bml annual report 2010 - english
TRANSCRIPT
-
7/28/2019 BML Annual Report 2010 - English
1/114
-
7/28/2019 BML Annual Report 2010 - English
2/114
-
7/28/2019 BML Annual Report 2010 - English
3/114
-
7/28/2019 BML Annual Report 2010 - English
4/114
Bank o Maldives PLC
11, Boduthakuruaanu Magu,
Male 20094,
Republic o Maldives.
Company Registry No. C-22/1982
Tel: + (960) 332 2948
Fax: + (960) 332 8233
SWIFT: MALBMVMV
www.bankomaldives.com.mv
email: [email protected]
Layo and Desin:
Masterpiece Pvt. Ltd.
www.themasterpiece.biz
-
7/28/2019 BML Annual Report 2010 - English
5/114
-
7/28/2019 BML Annual Report 2010 - English
6/114
We will lead the way through quality o service and dedication o our sta. Wewill serve all our communities to the best o our ability, strive always to listen toyour needs and so build total customer condence and satisaction.
Bank o Maldives PLC Naions Bank
-
7/28/2019 BML Annual Report 2010 - English
7/114
To be the leader in the nancial services industry in Maldives, spreading its
presence in all key economic geographies in Maldives.
To be the leader in the nancial services industry in Maldives, inculcating a long
term saving culture in the nation and promoting a cashless society
To be one o the most Ecient, Protable and Respected nancial institution in
Maldives.
-
7/28/2019 BML Annual Report 2010 - English
8/114
-
7/28/2019 BML Annual Report 2010 - English
9/114
Only indigenous Bank in Maldives
Over 28 years o pioneering banking services in the Maldives
Over 290,000 loyal deposit account holders
Over 40,000 lending relationships
Over 780 dedicated employees
Largest nancial network with 25 branches and 37 ATMs in the Maldives
The market leader in Electronic Banking with card issuance and acquiring with a wide network o
POS terminals
Introduced Maldives Mobile Banking Services, providing added fexibility or customers
Interbank unds transer acility between 25 branches in key islands and atolls across the Maldives
Appropriate liquidity prole
Strong customer relationships
Government stake and support
Long term unding lines rom international unding agencies
Growing correspondent banking relationships
Only public listed bank in the Maldives
The commitment to create lasting value or the people o Maldives
Facilitator o inrastructure development to enhance the living standard o the local community
-
7/28/2019 BML Annual Report 2010 - English
10/114
Resaed
2010 2009 Cane
Resls or e Year
Gross Income 830,195 958,726 -13%
Prot beore Taxation 125,065 78,382 60%
Net Prot ater Tax 49,572 42,967 15%
Resls a e Year End
Shareholders Equity 1,382,093 1,332,520 4%
Deposits rom Customers 7,012,579 7,826,185 -10%
Customer Advances (Net) 6,082,298 6,575,197 -7%
Total Assets 9,972,594 10,980,011 -9%
Inormaion per Ordinary Sare
Earnings - Basic (R ) 9.21 7.98 15%
Net Asset Value (R ) 257 248 4%
Market Value at Year End (R) 143 120 19%
Raios
Return on Average Shareholders Equity 3.7% 3.2% 14%
Return on Average Assets 0.5% 0.4% 16%
Price Earnings Ratio (times) 15.5 15.0 3%
Saory Raios
Capital Adequacy (Statutory Requirement 12%) 20.4% 19.3% 5%
(All amounts in Ruyaa thousands unless otherwise stated)
10
-
7/28/2019 BML Annual Report 2010 - English
11/114
(All amounts in Ruyaa millions)
11
-
7/28/2019 BML Annual Report 2010 - English
12/114
(All amounts in Ruyaa millions)
12
-
7/28/2019 BML Annual Report 2010 - English
13/114
-
7/28/2019 BML Annual Report 2010 - English
14/114
-
7/28/2019 BML Annual Report 2010 - English
15/114
Chairmans Message 16
Board o Directors 18
Board o Directors (Former Directors) 21
Acting Managing Directors Review 23
Corporate Management 25Senior Management Team 28
Head Oce Management Team 29
Branch Management Team 30
Management Discussions 34
Development Banking 36
Human Resources 37Corporate Social Responsibility 40
Risk Management 41
Financial Review 44
Directors Report 46
Audit & Risk Management Committee Report 51
Appointment, Nomination & Remuneration Committee Report 53Independent Auditors Report 57
Investor Inormation 107
-
7/28/2019 BML Annual Report 2010 - English
16/114
Dear Sareolders,
With the grace o Almighty Allah, on behal o the
members o the Board o Directors, let me take the
privilege o presenting the Annual Report o the Bank o
Maldives PLC or the year ended 31st December 2010.
2010 was a year o immense global challenges ranging
rom economic to political turbulence aecting the
local business environment and economy at large. Eventhough the markets pulled back rom the ace o
uncertainty rom the nancial crisis o year 2008, the
economy continued to ace the ater eects o it.
NatioNal EcoNomy
In these telling circumstances the Maldivian economy
continued to recover mostly in the tourism sector and
other mainstream industries, although the downturn in
the sheries sector continued throughout the year. GDP
grew by 4.8%, Infation was at 6% based on Consumer
Price Index (CPI) or Male, inching up rom 5% levelso 2009. The nancial market continued to experience
liquidity constraints in oreign currency and the Bank
was no exception in this regard.
Tourist arrivals rose by more than 20% during the year
with a signicant increase in Asian tourists, although
there was a all in average stay. The addition o more than
3,000 beds during the year holds promise or the year
ahead about sustaining growth and increasing tourism
related revenue.
The year saw decentralization initiatives mainly in the
area o delegation o powers to Atolls and Islands.
PErormaNcE
The year 2010 continued to be a year o consolidation,
ocusing on improving quality o the Banks asset
portolio. As a conscious eort, the Bank did not expand
its loan assets.
Concomitantly, the Bank shed some high cost deposit
unds to improve interest margins. Despite a reduced
loan portolio, Bank achieved 87% o gross income oprevious year at R 830 million. The prot beore tax
improved by R 47 million over 2009 to R 125 million.
A higher tax outfow o R 75.5 million has resulted in a
marginal increase in the Net Prot at R 50 million. The
delay in recovering the existing non perorming loans
continues to demand huge provisioning rom prots.
Thereore, the Bank is unable to declare any dividend to
the shareholders or the year 2010, however, we will work
towards reversing the situation during the course o 2011.
In this context, I would urge the shareholders to take note
that higher allocation or provisioning and retaining the
prots is enhancing the shareholders value and holding
higher promise or reward rom uture prots.
corPoratE GovErNaNcE
The Board has continuously upheld adherence to
the Corporate Governance Code o Capital Market
Development Authority (CMDA) and o the Bank. In this
regard, the Boards Committees were reconstituted in line
with stipulated guidelines and industry best practices.
The Whistle Blowing mechanism established in year
2009 proved to be a key instrument in ostering goodgovernance throughout.
16
-
7/28/2019 BML Annual Report 2010 - English
17/114
maNaGEmENt aNd HumaN rEsourcEs
The Corporate Management o the Bank demonstrated
considerable resilience to ensure that there was no
disruption in business subsequent to the departureo the CEO in May 2010. The Board has identied
Mr. Peter Horton to be the new CEO ater extensive
search and intensive ltering. He brings with him vast
experience in Corporate Credit, Retail Banking and Asset
Reconstruction, to take the Bank to higher levels o
growth and protability.
People are denitely a companys greatest asset. It
does not make any dierence whether the product is
cars or cosmetics. A company is only as good as the
people. As articulated in the preceding quote o amous
businesswoman Ms. Mary Kay Ash, I rmly believe thatthe Banks biggest asset is its committed employees.
The Bank made sincere eorts in development o
employees through scholarships, training and grooming
programmes. The Bank continues to place a premium on
sta quality, welare and development.
During the year, the Bank revised the Service Rules
to align with the Employment Act (Law No. 2/2008)
and to oster a more productive work environment.
The culture o teamwork, commitment and excellence
continues to prove to be the driver in providing
excellent customer service. Bank has also ormulateda policy on Workplace Non-Harassment to ensure a
congenial work environment or its employees.
lookiNG aHEad
It is always wise to look ahead, but dicult to look
urther than you can see. (Winston Churchill,1874-1965).
With signs o recovery in the economy, the opportunities
in the market will surely grow and Bank is poised to seize
these opportunities enabling improvement in asset
quality and ensuring better returns or shareholders. Agreater ocus will be given to customer satisaction and
improving service standards.
Despite the challenging business environment,
we oresee a successul year ahead through accelerated
recovery o stressed assets and improving risk
management processes.
I am condent the Bank will thrive to meet expectations
o the citizens by being the Nations Bank.
aPPrEciatioN
I would like to express my thanks to the unrelenting
loyalty, support and understanding o our shareholders
and stakeholders, and wish to convey my heartelt
appreciation to the employees o all levels o the Bank or
their dedicated eorts.
My deep appreciation goes to the ormer Minister
o Finance and Treasury, Mr. Ali Hashim, and to the
Acting Minister, Mr. Mahmood Razi, or their continued
guidance and stalwart support. Thanks also to the
Governor o Maldives Monetary Authority, Mr. Fazeel
Najeeb, and his team or the accommodative approachand insightul guidance provided throughout the year.
On behal o the Board o Directors I convey my gratitude
to His Excellency President Mohamed Nasheed and his
cabinet or their continued eorts in the development o
the nancial sector as well as the economy.
I wish to oer particular thanks to my colleagues,
Directors past and present, or their valuable contribution
in guiding and directing the Bank towards our vision.
Directors do not always agree on everything but we
have managed to make decisions on various matters, as
a democratic body, objectively and collectively, without
having a need to cast a Chairmans vote.
As a nal note, i must acknowledge and congratulate
Mr. Peter Horton on his rst year as our new Chie
Executive Ocer. During the ew months o his oce,
he has consistently demonstrated the creativity and
keen strategic insight we have been looking or in a chie
executive. I am absolutely condent that, with his proven
track record, the CEO will build exceptional value or the
shareholders now and well into the uture.
May Almighty Allah bless and guide us all and bestow on
us the will and strength to achieve greater heights in our
uture endeavours.
a ibh
Chairman o the Board o Directors
17
-
7/28/2019 BML Annual Report 2010 - English
18/114
m. a ibhIndependent, Non-Executive Director
He is the sole proprietor o Asraee Bookshop and has been managing
his business or the past 33 years. In addition he has over 23 years
experience in the eld o Education. He holds a Masters o Arts in
Education, Bachelor o Sciences Degree in Mathematics, and a Diploma
in Proessional Educational Practices rom Macquarie University o
Australia. Mr. Adam Ibrahim was appointed by the Government as a
Director and the Chairman o Bank o Maldives PLC on 07th August 2009
and was reappointed on 30th
October 2010. He holds no shares in BML.
m. ahh NeenNon-Independent, Executive Director
She was the Acting Managing Director and Chie Executive Ocer
o the Bank rom 29th August 2010. Ms. Aishath Noordeen is the
Assistant General Manager or Card Operations, Electronic Banking,
Inormation Technology, International Banking and Correspondent
Banking Division.
Prior to joining Bank o Maldives PLC in the year 1982, she served at
State Bank o India Male Branch. Over a career expanding 30 years in the
banking industry, she has gained vast exposure in Trade Finance and
International Banking Operations and has been involved in establishing
and maintaining numerous correspondent banking relationships
and inter-bank lines. She has represented and led the Bank on
numerous occasions.
The Government has been appointing her to the Board o Directors o
Bank o Maldives PLC since 13th June 2008 and was last reappointed on30th October 2010. Ms. Aishath Noordeen holds no shares in BML.
18
-
7/28/2019 BML Annual Report 2010 - English
19/114
m. a aNon-Independent, Non-Executive Director
He is the Managing Director o Novelty Printers and Publishers
Pvt. Ltd. and the Managing Director o Dritwood Maldives Pvt. Ltd. Heholds a Bachelors Degree in Business Administration rom University o
Ottawa o Canada. Mr. Asad Ali was appointed to the Banks Board on
07th August 2009 and was reappointed on 30th October 2010. He
holds 100 shares in BML.
m. mhe Jh ibhIndependent, Non-Executive Director
He is the Chairman o Central Utilities Ltd. He holds a First Class Honors
Degree in Interior Architecture rom the University o Nottingham Trent,
England. Mr. Mohamed Jaish Ibrahim was appointed to the Banks Board
on 07th August 2009 and was reappointed on 30th October 2010. He
holds no shares in BML.
m. Nh mhe rzIndependent, Non-Executive Director
She is the Head o Economic Policy and Business Facilitators Section o
Ministry o Economic Development. She is also a member o the Board o
Directors o Island Aviation Services. She holds a Masters in International
Accounting and Finance rom Carse Business School, City University,
London and a Degree in Economics rom Trinity College, University o
Cambridge, UK. Ms. Nuha Mohamed Riza was appointed to the Board on
30th October 2010. She holds no shares in BML.
m. Hn mzn mheIndependent, Non-Executive Director
He is the Assistant General Manager and Head o Cargo Clearance
Department o Maldives Ports Limited. He holds a Bachelor o
Sciences Honors Degree in Computing and a Post Graduate Diploma
in Technology Management rom Staordshire University, UK.
Mr. Hassan Muzni Mohamed was appointed to the Banks Board on
30th October 2010. He holds no shares in BML.
19
-
7/28/2019 BML Annual Report 2010 - English
20/114
m. ahe mheIndependent, Non-Executive Director
Mr. Ahmed Mohamed holds a Masters in Economics (Public Policy), and
a Bachelors Degree First Class Honours in Engineering Sciences rom theUniversity o Hull, UK. He has served as an appointed member o the
Board since 13th June 2008 and was subsequently elected to the Banks
Board by the public shareholders on 07th August 2009 and 30th October
2010. Mr. Ahmed holds 30 shares in BML.
m. mhe ab s
Independent, Non-Executive Director
Mr. Mohamed Abdul Sattar is the Managing Director o Cocoa Huts
Pvt. Ltd. He holds a Master o Business Administration rom University
o Wales, UK. He was elected to the Board o Directors o the Bank by
the public shareholders o the Bank rom 08th September 2004 to 29th
June 2005. On 30th October 2005, he was appointed to the Board o
Directors by the Government o Maldives and was last reappointed on
13th June 2008. On 07th August 2009, he was elected again to the
Board o BML by the public shareholders o the Bank and was re-elected
once more on 30th October 2010. He holds 2,300 shares in BML.
m. ibh mheIndependent, Non-Executive Director
He is the Managing Director o Tropical Island Holidays Pvt. Ltd. and
Osprey Fisheries Pvt. Ltd. He is also an Executive Director o Gasveli
Islands Pvt. Ltd. Mr. Ibrahim Mohamed holds a Master o Sciences
Degree in Tourism rom University o Strathclyde, UK and a Higher
National Diploma in Business and Finance (Tourism) rom South
Glamorgan Institute o Higher Education, University o Wales, UK.
He was elected by the public shareholders to the Banks Board on
07th
August 2009 and re-elected again on 30th
October 2010. He holds960 shares in BML.
20
-
7/28/2019 BML Annual Report 2010 - English
21/114
m. Gnen sbn
Former Managing Director & Chie Executive Ocer (CEO), Non-Independent,
Executive Director
Mr. Subramanyam resigned rom the Board eective 16thAugust 2010.
He joined the Bank as the Chie Executive Ocer on 01 st July 2009 and was
subsequently nominated as a member o the Board o Directors by the Maldivian
Government and was appointed to the Board at the Annual General Meeting
held on 07th August 2009. He worked at the Bank o Maldives PLC rom
05th July 2009 to 16th August 2010.
uz. i y
Independent, Non-Executive Director
Uz. Yasir ceased to be a Director eective 30th October 2010.
He is the Deputy Minister o Tourism Arts and Culture. Uz. Ismail Yasir was
appointed to the Banks Board on 13th June 2008 and was reappointed on
07th August 2009. He holds no shares in BML.
m. mhe ah
Independent, Non-Executive Director
Mr. Athi resigned rom the Board eective 27thJune 2010.
Mr. Mohamed Athi was appointed as a Director to the Banks Board on
07th August 2009. He holds no shares in BML.
m. eeh shee
Independent, Non-Executive Director
Ms. Fareeha resigned rom the Board eective 08th May 2010.
She is a member o the Board o Directors o Maldives Pension Administration
Oce and the Managing Director o FJS Consulting Pvt. Ltd. She wasappointed to the Banks Board on 07th August 2009. Ms. Fareeha Sharee holds
200 shares in BML.
m. azbn h
Independent, Non-Executive Director
Mr. Fahmy ceased to be a Director eective 12th December 2010.
He is the Finance Director o Noorban and Brothers Company Pvt. Ltd. He holds no
shares in BML. He ceased to be a Director with eect rom 12th December 2010 as
per Chapter 5, Section 15(c) o the Maldives Banking Act (Law No. 24/2010).
21
-
7/28/2019 BML Annual Report 2010 - English
22/114
-
7/28/2019 BML Annual Report 2010 - English
23/114
The commencement o 2010 brought the promise o
positive outcomes against a challenging outlook or
the global economy. However, despite extensive and
collaborative eorts to revive the global economy,
outcomes were restrained in such that numerous
challenges which developed post global crisis ailed to
abate over the course o the year. Though progressiveground was covered, the level o economic activity
remained below the pre-crisis era, and the application o
a ull recovery or the nancial industry, the world over,
remains subdued.
Nn En
Notwithstanding a rise in infation, the national GDP
growth is expected to be closer to 5%, leaving behind the
3% contraction o the previous year. This is contributed
by a 22% growth in tourist arrivals and committed
oreign investments. The bed capacity in the tourismindustry has increased by 16%. Fisheries continued to
remain subdued, only redeeming actor being increase
in sh purchases or processing and export, towards the
end o the year.
nn Pene
As we undergo a phase o recovery, the journey though
bitter has been a rewarding experience across numerous
acets. We believe that this transition phase we are in is
delivering us to what is gradually developing to be a more
mature, competitive and sel sucient organization.
Over the year, the Bank continued its consolidation
phase with a view to allocate maximum available prots
towards loan loss provisions. The delays in the legal
system in enorcing the Banks claims on assets
nanced by it or recovering its loans kept the provision
requirements high.
During the year, the loan assets reduced by R 493 million
to R 6.1 billion. However, the Bank has not turned down
during the year, any request or credit representing air
banking risk, or want o liquidity. With a view to improving
the interest margins, the Bank shed some o its higher
priced big ticket deposits. This resulted in a reduction o
R 814 million in the deposits during the year.
The Bank also reduced its borrowings by R 295 million.
The cumulative eect o these was the Bank could
generate 87% o gross income o previous year at
R 830 million. With reduction in interest expenses and
maintaining sta costs at 2009 levels, the prot beore
tax improved to R 125 million or the year rom R 78
million or 2009. Incidence o higher tax pay out o R
75 million resulted in the net prot or the year being
R 50 million.
By adding R 143 million to specic provisions, the
provision cover was maintained at 31% at the end o the
year. The Capital Adequacy Ratio improved to 20%.
23
-
7/28/2019 BML Annual Report 2010 - English
24/114
P n P dee
The Banks tie up with China UnionPay Card during the
year synchronized with the rising tourist arrivals rom
Asia, thus increasing revenue. Meanwhile the Bank alsointroduced issuance o American Express Debit Cards.
The Bank added value to its customers by launching
Maldives Mobile Banking Services, allowing services
such as retrieving account inormation and making own
account und transers possible via their mobile phones.
Similarly, the introduction o Customer Service SMS
allows customers to receive service prompts or their
enquiries. Further, to cater to the needs o the citizens
wanting to take up higher education, the Bank introduced
Kiyavaa loan scheme on liberalized terms. This product
has been well received by the customers.
Five branches were relocated to better reach our
customers while our operating hours were increased
or customer convenience. The Bank has also arranged
or installation o ATMs at the newly opened oce
building at Velaanaage where Government Oces
have been relocated.
r mngeen
The gradual shit to Risk Focused Internal Audit has
strengthened the risk management processes. The
revised Liquidity Management Policy introduced
during the year enabled the Bank to meet its business
plan without liquidity stress. The Credit Policy ensured
higher levels o risk assessment at entry level. The Bank
introduced a Credit Rating Model or individuals and
has put in place hurdle rates or credit dispensation. The
NPA Review Committee was hands on in ollowing up
stressed assets. The Bank has introduced a Procurement
Policy to bring in eciencies in quality and cost o its
procurement. A Bid Evaluation Committee deliberates
on all procurement requirements. The Audit and Risk
Management Committee at apex level has provided the
necessary guidance in implementing these measures.
Hn ree deepen
The Bank strongly believes in ostering the human
resources and invested heavily towards our greatest
asset. As a due result we continue to remain among the
most highly sought ater employers in the country.
cpe Genne
The Bank continued to strengthen corporate governance
measures throughout the year. The Whistle Blowing
mechanism acilitates employees to raise concerns
on governance issues directly to the Audit and Risk
Management Committee o the Board. The Committee
successully investigated the issues raised and enorced
appropriate actions. As a major initiative to keepShareholders inormed o the Banks perormance and
achieve greater transparency the Bank gives immense
importance to publish quarterly accounts.
appnen New cEo
The Board appointed Mr. Peter Horton as the new CEO o
the Bank during February 2011. He brings with him vast
experience in Corporate Credit, Retail Banking and Asset
Reconstruction. We look orward to achieve higher levels
o growth and protability with his guidance.
anwegeen
The Bank appreciates the guidance and contributions
derived rom all the stakeholders.
Our gratitude goes to:
BML customers or their loyal patronage.
The management team and BML sta or their
commitment and dedication to their job.
The multinational agencies, IFAD, AFD, EIB,IDB, ADB and IFC or partnership with BML in
developmental banking projects and technical
capacity building.
Our international correspondent banks or their
trade lines and unding support.
Chairman o the Board o Directors, Mr. Adam
Ibrahim and the individual Directors.
Governor o Maldives Monetary Authority Mr.
Fazeel Najeeb and ocials o Maldives Monetary
Authority.
Chie Executive Ocer o Capital Market
Development Authority and the ocials o CMDA
and the Maldives Stock Exchange.
Former Minister o Finance and Treasury Mr. Ali
Hashim, Acting Minister Mr. Mahmood Razi and
ocials o the Ministry.
ahh NeenActing Managing Director
Male, February 2011
24
-
7/28/2019 BML Annual Report 2010 - English
25/114
m. ahh NeenActing Managing Director / Assistant General Manager
Ms. Aishath Noordeen is the Assistant General
Manager or Card Operations, Electronic Banking,
Inormation Technology, International Banking and
Correspondent Banking Division.
Prior to joining Bank o Maldives PLC in the year 1982,
she served at State Bank o India Male Branch. Over
a career expanding 30 years in the banking industry,
she has gained vast exposure in Trade Finance and
International Banking Operations and has been
involved in establishing and maintaining numerous
correspondent banking relationships and inter-
bank lines. She has represented and led the Bank on
numerous occasions.
She served as the Acting Managing Director and
Chie Executive Ocer or the latter part o 2010,
consequent to the resignation o ormer Managing
Director and CEO.
m. Pee HnChie Executive Ocer
Mr. Peter Horton is a British citizen and joined the
Bank on 24th February 2011. His initial contract is or a
period o 03 years. He has a BSc. Honours in Financial
Services (First Class) and is an Associate o Chartered
Institute o Bankers (London).
He has been working in the International arena since
1999, having actually started his banking career with
Barclays in 1984, gaining signicant exposure to the
operations o a Bank and understanding all aspects
o the operations o Banking, including Retail and
Corporate Credit. During his banking career he has
successully led teams in the Risk, Distressed Debt and
Corporate arenas. He has been involved at a strategic
level in ormulating banks wide credit policies and
in implementing business transormations and
restructuring.
Prior to joining the Bank Mr. Peter Horton worked as
the Corporate Director o First Caribbean International
Bank, Bahamas and Turks and Caicos Islands.
25
-
7/28/2019 BML Annual Report 2010 - English
26/114
m. reh khnnChie Credit Ocer
Mr. Ramesh Krishnan joined the Bank as Chie Credit
Ocer in November 2009.
He is a graduate in Physics and a Certied Associate o
Indian Institute o Bankers (CAIIB). In a banking career
expanding over 25 years, he has gained exposure
across a wide spectrum o banking activities across
three dierent Banks in India. He is a specialist in Credit
and Treasury Management which include approvaland assessment o loans, recovery, NPA management,
investments, domestic treasury, risk management and
oreign exchange. He has also counselled on raising
cross currency resources through external commercial
borrowings, trade credits and private equity.
Prior to joining BML, he served as Deputy General
Manager o State Bank o Hyderabad at Mumbai
managing the largest credit portolio o the bank.
m. lnh thennnChie Financial Ocer
Mr. Lasantha Thennakoon joined the Bank as Chie
Financial Ocer in June 2010.
He is a Chartered Accountant by proession and holds
Associate Membership o the Institute o Chartered
Accountants o Sri Lanka (ACA), the Institute o
Certied Management Accountants o Sri Lanka
(ACMA), Fiji Institute o Accountants (CA) and the CPA
Australia (ASA). He is also a graduate in Accountingand Financial Management and holds a Master o
Business Administration (MBA). He counts over 13
years experience in nancial management both in
Sri Lanka and overseas in various industry segments
including Banking and Finance, Business Advisory and
Manuacturing.
Prior to joining BML, he was the General Manager
Finance and Administration (Chie Financial Ocer)
o the Fiji Development Bank, a leading Bank in the
South Pacic and was responsible or managing
Finance, Treasury, Management Inormation System(MIS) and Administration Business Units. Apart rom
the specialized business disciplines in Finance and
Treasury, he has had extensive training in Strategic
Planning, Corporate Governance, Risk Management
and Quality Management in various business
segments.
26
-
7/28/2019 BML Annual Report 2010 - English
27/114
m. ln JChie Internal Auditor and Chie
Compliance Ocer
Mr Lucian Jayakody joined the Bank in
October 2006.
He holds a Master o Business
Administration (MBA), Certied Internal
Auditor (CIA) USA, Certied Inormation
Systems Auditor (CISA) USA, Associate
o Charted Institute o Bankers London
(ACIB), International Certicate inBanking Risk and Regulation (ICBRR)
GARP-USA, and he is a Member o the
Institute o Internal Auditors USA (IIA), a
member o Inormation Systems Audit
and Control Association USA (ISACA)
and a member o Global Association o
Risk Proessionals (GARP) USA.
His experience in senior management
positions in the nancial sector extends
over more than 20 years. He was the
Head o Internal Audit in MERC Bank SriLanka, AGM Operations, Administrations
and Inormation Resource Management
in Pan Asia Banking Corporation Sri
Lanka, Senior Manager in Operations
and Systems Audit in Hatton National
Bank, Sri Lanka. He is a specialist in
productivity and system re-engineering
and has had extensive training in this
eld in Asian Productivity Organisation
(APO) Japan.
m. hh mneAssistant General Manager
Ms. Fathimath Manike is the Assistant
General Manager or Development
Banking, Human Resources and
Operations. She joined the Bank
in 1982.
She commenced her banking career
with the State Bank o India, Male
Branch in 1978. Throughout her
career she has gained immense
exposure in banking operations and
development banking. Having been
engaged in development banking
activities since 1992, she is among
the pioneers o development
banking in the Maldives.
She has participated in various
training programmes and workshops
held across South and South East
Asia covering development banking,
poverty alleviation and Islamic
Banking and Management.
m. N HnAssistant General Manager
Ms. Nadiya Hassan is the Assistant
General Manager who heads
the Non-Perorming Assets
Management Section under the
Credit Department. She joined the
Bank in 1985.
Prior to joining the Bank she served
at the Maldives Monetary Authority.
In a banking career spanning
over 29 years, she has gained vast
experience in corporate banking
and loan syndications. She also has
extensive experience in relationship
management with wide exposure
to tourism and related industries in
the Maldives.
She has participated in numerous
training workshops related to
lending activities.
27
-
7/28/2019 BML Annual Report 2010 - English
28/114
m. a ahe d
Head o Inormation Technology
m. hh rhee
Head o Internal Audit
m. mhe ahe
Head o Development
Banking Cell
m. Nh abwh
Head o Finance
m. hh rhee
Head o Legal Aairs &
Documentation
m. Hn sh
Head o Human Resources
m. mhe shee
Head o BML Card Centre
m. ahe rhee
Head o Operations
m. Hn rhee
Head o Training
m. mhe Hee
Head o Public Relations &
Administration
m. yn a
Head o International Banking
28
-
7/28/2019 BML Annual Report 2010 - English
29/114
m. ab rhee mhe
Manager Central Cash Unit
m. ahh Ng ab
Ghee
Manager Corporate Aairs
m. anh shheen
Manager / Card Centre Operations -BML Card Centre
m. ahh Nhee
Manager / Products Development -
BML Card Centre
m. anh shz
Manager Finance Department
m. ibhh ahe seeManager New Proposals & Renewals
Section, Credit Department
m. ahe Nz
Chie Manager
Internal Audit Department
uz. ahh sh
Company Secretary
m. hh meeh J
Manager - Development Banking Cell
m. rh JManager - Monitoring and Supervision
Section, Credit Department
29
-
7/28/2019 BML Annual Report 2010 - English
30/114
m. H ahe
Chie Manager - Main Branch
m. hh ab
Manager Villimale Branch
m. mhe meen
Manager - Male International
Airport Branch
m. ahe
Manager Hulhumale Branch
m. Hn rhee
Manager - Main Branch
m. Z mhe
Manager - Majeedheemagu Branch
m. ibh a
Chie Manager - Bazar Branch
m. Hn mn
Manager - Majeedheemagu Branch
m. y uManager - Bazar Branch
30
-
7/28/2019 BML Annual Report 2010 - English
31/114
m. ab azeez r
Manager - Kudahuvadhoo Branch
m. ab sbh
Manager - Dhidhdhoo Branch
m. anh rhee
Manager - Hithadhoo Branch
m. ab shee
Manager - Veymandoo Branch
m. ahe sh
Manager - Villingili Branch
m. hh Nhn
Manager - Gan Branch
m. ab rhee ab Bee
Manager - Naiaru Branch
m. ab sj
Manager - Ungooaaru Branch
m. anh W
Manager - Mahibadhoo Branch
31
-
7/28/2019 BML Annual Report 2010 - English
32/114
m. Hn Nee
Manager - Fonadhoo Branch
m. m shzeen
Manager - Hulhumeedhoo Branch
m. shhee mhe
Manager - Rasdhoo Branch
m. ibh Zh
Manager - Muli Branch
m. mhe ibh
Manager - Eydhaushi Branch
m. Hn ab
Manager - Fuvahmulaku Branch
m. mh u
Manager - Funadhoo Branch
m. ab sh
In-Charge - Manadhoo Branch
m. Hbeeb aIn-Charge - Kulhudhuushi Branch
m. mhe aIn-Charge - Thinadhoo Branch
32
-
7/28/2019 BML Annual Report 2010 - English
33/114
-
7/28/2019 BML Annual Report 2010 - English
34/114
Bank o Maldives PLC continues to be themost dominant orce within the banking
industry o Maldives. With the range
o products and services oered, the
extent o our reach and our signicant
customer base, the commitment to
provide an unparalleled service to our
customers remain a top priority.
StRENgthENINg OuR
OOthOLD
Being the leader in providing banking
products and services does not rule out
delivering exceptional service to our
customers. The value we place on our
customers is refected in our continuous
eort to enhance their banking
experience, through introduction and
innovation o our products and services
in line with our vision.
Despite the challenging economic
and operational environment whichpersisted over the year, we achieved
signicant milestones towards delivering
another remarkable year o results or
our customers. With the continued
extension o service, enhanced
deliverance and introduction o new
products, the year marks a success story
or the Banks eorts to deliver greater
customer value.
With a reach spreading across the
length and breadth o the Maldives,we had 37 ATMs in operation, while our
POS terminals exceeded 2,600 units.
Our integrated network across resorts,
businesses and service establishments
enables the Bank to hold the major
market share o card acquiring or
Visa, MasterCard, China UnionPay and
exclusive rights o American Express
transactions. China UnionPay Card
acquisition inauguration was also
undertaken in March 2010, which is
amongst the astest growing and most
popular card brands within Asia.
ADDINg VALuE
Furthermore, in May 2010, the Bank added to its card product range the
American Express Debit Card. With this prized addition, the Bank issues
the ollowing cards:
Visa Credit
Visa Debit
American Express Credit
American Express Debit
Visa Corporate cards
In committing to provide exceptional service to our clients, we continued
to provide ree Internet Banking to our customers through the standard
package. Adoption o internet banking among customers has been
very popular, as it acilitates customers to avoid commuting to a branch
to undertake their banking operations. With investments in state o the
art security eatures to our Maldives Internet Banking, customers are
ensured o the security o their transactions, ensuring hassle ree banking
anytime, anywhere.
Celebrating 5 years o partnership with American Express
34
Additionally, the inclusion o BillPay service provided via Maldives
Internet Banking allows customers to conveniently conduct transactions
with numerous business partners including Dhiraagu, Wataniya, STELCO,
MWSC, Raajje Online (RoL) and MediaNet.
It is all part o our commitment to provide a more convenient
banking experience.
-
7/28/2019 BML Annual Report 2010 - English
35/114
service via simply sending an SMS, acilitating to avoid
waiting in line to be serviced. Accordingly, one o our
representatives would initiate the call to our customer,
and provide assistance in addressing the customer
concerns.
With a view to providing a more convenient experience
or our customers, we relocated ve o our branches
during the year. The new state o the art branch premises
were custom built and designed to ensure that optimal
utility o these new premises are realized not only or the
Bank but to all our customers as well.
The relocation o branches undertaken during 2010
applied to:
Male International Airport Branch
Hulhumeedhoo Branch
Fuvahmulaku Branch
Villingilli Branch
Thinadhoo Branch
Further to the relocations, the Bank also commenced
operations at the renovated Male International Airports
departure hall, which acilitate greater convenience or
our customers.
thE ExtRA MILE
Listening to the concerns o our customers and delivering
is a custom well recognised at the Bank. In this regard,
we shited our operating hours so as to deliver greater
convenience or our customers. In application, our normal
banking operation hours changed to 0900 to 1500
hours, while operations at our Bazar Branch remained
uninterrupted rom 0900 to 1700 hours. Thus, adding
two and a hal hours o business time per week.
Maldives Mobile Banking was launched in October 2010,
as a urther measure o providing innovative customeroriented solutions. With this much awaited concept,
which is the rst in the Maldives, the Bank enabled
customers to access their account and card related
inormation via SMS prompts.
Through this popular initiative, customers are able to
receive numerous account and card related alerts to
monitor their account movement ensuring greater
security o unds and ease o mind or our customers.
Addressing the concerns o our customers in receiving
assistance, we initiated our Customer Service SMSprogramme also in 2010.
This mechanism enables customers to lodge a request or
Launching o Maldives Mobile Banking a frst in the Maldives.
35
-
7/28/2019 BML Annual Report 2010 - English
36/114
These loans signicantly contribute to improving the
livelihood o rural communities, alleviating poverty and
creating employment opportunities. Our reach extends
to all economic sectors both in the public and private
sectors and to customers rom largest o corporate
entities to individual borrowers.
RELOCAtION O AtOLL BRANChES
During the year, our atoll branches were relocated to
new premises with a view to provide more convenient
service to our customers.
Development Banking Cell (DBC) was established in 1990
to provide banking services to areas outside the capital
o the country with the vision o improving the living
standards and providing sustainable nancial services
with a particular ocus on the low income population.
The main objective o this is to reduce the income
disparity between the Male and rest o the country by
increasing the employment opportunities, income level
o outer atoll population.
There are a total o 19 branches in the atolls dedicated to
servicing the island communities. In addition, ve mobile
banking units (Bank Dhonis) are being used to provide
mobile banking services to the entire country.
During the year 2010 Development Banking Cell (DBC)
has improved its perormance in terms o credit, recovery
o non-perormance assets and cost control by training,
allocation o resources and attributing incentives to
strategic goals.
INANCINg SMALL AND MEDIuMENtERPRISES (SME)
The Bank continued to be actively engaged in nancing
Small and Medium Enterprises in sheries, agriculture
and commerce sectors.
Financing SME Sector Brick making
Financing SME Sector Promoting Agriculture
36
-
7/28/2019 BML Annual Report 2010 - English
37/114
Induction Training - 2010
I times o trouble showcase to represent its truestrength, our greatest contributor to this would be
our valuable employees. Our ability to continue and
compete given the challenges is much credited to the
commitment showcased by each employee, day ater
day in the service o the Bank.
In an extremely turbulent operating environment, the key
challenges related to human resources revolve around
keeping pace with development and change, valuing
and motivating sta, retaining their loyalty, building their
condence and listening to employees concerns.
The Bank strongly believes in ostering the human
resources and towards this end the ollowing activities
were undertaken during the year
174 employees underwent the Banks in
house training;
23 employees were deputed or trainings abroad;
03 employees were awarded local scholarships or
pursuing higher education locally;
05 employees were granted paid study leave or
upgrading their academic qualications;
In order to equip the Banks sta with the
necessary skills and knowledge to occupy
Corporate Management Positions o the Bank
in uture, 02 candidates were chosen or the
Executive Grooming Programme approved by the
Board o Directors;
97 new employees were enrolled into the Banks
workorce;
05 graduates were recruited directly as ocers;
Rotation o sta among the various positions othe Bank commenced with a view to upgrading
knowledge, skills and awareness among the
employees;
Bank o Maldives Service Rules was amended in
line with the Employment Act (Law No. 02/2008) o
Republic o Maldives and;
Bank o Maldives rst Workplace Non-Harassment
Policy was introduced and implemented during the
year 2010 in order to ensure a sae and congenial
work environment or its employees.
KEEPINg PACE wIth DEVELOPMENtAND ChANgE
As our sta strength has been increasing, it is vital to
develop ecient internal policies and practices or
attraction and retention o talent. Consequently, the
revised Service Rules o Bank o Maldives was ully
aligned as per Employment Act (Law No. 2/2008) and was
implemented eective October 2010. Our Service Rules
consists o guidelines on aspects such as sta recruitment
and selection, discipline, overtime, other allowances, sta
benets and sta leaves and breaks.
Furthermore, to comply with the Maldives Pension Act
(Law No. 8/2009), the Bank announced its Retirement
Pension Scheme on December 2010, or all sta eective
rom January 2011. The Retirement Pension scheme
requires 7% o basic salary to be contributed monthly
by the Bank matched by an equal contribution rom the
employee. The Bank continues to operate its existing
Provident Fund Scheme or its employees with changes
in the contributions pattern.
37
-
7/28/2019 BML Annual Report 2010 - English
38/114
LIStENINg tO OuR EMPLOYEES
In order to provide a sae and respectable work
environment to our employees, Bank o Maldives
Workplace Non-Harassment Policy was implementedeective October 2010. The Bank has a policy o zero
tolerance on harassment and the policy aims in creating
a workplace ree o any behaviour that can potentially
be deemed as harassment. The Policy elaborates on
the responsibility o the Human Resource Department,
Individual, Complaint Procedure, Protection against
intimidation and retaliation and the Right to Appeal.
SuCCESSION PLANNINg
As a great source o recognition or our employees and to
enhance employee development, during the year 2010
an exclusive programme was designed as Executive
Grooming Programme to equip sta with necessary
skills and knowledge to occupy Corporate Management
Positions o the Bank.
PROMOtINg SYNERgY
Our belies and behaviours are the oundations o our
culture. We place signicant eort throughout the year
to oster mutual reliance among our employees to
promote collaboration and teamwork. To promote sta
collaboration, the Bank organized an Inter-Department
Futsal Tournament and an Inter-Department Volleyball
Tournament. Furthermore, the Banks employees
represented the organization in the Inter-Organization
Mixed Netball Tournament and Club Maldives Futsal
Tournament. The benets achieved through promoting
such activities are refected in the synergy gained in our
ability to better service our customers.
DEVELOPINg SKILLS O EMPLOYEESAND tEAMS
Given the rapid pace o transormation in businesses,
work organisation and the labour markets, training and
skills development plays a critical role in:
Enhancing employees perormance levels;
Increasing their employability within the
organisation;
Recognising employees and developing loyalty;
Transmitting the corporate vision, mission and core
values o the organisation.
With the aim o creating a highly motivated and capable
workorce, training opportunities were given during the
year or a number o sta rom all levels o the Bank to
participate in various overseas training programmes,
as well as training programmes conducted by local
institutions.
In this respect 23 sta participated in 14 short term
training programmes/seminars overseas. A total o 09
sta participated in 05 training
programmes organized by local
institutions. Additionally, 05 batches
o in-house training programmes
were conducted as induction
or new sta and or branch/
department level sta aimed at
achieving procedural compliance
and sharpening required skills o
sta.
In addition, the ollowing training
programmes were organized by the
Training Department o the Bank:
1. Credit Assessment Procedures,
2.Training on Amex Debit Card,
3.Training on Signature
Verication and Identication
o Forged Notes (in collaboration
with Maldives Police Service)
4. EBS-RT (Report Tailoring)
Training (in collaboration withMisys)
38
-
7/28/2019 BML Annual Report 2010 - English
39/114
INVEStINg IN LONg tERMRELAtIONShIPS
Believing in lasting partnerships is a undamental concept
to our business. While much o such ocus relies on ourrelationship with customers, our attitude to our employees
is no exception, showcased in the
investment we place in developing
and enhancing our employee base,
by means o scholarships, unded
education and allowing leave or
those individuals pursuing urther
skills development.
During the year, 05 employees
were awarded Study Leave with
Pay under the Banks Study LeavePolicy. In this regard, 03 sta
pursued undergraduate degree
programmes, while 02 sta pursued
Association o Chartered Certied
Accountants (ACCA) in Malaysia
and Sri Lanka.
Further, 02 sta who were awarded
Study Leave with Pay in 2009 returned to duty ater
completing their study programmes overseas. Local
sponsorship opportunities were also provided or 03
sta during the year to undertake ACCA and CharteredInstitute o Management Accountants (CIMA) at local
institutions. Under this scholarship scheme employees
are required to work while undertaking the study
programmes.
39
Recognition o newly inducted employees
-
7/28/2019 BML Annual Report 2010 - English
40/114
At the Bank, Corporate Social Responsibility (CSR) goes
beyond a simple act o altruism. For us it is a management
tool to ensure that the company, its people, and its
surroundings are in line with our mission, vision and
core values.
The positive impact on our society which is refected by
our CSR initiatives motivates us to remain committed
to causes that promotes overall social benet o our
stakeholders. Despite the diculties o recent times, this
commitment remains arm.
PARtNER IN SOCIEtY
Our role in the society we operate has become more
prominent over time, beyond that o a nancial
intermediary. Today we remain a vital contributor in
acilitating smooth commerce across the economic
sectors o the country. From making a single deposit,
withdrawing unds, acilitating salary disbursements,
providing nance or residential and corporate sectors,
extending our service to remote locations, we aim at
making the Bank a vital component in our society.
In adding to the extensive range o services provided
through our expansive network, the Banks role in
acilitating Old Age Pensions is another notable addition.
While dedicated teams visited each and every inhabited
island on a routine basis, our activities extended during
such Dhoni banking trips urther acilitated account
opening, making withdrawals via POS terminals and
enabling deposits. Overall, our extensive solutions
provide a fexible and convenient gateway or conducting
banking transactions, unmatched by our competitors.
In collaboration with Ministry o Fisheries and Agriculture,
the Bank disbursed loans on concessionary terms to
the development o agricultural activities under the
Agricultural Development Program 2. Through this
scheme numerous customers across dierent areas o
the country received unding assistance to help revitalize
their livelihood. Similarly, the Bank in collaboration
with Ministry o Human Resources, Youth and Sports
undertook over 1,200 loans under National Student Loan
Scheme to provide assistance in unding urther studies
pursued both locally and internationally. In addition,
the Bank introduced Kiyavaa loan product to meet
the educational expenses o aspiring students under
liberalized terms.
CORPORAtE PhILANthROPY
Bank o Maldives takes concrete action to combine
perormance with social responsibility, not just in our
routine business activities but also through our corporate
philanthropy initiatives. Over the year, the Bank assumed
a more responsible stance, by extending our support tonumerous activities. We take pride in having contributed
to bone marrow transplants or Thalassaemic patients
and extending sponsorships in recognition o Fishermans
Day. We rmly believe that such opportunities acilitate
us to extend our gratitude to the valued stakeholders.
ENVIRONMENt
We rmly believe that a truly responsible organization has
its due commitments to its surroundings. In upholding
this view the Bank initiated on numerous steps to analyze
our impact on the environment. In this regard, signicant
expenses were borne by the Bank which would positively
contribute to our environment. Measures such as
adoption o duplex printers, creating greater awareness
o Maldives Internet Banking or our customers and
implementation o resources which reduces paper waste
were implemented to showcase our commitment to the
environment. Though some o these measures entailed
outlay o capital expenditure, we rmly believe the
longer term benets rom such initiatives outperorm the
costs incurred.
utuRE ENDEAVOuR
In order to cater to the evolving business environment,
we commenced initial reviews or establishing an Islamic
Banking arm o the Bank, in 2009. The Bank is working out
a business and capital plan. The Bank is endeavouring to
build more partnerships to assist cross border trade.
40
-
7/28/2019 BML Annual Report 2010 - English
41/114
The Bank is continuously exploring ways to improve
the quality o service provided to its customers by
implementing customer-oriented strategies.
The spill-over eects o the economic crisis to the
perormance o the Bank was oreseeable and as a result,
the Bank has exercised cautionary measures to minimize
possible negative impacts on the Banks loan portolio.
This has led to a contraction in our lending growth.
As an inherent part o conducting business, we are subject
to risks that can adversely impact our business, results ooperations, nancial condition and uture perormance.
Business related risks carry the potential to materially
and adversely aect our business, results o operations or
nancial condition.
RISK MONItORINg
Risks that are readily quantiable have their risk proles
restricted through numerous measures. Non-quantiable
risk categories are not managed in terms o dened
nancial limits, but by qualitative management standards
and procedures, which aims or air accountability o such
potential risk.
Our mission is to be the leader in
the nancial industry in Maldives.
Along with maintaining a clear
customer centric ocus, eective risk
management is crucial in achieving
this goal. It is a key component
o our corporate culture, our
infuences, customer experiences,
public perception, our reputation
and shareholder expectations; all
in all being a dening component
o our present perormance and
uture success. Managing risk is a
undamental activity perormed at
all levels o the organization, which
are oten governed by policies that
have been approved by the Board.
The Bank h as establ i shed
committees at various levels
in order to capture and reportall orms o risks in addition to
implementation o inancial,
operational and compliance controls and procedures or
identication, assessment and reporting o risk exposures.
Such monitoring also provides the required inormation
which is reported to respective regulatory authorities on
a routine basis.
CREDIt RISK
Credit risk is the risk o potential nancial loss where a
customer or counterparty ails to meet their nancial
obligations. The Banks Credit Policy addresses soundrisk management practice and is in accordance with the
regulatory requirements. The measurement o credit
risk or individuals is based on an internal credit risk
rating system.
Various methods o appraisal are used or evaluation o
a credit proposal ranging rom past track record with
the Bank, analysis o nancial strength o the applicant,
assessment o uture cash fows and verication o
sources o repayment. The Bank has also set in place
certain benchmarks and norms with regard to repayment
capacity and project nancing ratios in order to maintainasset quality.
41
-
7/28/2019 BML Annual Report 2010 - English
42/114
CREDIt DIVERSIICAtION
The Bank has been assisting commercially viable
activities in all sectors to build a balanced asset portolio.
The Bank has set internal caps on sector exposures toachieve this balance in portolio and adhering to these
limits. The diversication is closely aligned to the share o
contribution o various sectors to the national GDP.
RECOVERY EORtS INIMPLEMENtAtION
The global downturn had a serious impact on the local
economy through adverse eects on all major sectorssuch as tourism and construction. In order to provide
cash fow relie to the Banks customers engaged in such
activities, credit acilities were renegotiated by reducing
monthly instalments or extending loan tenor by aligning
them with revised cash fow expectations.
Recovery eorts o non-perorming loans are a high
priority or the Bank and in this regard, a separate
section specially ocused on this priority - NPA Retrieval
Section, continues to endeavour to reduce the number o
impaired assets o the Bank.
NPA Review Committee
meetings are conducted
routinely or monitoring
the development o such
assets.
LIquIDItY RISK
Liquidity Risk is dened as
the risk o being unable
to honour inancial
obligations as they all
due, without incurring
unacceptable losses, which
could potentially arise as
a result o mismatched
cash fows generated by
the Bank. The Bank has three strong controls in place
to manage its liquidity risk, namely, in-house Treasury
Operation, Liquidity Management Policy and the Assets
& Liabilities Committee (ALCO). Both Ruyaa and
US Dollar positions are managed very closely and ona daily basis.
ce defn P
42
-
7/28/2019 BML Annual Report 2010 - English
43/114
MARKEt RISK
Market risk is the potential
or loss arising rom adverse
changes in the level andvolatility o market actors
such as oreign exchange
rates, interest rates, lease
residual values, and prices
o commodities and equity
investments.
The Bank actively manages
its market risks through its
ALCO, Credit Committee and
associated policies relating to
liquidity and credit risk.
OPERAtIONAL RISK
Operational risk is the risk o loss or harm resulting
rom inadequate or ailed internal processes, people
and systems or rom external events. An element o
operational risk is embedded in all activities o the Bank,
including controls used to manage and mitigate risks.
The Bank manages the risks th rough a ramewo rk o
policies, procedures, controls, organizational structure,
risk management and monitoring mechanism that are
closely aligned with overall operational activities o the
Bank.
The Bank ensures that the key opera tional ri sks are
measured and managed in a timely and eective manner
through enhanced operational risk awareness, segregation
o duties, dual checks and improving early warning
signals. The Chie Internal Auditor o the Bank reports
directly to the Audit and Risk Management Committee
o the Board, which independently reviews all unctional
areas o the Bank to identiy control weaknesses and
recommend implementation o internal controlling
mechanism.
43
-
7/28/2019 BML Annual Report 2010 - English
44/114
The magnitude and the due repercussions o the global
nancial crisis continued to exert pressure on the Banks
perormance during 2010.
INCOME
Total Interest Income in 2010 stood at R 582 million,
refecting a decline o 11% against 2009. Meanwhile,
Interest Expenses reduced by 20%, refecting a Net
Interest Income o R 406 million which represents a
decline o 6% against 2009.
Given the volatility in the global market, especially
within the Euro region, there was signicant variation
in exchange rates during the year. Though the US Dollar
liquidity constraints in the economy continue to aect
our ee based income negatively, the Bank was able to
maintain Net Fees and Commission Income at 2009
levels.
OPERAtINg ExPENSES
Total Operating Expenses refected a decrease o 24 %
against 2009.
Continued pursuance o business opportunities and
new services, refected in a 10% increase in Premises
Equipment and Establishment Expenses or the year.
Meanwhile, Sta costs increased by a marginal 2% during
2010. This eat was achieved despite an increase in head
count by 4% or supporting additional operational
activities adopted during the year.
ASSEt COMPOSItION
Total Assets at the year end stood at R 9,973 million,
refecting a decrease o 9% against 2009. The contraction
in our assets portolio refects upon the prudential
outlook we adopted post global nancial crisis. Loans and
Advances portolio reduced by 7% against 2009, which in
turn negatively impacted the Net Interest Income.
Containing our lending policy and the oreseen reduction
in Interest Income, imposed the challenge o managing
our Net Interest Income. In due eect, numerous
measures were implemented towards minimizing the
negative implications. Signicant reduction in Interest
Expenses against 2009 refects the benets derived rom
shedding higher cost liabilities and reduced borrowings.
LIABILItY COMPOSItION
Movement o deposit unds throughout the year was
rather volatile with signicant und outfows occurring
as a consequence o external actors and internal
management policies. Governments policy to implement
Treasury Single Account implied that signicant unds
held with the Bank drited out o the Bank contributing
heavily to the decline in deposits. Furthermore, internal
policies which involved reduction o high cost deposits
also contributed to the overall decline.
Borrowings or the year refect a decrease o 19%
against 2009 gures. The reduction in Borrowings was
due to numerous actors, including the reduced asset
portolio and internal liquidity management strategies.
The unstable global nancial market, the high cost o
borrowing and restrictive resources ollowing the global
nancial crisis all imposed challenges to accessing low
cost borrowings.
ShAREhOLDERS uNDS
Shareholders Funds grew by 4% against 2009. The
incremental addition to the Shareholders Funds is on
account o the R. 50 million accounted or the year as
Retained Earnings.
The Banks Capital Adequacy Ratio at the end o the year
stood at 20.4%, refecting an improvement in comparison
to 19.3% accounted or 2009.
utuRE OutLOOK
The Maldivian economy is building momentum and
showing signs o recovery with the worst o the global
nancial crisis now being over. However, the journey
ahead remains challenging as we continue to be
vulnerable to external actors.
44
cpn dep Be
-
7/28/2019 BML Annual Report 2010 - English
45/114
-
7/28/2019 BML Annual Report 2010 - English
46/114
BOARD COMPOSItION
In accordance with Article 47 o the Articles o Association
o the Bank, out o the total 11 Directors o the Boards
composition, 08 Directors were nominated by the
Government and elected by the Shareholders while
the remaining 3 Directors were elected by the General
Public Shareholders. Furthermore, pursuant to Articles 79
and 80, the Chairman and the Managing Director were
appointed by the Board o Directors rom among the
elected Directors nominated by the Government. This
composition alls in line with the newly enacted Maldives
Banking Act (Law No. 24/2010) which came into orce on12th December 2010.
In compliance with Corporate Governance Code o
Capital Market Development Authority, the Board o
Directors o the Bank is composed to exempliy a mix o
Executive, Non-Executive and Independent Directors so
that the Board o Directors o the Bank is able to provide
equitable, ecient and eective guidance or the Bank
and uphold an environment o good governance.
The year 2010 began with the ollowing members in the
Board o Directors o the Bank;
Subsequent to Mr. Ganesan Subramanyams resignation,
Ms. Aishath Noordeen was appointed as the Acting
Managing Director and Chie Executive Ocer by the
Board on 29th August 2010.
At the 27th Annual General Meeting held on 30th October
2010, Uz. Ismail Yasir ceased to be a member o the Banks
Board o Directors upon conclusion o his term.
Ater the 27th Annual General Meeting the Board was
re-constituted with the ollowing 10 Directors or the
year 2010/2011;
As per Clause 47 o the Articles o Association o the Bank,
the number o Directors in the Board shall be 11. As the
Board o Directors o the Bank is to comprise 11 members,
the quorum required or the Board meetings as stipulated
in Chapter 5, Section 15(g) o the Maldives Banking Act
(Law No. 24/2010) is 09 members. Subsequent to the
disqualication o Mr. Azban Fahmy rom the Board as he
did not meet the minimum age requirement stipulated
under the provision o Chapter 5, Section 15(c) o the
Maldives Banking Act and due to the vacant position o
an Executive Director, the Boards strength was reduced to
09 members and the presence o all existing 09 Directors
was essential to ensure the quorum as per the Maldives
Banking Act. Thereore, the Board o Directors under its
discretionary powers as provided or in Article 65 and
Mr. Adam IbraimChairman
Government Nominee,
Independent & Non-Executive
1 Mr. ganesan SbramanyamManaging Director & CEO
Government Nominee,
Non-Independent & Executive
Ms. Aisa NoordeenAssistant General Manager
Government Nominee,
Non-Independent & Executive
2 Mr. Moamed Ai Government Nominee,Independent & Non-Executive
Mr. Moamed Jais Ibraim Government Nominee,Independent & Non-Executive
uz. Ismail Yasir Government Nominee,
Independent & Non-Executive3 Ms. areea Saree Government Nominee,
Independent & Non-Executive
Mr. Asad Ali Government Nominee, Non-Independent & Non-Executive
Mr. Moamed Abdl Saar Elected by Public Shareholders,Independent & Non-Executive
Mr. Amed Moamed Elected by Public Shareholders,Independent & Non-Executive
Mr. Ibraim Moamed Elected by Public Shareholders,Independent & Non-Executive
Mr. Adam IbraimChairman
Government Nominee,
Independent & Non-Executive
Ms. Aisa NoordeenActing Managing Director & CEO
Government Nominee,
Non-Independent & Executive
Mr. Moamed Jais Ibraim Government Nominee,Independent & Non-Executive
Mr. Asad Ali Government Nominee, Non-Independent & Non-Executive
Mr. hassan Mzni Moamed Government Nominee,Independent & Non-Executive
Mr. Azban amy Government Nominee,Independent & Non-Executive
Ms. Na Moamed Riza Government Nominee,Independent & Non-Executive
Mr. Moamed Abdl Saar Elected by Public Shareholders,Independent & Non-Executive
Mr. Amed Moamed Elected by Public Shareholders,Independent & Non-Executive
Mr. Ibraim Moamed Elected by Public Shareholders,Independent & Non-Executive
1 Mr. Ganesan Subramanyam ceased to be a Member o the Board
consequent to his resignation on 16thAugust 2010.
2 Mr. Mohamed Athi ceased to be a Member o the Board consequentto his resignation rom the Board on 27thJune 2010.
3 Ms. Fareeha Sharee ceased to be a Member o the Board consequent
to her resignation rom the Board on 8th May 2010
46
-
7/28/2019 BML Annual Report 2010 - English
47/114
No. o meeins
Direcors to attend attended
Mr. Adam Ibraim 42 42
Mr. ganesan Sbramanyam 26 14
Ms. Aisa Noordeen 42 38
Mr. Moamed Ai 21 16
Mr. Moamed Jais Ibraim 42 21
uz. Ismail Yasir 37 24
Ms. areea Saree 14 10
Mr. Asad Ali 42 36
Mr. Moamed Abdl Saar 42 34
Mr. Amed Moamed 42 36
Mr. Ibraim Moamed 42 38
Mr. hassan Mzni Moamed 5 4
Mr. Azban amy 4 4
* Ms. Na Moamed Riza 5 2
No. o meeins
Direcors to attend attended
Mr. Adam Ibraim 02 02
Ms. Aisa Noordeen 02 02
Mr. Moamed Jais Ibraim 02 00
Mr. Asad Ali 02 02
Mr. Moamed Abdl Saar 02 02
Mr. Amed Moamed 02 01
Mr. Ibraim Moamed02 02
Mr. hassan Mzni Moamed 02 02
* Ms. Na Moamed Riza 02 01
66 o the Articles o Association o the Bank ormed an
Executive Committee o the Board comprising o the
remaining 09 Directors on 28th December 2010 and
delegated certain powers o the Board to the Executive
Committee to ensure continuity in business.
The Appointment, Nomination and Remuneration
Committee o the Board commenced recruitment o 02
Directors or the vacant posts.
REquENCY O MEEtINgS
Regular Board meetings are held at least once in every
two weeks, while more requent meetings were convened
whenever necessary.
The Board o Directors held 42 meetings rom 01st
January 2010 to 31st December 2010 and attendance was
as ollows;
The Executive Committee o the Board held 02 meetings
rom 28th December 2010 to 31st December 2010 and
attendance is as ollows;
RELAtIONShIP wIthShAREhOLDERS ANDCuStOMERS
Important developments including
quarterly inancials o the Bank,announcements and notices are displayed in
the Banks website or the inormation o the
Shareholders as well as the General Public.
Additionally, the minutes o the 27th Annual
General Meeting held on 30th October 2010
was published on the Banks website on 17 th
February 2011. Furthermore, a brie summary
o procedures governing voting at the General
Meetings is given in the Proxy Form made
available to Shareholders 21 days prior to
the General Meeting. The Corporate Aairs
Department o the Bank handles all matters o
the Shareholders. The Bank always welcomes
active participation o the Shareholders at the
General Meetings and solicits their views at all
times.
In order to provide more eective and
convenient banking environment or the Banks
valued customers, the Board o Directors in its
436th meeting held on 28th April 2010 resolved
to change the working hours o the Bank rom
0800 -1600 hours to 0900 -1700 hours with
eect rom 09th May 2010. In line with this
change the Board resolved to extend the normal
*Ms. Nuha Mohamed Riza was on Maternity Leave
*Ms. Nuha Mohamed Riza was on Maternity Leave
47
-
7/28/2019 BML Annual Report 2010 - English
48/114
banking hours by 30 minutes rom 0800 - 1330 hours to
0900 -1500 hours on all working days o the Bank and to
extend the ocial transaction hours o Bazar Branch rom
0800 - 1330 hours to 0900 -1700 hours on all working days
o the Bank whereby the Branch extended ull-fedgedbanking services throughout the day.
INANCIAL REPORtINg
The Bank publishes the annual accounts prepared in
accordance with Maldives Monetary Authority (MMA)
regulations and International Financial Reporting
Standards (IFRS) with comprehensive disclosures,
enabling both existing and prospective Shareholders
to make a timely and air assessment o the Banks
perormance and prospects. Mediums o publication
include printed materials, newspapers and the website
o the Bank.
EMPLOYEES
It is vital to the Management and the Board o Directors
o the Bank to elevate and maintain sta motivation and
productivity. Thereore, the Bank attempts to provide
its sta with attractive remuneration packages and a
secure working environment. As such the ollowing
policies were approved by the Board o Directors duringthe year:
ormlaion o BMLs hosin Alloance Policy:
The Board o Directors in its 432nd meeting held
on 24th March 2010 adopted the Banks Housing
Allowance Policy. This Policy was ormulated in
order to rationalize the compensation or employees
working away rom their home branches as
required by the Banks Management.
Adopion o Pension Plan:
A Pension Plan structured as per the Maldives
Pension Act (Law No. 08/2009) was approved by the
Board o Directors in its 454th meeting held on 29th
September 2010. With the implementation o this
scheme, employees will enjoy the benet o both
the Pension Plan and Sta Provident Fund.
The newly adopted Pension Plan came into eect
rom 01st January 2011.
inalizaion o e revised Bank o Maldives
Service Rles:
The Board o Directors in its 459th meeting held
on 27th October 2010 adopted the revised Bank o
Maldives Service Rules in order to align with the
Employment Act (Law No. 02/2008).
Adopion o e Bank o Maldives workplace
Non-harassmen Policy
The Board o Directors in its 459th meeting held
on 27th October 2010 adopted the Banks rst
Workplace Non-Harassment Policy as it is the legal
and moral responsibility o the Bank to provide
a harassment ree work environment or its
employees.
In addition, with the successul implementation o
the Whistle Blowing System on 28th October 2009,
the Banks employees are given unrestricted access to
raise their concerns or grievances regarding any illegal
or unethical practices within the Bank directly to the
Audit and Risk Management Committee o the Board o
Directors without compromising the employees rights in
any way. In this regard, based on the eedback received
rom the employees, the Board o Directors conducted
scrupulous investigations on the issues raised through
this system and necessary corrective actions taken
wherever considered necessary.
CORPORAtE gOVERNANCE
Compliance with Corporate Governance Code o CapitalMarket Development Authority (CG Code);
The audited accounts prepared in accordance with
the International Accounting Standards were made
available to shareholders and other stakeholders.
To ensure rm adherence to good corporate
governance practices as stated in the CG Code, the
Bank abides by Corporate Governance Code o Bank
o Maldives PLC approved in the 329th meeting o
the Board o Directors held on 23rd March 2008.
The Audit Committee was renamed andreconstituted as the Audit and Risk Management
Committee during the 409th meeting o the Board
o Directors held on 17th August 2009. This was
carried out in order to broaden the mandate o
the Committee to identiy and quantiy potential
risks involved in the banking environment
according to the Basle Accord and to oversee the
Banks preparations thereto. The Committee was
reconstituted again during the 460th meeting o the
Board o Directors held on 31st October 2010.
The Appointment, Nomination and Remuneration
Committee which was also reconstituted during
48
-
7/28/2019 BML Annual Report 2010 - English
49/114
Obtaining the Best Value rom the Banks
expenditure on procurement;
Ensuring that the Management o the Banks
procurement projects are executed in a timely
manner so that the intended benets are realized;
Ensuring that partnering opportunities are sought
and considered, wherever required;
Developing pre-approved supplier database or
regular purchases and to seek quotations or
procurement rom the vendors in the approved list
in order to ensure timely procurement and ready
availability, and
Aiming at successul transition to e-procurement
or procurement o non-capital goods within areasonable period, in order to achieve benets o
availability and cost.
ACquIRINg CuStODIAL SERVICESLICENSE ROM CMDA
Since the Bank is best equipped to collect pension unds
through its nationwide branch network, the Board o
Directors in its 437th meeting held on 12th May 2010
resolved to apply or the Custodial Services License
to provide Custodial Services in accordance with the
Maldives Pensions Act (Law No. 08/2009). Subsequently,
the License was granted to the Bank by CMDA on 13 th
May 2010.
OVERALL DutIES O thE BOARD
The overall duties o the Board are:
Providing control and direction to the Bank,
including apex level leadership and setting strategic
targets / objectives or the Bank in conjunction with
the Corporate Management;
Deliberating on the business plan and the annual
budget or the Bank;
Reviewing the business and nancial perormance
o the Bank measured against the business plan and
the annual budget on a quarterly basis;
Ensuring the establishment o eective internal
controls within the Bank which will enable risks to be
assessed and managed, and monitor and assess the
eectiveness o such internal controls established;
Ensuring that the Bank has adequate human
resources to meet the objectives o the Bank;
IMPLEMENtAtION O LIquIDItYMANAgEMENt POLICY
Maintaining adequate liquidity is essential to manage
the projected and unexpected fuctuations in the assets
and liabilities o the Bank and to provide unds or
growth. Thereore, the Board o Directors in its 428th
meeting held on 24th February 2010 adopted the Banks
Liquidity Management Policy. The objective o the Policy
is to ensure the Banks ability to meet its liabilities asthey become due and to decrease the probability o an
irreversible adverse situation.
The Policy deals with the management o risks arising
rom the ollowing:
Changes in liquidity due to internal and
external actors;
Changes in interest rate movements.
IMPLEMENtAtION O BANK O
MALDIVES PROCuREMENt POLICY
The grounds or ormulation o a Procurement Policy
arose to acilitate the procurement o quality goods and/
or services at market related reasonable prices and to
promote transparency, airness, and cost eectiveness
in the Banks procurement process. Thus, the Board o
Directors o the Bank in its 436th meeting held on 28th
April 2010 approved the Banks rst Procurement Policy.
The basic approach in ormulation o this policy
includes:
Ensuring that the Banks Procurement contributesto the realization o the Banks vision and supports
the achievement o strategic objectives;
the 409th meeting o the Board o Directors held on
17th August 2009, was reconstituted again in the
460th meeting o the Board o Directors held on 31st
October 2010.
Perormance Assessment o individual Directors
and o the Board as a whole is conducted on an
annual basis.
Since the commencement o publication o
quarterly accounts o the Bank during the year 2009,
the Bank has given immense importance to publish
quarterly accounts.
To ensure compliance with best practice, 02
members o the Banks Corporate Management
were appointed as Executive Directors o the
Banks Board.
49
-
7/28/2019 BML Annual Report 2010 - English
50/114
Ensuring that obligations to shareholders and other
stakeholders are understood and met;
Ensuring that the Bank complies with all relevant
laws and regulations, including the Corporate
Governance Code and other codes o best
practices;
In order to ulll the aorementioned duties or any other
unction that the Board is obliged to adhere to, the
Board may responsibly delegate its authorities to the
most suitable subcommittee(s) o the Board, Corporate
Management, external proessional(s), consultant(s) or to
any such party or parties that the Board deems t in the
best interest o the Bank.
RESPONSIBILItY StAtEMENt
The Board o Directors hereby certies that:
I. The relevant accounting standards were considered
and ollowed all through the preparation o the
Banks Annual Accounts with proper explanations
relating to material departures;
II. The Board selected such accounting policies and
applied them consistently and made judgments and
estimates that are reasonable and prudent so as to
give a air and true view o the state o aairs;
III. It has taken proper and sucient care or the
maintenance o adequate accounting records in
accordance with the provisions o Companies Act o
the Republic o Maldives (Law No. 10/96), Maldives
Securities Act (Law No. 02/2006), Maldives Banking
Act (Law No. 24/2010), Prudential Regulations
issued by the Maldives Monetary Authority and the
Listing Rules and Securities (Continuing Disclosure
Obligations o Issuers) Regulations 2010 issued by
the Capital Market Development Authority;
IV. It has ollowed the Corporate Governance Code
issued by the Capital Market Development Authority
and;
V. All statements and accounts were prepared on a
going-concern basis.
VI. There were no unexpired service contracts within
one year without payment o compensation o any
director proposed or election.
50
VII. The borrowings o the Bank as at the end o the
accounting period is represented as ollows:
(in 000 R )
Not later than 1 year 485,929
Between 1 to 2 years 126,309
Between 2 to 3 years 107,462
Over 3 years 540,667
VIII. The Banks Total Liabilities or the comparative
years is:
(in 000 R )
2010 8,590,500
2009 9,647,490
Ix. The Board o Directors arms that there are
no other interests o the Directors o the Bank
except those disclosed in this report and theaccompanying nancial statements. Please reer
notes to the nancials, No. 41 or details on related
party transactions.
x. The Board o Directors urther arms that no
major events have occurred since the Balance
Sheet date, which would require adjustments to, or
disclosure in the nancial statements.
-
7/28/2019 BML Annual Report 2010 - English
51/114
In compliance with Article 69 o the Articles o
Association o the Bank o Maldives PLC and Section 1.8
o the Corporate Governance Code issued by the Capital
Market Development Authority, the initial Audit
Committee consisting o 03 Non-Executive members
o the Board was ormulated on 23rd March 2008.
Following the review o the Organization Chart during
the year 2009, it was decided to combine the Audit
Committee with the newly established Risk Management
Committee. In this regard the scope o the Committeewas widened; the composition increased to 05 Non-
Executive Directors and was renamed as Audit and Risk
Management (ARM) Committee.
OBJECtIVES O thE COMMIttEE
The purpose o the Audit and Risk Management
Committee is to assist the Board in ullling its overall
responsibility relating to:
(a) The integrity o the Banks nancial statements
and nancial reporting process and the Bankssystems o internal accounting and nancial
controls;
(b) The adequacy o the internal audit unction,
including reviewing the scope and results o audits
carried out in respect o the operations o the Bank;
(c) The annual independent audit o the Banks
nancial statements;
(d)The engagement o the external auditors and the
evaluation o the external auditors qualications,
independence, objectivity, and perormance; and
(e) The compliance by the Bank with legal and
regulatory requirements, including the Banks
disclosure controls and procedures.
COMPOSItION AND REquENCY OMEEtINgS
The year 2010 commenced with the ollowing members
in the Audit and Risk Management Committee o the
Board. Attendance o members rom 01st January 2010 to
30th October 2010 is as ollows;
No. o meeins
Direcors to attend attended
Ms. areea SareeChairperson o the Committee (Upto 08th May 2010)Non-Executive & Independent
09 09
Mr. Asad AliChairperson o the Committee (From23rd May 2010 to30th October 2010)Non-Executive & Non-Independent
29 27
Mr. Moamed Abdl SaarNon-Executive & Indepen