Managing Director's Report

Bangladesh Shilpa Rin Sangstha (BSRS) was established on October 31, 1972 under President’s Order No. 128 of 1972 with the unification of Pakistan Industrial Credit and Investment Corporation Limited (PICIC), Investment Corporation of Pakistan (ICP) and National Investment Trust Limited (NIT) located in Bangladesh with Tk. 50.00 million authorized capital and Tk. 50.00 million paid-up capital (Subsequently both Authorized and Paid-up capital was raised at different time in phases). The objective was to provide credit facilities vis-à-vis related assistance to large industrial concerns and to encourage/broaden the Investment base in Bangladesh. Later on Investment Advisory Centre of Bangladesh (IACB) was also merged with the Sangstha in 1987. At the initial stage, the Sangstha, used to receive significatnt foreign fund from World Bank, UNDP, Asian Development Bank, OPEC, Saudi Arabia, Germany and other countries for industrialization and to achieve the objective for which it was established. From 1972 the Sangstha granted term loans to various industries in different sectors of the economy.

Apart from development financing activities, the BSRS obtained permission from Bangladesh Bank to open commercial banking branches on April 19, 1993, Sangstha opened one branch at Motijheel Commercial area. Subsequently opened another branch at Karwan Bazar on October 31, 1999. Both the branches are currently doing commercial banking.

BSRS was set up with the objective of working as a Development Financing institution to provide credit facilities along with support and assistance to develop industrial concerns and encourage the base of investment in Bangladesh. BSRS was used to extend medium and long-term credit facilities to industrial projects mainly in the private sector. Besides, it was set to provide underwriting advances, bridge financing and debenture loans to public limited Companies. BSRS is also mandated to underwrite shares and debenture in the process of IPO floatation. It also has the mandate to float and manage mutual fund thereby providing impetus to the capital market. Being a member of the Dhaka Stock Exchange it participates at the share trading in the capital market.

Keeping pace with the global changes, the banking sector of the country has been undergoing remarkable changes during the last couple of years. In order to bring the sector in line with the international norms, the Central Bank has taken a number of steps under the Financial Sector Reforms Program. During the last couple of years, the Bangladesh Bank has taken a number of steps through prudential circulars and best practice guidelines to improve the governance practice of the sector.

During the FY 2006-2007 the net profit, after tax, of the Sangstha stood at Tk. 105.78 million compared to Tk. 85.85 million in FY 2005-2006 indicating an increase of 23.21% over the previous period. The above financial performance yields a return of 3.68% (ROAA) in the FY 2006-2007 compared to 2.24% in the previous year. Similarly during the same period yield on average equity stood at 6.78% compared to 4.55% in the previous year.

BSRS has Tk. 101.61 million investments in first BSRS mutual fund and at the end of FY 2006-2007 it stood at Tk. 280.71 million. Further at the same period BSRS has portfolio investment of Tk. 633.90 million, the market value of which stood at Tk. 2552.03 million. This is an excellent appreciation of capital market operation.
Net Interest Margin (NIM) ratio of BSRS shows rising trend over the last three years. The ratio was 5.65%, 5.10% and 2.38% in the FY 2006-2007, 2005-2006 and 2004-225 respectively. This shows good quality interest earning assets than interest sensitive borrowings.

BSRS has been maintaining a strong capital base compared to regulatory capital adequacy requirement. As on June 30, 2007 the Sangstha has capital surplus of Tk. 871.24 million compared to Tk. 800.72 million on June 30, 2006. The liquidity position of BSRS as reflected by its positions, as on June 30, 2007 is good and continuing in better trend.

BSRS is a developing organization now. Within a few days it is going to operate the brokerage house to give opportunity for small and medium investors in the capital market of the country. It is also going to operate its 2nd Mutual fund within a short time

We know that the main goal of the Government of Bangladesh is to achieve economic development. It is widely accepted that industrialization is the dominating factor for economic development. Bangladesh Shilpa Rin Sangstha is devoted to industrialize the country since its inception. It is one of the pioneering institutions in financing term loan to industrial concerning Bangladesh. Bangladesh Shilpa Rin Sangstha shows keen interest in the industrial development of Bangladesh accompanied with various steps to accelerate economic growth and development.

Finally, my thanks go to the Govt. of the People’s Republic of Bangladesh. Bangladesh Bank, the Chairman and other Members of the Board of Directors of BSRS who have been the driving force toward setting the strategy and guidance for the BSRS. The guidance and directives would like to attribute the year’s success to the magnificent teamwork and yearn of all of our officers & staff of BSRS who worked very hard in achieving the Mission of the Sangstha.