Background: Dutch-Bangla Bank Limited (the Bank, DBBL) is a scheduled joint venture commercial bank between local Bangladeshi

parties spearheaded by M Sahabuddin Ahmed (Founder & Chairman) and the Dutch company FMO. DBBL was established under the Bank Companies Act 1991 and incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. DBBL commenced formal operation from June 3, 1996. The Bank is listed with the Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. DBBL is most widely recognized for its donations to social causes and its IT investment (largest ATM network). However it has recently stated that it will stop expansion on its ATM network as the current numbers have exceeded demand and hence diminishing returns (if any). Although it is widely believed it is a loss-making/subsidized unit which DBBL rationalizes as quasi CSR. Profile: Dutch-Bangla Bank Limited Type-Private (Non-Government), (DSE DUTCHBANGLA) Industry-Banking Founded-Dhaka, Bangladesh (1995) Headquarters-Dhaka, Bangladesh Key people-M Sahabuddin Ahmed -Founder & Chairman Products-Banking services, ATM services, Consumer Banking Corporate Banking Investment Banking Employees-1600

Capital Management: The bank is committed to maintain a strong capital base to support business growth, comply with all regulatory requirements, and obtain good credit rating and CAMELS rating and to have a cushion to absorb any unforeseen shock arising from credit, operational and market risks.

Tools and Technique: Increased capital requirement for sustainable business growth. Keeping sufficient cushion to absorb unforeseen shock or stress. Cost effective options for raising Tier 1 and Tier 2 capital. Improving credit rating and CAMELS rating of the bank. Meeting regulatory requirements. Meeting covenants of lenders. The board is responsible to ensure capital management within a broad framework of risk management. The bank has been perusing a dividend policy that must ensure satisfactory return for shareholders as well as sustainable growth of the bank with strong capital adequacy ratio to protect greater interest of depositors and shareholders.

Tier 1 capital

Item Paid up Share Capital share premium statutory reserve dividend equalization reserve share capital retained earnings

Taka 1000000000 11067500 1197524880 25266875 500000000 177329775

Total

2911189030

Tier 2 Capital

Item Subordinated debt Asset Revaluation Reserve Revaluation Reserve of HTM securities

Taka 1423007500 244900889 64502264

Total

1732410653

Risk Weighted Asset

Item Loans and advances (41016622637* 100%) Balance with other bank (1901459632* 20%) Money at call and short notice (2500000000*50%)

Taka 41016622637 380291926 1250000000

Total

42646914563

Tier 1 CAR = T1RWA

T1RWA

291118903042646914563

= 0.0682625943712635

= 6. 823%

Tier 2 CAR = T2RWA

173241065342646914563

= 0.0406221803089835

= 4.06%
CAR = T1+T2RWA

= 2911189030+173241065342646914563

= 0.108884774680247

= 10.88%