directors' report - Dutch-Bangla Bank Limited

directors’ report
Bismillahir Rahmanir Rahim
Dear Fellow Shareholders
The Board of Directors is pleased to welcome the
honorable shareholders in the 15th Annual General
Meeting of the Bank. The Directors' Report along
with audited financial statements and auditors'
report thereon for the year ended December 31,
2010 are presented before your kind self.
In the report, DBBL's operational performance of
2010 as compared to 2009 has been evaluated and
analyzed within the prevailing business
environment. The information and analysis may be
read in conjunction with the DBBL's audited
financial statements which have been prepared in
accordance with Bangladesh Accounting Standards,
Bangladesh Financial Reporting Standards and
applicable legal and regulatory requirements.
REVIEW OF BUSINESS OPERATIONS AND
STRATEGY
Principal activities
The principal activities of DBBL are to provide all
kinds of commercial banking products and services
to the customers including project finance, working
capital finance and trade finance for corporate
customers, SME loans to small traders &
businesses; and house building loan, car loan and
wide range of life style and need based loans for
retail customers. There are various deposit products
particularly suitable for retail and institutional
customers. Off-shore Banking operation was started
in 2010. DBBL's state-of-the-art IT platform and
online banking system provide the largest ATM
network, Fast Track and POS services of the
country through which customers are getting anybranch
and anytime banking for 24 hours a day and
365 days a year. IT network also provides SMS
banking, alert banking and internet banking
services. Debit cards of MasterCard International
and DBBL's propriety cards are in operation. In
addition, international cards (VISA & MasterCard) of
different local & international banks are accepted at
DBBL's ATMs for withdrawal of money and at POS
terminals for payments of shopping, hotel and
dining bills etc. DBBL introduced EMV supported
Chip VISA Credit Cards for the first time in
Bangladesh in 2009. EMV Credit Cards of
MasterCard and EMV debit cards of MasterCard
were introduced in 2010. The EMV feature shields
DBBL customers from any kind of frauds as per the
guidelines provided by MasterCard & VISA.
Strategic plan for positioning the company for
future growth through capacity building
As part of its strategic plan, DBBL continued to
invest heavily to improve and expand IT network,
ATM services, Fast Track and card services along
with branch network, business promotion and
activities related to Social Cause. Though expenses
on such investments in 2010 apparently reduced
expected profit growth, however, these will
substantially improve our capacity to deliver
customer services with a wide range of products
and services that can be matched with the best in
the industry by strengthening IT platform,
expanding distribution channels and communication
networks and improving productivity. DBBL's
strategic objective is to have a clear competitive
advantage over its competitors to provide the full
range of banking services via multiple delivery
channels through state-of-the-art-technology at
the lowest cost.
Brand positioning
Throughout its operation for last 15 years, DBBL
has established itself as a different Bank from
others. It has differentiated itself as a leader in
technology by reaching the latest banking services
to its customers through largest ATM network in the
country at free or affordable cost. DBBL has created
an unprecedented example by providing thiunique
service at subsidized cost not only to its own
customers but also to customers of many other
banks. The service of ATM network has further
strengthened in 2010 by introducing Fast Track with
deposit kiosk to facilitate cash deposits by the
valued customers of the Bank. It has also
established itself as a Bank that cares for the
society. All the business activities of DBBL are done
in full conformity with social, ethical and
environmental standards. DBBL is the pioneer in
Social Cause programs in the country. It has been
intensifying its resources and efforts on a
continuous basis to reach the distressed & needy
people of the society to bring smile on their face
and to improve their quality of life.
Customer focus and customers' right
DBBL's performance can not be judged by just
looking at profit figures. DBBL considers that it is
the customers' right to get modern, online and full

anges of banking services at an affordable price at
anytime and anywhere. DBBL's service cost is the
lowest in the industry and in many cases services
provided through ATM and Fast Track are free.
DBBL is committed to put the customers' interest
first. In line with its central vision, DBBL is promisebound
to extend personalized services to the full
satisfaction of the customers that should be the
best in the industry.
Corporate governance ensuring best practices
DBBL complies with good corporate governance
practices in line with industry best practices and
regulatory requirements ensuring transparency,
accountability and fairness at every step of its
business operations to maximize performance with
governance. Corporate governance practices in
DBBL are set out on pages 41 to 53 of this Annual
Report.
Managing risks to ensure quality and value of assets
and uninterrupted operations
Risk management covering credit risks, operational
risks and market risks is at the heart of all business
operations and transactions of DBBL. Risk
management systems are designed and
implemented to ensure quality and value of assets,
and smooth banking operations and services in a
sustainable way to protect interest of shareholders,
depositors and all the stakeholders. Risk
management system also complies with Bangladesh
Bank's core risk management guidelines.

Progressive, healthy and safe working environment
for staff
A high quality and competent human resource is
crucial to continued growth and success of any
country which can be achieved by improving skill,
knowledge and productivity of employees.
Accordingly, how human resource is recruited,
trained, developed & motivated has far reaching
implication on long-term sustainable growth of the
Bank. Customers' perception & satisfaction
ultimately determines relative or absolute success
or failure of an organization. In turn, we need a
competent, well-trained, committed & motivated
team of human resources with positive & sincere
attitude towards customers that can build, maintain
and strengthen trust & confidence in our customers
that is crucial for our success.
A talented, committed, skilled and fully motivated
team of human resources is the main driving force
for providing better, faster and coordinated services
to the clients and for performing at the highest level
in a fiercely competitive financial market like
Bangladesh. Accordingly, the Bank's strategy is to
attract, retain and motivate the most talented
people and providing them with healthy, safe and
progressive working environment and competitive
compensation package.
HR policies are designed to long-term career growth
- unleashing the hidden potential
The Bank's HR policies are based on trust and
relationship. The Bank's policy is to look after
people who want to make a long-term career with
the Bank because trust and relationship are built
over time. Remuneration package may be an
important factor to motivate for joining a company,
but it is not the only one. The corporate culture at
DBBL as grew over last 15 years is such that the
members of the staff have ample opportunities to
take initiative and responsibilities to unleash their
hidden potential to maximize benefits for

themselves and for the society. The challenge is to
maintain a business like, committed corporate
culture that matches DBBL's mission. Achieving
results and taking responsibility are important
components of the culture we pursue, one in which
management and staff work together and are
mutually accountable.
DBBL provides challenging but rewarding career
where good values, fairness and hard work are
highly encouraged.
In case of DBBL, it is excellence of DBBL with good
values, fairness, potential for success, scope to
develop a broad interesting career etc. which
attract people to join and work with DBBL. DBBL
always encourages excellence in performance by
rewards and recognition.
Healthcare, safety standards and modern working
environment
● In order to ensure better healthcare of
employees there is a medical consultant in
the Bank where staff of DBBL can get
medical advice and treatments.
● In addition, a thorough medical checkup
facility is provided to each employee on a
yearly basis.
● Medical allowance @ 10% of basic salary is
paid to each employee which is tax-free.
● In order to provide highly sophisticated and
encouraging working environment, all the
DBBL offices including head office and
branches are equipped with modern
facilities with air-conditioning and generator
for power back up.
● All DBBL offices including head office and
branches are equipped with fire fighting
material and have multiple exit points for
emergency exit.
Staff welfare schemes in DBBL
A number of well thought out policies are in place
for welfare of employees in DBBL those are in
addition to competitive compensation package
available in the industry:
• DBBL Provident Fund,
• DBBL Superannuation Fund,
• DBBL Gratuity Fund,
• House Building Loan Scheme,
• Car Loan Scheme,
• Festival bonus,
• Performance bonus, and
• Study leave.
Career development and training program
DBBL attaches utmost importance to the
development of its employees through continuous
training so that DBBL executives can have
competitive advantage in the market. The training
need of individual employees including training
need for introducing new products, services and
technology is evaluated on a continuous and
systematic way. DBBL executives are encouraged to
attend high quality training at home and abroad to
develop and broaden existing knowledge and skills
and to acquire new skills and expertise.
We imparted training to 1,806 officers in 26
different courses during 2010. The training
programs were organized by our own training
institute. We also nominated 142 officers to
undergo 80 different training programs/courses
organized by different organizations like Bangladesh
Institute of Bank Management (BIBM), Bangladesh
Bank Training Academy (BBTA) and other similar
organizations. In addition, 9 executives were sent
abroad for attending overseas training and
workshop.
Moreover, to strive hard for winning the challenges
in a fiercely competitive market, the management
has been constantly pursuing the following areas
for professional and career development of
employees:
• To attract and retain best professionals in the
industry.
• Job evaluation, job enrichment, performance
target, performance evaluation, and performance
based compensation and incentives.
• Evaluating the training need of individual
employees including training need for introducing

new products, services and technology.
• Arranging high quality training at home and
abroad so that DBBL executives can have
competitive advantage in the market.
• Encouraging its employees to develop and
broaden existing knowledge and skills and to
acquire new skills and expertise.
• Reviewing and updating organizational structure
on a regular basis to have a structure, which can
give strong support to the strategic objectives of
the Bank.
The number of DBBL staff increased by 978 in
2010. At the end of 2010, number of staff stood at
2,763 compared to 1,785 at the end of 2009.

CONTRIBUTION TO NATIONAL ECONOMY &
NATIONAL EXCHEQUER
Contribution to national economy
Primarily our business strategies are based on
goodwill and trust of the customers and other
stakeholders. Our programs related to Social Cause
help strengthen this trust. DBBL conducts its
activities in responsible way to maximize value for
its customers, stakeholders and the economy.
Making technology affordable for masses to
facilitate seamless transaction and socio-economic
development
In DBBL, banking products and services based on
latest technology and multiple delivery channels are
aimed at faster and better customer services at the
doorsteps of customers at affordable cost. DBBL
being the most technologically advanced Bank has
established the largest ATM and Fast Track network
of the country with a huge investment which is not
at all financially rewarding. Still DBBL has taken
these initiatives as part of its Social Cause programs
to reach the benefits to the customers enabling
them to make seamless transaction 24 hours a day
across the country. At the end of 2010, such
services were provided through 96 branches, 1,100
ATMs, 50 Fast Tracks and a large number of POS
terminals spread throughout the country.
To widen and spread the benefit of the ATM and
Fast Track network DBBL is allowing customers of
other banks to use the network at nominal cost.
DBBL is committed to spread the network even
further to maximize socio-economic benefits of the
country though it is not cost-effective for the Bank.
By providing such services, DBBL is enabling the
customers to maximize their business potentials and
to fulfill their personal hopes and aspirations.
Mobilization and allocation of resources in optimum
way-extending loans to important sectors at
reasonable interest rate and charges
It is the policy of DBBL to mobilize resources from
diversified sources to make it cost effective and
sustainable to support business growth. Depositors
are offered the best technology driven products &
services available in the market to encourage them
in savings. While resources are allocated at
competitive rates preferably in most productive as
well as export-oriented sectors to maximize
economic and social development of the country.
Resources are also allocated to farmers, people
engaged in small business and trade and other
individuals to make them self reliant so that they
can fulfill their hopes and aspirations and lead a
meaningful life and contribute to social progress.
Credit-deposit ratio is contained within optimum
limits to ensure utilization of resources within
tolerable risks.
In 2010, total liability, including capital, deposit,
borrowing and others increased from Taka 81,788
million to Taka 101,182 million. Number of deposit
accounts increased from 761,120 to 1,352,870,
Loans and advances increased from Taka 48,411
million to Taka 67,658 million. Within loans, Taka
18,879.6 million was given to SME, Taka 1,535.0
million was given to retail and Taka 730.5 million
was given to agriculture sector.
Commitment to rural area and Supporting SME
DBBL has seven SME/Agriculture branch and three
SME service centers mainly in rural area to support
SMEs and to bring related low income group under
financial intermediation to help them become self
reliant and unleash the potential of economic

growth in rural areas. The branches/centers also
facilitate quick transfer of funds from home and
abroad to rural people through ATMs at free of cost.
Contribution to the national exchequer
DBBL made significant contribution to the
government in boosting its revenue collection. As
per the prevailing law of the country, the Bank
being a corporate citizen pays tax and VAT on its
own income. Besides, the Bank deducts income tax,
VAT and excise duty at source from clients,
depositors and suppliers, and deposits the same to
the national exchequer.
During the year 2010, the Bank contributed Taka
2,353.0 million to national exchequer as against
Taka 1,282.9 million in the previous year.
Social Cause
DBBL being a responsible corporate citizen of the
country has been playing a pioneering role in
implementing various social and philanthropic
programs to help disadvantaged people of the
country. Education, healthcare, human resource
development, conservation of nature, creation of
social awareness, rehabilitation of distress
humanities and such other programs to redress
human sufferings are some of the important areas
where the Bank carries out its social and
philanthropic activities.
Dutch-Bangla Bank Foundation (DBBF) was
established in 2001 for discharging dedicated
activities related to Social Cause.
In order to discharge its activities related to Social Cause programs in effective way DBBL established the Dutch-
Bangla Bank Foundation (DBBF) in 2001 in which 5% pre-tax profit of the Bank was contributed on a yearly
basis up to 2009. In addition, Bank also makes direct contribution towards highly important Social Cause
programs in the area of education, healthcare etc. DBBL contribution to Social Cause Programs was Taka 107.5
million in 2010 compared to Taka 206.0 million in 2009.
DBBL is committed to eco-friendly business
environment
DBBL complies with environmental standard while
financing industrial projects. Projects with likely
adverse impact on environment are strongly
discouraged by DBBL. We are trying to incorporate
sound environmental management process in
business operations of projects financed by us that
can ensure healthy and sustainable lives for our
future generations. DBBL introduced a guideline
demanding assessment of environmental and social
impacts of the projects to ensure that operations of
the projects would be eco-friendly.
DBBL is sponsoring social awareness programs for
protecting the environment. Environmental
degradation and depletion of natural resources are
matters of great concern in Bangladesh like
anywhere in the world. Environmental degradation
is taking place due to poverty, over population and
lack of awareness about the environment. It is
manifested by deforestation, destruction of
wetlands, depletion of soil nutrients etc. Natural
calamities like floods, cyclones and tidal bores also
result in severe socio-economic and environmental
damage. DBBL has been continuously creating
social awareness to protect the environment that is
essential for present and future generations. With
that end in view, DBBL is regularly advertising in
print and electronic media to develop an ecofriendly
society for sustainable and healthy human
life.
DEVELOPMENT IN IT INFRASTRUCTURE AND
ONLINE BANKING SERVICES
Dutch-Bangla Bank Limited owns the country's
largest ATM network comprising of 1100 ATMs at
the end of 2010. Bank's all ATMs and POS terminals
are EMV-compliant, introduced by Europay,
MasterCard and VISA jointly to protect capturing
card data. We are the first Bank in Bangladesh to
ensure such security to protect the insterest of our
valued customers. The ATM / POS network of the
DBBL accepts the following cards:
• EMV compliant chip cards of all the banks in the
world;
• Non-EMV Visa & MasterCard cards of all the banks
in the world;
• DBBL's proprietary cards (Nexus).
DBBL ATM network is accessible by many banks of
the country and abroad as well. In the month of

December, 2010 alone, the total count of Cash
withdrawal from ATMs was 230 million and the
corresponding amount of withdrawal was Taka
13.20 billion.Fast Tracks were introduced for the
first time in Bangladesh
The Bank has also, for the first time in Bangladesh,
introduced Fast Tracks (FT) in the country
comprising of several (5-10) ATMs, Deposit Kiosks
and Customer Service help desk officers to provide
uninterapted quick and faster service. The
customers have the faclity to deposit cash or
cheque, withdraw cash, pay utility bills etc at the
FT. DBBL has setup 50 FTs within 6 months of
introducing it. Bank's prospective customers can
come to these FTs to inquire about DBBL's products
and become a proud member of DBBL family just
by opening an account. The FTs can provide most
of the customer related services.
Internet Payment Gateway
DBBL again has been the first bank in the country
to have an Internet Payment Gateway. With the
help of this, any person in home or abroad can do
financial transactions using DBBL's proprietary
cards/ MasterCard/ Visa credit. They can purchase
goods and services from e-commerce web sites,
called e-merchants and pay bills online sitting at
their office or home using a card.
Introduction of Mobile Banking very soon
Even though there are many Banks in the country
spreading almost all over the country, around 87%
of the total population of Bangladesh is un-banked.
To provide the fundamental right to the un-banked
citizens of the country, DBBL is implementing a
software to launch mobile banking soon. With this
facility any person having a mobile number will be
able to use his number as a bank account. In this
mobile account they will be able to do the following:
• Cash deposit/ Withdrawal to/ from any Agent of
DBBL
• Cash withdrawal from DBBL ATMs
• Receive remittance from home and abroad
• Funds transfer to another mobile account
• Merchant Payment
• Utility bill payment, Tuition fee payment, Air time
top-up.
• Disbursement of salaries & Govt. allowances
• Balance Inquiry
The Bank is upgrading its core banking software to
Flexcube Universal Banking Solution
To serve the valued customers of the Bank, the
existing core banking software, the Flexcube has
been running since 2004. In the last few years, the
number of customers, accounts, ATMs, Point of
Sales (POS) terminals and cards has increased
enormously. To ensure better customer service, the
bank is upgrading its core banking software from its
present version to Flexcube Universal Banking
Solution (UBS) along with hardware, and the
switching software which is responsible for the ATM
& POS transactions.

DBBL Call Centre
Considering the growing number of customers, card
holders & transactions, DBBL has setup a Call
center. It is a world renowned Cisco hardwarebased
call center comprising of all the services a call
center can provide, e.g, Interactive Voice Response
(IVR) by virtue of which the customer will be able
to choose his options using the keypads of a phone
and listen to the responses related to his account or
card or transactions from the system or though live
agent. The customers can dial at 16216 from any
land or mobile phone and go to IVR or Live agent,
and get desired services.
DBBL's IT is working round the clock without any
downtime, offering its customers the enjoyment of
banking services. The banking has never been so
easy, comfortable, enjoying, yet most secure. DBBL,
like the past years is relentlessly striving every
moment to facilitate its customers with the most
advanced and secure technological environment. In
the coming days, the bank will continue its
endeavor to keep this standard high.
SME financing
Small and Medium Enterprises (SMEs) are major
contributors to GDP and generation of employment
in many countries of the world; they foster
economic growth, social stability, and contribute to
the development of a dynamic private sector. In
Bangladesh, they also play a major role for the
economic and social development by creating jobs
and generating higher earnings for low-income
people. Keeping in view the role of SMEs in our
country, the Bank has been financing to the SME
sectors since its inception. To boost up the activities
of SME banking, the Bank set up a dedicated SME
Division at the end of 2009.
Our SME business manifested a vibrant expansion
and positive output in 2010. In order to accelerate
SME and agricultural sectors, we have already 7
full-fledged SME/Agriculture branches and 3 SME
Service Centers in different important areas of the
country. The bank employed various tools and
techniques, products and policies, staff and
strategies to attract the potential entrepreneurs of
our country. We have modified and relaxed some
terms and conditions and reduced service charges
of our SME products for smooth penetration of very
competitive SME sectors in 2010.
In 2010, we took part in the initiative taken by
Bangladesh Bank in the mega "Road Show on SME
Financing, Agricultural Loan, Remittance through
Banking Channel and Anti-Money Laundering" from
Teknaf to Telulia. We have ensured active
participation in the 15th Dhaka International Trade
Fair (DITF), 2010. By participation of these Road
Show and Fair, we have presented our unique SME
products to the people of all strata and giving them
motivation as well as making them more conscious

egarding sending of remittance through banking
channel. We have informed them how to access to
financing under SME and Agricultural sector. We
have also signed a participation agreement with
Bangladesh Bank to avail Refinance under ADB fund
for accelerating SME business.
We have chalked out a numbers of cluster-wise
financial inclusion programs as thrust sectors in
order to create employment by exploring SME
potentials in Bhulta, Baburhat and Narsingdi areas.
The manufacturing segments like Weaving, Textile,
Dying and Light Engineering have been identified as
potential clusters.
DBBL has already disbursed around Taka 27,815.7
million in SME sectors consisting of 6,333 clients,
outstanding of which stood at Taka 18,879.6 million
at the end of 2010. We have targeted to disburse
about Taka 6,150.0 million in SME sectors in 2011.
A tailor-made SME product for Women
Entrepreneurs of our country will be introduced in
2011.
Retail Banking
Retail Banking is a very popular concept in all
foreign and local banks and competition in this
sector is increasing day by day. Retail Banking
Division (RBD) of DBBL commenced its operation on
March, 2006 and mainly engaged in processing &
monitoring of Retail Loan Application. DBBL aims to
serve each customer to the best of its abilities,
whether customer needs personal loan, Auto loan,
Home Loan or Foreign Education Finance: it is up to
the customer to choose according to their needs.
DBBL has developed extensive expertise in retail
banking over the last 3 years. Our professionals
assist employees in the corporate level, government
level, providing best Salary Account package to
maintain Power account with DBBL. This helps
corporate organization develop leading innovative
strategies. DBBL work side-by-side with our
corporate clients to implement successful solution,

including customer relationship management. RBD
also offers Power A/C, Power Line & Power-Plus
proposition to its salaried account holders.
DBBL has recently launched the Foreign Education
Line facility which is basically designed for the
Students who are planning to go abroad for higher
education. In coming year RBD is planning to offer
some special credit facilities to different segment of
people in the society. As of 31 December 2010,
number of DBBL Retail Loan customers stood at
8,100 and total disbursement was Taka 2,522.0
million and outstanding balance was Taka 1,535.0
million.
Key features of our Retail Banking are as
follows
● Market reputation
● Large number of Branches
● Strong alternative distribution channels.
● Wide range of retail banking products
● Centralized retail banking services
Retail Banking Division has taken following
strategies to achieve long-term sustainable
growth
● Excellent relationship with largecorporate
bodies.
● Providing better service through
expansionary distribution channels.
● Careful customer selection.
● Introducing new products and services.
● More focus on Retail Services in the
Branches.
● Developing faster communication process.
● Recruitment of contractual sales force,
introducing incentive schemes.
● Proactive risk management.
● Better customer services through
introduction of Mobile Banking services.
● Competitive pricing.
● Focusing on salaried customers.
DBBL uses competitive pricing to persuade the
clients to select certain products and services and it
helps gain market share very soon as the Bank is
strongly supported by adequate manpower, strong
IT and ATM networks, various promotional activities
as well as faster customer services. Bank uses
competitive pricing as a strategy for client
acquisition and retention.
Expansion of branches
The Bank opened 10 new branches in 2010 and
converted seven SME service centres into
SME/Agriculture branch to reach 96 branches at the
end of the year spreading the branch network
throughout the country. More branches will be
opened in 2011 to expand the branch and
distribution network. These will bring up-to-date
banking services to our existing and potential
customers. At the same time it will optimize
utilization of our strong delivery channels, increase
our resource position and business potentials that
will maximize profitability and shareholders' value.
DBBL's strategy is to reach the doorsteps of
customers to provide full range of banking services
based on state- of -the- art- technology and IT
platform at free or affordable cost.
Correspondent banking relationship
In order to facilitate international transactions
including trade facilitations and remittance services,
DBBL is having correspondent relationship and
agency arrangements with internationally reputable
major banks and other financial institutions
throughout the world. At present DBBL is having
521 correspondent relationships with international
banks covering 93 countries. In addition, we have
agency arrangements with 14 exchange houses to
facilitate remittance of expatriate Bangladeshis

working abroad. DBBL also maintains 21 nostro
accounts abroad in major currencies including eight
ACU nostro accounts in the ACU region to facilitate
international transactions. DBBL's excellent service
with competitive charges provides a good
correspondent banking solution for the valued
clients of DBBL. We are continuing our efforts to
establish relationship with more banks and
exchange houses in all important financial centers
of the world to cater to the growing needs of our
clients at home and abroad. DBBL always enjoys
excellent cooperation and business relation with all
of its correspondents due to international standard
business dealings which attracts more banks of
international standard to have relation with DBBL.
DBBL is also having 'Issuing Bank Agreement' with
ADB under their Trade Finance Facilitation Program.
This program supports a wide range of transactions,
from commodities and capital goods as well as
consumer goods.
Remittance inflow of DBBL rose from
US $ 97.90 million in 2009 to US $ 105.82 million in
2010.
REVIEW OF PERFORMANCE AND FINANCIAL
POSITION OF THE BANK
Summary
Healthy business and profit growth
DBBL registered healthy business and profit growth
in 2010 while being cautious to protect against
unforeseen business risk. The deposit of the Bank
increased by 22.8% from Taka 67,788.5 million in
2009 to Taka 83,244.8 million in 2010, loans and
advances increased by 39.8% from Taka 48,411.0
million to Taka 67,657.7 million in 2010 while
import business increased by 65.1% and export
business increased by 78.6%. Operating profit grew
by 55.7% from Taka 2,695.7 million to Taka
4,198.5 million and net profit after tax increased
from Taka 1,137.7 million to Taka 2,002.3 million
showing a growth of 76.0%.Despite lower yield on
loans and advances and higher operating cost,
higher net interest income resulting from improved
deposit mix and lower cost of fund and higher noninterest
income resulting from more value added
services contributed to notable growth in operating
profit. Net profit after tax grew at a faster rate than
operating profit mainly due to lower growth in
provisioning for loans and advances and
maintaining quality of assets. Return on equity was
35.3% in 2010 compared to 30.3% in 2009.
Higher investments in branch expansion, IT
platform, Fast Track and ATM network, card
services and human resources though contained
profit growth in 2010, however, these will increase
resource capacity, increase distribution network,
improve efficiency in operations, augment resource
flow to expand customer base and to provide much
better and faster customer services. As a result, in
the long term it will bring substantial and
sustainable benefits for the Bank.
Net interest income
During the year 2010, the net interest income of

the Bank rose by Taka 1,660.0 million or 80.3% to
Taka 3,726.8 million from Taka 2,066.8 million of
the previous year. Net interest income increased
mainly due to lower cost of fund resulting from
improved deposit mix and higher average loan
portfolio though yield on loans and advances
declined. Cost of fund declined from 6.53% in 2009
to 4.41% in 2010 while yield on loans and advances
declined from 12.96% in 2009 to 11.55% in 2010
mainly due to reduction in interest rate for market
competition and regulatory restrictions . However,
the share of net interest income to the total income
of the Bank increased to 52.1% in 2010 compared
to 42.9% of the previous year.
Investment income
During the year 2010, the investment income of the
Bank declined by Taka 55.4 million or
(-4.2%) to Taka 1,278.8 million from Taka 1,334.2
million of the previous year. Investment income
decreased mainly due to lower yield in 2010.
Non-interest income
The non-interest income consists of the
commission, exchange and other operating income
of the Bank. Total non-interest income of DBBL
increased by Taka 735.9 million or 51.9% in 2010
over the previous year. Commission and exchange
income increased by Taka 282.1 million or 32.8%
during the year 2010. Notable growth was achieved
in other operating income which grew by Taka
453.8 million to Taka 1,010.9 million in 2010 from
Taka 557.1 million in 2009 a rise by 81.4%. Other
operating income increased due to growing value
added services provided by online banking network
of the Bank.
Total operating expenses
Total operating expenses of the Bank during the
year grew by Taka 837.8 million or 39.5%. Higher
operating expenses were necessary to support the
overall business and profit growth of the Bank
during the year 2010. Increased expenses were
required to support capacity building and expansion
of distribution network and multiple delivery
channels. Ten (10) new branches were opened in
2010 and seven (7) SME service centers were
converted into SME/Agriculture branches in
2010.Four hundred (400) ATM units and fifty (50)
new Fast Tracks were installed in 2010. Recruitment
of new personnel, maintenance and upgradation of
IT network including ATM and Fast Track,
expansion of branch network, and introduction of
new products for SME and retail customers are
attributable to higher operating expenses.
However, because operating expenses grew at a
slower rate than operating income, the Bank's cost
to income ratio significantly improved to 41.4% in
2010 from 44.1% of the previous year
Provision for loans & advances and off-balance
sheet exposures
Total provision for loans & advances and offbalance
sheet exposures increased by Taka 35.4
million or 8.3% during the year. The specific
provision against loans decreased by Taka 237.2
million (-85.7%) though total loans & advances
grew by 39.8% during the year 2010 maintaining
quality of assets. Close monitoring and supervision
of the good and particularly non-performing loans
improved overall quality of loan portfolio requiring
lower provision. The general provision for
unclassified loans and off-balance sheet exposures
increased by Taka 272.6 million to Taka 422.8
million from Taka 150.2 million of the preceding
year due to higher outstanding balance of loans and
off-balance sheet exposures.

Profit before taxes
During the year 2010, profit before taxes of the Bank increased by Taka 1,584.6 million or 73.6% to Taka
3,739.0 million from the previous year's amount of Taka 2,154.4 million. This increase was mainly attributed to
higher operating profit comprising both net-interest income and non-interest income which grew at a faster rate
than operating expenses.
Provision for taxation
As per Income Tax Ordinance, 1984, an amount of Taka 1,709.5 million has been charged as provision for
current tax commensurate with the Bank's profit compared to Taka 1,141.7 million of 2009. However, Taka 27.3
million has been charged as deferred tax expenses as compared to Taka 125.1 million as deferred tax income
for the year 2009. The effective tax rate marginally decreased to 46.4% from 47.2% of 2009 against nominal
rate of 42.5%.
Net profit after taxation
The net profit after taxation grew by Taka 864.6 million to Taka 2,002.3 million from Taka 1,137.7 million of the
preceding year marking a growth of 76.0%. The growth in after tax profit contributed to higher Tier 1 capital as
well as total capital adequacy ratio of the Bank strengthening the capital base of the Bank.

Cash in hand and balances with Bangladesh Bank
and its agent bank(s) (including foreign currencies)
As at 31 December 2010, cash in hand and
balances with Bangladesh Bank and its agent banks
(including foreign currencies) stood at Taka
10,019.7 million as against Taka 6,653.9 million of
2009 registering a growth by Taka 3,365.8 million
or 50.6%. The increased cash was required to
provide uninterrupted cash services to our growing
customers through multiple delivery channels.
Online transaction facilities with 96 branches, 1,100
units of ATMs, 50 Fast Tracks and growing number
of account holders substantially increased cash
requirement in branches and ATMs. Substantial
growth in deposits and the increase of CRR by
0.50% at the end of 2010 by Bangladesh Bank
required higher balance with Bangladesh Bank to
maintain the increased CRR.
Balance with other banks and financial institutions
The Treasury Division of the Bank has to maintain
some special notice deposits (SND) accounts and
current deposits (CD) accounts with other banks
and financial institutions in and outside the country
for smooth functioning of treasury operations and
trade finance. A portion of the excess fund, if any,
after meeting the requirement to finance loan
portfolio and investments including SLR is placed
with other banks and financial institutions as term
deposits for optimizing the profit of the Bank. As at
31 December 2010, balance outstanding with other
banks and financial institutions substantially
decreased to Taka 2,695.8 million from Taka
10,213.8 million at the end of 2009 for higher
utilization of funds in loan portfolio.
Money at call and short notice
Money at call and short notice stood at Taka
1,400.0 million at the end of 2010 compared to
Taka 820.0 million at the end of 2009. The average
yield on fund placement at call and short notice of
the Bank was 6.61% for 2010 as against 8.06% for
2009. Short term excess fund is placed in money
market to augment the return on fund.
Investments
The Bank's investments stood at Taka 11,001.6
million at the end of 2010 that was higher by
13.6% from Taka 9,685.9 million of 2009. The
investments mainly included Government securities
for Taka 9,738.6 million (88.5% of total
investments) maintained mainly to cover SLR
requirement. In addition, investments were planned
in a way to provide sufficient liquidity and flexibility
in treasury operations and to boost the income from
investments as well as the total profitability of the
Bank.
Treasury team of the Bank was very much watchful
to manage market risk & uncertainty and ensure
maximum return from investments in security,
bonds, term deposits and call money market though
there was higher level of liquidity prevailing in the
market until before last quarter of 2010. The Bank
was able to maintain cash reserve requirement
(CRR) and statutory liquidity ratio (SLR) successfully
throughout the year though the money market
witnessed acute liquidity crisis in December 2010 to
meet the increased CRR by 0.50% required by
Bangladesh Bank with effect from 15 December
2010.
Loans and advances
Loans and advances of the Bank stood at Taka
67,657.7 million at the end of 2010, a growth of
39.8% over Taka 48,411.0 million in 2009. The
Bank continued to diversify its portfolio in 2010 to
have a diversified client base and portfolio
distributed across the sectors to reduce client
specific and industry specific concentration and to
reduce overall portfolio risk. Considering future
market direction and to capitalize on our robust IT
platform and the strongest ATM network, a number
of retail and SME loan products aimed at specific
target groups were launched in 2010 to augment
fee income and improve yield and spread on total
loan portfolio. At the end of 2010, DBBL's total
outstanding loans to SME stood at Taka 18,879.6
million compared to Taka 9,694.8 million of 2009.
At the end of 2010, DBBL's total outstanding retail
portfolio stood at Taka 1,535.0 million compared to
Taka 1,229.3 million of 2009.
Weighted average rate of return on total loans and
advances decreased to 11.55% in 2010 from
12.96% in 2009.Classified loans as a percentage of
total loan portfolio remained unchanged at 2.46%
at the end of 2010. However, full provision was
made against classified loans. Serious efforts are
being continued to bring down the amount and
percentage of classified loan further by exploring all
options including legal actions and out of court
settlements depending on the merit of the cases.

Total liabilities
The Bank's liabilities (except shareholders' equity) as at 31 December 2010 increased to Taka 94,180.6 million
compared to Taka 77,436.6 million at the end of 2009 showing a growth of 21.6%
Deposit is the biggest component of liabilities which increased to 88.4% of the total liabilities from 87.5% in
2009.

Deposits
The deposits grew by Taka 15,456.2 million in 2010 from Taka 67,788.5 million to Taka 83,244.8 million
showing a growth of 22.8%. The growth was supported by expansion of branch network and opening of new
ATM units and Fast Tracks at different business hubs of the country. Deposit mix improved substantially in 2010.
Online banking with expanded ATM network and tailor-made customer services helped increase confidence of
customers in DBBL. As a result, number of savings and current accounts as well as amount of deposits increased
substantially. The share of cost free or low cost deposits increased to 69.0% of total deposits in 2010 (63.6% in
2009), as a result weighted average cost of fund declined to 4.41% in 2010 from 6.53% in 2009.
The savings deposits of the Bank increased by Taka 8,685.7 million to Taka 31,030.0 million from Taka 22,344.4
million of the preceding year showing a significant growth of 38.9%. The share of high cost fixed deposits came
down to 31.0% of total deposits in 2010 from 36.4% of the preceding year though the absolute amount of fixed
deposits increased by Taka 1,179.7 million.

Borrowing from other banks, financial institutions
and agents
Borrowing from other banks, financial institutions
and agents including overnight borrowing stood at
Taka 1,864.9 million at the end of 2010 compared
to Taka 2,511.5 million at the end of 2009.
The Bank's borrowing includes borrowing against
refinance from Bangladesh Bank for financing under
housing scheme and financing to the power sector
under Investment Promotion and Financing Facility
(IPFF). Besides, the Bank has been availing credit
line facilities from the Rupantarita Prakritik Gas
Company Limited (RPGCL) for financing CNG buses/
chassis under Dhaka Clean Fuel project and credit
lines from Netherlands Development Finance
Company (FMO), The Netherlands.
In order to support some of the preferred sectors of
the economy, DBBL has extended soft term credit
facilities financed by Netherlands Development
Finance Company (FMO) as follows:
● Under a foreign currency loan for US$ 8.75
million from Netherlands Development
Finance Company (FMO), DBBL is providing
credit lines to export oriented RMG units at
an interest rate of 11.85 percent p.a. for
procurement of capital machinery.

● To develop small-scale entrepreneur, a long
term local currency loan equivalent to EURO
5.0 million was also arranged from
Netherlands Development Finance Company
(FMO) to finance small-scale enterprises
engaged in manufacturing, agriculture,
transport, tourism and productive trade &
commerce and service industries. The loan
amount was increased to EURO 7.5 million
to include residential housing finance only
for fixed income group.
Subordinated debt
The total amount of Subordinated loans stood at
Taka 1,416.3 million at the end of 2010.
Subordinated loans have been arranged from FMO
for financing housing sector of the country and to
strengthen the Tier 2 capital as well as total capital
of the Bank. Subordinated loans are eligible as Tier
2 capital of the Bank subject to the regulatory limit
of maximum 30% of Tier 1 capital. All the
subordinated loans were restructured in 2010 in line
with Bangladesh Bank requirement under Basel II.
Shareholders' equity
As at 31 December 2010, DBBL's shareholders'
equity increased to Taka 7,001.0 million from Taka
4,351.8 million of 2009 registering an increase by
Taka 2,649.2 million (60.9%). The increase resulted
from Taka 2,002.3 million after tax profit, Taka 41.4
million reserves against HFT and HTM securities and
Taka 605.5 million against assets revaluation
reserves. After issuing bonus shares @ 1:0.33, paid
up share capital of the Bank increased by Taka
500.0 million and stood at Taka 2,000.0 million at
the end of 2010. The statutory reserve increased to
Taka 2,748.4 million at the end of 2010 from Taka
2,000.0 million of 2009. The paid up share capital
and the statutory reserve together stood at Taka
4,748.4 million as at 31 December 2010. As per
Bangladesh Bank regulation, paid up share capital
and statutory reserve should be increased to at
least Taka 4,000.0 million latest by 11 August 2011
of which paid up share capital should be minimum
Taka 2,000.0 million. DBBL has met the
requirement much earlier before the deadline.
Capital management plan and capital adequacy
ratio
As per Bangladesh Bank guidelines in determining
the capital adequacy ratio (CAR) and minimum
capital requirement (MCR) for banks, Basel II
guidelines came into force with effect from 1
January 2010.
The capital adequacy ratio of DBBL stood at 9.64%
under Basel II at the end of 2010 as against 6.78%
of the previous year. Tier 1 capital increased to
Taka 6,051.2 million being 6.39% total risk
weighted assets (RWA) and supplementary capital
(Tier 2 capital) increased to Taka 3,074.7 million
being 3.25% of RWA.

REVIEW OF OFF-BALANCE SHEET EXPOSURES AS
AT 31 DECEBER 2010
Total outstanding amount of off-balance sheet
exposures of the Bank stood at Taka 46,497.8
million at the end of 2010 from Taka 26,262.8
million of 2009 registering a growth of 77.0%.
The letters of credit outstanding stood at Taka
20,251.7 million at the end of 2010 from Taka
15,816.4 million of 2009 registering a growth of
28.0%. The outstanding letters of guarantee
increased to Taka 4,045.3 million from Taka 3,025.1
million showing a growth of 33.7% in 2010.
Import-Export business and remittance
During the year under review, import business of
DBBL recorded growth of 65.1% (20.7% in 2009)
while export trade grew by 78.6% (2.7% in 2009).
Future Outlook for 2011
In the business plan and budget for 2011, deposits
are projected to grow by 32.1% to Taka 110,000.0
million and loans are projected to increase by
34.5% to Taka 91,000.0 million. Import and export
businesses are expected to rise by 71.1% to Taka
150,000.0 million and 104.1% to Taka 150,000.0
million respectively. With improved deposit mix ,
better quality of assets as well as growing nonfunded
business particularly those related to value
added online services, healthy growth in operating
profit and after tax profit is expected in 2011.
The above growth will be supported by introduction
of Mobile Banking services, expansion of branches
& ATM network and upgradation of IT and online
banking system to provide better and faster
customer services. Human resources will be
strengthened to improve operational efficiency and
productivity. A number of new products and
services particularly in SME and retail segments will
be introduced to provide wider choice to the
customers.

Sustainable dividend policy to ensure growth and
maximize share value
DBBL's dividend policy is designed in a way to ensure
sustainable growth of the Bank with strong capital
adequacy ratio which must maximize value for
shareholders. DBBL paid 33.33% stock dividend in 2009.
Election of the Directors
In terms of Article 113 of the Articles of Association of the
Company, at every Ordinary General Meeting, one-third
of the Directors for the time being or if their number is
not three or multiple of three, then the number nearest to
one-third shall retire from the office. Accordingly, as per
Article 114, Dr. Irshad Kamal Khan, Independent Director,
Dr. Syed Fakhrul Ameen & Mr. Chowdhury M. Ashraf
Hossain, Directors from the Depositors will retire by
rotation and they are eligible for re-election. Therefore,
they offered themselves for re-election.
In terms of Article 108 of the Articles of Association, Mrs.
Frey-Tang Yuen Mei, Barbara (nominated by M/s. Ecotrim
Hong Kong Limited) was appointed by the Board since
last Annual General Meeting held on March 25, 2010. Mrs.
Frey-Tang Yuen Mei, Barbara appointed since last Annual
General Meeting will retire from the office of the director
in this Annual General Meeting and she is eligible for reelection.
Accordingly, she offered herself for re-election.
Meetings of the Directors
Eight (08) Meetings of the Board of Directors and fifty
one (51) meetings of the Executive Committee of the
Board were held during the year under review. The Audit
Committee of the Board also held eight (08) meetings
during the year under review.
Appointment of Auditors
Our existing Auditors M/s. A. Qasem & Co., Chartered
Accountants (A Cooperating firm of
PricewaterhouseCoopers) has completed audit of 2010 as
first year of their audit and as per Bangladesh Bank's
BRPD Circular Letter No.12 dated July 11, 2001, they are
eligible for re- appointment. Accordingly, they have
expressed their willingness to continue as auditors for the
year 2011. The auditors will be appointed and their
remuneration will be fixed for the year 2011 by the
honorable shareholders in this Annual General Meeting.
Gratitude
The members of the Board of Directors of DBBL would
like to express their gratitude to all shareholders, valued
clients, patrons, all employees and well-wishers for their
continued support and cooperation, without which the
Bank would not be able to achieve its present amazing
position. We are also indebted to the Government of
Bangladesh, Bangladesh Bank, Securities and Exchange
Commission, Office of the Registrar of Joint Stock
Companies and Firms, the Stock Exchanges for their
continued support and co-operation.
We look forward for your continuous support and best
wishes for meeting the challenges that await us in days to
come.
With best regards
On behalf of the Board of Directors
Zahid Hossain Khan
Chairman