Overview of the City Bank Ltd - Assignment Point
Overview of the City Bank Ltd
Subject: Organizational Behavior | Topics:

 History of the City Bank LTD

The city bank ltd. was incorporated as a public limited company with limited liability on the 14th march 1983 (formal inauguration march 2,71,983) under companies act 1913 in Bangladesh with the primary objective to carry on all kinds of banking business. The bank is listed with Dhaka Stock Exchange and Chittagong Stock Exchange Limited. Functioning as a conventional bank in the country since 1983, it has been able to consolidate its position in the banking sector. The bank has been able to establish a solid presence with the customers and general public, through its improved services, value addition in the economy and increasing shareholders value. At present it is also operating Islamic banking facilities.

It started its operation in 1983 with the authorized capital Tk. 200 million and paid up capital was Tk. 34 million. Up to December 31,2005 Authorized capital Tk. 1,750,000,000, Paid-up Capital of the Bank stands at Tk. 720,000,000.

At present the bank is operating through 77 Branches at most key points of the country. It carries out all banking activities through its branches in Bangladesh. The principal place of business is the registered office at the registered office of the bank is at JibanBimaTower, 10, Dilkusha Commercial area, Dhaka-1000. The bank is listed in the Dhaka and Chittagong Stock Exchanges as a publicly quoted company for its shares. A professional team of Bankers is running the day-to-day operation of the bank.

Company Philosophy

Despite stiff competition among banks operation in Bangladesh, both local and international, The City Bank Ltd. has made a remarkable progress practically in every sphere of its activities. The activities of The City Bank Ltd. are very implicit and vast comparing to that of other bank in the country today. The slogan of the bank is “For Relationship Banking “. The mission of The City Bank Ltd. is to serve the nation through excellent customer services.

The prime objective of The City Bank Ltd. is to create a strong capital base, to earn good profit and pay satisfactory dividend to honorable Shareholders, to achieve the objectives, the bank works for improving the quality of bank’s assets by identifying potential good borrowers. And persuade the clients to open an account in the bank through their wit and intelligence as well as is to maintain the reputation through their customer services oriented facilities. To achieve this desired goal it has intention to pursuit of excellence in the climate of continuous improvement. Because it believes the line of excellence is never ending, it also believes that its strategic plans and business will its strength in competitive environment. Its motto is to provide every single customer services available in today’s banking procedure for their clients.

 The Vision of The City Bank Ltd.

To be the leading bank in the country with best practices and highest social commitment.

 The Mission of The City Bank Ltd.

  • To contribute to the socio economic development of the country.
  • To attain highest level of customer satisfaction through extension of services by

       dedicated and motivated team of professionals.

  • To maintain continuous growth of market share ensuring its steady growth.
  • To maximize bank’s profits by ensuring its steady growth.
  • To maintain the high moral and ethical standards.
  • To ensure participative management system and empowerment of human resources.

 Company Services

The City Bank Ltd. also concentrates the following categories of banking services.

  • General Banking.
  • Loan and Advance.
  • International Trade and Foreign Exchange.

Customer Services

The City Bank Ltd. is committed to serve the clients in a better way and for this it has been introduced some new innovative things.

 Small & Medium Enterprise (SME) Banking

Considering the growths potentially and demand situation he bank extended credit facilities to small and medium enterprises through SME banking in larger volume in the year 2005 in collaboration with South Asia enterprise development facility (SEDF) and partner banks, the bank took active participation in three daylong road show on SME banking in the city. A separate division was established in the head office to process and handle loans under SME for attaining a respectable market share and successful operation of the scheme. The bank organized several training programs for development of adequate human resources.

 Social Commitments

The city bank Ltd. had demonstrated its social responsibility by taking part in various activities. Significant among them is: donation to

  • Daridra Durikoron Sangshtha,
  • Financial assistance to center for rehabilitation of Paralyzed(CRP)
  • One time financial assistance to Dhaka University Alumni Association.
  • Continuous financial assistance to special education for intellectually disabled Trust (SEID) etc.
  • For the environmental and ecological sustainability, the bank implemented beautification project at different places in DhakaCity during 2005.
  • For the developments of sports ad games, the bank has been supporting a various tournaments with financial assistance. During the year under review the bank patronizes the one-day international (ODI) and test matches between Bangladesh and other test playing countries.

Online

In order to increase faster services in all 77 branches of the bank computerization was completed in 2007. Side by side online facility is gradually being available across the branch of Dhaka, Chittagong, Sylhet, Bogra and Khulna. During the year 2009, eight new branches have been brought under “Finacle” Software to facilitate online banking service. This process will continue and ‘Any Branch Banking’ through ‘On­line’ will be introduced within very short time. The number of branch under online banking increased to 17 by the year 2010.The bank had implemented new ABABIL software in its Islamic Banking branch. These developments will certainly increase the standard of customer services within the bank.

As a service center, bank is always under demand from its customer for better service atmosphere at the branch level. Keeping in view the requirement of customer, bank has renovated seven branches including relocation of two branches in 2009.

Online Bill Collection

Online bill collection service with Grameen Phone.

 Financing Services Provided in Different Business Sectors

  • Hospital project at Kustia.
  • Pharmaceutical project.
  • Re-rolling mill.
  • Garment industry.
  • Poultry project.
  • Hotel project at Bogra.

  Modern Technology for Services

Demand for modern services in the banking sector is growing faster. The services are now technology based and this bank is not for from competition. The City Bank already implemented world class financial banking software as one of the major technological initiatives in the IT infrastructure development. Ups to now 77 branches are under this software. Another factor needs to be under consideration that City Bank is the first among domestic banks to introduce Dual Currency City Card.

 Corporate Social Responsibility

As one of the leading bank, the City Bank plays its responsibility towards the society and contributed donation to various educational instates Trustee organizations. The “City Bank Foundation” has been established for same intention. The foundations aim at gearing up its on ongoing and new initiatives the cause of humanity through viable social welfare.

 Good Corporate Governance

In the absence of any code of conduct and business principles, it is difficult to have a Self-assessment of the status of the governance. Bank has developed and adopted various operating instruction and manuals for best practices. Key Performance Indicator (KPI) has been adopted to assess the employee performance.

Bank gas adopted a unique code of conduct and ethical guidelines for the employees. Bank has given stress to the compliance of the rules, regulations and guidelines of Securities and Exchange Commission and Bangladesh Bank. The external auditors were given absolute freedom in the process of audit and to verify the compliance, risk management and preparation of accounts as per IAS and BAS norms. Credit rating agency was engaged for rating the bank every year in order to give a fair view of the investors.

 Challenges and Prospects

City Bank is a string and effective player in the financial system. Banks exposure in core business of corporate and retail sectors with wide range of products is expanding. Its strategy will remain to grow in areas of core competence and expand activities in SME and Micro Finance to the development of national economy. Further to enhance foreign exchange reserve Bank will continue their efforts in mobilization of wage earners remittances with a meaningful presence in the overseas. Side by side, the Bank remains focused on quality business and exercise best practices to achieve satisfactory growth on the upcoming years.

Quick glance at the activities of The City Bank Ltd.

Particulars

2010

2009

Paid up capital

1080000000

720000000

Total capital

2601000000

2080700000

Capital surplus/ (deficit)

59500000

135300000

Total asset

47445751884

35303744444

Total deposit

39571945519

30647833255

Total loan and advance

30789021982

23326338550

Total contingent liabilities

13623395805

9040114395

Total loan deposit ratio

77.81

76.11

Profit after tax

240021913

540924588

Interest earning asset

40820243647

31913926565

Return on investment

8.58%

8.38%

Return on asset

0.58%

1.75%

Income from investment

431448405

285323890

Earning per share (Tk)

22.22

75.13

Net income per share (Tk)

22.22

75.13

Price earning ratio (times)

17.55

10.24

Products of The City Bank Ltd:

 City Credit Card

This is one kind of credit card, which is totally different from service of the bank. This is the only dwell card in credit card service that is we can use it at home and abroad.

(a) Kinds of City Card

  • DualCity card
  • LocalCity card
  • InternationalCity card
  • Co brand city card

(b) Type of Credit card

  • Visa Classic Gold / Local
  • Visa Classic Dual /Local
  • The American Express (Credit Card)

(c) Characteristics of City Card

  • Yearly fee and renew fees are least
  • It is free of cost for the local part of DualCity card.
  • Advantage of large POS (Point of Sell) and ATM Network
  • Community preference for 1st class government officer, businessmen, etc
  • Monthly fee is only 5% of total cost

(d) Sources of City Card

After collecting the form, party will fill up the form properly and forms are available at card division or any branch of city bank. Those who have account in any branch can collect the form & deposit these forms to front desk and later the front desk officer will send the forms to the card division at the principal office.

(e) Cash Transaction

50000tk are drawnable within a day but highest tk20000 is possible in one (1) transaction and ATM Transaction is possible not more than 4 times. In case of city gold card highest $1000 could be drawn & $500 through silver card. Maximum 80% of credit limit is drawnable in case of gold card 70% for silver. In international case, this limit is 60% and 50% respectively.

(f) Payment against Monthly Statement  

Payment of LocalCity card or local part of DualCity card is possible in any branch through the payment slip in cash counter. In case of cheque, it must be deliver to the officer 3 days before the payment due date. In case of international part of DualCity card, payment is possible through the foreign exchange department of authorized dealer branches like corporate office, Gulshan branch, Kawran Bazar branch, and new market branch, etc. Monthly statement & original passport is necessary in payment time.

If the credit limit is not endorse in original passport through card division, then branch officer of foreign exchange will endorse the credit limit & this may not necessary if the card division provide endorsement. In that case, customer copy could be provided through the payment slip.

VISA Electron Debit Card

(a)Unique Features

With this card a customer can withdraw cash from more than 300 ATM’s in the country. All ATM’s displaying VISA logo will accept this card 24 hours a day and 365 days a year. With this card a customer can shop and dine at hundreds of outlets across the country displaying VISA logo. It allows the right kind of financial planning and budgeting. This card prompts self-discipline to the customers,  that is spending money when needed only. No cash and cheque, it is hassle free and safer than carrying cash. Statement will show if money has been withdrawn at ATMs or spent at restaurant /shops. So, record of expenditure is readily available.

There is no extra expense, no interest, no late payment charges, and only a small annual fee.

 Some Service Products

 Lakhpati Savings Scheme

Any person of Bangladeshi who is 18 or over 18 has eligibility to open the account

Monthly installment for the scheme is 1000 Tk and this is fixed term deposit

Total duration is 6 years and total installment no is 72

Time

Monthly installment

Maturity

6 year (72month)

1000.00

100000.00

 After the death of the accountholder the nominee will get the amount.

After two years completion of regular installment payment the accountholder might borrow 80% of deposited amount. Any benefit from Lakhpati Savings scheme may come under preview of Income tax, excise duty, source tax, etc will be borne by the customer.

Monthly installment should be paid on the first 10 days of the following month.

 Three Stage Savings Scheme

Monthly installment of this scheme is 500 to 5000 Tk. This is also fixed and customer can open any no of TSSS (Three-Stage Savings Scheme).

The scheme is for 2/4/6 years and total no of monthly installment is 72.

Maturity payment:

Period

Interest

Maturity payment

1 year

8%

13093.00 Tk.(1st stage)

2 year

9%

3 year

10%

28955.00 Tk.(2nd stage)

4 year

11%

5 year

12%

48548.00 Tk.(3rd stage)

6 year

13%

 Junior Savers Scheme

Initial deposit for this scheme is 5000 Tk., which will be followed by monthly installment of 1000 Tk. till maturity. The scheme is for 10 years and 120 equal monthly installments.

The scheme is covered by insurance. In case of death of account holder, nominee will get the amount covered by insurance and maximum insurance coverage by an initial deposit is 600000-Tk. Insurance premium will be borne by the bank except premature encashment.

Matured value

Period

Initial deposit

Monthly installment

Matured value

10 years

(120 months)

5000.00 Tk

1000.00 Tk.

200000.00 Tk

 Islamic Banking

The City Bank Ltd. is operating now Islamic banking through some branches in the city. Their preceding years profit is well. The top management always follows up rules and regulations of the Islamic banking and Bangladesh Bank.

 Achievements Awards

The bank has been awarded the Manobadikar Padak­ 2006 by the Bangladesh society for the enforcement of human rights (BSEHR) for its achievements in beautification, preservation and nurturing of various projects in the city. The City Bank achieved the strongest Bank of the country Award 2010.

 Ethical Bank Environment

The word “Environment” is a generic concept, which embraces the totality of external environmental forces, which may influence any aspect of organizational activity. It also in simple terms means the ability of a corporation to relate its operation and policies to the social environment in ways that are mutually beneficial to the company and to society. Sustainable economical, ecological and social development of own surroundings is key element of all business decision. The City Bank Ltd. promotes sustainable development to meet the needs of the present without compromising the ability of the future generations to meet their own needs. The bank always analyzes its Strength, Weakness, Opportunity, and Threats (SWOT).

The bank also maintain the responsibilities for the society in which it securers. The prime concern of the bank is to influence and to take part in different social and cultural activities. By consulting the activities of the previous years many examples of such activities can be bought into being.

 SWOT Analysis

 Strength

(a) Financial Strength

The City Bank took a strategy of quality growth by adhering to compliance in all areas of operation. Bank consolidated its position as one of the successful financial institution and maintained satisfactory growth across many of its business lines. Bank remained focused in all key areas covering capital adequacy, meeting provision for loans and advances, good asset quality, sound management, satisfactory earning and strong liquidity.

Recognizes credit rating agency CRISL on the basis of Banks performance for the year 2006 assign Bank “A” in the long term category and “ST-3” in the short term category. Bank was able to make a net profit before tax of Tk. 653 million. Deposit of the bank increased by Tk. 8924 million indicating a growth of 29%. Loans and advances, which are well diversified, have growth by 32% last year.

(b) Modern Technology for Services

Demand for modern services in the banking sector is growing faster. The services are now technology based and this bank is not for from competition. The City Bank already implemented world class financial banking software as one of the major technological initiatives in the IT infrastructure development. Ups to now, 77 branches are under this software. Another factor needs to be under consideration that City Bank is the first among domestic banks to introduce Dual Currency City Card.

(c)Corporate Social Responsibility

As one of the leading bank, the City Bank plays its responsibility towards the society and contributed donation to various educational instates Trustee organizations. The “City Bank Foundation” has been established for same intention. The foundations aim at gearing up its on ongoing and new initiatives the cause of humanity through viable social welfare.

(d)Good Corporate Governance

In the absence of any code of conduct and business principles, it is difficult to have a Self-assessment of the status of the governance. Bank has developed and adopted various operating instruction and manuals for best practices. Key Performance Indicator (KPI) has been adopted to assess the employee performance.

Bank gas adopted a unique code of conduct and ethical guidelines for the employees. Bank has given stress to the compliance of the rules, regulations and guidelines of Securities and Exchange Commission and Bangladesh Bank. The external auditors were given absolute freedom in the process of audit and to verify the compliance, risk management and preparation of accounts as per IAS and BAS norms. Credit rating agency was engaged for rating the bank every year in order to give a fair view of the investors.

Weakness

1.       Lack of Adequate Employees: Number of employees is less than the volume

of works, which creates problem for prompt service.

2.       Lack of up to date equipment’s: The City Bank Limited has lack of modern    technologies and equipment’s like online facilities, fax, cash card and credit card system.

(a)Challenges and Prospect

City Bank is a string and effective player in the financial system. Banks exposure in core business of corporate and retail sectors with wide range of products is expanding. Its strategy will remain to grow in areas of core competence and expand activities in SME and Micro Finance to the development of national economy. Further to enhance foreign exchange reserve Bank will continue their efforts in mobilization of wage earners remittances with a meaningful presence in the overseas. Side by side, the Bank remains focused on quality business and exercise best practices to achieve satisfactory growth on the upcoming years.

OPPORTUNITIES

The City Bank Ltd. can pursue a diversification strategy in expanding its current line of business.  The management can consider options of starting client service in its merchant banking division. There are several opportunities for The City Bank Ltd. to expand its product line. In this competitive environment The City Bank Ltd. must expand its product line to enhance its Sustainable Competitive Advantage (SCA). As a part of its product line proliferation, The City Bank Ltd. can concentrate more on SME & Agro based industrial loan because these two sectors have huge potential. If The City Bank Ltd. can grab this opportunity then it will be better for the bank.

The City Bank Ltd. should move towards the real time on line banking operations. It is high time that they should go for this because the foreign banks as well as some local banks are already in to the total on line banking operations.

Threats

There are a lot of competitors in banking sector of Bangladesh. So it’s a great threat for them. There are not only the conventional banks but also some other Commercial & Islamic Banks in the market as their competitors. Conventional banks are always trying to understand people that interest and dividend are the same through various seminar, symposiums and publicity.

Despite of marvelous popular support, spectacular success in terms of mobilization of deposit and distribution of profit. Small Industries Bank in Bangladesh yet to achieve the designed level of success due to the absence of appropriate legal framework. All the Government approved securities in Bangladesh are interest bearing.

 Conclusion

The City Bank Limited is one of the fastest growing banks among all the private commercial banks in Bangladesh. This bank constantly looks for ways & means to improve productivity by rendering to its customers in order to remain competitive in the market.

The City Bank Limited plays a significant role in various fields in the economy such as industry, trade & commerce, transportation, deposit mobilization etc. It is playing a crucial role in human resource development and in creating new employment opportunities. It is also undertaking various welfare activities for the betterment of the society, in this context the bank has established The City Bank Foundation.

The reliability of the customers on The City Bank Limited is increasing promptly day by day. The overall performance of The City Bank Limited solid revenue growth together with strict discipline on expenses. The bank constantly reviews its systems, policies, process and prices of its products and services with the changing marketing reality.

Recommendations

(a) Performance Evaluation

Top management of The City Bank Limited should conduct a comprehensive study or survey on the branch performance, its management performance and their motivation as well. The marketing department should think freshly about their objectives and practices. As a developing private bank The City Bank Limited should allow their client satisfied with their services.

(b) Training

From my observation, the front desk people need more training to handle people smartly. In clearing section, there are not any trained employee and work delayed with mistakes often, even there are not any specific document regarding clearing vouchers. So, training is mandatory for this department for overall benefit and smart work along with client satisfaction.

(c) Salary and Motivation

Motivation is the key to employee satisfaction and employees are satisfied productivity will increase, profit of the organization also increased rapidly with customer satisfaction. When I have worked in cash section I have seen that employees of this section gets minimal salary compared to other sections of the bank and they are not satisfied with their salary, so management should think of them.

References

1. Annual Report of The City Bank Ltd.

2. Web side of The City Bank

            www.thecitybankltd.bd

3. Different document of The City Bank

            Limited, Kawran Bazar Branch

4. Search engine: Google, Wikipedia

5. Strategic Management, Charles W. L. Hill and Gareth R. Jones, 7th Edition

6. Principle of Marketing, Philip Kotler and Gary Armstrong, 11th Edition

City Bank Ltd

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