary company of Islami Bank Bangladesh Limited (IBBL) that holds all the shares of the company except
54 (fifty four) shares being held by six individual shareholders. The registered office of the company is situated at 20, Dilkusha
C/A, in Dhaka, Bangladesh.

1.1 Nature of business

The main objective of the company is to carry on the business of a stock broker and stock dealer that is to buy, sell and deal in
shares, stocks, debenture, bonds and other securities, as well as to carry on any business as permissible for a broker and dealer
duly licensed by the Bangladesh Securities and Exchange Commission (BSEC).

2.0 Significant accounting policies and basis of preparation of financial statements

2.1 Statement of compliance

The financial statements have been prepared and presented in accordance with
a) Bangladesh Financial Reporting Standards (BFRS)
b) The Companies act, 1994
c) Securities and Exchange Commission (Stock-Dealer, Stock Broker and Authorized Representative) Rules, 2000
d) Other relevant laws and regulations applicable in Bangladesh

2.2 Basis of preparation

The financial statements have been prepared on a going concern basis following accrual basis of accounting except for statement
of cash flows in accordance with the Companies Act 1994, Securities and Exchange Rules 1987, the Listing Rules of Dhaka and
Chittagong Stock Exchanges and Bangladesh Financial Reporting Standards and other applicable laws and regulations.
2.3 Basis of measurement
The financial statements have been prepared based on historical cost convention basis. The accounting policies, unless otherwise
stated, have been constantly applied by the Company and are consistent with those of the previous year.

2.4 Going concern

The Company has adequate resources to continue in operation for foreseeable future. For this reasons the directors continue
to adopt going concern basis in preparing the financial statements. The current credit facilities and adequate resources of the
Company provide sufficient funds to meet the present requirements of its existing businesses and operations.

2.5 Components of financial statements

The financial statements referred to here comprise:
a. Statement of Financial Position
b. Statement of Comprehensive Income
c. Statement of Cash Flows
d. Statement of Changes in Equity and
e. Notes to the Financial Statements

2.6 Statement of cash flows

Statement of cash flows is prepared in accordance with the Bangladesh Accounting Standard-7 Statement of Cash Flows under
indirect method.

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Islami Bank Bangladesh Limited Annual Report 2015
2.7 Reporting period
These financial statements cover one calendar year from 1 January 2015 to 31 December 2015.

2.8 Property, plant and equipment

All Property, Plant and Equipment are stated at cost less accumulated depreciation as per BAS-16 Property, Plant and Equipment.
The cost of acquisition of an asset comprises its purchase price and any directly attributable cost of bringing the assets to its
working condition for its intended use inclusive of inward freight, duties and non-refundable taxes.
The company recognizes the cost of purchasing new assets or cost of replacing new assets in the carrying amount of an item
of property, plant and equipment when that cost is incurred if it is probable that the future economic benefits embodied with
the item will flow to the company and the cost of the item can be measured reliably. Expenditure incurred after the assets have
been put into operation, such as repair and maintenance is normally charged off as revenue expenditure in the period in which it
is incurred.

2.8.1 Depreciation policy

Depreciation is charged at the following rates on a straight line method on motor vehicles and computers and other assets are
depreciated on reducing balance method according to their respective percentage given below. Depreciation is charged from the
date of acquisition of particular assets and up to the date of disposal.

Items Rate Method

Mechanical appliances 20-25% Reducing balance
Furniture and fixtures 10-20% Reducing balance
Computers 25% Straight line
Motor vehicles 20% Straight line

2.9 Intangible assets and amortization of intangible assets

Intangible assets acquired separately are measured on initial recognition at cost and are carried at cost less accumulated
amortization and accumulated impairment losses, if any. Amortization is calculated using the straight line method to write
down the cost of intangible assets to their residual values over their estimated useful lives based on the management best
estimates. Subsequent expenditure on software assets is capitalized only when it increases the future economic benefits in the
specifications to which it relates. All other expenditure is expensed as incurred.
Software
Acquired software licenses are capitalized on the basis of costs incurred to acquire and bring the specific software to use. These
costs are amortized over their estimated useful lives of four years.

2.10 Investment in TREC (Membership)

Investment in Stock Exchanges for TREC (Membership) are stated at cost. The cost of acquisition of a TREC (Membership)
comprises its purchase price and any directly attributable cost of completing compliance requirements relevant to it inclusive
of stamp duty and non-refundable taxes, etc. As per the Demutualization Act, 2013 Membership renamed as Trading Right
Entitlement Certificate (TREC) and we have been allotted 7,215,106 and 4,287,330 no. of ordinary shares of Dhaka Stock
Exchange Limited (DSE) and Chittagong Stock Exchange Limited (CSE) respectively.

2.11 Preliminary and deferred revenue expenses

All the preliminary and deferred revenue expenses have been recognized as assets and as per Boards decision all these assets
will be amortized over the period of 5 (five) years or at a rate of 20% commencing from the year 2011. All these assets are stated
in financial position at cost less accumulated amortization.
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and cash at bank, which are held and available for use by the company without
any restriction and are readily convertible to a known amount of cash and that are subject to an insignificant risk of change in
value.
2.13 Investment in securities
Investment in securities means purchase of shares of quoted/listed companies in DSE and CSE through stock dealer account.
Investment is made in shariah complied securities. Investment in securities is categorized as held for trading as per BAS 39 and
valued at market value on the last date of reporting period and relevant unrealized gain /(loss) is recognized in income statement
as per directive # SEC/CMRRCD/2009-193/181 dated December 8, 2015 and as per directive # SEC/CMRRCD/2009-193/166
dated January 12, 2015 respectively of Bangladesh Securities and Exchange Commission.

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Islami Bank Bangladesh Limited Annual Report 2015
2.14 Advance, deposits and prepayments
Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions, adjustments or
charges to other account heads. Deposits are measured at payment value. Prepayments are initially measured at cost. After
initial recognition, prepayments are carried at cost less charges to income statement.

2.15 Advance income tax

The amount of advance income tax are (a) Payment made through challan under section 64 and (b) Tax deduction at source
(TDS). TDS mainly deduction of tax at sources (i) By bank on profits arisen from bank deposits (SND and MTDR) (ii) By Dhaka
Stock Exchange Limited and Chittagong Stock Exchange Limited on trading turnover and (iii) against dividend income received
from securities owned by the company under portfolio investment.

2.16 Deferred taxation

Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets are the amount of income taxes recoverable in future periods in respect of deductible temporary differenc-
es. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences arising between the
carrying values of assets, liabilities, income and expenditure and their respective tax bases. Deferred tax assets and liabilities
are measured using tax rates and tax laws that have been enacted or substantially enacted at the reporting date. The impact on
the account of changes in the deferred tax assets and liabilities have also been recognized in the statement of comprehensive
income as per BAS-12 Income Taxes.

2.17 Provision for income tax

Provision for current income tax has been made in compliance with relevant provisions of income tax law.

2.18 Share Capital

Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.

2.19 Investment from IBBL

Investment has taken from its parent company ,Islami Bank Bangladesh Limited under mudaraba mode for investment in stocks,
investment in placement share and investment in margin account etc.

2.20 Revenue recognition

Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to the com-
pany in accordance with the Bangladesh Accounting Standard (BAS) 18 Revenue Recognition:

2.21 Dividend income

All dividends received or receivable against the investment in securities held both under dealer account and Musharaka In-
vestment have been considered as dividend income in statement of comprehensive income. Dividend income is recognized on
accrual basis.

2.22 Capital gains from direct investment

The difference between cost price and net sales price of the securities is considered as capital gain from direct investment.

2.22.1 Musharaka investment and income

Musharaka investment means the margins (Investment facilities) provided to eligible clients under brokerage operation in
Musharaka principle/ mode of finance. As per Musharaka principle, profits arisen through capital gain and dividend from this
investment are shared between company and client as per agreed ratio and loss is shared as per equity participation ratio.
Investment is valued at market value on the last date of reporting period and relevant unrealized gain (Loss) is recognized in
income statements as per directive # SEC/CMRRCD/2009-193/181 dated December 8, 2015 and as per directive # SEC/CMR-
RCD/2009-193/166 dated January 12, 2015 respectively of Bangladesh Securities and Exchange Commission.

2.23 Brokerage commission

Brokerage commission is recognized as income when selling or buying order executed.

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Islami Bank Bangladesh Limited Annual Report 2015
2.24 Provisions
All provision is recognized on the financial statement date if, as a result of past events, the company has a present legal or
constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to
settle the obligation.

2.25 Event after the reporting period

As per BAS - 10 Events after the Reporting period, events after the reporting period are those events, favorable and unfavorable,
that occur between the end of the reporting period and the date when the financial statements are authorized for issue. Two types
of events can be identified:
i) those that provide evidence of conditions that existed at the end of the reporting period (Adjusting events after the reporting
period) and
ii) those that are indicative of conditions that arose after the reporting period (Non- adjusting events after the reporting period).
There was no material events which have occurred after the reporting period which could affect the values stated in the financial
statements.

2.26 Related party transaction

As per BAS 24 Related Party Disclosures, a related party is a person or entity that is related to the entity (i.e. IBSL) that is pre-
paring its financial statements. Related party transaction is a transfer of resources, services, or obligations between a reporting
entity and a related party, regardless of whether a price is charged as per BAS 24.
Related Parties include the Companys Directors, key management personnel, associates, companies under common director-
ship etc. as per BAS 24 Related Party Disclosures. All transactions involving related parties arising in the normal course of
business are conducted as arms length transactions. Details are given in Note.37

2.27 Authorization of the financial statements for issue

The financial statements of the company have been authorized for issue by the Board of Directors on 14.03.2016.

2.28 Functional and presentation currency

The financial statements are presented in Bangladeshi Taka (BDT) currency, which is the companys functional currency.

2.29 General
a) The figures appearing in these financial statements are expressed in Taka currency and rounded off to the nearest Taka unless
otherwise stated.
b) Previous years figures have been rearranged, where necessary, to conform to current years presentation.

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 Amount in Taka
2015 2014
3 Property, plant and equipment
Cost
Opening balance at cost 13,412,837 12,599,370
Add: Assets purchased during the year 509,077 813,467
Less: Sale/Adjustment during the year - -
Closing value at cost (a) 13,921,914 13,412,837

Accumulated depreciation
Opening balance 9,655,363 7,273,346
Add: Depreciation charged during the year 33 2,188,426 2,382,016
Less: Adjustment during the year - -
Closing balance of depreciation (b) 11,843,789 9,655,362
Written down value (a - b) 2,078,125 3,757,475
Details are given in Annexure -A

4 Intangible assets
Cost
Opening balance at cost 1,541,763 1,521,908
Add: Assets purchased during the year 6,068 19,855
Less: Sale/Adjustment during the year - -
Closing value at cost (a) 1,547,831 1,541,763

Accumulated amortization
Opening balance 1,181,565 797,838
Add: Amortized during the year 34 366,266 383,727
Less: Adjustment during the year - -
Closing balance of Amortization (b) 1,547,831 1,181,565
Written down value (a - b) - 360,198

5 Investment in TREC (Membership)

DSE 24,453,399 24,453,399
CSE 280,000,000 280,000,000
304,453,399 304,453,399

This represents the acquisition cost of DSE and CSE memberships paid by Islami Bank Securities Limited. According to Exchanges Demutu-
alization Act 2013 and Bangladesh Securities and Exchange Commission (BSEC) approved Demutualization Scheme, Dhaka Stock Exchange
Ltd. (DSE) has allotted total 7,215,105 ordinary Shares at a face value of Taka 10.00 each against acquisition cost of Taka 24,453,399 while
Chittagong Stock Exchange Ltd. (CSE) allotted total 4,287,330 ordinary shares at face value of Taka 10.00 each against acquisition cost of Taka
280,000,000. Out of the shares allotted DSE has transferred 2,886,042 shares and CSE transferred 1,714,932 shares to BO account of the com-
pany. The remaining balance has been kept under blocked account. Since there is no active market for shares of DSE and CSE and the fair value
of the said investments could not be reliably measured.
6 Preliminary expenses
Total value at cost as on 31 December 540,125 540,125
Less: Accumulated amortization as on 31 December (540,125) (432,100)
- 108,025

7 Deferred revenue expenses

Total value at cost as on 31 December 2,441,852 2,441,852
Less: Accumulated amortization as on 31 December (2,441,852) (1,953,481)
- 488,371

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Islami Bank Bangladesh Limited Annual Report 2015
 Amount in Taka
2015 2014
8 Deferred tax assets
Accounting base of fixed assets 2,065,173 3,626,565
Tax base of fixed assets 3,960,459 4,529,081
Deductable temporary difference (DTD) 1,895,286 902,516
Deferred tax assets ( 35% of DTD) 663,350 315,880

9 Cash and cash equivalents

Cash in hand 1,776 19
Cash at bank 9.1 497,944,390 346,324,439
497,946,166 346,324,458
9.1 Cash at bank
i) IBSL account 349,255,187 281,966,263
ii) Customer account 148,689,203 64,358,176
497,944,390 346,324,439
10 Investment in securities
Own portfolio 10.1 1,624,364,908 1,483,281,601
Musharaka portfolio 10.2 31,441,571 33,075,657
1,655,806,479 1,516,357,258
10.1 Own portfolio
Opening balance at cost 1,876,030,202 1,913,693,110
Add: Shares purchased during the year 1,501,099,281 1,138,029,475
Less: Cost of shares sold during the year (1,335,573,339) (1,175,692,383)
Closing balance of investment at cost 2,041,556,144 1,876,030,202
Less: Provision against un-realized gain/(loss) (Note: 10.1.1) (417,191,236) (392,748,601)
1,624,364,908 1,483,281,601
10.1.1 Provision against unrealized gain/(loss)
Opening balance (392,748,601) (361,912,425)
Add: Addition during the year (Note:36.1) (24,442,635) (30,836,176)
Closing balance (417,191,236) (392,748,601)

10.2 Musharaka portfolio

Opening balance at cost 38,687,354 34,597,970
Add: Shares purchased/(sold) during the year 698,057 4,089,384
Closing balance of investment at cost 39,385,411 38,687,354
Less: Provision against un-realized gain/(loss) (Note: 10.2.1) (7,943,840) (5,611,697)
31,441,571 33,075,657
10.2.1 Provision against unrealized gain/(loss)
Opening balance (5,611,697) (3,338,395)
Add: Addition during the year (Note: 36.2) (2,332,143) (2,273,302)
Closing balance (7,943,840) (5,611,697)

11 Accounts receivables
Receivable from clients 2,181,823 1,199,325
Receivable from CSE (Dealer) - 16,986
Receivable from DSE (Broker) 1,409,507 487,449
Receivable from DSE (Dealer) - 3,742,870
3,591,330 5,446,630
12 Advances, deposits and prepayments
Advance office rent for head office 12.1 2,485,000 5,467,000
Advance office rent for Nawabpur office 12.2 285,000 -
Prepaid insurance premium 12.3 36,641 36,645
Prepaid motor car maintenance 12.4 35,814 35,174
Advance income tax 12.5 107,039,612 48,485,703
Advance for security depsoit 3,500 -
109,885,567 54,024,522

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Islami Bank Bangladesh Limited Annual Report 2015
 Amount in Taka
2015 2014
12.1 Advance office rent for head office
Opening balance 5,467,000 8,449,000
Add: paid during the year - -
Less: Charged to profit & loss during the year 2,982,000 2,982,000
2,485,000 5,467,000
12.2 Advance office rent for Nawabpur office
Opening balance - -
Add: paid during the year 410,400 -
Less: Charged to profit & loss during the year 125,400 -
285,000 -
12.3 Prepaid insurance premium
Opening balance 36,645 36,645
Add: paid during the year 43,971 43,973
Less: Charged to profit & loss during the year 43,975 43,973
36,641 36,645
12.4 Prepaid motor car maintenance
Opening balance 35,174 35,500
Add: paid during the year 35,814 35,174
Less: Charged to profit & loss during the year 35,174 35,500
35,814 35,174
12.5 Advance income tax
Opening balance 48,485,703 15,130,578
Add: Income tax paid during the year 12.5.1 58,553,909 33,355,125
Less: Adjustment against tax assessment - -
107,039,612 48,485,703
12.5.1 Income tax paid during the year
Advance income tax 14,752,700 20,914,690
Tax deduction at source (TDS) 12.5.1.1 43,801,209 12,440,435
58,553,909 33,355,125
12.5.1.1 Tax deduction at source (TDS)
TDS against dividend income 10,028,703 4,879,430
TDS from bank deposit profit 31,968,542 6,162,135
TDS on brokerage commission by CSE 31,411 7,247
TDS on brokerage commission by DSE 1,772,553 1,391,623
43,801,209 12,440,435
13 Investment in MTDR
Opening balance 3,636,152,827 889,006,145
Add: New/reinvestment during the year 3,805,157,102 2,805,096,682
Less: Encashment during the year 1,894,524,557 57,950,000
5,546,785,372 3,636,152,827
14 Other asset
Stock in hand 35,602 44,650
Receivable from dividend 3,066,350 748,020
Receivable profit from bank on MTDR 14,735,470 11,218,112
17,837,422 12,010,782

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Islami Bank Bangladesh Limited Annual Report 2015
 Amount in Taka
2015 2014
15 Share capital
Authorized capital
5,000,000 ordinary shares of Taka 1,000 each. 5,000,000,000 5,000,000,000

Paid- up capital
27,00,000 ordinary shares of Taka 1,000 only each:
No. of
Name of shareholder % Amount in Taka
shares
1) IBBL (Represented by three directors) 2,699,946 99.998 2,699,946,000 2,699,946,000
2) Janab Mohd. Shamsul Haque 9 0.0003 9,000 9,000
3) Janab Md. Kabir Hossain 9 0.0003 9,000 9,000
4) Janab Md. Nurul Islam 9 0.0003 9,000 9,000
5) Janab Muhammad Abul Bashar 9 0.0003 9,000 9,000
6) Janab Md. Abdul Jabbar 9 0.0003 9,000 9,000
7) Janab Md. Obaidul Haque 9 0.0003 9,000 9,000
2,700,000 100.00 2,700,000,000 2,700,000,000
16 Investment from IBBL
Opening balance 3,000,000,000 -
Add: Investment received during the year 2,000,000,000 3,000,000,000
Less: Repayment/adjustment investment - -
5,000,000,000 3,000,000,000

Investment has taken from Islami Bank Bangladesh Limited under mudaraba mode. These amount has been invested in MTDR amounting to
Taka 472 crore. The profit sharing ratio between IBBL and IBSL is to be at 50:50 basis.
17 Accounts payables
Payable to clients 141,841,932 51,872,809
Payable to clients (IPO) - 7,017,000
Payable to CSE (Dealer) 511,487 -
Payable to DSE (Broker) 10,738 1,631,549
Payable to DSE (Dealer) 4,032,198 637,481
146,396,355 61,158,839
18 Provision for income tax
Opening balance 61,664,633 37,356,636
Add: Provision for income tax for the year 58,578,966 25,368,838
Less: Adjustment against assessment - (1,060,841)
Tax deduction at source (TDS) - -
Advance income tax (Under sec. 64 of ITO) - -
Payment for tax during the year - (1,060,841)
120,243,599 61,664,633
19 Accrued expenses
Auditors fees 92,000 92,000
CDS charges 99,238 106,760
Electricity bills 17,035 13,424
Ex gratia bonus 1,965,045 1,200,550
Holiday allowance 14,731 5,400
Legal fees - 85,000
Network support 38,050 28,050
Office maintenance - 6,048
Office rents - 67,689
Professional and consultancy fees 40,250 40,250
Profit on investment of mudaraba fund 11,908,614 -
Service charges 17,250 17,250
Telephone bills 25,286 24,737
Wages 18,054 12,030
Water bills 6,000 6,000
14,241,553 1,705,188

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Islami Bank Bangladesh Limited Annual Report 2015
 Amount in Taka
2015 2014
20 Quard against MTDR
Opening balance 90,000,000 200,000,000
Add: Addition during the year 579,990,000 210,000,000
Less: Payment during the year 579,990,000 320,000,000
90,000,000 90,000,000
21 Other current liabilities
Security deposit from clients 1,111,279 1,111,279
Security deposits payable on fixed assets 21.1 16,920 16,920
Sundry creditors 25,802 25,757
TDS payable 164,298 240,608
VAT payable 39,666 32,769
Bank charge payable 30,000 31,150
1,387,965 1,458,483
21.1 Security deposits payable on fixed assets
Digilog System 5,550 5,550
Net Com 11,370 11,370
16,920 16,920
22 Investment income
Own fund 22.1 43,047,793 111,256,118
Mudaraba fund 22.2 294,438,715 -
337,486,508 111,256,118
22.1 Own fund

Cash dividend from own investment 48,847,343 28,602,873

Cash dividend from Musharaka investment 423,757 274,448
Profit from bank on SND 4,544,078 1,979,416
Profit from MTDR 48,752,873 57,286,496
Capital gains from direct investment 22.1.1 (59,520,258) 23,112,885
43,047,793 111,256,118
22.1.1 Capital gains from direct investment
Capital gains from sale of securities under dealer A/C 22.1.1.1 (59,779,800) 22,305,654
Capital gain from Musharaka investment 22.1.1.2 259,542 807,231
(59,520,258) 23,112,885
22.1.1.1 Capital gains from sale of securities under stock dealer
Capital gain 62,352,603 68,499,785
Less: Capital loss 122,132,403 46,194,131
(59,779,800) 22,305,654
22.1.1.2 Capital gain from musharaka investment
Capital gain 342,719 868,407
Less: Capital loss 83,177 61,176
259,542 807,231
22.2 Mudaraba fund
Cash dividend 3,728,624 -
Capital gains from sale of securities 22.2.1 19,522,091 -
Profit from MTDR 269,302,638 -
Profit from bank on SND 1,885,362 -
294,438,715 -
22.2.1 Capital gain from sale of securities
Capital gain 19,573,247 -
Less: Capital loss 51,156 -
19,522,091 -
23 Brokerage commissions
Commission on CSE turnover 243,129 66,861
Commission on DSE turnover 13,935,822 12,891,911
14,178,951 12,958,772

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Islami Bank Bangladesh Limited Annual Report 2015
 Amount in Taka
2015 2014
24 Other operating income
BO account opening fees 156,700 317,100
BO account maintenance fees 2,533,000 1,960,477
Commission from IPO 64,196 8,248
Documentation fee (Margin account) - 3,100
Miscellaneous income 20,347 39,388
2,774,243 2,328,313
25 Salary and allowances
Salary 13,474,935 11,705,941
Eid bonus 1,271,945 1,142,510
Ex gratia bonus 1,965,045 1,200,550
Holiday allowance 132,731 173,100
Wages 192,582 146,172
17,037,238 14,368,273
26 Rent, taxes, insurancees and electricity etc.
Office rents 3,929,886 3,656,514
Insurance premiums 43,975 43,973
Electricity bills 231,746 190,326
Renewal of tax token for motor vehicles 13,886 14,900
4,219,493 3,905,713
27 Brokerage expenses
CSE contact charges 3,152 884
CSE commission charges 10,234 2,560
DSE howla charges - 140,392
DSE transaction fee 897,845 561,548
Investors protection fund charges 4,235 3,319
915,466 708,703
28 Postage, stamps and communication etc.
Conveyances 54,421 23,245
Postage 2,146 3,517
Stamps 2,993 9,754
Telephone bills 184,506 162,153
244,066 198,669
29 Stationery, printing and advertisement etc.
Advetisement exp. 83,950 24,000
Printing expenses 79,980 58,088
Stationery expenses 428,032 120,413
591,962 202,501
30 Directors fees and expenses
Directors fees 380,000 345,000
Add: Value added tax (VAT) 57,000 51,750
437,000 396,750
31 Repair and maintenances
Motor car running and maintenances 773,651 589,622
Network support 445,471 336,600
Office maintenances 250,377 185,549
Software annual maintenance fees - 95,000
1,469,499 1,206,771
32 Depreciation
Mechanical Appliances 226,731 220,270
Computer 627,547 830,904
Furniture & fixture 176,336 191,070
Motor vehicles 1,157,812 1,139,772
2,188,426 2,382,016

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Islami Bank Bangladesh Limited Annual Report 2015
 Amount in Taka
2015 2014
33 Amortization
Preliminary expense 108,025 108,025
Deferred revenue expenses 488,371 488,370
Intangible assets 366,266 383,727
962,662 980,122
34 License expenses
Renewal fees for depository participant (DP) 4,000 4,000
Renewal fees for DSE (Stock Broker and Stock Dealer) 20,000 20,000
Renewal fee for TREC 150,000 50,000
Renewal fees for CSE (Stock Broker and Stock Dealer) 20,000 20,000
Trader certificate expense and renewal fees 72,500 48,500
Renewal of trade license fees 21,660 17,500
288,160 160,000
35 Other expenses
Annual subscription fees - 4,700
Bank charges 38,104 25,529
Business Development Expenses 711,583 -
Computer accessories 5,000 173,360
Electronic expenses 16,985 54,672
Entertainments 294,383 242,256
Excise duty 345,000 95,000
Govt. fees 1,770 3,199
Internet bills 98,040 99,841
Meeting expenses 77,921 72,055
Newspaper, magazine and periodicals 32,538 23,108
Professional and consultancy fees 161,638 103,638
Service charges 223,500 207,000
Software expenses - 10,000
Subsidy of BO accounts maintenance exp. 2,128 4,290
Training programme expenses 37,895 97,300
Water bills 83,475 82,100
2,129,960 1,298,048
36 Provision against unrealized gain/(loss)
Own portfolio during the year 36.1 (24,442,635) (30,836,176)
Musharaka portfolio during the year 36.2 (2,332,143) (2,273,302)
(26,774,778) (33,109,478)
36.1 Own portfolio during the year
a) Investment in securities at market price as on 31 December 1,526,594,370 1,359,936,897
b) Investment in securities at cost price as on 31 December 2,041,556,144 1,876,030,202
c) Total unrealized gain/(loss) as on 31 December (a-b) 36.1.1 (514,961,774) (516,093,305)
d) Opening balance of provision (392,748,601) (361,912,425)
e) Provision required to be provided (c-d) (122,213,173) (154,180,880)
f) Less: Provision yet to be provided carry forward in next year (97,770,538) (123,344,704)
g) Provision for the year (e-f) (Note: 10.1.1) (24,442,635) (30,836,176)

As per directive # SEC/CMRRCD/2009-193/181 dated December 8, 2015 of Bangladesh Securities and Exchange Commission, it is required
to maintain at least 20% provision against unrealized loss .IBSL has made 81% provision against unrealized loss arising to till date (31.12.15)
revaluation of share purchase through own portfolio. However, the directives prohibit payments of cash dividend if the company makes less than
100% provision against such unrealized loss.

273
Islami Bank Bangladesh Limited Annual Report 2015
 Amount in Taka
2015 2014
36.1.1 Unrealized gain/(loss)
Opening balance (516,093,305) (507,657,170)
Add: Addition during the year 1,131,531 (8,436,135)
Closing balance (514,961,774) (516,093,305)

36.2 Musharaka portfolio during the year

a) Investment in securities at market price as on 31 December 22,112,997 23,982,447
b) Investment in securities at cost price as on 31 December 39,385,410 38,687,354
c) Total unrealized gain/(loss) as on 31 December (a-b) 36.2.1 (17,272,413) (14,704,907)
d) Opening balance of provision (5,611,697) (3,338,395)
e) Provision required to be provided (c-d) (11,660,716) (11,366,512)
f) Less: Provision yet to be provided carry forward in next year (9,328,573) (9,093,210)
g) Provision for the year (e-f) (Note: 10.2.1) (2,332,143) (2,273,302)

As per directive # SEC/CMRRCD/2009-193/181 dated December 8, 2015 of Bangladesh Securities and Exchange Commission, it is required to
maintain at least 20% provision against unrealized loss.IBSL has made 46% provision against unrealized loss arising to till date (31.12.14) reval-
uation of share purchase through musharaka portfolio. However, the directives prohibit payments of cash dividend if the company makes less
than 100% provision against such unrealized loss.

36.2.1 Unrealized gain/(loss)

Opening balance (14,704,907) (11,608,408)
Add: Addition during the year (2,567,506) (3,096,499)
Closing balance (17,272,413) (14,704,907)

274
Islami Bank Bangladesh Limited Annual Report 2015
 38 Nature and type of related party transaction of the company

38.1 Nature and type of related party transaction disclosure of the company

Name of related party Relationship Nature of transaction Amount in Taka

Islami Bank Bangladesh Limited (IBBL) Parent- subsidiary Deposit to MSA 3,895,050,422
Withdraw from MSA 3,681,593,032
Deposit to AWCA 593,837,450
Withdraw from AWCA 597,865,881
Bank Charge paid 6,454
Payment against office rent 338,445
Tax deduction at source 3,562,625
against MTDR
Profit withdraw against MTDR 688,108,952
Payment against Quard 579,990,000
during the year
Quard availed during the year 579,990,000

38.2 Nature and type of balance of related party transaction of the company

Name of related party Relationship Nature of transaction Amount in Taka

Islami Bank Bangladesh Limited (IBBL) Parent- subsidiary Bank balance 250,511,153
MTDR balance 230,000,000
Quard balance 90,000,000
Receivable profit on MTDR 1,560,447

Investment from IBBL under Muda- 5,000,000,000

raba Mode
Profit against MTDR 25,968,585
Accounts payable 6,468,119
Bank charge payable 30,000
Board Member Board Meeting participation 437,000
fees
Directors
Chief Executive Officer key management Short-term employee benefits 2,677,225
personnel (Salary and allowance)

Engr. Md. Eskander Ali Khan Muhammad Abul Bashar A.K.M. Payer Ahammed
Chairman Director Cheif Executive Officer
As per our annexed report of even date

Dhaka
24 March, 2016

275
Islami Bank Bangladesh Limited Annual Report 2015
 ISLAMI BANK SECURITIES LIMITED
Schedule of Property, Plant & Equipment
as at 31 December 2015
Annexure -A
Amount in Taka
Cost Depreciation W.D.V.
Particulars as at
Charged during the 31.12.2015
Balance as at Addition Balance as at Balance as at Adjustment Balance as at
Adjustment year
01.01.2015 31.12.2015 01.01.2015 31.12.2015

Mechanical Appliances 1,840,645 249,785 - 2,090,430 997,318 226,731 - 1,224,049 866,381

Computer 3,545,370 126,360 - 3,671,730 3,044,181 627,547 - 3,671,728 2

Furniture & fixture 2,230,803 132,932 - 2,363,735 975,658 176,336 - 1,151,994 1,211,741

Islami Bank Bangladesh Limited

Motor vehicles 5,796,019 - - 5,796,019 4,638,206 1,157,812 - 5,796,018 1

Total assets 13,412,837 509,077 - 13,921,914 9,655,363 2,188,426 - 11,843,789 2,078,125

276
Cost Depreciation
W.D.V.
Particulars Balance as at Balance as at Charged during the as at
Addition Balance as at Balance as at
01.01.2014 Adjustment 01.01.2014 year Adjustment 31.12.2014
31.12.2014 31.12.2014

Annual Report 2015

Mechanical Appliances 1,642,976 197,669 - 1,840,645 777,048 220,270 - 997,318 843,327

Computer 3,144,635 400,735 - 3,545,370 2,213,277 830,904 - 3,044,181 501,189

Furniture & fixture 2,195,759 35,044 - 2,230,803 784,587 191,070 - 975,657 1,255,146

Motor vehicles 5,616,000 180,019 - 5,796,019 3,498,434 1,139,772 - 4,638,206 1,157,813

Total assets 12,599,370 813,467 - 13,412,837 7,273,346 2,382,016 - 9,655,362 3,757,475

 ISLAMI BANK SECURITIES LIMITED
Schedule of Intangible Assets
as at 31 December 2015
Annexure -B
Amount in Taka

Cost Depreciation
W.D.V.
Particulars as at
Charged during the 31.12.2015
Balance as at Addition Balance as at Balance as at Adjustment Balance as at
Adjustment year
01.01.2015 31.12.2015 01.01.2015 31.12.2015

Software 1,541,763 6,068 - 1,547,831 1,181,565 366,266 - 1,547,831

Total assets 1,541,763 6,068 - 1,547,831 1,181,565 366,266 - 1,547,831 -

Islami Bank Bangladesh Limited

Cost Depreciation

277
W.D.V.
Particulars Balance as at Balance as at Charged during the as at
Addition Balance as at Balance as at 31.12.2014
01.01.2014 Adjustment 01.01.2014 year Adjustment
31.12.2014 31.12.2014

Software 1,521,908 19,855 - 1,541,763 797,838 383,727 - 1,181,565 360,198

Annual Report 2015

Total assets 1,521,908 19,855 - 1,541,763 797,838 383,727 - 1,181,565 360,198
 ISLAMI BANK SECURITIES LIMITED
Schedule of Preliminary Expenses
as at 31 December 2015
Annexure -C
Cost Amortization W.D.V.
Particulars Balance as at Add/Adj during the Balance as at Rate Balance as at Amortization during Balance as at as at
01.01.2015 year 31.12.2015 01.01.2015 the year 31.12.2015 31.12.2015

Incorporation Fees 475,825 - 475,825 20% 380,660 95,165 475,825 -

Miscellaneous Exp. 3,000 - 3,000 20% 2,400 600 3,000 -

Professional Fees 41,800 - 41,800 20% 33,440 8,360 41,800 -

TIN Certificate 2,500 - 2,500 20% 2,000 500 2,500 -

Trade License Fees 17,000 - 17,000 20% 13,600 3,400 17,000 -

Islami Bank Bangladesh Limited

Total as at 31.12.2015 540,125 - 540,125 432,100 108,025 540,125 -

Total as at 31.12.2014 540,125 - 540,125 324,075 108,025 432,100 108,025

278
Schedule of Deferred Revenue Expenses
as at 31 December 2015

Cost Amortization W.D.V.

Particulars Balance as at Add/Adj during the Balance as at Rate Balance as at Amortization during Balance as at as at

Annual Report 2015

01.01.2015 year 31.12.2015 01.01.2015 the year 31.12.2015 31.12.2015

Authorized Capital increase fees 1,808,852 - 1,808,852 20% 1,447,081 361,771 1,808,852 -

Consent Fee for raising paid up capital 633,000 - 633,000 20% 506,400 126,600 633,000 -

Total as at 31.12.2015 2,441,852 - 2,441,852 1,953,481 488,371 2,441,852 -

Total as at 31.12.2014 2,441,852 - 2,441,852 1,465,111 488,370 1,953,481 488,371

 279
Islami Bank Bangladesh Limited Annual Report 2015
 Auditors Report
To the Shareholders of Islami Bank Capital Management Limited
Introduction

We have audited the accompanying financial statements of Islami Bank Capital Management Limited which comprise the
Statement of Financial Position as at 31 December 2015, the Statement of Comprehensive Income, Statement of Changes in
Equity, Statement of Cash Flows for the year then ended, a summary of significant accounting policies and other explanatory
information.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
Bangladesh Financial Reporting Standards (BFRS) and for such internal control as management determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Bangladesh Standards on Auditing(BAS). Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entitys preparation of financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements, give a true and fair view of the financial position of Islami Bank Capital Management
Limited as at 31 December 2015 and of their financial performance and cash flows for the year then ended in accordance
with Bangladesh Financial Reporting Standards (BFRS) and comply with the applicable sections of the Companies Act, 1994
and other applicable laws and regulations.

We further report that:

i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary
for the purpose of our audit and made due verification thereof;
ii) in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from
our examination of those books;
iii) the statement of financial position dealt with by the report are in agreement with the books of account;
iv) the expenditure incurred was for the purpose of companys business.

Place: Dhaka Hussain Farhad & Co.
Date: January 18, 2015 Chartered Accountants

280
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Capital Management Limited
Statement of Financial Position
As at 31 December 2015

Particulars 31.12.2015 31.12.2014

Note
Taka Taka

ASSETS:

Non-current assets - -

Preliminary expenses 3 - -

Current assets 388,112,315 463,795,405

Advance income tax 4 59,433,233 40,758,025

Accrued income 5 7,130,483 9,966,581
Cash & cash equivalents 6 321,548,600 413,070,799

Total assets 388,112,315 463,795,405

SHAREHOLDERS EQUITY & LIABILITIES:

Shareholders equity 326,194,408 307,871,339

Share capital 7 300,000,000 300,000,000

Retained earnings 26,194,408 7,871,339

Current liabilities 61,917,907 155,924,066

Accrued expenses 8 23,000 23,000

Dividend payable 12 - 105,000,000
Provision for income tax 9 61,894,907 50,901,066

Total shareholders equity & liabilities 388,112,315 463,795,405

The annexed notes 1 to 12 form an integral part of these financial statements.

Director Director Chairman
Signed as per our annexed report of even date

Hussain Farhad & Co.

Chartered Accountants
Place: Dhaka
Date: January 18 , 2016

281
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Capital Management Limited
Statement of Comprehensive Income
For the year ended 31 December 2015

2015 2014
Particulars Notes
Taka Taka

Operating income 10 29,501,539 52,663,859

Less : Operating expenses 184,629 702,131

Audit fees 23,000 23,000

Bank charge 11 1,405 2,270
Conveyance 140 70
Entertainment expenses 400 5,556
Excise duty 35,000 10,000
LTU charge - 2,500
Professional fees 121,274 119,250
Amortization of preliminary expenses - 537,485
Others Fees(Tribunal Fees) - 2,000
Paper Stationary 410
Tribunal fees 3,000 -

Profit/(loss) before tax 29,316,910 51,961,728

Less : Provision for income tax 10,993,841 18,609,428

Net profit/(loss) after tax 18,323,069 33,352,300

The annexed notes 1 to 12 form an integral part of these financial statements.

Director Director Chairman
Signed as per our annexed report of even date

Hussain Farhad & Co.

Chartered Accountants
Place: Dhaka
Date: January 18 , 2016

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Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Capital Management Limited
Statement of Changes in Equity
For the year ended 31 December 2015
Amount in Taka
Particulars Share capital Retained earnings Total
Balance as at 01 January 2014 300,000,000 79,519,039 379,519,039
Changes in equity during the period:
Issue of share capital - - -
Net profit/(loss) after tax - 33,352,300 33,352,300
Dividend - 105,000,000 105,000,000
Balance as at 31 December 2014 300,000,000 7,871,339 307,871,339

Balance as at 01 January 2015 300,000,000 7,871,339 307,871,339

Changes in equity during the period:
Issue of share capital - - -
Net profit/(loss) after tax - 18,323,069 18,323,069
Dividend - -
Balance as at 31 December 2015 300,000,000 26,194,408 326,194,408

The annexed notes 1 to 12 form an integral part of these financial statements.

Director Director Chairman
Signed as per our annexed report of even date

Hussain Farhad & Co.

Chartered Accountants
Place: Dhaka
Date: January 18 , 2016

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Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Capital Management Limited
Statement of Cash Flows
For the year ended 31 December 2015

2015 2014
Particulars
Taka Taka

Cash flows from operating activities

Profit/(loss) before tax 29,316,910 51,961,728

Adjustment: - -
Amortization of preliminary expenses - 537,485

Adjusted operating profit before changes in working capital 29,316,910 52,499,213

Changes in working capital: 2,836,098 (9,966,581)

Increase/ (decrease) in accrued income 2,836,098 (9,966,581)

Increase/ (decrease) in accrued expenses/other payables - -

Less: Tax paid 18,675,208 17,830,623

Net cash (used in)/ generated from operating activities (A) 13,477,801 24,702,009

Cash flow from investing activities (B) - -

Cash flows from financing activities (C) - -

Payment of dividend (105,000,000)

Net Increase/ (decrease) in cash & cash equivalents (D)=(A+B+C) (91,522,199) 24,702,009

Add: Opening cash & cash equivalents (E) 413,070,799 388,368,790

Closing cash & cash equivalents (D+E) 321,548,600 413,070,799

The annexed notes 1 to 12 form an integral part of these financial statements.

Director Director Chairman
Signed as per our annexed report of even date

Hussain Farhad & Co.

Chartered Accountants
Place: Dhaka
Date: January 18 , 2016

284
Islami Bank Bangladesh Limited Annual Report 2015
 Islami Bank Capital Management Limited
Notes to the Financial Statements
For the year ended 31 December 2015

1. Establishment and status of Islami Bank Capital Management Limited

Islami Bank Capital Management Ltd. was incorporated on 01 April, 2010 under the Companies Act, 1994 as a Public Limited
Company. It is a subsidiary company of Islami Bank Bangladesh Limited. Islami Bank Bangladesh Limited holds all the shares
of the company except 7 shares which are held by 7 individuals. The company has been established as per Bangladesh Bank
letter # BRPD (R-1)717/2010-47 dated 7 February 2010. The registered office of the company is situated at Yousuf Chamber, 20
Dilkusha C/A (6th Floor), Dhaka-1000. The main objectives of the company are to carry on business of Merchant Banking in all
its aspects including Underwriting and/or management of issue, public offer of shares, stocks, debentures, bonds, etc.; sale or
purchase of securities or transfer thereof; fund management for clients, underwriting of shares, stocks, debentures, bonds, etc.;
managing portfolio investments of any person or company, by investment in various avenues, etc. The Company has applied for
Registration Certificate as per rule-4 of Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Rule,
1996. The certificate of registration has not been issued yet by the Bangladesh Securities Exchange Commission against the
application.

2. Significant accounting Policies

2.1 Basis of accounting

The financial statements of the company have been prepared applying accrual basis of accounting under historical cost
convention in accordance with Bangladesh Financial Reporting Standards (BFRS) and other applicable laws and regulations.

2.2 Statement of cash flows

The statement cash flow is prepared using the indirect method as stipulated in Bangladesh Accounting Standard (BAS) 7
Statement of Cash Flows.

2.3 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, cash at bank and term deposits that are readily convertible to a known amount
of cash and that are subject to an insignificant risk of change in value.

2.4 General

The figures appearing in these Financial Statements have been rounded off to the nearest integer.

2.5 Profit on bank deposits

Profit on bank deposits has been recognized as per accrual basis.

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Islami Bank Bangladesh Limited Annual Report 2015
 2015 2014
Taka Taka
3. Preliminary expenses

Opening balance - 537,485

Less: Amortization/write-off of preliminary expenses - 537,485
Closing balance - -

4. Advance income tax

Opening balance 40,758,025 38,347,187

Add: Deducted at source during the year 3,223,993 4,265,595

Shahjalal Islami Bank Ltd. 106,250 576,665
EXIM Bank Bangladesh Ltd. 2,623,615 3,128,998
First Security Islami Bank Ltd. 494,128 559,932
Islami Bank Bangladesh Ltd. - -

Add: Paid through challan during the year 15,451,215 13,565,028

Less: Adjusted during the year - 15,419,785
Closing balance 59,433,233 40,758,025

5. Accrued profit on bank deposits

EXIM Bank Bangladesh Ltd. 4,846,083 6,433,631

Shahjalal Islami Bank Ltd. - 1,123,206
First Security Islami Bank Ltd. 2,284,400 2,409,744

7,130,483 9,966,581
6. Cash & cash equivalents

Cash in hand 4,445 394

Cash at bank Note - 6.1 321,544,155 413,070,405

321,548,600 413,070,799
6.1 Cash at bank

Shahjalal Islami Bank Ltd. - 7,030,337

EXIM Bank Bangladesh Ltd. 270,664,375 50,000,000
First Security Islami Bank Ltd. 49,853,780 310,618,438
Islami Bank Bangladesh Ltd. 1,025,999 45,421,630
321,544,155 413,070,405
7. Share capital

Authorized capital

1,000,000 Ordinary shares @ Tk. 1,000 each 1,000,000,000 1,000,000,000

Issued, subscribed and paid up capital

300,000 Ordinary shares @ Tk.1,000 each fully paid up 300,000,000 300,000,000

Details of shareholders are as under:

Name of the shareholders No. of shares Taka Taka

Islamic Bank Bangladesh Limited 299,993 299,993,000 299,993,000

Mr. M. Fariduddin Ahmad 1 1,000 1,000
Mr. Mohammad Abdul Mannan 1 1,000 1,000
Mr. Md. Setaur Rahman 1 1,000 1,000
Mr. Gulam Moula Choudhury 1 1,000 1,000
Mr. A.K.M Malek Chowdhury 1 1,000 1,000
Mr. Nurul Islam Khalifa 1 1,000 1,000
Mr. Abdus Sadeque Bhuiyan 1 1,000 1,000

Total 300,000 300,000,000 300,000,000

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Islami Bank Bangladesh Limited Annual Report 2015
 2015 2014
Taka Taka
8. Accrued expenses

Audit Fees 20,000 20,000

Add: Value Added Tax (VAT) @15% 3,000 3,000

Total 23,000 23,000

9. Provision for income tax

Opening Balance 50,901,066 47,711,423

Add: Provision made during the year 10,993,841 18,609,428
Less: Adjusted during the year due to completion of assessment 15,419,785
Closing balance 61,894,907 50,901,066

10. Operating income

Accrued Profit earned on bank deposits - 9,966,581
Shahjalal Islami Bank Ltd. (60,706) 5,766,661
EXIM Bank Bangladesh Ltd. 24,648,601 31,289,976
First Security Islami Bank Ltd. 4,815,935 5,599,321
Islami Bank Bangladesh Ltd. (MSND-94) 97,710 41,320
29,501,539 52,663,859
11. Bank charge

Account maintenance charge of IBSL 1,000

Account maintenance charge of Islami Bank 1,405 1,270
1,405 2,270
12. Dividend Payable
Opening Balance 105,000,000 -
Add: Dividend decleared - 105,000,000
Less: Dividend paid during the period 105,000,000 -

Closing Balance - 105,000,000

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Islami Bank Bangladesh Limited Annual Report 2015
 STANDARD DISCLOSURE INDEX
Disclosure checklist to the key sections of the Annual Report 2015
Items Ref. Page No.
Corporate Objectives, Values & Structure
Vision and Mission 6-7
Overall strategic objectives 8
Core values and code of conduct / ethical principles 9-10, 39-40
Profile of the Company 22, 60-62
Directors profiles and their representation on Board of other companies & Organization Chart 24, 28-34, 47-49, 207, 212-213
Management Report / Commentary and analysis including Directors Report / Chairmans
Review/CEOs Review etc.
A general review of the performance of the company 14-19, 63-84, 130-133, 156-158
Description of the performance of the various activities / products / segments of the
14-19, 63-84, 130-133, 156-158
company and its group companies during the period under review
A brief summary of the Business and other Risks facing the organization and steps
39, 85-94, 207
taken to effectively manage such risks
A general review of the future prospects/outlook 13, 15, 19, 89, 133
Information on how the company contributed to its responsibilities towards the staff
42-43, 124, 203
(including health & safety)
Information on companys contribution to the national exchequer & to the economy 119-129, 151, 153
Sustainability Reporting
Social responsibility initiatives (CSR) 119, 129, 153, 161-170
Environment related initiatives 18, 44-45, 119-129
Environment & Social Obligations 44, 119-129, 152-153
Integrated Reporting 123-129, 152-153
Appropriateness of Disclosure of Accounting policies and General Disclosures
Disclosures of adequate accounting policies relevant to assets, liabilities, income
191-219
and expenditure, cash flows, etc. in line with applicable financial reporting standards
Any Specific accounting policies 192-198
Impairment of Assets 202
Changes in accounting policies / Changes in accounting estimates 196
Accounting policy on subsidiaries 192-194, 210-211
Segment Information
Comprehensive segment related information bifurcating segment revenue, segment
results and segment capital employed
Availability of information regarding different segments and units of the entity as well
as non-segmental entities/units
Segment analysis of 101-102, 148, 206, 221-222,
Segment Revenue 248
Segment Results
Turnover
Operating profit
Carrying amount of net segment assets
Financial Statements (Including Formats)
Disclosures of all contingencies and commitments 179, 185, 205
Comprehensive Related party disclosures 211-214
Disclosures of remuneration & facilities provided to directors & CEO 41, 180, 186, 240

288
Islami Bank Bangladesh Limited Annual Report 2015
 Standard Disclosure Index

Items
Statement of Financial Position / Balance Sheet and relevant schedules 179-180, 184-185, 215-236, 241-244
Income Statement / Profit and Loss Account and relevant schedules 180, 186, 226-244
Statement of Changes in Equity / Reserves & Surplus schedule 182-183, 188-189
Disclosure of type of share capital 48-49, 142, 233-234
Statement of Cash Flow 181, 187
Consolidated Financial Statement (CFS) 178-182
Extent of compliance with the core IAS/IFRS or equivalent National Standards 210-212
Disclosures / contents of notes to accounts 191-244, 253-256, 263-275
Information about Corporate Governance
Board of Directors, Chairman and CEO 22, 24, 32-35
Audit Committee (composition, role, meetings, attendance, etc), Internal Control & 24, 33-39, 86-94, 172-175, 207,
Risk Management 212
Ethics And Compliance 11, 18, 39
Remuneration and other Committees of Board 24, 26, 33, 36, 40-41, 172
Human Capital 41-43, 158
Communication To Shareholders & Stakeholders 44, 144-145
-Information available on website 2,22, www.islamibankbd.com
-Other information
Management Review and Responsibility 142-144, 151-154, 156-158
Disclosure by Board of Directors or Audit Committee on evaluation of quarterly reports 45-46
Any other investor friendly information 37-38, 173-175
Risk Management & Control Environment 44, 142-143, 147-158
Description of the Risk Management Framework
Risk Mitigation Methodology 39, 85-94, 207-209
Disclosure of Risk Reporting
Stakeholders Information
Distribution of shareholding (Number of shares as well as category wise, e.g Promoter
48-49, 142-143, 234-236
group, FII etc)
Shares held by Directors/Executives and relatives of Directors/Executives 48-49
Redressal of investors complaints 144-145
Graphical/ Pictorial Data
Earnings per Share
Net Assets
Stock Performance 146-147
Shareholders Funds
Return on Shareholders Fund
Horizontal/Vertical Analysis including following
Operating Performance (Income Statement)
Total Revenue
Operating profit
Profit Before Tax
Profit after Tax
EPS
Statement of Financial Position (Balance Sheet) 149, 157-158, 178-180, 184-
Shareholders Fund 186
Property Plant & Equipment
Net Current Assets
Current Liabilities
Long Term Liabilities

289
Islami Bank Bangladesh Limited Annual Report 2015
Standard Disclosure Index

Items Ref. Page No.

Profitability / Dividends / Performance and Liquidity Ratios
Gross Profit Ratio
Earning before Interest, Depreciation and Tax
Price earning ratio
150, 156, 158
Current Ratios
Return on Capital Employed
Debt Equity Ratio
Statement of Value Added and Its Distribution
Government as Taxes
Shareholders as dividend
Employees as bonus/remuneration
151-154
Retained by the entity
Market share information of the Companys product/services
Economic value added
Additional Disclosures
Human Resource Accounting 43-44
Any other good additional disclosures (Independence certification Eg GNV /GRI) 44
Specific Areas for Banking Sector
Disclosure of Ratings given by various rating agencies for Instruments issued by /of Bank.
47, 210
For eg. FD, CD, Tier I perpetual Bonds
Details of Advances portfolio Classification wise as per the direction issued by the central
66-79, 101-104, 219-223
bank of the respective countries
Disclosure for Non Performing assets 79, 104
Movements in NPA
Sector-wise breakup of NPA
79, 103-104, 222-223
Movement of Provisions made against NPA
Details of accounts restructured as per regulatory guidelines
Maturity Pattern of Key Assets and Liabilities (ALM) 190, 217-228
Classification and valuation of investments as per regulatory guidelines/Accounting
217-222
Standards
Business Ratio/Information
Statutory Liquidity Reserve (Ratio) 92, 215
Net interest income as a percentage of working funds / Operating cost - Efficiency ratio 147-148, 158
Return on Average Asset 148, 156, 158
Cost / Income ratio 150, 158
Net Asset Value Per Share 146, 156, 158, 243
Profit per employee 44
Capital Adequacy ratio 98, 150, 157
Cash Reserve Ratio / Liquid Asset ratio 92
Dividend Cover ratio 156, 249
Gross Non-Performing assets to gross advances/Non-Performing Loans (Assets) to
156-157
Total Loans (Assets)
Details of credit concentration / Sector vise exposures 66-78, 92, 102, 148, 220
The break-up of Provisions and contingencies included in the Profit and Loss Account 179-180, 184-185, 229-231
Disclosure under regulatory guidelines 48-56, 95-113
Details of Non-Statutory investment portfolio 216-218
Disclosure in respect of assets given on operating & finance lease 66, 119-121
Disclosures for derivative investments 200
Banks Network: List of Centers or Branches 291-292

290
Islami Bank Bangladesh Limited Annual Report 2015
BANKS NETWORK
Zonal Offices 37 Islampur Branch* 90 Singair Branch
1 Dhaka Central Zone 38 Jamalpur Branch 91 Sonargaon Janapath Branch
2 Dhaka South Zone 39 Jatrabari Branch 92 Sonargaon SME/Krishi Branch
3 Dhaka North Zone 40 Kalampur SME/Krishi Branch 93 Sreenagar Branch
4 Chittagong North Zone 41 Kalkini Branch 94 Takerhat Branch
5 Chittagong South Zone 42 Kamrangirchar Branch 95 Tangail Branch
6 Khulna Zone 43 Kanchpur Branch 96 Tarakandi Branch
7 Bogra Zone 44 Kapasia Branch 97 Tongi Branch
8 Sylhet Zone 45 Kawran Bazar Branch* 98 Trishal Branch
9 Comilla Zone 46 Khilgaon Branch 99 Uttara Branch*
10 Barisal Zone 47 Kishoreganj Branch 100 VIP Road Branch*
11 Rajshahi Zone 48 Konabari Branch. 101 Wiseghat Branch
12 Mymensingh Zone 49 Kotiadi Branch 102 Zinzira Branch
13 Noakhali Zone 50 Lalbag Branch 103 Zirani Bazar SME/Krishi Branch
14 Rangpur Zone 51 Local Office * Chittagong Division
List of Branches 52 Madaripur Branch 104 Agrabad Branch*
Dhaka Division 53 Madhabdi Branch* 105 Anderkilla Branch*
1 Alanga SME/Krishi Branch 54 Madhupur Branch 106 Ashuganj Branch
2 Amin Bazar Branch 55 Manikganj Branch 107 Bancharampur Branch
3 Araihazar Branch. 56 Mawna Chowrasta Branch 108 Bandartila Branch
4 Ati Bazar Branch 57 Mirpur 1 Branch * 109 Bahaddarhat Branch
5 Badda Branch 58 Mirpur Branch * 110 Bank Road Branch
6 Bakshiganj Branch 59 Mirzapur Branch 111 Baraiyarhat Branch
7 Bandura SME/Krishi Branch 60 Moghbazar Branch* 112 Bashurhat Branch
8 Bangshal Branch* 61 Mohakhali Branch* 113 Bandarban Branch
9 Baridhara Branch 62 Mohammadpur Krishi Market Branch 114 Bangodda Bazar Branch
10 Bhairab Branch 63 Monohardi Branch 115 Boalkhali Branch
11 Bhanga SME/Krishi Branch 64 Motijheel Branch* 116 Brahmanbaria Branch
12 Bhulta Branch 65 Mouchak Branch * 117 CDA Avenue Branch
13 Board Bazar Branch 66 Muktagacha SME/Krishi Branch 118 Chaktai Branch
14 Cantonment Branch 67 Munshiganj Branch 119 Chandpur Branch
15 Chawk Mugaltuly Branch* 68 Mymensingh Branch 120 Chandanaish Branch
16 Chormuguria SME/Krishi Branch 69 Narayanganj Branch* 121 Chandraganj Branch
17 Damodya Branch 70 Naria Branch 122 Chatkhil Branch
18 Dhanmondi Branch* 71 Narsingdi Branch* 123 Chauddagram Branch
19 Dholaikhal Branch 72 Nawabganj Branch 124 Chawk Bazaar Branch
20 Dohar Branch 73 Nawabpur Road Branch* 125 Chiringa Branch
21 Elephant Road Branch* 74 Netrakona Branch 126 Chhagalnaiya Branch
22 Faridpur Branch 75 New Market Branch* 127 Chowmuhani Branch *
23 Farmgate Branch* 76 Nitaiganj Branch 128 College Road Branch
24 Fatulla Branch 77 Palash Branch 129 Comilla Branch
25 Foreign Exchange Branch* 78 Pallabi Branch. 130 Companiganj Branch
26 Fulbaria Branch 79 Paltan Branch* 131 Kosba Branch
27 Ganakbari Branch 80 Panthapath Branch 132 Coxs Bazar Branch
28 Gandaria Branch 81 Rajbari Branch 133 Dagunbhuiyan Branch
29 Gazipur Chowrasta Branch* 82 Ramna Branch* 134 Dewanhat Branch
30 Gazipur Sadar Branch 83 Rampura Branch* 135 Eidgah Branch
31 Gopalganj Branch 84 Sadarghat Branch* 136 Faridganj Branch
32 Gulshan Branch* 85 Savar Branch 137 Fatikchari Branch
33 Gulshan Circle1 Branch* 86 Shariatpur Branch 138 Feni Branch
34 Haji Camp Branch 87 Sherpur Branch 139 Gouripur Branch
35 Head Office Complex Branch* 88 Shyamoli Branch* 140 Hajiganj Branch
36 IDB Bhaban Branch 89 Shyampur Branch 141 Hazirhat Branch

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Islami Bank Bangladesh Limited Annual Report 2015
Banks Network

142 Halishahar Branch 197 Kalaroa Branch Barisal Division

143 Hathazari Branch 198 Kaliganj Branch 252 Barguna Branch
144 Jubilee Road Branch* 199 Kaliganj Branch 253 Barisal Branch*
145 Kalurghat Branch 200 Khulna Branch* 254 Bhola Branch
146 Keranihat Branch 201 Koat Chandpur Branch 255 Jhalokathi Branch
147 Khatunganj Branch* 202 Kumarkhali Branch 256 Kalapara Branch
148 Laksham Branch 203 Kushtia Branch* 257 Miarhat Branch
149 Luxmipur Branch 204 Magura Branch 258 Patuakhali Branch
150 Lohagara Branch 205 Meherpur Branch 259 Pirojpur Branch
151 Maijdee Court Branch 206 Mongla Branch 260 Torki Branch
152 Pahartali Branch* 207 Morrelgonj Branch 261 Bhandaria Branch
153 Nabinagar Branch 208 Narail Branch 262 Charfashion Branch
154 Nazumeah Hat Branch 209 Noapara Branch* 263 Hatkhola Chawkbazar Branch
155 Patiya Branch 210 Paikgacha Branch 264 Lalmohan Branch
156 Raipur Branch 211 Poradah Branch 265 Borhanuddin SME/Krishi Branch
157 Ramganj Branch 212 Sarankhola Branch Sylhet Division
158 Rangamati Branch 213 Satkhira Branch 266 Amberkhana Branch
159 Ramu Branch 214 Shyamnagar Branch 267 Baralekha Branch
160 Sandwip Branch 215 KDA Avenue Branch 268 Beani Bazar Branch
161 Senbag Branch 216 Dak Banglabazar SME/Krishi Branch 269 Biswanath Branch
162 Sitakunda Branch 217 Fultala SME/Krishi Branch 270 Chatak Branch
163 Sonagazi Branch 218 Jibon Nagar SME/Krishi Branch 271 Goala Bazar Branch
164 Station Road Branch* Rajshahi Division 272 Habiganj Branch
165 Subarnachar Branch 219 Belkuchi Branch 273 Jagannathpur Branch
166 Teknaf Branch 220 Bhawanigonj Branch 274 Kanaighat Branch
167 Terry Patty Branch 221 Bogra Branch* 275 Kulaura Branch
168 Khagrachari Branch 222 Chanchkoir Branch 276 Laldighirpar Branch
169 O.R. Nizam Road Branch 223 Chapai Nawabganj Branch* 277 Moulvi Bazar Branch
170 Oxyzen Moor Branch 224 Dupchanchia Branch 278 Sreemangal Branch
171 Matlab Branch 225 Highway Branch 279 Sylhet Branch*
172 Raozan Branch 226 Ishwardi Branch 280 Sunamganj Branch
173 Chandina Branch 227 Joypurhat Branch 281 Zindabazar Branch
174 Banshkhali Branch 228 Kashinathpur Branch 282 Dakshin Surma Branch
175 Sachar Branch 229 Naogaon Branch 283 Golapgonj Branch
176 Sonaimuri Branch 230 Natore Branch 284 Shayestagonj SME/Krishi Branch
177 Kadamtoli Branch 231 Nazipur Branch 285 Nabiganj SME/Krishi Branch
178 Pekua Branch. 232 New Market Branch Rangpur Division
179 Anwara Branch 233 Pabna Branch* 286 Birampur Branch
180 Coatbazar SME/Krishi Branch 234 Panchbibi Branch 287 Bhurungamari Branch
181 Barodarogahat SME/Krishi Branch 235 Rajshahi Branch* 288 Dinajpur Branch*
182 Moheshkhali SME/Krishi Branch 236 Rohanpur Branch 289 Dhap Branch
183 Mirerswarai SME/Krishi Branch 237 Santhia Branch 290 Gaibandha Branch
184 Burichong SME/Krishi Branch 238 Sapahar Branch 291 Gobindaganj Branch
185 Parshuram SME/Krishi Branch 239 Shahjadpur Branch 292 Jaldhaka Branch
186 Daudkandi SME/Krishi Branch 240 Shibganj Branch 293 Kurigram Branch
187 Chaprashirhat SME/Krishi Branch 241 Sirajganj Branch 294 Lalmonirhat Branch
188 Akhaura SME/Krishi Branch 242 Mohadevpur Branch 295 Nilphamari Branch
Khulna Division 243 Borogola Branch. 296 Panchagarh Branch
189 Bagerhat Branch 244 Ullahpara Branch 297 Pirganj Branch
190 Benapole Branch 245 Baneswar Branch 298 Rangpur Branch
191 Chowgacha Branch 246 Keshorehat SME/Krishi Branch 299 Saidpur Branch*
192 Chuadanga Branch 247 Shantahar SME/Krishi Branch 300 Setabganj Branch
193 Daulatpur Branch 248 Kahalu SME/Krishi Branch 301 Sundarganj Branch
194 Jessore Branch* 249 Nandigram SME/Krishi Branch 302 Thakurgaon Branch
195 Jhenaidah Branch 250 Sujanagar SME/Krishi Branch 303 Roumari Branch
196 Jhikorgacha Branch 251 Mohastangarh SME/Krishi Branch 304 Patrgram SME/Krishi Branch

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Islami Bank Bangladesh Limited Annual Report 2015
GLOSSARY
AAOIFI Accounting and Auditing Organization for Islamic Financial Institutions IAS International Accounting Standards
AD Authorized Dealer IBB Institute of Bankers, Bangladesh
ADB Asian Development Bank IBBL Islami Bank Bangladesh Limited
ADC Alternative Delivery Channel IBIT Islami Bank Institute of Technology
AGM Annual General Meeting IBCF Islamic Banks Consultative Forum
ALCO Asset Liability Committee IBCA Inter Branch Credit Advice
ATM Automated Teller Machine IBDA Inter Branch Debit Advice
BAB Bangladesh Association of Banks IBP Inland Bill Purchase
BACH Bangladesh Automated Clearing House IBF Islami Bank Foundation
BACPS Bangladesh Automated Cheque Processing System IBTRA Islami Bank Training & Research Academy
BAFEDA Bangladesh Foreign Exchange Dealers Association ICAB Institute of Chartered Accountants of Bangladesh
BAS Bangladesh Accounting Standards ICMAB Institute of Cost and Management Accountants of Bangladesh
BB Bangladesh Bank IC&CW Internal Control & Compliance Wing
BBTA Bangladesh Bank Training Academy ICB Investment Corporation of Bangladesh
BCP Business Continuity Plan ICT Information and Communication Technology
BDT Bangladeshi Taka ICTIC Information and Communication Technology Implementation
BEFTN Bangladesh Electronic Fund Transfer Network Committee
BFIU Bangladesh Financial Intelligence Unit IDB Islamic Development Bank
BFRS Bangladesh Financial Reporting Standards IFRS International Financial Reporting Standards
BIBM Bangladesh Institute of Bank Management IPO Initial Public Offering
BO Beneficiary Owners IRG Investment Risk Grading
BRPD Banking Regulation & Policy Department LC Letter of Credit
BSA Bangladesh Standards on Auditing MCR Minimum Capital Requirement
BSEC Bangladesh Security and Exchange Commission MEIS Micro Enterprise Investment Scheme
CAMLCO Chief Anti Money Laundering Compliance Officer MICR Magnetic Ink Character Recognition
CAR Capital Adequacy Ratio MIS Management Information System
CDBL Central Depository Bangladesh Limited MPB Mudaraba Perpetual Bond
CEO Chief Executive Officer NAV Net Asset Value
CFO Chief Financial Officer NOC No Objection Certificate
CIB Credit Information Bureau NPI Non-performing Investment
CNG Compressed Natural Gas NRD Non Resident Dollar account
CPI Consumer Price Index OBU Offshore Banking Unit
CRAR Capital Adequacy Assessment Ratio PCB Private Commercial Banks
CRISL Credit Rating Information and Services Limited POS Point of Sales
CRO Chief Risk Officer PPD Profit Paid on Deposits
CRR Cash Reserve Requirement PV Present Value
CSR Corporate Social Responsibility RDS Rural Development Scheme
CSBIBB Central Shariah Board for Islamic Banks of Bangladesh R&D Research and Development
CSE Chittagong Stock Exchange RMG Readymade Garments
CTR Cash Transaction Report ROA Return on Assets
DC Data Center ROE Return on Equity
DCFCL Departmental Control Function Check List ROI Return on Investment
DOS Department of Offsite Supervision RTGS Real Time Gross Settlement
DRS Disaster Recovery Site RWA Risk Weighted Assets
DSE Dhaka Stock Exchange Ltd SAFA South Asian Fedaration of Accountants
EFT Electronic Fund Transfer SEC Securities and Exchange Commission
eIBS Electronic Integrated Banking System SLR Statutory Liquidity Ratio
EPS Earnings Per Share SME Small & Medium Enterprise
ETP Effluent Treatment Plants SMS Short Massage Service
EU European Union SMA Special Mention Account
EVA Economic Value Added SOB State Owned Banks
FCB Foreign Commercial Bank SRP Supervisory Review Process
FY Financial Year STR Suspicious Transaction Report
GCIBFI General Council for Islamic Banks and Financial Institutions SWIFT Society for Worldwide Inter-Bank Financial Tele-communication
GDP Gross Domestic Product TA Traveling Allowance
GOB Government of Bangladesh TOR Terms of Reference
HDS Household Durables Scheme VAT Value Added Tax
HFT Held for Trading WAN Wide Area Network
HPSM Hire-Purchase under Shirkatul Melk
HR Human Resources
HTM Held to Maturity

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Islami Bank Bangladesh Limited Annual Report 2015
 NOTICE OF THE 33RD ANNUAL GENERAL MEETING
Notice is hereby given that the 33rd Annual General Meeting of Islami Bank Bangladesh Limited will be held on Thursday,
the 2nd June, 2016 at 10.00 AM at Bangabandhu International Conference Centre (BICC), Agargaon, Sher-E-Bangla Nagar,
Dhaka for transacting the following business:

Agenda
01. To receive, consider and adopt the Audited Financial Statements for the year that ended on
31st December 2015 and Reports of the Directors and Auditors thereon.
02. To approve Dividend for the year that ended on 31st December 2015.
03. To appoint Auditor(s) and to x up their remunerations for the year 2016.
04. To elect/re-elect Directors.
05. To approve appointment of Indepenednt Director(s).
06. To transact any other business with the permission of the chair.

All Members are requested to kindly make it convenient to attend the Meeting in time.
By order of the Board of Directors

Dated: Dhaka (Abu Reza Md. Yeahia)

20, April, 2016 Company Secretary
------------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
a) Record date is 11/05/2016 i.e. the honorable shareholders whose names will appear in the CDS (Central Depository
System) / Companys Register on 11/05/2016 will be entitled to get dividend for the Year 2015 against their
shareholdings.
b) A member eligible for attending and voting at the Annual General Meeting may appoint a proxy on his / her behalf.
c) Power of Attorney/ Proxy Forms must be submitted to the Registered Ofce or Share Department (63, Dilkusha C/A,
5th Floor, Dhaka) of the Company at least 48 (Forty Eight) hours before the Meeting i.e. 10.00 AM on 31st May, 2016,
Tuesday. Revenue Stamp of Tk.20/- (Taka Twenty) only shall have to be afxed on the Proxy Form.
d) The last date for submitting nomination papers at the registered ofce for election of Directors is 26th May, 2016,
Thursday up to 10.00 AM and Last date of withdrawal of nomination paper is 28th May, 2016, Saturday up to 12.00
Noon. Scrutiny of nomination papers will be completed on the same day by 5.00 PM.
e) List of the valid candidates for election of Directors will be hung in the Notice Board at the Registered Ofce on
Saturday the 28th May, 2016 in the afternoon.
f) Election procedures and rules thereto will be available at the Registered Ofce of the Company / Meeting place.
g) Annual Report, Attendance Slip and Proxy Form along with the Notice will be sent to the honourable shareholders by
post/courier. The honourable shareholders may also collect Proxy Forms etc. from the Share Department of the
Company.
h) Directors Report and Audited Financial Statements of the Bank for the year ended on 31st December 2015 along with
the Auditors Report thereon shall be available on Banks website (www.islamibankbd.com).
i) Entry is reserved only for members and Proxies / Attorneys. Attendance slip (duly signed) must be submitted to the
Registration Counter at the time of entrance. Registration Counter shall remain open till 11.00 AM on June 2, 2016.

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Islami Bank Bangladesh Limited Annual Report 2015
 PROXY FORM
I/We ------------------------------------------------------------------------------------------------------------------------------------------------------------------ being a member(s) of lslami

Bank Bangladesh Limited do hereby appoint Janab ----------------------------------------------------------------------------------------------------------------------------------------

of---------------------------------------------------------------------------------------- as my/our Proxy to attend and vote on behalf of me/us at the 33rd Annual General

Meeting of the Company to be held on Thursday the 2nd June, 2016 at 10.00 AM. at Bangabandhu International Conference Centre (BICC),

Agargaon, Sher-E-Bangla Nagar, Dhaka and at any adjournment thereof.

As witness my/our hand this --------------------------------- day of ----------------------------- 2016.

Folio No.:---------------------------------------------------- BO ID No.:

Tk. 20.00
---------------------------------------------- ------------------------------ (twenty) only -----------------------------------------------------
Signature of the Attorney/ No. of Share(s) Signature of the Member with date
Revenue Stamp
Proxy with date
N.B.: This Form of Proxy, duly signed (as recorded with the bank), stamped and completed must be submitted to the Registered Ofce or Share Department
(63 Dilkusha C/A, 5th Floor, Dhaka) of the Company at least 48 (Forty Eight) hours before the Meeting i.e. 10.00 AM on Tuesday the 31st May, 2016.

The 33rd Annual General Meeting dated Thursday, the 2nd June, 2016
ATTENDANCE SLIP
I do hereby submit the Attendance slip in connection with the 33rd Annual General Meeting of Islami Bank Bangladesh Limited held today Thursday, the 2nd
June, 2016 at 10.00 AM in Dhaka.

Full Name of the Member : ------------------------------------------------------ Signature of the Member with date

Folio No.: ---------------------- BO ID No.:

No. of Share(s)

Full Name of the Attorney/ Proxy:--------------------------------------------------------------------------------------------- Signature of the Attorney/Proxy with date

N.B.: The Members are requested to handover the Attendance Slip at the entrance of the Meeting Hall.

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Islami Bank Bangladesh Limited Annual Report 2015
Cover Design : Mazhar/Helpline Resources Ltd.

Inner Design : Mazhar, Ripon, Tajul / Helpline Resources Ltd.

Printed by : Helpline Resources Ltd.

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Islami Bank Bangladesh Limited Annual Report 2015