BANK-e- MILLIE AFGHAN THE MOST TRUSTED BANK IN AFGHANISTAN. Annual Report 2016

Transcription

1 BANK-e- MILLIE AFGHAN THE MOST TRUSTED BANK IN AFGHANISTAN Annual Report 206

2 Table of Content vision and Mission Bank-e-Millie Afghan 2 Shareholder 3 Governance Structure 4 Chairman (Board of Supervisors) 5 President & CEO 6 Board of Supervisors 7 Board of Management 8 Branches Network Financial Highlights 2 Our Correspondent Banking Relationships 3 Anti-Money Laundering and Counter financing terrorism (AML/CFT) Program. 4 Financial Statments 5

3 VISION MA will be dominant and leading bank in Afghanistan by providing modern products and services to its valued customers by meeting customers' and shareholders' Bexpectation. MISSION e have been with you since 933 and will lead you in the future with excellent Wcustomer services, shareholder accountability and employees' value. Annual Report 206

4 Bank-e- Millie Afghan Bank-e- Millie Afghan (BMA) is a state owned bank in Afghanistan. It was the first financial institution established in Afghanistan in 933. It is currently enjoying its 84th year of fame, having recognition both inside and outside Afghanistan. Similarly, it was the first financial institution established in a public private partnership set up with 72 percent share held by private sector. Later in 976, it was fully nationalized by the government of Islamic Republic of Afghanistan. As a first bank in the country, BMA introduced banking services to the people of Islamic Republic of Afghanistan. Since then, the banks competitive strength and ongoing market leadership philosophy lays in its strong capital base, strict compliance measures and proven trustworthiness. Currently BMA has 850 employees, 5 city branches in Kabul and 2 branches in provinces of Afghanistan. The bank has equity investments in USA and UK, and 70 thousands of customer base, the major portion of the customer base constitutes government entities, ministries, embassies, NGOs, and armies. The rest are house hold individuals and corporations i.e Beverages, Manufacturing, Trading, Services, Airlines, Transportations, Construction, Fuel, Steel, Medicines etc. The bank is equipped with all types of possibilities and geared up to provide the best and the most modern banking services to its customers. As a recognized and trusted bank for decades, BMA has a strong corporate governance structure with shareholders General Assembly, Board of Supervisors (BoS) and Board of Management. 2 Annual Report 206

5 Shareholder Beneficial Shareholder Type of Company Incorporated Board Members Ownership% Ministry of Finance N/A Government entity Kabul Minister 97.93% Afghan Red Crescent N/A Government entity Kabul Secretary General.79% Pashtany Bank N/A State owned Bank Kabul CEO 0.980% Afghan Air Force Command N/A Government entity Kabul Lieutenant General 0.032% Kabul Municipality N/A Government entity Kabul Mayor 0.004% Correspondent Relationship With City Bank New York Since 954 Annual Report 206 3

6 Governance Structure Board of Shareholders Board of Supervisors Board Risk Committee Audit Committee CEO Board of Management Business Units Back-office Support Units Islamic Banking Window Board of Advisors Chief Internal Auditor Chief Risk Officer Chief Compliance Officer ALCO Operations Finance Credit HR Board of Sharia Advisors Legal Advisor Credit Committee Branches General Management Investment Loan Disbursment IT Chief Islamic Banking Officer Economic Advisor HR Committee General Services Accounting Loan Monitoring Credit Committee IT (CBS) Committee Alternative Delivery Channel Loan Recovery Head Office Risk Committee Marketing Marketing Commitee Core Bankig System 4 Annual Report 206

7 K halid Zarif Chairman (Board of Supervisors) I am very pleased to see how far BMA has progressed since it s establishment in 933, this year (206), BMA made significant progress towards its mission and vision. As a leading bank, BMA has number of correspondent banking relations and is lead bank in terms of capital. Although the political uncertainties and security concerns continued in 206, the Bank has remained committed to participate in developing in the economy and banking sector, and the bank performed well financially. It met its profit and deposit targets. The Board of Supervisors (BoS) continued to provide significant oversight to Board of Management of the bank, the BoS has held regular meetings during the year to discuss major issues in greater details. As per best international practices and regulatory requirements bank policies and procedures were upgraded including anti-money laundering and combating financing terrorism (AML/CFT) policies, Risk Management Policy and IT Security Policy was also reviewed and upgraded. I extend my personal thanks and gratitude to the member of board, management team and all staff of BMA for their hard work, attentiveness and dedications for making this bank a successful financial institution. Khalid Zarif Chairman Annual Report 206 5

8 Ahmad Javed Wafa President & CEO I am pleased to see a consistent growth of Bank-e-Millie Afghan (BMA) in this changing and dynamic business environment. At Bank-e-Millie Afghan, our vision is to pursue excellence in all our operating areas and to remain as a trustable, dominant and leading bank in Afghanistan and in the region for our valued customers by meeting customers' and shareholders' expectation based on best international standards and practices with respect to our customers, employees, shareholders and the community we serve. Bank-e-Millie Afghan is committed to providing valuable, convenient and innovative products and services with the attentive customer service. This commitment to our customers has been in place for decades and will always define us simply because we treat our customers the way we want to be treated. During the year, the management had intensive reviewed and upgrade of Know Your Customer KYC, and Anti-Money Laundering/Counter Financing of Terrorism AML/CFT policies and procedure in order to ensure we comply with the best international standards. BMA has delivered consistently healthy profitability, despite challenging, albeit improving, operating conditions during the year. We managed to grow our assets to AFN 37.7 billion in 206 (205: AFN billion) 27.86%increase. Deposits grew by 23.43%, Our Total Equity has increased to AFN 8.58 billion in 206 (205: AFN 5.36 billion) 59.86% increase. Our Capital Adequacy Ratio of 72% is many fold higher than the minimum required ratio of 2% (required by Central Bank of Afghanistan). We believe our bank retains the highest CAMEL rating/scores (Capital, Asset quality, Management, Earnings & Liquidity) of all banks operating in Afghanistan. The loan portfolio is well diversified in different economic sectors, viz, Manufacturing, Trade, Services, Construction, Transportation, Beverages, Education, Medicines, Fuel, and Dairy Products etc. And this has enabled our role as growth engine in the national economic development. During the year we have introduced ATM facility. We believe that our structure enables us to provide the highest level of quality service, competitive products, and value to our customers. On the capacity building side, we have introduced 285 employees to different on-job trainings, workshops, and institutes ranging from basic banking to specialized area viz. Risk Management, Auditing, Financial management, Information Technology, Business Communication Skills, etc. The presence of female staff in Bank-e-Millie Afghan which constitutes 0 % of employees is the evidence of management commitment to ensure the gender equalities. We will continue to roll out fresh initiatives and invest in technological advancements to provide our customers with a seamless, virtual and personalized offering in upcoming years and at the same time to ensure we comply with the best international practices. Finally I would like to take this opportunity to express my gratitude to our loyal clients, employees, board members and shareholders for the confidence and trust they have shown in us. Ahmad Javed Wafa President & CEO 6 Annual Report 206

9 Board of Supervisors Associate Professor Abdul Malek Halimi Abdul Majeed Jabarkhail Mr. Khalid Zarif was born in 974 in Kabul, Afghanistan. He completed his baccalaureate from Habibia High School in the year 989. Mr. Haleemi did his bachelor's in business administration from Kabul University Faculty of Economics in 995. He did his Master's in development management from Institute of Development Research and Development policy, Ruhr University of Bochum, Germany in year In 995, he joined Kabul University Faculty of Economics as an associate professor. Since 2006, he headed the Department of Economics, National Centre for Policy Research at Kabul University. During he was the Deputy Director of Research Magazine of Kabul University. Further he served as member of advisory board Center for International Private Enterprises CIPE since 200. Mr. Halimi has also been member of the BMA Supervisory Board between Since January 206, he has been the Chairman of BMA Board of Supervisors. Moreover, Mr. Halimi has conducted research and produced papers in investment for private sector, economic and social impact of privatization, trade and transit relations between Afghanistan and Pakistan, India s role in reconstruction of Afghanistan, private sector investment, consumer rights and its prospects in Afghanistan, human capital and its role in economic growth of Afghanistan. Mr. Halimi developed guidelines related to the preparation of dissertation reports for faculty students. His contribution in introducing scientific research methodology in Afghanistan especially Afghan universities is of greater value. is an experience banker and finance analyst. Mr. Jabarkhail is approved as a supervisory board member in 203 by Da Afghanistan Bank (Central Bank of Afghanistan). He has worked on a key positions with government and private sector. He worked as a Executive Director of Afghanistan Banks Association (ABA), Public Financial Director with United States Assistance for International Development (USAID), Senior Financial Management Specialist with Ministry of Education. He has extensive experience in banking, budget & financial management and capacity building. He played a key role in modernizing municipality accounting and budgeting system and assisted in implementation of performance based budgeting in municipalities. He has completed his masters in international Financial Management from Guru GobindSingh Indraprastha University in Delhi, India, and has completed his under graduate degree in Economics from Nangarhar. is a professional accountant who has rich experience in banking. He worked in finance, banking, anti-money laundering and combating financing of terrorism (AML-CFT). He has more than 3 years working experiences. He has worked with a number of reputed national and international organizations including Da Afghanistan Bank (Central Bank of Afghanistan), Afghanistan Institute of Banking and Finance (AIBF), American University of Afghanistan (AUAF), US Treasury Department, International Rescue Committee -Learn For Life project (IRC- LFL), USAID Bearing Point, and the Adam Smith Institute (ASI) in a variety of capacities. He is a finalist of the Association of Chartered Certified Accountants (ACCA). Mr. Zarif got his BA in Accounting from Oxford Brookes University- UK, Advance Business and Finance Certificate from ACCA, International Certified Assessor (AML-CFT) Certificate from Asia Pacific Group- Financial Action Task Force regional body (APG-FATF), Certificate in International Financial Reporting Standards and International Accounting Standards (IFRSs & IASs) from ACCA Platinum Authorized Learning Partner (P-ALP) and provisional trainer license's from International Financial Cooperation (IFC) of the World Bank. Annual Report 206 7

10 Board of Management Ahmad Javed Wafa was appointed as President/CEO of Bank-e-Mil lie Afghan after successfully attaining the approval of Board of Supervisors and Da Afghanistan Bank (DAB). He formally joined the bank on 2 December 205 after being officially introduced to the bank. Mr. Wafa is a professional economist and banker. Since February 206, he has been working as a First Vice Chairman of Afghanistan Banks Association (ABA) and remained as Acting Chairman. He previously worked as Director Economic and Strategic Planning at the Administrative Office of the President, Chief Risk Officer at Bank e Millie Afghan (BMA), Deputy Director General Research Monetary and Fiscal Sector & Senior Analyst External Sector at Monetary Policy Department with Da Afghanistan Bank. Mr. Wafa has also worked as a National Economic Specialist, Afghanistan Sub-national Governance Program (ASGP) with UNDP. During his professional career as a senior economist and banker in various capacities, he has had substantial contributions to financial and monetary stability of the Afghanistan economy, his contributions to monetary stability during years were remarkable. Mr. Wafa completed bachelor degree in economics from international Islamic university in 2008 and joined National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan in 20 where he successfully completed master in public policy with specialization in economic policy in 202. After completing his master degree he has started working with the commercial banking sector, during his tenure as Executive Director at Afghanistan banking association, he has implemented strategic plan for the flourishing future of ABA & its members and strengthen coordination among commercial banks and commercial banks with DAB and ministry of finance, Mr. Wafa was able to successfully bring stability to the ABA operations and attain confidence of members, donors and other stakeholders. During his tenure as Director Economic and Strategic Planning at the Administrative Office of the President, he had significant role in improving 00 days strategic planning of ministries by holding seminars & meetings, he had substantial contributions in solving the issues faced by ministries in the implementation of development projects, Mr. Wafa participated in WTO final working party negotiations, and had great impact in improving the overall capacity of the directorate. Mr. Wafa has authored several papers and articles on various national and international issues related to banking sector, monetary policy, fiscal policy and international trade. Mr. Wafa is a committed professional who has strong communicating and negotiating skills, he has attended on job training in Central Bank of Italy, Macroeconomic Diagnostics in IMF, Washington D.C. USA, Monetary Policy, Exchange rate and Capital flows in Central Bank of Switzerland and attended several seminars, conferences and meetings on national and international platform where he represented his country. 8 Annual Report 206

11 Muhibullah Amini Chief Finance Officer Bank-e-Millie Afghan Mr. Muhibullah Amini is a professional banker, accountant and financial analyst who has previously worked with Da Afghanistan Bank as senior financial risk manager, deputy director risk management department and deputy general director PCR, Mr. Amini joined BMA in 200 in the capacity of deputy chief internal auditor who was promoted to the Chief Internal Auditor in 20, he currently serves as Chief Finance Officer of BMA, in addition to serving BMA he is a part time lecturer in university for the past 8 years, delivering lectures on banking, finance, accounting and economics subjects. Mr. Amini has successfully completed Master of Science in Economics and Bachelor of Science (Honors) in Economics from international Islamic university Islamabad and has attended several seminars, trainings and conferences domestically and abroad on banking, financial management, auditing, risk management, fraud detection and management, banking supervision and etc Waheedullah Hakimi Chief Credit Officer (CCO) at Bank-e-Millie Afghan, he officially was appointed as CCO after receiving the approval of Board of Supervisor of Bank-e-Millie Afghan (BMA) and successfully attaining the approval of Da Afghanistan Bank (DAB). Since April 206 he has been working as Deputy Chief Credit Officer and remained as Acting Chief Credit Officer. During , Mr. Hakimi worked as Credit Disbursement General Manager at Credit Department of BMA, as a Credit Disbursement General Manager, Mr. Hakimi successfully introduced new products and schemes in the Credit Department and brought significant changes in the loan portfolio of BMA. During , Mr. Hakimi worked as acting Chief Operations Officer (COO), Deputy General Manager of Accounting Department, Secretary of Board of Supervisors (BoS) at Bank-e-Millie Afghan. Mr. Hakimi has completed his secondary education in Mohammad Agha High School in Logar province. Then he did his bachelor's degree in economics from Kabul University in Hakimi has completed Associate Degree in Business Administration Management in Berkeley College, New York, USA in 200. Moreover, Mr. Hakimi has attended advanced level training in banking both inside and outside Afghanistan. In 2005, Mr. Hakimi worked with Economics Faculty of Kabul University as a part-time lecturer of economics and banking Annual Report 206 9

12 Zainullah Hassany Chief Operations Officer (COO) at Bank-e-Millie Afghan. Mr. Hassany is an experienced banker with broad experience both in central and commercial banking. Mr. Hassany holds his bachelor's degree in Economics from Islamic University of Science & Technology. He worked as a Deputy & Acting Chief Operations Officer with BMA during July 2009-May 204 and Advisor to the BMA CEO in Islamic banking during April-July, In Central Bank of Afghanistan (Da Afghanistan Bank), Mr. Hassany worked as a Corporate Governance Officer during July 2005-March He has also worked as a Logistic and Procurement Officer with United Methodist Committee on Relief (UMCOR), Kabul, Afghanistan during December 2004-July 2005, Field Supervisor with Organization of Mine Clearance and Afghan Rehabilitation (OMAR) during June 999-December Mr. Hassany attend number of advanced trainings, courses and seminars on Anti Corruption in UAE, Exchange Program and Economics Growth in Indonesia, On job training on Legal framework for the banks at State Bank of Pakistan (SBP), Management and Evaluation Seminar and Problem Solving Course at Da Afghanistan Bank. F ida Mohammad is a professional banker, he has joined Bank-e-Millie Afghan (BMA) in 207 and working at the capacity of Chief Risk Officer duly approved by Da Afghanistan Bank (DAB), he has more than 8 years experience in the banking sector with core competencies in Risk Management, Assets & liability management, Operations Management, Accounts Management, Strategic Planning, Compliance/KYC/AML/CFT, Credit Analysis, Credit review, Financial analysis and Budgeting. He began his career with Azizi Bank and later joining Bakhtar Bank where he rose to Deputy Chief Financial Officer (Dy.CFO). Prior to join BMA he had worked at the capacity of Risk Manager at Afghanistan International Bank (AIB) for more than 4 years. He holds MBA degree (Specialized in Banking and Finance) from American University of Afghanistan. 0 Annual Report 206

13 Bank-e- Millie Afghan Branches Network Samangan Branches: Samangan Branch Faryab branches: 2 Andkhoy Branch Faryab Branch Mazar- Sharif branches: Mazar-Sharif Branch Kunduz branches: Kunduz Branch Baghlan branches: Pol-e-Khumri Branch Juzjan branches: 2 Juzjan Branch Aqcha Branch 2 2 Jowzjan Balkh Kunduz Takhar Badakhshan Herat Badghis Faryab Ghor Sar-e Pol Daykundi Bamyan Samangan Ghazni Parwan Maidan Wardak Baghlan Kabul Logar Panjshir 5 Paktia Khost Nuristan Parwan branches: Parwan Branch Kunar Laghman Laghman branches: Nangarhar Laghman Branch 2 Nangarhar branches: Jalalabad Branch Torkham Branch Oruzgan Farah Zabul Paktika Khost branches: Khost City Branch Nimroz Helmand Kandahar Logar branches: Logar Branch Herat branches: Herat Branch Helmand branches: Helmand Branch Paktya branches: Paktya Branch Kandahar branches: Kandahar Branch Ghazni branches: Ghazni Branch Kabul branches: 5 BMA Main Office Wazir Akbar Khan Afghan Tejarti Markaz Said Noor Mohammad Shah Meena Khair Khana Meena Mirwais Maidan Shaharara First Macroryan Share Now Gul Bahar Center Sarai Shahzada Karte 3 Ahmad Shah Baba Meena Sorubi Macrorayan 3 Kabul ATMs: 4 Main Branch Mirwais Maidan Wazir Akber Khan Ahmad Shah Baba Meena Nimroz branches: Nimroz Branch Annual Report 206

14 FINANCIAL HIGHLIGHTS Bank-e-Millie Afghan (BMA)'s consistent healthy financial performance is the evident for the last 5 years. We maintained our established status as "The Most Trusted Bank in Afghanistan" and a leading bank in terms of Equity, Profitability and Liquidity. Deposits 6.7bn ,000 25,000 DEPOSITS AFN (MILLIONS) 20,000 Capital growth 3.2bn ,000 0,000 5, ASSETS AFN (MILLIONS) EQUITY AFN (MILLIONS) 40,000 35,000 30,000 25,000 20,000 5,000 0,000 5, ,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000, NET PROFIT AFN (MILLIONS) LOANS & ADVANCES AFN (MILLIONS) 3,500 3,000 3,000 2,500 2,500 2,000,500 2,000,500,000, Annual Report 206

15 Our Correspondent Banking Relationships for US Dollar clearing. Bank-e-Millie Afghan has US dollars clearing relationship with most reputed international bank: Citibank New York for decades, The Management Board of BMA has been pursuing other correspondent relationships, this remains our priority objective and will be supported by ensuring that our Know Your Customer and Anti-Money Laundering policies and procedures will comply with the highest international standards & best practices. We have invested in the advancement of technology and purchased compliance based software which enables transactions monitoring, customers screening against various sanction lists issued by regulators, UN, USA, European Union, etc. Citi Bank (New York) State bank of India (UK) l Canara Bank (UK) Punjab National Bank (Hong Kong) Annual Report 206 3

16 Anti-Money Laundering and Counter financing terrorism (AML/CFT) Program. Anti-Money Laundering and Counter financing terrorism (AML/CFT) legislation requires Bank-e-Millie Afghan (BMA) to have policies and program in place that is subject to oversight by Board of Supervisor. As a global and local regulatory requirement, Bank-e-Millie Afghan has been established an independent compliance function in 2006 to lead the best and sound Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT) program in the bank. Therefor BMA has adopted AML/CFT policies and procedures accordance with Islamic Republic of Afghanistan AML/CFT laws and regulations which approved by BoS and its applicable on all business units of the bank. For a sufficient AML/CFT program, BMA reviews its policies and procedures on annual basis to mitigate the risks of ML/FT in the bank, in case of any changes to the policies and procedures; this will immediately disseminate and communicated to all relevant employees of the bank through facilitating awareness sessions or by any other means. In addition BMA provides trainings program to all relevant staff regarding AML/CFT issues on annual basis (Need Assessment Plan) to make sure the policies and procedures effectively implemented in place. The bank will conduct customer identification and verification, CDD renewal on annual basis, monitor customer s transactions and activities, file LCTRs/STRs reports required by relevant regulatory bodies, and will retain all records for minimum 0 years. Bank-e-Millie Afghan has invested in technologies and introduced AML software from Virmati Telecommunication Company, for the purpose of monitoring customers transactions. On the other side BMA familiarized online compliance tool from (ACCUITY Vendor). ACCUITY provides AML screening solution banks globally and it has the most comprehensive coverage on sanctions lists, a global PEP database (over.6 million PEPs including Afghanistan PEPs), Enforcement records and negative news database. ACCUITY online compliance tool allows bank to screen wide variety of data such as individuals, companies, banks, vessels, ports, etc. with the unique capability to screen up to 0 names in a single click. Our local presence allows us a strong understanding of the markets and customers with whom we do businesses, as our business grow in size, the bank will use this Tool to protect its reputation, and to meet its regulatory commitments. 4 Annual Report 206 6

17 Independent Auditor s Report Annual Report 206 5

18 6 Annual Report 206

19 Annual Report 206 7

20 8 Annual Report 206

21 Annual Report 206 9

22 20 Annual Report 206

23 Annual Report 206 2

24