HISTORICAL BACKGROUND:

BRAC Bank Limited is a full service scheduled commercial bank. It has both local and

International Institutional shareholder. The bank is primarily driven with a view of

creating opportunities and pursuing market niches not traditionally meet by conventional

banks. BRAC Bank has been motivated to provide “best-in-the-class” services to its

diverse assortment of customers spread across the country under on-line banking.

At present, BRAC Bank is one of the fastest growing banks in the country. In order to

support the planned growth of its distribution, network and its various business segments,

BRAC Bank is currently looking for impressive goal oriented, enthusiastic, individuals for

various business operations. The bank wants to build a profitable and socially responsible

financial institution. It carefully listen to the market and business potentials, It is also

assisting BRAC and stakeholders to build a progressive, healthy, democratic and poverty

free Bangladesh. It helps make communities and economy of the country stronger and to

help people achieve their financial goals. The bank maintains a high level of standards in

everything for our customers, our shareholders, our acquaintances and our communities

upon, which the future affluence of our company rests.

BRAC Bank Limited, one of the latest generation of commercial banks started its journey

on July 04, 2001. It is an affiliate of BRAC (Bangladesh Rural Advancement Committee),

one of the world’s largest non-governmental development organizations founded by Fazle

Hasan Abed in 1972. It has been the fastest growing Bank in 2004 and 2005. The Bank

operates under a "double bottom line" agenda where profit and social responsibility go

hand in hand as it strives towards a poverty-free, enlightened Bangladesh.

BRAC Bank limited, with institutional shareholdings by BRAC, International Finance

Corporation (IFC) and Shore Cap International, has been the fastest growing Bank in

Bangladesh for the last three consecutive years. In the recent past the bank has gone public

with price of shares reaching impressive heights, further showing promising future.

PRODUCT PROFILE:

BRAC Bank Ltd. is currently focusing on four different areas of business activities. These

are:

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SME Banking

Retail Banking

Retail Distribution

Non Funded Business and Secured Value Center

Alternate Delivery Channel

Unsecured Value Center

Liability

Service Quality/Business Intelligence

Collections

Cross Selling

Regional Distribution

Corporate Banking

Probashi Banking

Cards

Treasury & Financial Institution

Marketing & Corporate Affairs

The businesses directly related to customer service are briefly described in the following

sections:

SME Banking:

BRAC Bank considers the population of Bangladesh the most valuable resource of the

country. According to BRAC Bank, after achieving liberation, the attainment of economic

uplift should be our most important goal. Micro lenders are working here in the financial

field, providing very small amount and on the other hand regular commercial banks have

been providing bigger amount of loans to larger industries and trading organizations. But

the small and medium entrepreneurs were overlooked. This missing middle group is the

small but striving entrepreneurs, who because of lack of fund cannot pursue their financial

uplift, as they have no property to provide as equity to the commercial banks. With this

end in view-BRAC Bank was opened to serve these small but hard working entrepreneurs

with double bottom line vision. As a socially responsible bank, BRAC Bank wants to see

the emancipation of grass-roots level to their economic height and also to make profit by

serving the interest of missing middle groups. 50% of BRAC Bank’s total portfolio

usually collected from urban areas, are channeled to support these entrepreneurs who in

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future will become the potential strength of our economy. The Bank currently is the

market leader in giving loans to Small and Medium Entrepreneurs. It has been doing this

for the last five years. Showing SME Network coverage in the figure below:

SME Products:

Currently BRAC Bank is offering 13 SME packages. These are listed and briefly

explained below:

Anonno Rin- “Anonno Rin” is a business loan designed to finance small scale trading,

manufacturing and service ventures, especially to help small and medium

entrepreneurs to meet their short-term cash flow shortages and bridge the fund-flow

gaps.

Apurbo Rin- Apurbo is a loan facility for Small and Medium business. Apurbo loan

has been designed and targeted for relatively bigger business units requiring loan

above tk. 8 lacs to 30 lacs.

Pathshala Rin- “Pathshala Rin” is a loan designed to meet the needs of small and

medium sized private educational institutions, such as kindergartens, schools and

colleges etc.

Aroggo Rin- “Aroggo” is a loan allowed to various Health service Provider like

private clinics, diagnostics centers and doctors' chambers. The product offers fixed

assets purchase financing under equated Monthly Installments.

Digoon Rin- This is a double loan on clients’ deposits. With this, clients do not need

to encash their savings rather they can take double amount of loan on their deposit for

their business expansion.

Supplier Finance- Supplier finance is a loan facility for the enlisted Suppliers of

various large retailers, marketing companies, distributors, exporters etc. This product’s

main objective is to help various Suppliers to meet their short-term cash flow shortages

or bridge the fund-flow gaps. Amount is minimum BDT 3 lac up to maximum BDT 30

lac.

Prothoma Rin- "PROTHOMA RIN" is a loan facility for small and medium sized

business, which is operated by women entrepreneur. The product offers terminating

loan facilities for the purpose of working capital finance and/or fixed assets purchase.

Loan limit is from minimum BDT 3 lac up to maximum of BDT 9.5 lac.

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BIZNESS Account- “Bizness Account” is an interest bearing current account for sole

proprietorship business Entrepreneur. Opening balance required is only BDT-

10,000.00

Cash Secured Loan- "Cash Secured Loan" is a loan facility for small and medium

sized business. There are two types of loan facility in the product i.e. Secured Loan

and Secured Overdraft. These facilities are fully secured by fixed deposit of BRAC

Bank. Amount is minimum BDT 3 lac up to maximum BDT 30 lac.

BIZNESS Loan- Bizness loan is an equated monthly loan facility for all types of

business who have healthy bank transactions for the purpose of working capital

finance and/or fixed assets purchase. Loan limit is minimum BDT 10 lac to maximum

of BDT 50 lac.

Proshar- "Proshar" is a loan facility for small & medium sized manufacturing

business. The product offers loan facilities for working capital finance and/or fixed

assets purchase.

Trade Plus- Trade plus is a composite facility for small & medium sized import-

oriented businesses to meet their trade finance requirements.

Super Supply Loan- Super Supply Loan is a loan facility for Suppliers of various

large retailers, marketing companies, manufacturing companies and various corporate

houses. This product’s main objective is to help various Suppliers to meet their

financial requirements.

Retail Banking:

There are retail banking products of three categories. One is Loan Products, second is

Deposit Products and the other is Cards. In Loan Products category there are eleven

services/products facilitating clients’ demands. These are: Salary Loan, NoW Loan, Car

Loan, Teacher’s Loan, Study Loan, Travel Loan, Credit Card Loan, Top Up Loan,

HighFlyer Loan, Secured Loan/ OD and Doctor’s Loan.

Under Deposit Products category currently there are ten services/products in total. These

are: Fixed Deposit, Interest First, Abiram Account, DPS, EZee Account, Savings Account,

Short Term Deposit, Current Account, Salary Account and Step Up Fixed Deposit.

Under Cards category there are two types of cards products active. One is ATM Debit

Cards and the other is Co-Branded Cards. ATM Debit Cards facilitates money withdrawal

of up to BDT 20,000.00 per day. Also checking balance statements of ATM and POS

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(Point Of Sale) transactions. The Cards Department provides 24 hour customer support

hotline to resolve queries and problems.

The Co-Branded Cards are from Aarong, ALICO and DIA Gold. The BRAC Bank Aarong

ATM Card gives users 5% cash back facility from shopping in any Aarong outlets. The

holder of BRAC Bank ALICO ATM Card can enjoy a special life insurance facility with

insurance coverage of up to BDT 200,000.00. And BRAC Bank DIA Gold ATM card

holder will enjoy a special cash back and cash discount feature. This feature is 10%

discount from any diamond product bought and 8% discount on making charge of any

gold products bought from DIA Gold.

Corporate Banking:

Corporate Banking section has three types of coverage currently. These are:

1. Corporate Loan Products

2. Trade Financing

3. Corporate Cash Management

Corporate Loan Products:

Corporate Loan Products is offering six services at the moment. The services are listed and

described in the following section:

Overdraft – This is an on-demand credit facility designed to meet day-to-day

operational activities of the business, including purchase of raw materials and

expenses.

Term Loan – Short Term Loan/Revolving Loan: This scheme is to meet different

short-term fund requirements of the client. Payment of duty, Tax, VAT and other

expenses related to the release of goods from customs through pay orders in the name

of customs authority or Bangladesh Bank cheque is payable through this scheme.

Lease Finance – One of the more convenient long-term sources of acquiring capital

machinery and equipment. The client is given an opportunity to have exclusive rights

to use an asset, for an agreed period of time, against payment of rent.

Loan Against Trust Receipt (LATR) – This is advancement against a Trust Receipt

provided to the client when the documents covering an import shipment are given

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without payment. Under this system, the client will hold the goods of their sale

proceeds in trust for the bank, until the loan allowed against the Trust Receipt is fully

paid.

Work Order Finance – BRAC Bank provides Work Order finance facility for its

valued clients. Through this arrangement, clients can avail loan facilities against valid

Work Orders up to a certain proportion.

Medium Enterprise - The products offered under this sort of financing are versatile in

nature and each product is tailored according to the need of the borrower, under certain

parameters. The range of organizations this sort of financing caters to include

proprietorship concerns, private limited companies, educational institutions as well as

NGOs.

The purpose of this unit is to serve medium enterprises having facility requirements

like a large corporate in nature, but smaller in volumes. The facilities may range from

a single-funded or non-funded limit to a composite credit facility that includes various

corporate products. The Bank believes that the emerging medium enterprise of today is

tomorrow’s large corporate that will facilitate the true growth of the nation.

Trade Finance:

Letter of Credit (LC): This facility is related to import or local purchase of different

items. It is also provided for the import and export of goods (such as raw materials,

machinery, equipment, any trading item).

Letter of Guarantee (LG): To meet different contractual requirement such as

participating in Bid, Performance Guarantee and Advance Payment guarantee for

different contractual requirements.

Corporate Cash Management:

NCS – BRAC Bank will collect clients’ bills through their Bills Pay Machines in the

strategic locations of the city and also at the correspondent branches, where the BRAC

Bank branches are not available and at the booths.

PTS – PTS will allow clients to disburse all kinds of payments anywhere in the

country through BRAC Bank’s own branch network in Dhaka, Chittagong, Sylhet,

Savar, Feni and the partner bank branches all over the country.

Advantages to Employers – BRAC Bank provides services such as Salary Upload,

Multi-Location Salary, payroll management, MIS on payroll etc. Salary Upload

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facility requires a consolidated cheque of the total salary amount and a break-up of the

disbursements to the employees in soft and hard copy format, BRAC Bank will do the

rest. Multi-Location Salary features salary disbursal in multiple locations within

BRAC Bank network. Payroll MIS creates standard reports for corporate clients with

neatness and conciseness.

Advantages to Employees – Along with all other Retail Banking services, employees

can avail 24 Hour Banking through ATMs, Online Banking, Extended Banking Hours

till 8:00 PM except for Thursdays and Fridays and Payday Overdraft on request for

emergency situations (this is adjusted with the employee’s following month’s salary).

Cash Management Services – BRAC Bank's national Collection Services (NCS) is

designed to assist corporate with nationwide collection requirements by providing

faster funds availability in a cost- effective manner.

Cash Collection Services - Through BRAC Bank Cash Collection Services they

collect cash directly from clients offices/business premises. The whole process is

arranged with executive logistic services.

Drop Box Facility - On request, BRAC Bank can install Drop Box at customer’s

office which can be used for depositing cheques or any instruction. Their

representative will visit client’s office and clear the box every day.

Probashi Banking:

Our nation’s workforce who are away from their families, relatives, friend and above all,

from breathing the air of our country, working abroad for the prosperity of their lives and

the nation in the long run while sacrificing a lot. BRAC Bank, through Probashi Banking

services, is facilitating the banking needs of remitters. Currently BRAC Bank is providing

six services for remitters under Probashi Banking. These products/services are described

below:

Probashi Current Account – It is ideal for Probashi Bangladeshis who do not wish to

earn interest due to religious reasons. This account also comes with cheque book and

ATM card and is ideal for regular transaction.

Probashi Savings Account – This account provides interest which is paid in June and

December of each year. This account comes with a cheque book and ATM Card and is

ideal for Probashi Bangladeshis who want to save. Accounts are maintained in Taka.

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Probashi DPS – Is a savings scheme specially designed for the Probashi clients. This

service requires monthly installment of minimum Tk. 500.00 and any multiples.

Provides a savings account with a personalized cheque book, earnings remitted to

savings account will be automatically transferred on the due dates and loans are

provided against 90% of deposited amount.

Probashi Fixed Deposit – A fixed deposit account allows remitters to deposit their

money for a set-period of time, thereby earning them a higher rate of interest in return.

Fixed Deposits can be made from 3 months to 3 years. Interest is paid on the maturity

at a very attractive rate. Accounts are maintained in Taka.

Probashi Abiram – Probashi Abiram is a Fixed Deposit which is ideal for Probashies

who want to get a return every month. If one has sufficient funds, this can be made

into a fixed deposit from 1 year to 3 years and interest will be paid every month on

their Savings Account automatically. This is ideal for customers who want to pay their

DPS installments. Accounts are maintained in Taka.

Probashi Shubidha (NRB Beneficiary) Account – This is a specialized account for

Non-Resident Bangladeshis where the remitter can open an account for the

Beneficiary. The beneficiary can then avail all the services offered by BRAC Bank

such as: SMS Banking, Phone Banking, Internet Banking etc. When the beneficiary’s

account is setup, the Remitter just requires the account number, and amount of money

to be sent to make a safe, fast and efficient transaction. Transaction is completed

within 6 hours of receiving instructions.

MARKET STATUS:

BRAC Bank wants to build a profitable and socially responsible financial institution. It

carefully listen to the market and business potentials, It is also assisting BRAC and

stakeholders to build a progressive, healthy, democratic and poverty free Bangladesh. It

helps make communities and economy of the country stronger and to help people achieve

their financial goals. The bank maintains a high level of standards in everything for our

customers, our shareholders, our acquaintances and our communities upon, which the

future affluence of our company rests.

According to the Half-Yearly Financial Statement of 2010- the number of Employees

including contractual engaged for the whole year or part there of (who received a total

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yearly remuneration of Tk. 36,000 or above) were 6,306 where as the total number of

employees were 7,075 as the same period of pervious year.

BRAC Bank, a fully operational Commercial Bank, focuses on pursuing unexplored

market niches in the Small and Medium Enterprise Business, which hitherto has remained

largely untapped within the country. In the last five years of operation, the Bank has

disbursed over BDT 2200 crore in loans to nearly 50,000 small and medium entrepreneurs

in 2007. And this year Bank’s disbursement plan is BDT 4100 crore. The management of

the Bank believes that this sector of the economy can contribute the most to the rapid

generation of employment in Bangladesh. Since inception in July 2001, the Bank's

footprint has grown to 36 branches, more than 400 SME unit offices and 38 ATM sites

across the country, and the customer base has expanded to 200,000 deposit and 45,000

advance accounts through 2006. In 2005, BRAC Bank had a $178 million portfolio

consisting of around 21,000 loans with an average loan size of $8,000. It has around 400

regionally-placed loan processing units offering services in the heart of rural and urban

communities and employs over 700 business loan officers – around 60% of total staff.

In addition to small business lending, BRAC Bank has fast growing remittance, savings

mobilization and consumer lending businesses. In the years ahead BRAC Bank expects to

introduce many more services and products as well as add a wider network of SME unit

offices, Retail Branches and ATMs across the country.

International Finance Corporation:

BBL has important international shareholdings apart from BRAC: IFC and Shore Cap.

International Finance Corporation (IFC) is the commercial wing of World Bank. Using

certain channels and overseas representatives, IFC helps local financial institutions find

profitable ways to target small and medium sized companies. Funding comes from the

Asian Development Bank, Canada, the European Commission, the Netherlands, Norway,

the United Kingdom and IFC itself.

IFC is a 9.5% shareholder in BBL. A new assistance program signed in August 2005 aims

to double the bank’s number of small and medium enterprise clients in 18 months through

campaigns to target women entrepreneurs and rural clients, introduce new products and

train branch managers.

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Shore Cap International Ltd:

Another international institutional investor Shore Cap International Ltd. is an international

private non-profit, equity company seeking to invest in small business banks and regulated

micro finance institutions in countries with developing and transitional economies. Shore

Cap typically invests between $500,000 and $2 million for an ownership position of 10-

25% of a company. As a minority shareholder, Shore Cap seeks financial institutions with

a strong, experienced management team and a committed set of local development-minded

investors. Shore Cap currently owns 8.75% of BBL’s shareholdings.

BUSINESS LEVEL STRATEGY PURSUED:

In business level, BRAC Bank uses differentiation strategy. After analyzing their business

level activities we have come up with these analyses:

Customer group & market segmentation

BRAC Bank has different loan & deposit products for different customer groups. Amongst

the three product lines- SME, Retail & Corporate, we are excluding corporate products

because these products are customized, almost on a per-client basis. SME, which is the

biggest profit earner for this bank has mostly loan products. These products are

customized based on the size of the clients business. Based on the business size, the

customers are divided into small business & medium business. In Retail product line, the

market segmentation is done mainly based on social class & profession. BRAC Bank first

tries to figure out whether a product will be attractive for a specific profession/class or not.

Then they try to customize & design the product to better meet customer needs.

Customer needs & product differentiation

BRAC Bank offers different products for different market segments. When a customer

comes for loans, BRAC Bank tries to sort out which category the customer fits in. Then

the customer is offered their specific product but if the customer qualifies for some other

products then he is left with the final choice. Also upon customers request BRAC Bank

further customizes their products on special cases.

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Distinctive competency

BRAC Bank developed their distinctive competency over its competitors by using

extensive IT. A bank needs rigorous reporting everyday. BRAC Bank has to generate a lot

of reports like compliance report for the Central bank, internal reports for the top

management and auditor's reports. Also the institutional investors need reports to realize

how the bank is doing. The base data for all these reports are generated by Finacle, BRAC

Bank core banking software. Then these data are formatted as required by different

stakeholders.

BRAC Bank has a strong backbone network connecting all its branches with the central

branch. At the end of the all the daily transactions on all branches are synchronized with

the central bank & the end-of-the-day procedure is run from the central server as well.

IMPACT OF BUSINESS LEVEL STRATEGY ON PERFORMANCE:

To evaluate the impact of business level strategy on performance of BBL, we will observe

some specific performance variables and their growth over six financial periods. The

performance indicators are:

Loans and advances,

Total Deposit,

Cost of Fund (COF),

Return on Investment (ROI),

Net Income (NI) Ratio,

Return on Assets (ROA),

Total Asset, and

Operating Profit.

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Loans and advances:

Loans and Advances increased by BDT 20,152 million or 31.41% in the year 2010. This is

a result of continued growth in the lending business and solid growth in the banking

Industry, reflecting the focus on customers and profitable growth.

Total Deposit:

Customer deposits of the Bank grew by 17.20% in 2010 which was the slowest growth

over the period of years. The Bank ended the year with total customer deposits of BDT

88,158 million, compared to 75,220 million in the year 2009. The growth rate of deposit

has increased at decreasing rate. Currently, the Bank's deposits mostly comprise of term

deposits. Almost 39% of the total deposits are in the form of fixed deposits, whereas only

18% and 23% are in the form of current and savings deposits respectively.

Cost of Fund (COF):

BBL has achieved a total profit after tax of Tk. 1,664 million in 2010, which is 27.7%

higher than last year. The operating profit was Tk. 4,969 million which posted a 33.7%

growth. The higher growth of profit highlights an increased efficiency of the Bank's

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operations. The Bank's total assets stood at Tk. 119,150 million with a 25.3% growth and

total customers' deposits stood at Tk. 88,158 million with a 17.2% growth. Moreover, cost

of deposit has decreased by 2%, in effect increasing interest margin with a positive impact

on the bottom line. COF rate was the lowest from the previous years.

Return on Investment (ROI):

BRAC Bank enjoys a favorable return on investment from 2007-2009 but in 2010 the

investment return fall to 9%. The increased in ROI to 11.64% as on December 31, 2007

was due to a sharp increment in the year 2004 but deal came to an end in 2010 and does

the effect.

Net Income (NI) Ratio:

The percentage growth of Net income after tax is increasing at a decreasing rate as its

calculation is effect by the increase and decrease of the operating expenses. Operating

expenses have increased by 29% in 2010.

Total Asset:

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Total assets of the Bank rose to BDT 119,150 million in 2010, from BDT 95,127 million

in 2009- registering a growth of 25%. The figure shows a significant increase in total

assets because loans and advances, investments, fixed assets and cash assets maintained by

the Bank increased. The growth rate of BBL total assets after 2008 has increased at a

decreased rate.

Operating Profit:

Despite some challenges, BBL operating profit of BDT 4,969 million- 34% higher than

that of last year.

SWOT ANALYSIS OF BRAC BANK LIMITED:

SWOT analysis means analyzing the strengths, weakness, opportunities and threats of the

Organization to know the present condition. This is very common analysis to determine

the company’s capabilities of doing effective business. This help to know the possible

advantages and disadvantages of the firm that it has compare to compare to others. Here is

the SWOT analysis of BRAC Bank:

Strengths

Wide range of service line

Online Banking Services

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Excellent working environment

The bank is providing modern services like ATM, on line banking, SWIT facilities,

SMS Banking.

The banking service is easily accessible and feasible

Efficient and skilled workforce

Higher profitability

The bank launched several deposit schemes, which have been appreciated by the

Consumers resulting growth of deposit of the bank.

Huge business area

The bank has earned customer loyalty as well as organizational loyalty. The bank has

also control in maintain quality services to its clients.

BRAC Bank Ltd. has a long-term reputation in the banking industry as it is one of the

promising players in the industry. So, their enduring good will in the field works as a

vital strength.

It’s one of the important strength is its big portion of share as it provides security to

the customers. They feel reliable to deal with this bank and usually do not switch.

BRAC Bank Ltd has a good number of corporate customers. They have clients from

all small, medium and big enterprises. This is because of the reliability they provide to

their customers.

The bank also provides all their services at a very low rate. As a result people of all

status can easily become a client of the bank.

They have qualified and experienced human resources who are highly committed to

their customers.

It has sophisticated automated banking system in most of its branches which foster the

overall banking activity.

They have excellent management system to integrate all the branches with the head

office.

Weaknesses

Lack of proper motivation, training and job rotation

Limited workforce compare to competitors

Lack of clearly define marketing objective

Limited number of branches

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Lack of promotional objectives and strategies

Lack of implementing more equipped IT technology

Fund is getting costlier and getting access to the fund is also becoming more difficult

Lack of experienced employees in junior level management.

Lack of motivation among the workers.

Heavy dependency on Head Office in decision making sometimes slower the work

process.

Lack of extrinsic and intrinsic reward & incentives for the employees from

management sometimes result to job burnout.

High dependency on ‘word of mouth’ strategy.

Opportunities

As the economy of Bangladesh is gradually boosting up and many industries are

performing better, there is always an opportunity of market growth. So, it is up to BRAC

bank to garb these opportunities with open arms. Traditionally the state owned and foreign

banks have been very keen to exploit these openings. Then again it is the correct strategy;

hence the efficient marketing mix of seven can play a crucial role in this regard. LC, credit

Openings to take market share away from rival firms services, corporate banking etc can

be very handy for BRAC bank in this regard.

Openings to exploit emerging new technologies in banking

With the advancement of technologies many new opportunities have also blessed the

banking sector worldwide. Bangladesh has also started to feel the wave of new

technologies. BRAC bank should size these opportunities specially credit card, telephone

banking, SMS banking, electronic money transfer etc. These new products of It revolution

can be very handy for BRAC bank in pursuit of a fast growth. Already, the ATM facilities

and tele-banking are proving their worth and more of these techno related services will

definitely add flexibility and diversification in services.

Serving additional customer groups and expanding geographic coverage and service

segments

BRAC bank can expand rapidly at the district towns and important rural business centers.

This move can secure them a stable client base without much competition as the state

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owned banks are mostly enjoying this opportunity. Also expanding in the remote areas can

help BRAC bank to obtain more profit against less competition like the metropolitan cites.

Beside that the already established positive image of BRAC NGO can play crucial role in

this regard. Also the BRAC NGO can help BRAC bank initially with its financial

activities.

Planning to go global

There is always a possibility of reaching the international customers. As BRAC Ngo has

extended its operation in Afghanistan, BRAC bank might consider expanding globally

with the NGO. But the precaution should be only countries with low concentration foreign

banks should be targeted. The presence of BRAC Ngo can work as catalyst in a foreign

country.

Comprehensive services

BRAC bank can provide diversified financial services. Organizations and people need

different sorts of financial services from time to time like banking, insurance, stock broker

services, money transfer etc. Becoming one stop solution for all financial services will

only enhance the possibilities that the clients are that corporate or individual will be

relying on BRAC bank heavily. Definitely if properly implemented diversification in

financial services are bound to provide a good return for BRAC bank.

Ability to take advantage of learning and experience curve effects

Learning and experience curve effect are the result of continuous repetition and large

volume of services rendered. If things go like now for BRAC bank within a few years

learning and experience curve effects will definitely drive down the cost. As a result the

overall cost structure will be lower and the gross profit margin will increase. Thus BRAC

bank will be more financially stronger.

Threats

Increasing bargaining power of the customer

As more banks are starting operation in Bangladesh, more the banking sector is getting

fragmented and thus customers are gaining more bargaining power over the banks. Today

high profile customers have all the rights to break away from the relationship with

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Standard & Chartered bank and go to HSBC or Citi bank N.A. This rise in bargaining

power of customers is a threat to BRAC bank which puts pressure for improved services at

minimum cost. As a result there are possibilities in reduction of gross profit.

Number of potential new competitors is increasing

In every year on average three new banks are coming up which is intensifying the

competition. To make the matter worse the metropolitan areas are becoming denser with a

branch of 4-5 different banks side by side. A downward economic situation may make the

chance of survival slim due to presence of lot of banks.

New regulations of the central bank

This threat is always on cards as the central bank is the most powerful authority in the

banking sector. Suppose a sudden change in required reserve ratio can squeeze the money

available to BRAC bank. Again the concretionary monetary policy currently adopted by

the central bank has already made the investment lower than the beginning of this decade.

Government's new rules and policy

Government is the legitimate source of power and is able to change anything overnight.

So, there is always a threat that Government can jeopardize the operation of BRAC bank.

Also Government can force to reduce the interest rates and reduce the salary of the top

management. As a result Government always remains at side of becoming a source of

negative impact.

Strong presence of international banks

Even before BRAC bank came to life the foreign banks like HSBC, Citi N.A, and

Standard & Chartered were here. They have more financial might than BRAC bank.

Beside that due to long presence and good reputation the foreign banks are currently

enjoying a clear upper hand. Also being early movers they are relatively nicely poised to

attack BRAC bank in many ways. So, obviously the presences of the foreign banks are a

big threat for BRAC bank.

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POSSIBLE MEASURES TO IMPROVE PERFORMANCE:

There are a lot of banks now in Bangladesh and customers now have lots of options.

So a bank should do everything possible for them to do to retain its customers.

In the branches of BBL there should be more number of service stations for

withdrawing and depositing money so that it reduces the customer waiting time.

There should be more efficient capital management and investment analysts appointed

so that idle money does not remain in the bank.

They should frequently keep their conscious observation to monitor that the ATM

machines in all the booths are usable and adequate cash is there.

They should increase their ATM booths substantially in order to compete with its

competitors.

They should update the information in the website in a regular basis.

BBL should increase the space in the branch offices as their client size is increasing

day by day and also introduce new branches in various places of the country for

expansion.

The managers should be sent to different training programs on aregular basis to

improve their knowledge base which would help them to improve their efficiency.

Employees of BRAC Bank should be provided a better salary package in order to keep

them otherwise they may switch to another job for higher salary.

Management should be more decentralized to provide faster services to the clients.

In order to remain as the market leading company they shouldemphasize much on

retain the existing customer base and also should try to attract new customers.

In the loan approval procedure the evaluation of creditworthiness of the clients should

be more authoritarian in order to reduce the chance of defaulter.

SME loan of BRAC Bank has already gained popularity to the businesspeople but

there is an objection about the interest rate where the bank should be more aware and

also try to decrease the interest rate. Because of higher rate of interest defaulter rate

may increase which would ultimately affect the profitability of the bank.

Some customers said that the service charges of BRAC bank are comparatively

higher than other bank so it should be reduced if possible. Otherwise it can be a threat

for the bank in future.

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CONCLUDING REMARKS

BRAC Bank Limited has gained a positive image in the mind of the people in Bangladesh

and this is reflected in the growth and performance of the bank in the last few years.

BRAC Bank’s steady rise to the top as the fastest growing bank in the country intends to

lead the bank towards the achievement of its ultimate objectives and goals in compliance

with its vision. This bank has a strong financial base and huge assets to meet up its

liabilities which make this organization financially sound and solvent. The management of

this bank is outfitted with expert and efficient bankers and managers who delicately serve

the bank. They work for the betterment of the bank as a team. According to the study the

performance of this bank is noticeable. In this study to evaluate the financial performance

of this bank various financial parameters were considered and BRAC Bank was found as a

fast growing bank and simultaneously performing well in almost all the areas. To keep

with this pace of growth and improvement they now should more vigilant on what their

customers want and should be more vigilant while giving loans to the clients in order to

reduce the defaulter rate.

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