Strategic Analysis Of Brac Bank
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Background
BRAC Bank Limited, a scheduled commercial bank established under the Banking Company Act, 1991 and incorporated as a public company limited by shares on May 20, 1999 under the Companies Act 1994 in Bangladesh. The banks has started its operation on 4th of July 2001 with a vision to be the market leader through providing all kinds of banking services suitable to the dynamic demands of both business and individual in the competitive market.
BRAC Bank has embarked with an avowed policy to provide “best-in-the-class” services to its diverse range of customers spread across the country based on latest information technology. To keep in tied with its sponsor, BRAC Banks goals, the bank endeavors to provide mass financing especially to focus on under-served enterprises across the rural – urban area. The bank focused on relationship based Banking, as it believes that the pursuit of profit and developmental goals are mutually reinforcing. This focus makes the bank to emphasize more on to explore and access market opportunities as well as build asset base to its clients conforming significant contribution to the profitability of the Bank.
Vision
BRAC Bank will be a unique organization in Bangladesh. It will be a knowledge-based organization where the BRAC Bank professionals will learn continuously from their customers and colleagues worldwide to add value. They will work as a team, stretch themselves, innovate and break barriers to serve customers and create customer loyalty through a value chain of responsive and professional service delivery. Continuous improvement, problem solution, excellence in service, business prudence, efficiency and adding value will be the operative words of the organization.
BRAC Bank will serve its customers with respect and will work very hard to instill a strong customer service culture throughout the bank. It will treat its employees with dignity and will build a company of highly qualified professionals who have integrity and believe in the Banks vision and who are committed to its success.
BRAC Bank will be a socially responsible institution that will not lend to businesses that have a detrimental impact on the environment and people.
Mission
BRAC Bank will adhere to highly professional and ethical business principles and internationally acceptable banking and accounting standards.
Every BRAC Bank professional will need first of all a commitment to excellence in all that he/she does, a keen desire for success, a determination to excel and a drive to be the best. We will individually and jointly learn continuously from customers and professional colleagues around the globe to improve the way we do business so that we are the best. We will walk that extra mile with enthusiasm and empathy to serve our customers and to solve problems together so that our customers succeed in their business and remain loyal to our Bank. We will set up goals for ourselves and then exceed the goals that we set up. We shall not accept failure.
Goals
BRAC Bank will be the absolute market leader in the number of loans given to small and medium sized enterprises through out Bangladesh. It will be a world – class organization in terms of service quality and establishing relationships that help its customers to develop and grow successfully. It will be the Bank of choice both for its employees and its customers, the model bank in this part of the world.
Capital Structure & Equity Partners
BRAC Bank has started with an initial capital of amount BDT 250 million, while the authorized capital is BDT 1,000 million. Over time the bank has increased it capital base because of its steady growth and within three years of operations, it has doubled its capital base to BDT 500 million. The Bank has planned to go public by the last quarter of this year (2005) and raise its paid up capital to BDT 1000 million.
BRAC Bank originated with Local and International Institutional shareholding including BRAC as promoter with IFC and ShoreCap International, UK. Here is the break-up of BRAC Banks shareholdings positions.
Infrastructure
Since its inception, BRAC bank has been expanding its Branch network across the country. Currently, the total number of branches is 26 including 8 branches in the prime locations of Dhaka City, 1 in Savar, 6 in Sylhet and 3 in Chittagong. All these branches are providing Real Time On-line (RTOL) banking services to its customers.
Parallel to the branch expansion policy, BRAC Bank has also 368 unit offices dispersed throughout the country. These unit offices are engaged in lending to Small & Medium Enterprises (SME) – the thrust lending sector of the bank.
BRAC BANK is one of the most IT enabled banks in Bangladesh. From its inception the bank has particularly emphasized on IT as a cutting edge advantage over competitors and also plans to continue as a major IT driven bank in the years to come.
Functional Divisions
BRAC Bank has a centralized banking structure through online banking system that resembles the ABN·AMRO Model. BRAC BANK consisted of four major divisions namely Small and Medium Enterprise (SME) Division, Retail Banking, Corporate Banking and Treasury division. Other important division are Credit Administration, Loan Administration, Trade Fin, IT, HRM, CCU, Internal Control etc, whose works as a back office to support its major four divisions.
BRAC Bank heavily depends on SME for its asset growth. The basic model of the bank is to grow its liability book (Deposit) from diversified sources and channel the same across the country through SME asset (Loans) booking. But, in order to diversify the asset portfolio, the bank also relies on both Retail & Corporate assets.
SME division at BRAC BANK comprises of about 300 unit small offices across the country.