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Citibank, N.A. Bangladesh Branches (Offshore Banking Unit)
Report and financial Statements as at and forthe year ended 31 December 2017
INDEPENDENT AUDITOR’S REPORT TO THE MANAGEMENT OF CITIBANK, N.A. BANGLADESH BRANCHES
Offshore Banking Unit
We have audited the accompanying financial statements of the Offshore Banking Unit (“the Unit”) of the Citibank, N.A., Bangladesh Branches (the “Bank”) which comprise the balance sheet as at 31 December 2017 and profit and loss account, cash flow statement and statement of changes in equity for the year then ended, and a summary of significant accounting policies, other explanatory notes and annexure thereto. Management Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements of the Unit that give a true and fair view in accordance with Bangladesh Financial Reporting Standards (BFRS) as explained in Note 2.1 and for such internal control as management determines is necessary to enable the preparation of financial statements of the Unit that are free from material misstatement, whether due to fraud or error. The Bank Company Act, 1991 and the local central bank (Bangladesh Bank) Regulations require the Management to ensure effective internal audit, internal control and risk management functions of the Unit. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements of the Unit give a true and fair view of the financial position of the Unit as at 31 December 2017, and of its financial performance and cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRS) as explained in Note 2.1.
Report on Other Legal and Regulatory RequirementsIn accordance with the Companies Act 1994, the Bank Company Act 1991 and the rules and regulations issued by Bangladesh Bank, we also report that:
(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof;
(ii) to the extent noted during the course of our audit work performed on the basis stated under the Auditor’s Responsibility
section in forming the above opinion on the financial statements of the Unit and considering the reports of the Management to Bangladesh Bank on anti-fraud internal controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the Financial Statements and Internal Control:
(a) internal audit, internal control and risk management arrangements of the disclosed in the financial statements
appeared to be materially adequate;
(b) nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or anything detrimental committed by employees of the Unit during the year ended 31 December 2017;
(iii) in our opinion, proper books of account as required by law have been kept by the Unit so far as it appeared from our examination of those books and proper returns adequate for the purpose of our audit have been received from branches not visited by us;
(iv) the balance sheet and profit and loss account of the Unit together with the annexed notes dealt with by the report are in agreement with the books of account and returns;
(v) the expenditures incurred was for the purpose of the Unit’s business;
(vi) the financial statements of the Unit have been drawn up in conformity with prevailing rules, regulations and accounting standards as well as related guidance issued by Bangladesh Bank;
(vii) adequate provisions have been made against classified loans and advances;
(viii) the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements;
(ix) the information and explanations required by us have been received and found satisfactory; and
(x) we have reviewed over 80% of the risk weighted assets of the Unit and spending over 250 person hours
Hoda Vasi Chowdhury & CoChartered Accountants
Dhaka, 22 February 2018
S. H. Aslam HabibChief Financial Officer, Bangladesh
As per our report of same date.
Auditor
Hoda Vasi Chowdhury & CoDhaka, 22 February 2018
N. RajashekaranManaging Director and
Citi Country Officer, Bangladesh
AuditorHoda Vasi Chowdhury & Co
N. Rajashekaran
Managing Director and
Citi Country Officer, Bangladesh
S. H. Aslam Habib
Chief Financial Officer, Bangladesh
As per our report of same date.
Dhaka, 22 February 2018
Citibank, N.A.
8 Gulshan Avenue, Gulshan - 1, Dhaka 1212, Bangladesh
A company incorporated in the USA with limited liabilities.
© 2018 Citigroup Inc. All rights reserved. Citi, Citi and arc Design are service and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.
Page 8 of 11
Balance Sheet as at 31 December 2017
Notes
4
5
6
7
8
9
10
11
12
13.1
13.2
13.3
Property and assets
Cash (including foreign currencies) Cash in hand Balance with Bangladesh Bank and its agent bank (s)
Balance with other banks and financial institutions Inside Bangladesh Outside Bangladesh
Money at call and short notice Investments Government securities Others Loans and advances Loans, cash credits and overdrafts Bills purchased and discounted
Fixed assets including premises, furniture and fixtures Other assets Non banking assets Total assets Liabilities and capital
Liabilities Borrowings from other banks, financial institutions and agents Deposits and other accounts Current and other accounts, etc. Bills payable Savings bank deposits Fixed deposits Bearer certificates of deposits Other deposits
Other liabilities
Total liabilities
Equity Fund deposited with Bangladesh Bank as capital Other reserve Profit and loss account Total equity Total liabilities and equity Off balance sheet items Contingent liabilities Acceptances and endorsements Letters of guarantee Irrevocable letters of credit Bills for collection Other contingent liabilities Other commitments Documentary credits and short term trade - related transactions Forward assets purchased and forward deposits placed
Undrawn note issuance and revolving underwriting facilities Undrawn formal standby facilities, credit lines and other commitments Total off-balance sheet items including contingent liabilities
- - -
- 18,291,703 18,291,703
-
- - -
10,636,348
36,969,786
47,606,134
51,369
30,738
- 65,979,944
56,953,855
2,886,851
- - - -
-
2,886,851
1,726,473
61,567,179
-
- 4,412,765 4,412,765
65,979,944
1,120,756 -
2,818,042 - -
3,938,798
-
-
-
- -
3,938,798
- - -
-
1,512,723,883 1,512,723,883
-
- - -
879,625,937
3,057,401,315
3,937,027,252
4,248,249
2,542,047
- 5,456,541,431
4,710,083,809
238,742,578
- - - -
- 238,742,578
142,779,337
5,091,605,724
-
-
364,935,707 364,935,707
5,456,541,431
92,686,504
- 233,052,081
- -
325,738,585
-
-
-
- -
325,738,585
- - -
- 7,085,406 7,085,406
-
- - -
14,324,042
28,327,183
42,651,225
76,338
15,882
- 49,828,851
42,245,550
2,882,751
- - - -
-
2,882,751
1,604,165
46,732,466
-
- 3,096,385 3,096,385 49,828,851
556,853
- 1,757,082
- -
2,313,935
-
-
-
- -
2,313,935
- - -
-
557,621,439 557,621,439
-
- - -
1,127,302,137
2,229,349,273
3,356,651,410
6,007,774
1,249,910
- 3,921,530,533
3,324,724,785
226,872,502
- - - -
-
226,872,502
126,247,812
3,677,845,099
-
- 243,685,434 243,685,434
3,921,530,533
43,824,365
- 138,282,350
- -
182,106,715
-
-
-
- -
182,106,715
2017
USD Taka
2016
USD Taka
The annexed notes 1 to 24 and annexures A to C form an integral part of these financial statements.
Profit and Loss Account for the year ended 31 December 2017
2017
USD Taka
2016
USD Taka
2,008,574 482,190
1,526,384
-
782,156
(606)
2,307,934
110,659 4,483
458 37
50
25,172
6,822
147,681
2,160,253
-
102,408
(25,980)
76,428 2,236,681
(925,789)
5,488 (920,301)
1,316,380
-
166,109,070 39,877,113
126,231,957
- 64,684,300
(50,116)
190,866,141
9,151,499 370,744
37,877 3,060
4,135
2,081,724
564,148
12,213,187
178,652,954
-
8,469,180
(2,148,575)
6,320,605 184,973,559
(76,562,750) 453,858
(76,108,892)
108,864,667
-
1,411,777 169,291
1,242,486
- 501,168
-
1,743,654
95,388 14,773
117 1,306
2,039
40,551
18,152
172,326
1,571,328
-
(227,508)
12,869
(214,639) 1,356,689
(662,105) 9,058
(653,047)
703,642
-
111,106,844 13,323,236
97,783,608
-
39,441,924
-
137,225,532
7,507,022 1,162,659
9,239 102,774
160,454
3,191,359
1,428,541
13,562,048
123,663,484
-
(17,904,863)
1,012,751
(16,892,112) 106,771,372
(52,107,638) 712,874
(51,394,764)
55,376,608
-
Interest income Interest paid on deposits and borrowings Net interest income
Income from investment Commission, exchange and brokerage Other operating income
Total operating income
Salaries and allowances Rent, taxes, insurance, electricity, etc. Legal expenses Postage, stamps, telephone, telex, etc. Stationary, Printing, advertisement, etc. Depreciation & repair-maintenance Other expenses Total operating expenses
Profit before provisions
Provision for loans and advancesSpecific provision for classified loans and advancesGeneral provision for unclassified loans and advances General provision for off balance sheet exposures
Total provisions Total Income before tax
Provisions for income tax: Current tax Deferred tax
Net profit after tax
Appropriations
15 16
17
18
Cash flow statement for the year ended 31 December 2017
A.
B.
C.
D.
E.
F.
G.
Cash flows from operating activitiesInterest receipts in cashInterest paymentsDividend receiptsFee and commission receipts in cash Recoveries of loans previously written offCash payments to employeesCash payment to suppliersIncome taxes paidIncome from trading securityCash paid for other operating activitiesOperating profit before changes in operating assets and liabilities
(Increase)/decrease in operating assets and liabilitiesStatutory depositsSale of trading securitiesLoans and advances to other banksLoans and advances to customersOther assetsDeposits from other banksDeposits from customersBorrowing from other banks and financial institutionsTrading liabilitiesOther liabilities
Net cash flow from operating activities
Cash flows from investing activitiesProceeds from sale of securitiesPayment for purchase of securitiesPurchase of fixed assetsProceeds from sale of assetsNet cash flow from investing activities
Cash flows from financing activitiesProfit remitted to head officeNet cash flow from financing activities
Net increase/(decrease) in cash and cash equivalents (A+B+C)
Cash and cash equivalents at the beginning of the year
Effect of difference in conversion rate
Cash and cash equivalents at the end of the year (D+E+F)
2017
USD Taka
2,042,698 (478,008)
-
782,156 -
(110,659) (6,225)
(693,353) -
(9,926)
1,526,683
- - -
(4,989,032) (14,857)
- 4,100
14,708,305
- (32,394)
9,676,122
11,202,805
-
-
- 3,492 3,492
- -
11,206,297
7,085,406
-
18,291,703
168,931,125 (39,531,251)
-
64,684,301 -
(9,151,499)
(514,841) (57,340,293)
-
(820,894)
126,256,648
- - -
(412,592,946) (1,228,643)
- 339,071
1,216,376,824
- (2,678,984)
800,215,322
926,471,970
-
-
- 288,767 288,767
- -
926,760,737
557,621,439
28,341,707
1,512,723,883
1,621,796 (197,350)
-
501,168 -
(95,388) (31,868)
(514,922) -
(18,144)
1,265,292
- - -
(9,298,962)(2,266)
- (627,899)
3,866,663
- 99,092
(5,963,372)
(4,698,080)
-
-
(2,943) -
(2,943)
(842,939) (842,939)
(5,543,962)
12,629,368
-
7,085,406
127,635,345 (15,531,457)
-
39,441,923 -
(7,507,022) (2,508,012)
(40,524,361) -
(1,427,926)
99,578,490
- - -
(731,828,309) (178,304)
- (49,415,635)
304,306,339
- 7,798,540
(469,317,369)
(369,738,879)
-
-
(231,618) -
(231,618)
(66,339,347) (66,339,347)
(436,309,844)
991,405,393
2,525,890
557,621,439
2016
USD Taka
Notes
19
Background Citibank, N.A. Bangladesh Branches (the "Bank") commenced its banking operations in Dhaka, Bangladesh on 24 June 1995 after obtaining licence from Bangladesh Bank dated 26 January 1995. Citigroup Inc. (formed from the merger of Citicorp Inc. and Travelers Group Inc. on 8 October 1998) a holding company under the law of United States of America, is the sole shareholder of Citibank, N.A. The Bank started its Offshore Banking Unit ("OBU"/the "Unit") on 26 April 2006.
Nature of business The OBU is engaged in offshore banking under a licence granted by Bangladesh Bank. The Unit provides off-shore banking services to Dhaka and Chittagong EPZ customers.
Basis of preparation
Statement of compliance
The financial statements of the Bank are prepared in accordance with Bangladesh Financial Reporting Standards (BFRS) and the requirements of the Bank Company (amendment) Act, 2013, the rules and regulations issued by Bangladesh Bank and the Companies Act 1994. In case any requirement of the Bank Company (amendment) Act, 2013, and provisions and circulars issued by Bangladesh Bank differ with those of BFRS, the requirements of the Bank Company (amendment) Act, 2013, and provisions and circulars issued by Bangladesh Bank shall prevail. Material departures from the requirements of BFRS are as follows:
Provisions on loans and advances BFRS: As per BAS 39 an entity should start the impairment assessment by considering whether objective evidence of impairment exists for financial assets that are individually significant. For financial assets that are not individually significant, the assessment can be performed on an individual or collective (portfolio) basis. Bangladesh Bank: As per BRPD circular No.16 (18 November 2014), BRPD circular No.14 (23 September 2012), BRPD circular No. 19 (27 December 2012) and BRPD circular No. 05 (29 May 2013) a general provision at 0.25% to 5% under different categories of unclassified loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also provision for sub-standard loans, doubtful loans and bad losses has to be provided at 5%, 20%, 50% and 100% respectively for loans and advances depending on time past due. Again as per BRPD circular no. 10 dated 18 September 2007 and BRPD circular no. 14 dated 23 September 2012 , a general provision at 1% is required to be provided for all off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by BAS 39.
Other comprehensive incomeBFRS: As per BAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of Other Comprehensive Income are to be included in a single Other Comprehen-sive Income Statement. Bangladesh Bank: Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to be included in a single (OCI) statement. As such the Bank does not prepare an OCI statement. However elements of OCI, if any, are shown in the statements of changes in equity.
Financial instruments – presentation and disclosure In several cases Bangladesh Bank guidelines categorise, recognise, measure and present financial instruments differently from those prescribed in BAS 39. As such some disclosure and presentation requirements of BFRS 7 and BAS 32 cannot be made in the financial statements.
Financial guaranteesBFRS: As per BAS 39, financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognised initially at their fair value, and the initial fair value is amortised over the life of the financial guarantee. The financial guarantee liability is subsequently carried at the higher of this amortised amount and the present value of any expected payment when a payment under the guarantee has become probable. Financial guarantees are included within other liabilities.
Bangladesh Bank: As per BRPD 14, financial guarantees such as letter of credit, letter of guarantee will be treated as off-balance sheet items. No liability is recognised for the guarantee except the cash margin.
1.
1.1
2
2.1
i)
ii)
iii)
iv)
Statement of Changes in Equity for the year ended 31 December 2017
Other reserve Profit and loss accountParticulars
Balance as at 1 January 2016
Net profit for the year
Profit remitted to Head Office
Adjustment for difference in conversion rate
Balance as at 31 December 2016
Net profit for the year
Adjustment for difference in conversion rate
Profit remitted to Head Office
Balance as at 31 December 2017
Fund deposited with
Bangladesh Bank
USD
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Taka USD
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Taka USD
3,235,682
703,642
(842,939)
-
3,096,385
1,316,380
-
-
4,412,765
254,648,173
55,376,608
(66,339,347)
-
243,685,434
108,864,667
12,385,606
-
364,935,707
Taka
Total
USD
3,235,682
703,642
(842,939)
-
3,096,385
1,316,380
-
-
4,412,765
254,648,173
55,376,608
(66,339,347)
-
243,685,434
108,864,667
12,385,606
-
364,935,707
Taka
Notes to the financial statements for the year ended 31 December 2017
The annexed notes 1 to 24 and annexures A to C form an integral part of these financial statements.
Citibank, N.A. Bangladesh Branches (Offshore Banking Unit)
Financial Statements as at and forthe year ended 31 December 2017
Cash and cash equivalentBFRS: Cash and cash equivalent items should be reported as cash item as per BAS 7.
Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, treasury bills, Bangladesh Bank bills and prize bond are not shown as cash and cash equivalents. Money at call and on short notice are presented on the face of the balance sheet, and treasury bills, prize bonds are shown in investments.
Non-banking assetsBFRS: No indication of non-banking asset is found in any BFRS. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, there must exist a face item named non-banking asset.
Cash flow statement BFRS: Cash flow statement can be prepared either in direct method or in indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, cash flow is the mixture of direct and indirect methods.
Off-balance sheet items BFRS: There is no concept of off-balance sheet items in any BFRS; hence there is no requirement for disclosure of off-balance sheet items. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, off-balance sheet items (e.g. L/C, L/G, etc.) must be disclosed separately on the face of balance sheet.
Disclosure of appropriation of profit
BFRS: There is no requirement to show appropriation of profit in the face of statement of comprehensive income. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, an appropriation of profit should be disclosed in the face of profit and loss account.
Loans and advance net of provision BFRS: Loans and advances should be presented net of provisions. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances.
Presentation of Intangible Assets
BFRS: An intangible asset must be identified and recognised, and the disclosure must be given as per BAS 38.
Bangladesh Bank: There is no regulation for intangible assets in BRPD 14. Recognition of interest in suspense
BFRS: Loans and advances to customers are generally classified as "loans and advances" as per BAS 39 and interest income is recognised through interest rate method over the life of the loan. Once a loan is impaired, interest income is recognised in profit and loss account on the same basis based on revised carrying amount.
Bangladesh Bank: In accordance with BRPD circular no. 14 dated 23 September 2012, interest accrued on sub-standard (SS) and Doubtful (DF) loans are credited to "interest suspense account" included in "other liabilities" instead of income account. Interest from loans and advances ceases to be accrued when they are classified as Bad and loss category. Basis of measurement
The financial statements have been prepared on the historical cost basis.
Functional and presentation currency Items included in the financial statements of the OBU are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial statements of the OBU are presented in USD which is the OBU’s functional and presentation currency. The balance sheet and profit and loss accounts are also presented in Taka using the exchange rate prevailing at the balance sheet date. Use of estimates and judgments The preparation of these financial statements in conformity with Bangladesh Bank Circulars and BFRSs requires management to make judgments, estimates and assump-tions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are described below:
Provisions for loans and advances
The Unit assesses its loans and advances for objective evidence of impairment on a regular basis and particularly at year end. While the primary criteria set out in BRPD circular no. 14 dated 23 September 2012, for determining whether a loan is impaired is objective, being based on borrower's ability to make timely repayments, loans and advances may also be classified based on qualitative judgment. This involves making assessments regarding the economic environment in which borrowers operate in addition to making judgments about a borrower's financial situation and net realisable value of any underlying collateral. Taxation The estimation of current tax provision involves making judgments regarding admissibility of certain expenses as well as estimating the amount of other expenses for tax purposes. In addition, the recognition of deferred tax assets requires the Unit to estimate to which it is probable that future taxable profits will be available against which the deferred tax may be utilised. Depreciation Depreciation is provided on a straight line basis over the estimated useful life of each item of property, plant and equipment. The determination of useful life involves the use of estimates regarding expected use of the assets, expected physical wear and tear, technical or commercial obsolescence and legal or similar limits on the use of the asset. Reporting period These financial statements cover one calendar year from 1 January to 31 December 2017. The financial statements were authorised for issue by the Citi Country Officer and the Chief Financial Officer on 22 February 2018. Cash flow Statement Cash flow statement has been prepared in accordance with the BRPD Circular No. 14 dated 25 June 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank. Statement of changes in equity The statement of changes in equity reflects information about the increase or decrease in net assets or wealth.
Liquidity Statements The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term which has been given in the statement. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in the financial statements. Foreign currencies Transactions in foreign currencies are translated into the respective functional currency of the operation at the spot exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the spot exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated into the functional currency at the spot exchange rate at the date that the fair value was determined. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translat-ed using the exchange rate at the date of the transaction. Foreign currency differences arising on translation are recognised in the profit and loss account.
Cash and cash equivalents Cash and cash equivalents in cash flow statement include notes and coins in hand both restricted and unrestricted balances held with Bangladesh Bank and its agent bank (including foreign currency) balance with other banks and financial institutions, money at call and short notice, 91 days treasury bills, Bangladesh Bank bills, reverse repo and prize bond. Loans and advances and provisions for loans and advances/investments Loans and advances are stated in the balance sheet on gross value. Loans and advances are initially measured at fair value, and subsequently measured at amortised cost. Provision for loans and advances is made on the basis of periodical review by the management and of instructions contained in Bangladesh Bank BRPD Circular No. 15 dated 27 September 2017, BRPD Circular No. 16 dated 18 November 2014, BRPD Circular No. 14 dated 23 September 2012, BRPD Circular No. 19 dated 27 December 2012 and BRPD Circular No. 5 dated 29 May 2013. The guidance in the circular follows a formulaic approach whereby specified rates are applied to the various categories of loans as defined in the circular. These circulars also provide scope for further provision-ing based on qualitative judgments. The rates of provision for different classifications are given below:
2.2
2.3
2.4
2.5
2.6
2.7
2.8
3
3.1
3.2
3.3
v)
vi)
vii)
viii)
ix)
x)
xi)
xii)
a)
b)
c)
a)
b)
In accordance with BRPD Circular No.14 dated September 23, 2012, BRPD circular No. 05 dated 29 May 2013 and BRPD Circular No. 16 dated 18 November 2014, the rate of provision on the outstanding amount of loans kept in the 'Special Mention Account' will be the same as the rates stated above i.e. 0.25% against all unclassified loans of Small and Medium Enterprise (SME), 5% on the unclassified amount for Consumer Financing, 2% on the unclassified amount for Housing Finance, 2.5% on the unclassified amount of agricultural loans and 1% against all other unclassified loans.
Loans and advances are written off in accordance with BRPD circular no. 02 dated 13 January 2003 and BRPD circular no. 13 dated 07 November 2013 to the extent that: i) there is no realistic prospect of recovery, and ii) against which legal cases are filed and classified as bad/loss as per guidelines of Bangladesh Bank.
These write off however will not undermine/affect the claim amount against the borrower. Detailed memorandum records for all such write off accounts are maintained and followed up. Write-off loans and advances are reported to the Credit Information Bureau (CIB) of Bangladesh Bank. Details are shown in note 5.
Fixed assets and depreciation Recognition and measurement Items of fixed assets excluding land are measured at cost/revaluation less accumulated depreciation and accumulated impairment losses, if any. Land is measured at cost/revalu-ation. Cost includes expenditure that are directly attributable to the acquisition of asset and bringing to the location and condition necessary for it to be capable of operating in the intended manner. When parts of an item of fixed asset have different useful lives, they are accounted for as separate items (major components) of property and equipment. The gain or loss on disposal of an item of fixed asset is determined by comparing the proceeds from disposal with the carrying amount of the item of fixed asset, and is recognised in other income/other expenses in profit or loss. Subsequent costs The cost of replacing a component of an item of fixed assets is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Unit and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of fixed assets are recognised in the profit and loss account as incurred. Depreciation Depreciation is recognised in the profit and loss account on a straight line basis, over the estimated useful life of each part of an item of fixed assets since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. In case of acquisition of fixed assets, depreciation is charged from the month of acquisition, whereas depreciation on disposed off fixed assets is charged up to the month prior to the disposal. Asset category-wise depreciation rates are as follows:
Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted, if appropriate. Retirement and disposals
An asset is derecognised on disposal or when no future economic benefits are expected from its use and subsequent disposal. Gains or losses arising from the retirement or disposal of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognised as gain and loss from disposal of asset under ""Other operating income"" in the profit and loss account.
Finance and operating leases Agreements which transfer to counterparties substantially all the risks and rewards incidental to the ownership of assets, but not necessarily legal title, are classified as finance leases. When the Unit is a lessee under finance leases, the leased assets are capitalised and included in “fixed assets” and the corresponding liability to the lessor is included in “Other liabilities”. A finance lease and its corresponding liability are recognised initially at the fair value of the asset or, if lower, the present value of the minimum lease payments. Finance charges payable are recognised as interest expense over the period of the lease based on the interest rate implicit in the lease so as to give a constant rate of interest on the remaining balance of the liability. All other leases are classified as operating leases. When the Unit is the lessee under an operating lease, leased assets are not recognised in the balance sheet. Rentals payable, including rent paid in advance, under operating leases are accounted for on a straight-line basis over the period of the lease, unless another systematic basis is more representative of the time pattern of the user’s benefit, and are included in “Rent, taxes, insurance, electricity, etc.” Borrowings from other banks, financial institutions and agents Borrowings from other banks, financial institutions and agents includes interest-bearing borrowings against securities from Bangladesh Bank and call borrowing from other banks. These items are brought to financial statements at the gross value of the outstanding balance. Details are shown in note 9. Deposits and other accounts Deposits and other accounts include non interest-bearing current deposit redeemable at call, interest bearing on demand and short-term deposits, savings deposit and fixed deposit. These items are brought to financial statements at the gross value of the outstanding balance. Details are shown in note 10. Other liabilities Other liabilities comprise items such as provision for loans and advances, provision for taxation, interest payable, interest suspense, accrued expenses etc. Other liabilities are recognised in the balance sheet according to the guidelines of Bangladesh Bank, Income Tax Ordinance 1984 and internal policy of the Bank. Details are shown in note 11. Contingencies Contingent liabilities A contingent liability is: A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Unit; or A present obligation that arises from past events but is not recognised because: - it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or - the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognised but disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is reliably estimated.
Contingent assets A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. An example is a claim that an entity is pursuing through legal processes, where the outcome is uncertain. Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate. A contingent asset is disclosed where an inflow of economic benefits is probable.
Revenue recognition Interest on loans and advances Interest income for all loans and advances are recognised in the profit and loss account using the effective interest method in accordance with BAS 39. The effective method is a way of calculating the amortised cost of financial asset and allocating the interest income over the relevant periods.
The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through out the expected life of the financial asset or where appropriate, a shorter period, to the carrying amount of the financial asset.
When calculating the effective interest rate, the Unit estimates cash flows considering all contractual terms of the financial instrument but not future credit losses. The calculation includes all amounts paid or received by the Bank that are an integral part of the effective interest rate of a financial asset, including transaction cost and all other premiums or discounts. Interest on loans and advances is calculated on daily product basis and accrued at the end of each month but charged to customer accounts on quarterly basis. In accordance with BRPD circular no. 14 dated 23 September 2012, interest accrued on sub-standard (SS) and Doubtful (DF) loans are credited to "interest suspense account" included in "other liabilities" instead of income account. Interest from loans and advances ceases to be accrued when they are classified as Bad and loss category.
Fees and commission income The Unit earns fees and commissions from a diverse range of services provided to its customers. Commission on Letter of Guarantee is recognised on accrual basis. Other fees and commission income is recognised on a realisation basis. Interest paid on borrowing and other deposits Interest paid on deposits and other accounts except fixed deposit is accrued on a monthly basis, but credited to customer account on half yearly basis. Interest on fixed deposit is accrued on a daily basis and credited to customer account on maturity of fixed deposit. Interest on borrowing from other banks is accrued on a daily basis and paid through Bangladesh Bank account on maturity. All other expenses are recognised on accrual basis.
3.4
3.4.1
3.4.2
3.4.3
3.4.4
3.5
3.6
3.7
3.8
3.9
3.9.1
3.9.2
3.10
3.10.1
3.10.2
3.11
Specific provision on: Substandard and doubtful agricultural loans Substandard loans and advances Doubtful loans and advances Bad/loss loans and advances
5.00%20.00%50.00%100.00%
5.00%20.00%50.00%100.00%
Category of assets
Furniture and fixturesEquipmentMotor vehicles
Rate of depreciation
10% - 33.33% 10% - 33.33% 20%
Provisions and accrued expenses In compliance with BAS 37, provisions and accrued expenses are recognised in the financial statements when the Unit has a legal or constructive obligation as a result of past event, it is probable that an outflow of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions for off balance sheet exposures In compliance with Bangladesh Bank guidelines off balance sheet items are disclosed under contingent liabilities. As per BRPD Circular No.14 dated 23 September 2012, the Bank is required to maintain provision at 1% against gross off-balance sheet exposures (cash margin or value of eligible collateral will not be deducted while computing off-balance sheet exposure). Details are shown in note 11.2. Provisions on balances with other banks and financial institutions (Nostro accounts) Provisions made for unsettled debit transactions for more than three months on nostro accounts are reviewed at each balance sheet date by management and certified by external auditors in accordance with Bangladesh Bank Foreign Exchange Policy Department, Circular No. FEOD (FEMO)/01/2005-677 dated 13 September 2005. Provisions for other assets BRPD Circular no. 14 dated 25 June 2001 requires a provision of 100% on other assets which are outstanding for one year and above. Provision for taxation Income tax Provision for taxation has been calculated using tax rates as prescribed in the Income Tax Ordinance (ITO) 1984 and relevant Special Regulatory Orders (SRO) and any adjustment to tax payable in respect of previous years. Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of prior years. Provision for taxation for the year ended 31 December 2017 has been made on the basis of the provisions of the income Tax Ordinance 1984 and the Finance Act 2017. Currently the income tax rate applicable for banks is 42.5%. Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: - temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; - temporary differences related to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future; and - temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities against current tax assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax relating to unrealised surplus on revaluation of held to maturity (HTM) securities and land and buildings are recognised directly in revaluation reserve as a part of equity and is subsequently recognised in profit and loss account on maturity of the security and disposal of land and buildings.
Impairment of non-financial assets The carrying amounts of the Unit's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its Cash Generating Unit (CGU) exceeds its estimated recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs) and then to reduce the carrying amount of the other assets in the CGU (group of CGUs) on a pro rata basis. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reconciliation of inter-bank/inter-branch account Books of account with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled and no material differences were found which may affect the financial statements significantly. Audit committee According to BRPD Circular No. 12 (23 December 2002), all banks are advised to constitute an audit committee comprising of member of the board. The audit committee will assist the board in fulfilling its oversight responsibilities including implementation of the objectives, strategies and overall business plan set by the board for the effective functioning of the Bank. The committee will review the financial reporting process, the system of internal control and management of the financial risk, the audit process and the Bank’s process for monitoring compliance with laws and regulations and its own code of business conduct.
The Bank, being a foreign bank, does not have a local board of directors from which to select an Audit Committee but there is a Business Risk, Compliance and Control Committee (BRCC) where all risk issues are discussed, action points set to mitigate risks identified and documented. However, the Bank obtained formal dispensation from the Banking Regulation and Policy Department of Bangladesh Bank as regards to the formation of the committee as suggested in the BRPD Circular No 12 dated 23 December 2002.
Changes in accounting policies The Bank has consistently applied the accounting policies as set out in Note 3 to all periods presented in these financial statements. The various amendments to standards, including any consequential amendments to other standards, with the date of initial application of 1 January 2017 have been considered. However, these amendments have no material impact on the financial statements of the Bank. In December 2017, ICAB has decided to adopt IFRS replacing BFRS effective for annual periods beginning on or after 1 January 2018. However, since currently issued BFRS have been adopted from IFRS without any major modification, such changes would not have any material impact on financial statements. A number of standards and amendments to standards are effective for annual periods beginning after 1 January 2017 and earlier application is permitted. However, the Bank has not early applied the following new standards in preparing these financial statements. (a) BFRS 9 Financial Instruments (to be adopted as IFRS 9) BFRS 9, published in July 2014, replaces the existing guidance in BAS 39 Financial Instruments: Recognition and Measurement. BFRS 9 includes revised guidance on the classification and measurement of the financial instruments, a new expected credit loss model for calculating impairment of financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from BAS 39. BFRS 9 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. As per the Bank's assessment, any material impact of BFRS 9 would be primarily on calculation of impairment provision. However, as Bangladesh Bank has not issued any circular to revise its current impairment, classification and measurement policies to align with BFRS 9 the Bank is unable to quantify any potential impact on its financial statements. (b) BFRS 15 Revenue from Contracts with Customers (to be adopted as IFRS 15) BFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing recognition guidance, including BAS 18 Revenue, BAS 11 Construction Contracts and BFRI 13 Customer Loyalty Programmes. BFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018, with early adoption permitted. Based on preliminary assessment the Bank has determined that BFRS 15 has no material impact on its financial statements.
(c) IFRS 16 Leases
IFRS 16, issued in January 2016 replaces existing leases guidance and effective for reporting period beginning on or after 1 January 2019. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not significantly change. The Bank has not yet assessed any potential impact of IFRS 16 on its financial statements.
(d) IFRS 17 Insurance Contracts
IFRS 17 was issued in May 2017 and applies to annual reporting periods beginning on or after 1 January 2021. IFRS 17 establishes the principles for the recognition, measure-ment, presentation and disclosure of insurance contracts within the scope of the standard. The objective of IFRS 17 is to ensure that an entity provides relevant informa-tion that faithfully represents those contracts. The Bank has not yet assessed in potential impact of IFRS 17 on its financial statements.
There are no other standards that are not yet effective and that would be expected to have a material impact on the Bank in the current or future reporting periods and on foreseeable future transactions. Offsetting Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, the Unit has a legal right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted under BFRSs, or for gains and losses arising from a group of similar transactions such as in the Unit’s trading activity. Events after the reporting period All material events after the reporting period are considered and where necessary, adjusted for or disclosed in accordance with BAS 10: Events after the reporting period.
3.12
3.13
3.14
3.15
3.16
3.16.1
3.16.2
3.16.3
3.17
3.18
3.19
3.20
3.21
3.22
C)
Citibank, N.A.
8 Gulshan Avenue, Gulshan - 1, Dhaka 1212, Bangladesh
A company incorporated in the USA with limited liabilities.
© 2018 Citigroup Inc. All rights reserved. Citi, Citi and arc Design are service and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.
Page 9 of 11
Particulars
General provision on: All unclassified loans and advances except the following: Small and medium enterprise financing Consumer financing Housing finance and loans for professionals to set up business under consumer financing scheme Loan to BHs/MBs/SDs against shares Agricultural loans
Rate2017
1.00%
0.25%5.00%
2.00%2.00%1.00%
2016
1.00%
0.25%5.00%
2.00%2.00%2.50%
Citibank, N.A. Bangladesh Branches (Offshore Banking Unit)
Financial Statements as at and forthe year ended 31 December 2017
6
7
7.1
7.2
7.3
8
9
9.1
10
5.8
5.9
5.9.1
5.10
5.11
Particulars of required
provision for loans and
advances
For loans and advances
Unclassified - general provision All unclassified loans (other than small enterprises, housing finance, loan to MBs, loans for professional, consumer financing and special mention account)
Small and medium enterprise financing Loan to BHs/MBs/SDs against shares Housing and loan for professional Consumer finance
Agriculture finance
Special Mention Account (SMA) Required general provision
Classified - specific provision
Sub-standard & doubtful agricultural loans
Sub-standard Doubtful Bad/loss Required specific provision
Required provision for loans and advances Total provision maintained (Note 11.1) Excess provision as at 31 December
2017 2016
47,606,134
-
-
-
-
-
-
- - - -
47,606,134
-
-
-
-
-
-
- - - -
1.00%
0.25%
2.00%
2.00%
5.00%
1.00%
1.00%
5.00%20.00%50.00%
100.00%
476,061
-
-
-
-
-
-
476,061
- - - - -
476,061
547,471
71,410
426,512
-
-
-
-
-
-
426,512
- - - - -
426,512
649,879
223,367
Outstandingas at
31 Dec 2017USD
Base for
provision USD
% of required provision
Required provision
USD
Required provision
USD Maturity grouping of other assets
On demand
Not more than one month Over one month but not more than three months
Over three months but not more than one year
Over one year but not more than five years
Over five years
2017
USD Taka
18,477
-
-
733
11,528
-
30,738
1,528,062
-
-
60,619
953,366
-
2,542,047
9,108
-
-
733
6,041
-
15,882
716,778
-
-
57,720
475,412
-
1,249,910
2016
USD Taka
Borrowings from other banks, financial institutions and agents
Inside Bangladesh
Outside Bangladesh
Outside Bangladesh
Secured Repayable on demand:
Others - borrowings:
Citibank, N.A. London
Citibank, N.A. Singapore
Unsecured
Maturity wise grouping of borrowings from other banks, financial institutions and agents
Payable on demand
Payable within one month
Payable within one to three months
Payable within three to twelve months
Payable within one to five years
Payable over five years
2017
USD Taka
-
56,953,855
56,953,855
56,953,855
-
56,953,855
-
56,953,855
-
55,819,840
-
1,134,015
-
-
56,953,855
-
4,710,083,809
4,710,083,809
4,710,083,809
-
4,710,083,809
-
4,710,083,809
-
4,616,300,768
-
93,783,041
-
-
4,710,083,809
2016
USD Taka
-
42,245,550
42,245,550
1,045,550
41,200,000
42,245,550
-
42,245,550
-
41,000,000
-
1,245,550
-
-
42,245,550
-
3,324,724,785
3,324,724,785
82,284,785
3,242,440,000
3,324,724,785
-
3,324,724,785
-
3,226,700,000
-
98,024,785
-
-
3,324,724,785
Particulars of required provision for other asset:
Particulars
Nil
Non banking assets
a) Income generating assets
b) Non-income generating assets
2017
Base forprovision
TakaRate (%)
Taka
-
-
- - -
-
-
- -
2016
Base forprovision
TakaRate (%)
Taka
-
-
- -
-
-
- -
2017
USD Taka
2016
USD Taka
Branch adjustments account represents outstanding interbank and head office transactions (net) originated but yet to be responded at balance sheet date. The unrespondent entries as at 31 December 2016 are given below:
Deposits and other accounts
Current and other accounts, etc.
Current account Short notice deposits Sundry deposits
Bills payable
Savings bank deposits
Fixed deposits
On demand Within one month
Over one month but within three months
2017 2016
USD Taka USD Taka
2,886,851
-
-
2,886,851
-
-
-
-
-
238,742,578
-
-
238,742,578
-
-
-
-
-
2,882,751
-
-
2,882,751
-
-
-
-
-
226,872,502
-
-
226,872,502
-
-
-
-
-
Citibank, N.A.
8 Gulshan Avenue, Gulshan - 1, Dhaka 1212, Bangladesh
A company incorporated in the USA with limited liabilities.
© 2018 Citigroup Inc. All rights reserved. Citi, Citi and arc Design are service and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.
Page 10 of 11
4
4.1
4.2
5
5.1
5.2
Balance with other banks and financial institutions
Inside Bangladesh
Outside Bangladesh (Note 4.1)
2017
USD Taka
2016
USD Taka
Outside Bangladesh
Current account:
Citibank, New York
Citibank, London
Citibank, Tokyo
Citibank, Bangladesh (Onshore branch)
2017
USD Taka
2016
USD Taka
Maturity grouping of loans and advances including bills purchased and discounted
Repayable on demand Within one month More than one month but less than three months More than three months but not more than one year More than one year but not more than five years
More than five years
2017
USD Taka
2016
USD Taka
Loans and advances
Loans, cash credit and overdrafts (Note 5.1) Bills purchased and discounted
Bills purchased and discounted consists of Usance bills paid at sight.
Loans, cash credits and overdrafts
Within Bangladesh:
Continuous loan
Demand loans Fixed term loan
Staff loan
Outside Bangladesh
2017
USD Taka
2016
USD Taka
Maturity grouping of balance with other banks and financial institutions
Repayable on demand Not more than one month Over one month but not more than three months Over three months but not more than one year Over one year but not more than five years Over five years
2017
USD Taka
2016
USD Taka
2017
USD Taka
2016
USD Taka
5.3
5.4
5.5
5.6
5.7
Analysis of significant concentration of loans and advances including bills purchased and discounted
Advances to allied concerns of Directors Advance to chief executive and other senior executives: City Country Officer Other senior executives and staff of the Bank
Advances to customers' group (Note 5.4)
Industry wise (Note 5.5)
Geographical location wise (Note 5.6)
2017
USD Taka
2016
USD Taka
Number of clients with amount of outstanding and classified loans to whom loans and advances sanctioned more than 10% of total capital of the Unit
Number of the clients
Amount of outstanding advances
USD Taka
Particulars of loans and advances - Industry wise
Textiles and garments
Others (UPAS Loan)
2017
USD Taka
2016
USD Taka
Particulars of loans and advances - Geographical location wise
Export Processing Zone - Dhaka
Export Processing Zone - Chittagong
Export Processing Zone - Adam zee
2017
USD Taka
2016
USD Taka
Classification of loans and advances
Unclassified: Standard Special Mention Account Classified: Substandard Doubtful Bad/Loss
2017
USD Taka
- 18,291,703
18,291,703
- 1,512,723,883
1,512,723,883
4,033,423
3,080,912
111,581
11,065,787
18,291,703
333,564,082
254,791,422
9,227,749
915,140,630
1,512,723,883
-
7,836,164
19,244,266
20,525,704
-
-
47,606,134
-
648,050,747
1,591,500,810
1,697,475,695
-
-
3,937,027,252
10,636,348
36,969,786
47,606,134
879,625,937
3,057,401,315
3,937,027,252
-
10,636,348
-
-
10,636,348
-
10,636,348
-
879,625,937
-
-
879,625,937
-
879,625,937
18,291,703
-
-
-
-
-
18,291,703
1,512,723,883
-
-
-
-
-
1,512,723,883
-
-
-
-
47,606,134
47,606,134
-
-
-
-
3,937,027,252
3,937,027,252
2017
USD Taka
-
-
-
-
10,636,348
36,969,786
47,606,134
879,625,937
3,057,401,315
3,937,027,252
34,324,281
13,281,853
-
47,606,134
2,838,617,985
1,098,409,267
-
3,937,027,252
47,606,134 -
47,606,134
- - -
-
47,606,134
3,937,027,252 -
3,937,027,252
- - -
-
3,937,027,252
- 7,085,406
7,085,406
- 557,621,439
557,621,439
2,893,589
765,066
16,091
3,410,660
7,085,406
227,725,442
60,210,730
1,266,342
268,418,925
557,621,439
-
7,320,125
16,527,602
18,803,498
-
-
42,651,225
-
576,093,836
1,300,722,283
1,479,835,291
-
-
3,356,651,410
14,324,042
28,327,183
42,651,225
1,127,302,137
2,229,349,273
3,356,651,410
-
14,324,042
-
-
14,324,042
-
14,324,042
-
1,127,302,137
-
-
1,127,302,137
-
1,127,302,137
7,085,406
-
-
-
-
-
7,085,406
557,621,439
-
-
-
-
-
557,621,439
-
-
-
-
42,651,225
42,651,225
-
-
-
-
3,356,651,410
3,356,651,410
2016
USD Taka
-
-
-
-
14,324,042
28,327,183
42,651,225
1,127,302,137
2,229,349,273
3,356,651,410
23,184,438
19,466,787
-
42,651,225
1,824,615,239
1,532,036,171
-
3,356,651,410
42,651,225 -
42,651,225
- - -
-
42,651,225
3,356,651,410 -
3,356,651,410
- - -
-
3,356,651,410
2016
USD Taka
Particulars of loans and advances
Loans considered good in respect of which the banking company is fully secured (unclassified loans and advances); Loans considered good against which the banking company holds no security other than the debtor's personal guarantee; Loans considered good secured by the personal undertakings of one or more parties in addition to the personal guarantee of the debtor; Loans adversely classified; provision not maintained there against; Loans due by directors or officers of the banking company or any of these either separately or jointly with any other persons; Loans due from companies or firms in which the directors of the banking company have interests as directors, partners or managing agents or in case of private companies as members; Maximum total amount of advance including temporary advance made at any time during the year to directors or managers or officers of the banking companies or any of them either separately or jointly with any other person; Maximum total amount of advances, including temporary advances granted during the year to the companies or firms in which the directors of the banking company have interest as directors, partners or managing agents or in case of private companies as members; Due from banking companies Classified loans for which
a) interest has not been charged: Increase/Decrease of provision (specific)
Amount of loans written off
Amount realized against the loan previously written off b) Provision against the loan classified as bad/loss at the date of balance sheet
c) Interest credited to the interest suspense account Loans written off:
Current year Cumulative to-date The amount of written off loan for which law suit has been filed
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
xi)
2017
USD Taka
47,606,134
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,937,027,252
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42,651,225
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,356,651,410
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2016
USD Taka
Particulars of required provision for loans and advances
Status
For loans and advances
Unclassified - general provision All unclassified loans (other than small enterprises, housing finance, loan to MBs, loans for professional, consumer financing and special mention account)
Small and medium enterprise financing Loan to BHs/MBs/SDs against shares Housing and loan for professional Consumer finance Agriculture finance Special Mention Account (SMA) Required general provision Classified - specific provision Sub-standard & doubtful agricultural loans Sub-standard Doubtful Bad/loss Required specific provision Required provision for loans and advances Total provision maintained (Note 11.1) Excess provision at 31 December
2017 2016
3,937,027,252
-
-
-
-
-
-
-
- - -
3,937,027,252
-
-
-
-
-
-
-
- - -
1.00%
0.25%
2.00%
2.00%
5.00%
1.00%
1.00%
5.00%
20.00%50.00%
100.00%
39,370,273
-
-
-
-
-
-
39,370,273
-
- - - -
39,370,273
45,275,813
5,905,540
33,566,514
-
-
-
-
-
-
33,566,514
-
- - - -
33,566,514
51,145,467
17,578,953
Outstandingas at
31 Dec 2017Taka
Base for
provision Taka
% of required provision
Required provision
Taka
Required provision
Taka
Bills purchased and discounted
Inside Bangladesh
Outside Bangladesh
2017
USD Taka
36,969,786
-
36,969,786
3,057,401,315
-
3,057,401,315
2016
USD Taka
Maturity wise Bills Purchased and Discounted
Payable within one month
Payable over one month but within three months
Payable over three months but within six months Payable over six months
Total
2017
USD Taka
4,487,437
14,648,412
17,474,872
359,065
36,969,786
371,111,037
1,211,423,684
1,445,171,929
29,694,665
3,057,401,315
28,327,183
-
28,327,183
2,229,349,273
-
2,229,349,273
4,682,452
8,399,867
15,008,138
236,726
28,327,183
368,508,965
661,069,551
1,181,140,422
18,630,335
2,229,349,273
2016
USD Taka
Fixed assets including premises, furniture and fixtures Premises used by the bank Furniture and fixtures Office equipment
Less: Accumulated
depreciation
For details refer to Annexure A
2017
USD Taka
- 64,568
152,111
216,679
165,310
51,369
- 5,339,794
12,579,596
17,919,390
13,671,141
4,248,249
- 68,493
157,986
226,479
150,141
76,338
- 5,390,399
12,433,504
17,823,903
11,816,129
6,007,774
2016
USD Taka
Other assets
a) Income generating other assets
b) Non-income generating other assets: I) Investments in shares of subsidiary companies ii) Stationery, stamps, printing materials in stock
iii) Advance rent and advertisement
iv) Interest accrued on investment but not collected, commission and brokerage receivable on shares and debentures, and other income receivables
v) Security deposits
vi) Preliminary, formation and organizational expenses, renovation, development and prepaid expenses
vii) Branch adjustment (Note 7.1) viii) Suspense ix) Deferred tax x) Prepaid expenses xi) Silver xii) Others
Branch adjustment General accounts debit
General accounts credit
Up to three months Over three months but within six months Over six months but within one year Over one year but within five years
-
-
-
-
-
2,033
-
-
18,477 9,495
733 - -
30,738
-
-
-
- -
-
-
-
-
-
-
-
-
168,129
-
-
1,528,062 785,237
60,619 - -
2,542,047
-
-
-
- -
-
-
-
-
-
-
-
-
2,033
-
-
9,108 4,008
733 - -
15,882
-
-
-
- -
-
-
-
-
-
-
-
-
159,997
-
-
716,778 315,415 57,720
- -
1,249,910
-
-
-
- -
-
-
-
Citibank, N.A. Bangladesh Branches (Offshore Banking Unit)
Financial Statements as at and forthe year ended 31 December 2017
2017
USD Taka
2016
USD Taka
2017
USD Taka
2016
USD Taka
2017
USD Taka
2016
USD Taka
2017
USD Taka
2016
USD Taka
2017 2016
20
20.1
20.2
21
22
22.1
22.2
22.3
23
24
Related party transactions
Transactions with key management personnel The key management personnel of the Unit for the purposes of BAS 24 are defined as those persons having authority and responsibility for planning, directing and controlling the Unit. Citibank N.A. offshore banking unit, not being incorporated locally, operate in Bangladesh under the Banking license issued by Bangladesh Bank and therefore for this Unit the key management personnel, who do qualify as related party under BAS 24, refer to Citibank officials located outside Bangladesh. There were no transactions between the Unit and the key management personnel in 2017 (2016 - nil).
Transactions with the onshore branches The Unit receives certain banking and financial services and administrative services from the onshore branches of Citibank, N.A. Bangladesh operating under the banking license issued by Bangladesh Bank. As at year end payable to onshore branch were nil and deposits with onshore were BDT 915,140,630. The disclosure of the year end balance is considered to be the most meaningful information to represent transactions during the year. These transactions arose in the ordinary course of business and are on substantially the same terms, including interest rates and security, as for comparable transactions with third party counterparties. All directly attributable operating expenses are allocated from Onshore Branches to OBU based on usage of the floor space on monthly basis. Also product and sales team expense is allocated based on contribution to total revenue earned. The ratio used for monthly expense allocation is reviewed annually. At every quarter, funds are transferred from OBU to Onshore branches for payment of advance tax.
Contingencies There are no material contingent liabilities at the year end, other than those disclosed as "Off Balance Sheet Items" in the balance sheet. General The assets and liabilities as at 31 December 2017 in foreign currencies have been converted to BDT at the following rates:
Figures of previous year have been rearranged whenever considered necessary to conform to current year's presentation. Figures appearing in these accounts have been rounded off to the nearest integer.
Highlights on the overall activities Highlights on the overall activities of the Unit have been furnished in Annexure - C.
Events after the balance sheet date There are no material events that had occurred after reporting period to the date of issue of these financial statements, which could affect the figures stated in the financial statements.
AUD =CAD =HKD =USD =CHF =GBP =EUR =DKK =SEK =NOK =SGD =JPY =
2017
Taka
64.3530 65.5569 10.5808 82.7000 84.4136 111.0992 98.7190 13.2585 10.0194 9.9981 61.8133 0.7329
2016
Taka
56.7821 58.2101 10.1474
78.7000 76.8592 96.4469 82.2848 11.0679 8.6084 9.0461 54.3171 0.6750
N. Rajashekaran
Managing Director and
Citi Country Officer, Bangladesh
S. H. Aslam Habib
Chief Financial Officer, Bangladesh
Citibank, N.A.
8 Gulshan Avenue, Gulshan - 1, Dhaka 1212, Bangladesh
A company incorporated in the USA with limited liabilities.
© 2018 Citigroup Inc. All rights reserved. Citi, Citi and arc Design are service and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.
Page 11 of 11
Tax expense Current tax expenses:
Current year Adjustments for prior years Deferred tax expenses/ (income)
Reconciliation of effective tax rate
Profit before provision and tax as per profit and loss account
Income tax using the tax rate at 42.5% Factors affecting the tax charge for current period
Non deductible expenses
Deductible expenses
Movement of temporary difference
Total income tax expenses
Cash and cash equivalent
Cash in hand (including foreign currencies) Balance with Bangladesh Bank and its agent bank (including foreign currencies)
Balance with other banks and financial institutions
Money at call and short notice
91 days treasury bills
Reverse Repo Prize bond
925,789
-
925,789
(5,488)
920,301
Percentage
42.50%
0.46%
-1.60%
-0.25%
41.11%
-
-
18,291,703
-
-
- -
18,291,703
76,562,750
-
76,562,750
(453,858)
76,108,892
Taka
184,973,559
78,613,763
842,681
(2,960,825)
(453,858)
76,041,761
-
-
1,512,723,883
-
-
- -
1,512,723,883
662,105
-
662,105
(9,058)
653,047
Percentage
42.50%
6.59%
-0.29%
-0.67%
48.14%
-
-
7,085,406
-
-
- -
7,085,406
52,107,638
-
52,107,638
(712,874)
51,394,764
Taka
119,919,073
45,377,833
7,037,137
(307,332)
(712,874)
51,394,764
-
-
557,621,439
-
-
- -
557,621,439
Commission, exchange and brokerage Commission income L/C commission
Collection
Transfer
Service charge
Others
Previous year's adjustments
Exchange incomeNet profit/(Loss) from foreign currency dealings
312,306
232,067
8,729
-
(98)
-
553,004
229,152
782,156
25,827,706
19,191,941
721,888
-
(8,105)
-
45,733,430
18,950,870
64,684,300
301,328
196,749
19,296
-
(75)
-
517,298
(16,130)
501,168
23,714,514
15,484,134
1,518,595
-
(5,863)
-
40,711,380
(1,269,456)
39,441,924
1,120,756
-
1,120,756
92,686,504
-
92,686,504
- 2,818,042
2,818,042
- 233,052,081
233,052,081
2,008,574
- 553,004
-
-
229,152
-
(606) -
2,790,124
482,190
-
115,687 6,822
25,172
629,871
2,160,253
166,109,070
-
45,733,430
-
-
18,950,870
-
(50,116) -
230,743,254
39,877,113
-
9,567,315 564,148
2,081,724
52,090,300
178,652,954
1,968,500
-
-
40,074
2,008,574
482,190
- -
482,190
162,794,950
-
-
3,314,120
166,109,070
39,877,113
- -
39,877,113
17
18
18.1
19
Particular
Cost
Balanceas at
1 January2017
USD
68,493
157,986
226,479
3,925
5,875
9,800
-
-
-
64,568
152,111
216,679
10-33.33
10-33.33
58,612
91,529
150,141
3,178
20,797
23,975
3,411
5,395
8,806
58,378
106,932
165,310
6,190
45,180
51,369
Additionsduring
the year
USD
(Disposals)/adjustments
duringthe year
USD
Balanceas at
31 December2017
USD
Rate of Depreciation
%
Balanceas at
1 January2017
USD
Chargedfor
the year
USD
(Disposals)/adjustments
duringthe year
USD
Balanceas at
31 December2017
USD
DepreciationWritten
down valueas at
31 December2017
USD
Furniture and fixturesOffice equipment
Total
Particular
Cost
Balanceas at
1 January2017
Taka
5,664,371
13,065,449
18,729,820
-
-
-
324,577
485,853
810,430
5,339,794
12,579,596
17,919,390
10-33.33
10-33.33
4,847,226
7,569,428
12,416,654
262,783
1,719,952
1,982,735
282,123
446,125
728,248
4,827,886
8,843,255
13,671,141
511,908
3,736,341
4,248,249
Additionsduring
the year
Taka
(Disposals)/adjustments
duringthe year
Taka
Balanceas at
31 December2017
Taka
Rate of Depreciation
%
Balanceas at
1 January2017
Taka
Chargedfor
the year
Taka
(Disposals)/adjustments
duringthe year
Taka
Balanceas at
31 December2017
Taka
DepreciationWritten
down valueas at
31 December2017
Taka
Furniture andfixturesOffice equipment
Total
Schedule of fixed assetsas at 31 December 2017
Items have been converted into Taka using the closing rate i.e. 82.7
Particular
Cost
Balanceas at
1 January2016
USD
68,493
153,927
222,420
-
4,059
4,059
-
-
-
68,493
157,986
226,479
10-33.33
10-33.33
51,393
69,981
121,374
7,219
20,433
27,652
-
1,115
1,115
58,612
91,529
150,141
9,881
66,457
76,338
Additionsduring
the year
USD
(Disposals)/adjustments
duringthe year
USD
Balanceas at
31 December2016
USD
Rate of Depreciation
%
Balanceas at
1 January2016
USD
Chargedfor
the year
USD
(Disposals)/adjustments
duringthe year
USD
Balanceas at
31 December2016
USD
DepreciationWritten
down valueas at
31 December2016
USD
Furniture and fixturesOffice equipment
Total
Particular
Cost
Balanceas at
1 January2016
Taka
5,390,399
12,114,061
17,504,460
-
319,443
319,443
-
-
-
5,390,399
12,433,504
17,823,903
10-33.33
10-33.33
4,044,642
5,507,524
9,552,166
568,135
1,608,038
2,176,173
-
87,790
87,790
4,612,777
7,203,352
11,816,129
777,622
5,230,152
6,007,774
Additionsduring
the year
Taka
(Disposals)/adjustments
duringthe year
Taka
Balanceas at
31 December2016
Taka
Rate of Depreciation
%
Balanceas at
1 January2016Taka
Chargedfor
the year
Taka
(Disposals)/adjustments
duringthe year
Taka
Balanceas at
31 December2016
Taka
DepreciationWritten
down valueas at
31 December2016
Taka
Furniture andfixturesOffice equipment
Total
Schedule of fixed assetsas at 31 December 2016
Items have been converted into Taka using the closing rate i.e. 78.7
(Annexure -C) Financial Highlights
Sl. no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Currency
Currency
Currency
Currency
%
Currency
Currency
Currency
Currency
Currency
Currency
Currency
%
Currency
USD
65,979,944
2,886,851
47,606,134
3,938,798
0.00%
1,316,380
-
-
71,410
-
65,897,837
82,108
2.27%
-
Particulars
Total assets
Total deposits
Total loans and advances
Total contingent liabilities and commitments
Classified advances as (%) of total advances
Net profit after tax and provisions
Amount of classified loans during current year
Amount of provisions against classified loans
Provision surplus/(shortage)
Interest suspense account
Interest bearing assets
Non-interest bearing assets
Return on assets (ROA)
Incomes from Investment
2017
Financial Highlights as at 31 December 2017
Taka
5,456,541,431
238,742,578
3,937,027,252
325,738,585
0.00%
108,864,667
-
-
5,905,540
-
5,449,751,135
6,790,296
2.32%
-
USD
49,828,851
2,882,751
42,651,225
2,313,935
0.00%
703,642
-
-
223,367
-
49,736,631
92,220
1.46%
-
2016
Taka
3,921,530,533
226,872,502
3,356,651,410
182,106,715
0.00%
55,376,608
-
-
17,578,953
-
3,914,272,849
7,257,684
1.47%
-
(Annexure -B) Liquidity Statement
(Asset and Liability Maturity Analysis)as at 31 December 2017
ParticularsMaturity
up to 1 monthMaturity
1 to 3 monthsMaturity
3 to 12 monthsMaturity
1 to 5 yearsMaturity
Over 5 years TotalTakaUSDTakaUSD TakaUSD TakaUSD TakaUSD TakaUSD
-
-
-
-
1,591,500,810
-
-
-
1,591,500,810
-
-
39,509,925
39,509,925
1,551,990,885
-
-
-
-
19,244,266
-
-
-
19,244,266
-
-
477,750
477,750
18,766,516
-
1,512,723,883
-
-
648,050,747
1,528,062
-
-
2,162,302,692
4,616,300,768
238,742,578
19,044,192
4,874,087,538
(2,711,784,846)
-
18,291,703
-
-
7,836,164
18,477
-
-
26,146,344
55,819,840
2,886,851
230,280
58,936,971
(32,790,627)
Assets
Cash balance
Balance with other banks
and financial institutions
Money at call and short notice
Investment in treasury bills
and others
Loans and advances
Other assets
Fixed assets
Non banking assets
Total assets
Liabilities
Borrowings from other banks
and financial institutions
Deposits and other accounts
Other liabilities
Total liabilities
Net liquidity difference
-
-
-
-
1,697,475,695
60,619
-
-
1,697,536,314
93,783,041
-
40,496,768
134,279,809
1,563,256,505
-
-
-
-
20,525,704
733
-
-
20,526,437
1,134,015
-
489,683
1,623,698
18,902,739
-
-
-
-
-
953,366
4,248,249
-
5,201,615
-
-
43,728,452
43,728,452
(38,526,837)
-
-
-
-
-
11,528
51,369
-
62,897
-
-
528,760
528,760
(465,863)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,512,723,883
-
-
3,937,027,252
2,542,047
4,248,249
-
5,456,541,431
4,710,083,809
238,742,578
142,779,337
5,091,605,724
364,935,707
-
18,291,703
-
-
47,606,134
30,738
51,369
-
65,979,944
56,953,855
2,886,851
1,726,473
61,567,179
4,412,765
(Annexure -A) Schedule of fixed assets
-
-
- -
2,886,851
2,886,851
-
-
-
-
-
2,886,851
238,742,578
-
-
-
-
-
238,742,578
547,471
49,120
-
-
995,057
127,452
-
7,374
-
-
-
1,726,473
45,275,813
4,062,200
-
-
82,291,214
10,540,280
-
609,830
-
-
-
142,779,337
53,744,993
-
-
-
53,744,993 8,469,180
45,275,813
649,879
-
-
-
649,879 102,408
547,471
1,913,625
2,148,575
4,062,200
-
4,062,200
23,139
25,980
49,120
-
49,120
63,068,757
75,357,811
138,426,568
(56,135,354)
82,291,214
762,621
911,219
1,673,840
(678,783)
995,057
-
19,044,192
39,509,925
40,496,768
43,728,452
-
142,779,337
256,071,040
108,864,667
364,935,707
-
364,935,707
-
230,280
477,750
489,683
528,760
-
1,726,473
3,096,385
1,316,380
4,412,765
-
4,412,765
-
-
- -
238,742,578 -
- 2,886,851
2,886,851
-
- 238,742,578
238,742,578
517,299 40,711,380
(16,130) (1,269,456)