AB Bank LTD 2016

AB Bank Limited
BCIC Bhaban
30-31 Dilkusha Commercial Area
Dhaka 1000
AB Bank Limited and its Subsidiaries

_____________________
Consolidated and separate financial statements
for the year ended December 31, 2016
AB Bank Limited & its Subsidiaries
Consolidated Balance Sheet
As at December 31, 2016
31.12.2016 31.12.2015
Notes
PROPERTY AND ASSETS Taka Taka
Cash 3(a) 19,707,725,976 17,034,569,843
In hand (including foreign currencies) 3.1(a) 1,536,407,693 1,205,441,602
Balance with Bangladesh Bank and its agent bank(s) 3.2(a) 18,171,318,283 15,829,128,241
(including foreign currencies)
Balance with other banks and financial institutions 4(a) 4,655,002,507 4,752,701,128
In Bangladesh 4.1(a) 2,624,288,364 2,196,851,448
Outside Bangladesh 4.2(a) 2,030,714,143 2,555,849,680
Money at call and on short notice 5(a) 7,633,213,824 4,566,844,263
Investments 6(a) 47,561,451,498 33,437,817,546
Government 6.1(a) 41,903,780,261 27,900,211,389
Others 6.2(a) 5,657,671,237 5,537,606,158
Loans, advances and lease/investments 226,546,501,234 216,364,880,127
Loans, cash credits, overdrafts, etc./Investments 7(a) 225,023,967,197 214,291,708,326
Bills purchased and discounted 8(a) 1,522,534,037 2,073,171,801
Fixed assets including premises, furniture and fixtures 9(a) 4,680,967,000 4,819,543,816
Other assets 10(a) 6,383,908,169 5,962,473,246
Non-banking assets - -
Total Assets 317,168,770,208 286,938,829,969
LIABILITIES AND CAPITAL (142,839,772)

Liabilities
Borrowings from other banks,
financial institutions and agents 11(a) 15,757,755,476 24,098,598,784
AB Bank Subordinated Bond 12 6,500,000,000 6,500,000,000
Deposits and other accounts 13(a) 245,394,404,421 213,671,723,838
Current account and other accounts 22,296,581,953 20,050,332,586
Bills payable 4,865,582,322 3,699,973,387
Savings bank deposits 28,024,691,434 22,573,067,458
Fixed deposits 122,034,379,371 111,741,032,463
Other deposits 68,173,169,341 55,607,317,944
Other liabilities 14(a) 25,182,491,365 19,094,756,031
Total Liabilities 292,834,651,262 263,365,078,652
Capital/Shareholders' Equity 2
Equity attributable
to equity holders of the parent company 24,324,206,960 23,575,987,130
Paid-up capital 15 6,738,936,140 5,990,165,460
Statutory reserve 16 6,495,637,440 6,111,203,545
Other reserve 17(a) 3,253,395,264 4,039,376,532
Retained earnings 18(a) 7,836,238,115 7,435,241,593
Minority interest 18(b) 9,911,986 (2,235,814)
Total Equity 24,334,118,946 23,573,751,317
Total Liabilities and Shareholders' Equity 317,168,770,208 286,938,829,969
2 (0) (1)
- -
3
31.12.2016 31.12.2015
Notes
Taka Taka
Off-Balance Sheet Items
Contingent liabilities - 19 73,478,914,136 68,649,158,866
Acceptances and endorsements 29,034,996,366 24,351,049,686
Letters of guarantee 19.1 13,920,306,922 12,327,410,154
Irrevocable letters of credit 22,005,679,984 23,650,724,184
Bills for collection 8,517,930,863 8,319,974,842
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 73,478,914,136 68,649,158,866
The annexed notes form an integral part of these consolidated financial statements.
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Moshiur Rahman Chowdhury Shishir Ranjan Bose, FCA M. A. Awal M. Wahidul Haque
President & Managing Director Independent Director Director Chairman
(Current Charge)
This is the Consolidated Balance Sheet referred to in our separate report of even date.
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Dhaka, Howladar Yunus & Co.
April 29, 2017 Chartered Accountants
4
Consolidated Profit and Loss Account
For the year ended December 31, 2016
2016 2015
Notes
OPERATING INCOME Taka Taka
Interest income/profit on investments 21(a) 19,450,005,916 21,228,897,178
Interest/profit paid on deposits and borrowings, etc. 22(a) (16,139,157,478) (16,608,847,742)
Net interest income 73,070,673 3,310,848,438 4,620,049,436
Investment income 23(a) 5,105,865,296 3,281,987,184
Commission, exchange and brokerage 24(a) 2,855,788,192 2,964,436,043
Other operating income 25(a) 168,909,279 227,682,558
8,130,562,767 6,474,105,785
Total operating income (a) 11,441,411,205 11,094,155,221
OPERATING EXPENSES -
Salary and allowances 26(a) 3,011,081,546 2,904,505,487
Rent, taxes, insurance, electricity, etc. 27(a) 711,166,604 606,508,831
Legal expenses 28(a) 18,571,996 9,292,376
Postage, stamps, telecommunication, etc. 29(a) 143,774,685 139,947,246
Stationery, printing, advertisement, etc. 30(a) 197,362,277 168,617,596
Chief executive's salary and fees 26.1 12,900,000 13,900,000
Directors' fees 31(a) 10,699,895 8,783,017
Auditors' fees 32(a) 5,762,139 5,285,950
Depreciation and repairs of Bank's assets 33(a) 585,870,806 600,206,526
Other expenses (0) 34(a) 1,323,937,179 1,255,511,701
Total operating expenses (b) 6,021,127,128 5,712,558,730
Profit before provision c = (a-b) 5,420,284,078 5,381,596,491
Provision against loans and advances 35(a) 2,938,984,936 2,066,527,189
Provision for diminution in value of investments 36(a) 21,980,479 44,910,791
Other provisions 37(a) 59,558,484 200,066,450
Total provision (d) 3,020,523,899 2,311,504,430
Loss on disposal of AB Exchange (UK) Limited 4,381,780 -
Profit before tax 2,395,378,399 3,070,092,061
Provision for taxation 886,586,150 1,612,779,701
Current tax 1,774,806,624 2,015,720,840
Deferred tax (888,220,474) (402,941,140)
Net profit after tax (4,381,781) 1,508,792,249 1,457,312,360
Appropriations
Statutory reserve 388,712,367 535,826,124
General reserve - -
Dividends, etc. - -
388,712,367 535,826,124
Retained surplus 1,120,079,882 921,486,237
Minority interest (5,944,179) 7,220,463
Net Profit attributable to the shareholders of parent company 1,126,024,060 914,265,774
Consolidated Earnings Per Share (EPS) 39(a) 2.25 2.15
The annexed notes form an integral part of these consolidated financial statements.
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(Current Charge)
This is the Consolidated Profit and Loss Account referred to in our separate report of even date.
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5
Consolidated Cash Flow Statement
2016 2015
Cash Flows from Operating Activities Taka Taka
Interest receipts 18,320,297,829 21,773,331,027
Interest payments (16,125,576,572) (16,508,505,249)
Dividend receipts 18,968,685 133,087,213 115,124,494
Fee and commission receipts 3,150,789 2,007,736,220 1,989,547,686
Recoveries on loans previously written off 23,385,264 66,437,637
Payments to employees (3,023,981,546) (2,918,405,487)
Payments to suppliers (197,362,277) (168,617,596)
Income taxes paid (1,531,193,578) (2,402,728,026)
Receipts from other operating activities 6,170,669,593 4,302,995,967
Payments for other operating activities (2,443,034,619) (2,257,080,318)
Operating profit before changes in operating assets & liabilities 3,334,027,525 3,992,100,136
Increase/decrease in operating assets and liabilities
Loans and advances to customers (12,091,885,321) (34,002,162,475)
Other assets 285,323,789 (1,132,502,797)
Deposits from other banks 963,238,791 (6,289,172,380)
Deposits from customers 30,745,860,885 21,743,796,011
Trading liabilities (short-term borrowings) (8,557,748,994) 12,483,490,932
Other liabilities 5,875,153,318 3,783,309,830
17,219,942,470 (3,413,240,879)
Net cash flow from operating activities (a) 20,553,969,995 578,859,257
Cash Flows from Investing Activities
Purchase of government securities (14,790,747,653) (1,534,904,107)
(Purchase)/Sale of trading securities, shares, bonds, etc. (120,065,079) 257,702,023
Purchase of property, plant and equipment (217,381,698) (139,989,135)
Net cash used in investing activities (b) (15,128,194,430) (1,417,191,220)
Cash Flows from Financing Activities

Increase/(decrease) of long-term borrowings 216,905,686 4,229,440,326
Dividend paid (120,780) (392,021)
Net cash flow from financing activities (c) 216,784,906 4,229,048,305
Net (decrease)/increase in cash (a+b+c) 5,642,560,471 3,390,716,342
Effects of exchange rate changes on cash and cash equivalents - -
Cash and cash equivalents at beginning of the year 26,357,133,035 22,966,416,693
Cash and cash equivalents at end of the period (*) 31,999,693,507 26,357,133,035
(*) Cash and cash equivalents:
Cash 1,536,407,693 1,205,441,602
Prize bonds 3,751,200 3,017,800
Money at call and on short notice 7,633,213,824 4,566,844,263
Balance with Bangladesh Bank and its agent bank(s) 18,171,318,283 15,829,128,241
Balance with other banks and financial institutions 4,655,002,507 4,752,701,129
31,999,693,507 26,357,133,035
Net Operating Cash Flow Per Share (NOCFPS) 30.50 0.86
(0) (0.15)
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(Current Charge)
This is the Consolidated Cash Flow Statement referred to in our separate report of even date.
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6
Consolidated Statement of Changes in Equity
(Amount in Taka)
Foreign exchange
Investment
Paid-up Statutory General Assets revaluation revaluation reserve Minority Retained
Particulars revaluation Total
capital reserve reserve reserve on investment in interest earnings
foreign operation reserve
Balance at 01 January 2016 5,990,165,460 6,111,203,545 1,298,786,918 1,305,535,181 944,469 1,434,109,964 (2,235,814) 7,435,241,593 23,573,751,317
Adjustment:
Bonus for 2015:
12.50% Stock Dividend 748,770,680 - - - - - - (748,770,680) -
Restated balance at 01 January 2016 6,738,936,140 6,111,203,545 1,298,786,918 1,305,535,181 944,469 1,434,109,964 (2,235,814) 6,686,470,913 23,573,751,317
Net profit after taxation for the year - - - - - - (5,944,179) 1,514,736,427 1,508,792,249
Adjustment for subsidiaries - - - - - - - 230,620,224 230,620,224
Addition/(Adjustment) made during the year - 388,712,366 - (1,774,401) - (787,912,180) 18,091,978 (495,941,985) (878,824,221)
Foreign Exchange Rate Fluctuation - (4,278,471) 123,023 - 3,582,290 - - (99,647,465) (100,220,623)
Balance at December 31, 2016 6,738,936,140 6,495,637,440 1,298,909,941 1,303,760,780 4,526,759 646,197,784 9,911,986 7,836,238,115 24,334,118,946
Balance at December 31, 2015 5,990,165,460 6,111,203,545 1,298,786,918 1,305,535,181 944,469 1,434,109,964 (2,235,814) 7,435,241,593 23,573,751,317
6,738,936,140 6,495,637,440 1,298,909,942 1,303,760,781 4,526,759 646,197,783 7,836,238,115 24,334,118,946
(0) (0) (0) (0) - 1 (1) (0)
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(Current Charge)
This is the Consolidated Statement of Changes in Equity referred to in our separate report of even date.
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7
AB Bank Limited
Balance Sheet
31.12.2016 31.12.2015
Notes
PROPERTY AND ASSETS 148,435,293 Taka Taka
Cash 3 19,707,650,776 17,033,284,356
In hand (including foreign currencies) 3.1 1,536,332,492 1,204,156,116
Balance with Bangladesh Bank and its agent bank(s) 3.2 18,171,318,283 15,829,128,241
Balance with other banks and financial institutions 4 4,557,434,958 4,711,003,257
In Bangladesh 2,531,704,237 2,159,121,205
Outside Bangladesh 2,025,730,721 2,551,882,052
Money at call and on short notice 5 8,325,871,504 5,284,337,005
Investments 6 46,666,898,817 32,559,141,564
Government 6.1 41,903,780,261 27,900,211,389
Others 6.2 4,763,118,556 4,658,930,176
Loans, advances and lease/investments 7 218,769,451,248 209,725,203,268
Loans, cash credits, overdrafts, etc./Investments 218,136,406,416 208,565,121,079
Bills purchased and discounted 8 633,044,832 1,160,082,188
Fixed assets including premises, furniture and fixtures 9 4,080,377,435 4,200,872,767
Other assets 10 12,728,206,273 11,496,412,503
Total Assets 314,835,891,011 285,010,254,720
LIABILITIES AND CAPITAL (0) 148,435,293
353,038,032
Liabilities 29,685,925,468 215,954,857,441
financial institutions and agents 148,435,293 11 15,454,422,143 23,693,344,309
AB Bank Subordinated Bond (0) 12 6,500,000,000 6,500,000,000
353,038,032
Deposits and other accounts 13 245,640,782,909 213,818,905,499
Current accounts and other accounts 22,298,120,917 20,067,587,921
Bills payable 4,865,582,322 3,699,973,387
Savings bank deposits 28,024,691,434 22,573,067,458
Fixed deposits 122,034,379,371 111,741,032,463
Other deposits 68,418,008,865 55,737,244,271
Other liabilities 14 24,126,225,778 18,205,779,567

Capital/Shareholders' Equity 2 1.653535843
Total Shareholders' Equity 2 23,114,460,183 22,792,225,345
Paid-up capital 15 6,738,936,140 5,990,165,460
Statutory reserve 16 6,495,637,440 6,111,203,545
Other reserve 17 3,070,222,838 3,859,909,419
Retained earnings 18 6,809,663,765 6,830,946,921
(0) 0
(2)
8
31.12.2016 31.12.2015
Notes
Taka Taka
Contingent liabilities 19 73,478,914,136 68,649,158,866
Acceptances and endorsements 29,034,996,366 24,351,049,686
Letters of guarantee 19.1 13,920,306,922 12,327,410,154
Irrevocable letters of credit 22,005,679,984 23,650,724,184
Bills for collection 8,517,930,863 8,319,974,842
Other contingent liabilities - -
Other commitments - -
Documentary credits and short term trade-related transactions - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total 73,478,914,136 68,649,158,866
The annexed notes form an integral part of these financial statements.
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(Current Charge)
This is the Balance Sheet referred to in our separate report of even date.
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9
AB Bank Limited
Profit and Loss Account
2016 2015
Notes
Taka Taka
OPERATING INCOME
Interest income/profit on investments 73,070,673 21 18,914,027,627 20,811,576,016
Interest paid/profit on deposits and borrowings, etc. 22 (16,077,046,356) (16,532,249,413)
Net interest income 73,070,673 2,836,981,270 4,279,326,603
Investment income 23 5,348,168,994 3,355,421,410
Commission, exchange and brokerage 24 2,717,093,896 2,828,755,798
Other operating income 25 115,809,979 118,591,268
8,181,072,869 6,302,768,477
Total operating income (a) 73,070,673 11,018,054,139 10,582,095,080
OPERATING EXPENSES
Salary and allowances 73,070,673 26 2,934,133,386 2,820,224,346
Rent, taxes, insurance, electricity, etc. 27 697,882,398 592,500,607
Legal expenses 28 18,146,709 8,418,187
Postage, stamps, telecommunication, etc. 29 135,901,070 135,241,035
Stationery, printing, advertisement, etc. 30 196,167,659 167,510,614
Chief executive's salary and fees 26.1 12,900,000 13,900,000
Directors' fees 31 9,586,543 7,985,347
Auditors' fees 32 5,012,790 4,345,900
Depreciation and repairs of Bank's assets 33 564,494,152 573,803,326
Other expenses 73,070,673 34 1,424,393,841 1,304,413,020
Total operating expenses (b) (0) 5,998,618,547 5,628,342,383
Profit before provision c = (a-b) (0) 5,019,435,593 4,953,752,697
Provision against loans and advances 35 2,932,772,661 1,994,811,363
Provision for diminution in value of investments 36 25,000,000 -
Other provisions 37 59,558,484 200,000,000
Total provision (d) 3,017,331,145 2,194,811,363
Profit before taxation (c-d) 2,002,104,448 2,758,941,334
Provision for taxation 697,434,025 1,488,526,466
Current tax 1,581,104,434 1,896,468,866
Deferred tax (883,670,410) (407,942,400)
Net profit after taxation (0) 1,304,670,423 1,270,414,868
Appropriations
General reserve - -
Dividends, etc. - -
388,712,367 535,826,124
Retained surplus 915,958,056 734,588,744
Earnings Per Share (EPS) 39 1.94 1.89
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(Current Charge)
This is the Profit and Loss Account referred to in our separate report of even date.
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10
AB Bank Limited
Cash Flow Statement
2016 2015
Notes
Taka Taka
Cash flows from Operating Activities
Interest receipts 17,784,319,539 21,356,009,865
Interest payments (16,063,465,450) (16,431,906,919)
Dividend receipts 192,687,562 180,634,136
Fees and commission receipts 1,872,192,713 1,855,689,669
Recoveries on loans previously written off 23,385,264 66,437,637
Payments to employees 26,040,478,378 (2,947,033,386) (2,834,124,346)
Payments to suppliers (196,167,659) (167,510,614)
Income taxes paid (1,426,153,910) (2,169,479,061)
Receipts from other operating activities 40 6,167,893,301 4,266,444,672
Payments for other operating activities 41 (2,517,832,213) (2,283,109,070)
Operating profit before changes in operating assets & liabilities 2,889,825,760 3,839,085,967
Increase/decrease in operating assets and liabilities
Loans and advances to customers (10,954,512,194) (34,529,580,155)
Other assets (575,458,450) (1,194,431,447)
Deposits from other banks 963,238,791 (6,289,172,380)
Deposits from customers 30,845,057,712 21,818,538,165
Trading liabilities (short-term borrowings) (8,455,827,852) 12,487,093,552
Other liabilities 5,746,275,074 3,846,295,697
17,568,773,082 (3,861,256,567)
Net cash flow from operating activities (a) 20,458,598,843 (22,170,601)
Cash Flows from Investing Activities
Purchase of government securities (14,790,747,653) (1,534,904,107)
(Purchase)/Sale of trading securities, shares, bonds, etc. (104,188,380) 197,069,162
Purchase of property, plant and equipment (217,381,698) (139,989,135)
Net cash used in investing activities (b) (15,112,317,731) (1,477,824,080)
Cash Flows from Financing Activities
Increase/(decrease) of long-term borrowings 216,905,686 4,229,440,326
Dividend paid (120,780) (392,021)
Net cash flow from financing activities (c) 216,784,906 4,229,048,305
Net Increase/(decrease) in cash (a+b+c) 5,563,066,018 2,729,053,624
Effects of exchange rate changes on cash and cash equivalents - -
Cash and cash equivalents at beginning of the year 27,031,642,418 24,302,588,793
Cash and cash equivalents at end of the period (*) 32,594,708,438 27,031,642,417
(*) Cash and cash equivalents:
Cash 1,536,332,492 1,204,156,116
Prize bonds 3,751,200 3,017,800
Money at call and on short notice 8,325,871,504 5,284,337,004
Balance with Bangladesh Bank and its agent bank(s) 18,171,318,283 15,829,128,241
32,594,708,438 27,031,642,417
Net Operating Cash Flow Per Share (NOCFPS) 30.36 (0.03)
(0) 0.06
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(Current Charge)
This is the Cash Flow Statement referred to in our separate report of even date.
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11
AB Bank Limited
Statement of Changes in Equity
(Amount in Taka)
Assets Investment
Paid-up Statutory General Retained
Particulars revaluation revaluation Total
capital reserve reserve earnings
reserve reserve
Balance at 01 January 2016 5,990,165,460 6,111,203,545 1,222,199,200 1,305,535,182 1,332,175,037 6,830,946,921 22,792,225,345
Adjustment:
Bonus for 2015:
12.50% Stock Dividend 748,770,680 - - - - (748,770,680) -
Restated balance at 01 January 2016 6,738,936,140 6,111,203,545 1,222,199,200 1,305,535,182 1,332,175,037 6,082,176,241 22,792,225,345
Net profit after taxation for the year - - - - - 1,304,670,423 1,304,670,423
Addition/(Adjustment) made during the year - 388,712,367 - (1,774,401) (787,912,180) (477,850,007) (878,824,221)
Foreign Exchange Rate Fluctuation - (4,278,471) - - - (99,332,892) (103,611,364)
Balance at December 31, 2016 6,738,936,140 6,495,637,440 1,222,199,200 1,303,760,781 544,262,857 6,809,663,765 23,114,460,183
Balance at December 31, 2015 5,990,165,460 6,111,203,545 1,222,199,200 1,305,535,182 1,332,175,037 6,830,946,921 22,792,225,345
(0.20) 0.16 - 0.17 - (0.02) 0.11
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(Current Charge)
This is the Statement of Changes in Equity referred to in our separate report of even date.
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12
AB Bank Limited
Liquidity Statement
Analysis of Maturity of Assets and Liabilities
Amount in Taka
Up to 1 month's 1-3 months' 3-12 months' 1-5 years' More than 5 years'
Particulars Total
maturity maturity maturity maturity maturity
Assets
Cash in hand & with banks 2,904,066,153 - - - 16,803,584,623 19,707,650,776
Balance with Other banks and financial institutions 3,527,434,958 700,000,000 330,000,000 - - 4,557,434,958
Money at Call & Short Notice 4,716,455,032 3,285,381,956 324,034,516 - - 8,325,871,504
Investments 575,534,920 4,989,246,060 4,450,983,640 13,545,313,988 23,105,820,209 46,666,898,817
Loans & advances 26,548,123,560 57,221,854,887 95,569,461,888 34,298,354,326 5,131,656,587 218,769,451,248
Fixed assets including premises, furniture and fixture - - - - 4,080,377,435 4,080,377,435
Other assets 377,360,854 2,639,668,325 2,552,611,376 1,251,468,568 5,907,097,149 12,728,206,273
Non-banking assets - - - - - -
Total Assets 38,648,975,477 68,836,151,228 103,227,091,421 49,095,136,882 55,028,536,004 314,835,891,011
Liabilities
Borrowing from Bangladesh Bank, other banks,
5,528,473,257 7,287,965,189 2,438,516,686 5,625,373,900 1,074,093,110 21,954,422,143
financial institutions and agents
Deposit and other accounts 31,227,249,880 60,103,828,484 89,703,315,254 62,520,054,989 2,086,334,302 245,640,782,909
Provision and other Liabilities 613,533,275 461,642,202 4,903,613,722 18,146,814,990 621,590 24,126,225,778
Total Liabilities 37,369,256,412 67,853,435,875 97,045,445,662 86,292,243,880 3,161,049,001 291,721,430,830
Net Liquidity Excess/(shortage) 1,279,719,065 982,715,353 6,181,645,759 (37,197,106,998) 51,867,487,003 23,114,460,183
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(Current Charge)
This is the liquidity statement referred to in our separate report of even date.
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13
AB Bank Limited
Notes to the Financial Statements
1.1 The Bank and its activities
AB Bank Limited (the Bank) is one of the first generation Private Commercial Banks (PCBs) incorporated in
Bangladesh on 31 December 1981 as a public limited company under the Companies Act 1913, subsequently
replaced by the Companies Act 1994, and is governed by the Bank Company Act, 1991 (Amendment up to 2013).
The Bank went for public issue of its shares on 28 December 1983 and its shares are listed with Dhaka Stock
Exchange Limited and Chittagong Stock Exchange Limited. AB Bank Limited has 104 Branches including one (1)
Islami Banking Branch and one (1) Overseas Branch in Mumbai, India. The Bank has five subsidiary companies
namely AB Investment Limited, AB Securities Limited, Cashlink Bangladesh Limited, Arab Bangladesh Bank
Foundation all incorporated in Bangladesh and AB International Finance Limited, incorporated in Hong Kong.
AB Investment Limited (ABIL) and AB Securities Limited (ABSL) were incorporated as subsidiary companies
after obtaining the approvals from Bangladesh Bank following guidelines of the Bangladesh Securities and
Exchange Commission (BSEC). These two subsidiaries are being put into operations to cater the merchant
banking and brokerage business which were previously carried out by the Bank itself.
The Bank through its Branches and non-banking subsidiaries provides a diverse range of financial services and
products in Bangladesh and in certain international markets. The Bank has expanded its capital market oriented
service horizon to its customers through AB Investment Limited. The Bank obtained permission from BSEC to
embark upon merchant banking vide its certificate no. MB-1.02/2001-30 dated 15 May 2001 under the Securities
and Exchange Commission Act 1993. Subsequently, the Bank has formed a subsidiary company named AB
Investment Limited in accordance with the approval of Bangladesh Bank vide letter no. BRPD(R-1)717/2009-538
dated 09 December 2009 and the Bangladesh Securities and Exchange Commission vide letter no. Sec/Reg/MB-
79/2010/73 dated 10 March 2010 for dealing the Merchant Banking business.
Brokerage business of Arab Bangladesh Bank Foundation (ABBF) was transferred on 01 August 2010 to AB
Securities Limited (ABSL) vide Bangladesh Bank approval letter BRPD(R-1)717/2009-493 dated 08 November
2009.
AB Bank Limited started its Islami Banking operation through its Dilkusha Islami Banking Branch, Dhaka on 23
December 2004 following the permission of Bangladesh Bank vide letter no. BRPD (P) 745 (12)/2004-2702 dated
08 July 2004. Subsequently the Branch was shifted to Kakrail, Dhaka on 18 October 2006.
The Bank obtained permission to work as a security custodian from the Bangladesh Securities and Exchange
Commission vide its certificate no. SC-05/2007 dated 22 January 2007 under the Securities and Exchange
Commission (Securities Custodian Service) Rules 2003.
In the year 2009, the Bank obtained permission to operate Off Shore Banking Unit (OBU) vide letter # BRPD (P-
3)744/(106)/2009-4486 dated 06 December 2009 of Bangladesh Bank. OBU operation has been carried out from
28 April 2010 through the Bank's EPZ Branch, Chittagong.
The Bank has a dedicated philanthropic unit named Arab Bangladesh Bank Foundation (the Foundation) which
has been operating since 2002. Foundation has obtained brokerage licenses from BSEC on 15 August 2006 and 23
October 2006 for Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) respectively and started
its operation from 28 August 2006 and 05 December 2006 on DSE and CSE respectively. However, in view of the
decision of Bangladesh Bank and upon due agreement to that effect the Board of Directors of ABBL and ABBF
respectively, launched a new subsidiary company AB Securities Limited for the operation of brokerage business.
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1.2 Significant accounting policies and basis of preparation of the financial statements
Presentation of the financial statements
Consolidated financial statements and separate financial statements of the Bank comprise of Balance Sheet, Profit
and Loss Account, Cash Flow Statement, Statement of Changes in Equity, Liquidity Statement and relevant notes
and disclosures.
Consolidated financial statements and financial statements of the Bank were made as at December 31, 2016 and
were prepared under the historical cost convention except investments categorised under held for trading and in
accordance with Bank Company Act 1991, (Amendment up to 2013); BRPD circular no. 14 dated 25 June 2003,
the Companies Act 1994, the Securities and Exchange Ordinance 1969, Securities and Exchange Rules 1987 and
other laws and rules applicable for the Bank.
Consolidated financial statements and financial statements of the Bank have been prepared in accordance with the
measurement and recognition requirements of International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) as adopted by the Institute of Chartered Accountants of Bangladesh as
Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS).
Basis of consolidation
Separate set of records for consolidating the financial statements of the Branches including Mumbai Branch, India,
AB Investment Limited, AB Securities Limited, Cashlink Bangladesh Limited and AB International Finance
Limited, Hong Kong are maintained at the Head Office of the Bank, based on which these financial statements
have been prepared. The consolidated financial statements have been prepared in accordance with the BFRS 10
"Consolidated Financial Statements". The Consolidated Financial Statements have been prepared to a common
reporting period ending on December 31, 2016.
Mumbai Branch, India
The assets and liabilities of Mumbai Branch, India have been incorporated in the accounts at year end exchange
rate. Income and expenditures have been incorporated in the accounts by each line item. The Balance Sheet and
Profit and Loss Account of the Mumbai Branch have been shown separately in Annexure-F.
Islami Banking Branch
Islami Banking Branch has been maintaining separate set of books and records for its operations following
Bangladesh Bank guidelines. All assets-liabilities and income-expenses of this Branch have been incorporated in
similar heads of account of the Bank's financial statements. Balance Sheet and Profit and Loss Account of Islami
Banking Branch is shown separately in Annexure-G as per Bangladesh Bank BRPD Circular No. 15 dated 09
November 2009. Distribution of profit under Islamic Banking Operation and fixation of final rate for the year
2016 has also been disclosed separately in Annexure-H.
Custodian Wing
Financial statements of Custodian Wing have been separately audited by the auditors of the Bank. Income-
expenditures of Custodian Wing have been incorporated in similar heads of account of the Bank's Profit and Loss
Account. Profit and Loss Account of Custodian Wing has been shown separately in Annexure-I.
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Off-Shore Banking Unit (OBU)
This particular unit of the Bank started its operation in the year 2010. Assets-liabilities and income-expenditures of
Off- Shore Banking Unit are incorporated in similar heads of account of the Bank's Balance Sheet and Profit and
Loss Account. The Balance Sheet and Profit and Loss Account of the Off- Shore Banking Unit (OBU) have been
shown separately in Annexure-J.
Amana Bank Limited as Associates
AB Bank Limited invested in Amana Bank Limited, Srilanka which is a licensed commercial bank and established
under the Banking Act No. 30 of 1988 (Srilankan Banking Act) and amendments thereto. Amana Bank is a public
limited liability company incorporated on 5 February 2009 and the registered office of the Bank is located at No.
480, Galle Road, Colombo 3. The Bank commenced commercial banking operations on 1 August 2011. Amana
Bank is also a listed company under the Colombo Stock Exchange.
The principal activities of the Bank is to provide Sharia compliant banking and related activities such as accepting
customer deposits, personal banking, lease financing, home and property financing, advances against gold, resident
and non-resident foreign currency operations, trade financing, import and export financing, equipment and
machinery financing, working capital financing and project financing.
Although AB Bank Limited invested 14.44% in equity of Amana Bank Limited, Amana Bank Limited considered
as Associates. A representative in the board of directors of Amana Bank Limited holds by the Bank.
Investment in Amana Bank Limited is initially recognised at cost and adjusted thereafter for the post-acquisition
change in the investor’s share of the investee’s net assets in accordance with BAS 28 using the equity method as
AB has 14.44% holding in equity of Amana Bank with a representation in their Board. The Balance Sheet and
Profit and Loss Account of Amana Bank Limited have been shown separately in Annexure-K.
Subsidiaries Operation
The financial statements of subsidiaries (except Arab Bangladesh Bank Foundation-ABBF) have been
consolidated following BFRS 10 "Consolidated Financial Statements". ABBF operated only for philanthropic
purpose and its profit is not distributable to the shareholders. Thus, for ensuring the fair presentation of the
Financial Statements of the Parent Company (the Bank), the Financial Statements of ABBF has not been
consolidated.
AB Investment Limited (ABIL)
AB Investment Limited (ABIL) started its operation from 10 March 2010 for Merchant Banking Operation. AB
Bank Limited holds 99.99% shares in ABIL.
The Balance Sheet and Profit and Loss Account of the ABIL have been shown separately in Annexure-L.
AB Securities Limited (ABSL)
Brokerage business of Arab Bangladesh Bank Foundation has been transferred to AB Securities Limited (ABSL)
vide Bangladesh Bank approval letter BRPD(R-1)717/2009-493 dated 08 November 2009. AB Bank Limited at
present holds 99.91% shares in ABSL.
The Balance Sheet and Profit and Loss Account of the ABSL have been shown separately in Annexure-M.
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Cashlink Bangladesh Limited (CBL)
Cashlink Bangladesh Limited (CBL) was incorporated on 24 September 2008 with an authorised capital of Taka
1,000,000,000 divided into 100,000,000 ordinary shares of Taka 10 each. The Bank at present holds 90% shares in
CBL.
The Balance Sheet and Profit and Loss Account of the CBL have been shown separately in Annexure-N.
AB International Finance Limited (ABIFL)
AB International Finance Limited (ABIFL) is a company incorporated in Hong Kong. Its registered office and
principal place of business is situated at Unit 1201-B, 12/F, Admiralty Centre, Tower One, 18 Harcourt, Hong
Kong. It is a fully owned (100%) Subsidiary of AB Bank Limited.
The Balance Sheet and Profit and Loss Account of the ABIFL have been shown separately in Annexure-O.
AB Exchange (UK) Limited
AB Exchange (UK) Limited (ABEL) is a company incorporated and domiciled in United Kingdom (UK) vide
registration no. 07272766 (England & Wales). The registered office is situated at 69 Whitechapel High Street,
London, E1 7PL. ABEL is a fully owned (100%) Subsidiary of AB Bank Limited.
The Board of Directors of AB Bank Limited has decided to close-down the AB Exchange (UK) Limited, UK in
its 607th Board Meeting held on July 12, 2016. Accordingly, after completing all the formalities, Management of
AB Exchange (UK) applied to Companies House (UK) on July 25, 2016 for striking off the company and on
November 15, 2016 the Company was dissolved through official gazette.
The company ceased its commercial operations from November 15, 2016 and treated the assets and liabilities at
net realizable value as per BFRS 5 – Non –current Assets Held for Sale and discontinued operation. The financial
statements for the period ended as on 15 November 2016 were prepared.
The Balance Sheet and Profit and Loss Account of the ABEL have been shown separately in Annexure-P.
Arab Bangladesh Bank Foundation (ABBF)
Arab Bangladesh Bank Foundation (ABBF) has maintained separate set of books and records for its operation.
The Balance Sheet and Profit and Loss Account of the ABBF have been shown separately in Annexure -Q.
Use of estimates and judgments
The preparation of consolidated financial statements and financial statements of the Bank required management to
make judgments, estimates and assumptions that affected 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 have been reviewed considering business realities. Revisions of accounting
estimates have been recognised in the period in which the estimates have been revised and in the future periods
affected, if applicable.
All intergroup balances, transactions, income and expenses are fully eliminated while preparing the consolidated
financial statements.
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Materiality, aggregation and offsetting
The Bank aggregates each material class of similar items and separately which are dissimilar in nature or function
unless those are immaterial. The Bank did not offset assets and liabilities or income and expense, unless required
or permitted by BAS/ BFRS.
Foreign currency transactions

Functional and presentational currency
Financial statements of the Bank have been presented in Taka, which is the Bank’s functional and presentational
currency.
Foreign currency translation
Foreign currency transactions have been converted into equivalent Taka currency at the ruling exchange rates on
the respective date of such transactions as per BAS 21 “The Effects of Changes in Foreign Exchange Rates”.
Assets and liabilities in foreign currencies as at 31 December 2016 have been converted into Taka currency at the
average of the prevailing buying and selling rates of the relevant foreign currencies at that date except "balances
with other banks and financial institutions" which have been converted as per directives of Bangladesh Bank vide
its circular no. BRPD (R) 717/2004-959 dated 21 November 2004.
Differences arising through buying and selling transactions of foreign currencies on different dates of the year
have been adjusted by debiting /crediting exchange gain or loss account.
Commitment
Commitments for outstanding forward foreign exchange contracts disclosed in the consolidated financial
statements and financial statements of the Bank have been translated at contracted rates. Contingent
liabilities/commitments for letter of credit, letter of guarantee and acceptance denominated in foreign currencies
have been expressed in Taka terms at the rates of exchange ruling on the balance sheet date.
Translation gain and losses
Gains or losses arising out of translation of foreign exchange have been included in the Profit and Loss Account,
except those arising on the translation of net investment in foreign branch and subsidiaries.
Foreign operations
The results of financial statements of the Bank whose functional currency is not Bangladesh Taka are translated
into Bangladesh Taka as follows:
a. assets and liabilities for each items of Balance Sheet have been translated at the closing rate on the date of
Balance sheet.
b. income and expenses for Profit and Loss Account have been translated at an monthly average rate of the
year; and
c. all resulting exchange differences have been recognized in the P&L or as a separate components of equity,
where appropriate.
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Cash flow statement
Cash Flow Statement is prepared principally in accordance with BAS 7 “Statement of Cash Flows” under direct
method as per the guidelines of BRPD circular no. 14 dated 25 June 2003. The Statement of Cash Flows show the
structure of and changes in cash and cash equivalents during the year. Cash Flows during the period have been
classified as operating activities, investing activities and financing activities.
Statement of changes in equity

Statement of Changes in Equity has been prepared in accordance with BAS 1 “Presentation of Financial
Statements” and following the guidelines of Bangladesh Bank BRPD circular no.14 dated 25 June 2003.
Liquidity statement
The basis of the liquidity statement of assets and liabilities as on the reporting date is given below:
Particulars Basis used
Balance with other banks and financial institutions Maturity term
Investments Respective maturity terms
Loans and advances Repayment schedule basis
Fixed assets Useful life
Other assets Realization/ amortization basis
Borrowing from other banks, financial institutions and agents Maturity/ repayments terms
Deposits and others accounts Maturity term/ Previous trend
Other liabilities Payments/ adjustments schedule basis
1.3 Assets and basis of their valuation
Cash and cash equivalents

Cash comprises cash in hand and demand deposits in the banks.
Cash equivalents are short term, highly liquid investments that are readily convertible into known amounts of cash
and which are subject to an insignificant risk of changes in value.
Loans and advances

i. Loans and advances/investments in Islamic Banking Branch are stated at gross amounts at December 31,
2016.
ii. Interest/profit is calculated on a daily basis but charged and accounted on accrual basis. Interest/profit on
classified loans and advances/ investment is kept in suspense account as per Bangladesh Bank instructions
and such interest/ profit is not accounted for income until realized from borrowers. Interest/profit is not
charged on bad and loss loans/ investments as per guideline of Bangladesh Bank.
iii. Commission on bills purchased and discounting are recognised at the time of realisation.
iv. Provision for loans and advances is made on the basis of quarter-end review by the management and as per
instructions contained in BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27
December 2012, BRPD circular no. 05 dated 29 May 2013, BRPD Circular No. 16 dated 18 November,
2014, BRPD Circular No. 04 dated January 29,2015 and BRPD Circular No. 08 dated 02 August 2015 . The
rates for provisions are stated below:
Consumer Financing Loans to Off Balance

Short Term All Other
Particulars Other than SMEF BHs/MBs Sheet
Agri Credit HF LP Credit
HF, LP /SDs Exposures
Standard 2.5% 5% 2% 2% 0.25% 2% 1%
UC
SMA 2.5% 5% 2% 2% 0.25% 2% 1%
SS 5% 20% 20% 20% 20% 20% 20% 1%
Classified DF 5% 50% 50% 50% 50% 50% 50%
BL 100% 100% 100% 100% 100% 100% 100%
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Investment
Investments have been initially recognised at cost, including acquisition charges associated with the investment.
Premium have been amortised and discount accredited, using the effective or historical yield method. Government
Treasury Bills and Bonds (categorized as HFT or/and HTM) are accounted for as per Bangladesh Bank DOS
circular letter no. 05 dated 26 May 2008 and DOS circular no. 05 dated 28 January 2009.
The valuation methods of investment used are:

Government securities
Held to Maturity (HTM)
Investments which are intended to be held to maturity are classified as “Held to Maturity”. These are measured at
amortised cost at each year end by taking into account any discount or premium in acquisition. Amortised amount
of such premium are booked into Profit and Loss Account or discount is booked to reserve until
maturity/disposal.
Held for Trading (HFT)
Investment primarily held for selling or trading is classified in this category. After initial recognition, investments
are mark to market weekly. Decrease in the book value is recognised in the Profit and Loss Account and any
increase is transferred to revaluation reserve account.
Value of investments has been enumerated as follows:
Investment class Initial recognition Measurement after initial Recording of changes

Loss to Profit and Loss Account
Treasury Bill / Bond (HFT) Cost Market value
(P&L), gain to revaluation
Treasury Bill / Bond (HTM) Cost Amortised value Increase in value to equity and
Debenture Face value None
Prize bond Cost None None
Realised gain or loss, recognised
Shares Cost Lower of cost and market value
Unrealized gain is not
Investment in listed securities
These securities are brought and held primarily for the purpose of selling them in future or held for dividend
income. These are reported at cost. Unrealised gains are not recognised in the Profit and Loss Account as per BAS
18 "Revenue".
In Accordance with BRPD Circular no. 14 dated 25 June 2003, provisions should be made for any loss arising
from the diminution in value of investments. Subsequently as per DOS Circular No.04 dated 24 November 2011,
provisions may be made for any loss arising from the diminution in value of investments after netting of gain.
Investment in unlisted securities
Investment in unlisted securities is reported at cost under cost method.
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Investment in subsidiaries
Investment in subsidiaries is accounted for under the cost method of accounting in the Bank’s financial statements in
accordance with the BAS 27 "Separate Financial Statements".
Fixed assets
i. All fixed assets are stated at cost less accumulated depreciation as per BAS 16 "Property, Plant and
Equipment". The cost is the amount of cash or cash equivalents paid or the fair value of the other
consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the
amount attributed to that asset when initially recognised in accordance with the specific requirements of the
BFRS.
ii. The cost of an item of property, plant and equipment is recognised as an asset if-
it is probable that future economic benefits associated with the item will flow to the entity and the cost of the
item can be measured reliably.
Depreciation on fixed assets is charged using reducing balance method except motor vehicles, computers &
iii. computer equipments and photocopiers for which straight-line method is used. The rates of depreciation are
as follows:
Category of asset Rate of depreciation

Land Nil
Building 2.5%
Furniture and fixtures 10%
Electrical appliances 20%
Motor vehicles 20%
Leasehold assets - vehicles 20%
iv. Depreciation on fixed assets acquired during the year is charged from the month of their acquisition. Full
month's depreciation is charged in the month of addition irrespective of the date of acquisition and no
depreciation is charged in the month of their disposal.
v. The cost and accumulated depreciation of disposed assets are eliminated from the fixed assets schedule and
gain or loss on such disposal is reflected in the Profit and Loss Account.
vi.
Useful lives and method of depreciation of fixed assets are reviewed periodically. If useful lives of assets do
not differ significantly as these were previously estimated, revaluation of assets does not consider to be done.
vii. Bank capitalised items value of which is over Taka 50,000 and the items below Taka 50,000 were booked as
non-capitalised items under the broader head of other expenses with effect from 01 March 2009 in
accordance with the relevant policy of the Bank.
viii. Bank also follows a policy for amortisation of expenditure considering the durability and useful lives of items.
These are treated as intangible assets and are booked under the head “Fixed Assets” and amortised over their
estimated useful lives by charging under the broad head “Depreciation”.
Intangible assets
An intangible asset is recognised if-
a. It is probable that the expected future economic benefits that are attributable to the assets will flow to the
entity; and
b. The cost of the assets can be measured reliably.
Other assets
Other assets include all balance sheet items not covered specifically in other areas.
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Leasing
Where property, plant and equipment have been financed by lease arrangement under which substantially all the risks
and rewards of ownership are transferred to the lessees are treated as finance leases as per BAS 17 "Leases". All other
leases are classified as operating leases as per BAS 17 "Leases".
Bank as lessee
Assets held under finance lease are recognised as assets of the Bank at their fair value at the date of acquisition or if
lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation.
Assets held under finance lease are depreciated over their expected useful lives on the same basis as owned assets.
Bank as lessor
The Bank did not grant any lease finance.
Stock of stationery
Stock of stationery has been shown under other assets and is valued at cost.
1.4 Capital, reserve, liabilities and provision and basis of their valuation
Share capital
Ordinary shares are classified as equity when there is no contractual obligation to transfer cash or other financial
assets.
Statutory reserve
As per Section 24 of the Bank Company Act, 1991 (Amendment up to 2013), 20% of current year’s profit of the Bank
is required to be transferred to Statutory Reserve until such reserve together with share premium account equals to its
paid up capital.
Revaluation reserve
When an asset’s carrying amount is increased as a result of revaluation, the increased amount should be credited
directly to equity under the head revaluation surplus/ reserve as per BAS 16 "Property, Plant and Equipment".
Deposits and other accounts

Deposits are recognised when the Bank enters into contractual arrangements with the counterparties, which are
generally on trade date and initially measured at the amount of consideration received.
Borrowing
Borrowed funds include call money, term borrowings and re-finance from different commercial banks, non-banking
financial institutions and central bank.
Provision for taxation

Income tax represents the sum of the current tax and deferred tax.
Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The Bank’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet date.
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Provision for current income tax has been made @ 40% on the accounting profit made by the Bank after considering
taxable allowances and disallowances as per income tax laws applicable for the Bank.
Deferred Tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit and are accounted for using the
balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences, unused tax losses or unused tax credits can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the Bank is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
asset is realised, based on tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred
tax is charged or credited to the income statement, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company
intends to settle its current tax assets and liabilities on a net basis.
The impact on the account of changes in the deferred tax assets and liabilities has also been recognized in the Profit
and Loss Account as per BAS-12 "Income Taxes" (note 10.01).
Retirement benefits to the employees

The retirement benefits accrued for the employees of the Bank as on the reporting date have been accounted for in
accordance with the provision of BAS 19 "Employee Benefits". Bases of enumerating the retirement benefits schemes
operated by the Bank are outlined below:
Provident fund
There is a provident fund scheme under the defined contribution plan. The fund is operated by a separate board of
trustees approved by the National Board of Revenue as per Income Tax Ordinance, 1984. All eligible employees
contribute 10% of their basic pay to the fund. The Bank also contributes equal of employee’s contribution to the fund.
These contributions are invested separately. Benefits from the fund are given to eligible employees at the time of
retirement/resignation as per approved rules of the fund.
Staff gratuity
The Bank has a separate Board of Trustees for operating the staff gratuity fund approved by the National Board of
Revenue. Employees of the Bank, who served the Bank for ten years or above are entitled to get gratuity benefit at
rates determined by the Service Rules of the Bank.
Superannuation fund
The Bank operates a Superannuation Fund as death-cum-retirement benefit for its employees. The fund is operated by
a separate Board of Trustees.
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Provision for liabilities
A provision is recognised in the balance sheet when the Bank has a legal or constructive obligation as a result of past
event and it is probable that an outflow of economic benefit will be required to settle the obligations, in accordance
with BAS 37 “Provisions, Contingent Liabilities and Contingent Assets”.
No provision is recognised for any 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 Bank, or any present obligation that arises from past events and it is not probable that an outflow of
resources embodying economic benefits will be required to settle the obligation, or a reliable estimates of the amount
of obligation cannot be made.
However, certain provisions on assets and liabilities are maintained in accordance with relevant Bangladesh Bank
Circulars issued from time to time.
Provision for nostro accounts
Provision for nostro accounts is maintained as per circular letter no. FEPD(FEMO)/01/2005-677 dated 13
September 2005 issued by Foreign Exchange Policy Department of Bangladesh Bank.
Minority Interest
Minority Interest is the equity in a subsidiary not attributable, directly or indirectly, to parent.
As per BFRS 10 ‘Consolidated Financial Statements’ Bank presents Minority Interest separately in financial
statements.
Profit or loss and each component of other shareholders equity are attributed to the owners of the parent and to the
Minority Interest. Total shareholders equity is attributed to the owners of the parent and to the Minority Interest even
if this result in the Minority Interest having a deficit balance.
1.5 Revenue recognition
Interest income
According to the BAS 18 "Revenue", the interest income is recognised on accrual basis. Interest on loans and
advances ceases to be taken into income when such advances are classified or treated as Sub Standard (SS) as per
BRPD circular no. 14 dated 23 September 2012 and is kept in interest suspense account. Interest on classified
advances is accounted for as income when realised.
Profit on investment (Islami Banking Branch)
Profit on investment is taken into income account from profit receivable account. Overdue charges/ compensation on
classified investment is transferred to profit suspense/ compensation receivable account instead of income account.
Investment income
Interest income on investments is recognised on accrual basis except treasury bills. Capital gains on investments in
shares are also included in investment income. Capital gains are recognized when these are realised.
Fees and commission income
Fees and commission income on services provided by the Bank are recognised as and when the services are rendered.
Commission charged to customers on letters of credit and letters of guarantee are credited to income at the time of
affecting the transactions.
Dividend income on shares
As per BAS 18 "Revenue", dividend income from investment in shares is recognised when the Bank's right to receive
dividend is established. It recognised when:
a. It is probable that the economic benefits associated with the transaction will flow to the entity; and
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b. the amount of the revenue can be measured reliably.
Interest paid on deposits and borrowings

Interest paid on deposits, borrowings, etc. is accounted for on accrual basis according to the BAS 1 “Presentation of
Financial Statements”.
Profit paid on deposits (Islami Banking Branch)
Profit paid to different Mudaraba depositors is recognised on accrual basis as per provisional rate. However, the final
rate of profit is determined and to be paid to the depositors as per Annex H.
Other operating expenses
All other operating expenses are provided for in the books of the account on accrual basis according to the BAS 1
“Presentation of Financial Statements”.
1.6 Reconciliation of books of account
Books of account with regard to inter-bank (in Bangladesh and outside Bangladesh) and inter-branch transactions are
reconciled and no material difference was found which may affect the financial statements significantly. There exist no
un-reconciled items in NOSTRO accounts as at December 31, 2016.
1.7 Earnings Per Share (EPS)

Basic earnings per share
Basic earnings per share have been calculated in accordance with BAS 33 "Earnings per Share" which has been shown
in the face of the Profit and Loss Account. This has been calculated by dividing the basic earnings by the total
ordinary outstanding shares. EPS of previous year was restated giving effect of issue of bonus shares.
Diluted earnings per share
No diluted earnings per share is required to be calculated for the year as there was no scope for dilution during the
year under review.
1.8 Off-balance sheet items
Off-Balance Sheet items have been disclosed under contingent liabilities and other commitments as per Bangladesh
Bank's guidelines.
In accordance with BRPD circular no.14 dated 23 September 2012, general provision @ 1% has been made on the
outstanding balances of Off-Balance Sheet exposure of the Bank as at December 31, 2016. Provision is made on the
total exposure and amount of cash margin or value of eligible collateral is not deducted while computing Off-Balance
sheet exposure.
1.9 Memorandum items
Memorandum items are maintained for those items for which the Bank has only a business responsibility and no legal
commitment.
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1.10 Segment Reporting
The Bank reports its operations under the following two business segments as per Bangladesh Financial Reporting Standards (BFRS)-8 "Operating Segment".
By Geographical Location & Segment Business
Profit and Loss Account for the year ended December 31, 2016
Amount in Crore Taka
AB Bank Limited Subsidiaries AB Bank & it's
Inside Bangladesh Inside Bangladesh AB Int. subsidiaries
Particulars India Finance Ltd. Adjustment
Conventional Islamic Investment Off- Shore (Mumbai Adjustment Total AB AB Securities Cash Link
(Hong Kong)
Banking Banking Banking Banking Unit Branch) Investment Ltd. Bangladesh
Limited Ltd. (CBL)
Interest income 1,827.52 58.39 - 71.30 6.12 (71.93) 1,891.40 41.20 7.75 0.15 5.04 (0.54) 1,945.00
Interest paid on deposits and borrowings, etc. 1,530.78 38.52 31.78 51.20 1.97 (46.54) 1,607.70 3.64 2.81 - 0.58 (0.81) 1,613.92
Net interest income 296.74 19.86 (31.78) 20.11 4.15 (25.38) 283.70 37.57 4.94 0.15 4.46 0.27 331.08
Investment income 510.95 0.05 21.06 - 2.76 - 534.82 0.79 1.10 (18.26) - (7.86) 510.59
Commission, exchange and brokerage 236.52 3.46 - 0.28 32.27 (0.83) 271.71 4.25 4.35 12.33 5.14 (12.21) 285.58
Other operating income 11.27 0.07 - 0.01 0.24 - 11.58 1.14 0.21 - 4.78 (0.82) 16.89
Total operating income 1,055.48 23.44 (10.71) 20.39 39.42 (26.21) 1,101.81 43.75 10.60 (5.79) 14.39 (12.76) 1,144.14
OPERATING EXPENSES
Salary and allowances 289.27 3.32 - 0.58 1.54 - 294.70 1.52 3.06 0.02 3.09 - 302.40
Rent, taxes, insurance, electricity, etc. 67.77 0.15 - 0.00 1.86 - 69.79 0.27 0.84 - 0.78 (0.55) 71.12
Legal expenses 1.80 - - 0.01 0.01 - 1.81 0.01 - 0.01 0.03 - 1.86
Postage, stamps, telecommunication, etc. 12.44 0.06 - 0.03 1.06 - 13.59 0.09 0.16 0.00 0.75 (0.21) 14.38
Stationery, printing, advertisement, etc. 19.27 0.05 - 0.00 0.29 - 19.62 0.04 0.05 - 0.03 - 19.74
Directors' fees 0.94 0.02 - - - - 0.96 0.04 0.05 0.03 - - 1.07
Auditors' fees 0.43 - - - 0.07 - 0.50 0.01 0.01 0.02 0.04 - 0.58
Charges on loan losses - - - - - - - - - - - - -
Depreciation and repairs of Bank's assets 55.34 0.29 0.01 0.08 0.73 - 56.45 1.89 0.20 0.01 0.04 - 58.59
Other expenses 128.25 0.75 0.34 1.23 11.87 - 142.44 0.73 0.97 0.00 0.25 (12.00) 132.39
Total operating expenses 575.53 4.62 0.35 1.93 17.43 599.86 4.59 5.34 0.08 5.00 (12.76) 602.11
Profit before provision 479.95 18.82 (11.07) 18.46 21.99 (26.21) 501.94 39.16 5.26 (5.87) 9.39 - 542.03
Provision against loans and advances 293.28 293.90

Provision for diminution in value of investments 2.50 2.20
Other provisions 5.96 5.96
Total provision 301.73 302.05
Loss on disposal of AB Exchange (UK) Limited - 0.44
Profit before taxation 200.21 239.54
Provision for taxation 69.74 88.66
Net profit after taxation 130.47 150.88
26
Balance Sheet
Amount in Crore Taka
AB Bank Limited Subsidiaries
Inside Bangladesh Inside Bangladesh
India AB Int. AB Bank & it's
Particulars AB Cash Link Adjustment
Conventional Islamic Investment (Mumbai Adjustment Total AB Securities Finance Ltd. subsidiaries
OBU Investment Bangladesh
Banking Banking Banking Branch) Ltd. (Hong Kong)
Limited Ltd. (CBL)
PROPERTY AND ASSETS
Cash 1,941.51 28.39 - - 0.87 - 1,970.77 0.00 0.00 0.00 0.00 - 1,970.77
Balance with other banks and financial instit. 84.79 241.56 - 10.35 127.07 (8.02) 455.74 0.06 30.18 3.51 0.64 (24.64) 465.50
Money at call and on short notice 1,069.88 - - 221.30 47.68 (506.27) 832.59 - - - - (69.27) 763.32
Investments 4,172.03 24.85 427.58 - 42.23 - 4,666.69 72.13 17.29 0.04 - - 4,756.15
Loans and advances 20,254.18 442.30 - 1,136.11 46.93 (2.57) 21,876.95 722.98 95.77 - 88.95 (130.00) 22,654.65
Fixed assets 405.74 0.93 - 0.18 1.19 - 408.04 59.72 0.32 0.01 0.02 - 468.10
Other assets 2,872.13 2.65 4.05 3.03 30.94 (1,639.98) 1,272.82 5.67 3.28 3.09 2.34 (648.82) 638.39
Non-banking assets - - - - - - - - - - - - -
Total Assets 30,800.24 740.67 431.63 1,370.97 296.91 (2,156.84) 31,483.59 860.55 146.84 6.66 91.95 (872.72) 31,716.88
LIABILITIES AND CAPITAL
Liabilities
financial institutions and agents 1,686.42 - - 1,335.12 - (826.10) 2,195.44 120.73 25.36 - 69.22 (184.98) 2,225.78
Deposits and other accounts 23,675.40 731.13 0.00 7.17 158.39 (8.01) 24,564.08 - - - - (24.64) 24,539.44
Other liabilities 3,088.52 8.17 432.03 10.15 21.89 (1,148.13) 2,412.62 61.37 69.97 0.99 5.58 (32.29) 2,518.25
Total Liabilities 28,450.34 739.30 432.03 1,352.44 180.29 (1,982.25) 29,172.14 182.10 95.33 0.99 74.81 (241.91) 29,283.47
Total Shareholders' Equity 2,349.90 1.38 (0.40) 18.54 116.62 (174.59) 2,311.45 678.45 51.51 5.67 17.15 (631.80) 2,432.42
Minority Interest - - - - - - - - - - - 0.99 0.99
Total Liabilities and Shareholders' Equity 30,800.24 740.67 431.63 1,370.97 296.91 (2,156.84) 31,483.59 860.55 146.84 6.66 91.95 (872.72) 31,716.88
27
1.11 Compliance of Bangladesh Accounting Standard (BAS) and Bangladesh Financial Reporting Standards
(BFRS)
While preparing the financial statements, Bank applied most of the Bangladesh Accounting Standards (BAS) and
Bangladesh Financial Reporting Standards (BFRS) as adopted by the Institute of Chartered Accountants of
Bangladesh as applicable to the Bank:
Sl # Name of BAS No. of BAS Status
1 Presentation of Financial Statements 1 Complied
2 Inventories 2 Complied
3 Statement of Cash Flows 7 *
4 Accounting Policies, Changes in Accounting Estimates and Errors 8 Complied
5 Events after the Reporting Period 10 Complied
6 Construction Contracts 11 N/A
7 Income Taxes 12 Complied
8 Property, Plant and Equipment 16 Complied
9 Leases 17 Complied
10 Revenue 18 Complied
11 Employee Benefits 19 Complied
12 Accounting for Govt. Grants and Disclosure of Govt. Assistance 20 N/A
13 The Effects of Changes in Foreign Exchanges Rates 21 Complied
14 Borrowing Costs 23 Complied
15 Related Party Disclosures 24 Complied
16 Accounting and Reporting by Retirement Benefit Plans 26 Complied
17 Separate Financial Statements 27 Complied
18 Investments in Associates and Joint Ventures 28 Complied
19 Financial Reporting in Hyperinflationary Economics 29 N/A
20 Interests in Joint Ventures 31 N/A
21 Financial Instruments: Presentation 32 *
22 Earnings Per Share 33 Complied
23 Interim Financial Reporting 34 Complied
24 Impairment of Assets 36 Complied
25 Provisions, Contingent Liabilities and Contingent Assets 37 Complied
26 Intangible Assets 38 Complied
27 Financial Instruments: Recognition and Measurement 39 *
28 Investment Property 40 N/A
29 Agriculture 41 N/A
Sl # Name of BFRS No. of BFRS Status

1 First-time Adoption of International Financial Reporting Standards 1 N/A
2 Share Based Payment 2 N/A
3 Business Combinations 3 N/A
4 Insurance Contracts 4 N/A
5 Non-Current Assets Held for Sale and Discontinued Operations 5 Complied
6 Exploration for and Evaluation of Mineral Resources 6 N/A
7 Financial Instruments: Disclosures 7 *
8 Operating Segments 8 Complied
9 Consolidated Financial statements 10 Complied
10 Joint Arrangements 11 N/A
11 Disclosure of interests in other Entities 12 Complied
* Relevant disclosures are made according to the requirement of Bangladesh Bank.
28
1.12 Compliance of Bangladesh Bank regulations over BAS/BFRS:
Sl No. Issues BAS/BFRS Bangladesh Bank

1 Presentation As per BAS 1 Other Comprehensive Income is a In accordance with BRPD Circular no. 14 dated
component of financial statements or the elements of 25 June 2003 financial statements do not require
Other Comprehensive Income are to be included in a to include the statement of Other
single Comprehensive income statement and there is Comprehensive Income and appropriation of
no requirement to show appropriation of profit in the profit is provided in the face of Profit and Loss
face of statement of comprehensive income. Again, Account. Intangible assets are provided under the
Intangible assets must be identified, recognised, head Fixed Assets.
presented in the face of the balance sheet and the
disclosures to be given as per BAS 38.
2 Cash and cash As per BAS-7 cash comprises cash in hand & demand Balance with Bangladesh Bank is treated as cash
equivalent deposits and Cash equivalents recognises the short- and cash equivalents as per BRPD Circular no. 14
term, highly liquid investments that are readily dated 25 June 2003.
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Therefore, some items like- Balance with Bangladesh
Bank on account of CRR/ SLR are not part of cash
and cash equivalents as those are not readily available.
3 Investment in As per requirements of BAS 39 investment in shares As per BRPD Circular no. 14 dated 25 June 2003,
shares and and securities generally falls either under “at fair value provisions should be made for any loss arising
securities through profit and loss account” or under “available from the diminution in value of investments. But,
for sale” where any change in the fair value (as as per DOS Circular No.04 dated 24 November
measured in accordance with BFRS 13) at the year-end 2011, provisions can be made for any loss arising
is taken to profit and loss account or revaluation from the diminution in value of investments after
reserve respectively. netting of gain.
4 Revaluation As per requirement of BAS 39 where securities will fall As per Bangladesh Bank DOS circular letter no.
gains/losses on under the category of Held for Trading (HFT), any 05 dated 26 May 2008 and DOS circular no. 05
Government change in the fair value of Held For Trading (HFT) dated 28 January 2009. HTM measured at
securities assets is recognised through profit and loss account. amortised cost at each year end by taking into
Securities designated as Held to Maturity (HTM) are account any discount or premium in acquisition.
measured at amortised cost method and interest Amortised amount of such premium are booked
income is recognised through the profit and loss into Profit and Loss Account or discount is
account. booked to reserve until maturity/disposal. In case
of HFT after initial recognition, investments are
revalued at mark to market on weekly basis.
Decrease in the book value is recognised in the
Profit and Loss Account and any increase is
transferred to revaluation reserve account.
5 Repo and reverse When an entity sells a financial asset and As per Bangladesh bank Circulars / guidelines,
repo transactions simultaneously enters into an agreement to repurchase when a Bank sells a financial asset and
the asset (or similar asset) at a fixed price on a future simultaneously enters into an agreement to
date (REPO), the arrangements is accounted for as a repurchase the asset (or a similar asset) at a fixed
deposit as oppose to a sale, and the underlying asset price on future date (REPO), the arrangement is
continues to be recognized in the entity's financial accounted for as a normal sales transactions and
statements. Such transaction do not satisfy de- the financial assets should be derecognized in the
recognition criteria specified in BAS 39. Same rule seller's book and recognized in the buyer's book.
applies to the opposite side of the transaction (reverse
REPO).
29
1.12 Compliance of Bangladesh Bank regulations over BAS/BFRS (cont.)
Sl No. Issues BAS/BFRS Bangladesh Bank
6 Provision on loans As per BAS 39 an entity should start the impairment As per BRPD circular No.14 (23 September
and advances/ assessment by considering whether objective evidence 2012), BRPD circular No. 19 (27 December
investments of impairment exists for financial assets that are 2012) and BRPD circular No. 05 (29 May 2013) a
individually significant. For financial assets that are not general provision at 0.25% to 5% under different
individually significant, the assessment can be categories of unclassified loans (good/standard
performed on an individual or collective (portfolio) loans) has to be maintained regardless of
basis. Such provision shall be netted off against loans objective evidence of impairment. Also provision
and advances. for sub-standard loans, doubtful loans and bad
losses has to be provided at 20%, 50% and 100%
respectively for loans and advances depending on
the duration of overdue. 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. Also for
disclosure such provision shall be shown as
liability as opposed to netting of against loans
and advances.
7 Recognition of Loans and advances to customers are generally As per BRPD circular no. 14 dated 23 September
interest in suspense classified as 'loans and receivables' as per BAS 39 and 2012, once a loan is classified; interest on such
interest income is recognised through effective interest loans are not allowed to be recognised as income,
rate method over the term of the loan. Once a loan is rather the corresponding amount needs to be
impaired, interest income is recognised in profit and credited to interest suspense account, which is
loss account on the same basis based on revised presented as liability in the balance sheet.
carrying amount.
8 Non-banking asset No indication of Non-banking asset is found in any As per BRPD circular No. 14, dated 25 June 2003
BFRS. there must exist a face item named Non-banking
asset.
9 Cash flow The cash flow statement can be prepared using either As per BRPD circular No. 14, dated 25 June 2003
statement the direct method or the indirect method as per BAS-7. cash flow is the mixture of direct and indirect
The presentation is selected to present these cash flows methods.
in a manner that is most appropriate for the business
or industry. The method selected is applied
consistently.
10 Financial Financial guarantee liabilities are recognised initially at As per BRPD Circular no. 14 dated 25 June 2003,
Guarantee their fair value (as measured in accordance with BFRS financial guarantees such as Letter of Credit,
13), and the initial fair value is amortised over the life Letter of Guarantee, Acceptance and
of the financial guarantee. The financial guarantee Endorsement, etc. will be treated as off balance
liability is subsequently carried at the higher of this sheet items.
amortised amount and the present value of any
expected payment when a payment under the
guarantee has become probable. Financial guarantees
are included under other liabilities.
30
1.13 Regulatory and legal compliance
The Bank complied with the requirement of the following regulatory and legal authorities:
i. The Bank Company Act, 1991 (Amendment up to 2013)

ii. The Companies Act, 1994
iii. Rules, regulations and circulars issued by the Bangladesh Bank from time to time
iv. The Securities and Exchange Rules, 1987
v. The Securities and Exchange Ordinance, 1969
vi. The Securities and Exchange Commission Act, 1993
vii. The Securities and Exchange Commission (Public Issues) Rules, 2015
viii. The Income Tax Ordinance, 1984 and Rules
ix. The Value Added Tax (VAT) Act, 1991 and Rules
x. Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) Listing Regulations, 2015
xi. Central Depository Bangladesh Limited (CDBL) rules and regulations.
1.14 Reporting period
Sl no. Name of the entity/segment Reporting period

1 AB Bank Limited 01 January 2016 to 31 December 2016
2 Off Shore Banking Unit 01 January 2016 to 31 December 2016
3 Mumbai Branch, India 01 January 2016 to 31 December 2016
4 AB Investment Limited 01 January 2016 to 31 December 2016
5 AB Securities Limited 01 January 2016 to 31 December 2016
6 Cashlink Bangladesh Limited 01 January 2016 to 31 December 2016
7 AB International Finance Limited 01 January 2016 to 31 December 2016
8 AB Exchange (UK) Limited 01 January 2016 to 15 November 2016
9 Arab Bangladesh Bank Foundation 01 January 2016 to 31 December 2016
1.15 Risk management
As a financial intermediary, the Bank is exposed to various types of risks. Risk is defined as uncertainties resulting
in adverse variation of profitability or in losses, financial or otherwise. The risk management of the Bank covers
core risk areas of banking as defined by Bangladesh Bank and Pillar-2 risk as well. The core risks are credit risk,
asset liability risks, money laundering risks, internal control and compliance risks, information technology risks
and foreign exchange risks. Some other risks those also affect banking business are liquidity risk, market risk
interest rate risk, equity risk, operational risk, reputation risk, strategic risks, credit concentration risks,
environmental and climate change risks etc.
The objective of the risk management framework at the bank is that the Bank understands, evaluates and takes
well calculative risks and thereby safeguarding the Bank's capital, its financial resources and profitability from
various business risks through its own measures, policies and procedures established to address these risks and
also implementing Bangladesh Bank's guidelines and following some of the best practices as under:
Credit risk
It arises mainly from lending, trade finance and treasury businesses. This can be described as potential loss arising
from the failure of a counter party to perform as per contractual agreement with the Bank. The failure may result
from unwillingness of the counter party or decline in his/ her financial condition. Therefore, the Bank's credit risk
management activities have been designed to address all these issues.
31
The Bank has segregated duties of the officers / executives involved in credit related activities. A separate
Department has been formed at Head Office which is entrusted with the duties of maintaining effective
relationship with the customers, marketing of credit products, exploring new business opportunities, etc.
Moreover, credit approval, administration, monitoring and recovery functions have been segregated. For this
purpose, two separate divisions have been formed within the Credit Department. These are (a) Credit Risk
Management Division and (b) Credit Administration Division. Credit Risk Management Division is entrusted
with the duties of maintaining asset quality, assessing risk in lending to a particular customer, sanctioning credit,
formulating policy / strategy for lending operation, etc. Adequate provision has been made on classified loans /
investments. “A thorough assessment is done before sanction of any credit facility at Credit Risk Management
Division. The risk assessment includes borrower risk analysis, financial analysis, industry analysis, historical
performance of the customer, security of the proposed credit facility, etc. The assessment process starts at
Corporate Division by the Relationship Manager / Officer and ends at Credit Risk Management Division when it
is approved / declined by the competent authority. Credit approval authority has been delegated to the credit
committee. In determining single borrower / large loan limit, the instructions of Bangladesh Bank are strictly
followed. Internal audit is conducted at periodical intervals to ensure compliance of Bank’s and Regulatory
polices. Loans are classified as per Bangladesh Bank’s guidelines.
Operational risk
Operational risk address the risk associated with fraud, forgery, unauthorized activities, error, omission, system
failure and external events among others. Bank is managing these risks through written procedures, regular
training and awareness programs. Departmental Control Function Checklist (DCFCL), Quarterly Operations
Report, Loan Documentation Checklist etc. are in place covering all probable risks associated with bank’s
business and operations. Surprise inspections are also made on a regular basis to make sure that all control tools
are functioning properly.
Market risk
The exposure of market risk of the Bank is restricted to foreign exchange risk, interest rate risk and equity
position risk.
Foreign exchange risk

Foreign exchange risk is defined as the potential change in earnings due to change in market prices. The foreign
exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against
underlying L/C commitments and other remittance requirements. Financial Institution and Treasury (FIT)
Division independently conducted the foreign exchange transactions and the Mid office and the Back office of
Treasury is responsible for verification of the deals and passing of their entries in the books of account. All
foreign exchange transactions are revalued at Market rate as determined by Bangladesh Bank at the month end.
All nostro accounts are reconciled on a monthly basis and outstanding entry is reviewed by the management for
its settlement. The position maintained by the Bank at the end of day was within the stipulated limit prescribed by
the Bangladesh Bank.
Interest rate risk

Interest rate risk may arise from trading portfolio and non- trading portfolio. The trading portfolio of the bank
consists of government treasury bills, bond, etc. The short term movement in interest rate is negligible or nil.
Interest rate risk of non-trading business arises from mismatches between the future yield of an asset and its
funding cost. Asset Liability Committee (ALCO) monitors the interest rate movement on a regular basis.
Equity risk
Equity risk arises from movement in market value of equities held. The risks are monitored by the Investment
Banking Division under a well-designed policy framework. Adequate provision was maintained by the Bank for
diminution of market value of Investments.
32
Liquidity risk
The objective of liquidity risk management is to ensure that all foreseeable funding commitments and deposit
withdrawals can be met when due. To this end, the Bank is maintaining a diversified and stable funding base
comprising of core retail and corporate deposits and institutional balance. Management of liquidity and funding is
carried out by Financial Institution and Treasury (FIT) Division under approved guidelines. FIT front office is
supported by a very structured Mid Office and Back Office. The liquidity management is monitored by Asset
Liability Committee (ALCO) on a regular basis. A written contingency plan is in place to manage extreme
situation.
Risk arising from money laundering
AB Bank Limited considers prevention of money laundering risk not only as a compliance requirement imposed
by the law of the country but also as one of its core business values. The board of directors and senior
management are firmly committed to combat money laundering. Every year, a message from the President and
Managing Director’s office goes to all employees' of the Bank reiterating the importance of the issue. There is a
high profile Central Compliance Unit (CCU) in place to oversee the anti-money laundering activities. The
president and managing director himself supervise the function of CCU's. Operation has separated and dedicated
headcount for surveillance of the anti-money laundering functions across the bank. Training and awareness
programs are regularly held to make all employees' aware of the issue. Bank has also undertaken campaign against
money laundering in electronic media.
Internal Control and Compliance Risk

Internal Control and Compliance Division (ICCD) of the bank performs three core functions - Internal Audit,
Monitoring and Compliance in order to mitigate the internal control and compliance risk. ICCD conducts Risk
Based Audit and Annual Audit of the Branches. Audit of Head Office Divisions also come under ICCD. ICCD
monitors compliance of Internal as well as Bangladesh Bank Audit Reports including Bangladesh Bank Special
Audit Reports on Core Risks. Besides, Special Audit on some specific issues like year-end Cash Position, Security
Stock verification etc. are also done by ICCD.
Information and Communication Technology (ICT) Security Risk

IT division of AB Bank took several initiatives to minimize the ICT related risk. Among those ATM Switch
Migration from Euronet iTM to ECS iTx, Automatic Voltage Regulator for Head Office Data Center and
Disaster Recovery Site, CISCO IronPort Web Security implementation to protect Internet threat, Building
Management System (BMS) expanded to protect AB Bank Data Center and Disaster Recovery Site from fire and
water and Implemented CISCO Nexus 7009 Switch into DC and DR which is the first time for any financial
institution in Bangladesh.
1.16 Environment Risk Management (ERM)

Bangladesh Bank issued Guidelines on Environment Risk Management (ERM) to streamline solutions for
managing the environmental risks in the financial sector – Ref: BRPD Circular No.01/2011 dated 30.01.2011 and
BRPD Circular no.02 dated 27 February, 2011 respectively. Bank accordingly introduced the Guideline on
Environment Risk Management on June 15, 2011. These ERM guidelines are an attempt to incorporate the
environmental impact of a business into the lending process, so that the environment gets due consideration in
the appraisal process.
Environmental risk is a facilitating element of credit risk arising from such environmental issues. These can be
due to environmental impacts caused by and / or due to the prevailing environmental conditions. These increase
risks as they bring an element of uncertainty or possibility of loss in the context of a financing transaction.
The Bank is complying with Bangladesh Bank Guidelines to the above effect from time to time and reporting
activities on ERM and Green Banking every quarter.
33
1.17 Credit Rating of the Bank
Credit rating of the Bank:
Year Date of Rating Long term Short term

Jan to Dec 2015 May 19, 2016 AA3 ST-2
Jan to Dec 2014 April 30, 2015 AA3 ST-2
Jan to Dec 2013 March 27, 2014 AA3 ST-2
Jan to Dec 2012 May 26, 2013 AA3 ST-2
1.18 Events after the Reporting Period
As per BAS -10 "Events after the Reporting Period" events after the reporting period are those events, favorable
and unfavorable, that occur between the end of the reporting period and the date when the financial statements
are authorised for issue. Two types of events can be identified:
(a) those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after
the reporting period); and
(b) those that are indicative of conditions that arose after the reporting period (no adjusting events after the
reporting period).
There was no material event which have occurred after the reporting period which could affect the values stated
in the financial statements.
1.19 Related party disclosures

A party is related to the company if:
(i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under
common control with, the company; has an interest in the company that gives it significant influence over
the company; or has joint control over the company;
(ii) the party is an associate;

(iii) the party is a joint venture;
(iv) the party is a member of the key management personnel of the Company or its parent;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which
significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv)
or (v); or
(vii) the party is a post-employment benefit plan for the benefit of employees of the company, or of any entity
that is a related party of the company.
a) Significant contracts where the Bank is a party and wherein Directors have interest:
Name of the Name of Director
Name of contract Relationship
Party and Related by
Elite
Salim Ahmed &
Lease agreement with AB Bank Limited International Common Director
Feroz Ahmed
Ltd.
b) Related party transactions:
Nature of
Name of related party Relationship Amount in Taka
transaction
Elite International Ltd. Common Director Office Rent 2,021,840
34
c) Loans/Placement given to subsidiary of the Bank
Sl. Connection
Name of Party Nature of transaction Amount in BDT
No. with party
01 AB Investment Limited 99.99% owned Loans and advances 902,012,897
Subsidiary
02 AB Securities Limited 99.91% owned Loans and advances 253,621,766
Subsidiary
03 Cash link Bangladesh Limited 90% owned Loans and advances 142,388,324
(CBL) Subsidiary
04 AB Int. Finance Limited Fully owned Placement through OBU 692,657,680
(100%)
Subsidiary
Total Loans/placemen to subsidiary 1,990,680,667
1.20 Audit Committee of the Board of Directors
i) Particulars of Audit Committee
The Audit Committee of the Board was duly constituted by the Board of Directors of the Bank in accordance
with the BRPD Circular No. 11 dated 27 October, 2013 issued by Bangladesh Bank. The Committee was formed
comprising 5 (five) Members of the Board:
Educational/
Sl Status with Status with
Name Duration Professional
no. Bank Committee
Qualification
1 Mr. Shishir Ranjan Bose, Independent Chairman With effect from 16 Chartered
FCA Director July 2008 Accountant
2 Mr. M. Wahidul Haque Chairman Member With effect from 04 B.A., LLB
February 2008
3 Mr. Salim Ahmed Vice Chairman Member With effect from 08 B.A (Hons.) M.A.
May 2014 (History)
4 Mr. M.A. Awal Director Member With effect from 12 B.Com.
July 2011
5 Prof. Dr. M. Imtiaz Hossain Independent Member With effect from 12 Ph. D. from
Director April 2015 University of
Manchester, U.K.
The Company Secretary acts as the Secretary of the Audit Committee of the Board.
ii) Meeting held with Audit Committee
During the year 2016, the Audit Committee conducted 13 (thirteen) meetings in which, among others, the
following issues were reviewed and discussed:
- comprehensive inspection report of Bangladesh Bank including status of compliance thereof;
- inspection reports of Branches/Head Office conducted by Bank's Internal Control & Compliance
Division;
- financial statements of the Bank;
- quarterly and half-yearly Financial Statements of the Bank for the year 2016;
- review of the financial statements of the subsidiary companies; and
- status of compliance of different rules and regulations.
35
iii) Steps taken for implementation on effective internal control procedure of the Bank
The Committee placed its report regularly to the Board of Directors of the Bank mentioning its review results and
recommendations on internal control system, compliance of rules and regulations and establishment of good
governance within the organization.
1.21 Shariah Council

Members of AB Bank Shariah Supervisory Committee are as under:
Status with
Educational/ Professional
Sl no. Name the
Qualification
Committee
1 Jb. M. Azizul Huq Chairman Prominent Islamic Scholar & Banker. M.A
(Economics), Dhaka University.
2 Jb. Md. Shouquat Ali Vice B.A (Hons.) M.A (Eco.), LLB (1st class).
Chairman Ex-Company Secretary & Head of Law
Division, IBBL
3 Jb. M. Wahidul Haque Member BA, LLB

Chairman, BOD, ABBL
4 Jb. Shamim Ahmed Chaudhury, President & Member MBA with Major in Finance
Managing Director, ABBL
5 Jb. Mawlana Muhammad Musa Member Prominent auther and research Scholar of
Quran & Hadith. Kamil, Madrasah Edu.
Board, B.Com (Hons) M.Com, Dhaka
University
6 Jb. Dr. Mohd. Haroon Rashid Member M.A, M. Phil PhD Aligor University,
Secretary India. Mufti (1st Class) Darul Ulum
Dewband, India
During the Year 2016, AB Bank Shariah Supervisory Committee met in 05 (Five) meetings (Full Committee
03+Sub-Committee 02) and reviewed different operational issues, including those referred to it by the
Management of the Bank and gave opinion & decisions related to Islamic Shariah.
The important issues attending by the Shariah Supervisory Committee during the year 2016 are :
- Reviewing the Half-Yearly Shariah Audit Report (July-December,2015) of Islami Banking Branch and its
observations.
- Reviewing the Half- Yearly Shariah Audit Report (January-June,2016) of Islami Banking Branch .
- Approving the Final Account, 2015 of Islami Banking Branch.
- Approving the Annual Report of Shariah Supervisory Committee for the year 2015 on Islamic banking
operation of the Bank.
- Reviewing the Shari'ah By-Laws of the Bank.
2. General
i. Figures relating to the previous year included in this report have been rearranged, wherever considered
necessary, to make them comparable with those of the current year.
ii. Figures in these notes and in the annexed financial statements have been rounded off to the nearest Taka.
iii. These notes form an integral part of the annexed financial statements and accordingly are to be read in
conjunction therewith.
36
31.12.2016 31.12.2015
Taka Taka
3. Cash
Cash in hand (Note: 3.1) 1,536,332,492 1,204,156,116

Balance with Bangladesh Bank and its agent bank(s) (Note: 3.2) 18,171,318,283 15,829,128,241
19,707,650,776 17,033,284,356
3(a) Consolidated Cash
AB Bank Limited 19,707,650,776 17,033,284,356

AB Investments Limited 25,000 25,000
AB International Finance Limited 10,117 -
AB Securities Limited 2,245 2,410
Cashlink Bangladesh Limited (CBL) 37,839 6,445
AB Exchange (UK) Ltd. - 1,251,631
0 19,707,725,976 17,034,569,843
3.1 Cash in hand
In local currency 1,505,667,616 1,174,908,808

In foreign currency 30,664,876 29,247,308
1,536,332,492 1,204,156,116
3.1(a) Consolidated Cash in hand
AB Bank Limited 1,536,332,492 1,204,156,116

AB Investments Limited 25,000 25,000
1,536,407,693 1,205,441,602
3.2 Balance with Bangladesh Bank and its agent bank(s)
Balance with Bangladesh Bank
In local currency 17,465,080,869 14,828,917,268

In foreign currency 298,117,635 636,067,309
17,763,198,503 15,464,984,577
Sonali Bank Limited
(as an agent bank of Bangladesh Bank) - local currency 408,119,780 364,143,664
18,171,318,283 15,829,128,241
3.2.1 Balance with Bangladesh Bank- local currency
Balance as per Bank Ledger 17,465,080,869 14,828,917,268
Unresponded debit entries: 416,427,442 73,257,072

Bangladesh Bank statement 407,941,845 73,257,072
AB Bank's ledger 8,485,597 -
Unresponded credit entries: 82,152,179 6,754,860

AB Bank's ledger 190,000 196,975
17,130,805,606 14,762,415,056
37
Bangladesh Bank Account represents outstanding transactions (net) originated but yet to be responded at the Balance
Sheet date. However, the status of unresponded entries as of 31.12.2016 is given below:
Number of Unresponded Amount

year of Unreconciliation
Debit Credit Debit Credit
Less than 3 months 20 13 415,384,042 81,962,179
3 months to less than 6 months 1 - 543,400 -
6 months to less than 12 months - - - -
12 months and more 1 1 500,000 190,000
Total 22 14 416,427,442 82,152,179
31.12.2016 31.12.2015
3.2.2 Balance with Bangladesh Bank-Foreign currency Taka Taka
Balance as per Bank Ledger 298,117,635 636,067,309
Unresponded debit entries: 118,316,794 91,784,804

Bangladesh Bank statement 250,144 69,780,153
AB Bank's ledger 118,066,650 22,004,651
Unresponded credit entries: 518,246,575 293,977,233

AB Bank's ledger 294,403,946 176,790,252
Balance as per Bangladesh Bank Statement 698,047,416 838,259,738
Bangladesh Bank Account represents outstanding transactions (net) originated but yet to be responded at the
Balance sheet date. However the status of unresponded entries as of 31.12.2016 is given below:
Number of Unresponded Amount

Period of Unreconciliation
Debit Credit Debit Credit
Less than 3 months 3 360 118,316,794 518,064,716
3 months to less than 6 months - 3 - 57,685
6 months to less than 12 months - 2 - 124,175
12 months and more - - - -
Total 3 365 118,316,794 518,246,575
3.2(a) Consolidated Balance with Bangladesh Bank and its agent bank(s)
AB Bank Limited 18,171,318,283 15,829,128,241
AB Investments Limited - -
AB International Finance Limited - -
AB Securities Limited - -
Cashlink Bangladesh Limited (CBL) - -
AB Exchange (UK) Ltd. - -
18,171,318,283 15,829,128,241
3.3 Statutory deposits
Conventional Banking (Inside Bangladesh)
Cash Reserve Requirement and Statutory Liquidity Ratio
Cash reserve requirement and statutory liquidity ratio have been calculated and maintained in accordance with section 33
of the Bank Company Act, 1991 (Amendment up to 2013), Bangladesh Bank's MPD circular no. 05 dated 01 December
2010, MPD circular no. 01 dated 23 June 2014 and DOS circular no. 01 dated 19 January 2014.
The statutory cash reserve requirement is on the Bank's time and demand liabilities at the rate of 6.50% and has been
calculated and maintained with Bangladesh Bank in current account while statutory liquidity ratio of 13.00% is required,
on the same liabilities is also maintained in the form of Government Securities and other regulatory components which
supported to SLR. Both the reserves are maintained by the Bank in excess of the statutory requirements, as shown below:
38
(a) Cash Reserve Requirement (CRR)
As per Bangladesh Bank MPD Circular No. 01 dated 23 June 2014, Bank has to maintain CRR @ 6.50% on fortnightly
cumulative average basis and minimum CRR @ 6.00% on daily basis.
31.12.2016 31.12.2015
Taka Taka
i. Daily Position as on the reporting date
Required reserve 16,524,589,436 14,311,926,525

Actual reserve maintained 16,840,182,357 14,451,833,382
Surplus 315,592,920 139,906,857
As per Bank ledger, balance with Bangladesh Bank (local currency) is Tk 17,185,457,620 while as per Bangladesh Bank
Statements balance is Tk 16,851,182,356.81 Difference between the balance as per Bank Ledger and as per the Bangladesh
Bank Statement is properly reconciled and adjusted accordingly.
ii. Fortnightly cumulative Position
As per Bangladesh Bank MPD Circular No. 01 dated 23 June 2014, Bank has to maintain CRR @ 6.50% on fortnightly
cumulative average basis.
Required reserve (6.5% of total time & demand liabilities) 280,918,020,418 243,302,750,923
Surplus 2,530,586,374 369,904,004
(b) Statutory Liquidity Ratio (SLR)

Required reserve (13% of total time & demand liabilities) 33,049,178,873 28,623,853,050
Total surplus 10,849,418,817 732,214,597
As per Bangladesh Bank MPD circular no. 05 dated 01 December 2010, MPD circular no. 01 dated 23 June 2014 and
Bangladesh Bank DOS circular no. 01 dated 19 January 2014 all scheduled Banks have to maintain CRR and SLR @
6.50% and @ 13.00% respectively of their total time and demand liabilities on bi-weekly average basis, where the Bank
maintained @ 6.62% and @ 17.27% respectively at the year end.
(c) Components of Statutory Liquidity Ratio (SLR)

Cash in hand 1,523,355,928 1,194,823,535
Balance with Sonali Bank 408,119,780 364,143,664
HTM Securities 26,772,534,816 18,599,744,739
HFT Securities 14,878,994,246 9,057,448,852
Excess Reserve of CRR 315,592,920 139,906,857
Other Eligible Security - -
43,898,597,690 29,356,067,647
Islamic Banking - 0.01
Cash Reserve Requirement and Statutory Liquidity Ratio
Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance
with section 33 of the Banking Companies Act 1991 and subsequent Bangladesh Bank (BB) MPD's circular no. 01 dated:
23 June 2014.
The Statutory Cash Reserve is required on the Bank's Time and Demand Liabilities at the rate of 6.50% which has been
calculated and maintained with Bangladesh Bank in Al-Wadeeah Current Account while Statutory Liquidity Ratio of
5.50% is required including excess amount of CRR on the same liabilities. The required amount maintained in the form of
Bangladesh Government Islami Investment Bond (BGIIB), Cash Balance in the Vault and Foreign Currency (FC) Balance
with Bangladesh Bank. Both the reserves (CRR &SLR) are maintained in excess, as shown below :
39
31.12.2016 31.12.2015
Taka Taka
(a) Cash Reserve Requirement (CRR)
Required reserve 278,995,186 299,107,166

Actual reserve maintained 279,623,249 299,581,674
Surplus 628,063 474,508
Total required reserve 236,072,850 253,090,679

Total actual reserve held 253,428,446 254,179,042
Total surplus 17,355,596 1,088,363
Mumbai Branch
Cash reserve ratio and statutory liquidity ratio
Cash reserve ratio and statutory liquidity ratio have been calculated and maintained in accordance with Section 24 of the
Banking Companies Act 1949, Section 42 (2) of the RBI Act 1934 and RBI circular nos. DBOD. No.Ret.
BC.24/12.01.001/2015-16
The statutory cash reserve ratio is required on the Bank's time and demand liabilities at the rate of 4.00 % for 31.12.2015
& for 31.12.2016 and has been calculated and maintained with RBI in current account while statutory liquidity ratio of
21.50% for 31.12.2015 & 20.75% for 31.12.2016 is required, on the same liabilities is also maintained in the form of
treasury bills, and bonds including foreign currency balance with RBI. Both the reserves are maintained by the Bank in
excess of the statutory requirements, as shown below:
(a) Cash Reserve Ratio (CRR)

Surplus 14,116,141 5,613,966

Surplus 124,357,623 122,821,632
Total required reserve 309,650,766 297,556,677

Total actual reserve held 448,124,531 425,992,275
Total surplus 138,473,765 128,435,598
4. Balance with other banks and financial institutions
In Bangladesh (Note: 4.1) 2,531,704,237 2,159,121,205

Outside Bangladesh (Note: 4.2) 2,025,730,721 2,551,882,052
4,557,434,958 4,711,003,257
4(a) Consolidated balance with other banks and financial institutions
In Bangladesh (Note: 4.1.a) 2,624,288,364 2,196,851,448

Outside Bangladesh (Nostro Accounts) (Note: 4.2.a) 2,030,714,143 2,555,849,680
4,655,002,507 4,752,701,128
40
31.12.2016 31.12.2015
Taka Taka
4.1 In Bangladesh
Current Deposits
Standard Chartered Bank, Dhaka City Centre Branch 2,913,073 3,753,023
Agrani Bank Ltd., VIP Road Branch, Sylhet 7,010 3,779
Agrani Bank Ltd., Local Office, Dhaka 24,885 24,885
Islami Bank Bangladesh Ltd., Local Office 17,277 17,277
Agrani Bank Ltd., Bhairab Bazar Branch 7,000,534 30,000,534
Janata Bank Ltd., Jessore Branch 60,463 4,810
Agrani Bank Ltd., Mymensingh Branch 47,350 29,490,600
Trust Bank Ltd., Mymensingh Branch 87,774 6,096,580
Janata Bank Ltd., Corporate Branch, Bogra 38,685 88,791
Rupali Bank Ltd., Bogra Branch 10,175 24,410
Agrani Bank Ltd., Thana Road Branch, Bogra 41,322,566 15,090,109
RAKUB, Bogra Branch 11,339 21,220
Agrani Bank Ltd., Shaheb Bazar Branch, Rajshahi 5,000 5,230
Janata Bank Ltd., Rajshahi Branch 5,000 5,000
IFIC Bank Ltd., Rajshahi Branch - 265
Rupali Bank Ltd., Rajshahi Branch 7,925 10,575
Janata Bank Ltd., Rangpur Branch 17,305,223 52,021,549
RAKUB, Rangpur Branch 109,593 110,168
Rupali Bank Ltd., Rangpur Branch 691,095 16,765
Janata Bank Ltd., Chapai Nawabganj Branch 13,919 1,216
Agrani Bank Ltd., Brahmanbaria Branch 270 2,930
69,679,155 136,789,715
Special Notice Deposits
Agrani Bank Ltd., Rangpur Branch 22,587,987 66,508,857
Agrani Bank Ltd., Saidpur Branch 3,892 12,657
Agrani Bank Ltd., VIP Road Branch, Sylhet 23,939 34,026
Agrani Bank Ltd., Bogra Branch 7,530 7,530
Agrani Bank Ltd., Pabna Branch 1,000 1,000
Janata Bank Ltd., Pabna Branch 1,000 1,000
Agrani Bank Ltd., Jhikargachha Branch 23,059,512 24,428,851
Agrani Bank Ltd., Sirajgonj Branch 18,858,257 -
RAKUB, Sirajgonj Branch 1,425 -
Agrani Bank Ltd., Sir Iqbal Road Branch, Khulna 45,595 1,691
Agrani Bank Ltd., Naogaon Branch 15,571,462 4,133,689
Agrani Bank Ltd., Jessore Branch 5,031,193 8,595
Agrani Bank Ltd., Moulvi Bazar Branch 2,540,180 12,757,552
Agrani Bank Ltd., Satkhira Branch 9,443 10,018
Southeast Bank Ltd., Principal Branch 48,120 48,120
Agrani Bank Ltd., Principal Branch, Dhaka 668 189
Agrani Bank Ltd., Barisal Branch 31,542 37,554
Bangladesh Krishi Bank, Barisal Branch 42,691 90,425
Janata Bank Ltd., Barisal Branch 5,142 4,953
Standard Chartered Bank, Dhaka City Centre Branch 1,039,533 1,041,033
Islami Bank Bangladesh Ltd., Head Office Complex Corporate Br. 527,037 515,815
Bank Asia Ltd., Islami Banking Window, Shantinagar Branch 40,222 41,647
First Security Islami Bank Ltd, Dilkusha Br. 158,321 156,386
Al-Arafah Islami Bank Ltd, Dilkusha Branch 333,306,075 3,100,111
Shahjalal Islami Bank Ltd, Dhaka Main Branch 165,961 80,630
The City Bank Ltd, Islamic Banking Br, Paltan, Dhaka 89,319 88,303
Bank Alfalah Ltd, Main Branch, Dhaka 250,000,000 254,112,588
Southeast Bank Ltd., Motijheel Branch (Islami Banking) 2,473,793 5,729,315
ICB Islamic Bank Ltd., Principal Br, Motijheel 139,688 29,993,421
Agrani Bank Ltd., Islami Banking Window, Amin Court Corp. Br. 3,878,505 298,831,582
Jamuna Bank Ltd. Nayabazar Islami Banking Br. 14,665 150,207,721
Union Bank Ltd., Dilkusha Branch 6,758 8,083
679,710,453 851,993,342
41
31.12.2016 31.12.2015
Taka Taka
Savings Deposits
Social Islamic Bank Ltd. Principal Branch 2,008,758 160,982
EXIM Bank Ltd, Motijheel Branch 305,873 177,168
2,314,630 338,149
Fixed Deposits
Hajj Finance Company Ltd. 230,000,000 90,000,000
Social Islami Bank Ltd. 700,000,000 400,000,000
Phoenix Finance and Investment Ltd. 200,000,000 100,000,000
ICB Islamic Bank Ltd. - 150,000,000
Islamic Finance & Investment Ltd. 100,000,000 30,000,000
Union Capital Ltd. 150,000,000 -
IDLC Finance Ltd. 150,000,000 150,000,000
IIDFC 150,000,000 150,000,000
Peoples Leasing 100,000,000 100,000,000
1,780,000,000 1,170,000,000
2,531,704,237 2,159,121,205
4.1(a) Consolidated In Bangladesh 0 0
AB Bank Limited 2,531,704,237 2,159,121,205

AB Investment Limited 589,394 407,792
AB Securities Limited 301,781,150 165,337,954
Cashlink Bangladesh Limited (CBL) 35,129,817 2,541,951
2,869,204,598 2,327,408,902
Less: Inter company transaction 244,916,234 130,557,454
2,624,288,364 2,196,851,448
4.2 Outside Bangladesh
Current Deposits
The Bank of Tokyo Mitsubishi Limited 1,517,399 2,346,493
HSBC AUST - 1,964,146
JP Morgan Chase Bank 66,606,161 289,365,303
Sonali Bank (Kolkata) 4,419,042 3,214,619
Sonali Bank (UK) Limited USD 34,651,846 61,274,722
Sonali Bank (UK) Limited GBP 14,327 2,908,780
Myanmar Economic Bank 32,272 32,185
Citibank NA 15,969,528 58,242,176
Hatton National Bank Limited 3,582,419 6,100,873
Commerz Bank AG 27,564,966 52,995,482
NIB Bank Limited 7,467,975 11,115,678
Mashreq Bank Psc 56,562,687 65,780,113
Nepal Bangladesh Bank Limited 1,417,764 1,705,203
Bank of Bhutan 7,409,209 1,896,107
HABIB Zuric 1,012,020 2,102,504
Wachovia Bank/Wells Fargo N.A 232,728,906 113,483,885
Habib America Bank 34,895,134 50,804,395
Commerz Bank AG 11,002,073 56,399,858
Hypovereins Bank 16,085,422 4,314,679
Habib Metro Bank 29,493,069 43,348,031
Habib Bank AG(AED) 295,963 494,717
COMMERZ BK CAD 3,614,893 5,257,648
COMMERZ BK CHF 4,198,199 2,916,759
HSBC NY (OBU) - 14,423,769
42
31.12.2016 31.12.2015
Taka Taka
JPMC NY-OBU 102,727,497 978,429

Commerz Bank (R)-OBU 19,479 -
HSBC New York - 173,528,238
Reserve Bank of India 25,831,749 19,205,033
HDFC BANK CSGL 264,968 125,063
HDFC Bank Limited 40,875,802 45,616,872
Commerz Bank AG (Euro) - 3,756,767
Commerz Bank AG (ACU) - 9,167,230
Kotak Mahindra Bank 61,554,263 65,991,225
HSBC (USD) - 7,445,573
HSBC (ACUD) - 690,660,468
Habib American Bank Limited 3,303,805 41,322,812
Habib Bank 2,963,103 -
Habib Bank ACU 1,744,326 -
JP CHASE ACU 1,087,748,226 -
Habib Sons Bank 1,593,766 42,990,297
Standard Chartered Bank, NY, USA 37,347,945 86,167,373
Standard Chartered Bank, Singapore 1,721,935 5,091,531
Standard Chartered Bank, UK, GBP 4,491,311 4,050,657
HABIB UK, GBP 1,532,647 3,808,784
HABIB UK, USD 45,922,344 56,579,791
JP Morgan Chase Bank 45,546,283 442,907,785
(Details are given in Annex - A) 2,025,730,721 2,551,882,052
0
4.2 (a) Consolidated Outside Bangladesh (Nostro Accounts) 0.12 (0)
AB Bank Limited 2,025,730,721 2,551,882,052

AB Investment Limited - -
AB International Finance Limited 6,443,952 20,473,829
AB Exchange (UK) Ltd. - 116,291
2,032,174,673 2,572,472,172
Less: Inter company transactions 1,460,530 16,622,492
2,030,714,143 2,555,849,680
4.3 Account-wise/grouping of balance with other banks and financial

institutions
Current deposits 2,095,409,877 2,688,673,767

Savings deposits 2,314,630 338,149
Short-Notice Deposits 679,710,453 851,991,342
Fixed deposits 1,780,000,000 1,170,000,000
4,557,434,958 4,711,003,257
0 0
43
31.12.2016 31.12.2015
Taka Taka
4.4 Maturity grouping of balance with other banks
Repayable – on demand 2,095,409,877 2,688,673,767
– up to 3 months 2,132,025,082 1,982,329,491
– over 3 months but below 1 year 330,000,000 40,000,000
– over 1 year but below 5 years - -
– over 5 years - -
4,557,434,958 4,711,003,257
5. Money at call and on short notice
8,325,871,504 5,284,337,005
5.1 In Bangladesh
With banking companies
Local Currency:
Mercantile Bank Limited 1,000,000,000 -
NRB Commercial Bank Limited 400,000,000 -
National Bank Limited 1,000,000,000 -
NRB Global Bank Limited 100,000,000
Jamuna Bank Limited 500,000,000
Basic Bank Limited 1,000,000,000 -
4,000,000,000 -
Foreign Currency:
Eastern Bank Limited 236,133,300 392,501,500
Islami Bank Bangladesh Limited - 1,570,006,000
236,133,300 1,962,507,500
With non-banking financial institutions
Prime Finance & Investment Ltd. 150,000,000 50,000,000
Bay Leasing and Investment Limited 100,000,000 50,000,000
Industrial and Infrastructure Development Finance Company (IIDFC) - 100,000,000
GSP Finance 100,000,000 -
Lanka Bangla 200,000,000 -
Delta Brac Housing 250,000,000 -
Union Capital 150,000,000 -
People's Leasing and Financial Services Ltd. - 100,000,000
International Leasing & Financial Services Ltd. 450,000,000 450,000,000
1,400,000,000 750,000,000
5,636,133,300 2,712,507,500
At short notice - -
On calls and placements
Eastern Bank Limited 236,133,300 392,501,500
Islami Bank Bangladesh Limited - 1,570,006,000
Mercantile Bank Limited 1,000,000,000 -
NRB Commercial Bank Limited 400,000,000 -
National Bank Limited 1,000,000,000 -
NRB Global Bank Limited 100,000,000 -
Jamuna Bank Limited 500,000,000 -
Basic Bank Limited 1,000,000,000 -
GSP Finance 100,000,000 -
Lanka Bangla 200,000,000 -
Delta Brac Housing 250,000,000 -
Union Capital 150,000,000 -
Industrial and Infrastructure Development Finance Company (IIDFC) - 100,000,000
Prime Finance & Investment Ltd. 150,000,000 50,000,000
Bay Leasing & Investment Limited 100,000,000 50,000,000
People's leasing and financial services Limited - 100,000,000
International Leasing & Financial Services Limited 450,000,000 450,000,000
5,636,133,300 2,712,507,500
44
5.2 Outside Bangladesh - -
Pinnacle Global Fund Pte Limited 1,520,308,045 1,570,006,000
Kotak Mahindra Bank 93,789,706 106,254,000
Abu Dhabi Commercial Bank 34,736,928 -
HDFC Bank Limited 348,245,845 178,076,763
0 2,689,738,204 2,571,829,505
5(a) Consolidated money at call and on short notice 0 0
AB Bank Limited 8,325,871,504 5,284,337,005
AB Exchange (UK) Limited - -
8,325,871,504 5,284,337,005
Less: Inter-group transaction (692,657,680) (717,492,742)
7,633,213,824 4,566,844,263
6. Investments 46,666,898,817 32,559,141,564

Nature wise (Bangladesh Operation):
Held for Trading 14,878,994,246 9,057,448,852
Held to Maturity 26,772,534,816 18,599,744,739
Others 1 4,593,076,974 4,495,160,732
46,244,606,036 32,152,354,323
Nature wise (Mumbai Branch):

Held for Trading/Available for Sale 168,382,569 192,159,840
Held to Maturity 253,910,212 214,627,402
Others - -
422,292,782 406,787,241
Claim wise: -
Government securities (Note: 6.1) 41,903,780,261 27,900,211,389
Other investments (Note: 6.2) 4,763,118,556 4,658,930,176
46,666,898,817 32,559,141,564
6 (a) Consolidated investments
AB Bank Limited 46,666,898,817 32,559,141,564
AB Investment Limited 721,255,054 686,571,505
Cashlink Bangladesh Limited (CBL) 431,639 23,506,275
47,561,451,498 33,437,817,546
6.1 Government securities
Treasury bills 3,099,601,719 -
Treasury bonds 38,551,927,342 27,657,193,589
Bangladesh Bank Islami Investment bonds 248,500,000 240,000,000
Prize bonds 3,751,200 3,017,800
41,903,780,261 27,900,211,389
6.1.1 Maturity wise Treasury Bills & Bonds
(a) 30 Days Bangladesh Bank Bill - -

(b) Treasury Bill
(i) 91 Days Treasury Bill - -
(ii) 182 Days Treasury Bill 89,883,720 -
(iii) 364 Days Treasury Bill 3,009,717,999 -
Total Treasury Bill 3,099,601,719 -
45
31.12.2016 31.12.2015
Taka Taka
(c) Treasury Bond
(i) 02 Years Treasury Bond 2,754,212,762 1,376,476,025
(ii) 05 Years Treasury Bond 4,244,212,683 3,829,558,681
(iii) 10 Years Treasury Bond 19,015,316,652 13,287,209,326
(iv) 15 Years Treasury Bond 6,914,912,645 4,792,573,141
(v) 20 Years Treasury Bond 5,623,272,600 4,371,376,416
Total Treasury Bond 38,551,927,343 27,657,193,589
Total (a)+(b)+(c) 41,651,529,062 27,657,193,589
6.1(a) Consolidated Government securities
AB Bank Limited 41,903,780,261 27,900,211,389

41,903,780,261 27,900,211,389
6.2 Other investments
Shares (Note 6.2.1) 4,275,825,774 4,132,142,935

Bond (Note 6.2.2) 65,000,000 120,000,000
4,340,825,774 4,252,142,935
Investments -ABBL, Mumbai Branch
Treasury bills 422,292,782 406,787,241

Debentures and Bonds - -
422,292,782 406,787,241
Total Other investments 4,763,118,556 4,658,930,176
6.2 (a) Consolidated other investments

AB Bank Limited 4,763,118,556 4,658,930,176
Cashlink Bangladesh Limited (CBL) 431,639 23,506,275
5,657,671,237 5,537,606,158
6.2.1 Investments in shares

Quoted (Publicly Traded) 4,044,554,844 3,900,872,005
Unquoted 231,270,930 848,006,845
4,275,825,774 4,748,878,849
Details are given in Annexure-B
6.2.2 Investment in subordinated bonds
Prime Bank Limited 45,000,000 90,000,000
Trust Bank Limited 20,000,000 30,000,000
65,000,000 120,000,000
6.3 Maturity grouping
Repayable – on demand - -
– upto 3 months - 5,564,780,980 836,521,967
– over 3 months but below 1 year - 4,450,983,640 5,929,296,131
– over 1 year but below 5 years 1 13,545,313,989 7,839,516,342
– over 5 years - 23,105,820,209 17,953,807,124
46,666,898,818 32,559,141,564
1 -
46
6.4 Disclosure of uniform accounting procedures for REPO transactions under DOS circular no 06 dated July 15, 2010
is given below:
a.(i) Disclosure regarding outstanding Repo as on December 31, 2016:
Amount (1st leg cash

Counter party name Agreement Date Reversal Date
consideration)
Janata Bank Limited 29/Dec/16 01/Jan/17 3,248,038,900
National Bank Limited 29/Dec/16 01/Jan/17 990,677,600
Total 4,238,716,500
(ii) Disclosure regarding outstanding Reverse Repo as on December 31, 2016:
Amount (1st leg cash

Counter party name Agreement Date Reversal Date
consideration)
NIL N/A N/A N/A
b. Disclosure regarding overall transaction of Repo and Reverse repo:
Maximum Daily average

Minimum outstanding
outstanding during outstanding during
during the year
the year the year
Securities sold under repo:
i) with Bangladesh Bank - - -
ii) with other banks & FIS - 7,024,910,000 1,163,388,852
Securities purchased under reverse repo:
i) from Bangladesh Bank - NIL NIL
ii) from other banks & FIS - 3,221,953,443 374,898,758
31.12.2016 31.12.2015
Taka Taka
7. Loans, advances and lease/investments 218,769,451,248 209,725,203,268

– upto 3 months 76,286,162,255 85,394,625,460
– over 3 months but below 1 year 95,569,461,888 83,823,390,835
– over 1 year but below 5 years 34,298,354,326 34,627,758,562
– over 5 years 5,131,656,587 1,780,199,748
218,769,451,248 209,725,203,268
7.2 Broad category-wise breakup

In Bangladesh
Loans - 0 196,098,211,776 186,497,250,636
Overdrafts 21,894,121,995 21,933,481,587
Cash credits - -
217,992,333,771 208,430,732,223
Outside Bangladesh: ABBL, Mumbai Branch
Loans 127,607,382 118,274,428
Overdrafts 2,657,760 172,003
Cash credits 13,807,503 15,942,426
144,072,646 134,388,856
218,136,406,416 208,565,121,079
- -
47
31.12.2016 31.12.2015
Taka Taka
7.3 Product wise Loans and Advances
Overdraft 21,896,779,755 21,933,653,590
Cash Credit 13,807,503 15,942,426
Time loan 57,816,781,042 62,722,556,379
Term loan 119,784,568,627 105,476,350,097
Bills under LC 207,109,508 238,473,847
Trust Receipt 9,162,163,925 10,158,011,199
Packing credit 212,208,534 436,274,437
Loan against accepted bills 2,930,851,022 4,924,495,085
Loan-EDF 3,205,905,915 -
Consumer Loan 1,402,328,120 1,370,222,178
Staff Loan 1,503,902,463 1,289,141,842
Bills Purchased & Discounted 633,044,832 1,160,082,188
218,769,451,248 209,725,203,268
7.4 Net loans, advances and lease/investments (0)
Gross loans and advances 218,769,451,248 209,725,203,268
Less:
Interest suspense 10,459,867,308 6,071,639,588
Provision for loans and advances 6,605,083,960 4,714,778,454
17,064,951,268 10,786,418,042
201,704,499,980 198,938,785,226
7.5 Significant concentration
Advances to industries 103,892,254,569 102,402,047,046
Advances to customer groups 114,877,038,550 107,323,060,171
Advances to allied concerns of Directors - -
Advances to Chief Executive 158,129 96,051
218,769,451,248 209,725,203,268
7.6 Advances to customers for more than 10% of Bank's total capital (0) (1)
Total capital of the Bank 30,640,391,090 28,332,822,072

Number of clients 29 34
Amount of outstanding advances 81,708,700,000 74,749,500,000
Amount of classified advances - -
Measures taken for recovery Not applicable Not applicable
7.7 Industry-wise loans, advances and lease/investments

Agriculture 3,116,265,264 2,058,247,212
Large and medium scale industry 64,053,600,000 64,732,262,241
Working capital 38,301,100,000 36,768,278,195
Export 3,722,200,000 921,400,000
Commercial lending 52,550,500,000 56,041,600,000
Small and cottage industry 1,537,400,000 901,506,610
Others 55,488,385,984 48,301,909,009
218,769,451,248 209,725,203,268
0.214324951 0.299987793
7.8 Geographical location-wise (division) distribution
In Bangladesh
Urban Branches
Dhaka 17,638,771,693 154,911,059,292 137,272,287,598
Chittagong (7,352,162,676) 45,824,548,751 53,176,711,427
Khulna (368,068,160) 4,787,526,569 5,155,594,729
Sylhet (205,213,421) 2,083,030,726 2,288,244,147
Barisal (43,641,037) 247,632,983 291,274,020
Rajshahi (417,839,584) 3,637,345,158 4,055,184,742
Rangpur 95,798,423 3,903,431,024 3,807,632,601
Mymensingh 947,782,315 898,609,694
216,342,356,818 206,945,538,959
48
31.12.2016 31.12.2015
Taka Taka
Rural Branches
Dhaka 1,405,596,596 1,435,259,973
Chittagong 504,644,774 480,644,102
Khulna - -
Sylhet 47,546,256 66,005,026
Barisal - -
Rajshahi - -
Rangpur - -
Mymensingh - -
1,957,787,626 1,981,909,101
Outside Bangladesh
ABBL, Mumbai Branch 469,306,804 797,755,207

218,769,451,248 209,725,203,268
7.9 Classification of loans, advances and lease/investments 0 0
In Bangladesh
Unclassified
Standard 191,153,443,332 194,703,648,060
Special Mention Account 15,903,500,316 7,715,500,000
207,056,943,648 202,419,148,060
2.18326E+11 11,364,818,034.24
Classified 11,364,818,034 5.19%
Sub-Standard 1,236,200,000 266,500,000
Doubtful 11,364,818,034 1,175,345,000 241,200,000
Bad/Loss 8,831,655,796 6,000,600,000
(0) 11,243,200,796 6,508,300,000
(0) 218,300,144,444 208,927,448,060
Outside Bangladesh-Mumbai Branch
Unclassified Loan 347,689,566 686,976,757
Classified Loan 121,617,238 110,778,451
469,306,804 797,755,207
- 218,769,451,248 209,725,203,268
7.10 Particulars of Loans, advances and lease/investments (0)
Loans considered good in respect of which the Bank is fully
(i) 204,625,033,550 188,714,991,048
secured
Loans considered good against which the Bank holds no security
(ii)
other than the debtors’ personal guarantee
Loans considered good and secured by the personal undertaking of
(iii) one or more parties in addition to the personal guarantee of the 14,144,417,698 21,010,212,219
debtors
Loans adversely classified but provision not maintained there
(iv) - -
against
(v) Loans due by directors or officers of the Bank or any of them
1,503,902,463 1,289,141,842
either separately or jointly with any other persons
Loans due from companies or firms in which the directors of the

(vi) Bank are interested as directors, partners or managing agents or, in - -
case of private companies, as members
Maximum total amount of advances, including temporary advances

made at any time during the year to directors or managers or
(vii) 1,503,902,463 1,292,195,879
officers of the Bank or any of them either separately or jointly with
any other persons [note 7.10 (a)]
49
31.12.2016 31.12.2015
Taka Taka
Maximum total amount of advances, including temporary advances
granted during the year to the companies or firms in which the
(viii) - -
directors of the Bank are interested as directors, partners or
managing agents or, in the case of private companies, as members
(ix) Due from other banking companies - -

Amount of classified loans on which interest has not been
(x) - -
charged:
(a) Increase/(decrease) of provision (specific) 1,947,800,261 1,092,961,223
(b) Amount of loan written off 3,039,972,301 1,830,740,429
(c) Amount realised against loan previously written off 23,892,175 67,170,000
(d) Provision kept against loans classified as bad /loss on the date 2,108,653,374 2,465,200,000
of preparing the balance sheet
(e) Interest creditable to interest suspense account 5,145,548,468 3,719,575,575
(xi) Written off loan:
Openning written off loan 9,019,658,429 7,188,918,000
Add: Written off during the year 3,039,972,301 1,830,740,429
Cummulative Written off loans 12,059,630,730 9,019,658,429
Less: Adjustments/ recoveries/ Settlement up to the period 3,062,264,760 2,899,594,000
Closing Balance of Written off loan 8,997,365,970 6,120,064,429
The amount of written off loans for which lawsuits have been
8,989,538,956 6,113,171,556
filed for its recovery
7.10 (a) The amount represents loans Tk. 1,503,902,463 due by the employees of the Bank.
7.11 Securities wise Loans, advances and lease/investments

Nature of security
Collateral of movable/immovable assets 178,714,611,427 167,374,155,209
Cash collateral 4,374,830,636 5,830,295,248
Banks and financial institutions guarantee 632,913,831 1,160,082,188
Personal guarantee 10,167,850,166 10,499,990,839
Corporate guarantee 3,976,567,532 3,079,575,524
Other securities 20,902,677,657 21,781,104,259
218,769,451,249 209,725,203,267
7(a) Consolidated Loans, advances and lease/investments 1 (0)

AB Bank Limited 218,136,406,416 208,565,121,079
AB Investment Limited 7,229,768,195 6,990,517,740
226,323,917,319 216,545,939,652
Less: Inter company transaction 1,299,950,122 2,254,231,326
225,023,967,197 214,291,708,326
50
7.12 Large Loan Restructuring
Bank has restructured some loans and advances by complying with the Bangladesh Bank, BRPD Circular No. 04, dated
January 29, 2015. Restructured loan details of the Bank has given below:
Name of the Client Loan Type Expiry Date Amount in Taka
Beximco Ltd. Corp-Term June 29, 2022 133,202,252
Abdul Monem Sugar Corp-Term December 22, 2021 499,974,836
Beximco Ltd. Corp-Term June 26, 2028 986,410,417
R & R Aviation Limited Corp-Term December 23, 2027 89,016,931
BEL Construction SDN BHD Ltd SME-Term September 30, 2021 511,433,309
BEL Construction SDN BHD Ltd SME-Term September 30, 2027 3,626,482,154
Bangladesh Export Import Co. Ltd Corp-Term June 29, 2022 546,673,143
International Knitwear & Apparels Ltd Corp-Term June 29, 2028 728,798,282
New Dacca Industries Ltd Corp-Term June 29, 2028 771,706,013
New Dacca Industries Ltd Corp-Term June 29, 2022 2,695,176,302
R & R Holdings Corp-Term December 22, 2027 2,644,554,796
13,233,428,436
31.12.2016 31.12.2015
Taka Taka
8 Bills purchased and discounted
In Bangladesh 307,810,673 496,715,837
Outside Bangladesh - ABBL, Mumbai Branch 325,234,158 663,366,351
633,044,832 1,160,082,188
8 (a) Consolidated Bills purchased and discounted - -
AB Bank Limited 633,044,832 1,160,082,188

1,522,534,037 2,073,171,801
Repayable – within 1 month 273,275,308 280,039,913
– over 1 month but within 3 months 173,851,736 602,134,186
– over 3 months but within 6 months 138,487,586 277,908,089
– over 6 months 47,430,201 -
633,044,831 1,160,082,188
(0) (0)
9. Fixed assets including premises, furniture and fixtures (0) (0)
Cost:
Land and Building 3,341,682,082 3,341,682,082
Furniture and fixtures 244,966,861 230,635,936
Office appliances 60,825,847 62,729,842
Electrical appliances 1,558,912,484 1,489,025,807
Motor vehicles 680,140,745 581,049,757
Intangible Assets 594,165,723 571,059,066
6,480,693,743 6,276,182,491
Less: Accumulated depreciation and amortization 2,400,316,308 2,075,309,724
4,080,377,435 4,200,872,767
A schedule of fixed assets is given in Annexure-C
9(a) Consolidated Fixed assets including premises, furniture and fixtures
Cost:
AB Bank Limited 6,480,693,743 6,276,182,491
AB Investments Limited 683,616,541 682,564,941
51 7,283,954,972 7,092,553,586
31.12.2016 31.12.2015
Taka Taka
Accumulated depreciation:
AB Bank Limited 2,400,316,308 2,075,309,724
AB Investments Limited 86,449,029 68,747,827
2,602,987,972 2,273,009,770
4,680,967,000 4,819,543,816
10 Other Assets:
Income generating-Equity Investment
In Bangladesh:
(99.99% owned subsidiary company of ABBL)
(90% owned subsidiary company of ABBL)
6,223,910,978 3,212,479,228
Outside Bangladesh:
AB International Finance Ltd., Hong Kong 5,203,944 5,203,944

(wholly owned subsidiary company of ABBL)
AB Exchange (UK) Limited - 50,423,392
(wholly owned subsidiary company of ABBL)
Investment in Amana Bank Limited as Associates 439,683,073 616,735,915
444,887,018 672,363,251
6,668,797,996 3,884,842,479
Non-income generating
Arab Bangladesh Bank Foundation 19,920,000 19,920,000
Share Money Deposits - AB Investment Limited - 2,199,999,000
Deferred Tax (Note:10.01) 2,312,064,286 1,428,252,732
Accounts receivable 889,650,552 1,058,534,763
Preliminary, formation, organisational, renovation,
development, prepaid expenses and others 805,559,950 644,563,195
Exchange for clearing 570,641,969 1,044,718,906
Interest accrued on investment but not collected,
commission and brokerage receivable on shares
and debentures, and other income receivables 1,026,651,535 791,115,465
Security deposits 159,266,370 166,089,818
Advance rent and advertisement 246,555,630 233,138,317
Stationery, stamps, printing materials, etc. 28,476,396 25,237,828
Inter-branch adjustment 621,590 -
148,435,293 6,059,408,278 7,611,570,024
12,728,206,273 11,496,412,503
52
31.12.2016 31.12.2015
Taka Taka
10(a) Consolidated Other assets
AB Bank Limited 1,231,793,770 12,728,206,273 11,496,412,503
AB Investment Limited 22,445,235 56,699,559 34,254,324
AB International Finance Limited 18,833,184 23,437,029 4,603,844
AB Securities Limited 17,916,068 32,836,258 14,920,190
Cashlink Bangladesh Limited (CBL) 694,445 30,917,320 30,222,875
1,289,524,471 12,872,096,439 11,582,571,968
Less: Inter-group transaction 868,089,551 6,488,188,273 5,620,098,722
421,434,924 6,383,908,169 5,962,473,246
10.01 Deferred Tax Assets

a) Deferred tax assets for specific provisions of loans and advances
Opening Deferred Tax (Assets)/Liabilities 1,561,348,994 1,156,529,394
Add. Deferred Tax Income during the year 872,165,895 404,819,600
(Tax @ 40% on Specific provision made during the year Tk.
2,180,414,736 & last year Tk. 1,012,049,000)
Closing Deferred Tax Assets 2,433,514,888 1,561,348,994
b) Deferred tax liabilities against Property, Plant & Equipment
Balance at 01 January 133,096,262 136,219,062

Add/(less): Provision made during the year (11,504,515) (3,382,036)
Add/(Less): Adjustment for Rate Fluctuation during the year (141,145) 259,236
Closing Deferred Tax Liabilities 121,450,602 133,096,262
Net Deferred Tax Assets (a-b) 2,312,064,286 1,428,252,732

883,811,555
Net Deferred Tax Income during the year 883,670,410 407,942,400
31.12.2016 31.12.2015
11. Borrowings from other banks, financial institutions and agents

15,454,422,143 23,693,344,309
(0)
11.1 In Bangladesh: (0)
11.1.1 Bangladesh Bank
ADB loan 890,625 6,334,875
Export Development Fund 2,961,842,309 -
Islamic Investment Bond - -
Refinance against IPFF 372,713,265 354,656,325
Refinance against Women Entr., Small Enterprise, ETP & Others 321,659,394 117,366,398
3,657,105,593 478,357,598
11.1.2 Call & Term Borrowing from

Basic Bank Limited - 400,000,000
Dutch Bangla Bank Limited 792,450,236 2,714,640,637
CITI Bank NA 220,000,000 220,000,000
Agrani Bank Limited 393,555,500 150,000,000
One Bank Limited - 300,000,000
HSBC - 300,000,000
Sonali Bank Limited - 290,000,000
Bank Asia Limited - 1,400,000,000
53
31.12.2016 31.12.2015
Taka Taka
Call & Term Borrowing from (cont..)
Mutual Trust Bank Limited - 190,000,000
National Bank Limited 900,000,000 892,501,500
Premier Bank Limited - 795,170,510
NCC Bank Limited - 500,000,000
Uttara Bank Limited - 892,501,500
Habib Bank Limited 79,236,934 79,010,552
Southeast Bank Limited 712,722,451 392,891,276
Bank Al Falah 196,777,750 157,000,600
Dhaka Bank Limited 1,187,290,259 392,501,500
Pubali Bank Limited - -
Trust Bank Limited 1,000,000,000 -
Brac Bank Limited - 1,394,324,451
United Commercial Bank Limited - 1,000,000,000
Commercial Bank of Ceylon - 628,002,400
Accrued interest 1,447,372 14,801,596
Accrued Interest Repo Other Bank 1,104,429 -
6,284,584,931 13,803,346,522
9,941,690,524 14,281,704,120
11.2 Outside Bangladesh
Sonali Bank UK 495,452,954 598,215,467
ICICI BK LTD, HK - 1,729,347,653
International Finance Corporation - 2,752,715,811
Banca UBAE, Italy 395,436,258 -
Noor Bank Limited 3,940,519,398 4,331,361,258
RAK BANK 681,323,009 -
5,512,731,619 9,411,640,189
Schedule of Borrowings from other banks, financial institutions and agents outside Bangladesh is given in Annex - D.
- -
11.3 Analysis by security
Secured (assets pledge as security for liabilities) - -
Unsecured 15,454,422,143 23,693,344,309
15,454,422,143 23,693,344,309
11.4 Repayment pattern
Repayable on demand 1,120,000,000 3,500,000,000
Repayable on maturity (Note: 11.4.1) 14,334,422,143 20,193,344,309
15,454,422,143 23,693,344,309
11.4.1 Repayable on maturity - -
Bangladesh Bank refinance:
ADB loan 890,625 6,334,875
Export Development Fund 2,961,842,309 -
Refinance against IPFF 372,713,265 354,656,325
Refinance against Women Entr., Small Enterprise, ETP & Others 321,659,394 117,366,398
3,657,105,593 478,357,598
Term borrowings:
International Finance Corporation - 2,752,715,811
Trust Bank Limited 1,000,000,000 -
Agrani Bank Limited 393,555,500 -
South East Bank Limited 712,722,451 -
First Gulf Bank - -
Commercial Bank of Ceylon - 628,002,400
Uttara Bank Limited - 892,501,500
Bank Al Falah 196,777,750 157,000,600
National Bank Limited 892,501,500
54
31.12.2016 31.12.2015
Taka Taka
Term borrowings (cont..):
Dhaka Bank Limited 1,187,290,259 392,501,500
Bank Asia Limited - 800,000,000
Premier Bank Limited - 795,170,510
NCC Bank Limited - 500,000,000
Habib Bank Limited 79,236,934 79,010,552
Southeast Bank Limited - 392,891,276
Meghna Bank Limited - -
Brac Bank Limited - 1,394,324,451
United Commercial Bank Limited - 1,000,000,000
Dutch Bangla Bank Ltd 792,450,236 1,964,640,637
BANCA UBAE SPA 395,436,258 -
RAK Bank 681,323,009 -
Sonali Bank UK 495,452,954 598,215,467
ICICI BK LTD,HK - 1,729,347,653
Al-Noor Bank Limited 3,940,519,398 4,331,361,258
Accrued interest 2,551,802 14,801,596
10,677,316,550 19,714,986,711
14,334,422,143 20,193,344,309
11(a) Consolidated Borrowings from other banks, financial institutions
and agents
AB Bank Limited 15,454,422,143 23,693,344,309
Cashlink Bangladesh Limited (CBL) - 106,741,029
17,607,559,639 26,934,409,195
Less: Intercompany transactions 1,849,804,163 2,835,810,411
15,757,755,476 24,098,598,784
12. AB Bank Subordinated Bond
AB Bank Subordinated Bond-I 2,500,000,000 2,500,000,000
AB Bank Subordinated Bond-II 4,000,000,000 4,000,000,000
6,500,000,000 6,500,000,000
AB Bank Subordinated Bonds
Bank has issued 7 years Sub-Ordinated bonds in two phases, namely- AB Bank Subordinated Bond-I for BDT 250 crore in
August 2014 and AB Bank Subordinated Bond-II for BDT 400 crore in September 2015 under Private Placement of Debt
Securities Rules, 2012. These bonds are non-convertible, unsecured in nature and approved by the Central Bank for
inclusion in Tier-II capital of the Bank.
BRAC 1,000,000,000 1,000,000,000
Sonali Bank Limited 1,500,000,000 1,500,000,000
Agrani Bank Limited 1,000,000,000 1,000,000,000
Midland Bank Limited 200,000,000 200,000,000
BRAC Bank Limited 400,000,000 400,000,000
NRB Commercial Bank Limited 100,000,000 100,000,000
Mutual Trust Bank Limited 80,000,000 80,000,000
Grameen Capital Management Limited 20,000,000 20,000,000
Rupali Bank Limited 1,000,000,000 1,000,000,000
Janata Bank Limited 500,000,000 500,000,000
NRB Commercial Bank Limited 300,000,000 300,000,000
Uttara Bank Limited 300,000,000 300,000,000
National Life Insurance Co. Ltd. 100,000,000 100,000,000
6,500,000,000 6,500,000,000
55
31.12.2016 31.12.2015
Taka Taka
13. Deposit and other accounts
Inter-bank deposits 4,681,805,278 3,718,566,487
Other deposits 240,958,977,631 210,100,339,012
245,640,782,909 213,818,905,499
(0) (0)
13(a) Consolidated Deposit and other accounts
AB Bank Limited 245,640,782,909 213,818,905,500

245,640,782,909 213,818,905,500
Less: Inter-group transaction 246,378,489 147,181,662
245,394,404,421 213,671,723,838
13.1 Maturity analysis of inter-bank deposits

– within 1 month 3,338,175,477 568,375,673
– over 1 month but within 3 months - 34,581,657
– over 3 months but within 1 period 20,400,833 -
– over 1 period but within 5 periods - -
– over 5 periods but within 10 periods - -
– over 10 periods - -
- 4,681,805,278 3,718,566,487
-
13.2 Maturity analysis of other deposits
Repayable – on demand 3,408,558,336 200,184,005
– within 1 month 23,157,287,099 19,180,421,571
– over 1 month but within 3 months 60,103,828,484 56,111,962,963
– over 3 months but within 1 period 89,682,914,421 77,983,565,999
– over 1 period but within 5 periods 62,520,054,989 54,567,155,889
– over 5 periods 2,086,334,302 2,057,048,586
0 240,958,977,631 210,100,339,013
13.1 Demand and time deposits 0 1
a) Demand Deposits 29,685,925,468 25,799,137,379

Current accounts and other accounts 22,298,120,917 20,067,587,921
Savings Deposits (9%) 2,522,222,229 2,031,576,071
Bills Payable 4,865,582,322 3,699,973,387
b) Time Deposits 215,954,857,441 188,019,768,120

Savings Deposits (91%) 25,502,469,205 20,541,491,386
Short Notice Deposits 49,236,728,682 37,757,866,523
Fixed Deposits 122,034,379,371 111,741,032,463
Other Deposits 19,181,280,183 17,979,377,748
Total Demand and Time Deposits 0 245,640,782,909 213,818,905,499
13.4 Sector-wise break up of deposits and other accounts 0 0
Government 1,753,988,460 2,695,343,411

Deposit money Banks 4,681,805,278 3,718,566,487
Autonomous & Semi-Autonomous Bodies 4,667,196,517 3,717,509,300
Public Non-Financial Organisation 61,334,737,839 49,055,402,371
Other Public 3,394,084,791 3,811,432,586
Foreign Currency 6,805,419,728 6,902,166,758
Private 163,003,550,296 143,918,484,587
- 245,640,782,909 213,818,905,499
- -
56
31.12.2016 31.12.2015
Taka Taka
14. Other liabilities
Accumulated provision against loans and advances (Note 14.1) 6,605,083,960 4,714,778,454
Inter-branch adjustment - 366,832
Provision for current tax (net of advance tax) (Note 14.2) 2,561,589,337 2,739,993,532
Interest suspense account (Note 14.3) 10,459,867,308 6,071,639,588
Provision against other assets (Note 14.3) 237,198,969 764,251,969
Provision for outstanding debit entries in NOSTRO accounts - 200,000
Accounts payable - Bangladesh Bank 802,485,542 186,568,806
Accrued expenses 360,305,082 341,172,292
Provision for off balance sheet items (Note 14.4) 860,000,000 860,000,000
Provision against investments (Note 14.5) 1,550,053,000 1,875,053,000
Others (*) 689,642,580 651,755,094
353,038,032 24,126,225,778 18,205,779,567
(*) Others includes provision for audit fee, excise duty, income tax and VAT deducted at source, unclaimed dividend, accounts payable
for safe keeping, earnest and security money.
14.1 Accumulated provision against loans and advances
The movement in specific provision for bad and doubtful debts
Balance at 01 January 2,564,529,261 2,891,323,484
Fully provided debts written off during the year (-) (2,305,175,887) (1,338,843,223)
Recovery of amounts previously written off (+) 23,385,264 66,437,637
Specific provision made during the year (+) 2,180,414,736 945,611,363
Transferred from provision for current tax (+) -
Transfer from general reserve (+)
Recoveries and provision no longer required (-) - -
Net charge to Profit and Loss Account (+)
(101,375,887) (101,375,887) (326,794,223)
Balance at December 31 (1,632,113,939) 2,463,153,374 2,564,529,261
Provision made by ABBL, Mumbai Branch 43,189,581 31,640,080
Total provision on classified loans and advances 2,506,342,955 2,596,169,341
On unclassified loans 0
Transfer from other assets provisions (+) 100,000,000 -
Transfer from investment provisions (+) 350,000,000
Transfer from Other Assets 440,000,000
Transferred from provision for current tax 350,000,000
Transfer to general reserve during the year (-) - (860,000,000)
General provision made during the year (+) 740,200,000 1,049,200,000
1,980,200,000 189,200,000
Balance at the year ended 4,095,267,313 2,115,067,313
Provision made by ABBL, Mumbai Branch 3,473,693 3,541,800
Total provision on un-classified loans and advances 4,098,741,006 2,118,609,113
Total provision on loans and advances 6,605,083,960 4,714,778,454
0
31.12.2016
Provision for Required Maintained Excess
Un-classified loans and advances 4,080,365,693 4,098,741,006 18,375,313
Classified loans and advances 2,500,989,581 2,506,342,955 5,353,374
6,581,355,273 6,605,083,960 23,728,687
In accordance with letter no. BRPD(P-1)/661/13/2017/2606 dated April 27, 2017 of Banking Regulations & Policy Department
(BRPD) of Bangladesh Bank (BB), provision for Loans and Advances (against unclassified, writ cases & classified loans determined by
Department of Banking Inspection-1 of BB) amounting Tk. 167.66 crore has been maintained in 2016 and rest amount is required to be
maintained @ 30% from 2017-2019 amounting to Tk. 502.95 crore for each year.
14.1.1 Details of provision for loans and advances

31.12.2016
Required Maintained
General Provision 4,080,365,693 4,098,741,006
Standard 3,752,565,693 3,770,941,006
Special Mention Account 327,800,000 327,800,000
Specific Provision 2,500,989,581 2,506,342,955
Substandard 22,100,000 22,100,000
Doubtful 375,589,581 375,589,581
Bad/Loss 2,103,300,000 2,108,653,374
Surplus provision maintained at December 31, 2016 23,728,687
57
31.12.2016 31.12.2015
14.2 Provision for current tax (net of advance tax) Taka Taka
Current Tax (0) (note 14.2.1) 15,150,207,047 14,117,950,475
Advance Income Tax (note 14.2.2) 12,588,617,710 11,377,956,943
Provision for current tax (net of advance tax) (0) 2,561,589,337 2,739,993,532
14.2.1 Provision for current tax

Add: Provision made during the year 1,495,394,805 1,801,901,343
Less: Transferred to General Provision of loans and advance 350,000,000 -
Balance at the year ended 15,080,733,191 13,935,338,386
Provision held by ABBL, Mumbai Branch 69,473,856 182,612,089
- 15,150,207,047 14,117,950,475
Corporate income tax assessment of the Bank is completed up to the income year ended 31 December 2013 (Assessment Year 2014-15).
Corporate income tax return for the years 2014 & 2015 submitted under section 82BB corresponding to Assessment Years 2015-16 &
2016-17. Tax assessments for income years 1995, 1996, 1997, 2007, 2009, 2010, 2011 and 2012 were completed but these were referred
to the Hon'ble High Court on the application made by the Bank for some disputed points.
14.2.2 Advance corporate income tax
In Bangladesh:
Balance at 01 January 2016 11,180,990,162 9,125,367,470

Add: Paid during the year 1,241,741,245 1,948,415,000
Tax withheld during the year 91,876,011 105,955,561
1,333,617,256 2,054,370,561
Less: Transfer/Adjustment during the year - 1,252,131
Balance at December 31 12,514,607,419 11,180,990,162
Advance tax of ABBL, Mumbai Branch 74,010,292 196,966,780
0.26 12,588,617,710 11,377,956,943
14.3 Interest suspense account

Transfer during the year (+) 5,184,751,472 3,747,616,575
Recovery during the year (-) 34,455,000 74,548,032
Waiver during the year 39,203,000 9,900,000
Write off during the year (-) 734,796,414 491,897,206
Balance at December 31 10,414,337,836 6,038,040,779
Mumbai Branch 45,529,471 33,598,809
(0) (0.27) 10,459,867,307 6,071,639,588
(0) (0)
14.4 Provision against other assets (0)
Provision for
Prepaid legal expenses 85,030,000 72,030,000
Protested bills 26,065,610 26,065,610
Others 126,103,359 666,156,359
237,198,969 764,251,969
Provision against other assets was made as per BRPD Circular # 14 dated 25 June 2001 issued by Bangladesh Bank.
14.4.1 Calculation of Provision against other assets
Outstanding Provisions Provisions
Base for Provision Rate
amount Requirement Maintained
Prepaid legal expenses 84,296,684 84,296,684 50% & 100% 42,148,342 85,030,000
Protested bills 23,743,304 23,743,304 100% 23,743,304 26,065,610
Others 93,589,571 93,589,571 100% 93,589,571 126,103,359
Required provision for other assets 159,481,217 237,198,969
Total provision requirement 159,481,217
Total provision maintained 237,198,969
Excess provision maintained at December 31, 2016 77,717,752
58
31.12.2016 31.12.2015
Taka Taka
14.5 Provision for off balance sheet items
Balance at 01 January 860,000,000 1,010,000,000
Less. Transferred to general reserve - (200,000,000)
Add: Provision made during the year - 50,000,000
Less: Adjustment during the year - -
860,000,000 860,000,000
14.5.1 Particulars of required provision for Off-Balance Sheet Items
Base for Provision Rate (%) 31.12.2016 31.12.2015

Acceptances and endorsements 28,966,637,831 1% 289,666,378 242,564,308
Letters of guarantee 13,920,306,922 1% 139,203,069 123,274,102
Irrevocable letters of credit 22,005,679,984 1% 220,056,800 236,507,242
Bills for collection 6,031,396,865 1% 60,313,969 61,096,751
Others - 1% - -
Total Off Balance Sheet Items &
70,924,021,602 709,240,216 663,442,402
required provision
Total provision maintained 860,000,000 860,000,000
Excess provision at December 31, 2016 150,759,784 196,557,598
No provision has been maintained against Off Balance Sheet items of Mumbai Branch amounting Tk. 2,554,892,533 as per Reserve
Bank of India (RBI) guidelines.
31.12.2016 31.12.2015
Taka Taka
14.6 Provision against investments
Add: Provision made during the year 25,000,000 -
Less: Transferred to general provision for loans and advances 350,000,000 -
Less: Transferred to General Reserve - (120,000,000)
Balance at December 31 - 1,550,053,000 1,875,053,000
Total provision maintained for Investment 1,550,053,000 1,875,053,000

Total provision requirement for Investment 1,547,018,037 1,505,598,610
Excess provision at December 31 3,034,963 369,454,390
14(a) Consolidated Other liabilities

AB Bank Limited 24,126,225,778 18,205,779,567
25,505,385,002 19,308,223,938
Less: Inter-group transaction 322,893,637 213,467,908
25,182,491,365 19,094,756,031
15. Share Capital 6,738,936,140 5,990,165,460
15.1 Authorised Capital
1,500,000,000 ordinary shares of Tk. 10 each 15,000,000,000 6,000,000,000
15.2 Issued, Subscribed and Paid-up Capital

10,000,000 ordinary shares of Taka 10 each issued for cash 100,000,000 100,000,000
5,000,000 ordinary shares of Taka 10 each (Rights issue) 50,000,000 50,000,000
658,893,614 ordinary shares of Taka 10 each (Bonus shares) 6,588,936,140 5,840,165,460
0 6,738,936,140 5,990,165,460
15.3 Percentage of shareholding
As at December 31, 2016 As at December 31, 2015
No. of shares % No. of shares %
Sponsors and public 670,030,788 99.43 595,582,922 99.43

Government 3,862,826 0.57 3,433,624 0.57
673,893,614 100.00 599,016,546 100.00
59
15.4 Classification of shareholders by holding
No. of Shareholders % of total Shareholding

Holding
31.12.2016 31.12.2015 31.12.2016 31.12.2015
Upto 500 40,376 49,546 55.74 60.59
501 to 5,000 25,968 26,938 35.85 32.94
5,001 to 10,000 3,082 2,798 4.26 3.42
10,001 to 20,000 1,570 1,327 2.17 1.62
20,001 to 30,000 514 399 0.71 0.49
30,001 to 40,000 199 180 0.27 0.22
40,001 to 50,000 145 103 0.20 0.13
50,001 to 100,000 250 206 0.35 0.25
100,001 to 1,000,000 270 226 0.37 0.28
Over 1,000,000 58 56 0.08 0.07
72,432 81,779 100 100
15.5 Names of the Directors and their shareholding as at December 31, 2016
No of Shareholding
Name of the Director Status
31.12.2016 31.12.2015
Mr. M. Wahidul Haque Chairman 145,793 129,595
Mr. Salim Ahmed Vice-Chairman 15,917,596 14,148,975
Mr. Feroz Ahmed Director 13,982,398 12,428,799
Mr. M. A. Awal Director 4,222 3,753
Mr. Shishir Ranjan Bose FCA Independent Director - -
Mr. Faheemul Huq, Barrister - at -Law Director 578,201 513,957
Mr. Syed Afzal Hasan Uddin, Barrister -
Director 2,997 2,664
at -Law
Mr. Md. Mesbahul Hoque Director 2,997 2,664
Mr. Syed Golam Kibria Director 1,000
Mr. Asish Baran Sarkar Director 1,000
Prof. Dr. M. Imtiaz Hossain Independent Director - -
Mr. Shamim Ahmed Chaudhury* President & Managing Director - -
* Contract expired on February 22, 2017. Board in its 626th meeting held on April 19, 2017 appointed Mr. Moshiur Rahman Chowdhury
as President & Managing Director & Bangladesh Bank approval is under process.
15.6 Capital to Risk Weighted Assets Ratio (CRAR) - As per BASEL III
Consolidated - Capital Adequacy Ratio

In terms of section 13(2) of the Bank Company Act, 1991(amendment up to 2013) and Bangladesh Bank BRPD Circular no. 18 dated
21 December 2014, required capital of the Bank on Consolidated basis at the close of business on 31 December 2016 is Taka
30,515,446,584 as against available Total Common Equity Tier-I Capital of Taka 19,806,069,176 and Total Tier-2 Capital available of
Taka 12,063,963,398 that is, a total of Taka 31,870,032,574 thereby showing surplus capital of Taka 1,354,585,990 at that date. Details
are shown below:
31.12.2016 31.12.2015
Taka Taka
Tier I Capital (Going-Concern Capital)
Common Equity Tier-I Capital

Fully Paid-up Capital/Capital Deposited with BB 6,738,936,140 5,990,165,460
Statutory Reserve 6,495,637,440 6,111,203,545
Non-repayable share premium account - -
General Reserve 1,298,909,942 1,401,086,919
Retained earnings 7,836,238,115 7,435,241,593
Minority interest in Subsidiaries 9,911,986 (2,235,814)
Non-Cumulative irredeemable Preferences shares - -
Dividend Equalization Account - -
22,379,633,623 20,935,461,703
60
31.12.2016 31.12.2015
Taka Taka
Regulatory Adjustment:
Goodwill and all other Intangible Assets 238,275,824 322,958,427

Shortfall in provisions required against Non Performing Loans (NPLs) -
Shortfall in provisions required against investment in shares -
Remaining deficit on account of revaluation of investments in securities after netting
off from any other surplus on the securities. -
Deferred Tax Assets (DTA) 2,311,839,144 1,483,281,544
Defined benefit pension fund assets
Gain on sale related to securitization transactions -
Investment in own CET-1 Instruments/Shares -
Reciprocal crossholdings in the CET-1 capital of Banking, Financial and Insurance
Entities 13,489,480 9,054,440
Any investment exceeding the approved limit under section 26(2) of Bank Company
Act, 1991. -
Investments in subsidiaries which are not consolidated- 50% of Investment

9,960,000 9,960,000
Other if any
2,573,564,448 1,825,254,411
Total Common Equity Tier-I Capital 19,806,069,176 19,110,207,292
Additional Tier-I Capital - -
Tier-2 Capital (Gone concern Capital)

General Provision/General loan-loss reserve 5,064,140,543 2,867,752,202
All other preference shares
Subordinated debt/Instruments issued by the banks that meet the qualifying criteria
for Tier 2 capital (as per Annex 4 of Basel III Guidelines) 6,500,000,000 6,500,000,000
Minority Interest
HO borrowings in foreign currency received that meet the criteria of Tier 2 debt capital
-
Revaluation Reserves as on 31 December, 2014 (50% of Fixed Assets and Securities &
849,638,093 849,638,093
10% of Equities)
Other (if any item approved by Bangladesh Bank)
Sub-Total 12,413,778,636 10,217,390,295
Regulatory Adjustments:
Revaluation Reserves for Fixed Assets, Securities & Equity Securities 339,855,237 169,927,619
Investment in own T-2 Instruments/Shares -
Reciprocal crossholdings in the T-2 capital of Banking, Financial and Insurance
Entities -
Act, 1991. (50% of Investment) -
Investments in subsidiaries which are not consolidated- 50% of Investment 9,960,000 9,960,000
Other (if any )
Total Tier-2 Capital Available 12,063,963,398 10,037,502,676
Maximum limit of Tier-2 Capital (Tier 2 Capital can be maximum up to 4.0% of the
total RWA or 88.89% of CET1, whichever is higher) 17,605,614,890 16,987,063,262
Excess amount over maximum limit of T 2 - -

Total admissible Tier 2 Capital 12,063,963,398 10,037,502,676
Total Eligible Capital 31,870,032,574 29,147,709,968
Total assets including off-Balance Sheet items 390,647,684,343 355,587,988,835

Total risk-weighted assets (RWA) 287,204,203,147 258,013,752,529
B. Total required capital (10.625% of Total RWA) 30,515,446,584 25,801,375,253
Capital Surplus / (Shortfall) [A-B] 1,354,585,990 3,346,334,716
Capital to Risk Weighted Assets Ratio (CRAR) 11.10% 11.30%
61
Solo - Capital to Risk Weighted Assets Ratio (CRAR)
In terms of section 13(2) of the Bank Company Act, 1991 (amendment up to 2013) and Bangladesh Bank BRPD Circular no. 18 dated
21 December 2014, required capital of the Bank on solo basis at the close of business on 31 December 2016 is Taka 30,178,032,248 as
against available Total Common Equity Tier-I Capital of Taka 18,702,832,098 and Total Tier-2 Capital available of Taka
11,937,558,993 that is, a total of Taka 30,640,391,090 thereby showing surplus capital of Taka 462,358,843 at that date. Details are
shown below:
31.12.2016 31.12.2015
Tier I Capital (going-concern capital) Taka Taka
Common Equity Tier-I Capital

Fully Paid-up Capital/Capital Deposited with BB 6,738,936,140 5,990,165,460
Statutory Reserve 6,495,637,440 6,111,203,545
Non-repayable share premium account -
General Reserve 1,222,199,200 1,222,199,200
Minority interest in Subsidiaries
Non-Cumulative irredeemable Preferences shares
Dividend Equalization Account
21,266,436,546 20,154,515,126
Regulatory Adjustment :
Goodwill and all other Intangible Assets 238,275,824 322,958,427

Shortfall in provisions required against Non Performing Loans (NPLs) -
Shortfall in provisions required against investment in shares -
Remaining deficit on account of revaluation of investments in securities after netting -
Deferred Tax Assets (DTA) 2,311,839,144 1,483,281,544
Defined benefit pension fund assets -
Gain on sale related to securitization transactions -
Investment in own CET-1 Instruments/Shares -
Reciprocal crossholdings in the CET-1 capital of Banking, Financial and Insurance 13,489,480 9,054,440
Other if any
2,563,604,448 1,815,294,411
Total Common Equity Tier-I Capital 18,702,832,098 18,339,220,715
Tier-2 Capital (Gone concern Capital)
General Provision/General loan-loss reserve 4,958,741,006 2,855,177,375

All other preference shares -
Subordinated debt/Instruments issued by the banks that meet the qualifying criteria 6,500,000,000 6,500,000,000
Minority Interest -
HO borrowings in foreign currency received that meet the criteria of Tier 2 debt capital -
Revaluation Reserves as on 31 December, 2014(50% of Fixed Assets and Securities &
10% of Equities) 798,029,978 798,029,978
Other (if any item approved by Bangladesh Bank)
Sub-Total 12,256,770,984 10,153,207,353
Regulatory Adjustments:
Revaluation Reserves for Fixed Assets, Securities & Equity Securities 319,211,991 159,605,996
Investment in own T-2 Instruments/Shares
Reciprocal crossholdings in the T-2 capital of Banking, Financial and Insurance
Other (if any )
Total Tier-2 Capital Available 11,937,558,993 9,993,601,357
Maximum limit of Tier-2 Capital (Tier 2 Capital can be maximum up to 4.0% of the
total RWA or 88.89% of CET1, whichever is higher) 16,624,947,452 16,301,733,294
Excess amount over maximum limit of T 2 -

Total admissible Tier 2 Capital 11,937,558,993 9,993,601,357
Total Eligible Capital 30,640,391,090 28,332,822,072
62
31.12.2016 31.12.2015
Taka Taka
Total assets including off-Balance Sheet items 388,314,805,147 353,659,413,585

Total risk-weighted assets (RWA) 284,028,538,801 255,525,397,235
B. Total required capital (10.625% of Total RWA) 30,178,032,248 25,552,539,723
Capital Surplus / (Shortfall) [A-B] 462,358,843 2,780,282,349
Capital to Risk Weighted Assets Ratio (CRAR) 10.79% 11.09%
Detailed Disclosure under Pillar III of Basel III is presented in (Annex- E).
16. Statutory reserve 748,770,680.00
In Bangladesh
Opening balance 5,888,708,849 5,384,130,846
Add: Addition during the year 368,185,215 504,578,003
Add./less Adjustment for Foreign Exchange Rate Fluctuation - -
6,256,894,064 5,888,708,849
Outside Bangladesh - ABBL, Mumbai Branch
Opening balance 222,494,695 198,309,382

Add: Addition during the year 20,527,152 31,248,121
Add: Transferred from Investment fluctuation reserve - -
Add/(Less): Adjustment for Foreign Exchange Rate Fluctuation (4,278,471) (7,062,808)
238,743,376 222,494,695
(0) 6,495,637,440 6,111,203,545
17. Other reserve -
General reserve (Note-17.1) 1,222,199,200 1,222,199,200

Assets revaluation reserve (Note-17.2) 1,303,760,781 1,305,535,182
Investment revaluation reserve (Note-17.3) 544,262,857 1,332,175,037
Foreign exchange revaluation for investment in foreign operation - -
3,070,222,838 3,859,909,419
17.1 General reserve
Opening balance 1,222,199,200 42,199,200

Add. Transferred from general provision of loans and advances - 860,000,000
Add. Transferred from off balance sheet provisions - 200,000,000
Add: Transferred from investment provisions - 120,000,000
- 1,222,199,200 1,222,199,200
17.2 Assets revaluation reserve
Opening balance 1,305,535,182 1,323,567,486

Add: Addition during the period - -
Less: Transferred to retained earnings 0 (1,774,401) (18,032,304)
0 1,303,760,781 1,305,535,182
17.3 Investment revaluation reserve (Treasury Bills & Treasury Bonds) 0
In Bangladesh
Revaluation Reserve for:
Held to Maturity (HTM) Note (17.3.1) 2,227,349 2,176,484

Held for Trading (HFT) Note (17.3.2) 542,035,508 1,329,998,553
544,262,857 1,332,175,037
-
Outside Bangladesh
ABBL, Mumbai Branch - -
- 544,262,857 1,332,175,037
17.3.1 Revaluation Reserve for Held to Maturity (HTM)
Opening balance 2,176,484 3,946,258
Add: Addition during the year 672,032 773,514
2,848,516 4,719,772
Less: Adjustment during the year 621,167 2,543,288
- 2,227,349 2,176,484
63
31.12.2016 31.12.2015
Taka Taka
17.3.2 Revaluation Reserve for Held for Trading (HFT)
Opening balance 1,329,998,553 268,546,211
Add: Addition during the year 2,261,509,415 1,795,936,708
3,591,507,968 2,064,482,919
Less: Adjustment during the year 3,049,472,459 734,484,366
1 542,035,509 1,329,998,553
17(a) Consolidated Other reserve

AB Bank Limited 3,070,222,838 3,859,909,419
3,253,395,264 4,039,376,532
18. Retained earnings
Opening balance 6,830,946,921 6,768,352,063
Less. Adjustment for investment in Amana Bank 180,140,019 -
Add: Post-tax profit for the year 1,304,670,423 1,270,414,868
Less: Transfer to statutory reserve 388,712,367 535,826,124
Cash dividend - -
Bonus shares issued 748,770,680 665,573,940
2 6,817,994,278 6,837,366,867
Add/(Less): Transferred from Assets Revaluation Reserve 1,774,401 18,032,304
Add/(Less): Retained earnings adjustment - (2,946,778)
Add/(Less): Foreign Exchange Translation gain/(loss) (10,104,914) (21,505,472)
6,809,663,765 6,830,946,921
18(a) Consolidated Retained earnings
AB Bank Limited 6,809,663,765 6,830,946,921
Cashlink Bangladesh Limited (CBL) (185,493,381) (306,731,436)
AB Exchange (UK) Ltd. - (45,308,187)
7,510,161,269 7,242,242,176
Add./(Less): Adjustment made during the year 307,674,218 162,448,989
Minority Interest 2 (18,402,628) (30,550,428)
2 7,836,238,115 7,435,241,593
18(b) Minority Interest
AB Investment Limited (701) 347 9,797 10,498

AB Securities Limited 24,695 6,829 451,527 426,832
Cashlink Bangladesh Limited 12,123,805 (5,969,220) 9,450,662 (2,673,144)
9,911,986 (2,235,814)
-
19. Contingent liabilities 73,478,914,136 68,649,158,866
19.1 Letters of guarantee

Money for which the Bank is contingently liable in respect of guarantees issued
favoring:
Directors - -
Government - -
Banks and other financial institutions 126,303,800 118,800,000
Others 13,794,003,122 12,208,610,154
- 13,920,306,922 12,327,410,154
64
2016 2015
Taka Taka
20. Profit and loss account
Income:
Interest, discount and similar income 22,941,335,413 23,664,997,552
Dividend income 192,687,562 180,634,136
Fee, commission and brokerage 1,872,192,713 1,855,689,669
Gains less losses arising from investment securities 96,492,875 2,996,773
Gains less losses arising from dealing in foreign currencies 844,901,183 973,066,129
Other operating income 115,809,979 118,591,269
Gains less losses arising from dealing securities 1,086,468,655 318,368,965
Income from non-banking assets - -
losses
Loss on
on disposal
interest rate
of ABchanges
Exchange (UK) Limited (54,787,885) -
27,095,100,496 27,114,344,493
Expenses:
Interest, fee and commission 16,077,046,356 16,532,249,413
Administrative expenses 4,236,639,417 3,980,332,983
Other operating expenses 1,424,393,841 1,304,413,020
Depreciation and amortization on banking assets 337,585,289 343,596,380
Losses on loans and advances - -
22,075,664,903 22,160,591,796
5,019,435,593 4,953,752,697
21. Interest income/profit on investments 0 -
Interest on loans and advances:

Loans and advances 18,052,078,467 20,145,481,015
Bills purchased and discounted 361,618,093 298,078,258
18,413,696,561 20,443,559,273
*Less. Incentive for good borrowers 13,655,184 63,960,816
18,400,041,377 20,379,598,457
Interest on:
Calls and placements 497,120,122 407,090,134
Balance with foreign banks 1,315,791 1,322,879
Reverse Repo 12,732,711 22,729,948
Balance with Bangladesh Bank 2,817,625 834,599
513,986,250 431,977,559
18,914,027,627 20,811,576,016
*Bank has maintained incentive for good borrowers in accordance with Bangladesh Bank, BRPD circular no. 06 dated March 19,
2015, BRPD circular letter no.16 dated December 30, 2015 and BRPD circular letter no. 03 dated February 16, 2016.
21(a). Consolidated Interest income/profit on investments
AB Bank Limited 18,914,027,627 20,811,576,016

Cashlink Bangladesh Limited (CBL) 1,470,187 336,312
19,455,416,990 21,352,899,645
Less: Intercompany Transactions 5,411,074 124,002,467
19,450,005,916 21,228,897,178
65
2016 2015
Taka Taka
22. Interest/profit paid on deposits, borrowings, etc.
Interest on deposits:
Fixed deposits 8,442,005,899 10,842,348,932
Savings deposits 769,587,124 694,118,806
Special notice deposits 2,981,596,605 1,912,833,661
Other deposits 1,932,860,542 1,781,765,032
14,126,050,170 15,231,066,431
Interest on borrowings:
Local banks, financial institutions including Bangladesh Bank 1,254,092,081 892,689,832
Subordinated Bond 696,904,106 408,493,151
16,077,046,356 16,532,249,413
22(a). Consolidated Interest/profit paid on deposits, borrowings, etc.

AB Bank Limited 16,077,046,356 16,532,249,413
16,147,246,706 16,735,777,862
(73,070,673) 16,139,157,478 16,608,847,742
23. Investment income -
Capital gain on sale of shares 96,492,875 2,996,773
Interest on treasury bills 423,855,841 287,706,047
Dividend on shares 192,687,562 180,634,136
Income from Amana Bank Limited as Associates 3,087,178 -
Loss on disposal of ABEL (54,787,885) -
Interest on debentures - 641,671
Interest on treasury bonds 3,590,641,483 2,548,036,366
Gain/(Loss) on treasury bills and treasury bonds 1,086,468,655 318,368,965
Interest on other bonds & others 9,723,285 17,037,452
5,348,168,994 3,355,421,410
23(a). Consolidated Investment income
AB Bank Limited 5,348,168,994 3,355,421,410
AB Investment Limited 7,902,899 252,437
Cashlink Bangladesh Limited (CBL) (182,616,310) (756,799)
5,184,434,330 3,356,353,037
Less: Intercompany Transactions (*) 78,569,034 74,365,853
5,105,865,296 3,281,987,184
(*) Inter-company transactions includes dividend income from AB International Finance Limited.
24. Commission, exchange and brokerage
Other fees, commission and service charges 1,039,395,834 989,906,895

Commission on letters of credit 657,804,855 694,088,952
Commission on letters of guarantee 174,992,024 171,693,822
Exchange gains less losses arising from dealings in foreign currencies 844,901,183 973,066,129
2,717,093,896 2,828,755,798
66
2016 2015
Taka Taka
24(a). Consolidated Commission, exchange and brokerage
AB Bank Limited 2,717,093,896 2,828,755,798

2,977,876,650 3,040,246,306
2,855,788,192 2,964,436,043
25. Other income

Locker rent, insurance claim and others 4,751,956 8,144,567
Recoveries on telex, telephone, fax, etc. 84,781,759 82,288,508
Recoveries on courier, postage, stamp, etc. 26,005,800 24,950,165
Non-operating income (*) 270,463 3,208,028
115,809,979 118,591,268
(*) Non-operating income includes sale of scrap items.

25(a). Consolidated other income
AB Bank Limited 115,809,979 185,028,906
177,142,862 236,126,731
168,909,279 227,682,558
26. Salary and allowances

Basic salary, provident fund contribution and all other allowances 2,603,883,283 2,557,134,869
Festival and incentive bonus 330,250,103 263,089,477
2,934,133,386 2,820,224,346
26.1 Chief executive's salary and fees 12,900,000 13,900,000
In 2016, incentive bonus paid to Chief Executive Officer Taka 1,000,000 which was charged against salary and allowances
in 2015. Thus, Chief Executive's salary and fees for the year 2015 has been restated by Taka 1,000,000 with salary and
allowances.
26(a). Consolidated salary and allowances

AB Bank Limited 2,934,133,386 2,820,224,346
3,011,081,546 2,904,505,487
2016 2015
67
2016 2015
Taka Taka
27. Rent, taxes, insurance, electricity, etc.
Rent, rates and taxes 430,192,895 355,383,641

Electricity, gas, water, etc. 170,375,310 145,062,566
Insurance 97,314,193 92,054,400
- 697,882,398 592,500,607
27(a). Consolidated Rent, taxes, insurance, electricity, etc.
AB Bank Limited 697,882,398 592,500,607

716,683,124 612,025,351
711,166,604 606,508,831
28. Legal expenses
Legal expenses - 18,146,709 8,418,187
28(a). Consolidated Legal expenses
AB Bank Limited 18,146,709 8,418,187

AB Securities Limited - 95,500
18,571,996 9,292,376
29. Postage, stamp, telecommunication, etc.
Telex, fax, internet, wireless link, SWIFT, etc. 91,998,742 91,884,268

Telephone 10,731,635 11,806,021
Postage, stamp and shipping 33,170,694 31,550,746
- 135,901,070 135,241,035
29(a). Consolidated Postage, stamp, telecommunication, etc.
AB Bank Limited 135,901,070 135,241,035

Cashlink Bangladesh Limited (CBL) 413 4,756
145,863,143 143,929,785
Less: Inter company transactions (2,088,458) (3,982,539)
143,774,685 139,947,246
30. Stationery, printing, advertisements, etc.
Printing and stationery 152,711,368 129,704,906

Publicity, advertisement, etc. 43,456,291 37,805,709
196,167,659 167,510,614
68
2016 2015
Taka Taka
30(a). Consolidated Stationery, printing, advertisements, etc.
AB Bank Limited 196,167,659 167,510,614

AB International Finance Limited 338,886 329,663
197,362,277 168,617,596
31. Directors' fees
Directors' fees 2,718,600 2,129,100

Meeting expenses 6,867,943 5,856,247
- 9,586,543 7,985,347
Directors' fees includes fees for attending the meeting of the Board, Executive Committee, Audit Committee, Risk
Management Committee and Shariah Council.
31(a). Consolidated Directors' fees
AB Bank Limited 9,586,543 7,985,347

10,699,895 8,783,017
32. Auditors' fees
Statutory 1,213,141 911,950

Others 3,799,649 3,433,950
- 5,012,790 4,345,900
32(a). Consolidated Auditors' fees
AB Bank Limited 5,012,790 4,345,900

5,762,139 5,285,950
33. Depreciation and repairs of Bank's assets

Depreciation :
Electrical appliances 135,030,950 147,802,949
Building 19,070,730 19,552,271
Motor vehicles 59,394,125 52,688,093
229,618,514 235,368,419
69
2016 2015
Taka Taka
Repairs:
Motor vehicles 40,955,249 32,274,445
Electrical appliances 75,952,267 82,357,927
Office premises and others 102,485,767 107,939,444
226,908,863 230,206,946
456,527,377 465,575,365
Amortization of Intangible Assets 107,966,775 108,227,961
- 564,494,152 573,803,326
33(a). Consolidated Depreciation and repairs of Bank's assets
AB Bank Limited 564,494,152 573,803,327

585,870,806 600,206,526
34. Other expenses

Contractual service 582,616,075 477,627,551
Petrol, oil and lubricant 74,903,921 71,402,998
Software expenses 145,829,727 142,300,110
Entertainment 49,906,193 64,040,138
Travelling 28,945,241 32,338,978
Subscription, membership and sponsorship 79,105,129 78,285,480
Training, seminar and workshop 37,369,497 40,526,503
Local conveyance 9,659,008 9,306,348
Professional charges 55,930,874 89,875,491
Books, newspapers and periodicals 1,611,813 1,580,622
Branch opening expenses 311,994 404,204
Bank Charges 73,070,673 24,052,653
Sundry expenses (*) 285,133,696 272,671,945
- 1,424,393,841 1,304,413,020
(*) Sundry expenses includes business promotion, rebate to foreign correspondents, donation & dress employees etc.
34(a). Consolidated other expenses
AB Bank Limited 1,424,393,841 1,304,413,020

1,443,976,088 1,327,339,425
1,323,937,179 1,255,511,701
35. Provision against loans and advances
On un-classified loans 740,200,000 1,049,200,000
On classified loans 2,192,572,661 945,611,363
2,932,772,661 1,994,811,363
70
2016 2015
Taka Taka
35(a). Consolidated provision against loans and advances
AB Bank Limited 2,932,772,661 2,061,249,000

AB Investment Limited - 3,864,130
2,938,984,936 2,066,527,189
36. Provisions for diminution in value of investments

In quoted shares 25,000,000 -
36(a). Consolidated provisions for diminution in value of investments
AB Bank Limited 25,000,000 -

AB Investment Limited - 40,000,000
Cashlink Bangladesh Limited (CBL) (4,307,246) 3,324,850
21,980,479 44,910,791
37. Other provision
Provision for off balance sheet items - 50,000,000
Provision for Other assets 59,558,484 150,000,000
59,558,484 200,000,000
Provision for other assets included prepaid legal expenses,protested bills and others has been made as per Bangladesh Bank
BRPD Circular # 14 dated 25 June 2001.
37(a). Consolidated other provisions

AB Bank Limited 59,558,484 200,000,000
AB International Finance Limited - 66,450
59,558,484 200,066,450
38. Appropriations
Retained earnings - brought forward 6,830,946,921 6,768,352,063
Less. Adjustment for investment in Amana Bank 180,140,019 -
Add: Post-tax profit for the year 1,304,670,423 1,270,414,868
7,955,477,324 8,038,766,931
Less: Dividend-
Cash dividend - -
Bonus shares issued 748,770,680 665,573,940
7,206,706,644 7,373,192,991
71
2016 2015
Appropriations (cont..) Taka Taka
Transferred to
General reserve - -
Proposed dividend - -
388,712,367 535,826,124
Add: Transferred from Assets Revaluation Reserve 1,774,401 18,032,304
Less: Adjustment during the year - (2,946,778)
Add: Foreign Exchange translation gain/(Loss) (10,104,914) (21,505,472)
(0) 6,809,663,765 6,830,946,921
39. Earnings Per Share (EPS)
Profit after taxation 1,304,670,423 1,270,414,868

Number of ordinary shares outstanding 673,893,614 673,893,614
Earnings Per Share 1.94 1.89
39.(a) Consolidated Earnings Per Share
Net Profit attributable to the shareholders of parent company 1,514,736,427 1,450,091,898

Number of ordinary shares outstanding 673,893,614 673,893,614
Earnings Per Share 2.25 2.15
Earnings Per Share (EPS) has been computed by dividing the basic earnings by the number of ordinary shares outstanding
as of December 31, 2016 in terms of Bangladesh Accounting Standard (BAS)-33. According to BAS-33, EPS for the
period ended December 31, 2015 was restated for the issues of bonus share in 2015.
40. Receipts from other operating activities
Interest on treasury bills, bonds, debenture and others 5,207,182,139 3,174,787,275

Exchange earnings 844,901,183 973,066,129
Recoveries on telex, telephone, fax, etc. 84,781,759 82,288,508
Recoveries on courier, postage, stamp, etc. 26,005,800 24,950,165
Non-operating income 270,463 3,208,028
Others 4,751,956 8,144,567
- 6,167,893,301 4,266,444,672
41. Payments for other operating activities
Rent, taxes, insurance, electricity, etc. 0 697,882,398 592,500,607
Postage, stamps, telecommunication, etc. 135,901,070 135,241,035
Repairs of Bank's assets 226,908,863 230,204,974
Legal expenses 18,146,709 8,418,187
Auditor's fees 5,012,790 4,345,900
Directors' fees 9,586,543 7,985,347
Other Expenses 1,424,393,841 1,304,413,020
- 2,517,832,213 2,283,109,070
-
72
2016 2015
Taka Taka
42. Decrease in other assets
Investment in Subsidiaries 6,229,114,922 5,468,105,565
Advance rent and advertisement 246,555,630 233,138,317
Stationery, stamps, printing materials, etc. 28,476,396 25,237,828
Security deposits 159,266,370 166,089,818
Commission and brokerage receivable on shares - -
and debentures, and other income receivables 1,026,651,535 791,115,465
Accounts receivable 889,650,552 1,058,534,763
Preliminary, formation, organizational, renovation,
development and prepaid expenses 805,559,950 644,563,195
Exchange for clearing 570,641,969 1,044,718,906
Arab Bangladesh Bank Foundation 19,920,000 19,920,000
Inter-branch adjustment 621,590 -
9,976,458,914 9,451,423,856
Add. Adjustment during the year - 50,423,392 -
10,026,882,306 9,451,423,856
Net Decrease (0) 575,458,450 1,194,431,447
43. Increase/(decrease) in other liabilities

Accumulated provision against loans and advances 6,605,083,960 4,714,778,454
Provision for current tax 2,561,589,337 2,739,993,532
Interest suspense account 10,459,867,308 6,071,639,588
Accounts payable - Bangladesh Bank 802,485,542 186,568,806
Provision against other assets 237,198,969 764,251,969
Accrued expenses 360,305,082 341,172,292
Provision against investments 1,550,053,000 1,875,053,000
Provision against off balance sheet items 860,000,000 860,000,000
Provision for outstanding debit entries in NOSTRO accounts - 200,000
Others 689,642,580 651,755,094
24,126,225,778 18,205,412,735
Less: Adjustment for provision & others 11,703,765,438 11,559,227,467
12,422,460,340 6,646,185,268
Net Increase/(Decrease) 30,000,000 5,776,275,074 3,846,295,697
44. Conversion Rates

Assets and liabilities as at December 31, 2016 denominated in foreign currencies have been converted to local currency
Bangladesh Taka (BDT) at the following exchange rates:
Currency Abbreviation Unit Equivalent to BDT
British Pound Sterling GBP 1.00 96.59
European Currency EURO 1.00 82.31
Indian Rupee INR 1.00 1.16
Japanese Yen JPY 1.00 0.67
US Dollar USD 1.00 78.71
Honkong Dollar HKD 1.00 10.14
U.A.E Dirham DIRHAM 1.00 21.43
73
45. Highlights of the overall activities of the Bank
2016 2015
Sl # Particulars
Taka Taka
1 Paid-up capital 6,738,936,140 5,990,165,460
2 Total capital 30,640,391,090 28,332,822,072
3 Capital surplus 462,358,843 2,780,282,349
4 Total assets 314,835,891,011 285,010,254,719
5 Total deposits 245,640,782,909 213,818,905,499
6 Total loans and advances 218,769,451,248 209,725,203,267
7 Total contingent liabilities and commitments 73,478,914,136 68,649,158,866
8 Credit-deposit ratio* 83.67% 96.80%
9 Ratio of classified loans against total loans and advances 5.19% 3.16%
10 Profit after tax and provision 1,304,670,423 1,270,414,868
11 Loans Classified during the year 7,785,711,884 1,593,869,499
12 Provision kept against classified loans 2,506,342,955 2,596,169,341
13 Provision surplus 23,728,687 151,696,574
14 Cost of fund 8.06% 9.75%
15 Interest earning assets 272,624,556,302 249,984,680,535
16 Non-interest earning assets 42,211,334,710 35,025,574,184
17 Return on investments (ROI) 13.50% 10.49%
18 Return on assets (ROA) 0.44% 0.48%
19 Income from investments 5,348,168,994 3,355,421,410
20 Earnings per share 1.94 1.89
21 Net Income per share 1.94 1.89
22 Price-earnings ratio (Times) 11.52 11.09
* Credit-deposit ratio calculation has been done as per Bangladesh Bank guidelines.
-Sd- -Sd- -Sd- -Sd-

(Current Charge)
Dhaka,
April 29, 2017
74
Annexure-A
AB Bank Limited
Currency wise Balances

Name of
Name of the bank Location Amounts in Conversion Equivalent amounts
currency
foreign currency rate in Taka
The Bank of Tokyo Mitsubishi Ltd. Japan JPY 2,263,761.00 0.67 1,517,399.00
JP Morgan Chase Bank USA USD 846,210.52 78.71 66,606,160.86
Sonali Bank (Kolkata) India ACU 56,142.55 78.71 4,419,041.87
Sonali Bank (UK) UK,London USD 440,240.91 78.71 34,651,846.29
Sonali Bank (UK) UK,London GBP 148.33 96.59 14,326.66
Myanmar Economic Bank Myanmar ACU 410.00 78.71 32,271.55
Citibank NA USA USD 202,887.88 78.71 15,969,528.21
Hatton National Bank Ltd. Srilanka ACU 45,513.52 78.71 3,582,419.22
Commerz Bank AG Germany USD 350,204.31 78.71 27,564,966.46
NIB Bank Ltd. Pakistan ACU 94,878.29 78.71 7,467,974.57
Mashreq Bank Psc USA USD 718,611.32 78.71 56,562,687.47
Nepal Bangladesh Bank Ltd. Nepal ACU 18,012.25 78.71 1,417,764.01
Bank of Bhutan Bhutan ACU 94,131.69 78.71 7,409,208.86
HABIB Zuric Germany EUR 12,295.50 82.31 1,012,020.47
Wachovia Bank/Wells Fargo N.A USA USD 2,956,748.23 78.71 232,728,905.61
Habib America Bank USA USD 443,331.81 78.71 34,895,134.43
Commerz Bank AG Germany EUR 133,669.22 82.31 11,002,072.89
Hypovereins Bank Germany EUR 195,429.15 82.31 16,085,421.56
Habib Metro Bank Pakistan ACU 374,700.25 78.71 29,493,068.85
Habib Bank AG Dubai AED 13,809.42 21.43 295,963.49
COMMERZ BK CAD Germany CAD 62,344.66 57.98 3,614,893.01
COMMERZ BK CHF Germany CHF 54,835.55 76.56 4,198,198.74
Commerz Bank (R)-OBU Germany EUR 236.66 82.31 19,479.06
JPMC NY-OBU USA USD 1,305,120.84 78.71 102,727,496.95
Reserve Bank of India Mumbai INR 22,309,182.57 1.16 25,831,748.99
HDFC Bank Ltd. Mumbai INR 35,530,576.33 1.16 41,140,769.11
HABIB BANK Newyork EUR 35,999.31 82.31 2,963,103.21
HABIB BANK ACU Newyork EUR 21,192.15 82.31 1,744,325.87
JP MORGAN CHASE Newyork USD 578,651.34 78.71 45,546,283.49
HABIB AMERICAN Newyork USD 41,973.81 78.71 3,303,804.76
HABIBSONS BANK London USD 20,248.30 78.71 1,593,765.97
JP CHASE ACU Newyork USD 13,819,502.28 78.71 1,087,748,225.91
Kotak Mahindra Bank India INR 53,160,367.92 1.16 61,554,262.51
Standard Chartered Bank New York USD 474,494.01 78.71 37,347,945.47
Standard Chartered Bank Singapore SGD 31,710.23 54.30 1,721,935.25
Standard Chartered Bank,UK UK,London GBP 46,500.45 96.59 4,491,311.06
HABIB,UK UK,London GBP 15,868.14 96.59 1,532,646.52
HABIB,UK UK,London USD 583,429.07 78.71 45,922,343.87
Total 2,025,730,722.10
75
Annexure-B
AB Bank Limited
Investment in Shares as at 31 December 2016
Amount in Taka
Market
Number of Total market Cost per
Particulars price per Total cost
shares price Share
share
National Bank Limited 1,391,500 10.20 14,193,300 33.43 46,512,852
City Bank Limited 2,220,000 27.20 60,384,000 26.21 58,180,067
AB Bank 1st Mutual Fund 41,714,127 5.90 246,113,349 7.19 300,000,004
LR Global Bangladesh Mutual Fund One 10,369,343 7.10 73,622,335 9.64 100,000,001
Popular Life First Mutual Fund 2,600,799 5.40 14,044,315 5.78 15,041,003
Pragati Insurance Limited 1,054,416 27.10 28,574,674 119.10 125,579,298
Dhaka Electric Supply Company Limited 7,023,760 46.30 325,200,088 87.73 616,189,388
Jamuna Oil Company Limited 207,598 181.60 37,699,797 196.49 40,791,122
Khulna Power Company Limited 3,868,584 62.50 241,786,500 97.34 376,579,625
Linde Bangladesh Limited 13,869 1296.00 17,974,224 1386.09 19,223,714
Meghna Petroleum Limited 72,442 170.40 12,344,117 197.55 14,310,988
Padma Oil Company Limited 305,000 180.20 54,961,000 306.07 93,352,670
Powergrid Company of Bangladesh Limited 3,366,500 54.00 181,791,000 81.61 274,723,472
United Power Generation & Distribution
843,983 141.60 119,507,993 154.83 130,672,135
Company Ltd.
Beacon Pharmaceuticals Limited 6,642,500 22.00 146,135,000 73.96 491,289,694
Beximco Pharmaceuticals Limited 613,083 80.80 49,537,106 62.14 38,096,239
Orion Pharma Limited 1,200,000 42.10 50,520,000 83.33 100,000,001
The ACME Laboratories Limited 20,000 99.00 1,980,000 112.75 2,255,095
Fu Wang Food Limited 629,096 16.00 10,065,536 24.90 15,666,130
Heidelberg Cement Bangladesh Limited 116,816 552.30 64,517,477 552.86 64,582,844
Lafarge Surma Cement Limited 125,000 82.10 10,262,500 134.50 16,812,600
BSRM Steels Limited 3,330,801 92.80 309,098,333 108.16 360,249,532
GPH Ispat Limited 3,970,000 34.30 136,171,000 31.17 123,761,020
Union Capital Limited 2,011,963 20.50 41,245,242 74.08 149,037,206
Bangladesh Export Import Company Limited 4,044,138 26.00 105,147,588 83.35 337,094,017
Shinepukur Ceramics Limited 1,143,962 10.40 11,897,205 58.13 66,501,146
Argon Denims Limited 1,656,000 31.10 51,501,600 41.09 68,052,981
2,416,275,278 4,044,554,844
Shares/Bond (unquoted)
Number of Cost per Book
Particulars
shares Share Value/Cost
CDBL 5,000,000 2.00 10,000,002
CDBL (Placement) 711,804 8.00 5,694,428
IIDFCL 105,765 100.00 10,576,500
Bangladesh Fund 2,000,000 100.00 200,000,000
Stock Market Stablization Fund 500,000 10.00 5,000,000
231,270,930
76
Annexure-C
AB Bank Limited
Schedule of Fixed Assets
As of December 31, 2016
Amount in Taka
Land and Furniture and Office Electrical Intangible
Particulars Motor Vehicles Total
Building Fixtures Appliances Appliances Assets
Cost/ Revaluation
Balance at 01 January 2016 3,341,682,082 230,635,936 62,729,842 1,489,025,808 581,049,757 571,059,065 6,276,182,491
Addition during the year - 16,079,027 1,511,000 78,427,967 99,166,700 23,444,498 218,629,192
Less: Disposal/Adjustment during the year - 1,688,397 3,261,262 8,152,572 - - 13,102,231
Less: Adjustment for FX Rate Fluctuation - 59,705 153,733 388,719 75,712 337,840 1,015,709
At 31 December 2016 3,341,682,082 244,966,861 60,825,847 1,558,912,484 680,140,745 594,165,723 6,480,693,743
Accumulated Depreciation
Balance at 01 January 2016 112,276,012 114,611,104 51,894,820 1,082,791,942 465,635,206 248,100,640 2,075,309,724
Addition during the year 19,070,729 13,762,881 2,359,829 135,030,949 59,394,124 107,966,775 337,585,287
Less: Disposal/Adjustment during the year - 1,453,168 3,250,571 7,150,998 - - 11,854,737
Less: Adjustment for FX Rate Fluctuation - 44,491 147,470 293,793 60,696 177,516 723,966
At 31 December 2016 131,346,741 126,876,326 50,856,608 1,210,378,100 524,968,634 355,889,899 2,400,316,308
Net Book Value
At 31 December 2016 3,210,335,341 118,090,535 9,969,239 348,534,384 155,172,112 238,275,824 4,080,377,435
At 31 December 2015 3,229,406,070 116,024,832 10,835,021 406,233,865 115,414,552 322,958,426 4,200,872,766
77
Annexure-D
AB Bank Limited
Borrowings from other banks, financial institutions and agents-outside Bangladesh
At December 31 2016 At December 31, 2015

Amounts in Equivalent amount Equivalent
Name of the bank Location Currency Conversion Amounts in Conversion
foreign in amount in
rate foreign currency rate
currency Taka Taka
Sonali Bank UK UK USD 6,294,575 78.7111 495,452,954 7,620,550 78.5003 598,215,461
ICICI BK LTD HK USD - 78.7111 - 22,029,822 78.5003 1,729,347,639
Noor Bank Limited UAE USD 50,063,071 78.7111 3,940,519,398 55,176,366 78.5003 4,331,361,309
International Finance Corporation USA USD - 78.7111 - 35,066,309 78.5003 2,752,715,780
RAK Bank UAE USD 8,655,997 78.7111 681,323,009 - - -
BANCA UBAE SPA Italy USD 5,023,894 78.7111 395,436,258 - - -
5,512,731,619 9,411,640,189
(244,065,398)
78
Annexure-E
AB Bank Limited
Detailed of Risk Weighted Assets under Basel III at 31 December 2016
Amount in Taka
31.12.2016 31.12.2015
Risk Weighted Assets (RWA) for Risk Weighted Risk Weighted
Exposure Exposure
Asset Asset
A. Credit Risk
On- Balance sheet (as shown below) 292,818,157,041 218,150,288,581 278,342,180,617 200,964,390,233
Off-Balance sheet (as shown below) 42,739,092,226 34,969,765,767 36,720,306,577 27,449,799,774
B. Market Risk 8,767,854,108 7,796,149,895
C. Operational Risk 22,140,630,345 19,315,057,333
Total RWA (A+B+C) 335,557,249,267 284,028,538,801 315,062,487,194 255,525,397,235
Credit Risk - On Balance Sheet
31.12.2016 31.12.2015
Sl. Exposure Type Risk Weighted Risk Weighted
Exposure Exposure
Asset Asset
a) Cash and Cash Equivalents 1,540,083,692 - 1,207,173,916 -
b) Claims on Bangladesh Government and Bangladesh Bank 45,170,375,416 - 34,651,501,799 -
c) Claims on other Sovereigns & Central Banks* 422,292,782 211,146,391 406,787,241 203,393,621
Claims on Bank for International Settlements, International
d) - - - -
Monetary Fund and European Central Bank
e) Claims on Multilateral Development Banks (MDBs) - - - -
Claims on Public Sector Entities (other than Government) in
f) 28,021,152 14,010,576 55,892,214 27,946,107
Bangladesh
Claims on Banks and Non-bank Financial Institution (NBFI)
g) i) Original maturity over 3 months 2,365,363,255 618,679,356 1,570,782,197 494,881,132
ii) Maturity less than 3 months 14,589,166,314 2,917,833,263 14,993,279,001 2,998,655,800
h) Claims on Corporate (excluding equity exposure) 125,278,972,963 116,520,195,230 123,252,283,275 113,999,929,922
hi) Claims on SME 36,418,048,526 28,403,178,039 36,260,300,864 30,024,518,347
Claims under Credit Risk Mitigation
i) 5,504,105,664 1,074,326,375 4,806,284,250 1,315,810,291
Fixed Risk Weight Groups:
j) Claims categorized as retail portfolio (excluding consumer loan ) 2,544,276,130 1,908,207,097 2,981,961,393 2,236,471,045
k) Consumer Loan 1,053,460,558 1,053,460,558 935,140,862 935,140,862
l) Claims fully secured by residential property 1,335,088,529 667,544,264 1,380,482,151 690,241,075
m) Claims fully secured by commercial real estate 6,779,256,684 6,779,256,684 5,585,188,457 5,585,188,457
Past Due Claims (Risk weights are to be assigned net of specific
n) 24,783,786,556 36,238,413,591 11,739,283,667 16,381,305,806
provision)
Claims fully secured against residential property that are past due
o) for more than 90 days and/or impaired specific provision held 14,256,000 14,256,000 - -
there-against is less than 20% of outstanding amount
p) Investments in venture capital 468,976,102 703,464,154 1,085,712,017 1,628,568,026
q) Claim on Capital Market Exposure 1,597,244,871 1,996,556,089 4,211,649,696 5,264,562,121
Unlisted equity investments and regulatory capital instruments
r) issued by other banks (other than those deducted from capital) held 6,011,329,750 7,514,162,188 3,050,321,392 3,812,901,740
in banking book
Investments in premises, plant and equipment and all other fixed
s) 3,842,101,611 3,842,101,611 3,877,914,340 3,877,914,340
assets
t) Claims on all fixed assets under operating lease - - - -
u) All other assets 13,071,950,486 7,673,497,117 26,290,241,883 11,486,961,542
Total 292,818,157,041 218,150,288,581 278,342,180,617 200,964,390,233
79
Annexure-E
AB Bank Limited
Detailed of Risk Weighted Assets under Basel III at 31 December 2016
Credit Risk - Off Balance Sheet
31.12.2016 31.12.2015
Sl. Exposure Type Risk Weighted Risk Weighted
Exposure Exposure
Asset Asset
1 2 3 4 5 6
a) Claims on Bangladesh Government and Bangladesh Bank
- - - -
b) Claims on other Sovereigns & Central Banks*
- - - -
c) Claims on Bank for International Settlements, International
Monetary Fund and European Central Bank - - - -
d) Claims on Multilateral Development Banks (MDBs):
- - - -
e) Claims on Public Sector Entities (other than Government) in
Bangladesh - - - -
f) Claims on Banks:
- - - -
i) Maturity over 3 months
- - - -
ii) Maturity less than 3 months
63,151,900 12,630,380 59,400,000 11,880,000
g) Claims on Corporate (excluding equity exposure)
39,482,534,916 32,311,550,491 32,179,285,626 24,115,523,628
h) Against retail portfolio (excluding consumer loan)
222,061,902 166,546,427 193,101,302 144,825,977
hi) Claims on SME
2,925,630,204 2,433,325,165 4,258,567,346 3,147,617,867
i) Consumer Loan
45,713,304 45,713,304 29,952,302 29,952,302
j) Claims fully secured by residential property
- - - -
k) Claims fully secured by commercial real estate
- - - -
l) Investments in venture capital
- - - -
m) Capital Market Exposure
- - - -
n) All other assets
- - - -
Total 42,739,092,226 34,969,765,767 36,720,306,577 27,449,799,774
80
Annexure: E-1
AB Bank Limited
Disclosures on Risk Based Capital (Basel III) based on 31 December 2016
These disclosures have been made in accordance with the Bangladesh Bank BRPD Circular no. 18 of 21 December 2014 as to Guidelines on
'Risk Based Capital Adequacy for Banks' in line with Basel III.
1. Capital Adequacy under Basel-III

To cope with the international best practices and to make the Bank’s capital more risk sensitive as well as more shock resilient,
‘Guidelines on Risk Based Capital Adequacy (RBCA) for Banks’ (Revised regulatory capital framework in line with Basel III) have been
introduced from January 01, 2015. The guidelines were issued by Bangladesh Bank (BB) under section 13 and section 45 of the Bank
Company Act, 1991 (amendment up to 2013) .
Basel III guidelines are structured on the following aspects:

a) Minimum capital requirements to be maintained by a Bank against credit, market, and operational risks.
b) Process for assessing the overall capital adequacy aligned with risk profile of a Bank as well as capital growth plan.
c) Framework of public disclosure on the position of a Bank’s risk profiles, capital adequacy, and risk management system.
2. Scope of application
Basel III guidelines apply to all scheduled banks on ‘Solo’ basis as well as on ‘Consolidated’ basis where-
- Solo Basis refers to all position of the bank and its local and overseas branches/offices; and
- Consolidated Basis refers to all position of the bank (including its local and overseas branches/offices) and its subsidiary
company(ies) engaged in financial (excluding insurance) activities like merchant banks, brokerage firms, discount houses, etc. (if
any).
AB Bank followed the scope narrated above. Bank has Tier 1 Capital (Going concern) and tier 2 Capital (Gone concern)
structure at the moment.
3. Capital base
Regulatory capital has been categorized into following way:
1) Tier 1 Capital (going-concern capital)
a) Common Equity Tier I
b) Additional Tier I
2) Tier 2 Capital (Gone concern)
1. (a) Common Equity Tier 1 Capital

For the local banks, Common Equity Tier 1 (CET1) capital shall consist of sum of the following items:
a) Paid up capital
b) Non-repayable share premium account
c) Statutory reserve
d) General reserve
e) Retained earnings
f) Dividend equalization reserve
g) Minority interest in subsidiaries
Less: Regulatory adjustments applicable on CET1
1. (b) Additional Tier 1 Capital

For the local banks, Additional Tier 1 (AT1) capital shall consist of the following items:
a) Instruments issued by the banks that meet the qualifying criteria for AT1 as specified at Annex4.
b) Minority Interest i.e. AT1 issued by consolidated subsidiaries to third parties (for consolidated reporting only);
Less: Regulatory adjustments applicable on AT1 Capital
81
2. Tier 2 Capital
Tier 2 capital, also called ‘gone-concern capital’, represents other elements which fall short of some of the characteristics of the core
capital but contribute to the overall strength of a bank. For the local banks, Tier 2 capital shall consist of the following items:
a) General Provisions
b) Subordinated debt / Instruments issued by the banks that meet the qualifying criteria for Tier 2 capital;
c) Minority Interest i.e. Tier-2 issued by consolidated subsidiaries to third parties as specified
Less: Regulatory adjustments applicable on Tier-2 capital;
4. Limits (Minima and Maxima)

These instructions will be adopted in a phased manner starting from the January 2015, with full implementation of capital ratios from
the beginning of 2019. Banks will be required to maintain the following ratios on an ongoing basis:
a) Common Equity Tier 1 of at least 4.5% of the total RWA.
b) Tier-1 capital will be at least 6.0% of the total RWA.
c) Minimum CRAR of 10% of the total RWA.
d) Additional Tier 1 capital can be admitted maximum up to 1.5% of the total RWA or 33.33% of CET1, whichever is higher
e) Tier 2 capital can be admitted maximum up to 4.0% of the total RWA or 88.89% of CET1, whichever is higher
In addition to minimum CRAR, Capital Conservation Buffer (CCB) of 2.5% of the total RWA is being introduced which will be
f)
maintained in the form of CET1.
Following is the phase-in arrangement for the implementation of minimum capital requirements
Phase-in arrangement of minimum capital requirements
2015 2016 2017 2018 2019
Minimum Common Equity Tier-1 Capital Ratio 4.50% 4.50% 4.50% 4.50% 4.50%
Capital Conservation Buffer - 0.63% 1.25% 1.88% 2.50%
Minimum CET-1 plus Capital Conservation Buffer 4. 5% 5.13% 5.75% 6.38% 7.00%
Minimum T-1 Capital Ratio 5.50% 5.50% 6.00% 6.00% 6.00%
Minimum Total Capital Ratio 10.00% 10.00% 10.00% 10.00% 10.00%
Minimum Total Capital plus Capital Conservation Buffer 10.00% 10.625% 11.25% 11.875% 12.50%
5. Capital Conservation Buffer
Banks are required to maintain a capital conservation buffer of 2.5%, comprised of Common Equity Tier 1 capital, above the regulatory
minimum capital requirement of 10%. Banks should not distribute capital (i.e. pay dividends or bonuses in any form) in case capital
level falls within this range. However, they will be able to conduct business as normal when their capital levels fall into the conservation
range as they experience losses. Therefore, the constraints imposed are related to the distributions only and are not related to the
operations of banks. The distribution constraints imposed on banks when their capital levels fall into the range increase as the banks’
capital levels approach the minimum requirements. The Table below shows the minimum capital conservation ratios a bank must meet
at various levels of the Common Equity Tier 1 capital ratios.
Bank’s minimum capital conservation standards
CET-1 Ratio Minimum Capital Conservation Ratio (expressed
as percentage of earnings)
4.5% - 5.125% -
>5.125% 100%
5.75%
>5.75% - 80%
6.375% 60%
>6.375% - 7.0% 40%
>7.0% 0%
6 Regulatory Adjustments / Deductions
In order to arrive at the eligible regulatory capital for the purpose of calculating CRAR, banks are required to make the following
deductions from CET1/Capital:
Shortfall in provisions against NPLs and Investments
Goodwill and all other Intangible Assets
Deferred tax assets (DTA)
Defined benefit pension fund assets
Gain on sale related to securitization transactions
Investment in own shares
Investments in the Capital of Banking, Financial and Insurance Entities
(Reciprocal crossholdings in the Capital of Banking, Financial and Insurance Entities)
82
Transitional Arrangements for Capital Deductions
Currently, 10% of revaluation reserves for equity instruments and 50% of revaluation reserves for fixed assets and securities are eligible
for Tier 2 capital. However, Bangladesh Bank, in the light of Basel III proposals, has harmonized deductions from capital which will
mostly be applied at the level of Tier 2. The regulatory capital adjustment will start in a phased manner from January, 2015 in the
following manner:
Transitional Arrangements for Capital Deductions
Phase-in of deductions from Tier 2 2015 2016 2017 2018 2019
RR for Fixed Assets 20% 40% 60% 80% 100%
RR for Securities 20% 40% 60% 80% 100%
RR for Equity Securities 20% 40% 60% 80% 100%
Bank complied with the conditions as embodied in this respect wherever applicable.
7. Leverage Ratio
A minimum Tier 1 leverage ratio of 3% is being prescribed both at solo and consolidated level
The banks will maintain leverage ratio on quarterly basis. The calculation at the end of each calendar quarter will be submitted to BB
showing the average of the month end leverage ratios based on the following definition of capital and total exposure.
Tier 1 Capital (after related deductions)
Leverage Ratio =
Total Exposure (after related deductions)
Transitional Arrangements
The parallel run period for leverage ratio will commence from January, 2015 and run until December 31, 2016. During this period, the
leverage ratio and its components will be tracked to assess whether the design and calibration of the minimum tier 1 leverage ratio of
3% is appropriate over a credit cycle and for different types of business models, including its behavior relative to the risk based
requirements.
Bank level disclosure of the leverage ratio and its components will start from January 1, 2015. However, banks should report their Tier
1 leverage ratio to the BB (Department of Off-Site Supervision) along with CRAR report from the quarter ending March, 2015. Based
on the results of the parallel run period, any final adjustments to the definition and calibration of the leverage ratio will be made by BB
in 2017, with a view to setting the leverage ratio requirements as a separate capital standard from January 1, 2018.
Bank complied with the conditions as embodied in this respect wherever applicable.
8. a) Credit Risk
Credit risk is the potential that a bank borrower or counterparty fails to meet its obligation in accordance with agreed term.
Bank followed the suggested methodology, process as contained in the Guidelines.

b) Methodology
Bangladesh Bank adopted Standardized Approach for calculating Risk Weighted Assets. The capital requirement for credit risk is
based on the risk assessment made by external credit assessment institutions (ECAIs) recognized by BB for capital adequacy
purposes. Banks are required to assign a risk weight to all their on-balance sheet and off-balance sheet exposures. Risk weights are
based on external credit rating (solicited) which was mapped with the BB rating grade or a fixed weight that is specified by
Bangladesh Bank.
c) Credit Risk Mitigation
AB Bank uses a number of techniques to reduce its credit risk to which the Bank is exposed. For example, exposures may be
collateralized by first priority claims, in whole as in part with cash or securities, a loan exposure may be guaranteed by a third party.
Additionally, Bank may agree to net loans owed to them against deposits from the same counterparty.
Bank uses Comprehensive Approach as adopted by the Central Bank. In this approach when taking collateral, Bank will need to
calculate adjusted exposure to a counterparty for capital adequacy purposes in order to take account of the effects of that collateral.
Using haircut, Bank is required to adjust both the amount of the exposure to the counterparty and the value of any collateral
received in support of that counterparty to take account of possible future fluctuations in the value of either, occasioned by market
movements. This will produce volatility adjusted amounts for both exposure and collateral.
83
9. a)a) Market
MarketRisk
Risk
Market risk is defined as the risk of losses in on and off-balance sheet positions arising from movements in market prices. The
market risk positions subject to this requirement are:
i) The risks pertaining to interest rate related instruments and equities in the trading book; and
ii) Foreign exchange risk and commodities risk throughout the bank (both in the banking and in the trading book).
b)
b) Methodology
Methodology
In Standardized Approach, the capital requirement for various market risks (interest rate risk, equity price risk, commodity price
risk, and foreign exchange risk) is determined separately. The total capital requirement in respect of market risk is the sum of
capital requirement calculated for each of these market risk sub-categories. The methodology to calculate capital requirement
under Standardized Approach for each of these market risk categories is as follows:
a) Capital Charge for Interest Rate Risk = Capital Charge for Specific Risk + Capital Charge for General Market Risk.
b) Capital Charge for Equity Position Risk = Capital Charge for Specific Risk + Capital Charge for General Market Risk.
c) Capital Charge for Foreign Exchange Risk = Capital Charge for General Market Risk
d) Capital Charge for Commodity Position Risk = Capital Charge for General Market Risk
10. a) Operational Risk

Operational Risk is defined as the risk of losses resulting from inadequate or failed internal processes, people and systems or from
external events. This definition includes legal risk, but excludes strategic and reputation risk.
b) Measurement Methodology
Banks operating in Bangladesh shall compute the capital requirements for operational risk under the Basic Indicator Approach
(BIA). Under BIA, the capital charge for operational risk is a fixed percentage, denoted by (alpha), of average positive annual gross
income of the bank over the past three years. Figures for any year in which annual gross income is negative or zero, should be
excluded from both the numerator and denominator when calculating the average.

11. Disclosure under Pillar III
Disclosure given below as specified by RBCA Guidelines dated 21 December 2014:
A) Scope of Application
Qualitative Disclosure
(a) The name of the top

corporate entity in the group
to which this guidelines AB Bank Limited
applies.
(b) An outline of differences in The consolidated financial statements of the Bank include the financial statements of (a) AB Bank
the basis of consolidation Limited (b) AB Investment Limited (c) AB Securities Limited (d) Cash Link Bangladesh Limited (e)
for accounting and AB International Finance Limited and (f) AB Exchange (UK) Limited. A brief description of these
regulatory purposes, with a are given below:
brief description of the AB Bank Limited (ABBL)
entities within the group (a)
that are fully consolidated; AB Bank Limited is one of the first generation private commercial banks (PCBs), incorporated in
(b) that are given a Bangladesh on 31 December 1981 as a public limited company under the Companies Act 1913,
deduction treatment; and (c) subsequently replaced by the Companies Act 1994, and governed by the Bank Company
that are neither consolidated (Amendment upto 2013) Act 1991. The Bank went for public issue of its shares on 28 December
nor deducted (e.g. where the 1983 and its shares are listed with Dhaka Stock Exchange and Chittagong Stock Exchange
investment is risk-weighted). respectively. AB Bank Limited has 101 Branches including 1 Islami Banking Branch, 1 Overseas
Branch in Mumbai, India. The Bank has six (06) subsidiary companies, AB Investment Limited
(ABIL), AB Securities Limited (ABSL), CashLink Bangladesh Limited (CBL), AB International
Finance Limited (ABIFL), incorporated in Hong Kong, AB Exchange (UK) Limited (ABEL) and
Arab Bangladesh Bank Foundation (ABBF).
84
(b) Continued.. AB Investment Limited
AB Investment Limited (ABIL), a Subsidiary of AB Bank Limited was incorporated under the
Companies Act, 1994 on 24 December 2009 with a view to run and manage the operations of Merchant
Banking Wing of AB Bank Limited independently. AB Investment Limited started its operation on 10
March 2010. AB Investment Limited has achieved an unparallel reputation as a leading Merchant Banker
through providing portfolio management services by maintaining a high level of professional expertise
and integrity in client relationship. ABIL's Registered Office is located at WW Tower (Level 7), 68
Motijheel C.A., Dhaka. ABIL has two branch offices at Agrabad, Chittagong and Chowhatta, Sylhet.
AB Securities Limited
Brokerage business of Arab Bangladesh Bank Foundation has been transferred to the newly formed AB
Securities Limited (ABSL) vide Bangladesh Bank approval letter BRPD(R-1)717/2009-493 dated 08
November 2009. Main objective of the company is to act as a stock broker to buy and sell Securities,
Bond, Debenture, etc. on behalf of clients. ABSL also manages its own portfolio under Stock Dealer
License. ABSL is a member of both Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd.
ABSL started it’s operation independently on 02 August 2010, before that it was operated under the
ABBF License.
Cashlink Bangladesh Limited

Cashlink Bangladesh Limited (CBL) was incorporated on 24 September 2008 in Bangladesh under the
Companies Act 1994 as a private company limited. AB Bank Limited presently holds 90% shares in CBL.
The principal activity of the company is to install and operate a switched Automated Teller Machines
(ATM) and Point of Sales (POS) network on behalf of a number of local and foreign banks enabling
these member bank customers who are active cardholders to withdraw cash, make utility bill payments
(e.g. water, gas, electricity and telephone bills) and to purchase commodity goods from any of the ATM
and POS terminals established under the network.
AB International Finance Limited

AB International Finance Limited (ABIFL) is a company incorporated and domiciled in Hong Kong and
has its registered office and principal place of business at Unit 1201-B, 12/F, Admiralty Centre, Tower
One, 18 Harcourt, Hong Kong.
AB Exchange (UK) Limited
AB Exchange (UK) Limited (ABEL) is a company incorporated and domiciled in United Kingdom (UK)
and has its registered office 69 Whitechapel High Street, London, E1 7PL. Its registered number is
07272766 (England & Wales). ABEL was fully owned (100%) Subsidiary of AB Bank Limited. The Board
of Directors of AB Bank Limited has decided to close-down the AB Exchange (UK) Limited, UK in its
607th Board Meeting held on July 12, 2016. Accordingly, after completing all the formalities, Management
of AB Exchange (UK) applied to Companies House (UK) on July 25, 2016 for striking off the company
and on November 15, 2016 the Company was dissolved through official gazette.
Arab Bangladesh Bank Foundation

Bank also has a Subsidiary (99.60% owned by AB Bank) for philanthropic/ CSR activities known as Arab
Bangladesh Bank Foundation (ABBF). This has not been included in the Consolidation as ABBF
operated only for philanthropic purpose and its profit is not distributable to the shareholders. Thus, for
ensuring the fair presentation of the Financial Statements of the Parent Company (the Bank), the
Financial Statements of ABBF has not been consolidated.
(c) Any restrictions, or other Not Applicable

major impediments, on
transfer of funds or
regulatory capital within the
group
(d) The aggregate amount of

surplus capital of insurance Aggregate amount of Capital: Tk. 20,000,000
subsidiaries (whether Name of Subsidiary: Arab Bangladesh Bank Foundation (ABBF)
deducted or subjected to an
alternative method) included
in the capital of the
consolidated group.
85
B) Capital Structure
(a) Summary information on The terms and conditions of the main features of all capital instruments have been segregated in line
the terms and conditions of with of the eligibility criteria set forth vide BRPD Circular No. 18 dated 21 December 2014 and
the main features of all other relevant instructions given by Bangladesh Bank from time to time. The main features of the
capital instruments, capital instruments are as follows:
especially in the case of
capital instruments eligible Common Equity Tier 1 capital instruments
for inclusion in CET 1,
Paid-up share capital: Issued, subscribed and fully paid up share capital of the Bank. It represents
Additional Tier 1 or Tier 2.
Paid up Capital, Right Shares as well as Bonus Shares issued from time to time.
Statutory Reserve: As per Section 24(1) of the Bank Company (Amendment upto 2013) Act, 1991,
an amount equivalent to 20% of the profit before taxes for each year of the Bank has been
transferred to the Statutory Reserve Fund.
General reserve: Any reserve created through Profit and Loss Appropriation Account for fulfilling
any purpose.
Retained Earnings: Amount of profit retained with the banking company after meeting up all
expenses, provisions and appropriations.
In this respect, Bank is complied.

Additional Tier 1 Capital
Bank has no any type of Additional Tier I Capital.
Tier 2 Capital
a) General Provisions;
b) Subordinated debt / Instruments issued by the banks that meet the qualifying criteria for Tier 2
capital;
c) Minority Interest i.e. Tier-2 issued by consolidated subsidiaries to third parties as specified
Less: Regulatory adjustments applicable on Tier-2 capital;
Taka in Crore
31.12.2016 31.12.2015
Solo Conso Solo Conso
(b) The amount of Regulatory > Paid up Capital 674 674 599 599
capital, with separate > Non- repayable share premium account - - - -
disclosure of: > Statutory reserve 650 650 611 611
CET 1 Capital > General reserve 122 130 122 140
> Retained earnings 681 784 683 744
> Minority Interest in Subsidiaries - 1 - (0.22)
> Non- cumulative irredeemable preference shares - - - -
> Dividend equalization account - - - -
2,127 2,238 2,015 2,094
Additional Tier 1 Capital - - - -
Total Tier 1 Capital 2,127 2,238 2,015 2,094
Tier 2 Capital 1,194 1,206 999 1,004
(c) Regulatory Adjustments/Deductions from capital 256 257 182 183
(d) Total eligible capital 3,064 3,187 2,833 2,915
86
C) Capital Adequacy
(a) A summary discussion of Capital Adequacy is the cushion required to be maintained for covering the Credit risk, Market risk
the Bank's approach to and Operational risk so as to protect the depositors and general creditors interest against such losses.
assessing the adequacy of its In line with BRPD Circular No. 18 dated 21 December, 2014, the Bank has adopted Standardized
capital to support current Approach for Credit Risk, Standardized (Rule Based) Approach for Market Risk and Basic Indicator
and future activities. Approach for Operational Risk for computing Capital Adequacy.
Taka in Crore
31.12.2016 31.12.2015
Solo Conso Solo Conso
(b) Capital requirement for Credit Risk: 2,531 2,546 2,284 2,294
(C) Capital requirement for Market Risk: 88 98 78 86
(d) Capital requirement for Operational Risk: 221 228 193 200
(e) Total capital, CET 1 capital, Total Tier 1 capital and Tier 2 capital ratio:
> For the Bank alone 69.41% - 71.13% -
> For the consolidated group - 70.22% - 71.83%
(f) Capital Conservation Buffer N/A N/A N/A N/A
(g) Available Capital under Pillar 2 Requirement 1,194 1,206 999 1,004
D) Credit Risk
(a) The general qualitative

disclosure requirement with
respect to credit risk,
including:
> Definitions of past due and Bank classifies loans and advances (loans and bill discount in the nature of an advance) into
impaired (for accounting performing and non-performing loans (NPL) in accordance with the Bangladesh Bank guidelines in
purposes) this respect.
An NPA (impaired) is defined as a loan or an advance where interest and/ or installment of principal
remain overdue for more than 90 days in respect of a Continuous credit, Demand loan or a Term
Loan etc.
Classified loan is categorized under following 03 (three) categories:

> Sub-standard
> Doubtful
> Bad & Loss
Any continuous loan will be classified as:
> Sub-standard' if it is past due/over due for 3 months or beyond but less than 6 months.
> "Doubtful' if it is past due/over due for 6 months or beyond but less than 9 months.
> ‘Bad/Loss' if it is past due/over due for 9 months or beyond.
Any Demand Loan will be classified as:
> Sub-standard' if it remains past due/overdue for 3 months or beyond but not over 6 months from
the date of claim by the bank or from the date of creation of forced loan.
> Doubtful' if it remains past due/overdue for 6 months or beyond but not over 9 months from the
date of claim by the bank or from the date of creation of forced loan.
> Bad/Loss' if it remains past due/overdue for 9 months or beyond from the date of claim by the
bank or from the date of creation of forced loan.
In case of any installment(s) or part of installment(s) of a Fixed Term Loan is not repaid within the
due date, the amount of unpaid installment(s) will be termed as `defaulted installment'.
87
> Definitions of past due and i. In case of Fixed Term Loans :
impaired (for accounting
purposes) > If the amount of 'defaulted installment' is equal to or more than the amount of installment(s) due
within 3 (three) months, the entire loan will be classified as ''Sub-standard''.
> If the amount of 'defaulted installment' is equal to or more than the amount of installment(s) due
within 6 (six) months, the entire loan will be classified as ''Doubtful".
> If the amount of 'defaulted installment' is equal to or more than the amount of installment(s) due
within 9 (nine) months, the entire loan will be classified as ''Bad/Loss''.
If any Fixed Term Loan is repayable on monthly installment basis, the amount of installment(s) due
within 06 (six) months will be equal to the sum of 06 monthly installments. Similarly, if the loan is
repayable on quarterly installment basis, the amount of installment(s) due within 06 (six) months will
be equal to the sum of 2 quarterly installments.
> Description of approaches Consumer Financing Off Balance

followed for specific and Short Term Loans to All other
Particulars Other than SMEF Sheet
general allowances and Agri Credit HF LP BHs/MBs/SDs Credit
statistical methods HF, LP Exposures
Standard 2.50% 5% 2% 2% 0.25% 2% 1%
UC
SMA - 5% 2% 2% 0.25% 2% 1%
SS 5% 20% 20% 20% 20% 20% 20% 1%
Classified DF 5% 50% 50% 50% 50% 50% 50%
BL 100% 100% 100% 100% 100% 100% 100%
> Discussion of the Bank's The Board approves the credit policy keeping in view relevant Bangladesh Bank guidelines to ensure
credit risk management best practice in credit risk management and maintain quality of assets. Authorities are properly
policy delegated in ensuring check and balance in credit operation at every stage i.e. screening, assessing
risk, identification, management and mitigation of credit risk as well as monitoring, supervision and
recovery of loans with provision for early warning system. There is a separate Credit Risk
Management Division for ensuring proper risk management of Loans and Credit Administration
Management Division for monitoring and recovery of irregular loans. Internal control & compliance
division independently assess quality of loans and compliance status at least once in a year. Adequate
provision is maintained against classified loans as per Bangladesh Bank Guidelines. Status of loans
are regularly reported to the Board/ Board Audit Committee. Besides, Credit risk management
process involves focus on monitoring of Top 30 Loans, Sectoral exposures etc. among others limit.
Quantitative Disclosure
Taka in Crore
31.12.2016 31.12.2015
In % Taka In % Taka
(b) Total gross credit risk Overdraft 10.01% 2,190 10.46% 2,193
exposures broken down by Cash Credit 0.01% 1 0.01% 2
major types of credit Time loan 26.43% 5,782 29.91% 6,272
exposure Term loan 54.75% 11,978 50.29% 10,548
Blc 0.09% 21 0.11% 24
TR 4.19% 916 4.84% 1,016
Packing credit 0.10% 21 0.21% 44
Loan-accp bills 1.34% 293 2.35% 492
Loan-EDF 1.47% 321 - -
Consumer Loan 0.64% 140 0.65% 137
Staff Loan 0.69% 150 0.61% 129
Bills Purchased & Discounted 0.29% 63 0.55% 116
Total 100% 21,877 100% 20,973
88
Qualitative Disclosure: credit risk (cont..) 31.12.2016 31.12.2015
In % Taka In % Taka
(C) Geographical distribution of Urban Branches
exposures, broken down in Dhaka 71.60% 15,491 66.46% 13,630
significant areas by major types
Chittagong 21.18% 4,582 25.93% 5,318
of credit exposure
Khulna 2.21% 479 2.51% 516
Sylhet 0.96% 208 1.12% 229
Barisal 0.11% 25 0.14% 29
Rajshahi 1.68% 364 1.98% 406
Rangpur 1.80% 390 1.86% 381
Mymensingh 0.44% 95 - -
100% 21,634 100% 20,508
Rural Branches
Dhaka 71.80% 141 85.80% 330
Chittagong 25.78% 50 12.48% 48
Khulna 0.00% - 0.00% -
Sylhet 2.43% 5 1.71% 7
Barisal 0.00% - 0.00% -
Rajshahi 0.00% - 0.00% -
Rangpur 0.00% - 0.00% -
100% 196 100% 385
Outside Bangladesh
ABBL, Mumbai Branch 0.21% 47 0.38% 80
100% 21,877 100% 20,973
(d) Industry or counterparty type Agriculture 1.42% 312 0.98% 206
distribution of exposures, Large and medium scale industry 29.28% 6,405 30.87% 6,473
broken down by major types of
Working capital 17.51% 3,830 17.53% 3,677
credit exposure.
Export 1.70% 372 0.44% 92
Commercial lending 24.02% 5,255 26.72% 5,604
Small and cottage industry 0.70% 154 0.43% 90
Others 25.36% 5,549 23.03% 4,830
100% 21,877 100% 20,973
(e) Residual contractual maturity Repayable – on demand 3.42% 748 1.95% 410
breakdown of the whole – upto 3 months 34.87% 7,629 40.72% 8,539
portfolio, broken down by
– over 3 months but below 1 year 43.69% 9,557 39.97% 8,382
major types of credit exposure.
– over 1 year but below 5 years 15.68% 3,430 16.51% 3,463
– over 5 years 2.35% 513 0.85% 178
100% 21,877 100% 20,973
(f) By major industry or counterparty type:
i. Amount of impaired loans and if available, past due loans, provided separately
5.19% 1,136 3.16% 662
ii. Specific and general provisions 661 471
iii. Charges for specific allowances and charge-offs during the period 451 235
(g) Gross Non Performing Assets 2016 2015
(NPAs) Non Performing Assets (NPAs) 1,136 662
Non Performing Assets (NPAs) Non Performing Assets (NPAs) to Outstnading Loans & Advances 5.19% 3.16%
to Outstanding Loans & Movement of Non Performing Assets (NPAs)-Bangladesh Operations:
advances
Opening Balance 650.83 675.46
Additions 854.51 398.99
Reductions 381.02 423.62
Closing balance 1,124.3 650.83
Movement of Specific Provision for Non Performing Assets (NPAs)
Opening Balance 256.45 289.13
Provision made during the period 220.38 101.20
Write-off 230.52 133.88
Closing balance 246.32 256.45
Provision held by Mumbai Branch 4.32 3.16
Provision made during the period 250.63 259.62
89
E) Equities: Disclosures for Banking Book Positions
(a) The general qualitative disclosure requirement with
respect to the equity risk, including:
> differentiation between holdings on which capital Investment in equity mainly for capital gain purpose but Bank has some investment for
gains are expected and those taken under other relationship and strategic reasons.
objectives including for relationship and strategic
reasons
> discussion of important policies covering the Quoted shares are valued at cost. Necessary provision is maintained if market price fall
valuation and accounting of equity holdings in the below the cost price. Unquoted shares are valued at cost.
banking book. This includes the accounting
techniques and valuation methodologies used,
including key assumptions and practices affecting
valuation as well as significant changes in these
practices
(b) Value disclosed in the balance sheet of investment, as Not Applicable

well as the fair value of those investments; for quoted
securities, a comparison to publicly quoted share
values where the share price is materially different
from fair value.
(C) The cumulative realized gains (losses) arising from Taka in Crore
sales and liquidations in the reporting period (2016) 9.65
(d) > Total unrealized gains (losses) (162.83)

> Total latent revaluation gains (losses) Nil
> Any amounts of the above included in Tier 2
capital Nil
(e) Capital requirements broken down by appropriate Nil
equity grouping, consistent with the bank's
methodology, as well as the aggregate amounts and
the type of equity investments subject to any
supervisory provisions regarding regulatory capital
requirements
F) Interest Rate Risk in the Banking Book (IRRBB)

(a) The general qualitative disclosure requirement Interest rate risk is the potential that the value of the On Balance Sheet and the Off
including the nature of IRRBB and key assumptions, Balance Sheet position of the Bank would be negatively effected with the change in the
including assumptions regarding loan prepayments Interest rate. The vulnerability of an institution towards the advance movement of the
and behavior of non-maturity deposits, and frequency interest rate can be gauged by using Duration GAP under Stress Testing Analysis.
of IRRBB measurement.
AB Bank has also been exercising the Stress Testing using the Duration GAP for
measuring the Interest Rate Risk on its On Balance Sheet exposure for estimating the
impact of the net change in the market value of equity on the Capital Adequacy Ratio
(CAR) due to change in interest rates only on its On Balance Sheet position (as the Bank
holds no interest bearing Off Balance Sheet positions and or Derivatives). Under the
assumption of three different interest rate changes i.e. 1%, 2% and 3%.
(b) The increase (decline) in earnings or economic value Taka in Crore
(or relevant measure used by management) for 31.12.16 31.12.15
upward and downward rate shocks according to
Market Value of Assets 32,012 29,001
management’s method for measuring IRRBB, broken
Market Value of Liability 29,296 27,011
down by currency (as relevant).
Weighted Avg. Duration GAP 0.98 0.79
CRAR after different level of Shocks:
Minor Level 9.87% 10.36%
Moderate Level 8.93% 9.61%
Major Level 7.96% 8.85%
90
G) Market Risk
(a) > Views of BOD on trading/ investment activities The Board approves all policies related to market risk, sets limits and reviews compliance
on a regular basis. The objective is to provide cost effective funding last year to finance
asset growth and trade related transaction.
> Methods used to measure Market risk Standardized approach has been used to measure the market risk. The total capital
requirement in respect of market risk is the aggregate capital requirement calculated for
each of the risk sub-categories. For each risk category minimum capital requirement is
measured in terms of two separately calculated capital charges for 'specific risk' and
'general market risk'.
> Market risk Management system The Treasury Division manage market risk covering liquidity, interest rate and foreign
exchange risks with oversight from Asset-Liability Management Committee (ALCO)
comprising senior executives of the Bank. ALCO is chaired by the Managing Director.
Alco meets at least once in a month.
> Policies and process for mitigating market risk There are approved limits for Market risk related instruments both on-balance sheet and
off-balance sheet items. The limits are monitored and enforced on a regular basis to
protect against market risks. The exchange rate committee of the Bank meets on a daily
basis to review the prevailing market condition, exchange rate, forex position and
transactions to mitigate foreign exchange risks.
(b) The capital requirements for: Taka in Crore
31.12.16 31.12.15
Interest rate risk 37.53 30.33
Equity position risk 48.33 44.49
Foreign exchange risk 1.82 3.14
Commodity risk - -
87.68 77.96
H) Operational Risk
(a) > Views of BOD on system to reduce The policy for operational risks including internal control & compliance risk is approved
Operational Risk by the board taking into account relevant guidelines of Bangladesh Bank. Audit
Committee of the Borad oversees the activities of Internal Control & Compliance
Division (ICCD) to protect against all operational risk.
> Performance gap of executives and staffs AB has a policy to provide competitive package and best working environment to attract
and retain the most talented people available in the industry. AB's strong brand image
plays an important role in employee motivation. As a result, there is no significant
performance gap.
> Potential external events No potential external events is expected to expose the Bank to significant operational
risk.
> Policies and processes for mitigating operational The policy for operational risks including internal control & compliance risk is approved
risk by the Board taking into account relevant guidelines of Bangladesh bank. Policy
guidelines on Risk Based Internal Audit system is in operation as per RBA branches are
rated according to their risk status and branches scoring more on risk status are subjected
to more frequent audit by Internal Control & Compliance Division (ICCD). It is the
policy of the bank to put all the branches of the bank under any form of audit at least
once in a year. ICCD directly reports to Audit Committee of the Board. In addition there
is a Vigilance Cell established in 2009 to reinforce operational risk management of the
bank. Bank's Anti-Money laundering activities are headed by CAMELCO and their
activities are devoted to protect against all money laundering and terrorist finance related
activities. Apart from that, there is adequate check & balance at every stage of operation,
authorities are properly segregated and there is at least dual control on every transaction
to protect against operational risk.
> Approach for calculating capital charge for Basic Indicator Approach was used for calculating capital charge for operational risk as
operational risk of the reporting date.
91
Quantitative Disclosure Taka in Crore
(b) The capital requirements for Operational Risk 31.12.16 31.12.15
221.41 193.15
I) Liquidity Ratio
(a) > Views of BOD on system to reduce Liquidity risk is the potential for loss to the bank arising from either its inability to meet
liquidity Risk its obligations of depositors as they fall due or to fund in increased assets as per
commitment.
To mitigate liquidity Risk bank asses its risk appetite and manage the risk within a
structured frame work. Professional resources are deployed to set the limits and
procedures and get them approved by the Board.
To reduce the liquidity Risk in a structured way, Bank monitors various indicators like
regulatory indicators(CRR, SLR, MTFR, MCO, ADR, LCR, NSFR) and uses internal
monitoring tools (WBG, CLP and MAT)
> Methods used to measure Liquidity risk Liquidity measurement involves forecasting the bank's cash inflows against its outflows
to identify the potential for any net shortfalls going forward. For measuring Bank uses
some simple techniques as mentioned below:
>Bank prepares Structural Liquidity Profile (SLP) on monthly basis. SLP is used to
estimate the Bank's cash inflows and outflows and thus net deficit or surplus (GAP) over
a series of specified time periods. Bank focuses on the maturity of its assets and liabilities
in different tenors. Excessive longer tenor lending against shorter-term borrowing is
monitored as this can put the Bank’s balance sheet in a very critical and risky position.
> Bank has a Contingency Funding Plan (CFP) in place. Contingency Funding Plan
(CFP)is a set of policies and procedures that serves as a blueprint for the Bank to meet
its funding needs in a timely manner and at a reasonable cost. Bank maintains sufficient
High Quality Liquid Assets to meet the liquidity crisis period.
> Bank estimates the funding requirement both is normal and stress conditions arising
from on and off balance sheet exposures. Bank monitors its products which are interest
rate sensitive. Those are taken care of at the time of interest rate movement in the
market based on behavior of clients and other competitors.
> Bank monitors liability concentration level. Highly concentrated deposits means bank
is relying on too few providers or funding sources. Bank has to be ready for arranging
fund if concentrated deposits are withdrawn at a time or Bank place this fund for short
term lending.
> Bank uses variety of ratios to quantify the liquidity and interpret them taking into
account the qualitative factors.
> Liquidity risk management system The Management of the Bank measures the liquidity risk and manage them under the
Board approved guidelines and policies. Bank prepares extensive reports for monitoring
the balance sheet movement on daily basis. Bank also monitors the Market information
of the country and global market. Bank has an Asset Liability Committee (ALCO).
ALCO is a senior management level committee responsible for supervision and

management of liquidity and other risks using different monitoring tools. They monitor
the limit for indicators set by Bangladesh Bank as well as Bank’s Board.
Key elements of an effective liquidity risk management process include an efficient MIS
to measure, monitor and control existing as well as future liquidity risks and reporting
them to senior management and the Board. Bank is therefore working for continuous
improvement of MIS.
92
> Policies and processes for mitigating Bank has set of policies duly approved by the Board for mitigating liquidity risk. These
liquidity risk policies are supported by effective procedures to measure, achieve and maintain liquidity.
The ALCO recommends the policies for liquidity risk which is reviewed and approved
by the Board.
Operating liquidity is managed by the Bank for day to day fund requirements. And for
managing the crisis period Bank follows the CFP approved by the Board.
For regulatory purposes the Bank maintains specific amount of assets classed as "liquid",
based on its liabilities. In addition, the Bank has to maintain excess liquid assets as per
CFP.
(b) Taka in Crore
31.12.2016
Liquidity Coverage Ratio 123.00%
Net Stable Funding Ratio (NSFR) 106.61%
Stock of High quality liquid assets 6,123.50
Total net cash outflows over the next 30 calendar days 4,978.33
Available amount of stable funding 24,531.07
Required amount of stable funding 23,010.39
J) Leverage Ratio
(a) > Views of BOD on system to reduce For reducing the leverage up to an optimum level, the Board of Directors of the Bank
excessive leverage always keen to focus on the capital strength and the quality of the assets. Board is always
concern to maximise the core capital portion and keep the growth of on and off balance
sheet exposures at a favourable level.
Key initiatives of the Board:
• Emphasized to keep LD ratio at the optimal level/budgeted level
• Stressed to keep the interest rate spread at the optimal level for ensuring the
profitability of the Bank
• Market competitive Cost of Fund must be maintained
• Non-funded business i.e. import, export and bank guarantee to be expedited as per
budget
• Operational expenses must be reduced at rational level
• Decentralization of portfolio in SME and Retail business
• Special Mentioned Account (SMA) and classified loans are to be closely monitored for
ensuring asset quality, and
• Recovery cell must ensure the monitoring of risk assets frequently to maintain the asset
quality.
> Policies and processes for managing Primary principle of the Board is to enhance the core capital of the Bank. To keep the
excessive on and off-balance sheet leverage at a reduced level, Board emphasised Management to build strong internal
leverage control system specifically in the risk points by putting dual control in each phase. Apart
from this, by the instruction of the Board, Management formed different Committees to
work under specific Terms of Reference (ToR) and to report to the Board.
All these above measures as a whole, helps the Management to keep the exposures at
sound level.
> Approach for calculating exposure The exposure calculation for the leverage ratio is generally followed the accounting
measure of exposure. In order to measure the exposure consistently with financial
accounts, the following is applied by the bank:
i. On balance sheet and non-derivative exposures are net of specific provisions and
valuation adjustments (e.g. surplus/ deficit on Available for sale (AFS)/ Held-for-trading
(HFT) positions).
ii. Physical or financial collateral, guarantee or credit risk mitigation purchased is not
allowed to reduce on-balance sheet exposure.
iii. Netting of loans and deposits is not allowed.
93
> Approach for calculating exposure On-Balance Sheet Items
(Continued…)
Bank included items using their accounting balance sheet for the purposes of the
leverage ratio. In addition, the exposure measure is included the following treatments for
Securities Financing Transactions (e.g. repo, reverse repo etc.):
Repurchase Agreements and Securities Financing:
Securities Financing Transactions (SFT) are a form of secured funding and therefore an
important source of balance sheet leverage that included in the leverage ratio. Therefore
Banks calculate SFT for the purposes of leverage ratio by applying:
• The accounting measure of exposure; and

• Without netting various long and short positions with the same counterparty

Bank calculates the Off-Balance Sheet (OBS) items specified in Risk based Capital
Adequacy Guidelines issued by Bangladesh Bank vide BRPD Circular No. 18 dated
December 21, 2014. OBS exposures calculation is given below for considering Leverage
Ratio of the Bank:
Notional Amount Exposure

Exposures Types CCF
(In Taka) (In Taka)
Direct credit
100% 29,753,575,932 29,753,575,932
substitutes
Performance related
50% 11,168,754,914 5,584,377,457
contingencies
Short-term self-
liquidating trade letters 20% 21,714,674,152 4,342,934,830
of credit
Lending of securities
or posting of securities 100% - -
as collateral
Other commitments
100% - -
with certain drawdown
Commitments with
original maturity of 20% 15,291,020,036 3,058,204,007
one year or less
Commitments with
original maturity of 50% - -
over one year
Other commitments
that can be
10% 16,445,900,000 1,644,590,000
unconditionally
cancelled by any time
Market related Off-
- -
Balance sheet exposure
Total 94,373,925,034 44,383,682,227
Taka in Crore
(b) 31.12.2016
Leverage Ratio 5.28%
On balance sheet exposure 31,232.95
Off balance sheet exposure 4,438.37
Total exposure 35,414.96
94
K) Remuneration
Information relating to the bodies that
oversees remuneration.
> Name of the bodies that oversees The primary body that currently oversees remuneration practices includes: In-charge of
remuneration remuneration & payroll, Head of HR, and Managing Director of the bank.
>
Name, composition and mandate of the Board of Directors of the bank is the main body which approves the remuneration
main body overseeing remuneration. proposals/changes as when needed based on the recommendation of the primary body
> Periodically services of external consultants are sought in the process of remuneration
External consultants whose advice has
update/survey in every 2/3 years to ensure competitive effectiveness of remuneration
been sought, the body by which they
structure. Survey focuses on gross remuneration package in each job grade i.e. Minimum,
were commissioned, and in what areas
Mid Point & Maximum in the given scale. Gross salary includes different elements like
(a) of the remuneration process.
Basic pay and other admissible emoluments.
> A description of the scope of the bank’s Key objective of the remuneration policy is to offer competitive remuneration package to
remuneration policy (eg by regions, employees in each job grade commensurate with job responsibilities irrespective of any
business lines), including the extent to location/region. It is done through periodical remuneration survey with local
which it is applicable to foreign comparators engaging consultant. Similarly, for foreign subsidiaries, it is done in context
subsidiaries and branches. of specific country remuneration market status to remain competitive in the foreign
market that ensures attracting and retention of the best performers.
> Divisional Heads, Departmental Heads, Senior Members of Management, Head of

A description of the types of employees
Branches/Business Units supported by MANCOM are the material risk takers in
considered as material risk takers and as
business.
senior managers, including the number
of employees in each group.
(b) Information relating to the design
and structure of remuneration
processes.
> An overview of the key features and #A scale of salary structure with a minimum – mid point and maximum package for
objectives of remuneration policy. each job grade is available #The package includes: Basic pay, Housing, Medical,
conveyance (when car is not allowed), Utilities, Maintenance, Leave fare assistance,
Personal pay (in appropriate cases) etc.
#Salary progression in the form of annual merit pay linked to individual performance
within the scale etc. #Service benefits like Provident Fund, Gratuity, Group term
insurance, festival bonus, car facilities and related cost as per bank,s service rules are
components of total compensation.
#Objective of remuneration policy is to pay competitively within industry norms in order

to attract & retain good employees,
#Pay for performance link to merit measured in terms of delivery of set KPI annually
(annual merit pay)
#Bank's service rules stands as a guide besides instructions & guidance from the Board
from time to time
> Whether the remuneration committee Remuneration structure is updated periodically usually in an interval of 2/3 years to
reviewed the firm’s remuneration policy remain competitive in the market with the approval of the Board of Directors of the
during the past year, and if so, an bank. No major change made in the recent past
overview of any changes that were
made.
95
> Risks & compliance employees carry out their job independently as per terms of
A discussion of how the bank ensures
reference. In respect of remuneration, they are treated equally in line with other regular
that risk and compliance employees are
employees
remunerated independently of the
businesses they oversee.
(c)
Description of the ways in which current
and future risks are taken into account in
the remuneration processes.
> An overview of the key risks that the The business risks including credit/default risk, compliance & reputational risk, financial
bank takes into account when and liquidity risk are considered while implementing remuneration measures for each
implementing remuneration measures. employee/group of employees.
> An overview of the nature and type of Different set of measures are in practice based on nature of business lines/segments etc.
the key measures used to take account these measures are primarily focused on the business targets/goals set for each area of
of these risks, including risks difficult to operation, branch vis-à-vis actual results achieved as of the reporting date. The most
measure important tools & indicators used for measuring the risks are asset quality (NPL ration),
LD ratio, Net Interest Margin (NIM), provision coverage ratio, cost income ratio, cost of
fund, growth of net profit as well as non-financial indicators i.e. compliance status with
regulatory norms/instructions, service delivery etc. are brought to all concerned of the
bank from time to time.
> A discussion of the ways in which these Individual employee’s performance standards are set in term of financial & non-financial
measures affect remuneration. indicators (KPI) early each year which are expected to be delivered by them individually.
Performance evaluation at the end of year results in variation in performance outcome
(KPI fully achieved, partially achieved & not achieved) leading to variation in
performance reward (annual merit pay) thus affects in remuneration.
> A discussion of how the nature and type Based on differentiating performance outcome employees are rewarded annually.
of these measures has changed over the Differentiating reward i.e. good, better & best impact on competitive motivation at work
past year and reasons for the change, as as usual. No material change in remuneration package.
well as the impact of changes on
remuneration.
(d) Description of the ways in which the

bank seeks to link performance
during a performance measurement
period with levels of remuneration.
Performance matrix in terms of broad KPI is set by the Board for the Management
covering business lines/different segments of businesses each year. The Management in
turn develops strategies and set performance KPI for individual employees across
An overview of main performance functions/business to activate and achieve the set targets/KPI in delivering business
> metrics for bank, top-level business lines results. The most common KPIs are loan deposit ratio, cost of fund, cost income ratio,
and individuals. yield on loan, quality of asset, profit target, provision coverage ration, capital to risk
weighted ratio, ROE, ROA, Liquidity position, naintenance of CRR and SLR etc. beside
non-financial KPI.
> Annual merit pay i.e. merit increment of employees are linked to performance outcome
A discussion of how amounts of based on individual performance criteria (KPI). Merit increase is also liked to other
individual remuneration are linked to elements of remuneration package, so aggregate of all employees has reasonable impact
bank-wide and individual performance. on the remuneration package and not insignificant.
> A discussion of the measures the bank No documented criteria as such is available to adjust remuneration of employees in the
will in general implement to adjust event of weak business performance matrix. If profit target is not met in a given year,
remuneration in the event that generally annual merit increment is lower.
performance metrics are weak
96
Description of the ways in which the
bank seek to adjust remuneration to take
account of longer-term performance.
> A discussion of the bank’s policy on The concept of variable remuneration or for that matter deferred payment system is not
deferral and vesting of variable in practice. A share of profit in the form of incentive bonus is allowed to employees as
remuneration and, if the fraction of approved by the board when profit target is favorably met.
variable remuneration that is deferred
(e) differs across employees or groups of
employees, a description of the factors
that determine the fraction and their
relative importance.
> A discussion of the bank’s policy and
criteria for adjusting deferred
remuneration before vesting and (if Not applicable
permitted by national law) after vesting
through clawback arrangements.
Description of the different forms of
variable remuneration that the bank
utilises and the rationale for using these
different forms.
> An overview of the forms of variable
remuneration offered (ie cash, shares
Not applicable
and share-linked instruments and other
forms
(f) >
A discussion of the use of the different
forms of variable remuneration and, if
the mix of different forms of variable
remuneration differs across employees Not applicable
or groups of employees), a description
the factors that determine the mix and
their relative importance.
(g) Number of meetings held by the main The main body that oversees remunerations organizes meeting as & when needed to
body overseeing remuneration during the discuss issues arising in the process of administration.
financial year and remuneration paid to
its member.
> Number of employees having received a
variable remuneration award during the Not applicable (Variable remuneration practice is not available)
financial year.
> Number and total amount of guaranteed Bank has disbursed 02(two) festival bonus among the employees amounting to taka
bonuses awarded during the financial 183,209,903 during the year 2016.
year.
> Number and total amount of sign-on

Not applicable
awards made during the financial year.
> Number and total amount of severance None during the financial year
payments made during the financial year
> Total amount of outstanding deferred

remuneration, split into cash, shares and Not applicable
share-linked instruments and other
> Total amount of deferred remuneration Not applicable
paid out in the financial year.
97
Breakdown of amount of remuneration
awards for the financial year to show:
(j)
Fixed and variable. BDT 294.70 crore (Fixed including annual merit pay)
Deferred and non-deferred. Not applicable
Different forms used (cash, shares and
Not applicable
share linked instruments, other forms).
Quantitative information about employees’
exposure to implicit and explicit adjustments
of deferred remuneration and retained
remuneration:
> Total amount of outstanding deferred

remuneration and retained remuneration
Not applicable
exposed to ex post explicit and/or
implicit adjustments.
> Total amount of reductions during the

financial year due to ex post explicit Not applicable
adjustments.
> Total amount of reductions during the
financial year due to ex post implicit Not applicable
adjustments.
98
Annexure-F
AB BANK LIMITED
Mumbai Branch
Balance Sheet
As at 31 December 2016
31.12.2016 31.12.2015
PROPERTY AND ASSETS INR INR
Cash 29,802,230 19,763,748
In hand (including foreign currencies) 7,493,047 3,496,567
Balance with Reserve Bank India 22,309,183 16,267,181
In India 88,690,944 94,640,996
Outside India 986,391,664 1,043,564,508
Money at call and on short notice 411,757,031 240,835,815
Investments 364,706,500 344,559,750
Government 364,706,500 344,559,750
Others - -
Loans and advances 405,309,419 673,914,433
Loans, cash credits, overdrafts, etc. 124,426,068 113,830,982
Bills purchased and discounted 280,883,351 560,083,451
Fixed assets including premises, furniture and fixtures 10,288,025 15,224,667
Other assets 267,229,419 334,754,336
Total Assets 2,564,175,232 2,767,258,253
Liabilities
Borrowings from other banks, financial institutions and agents - -
Deposits and other accounts 1,367,943,715 1,609,578,899
Current deposits 1,155,747,445 1,406,647,806
Demand deposits 586,287 644,915
Bills payable 626,723 718,815
Savings deposits 9,100,177 9,572,472
Fixed deposits 201,883,083 191,994,891
Other deposits - -
Other liabilities 189,063,895 214,195,396
Capital/Shareholders' Equity
Total Shareholders' Equity 1,007,167,621 943,483,958
Paid-up capital 369,822,602 369,822,602
Other reserve - -
Retained earnings 431,158,067 385,202,356

99
Annexure-F-1
AB BANK LIMITED
Mumbai Branch
For the year ended 31 December 2016
2016 2015
INR INR
OPERATING INCOME
Interest income 52,470,472 57,796,620
Interest paid on deposits and borrowings, etc. (16,866,394) (15,895,873)
Net interest income 35,604,078 41,900,747
Investment income 23,643,631 25,329,482
Commission, exchange and brokerage 276,706,121 276,779,051
302,398,392 304,411,717
Total operating income (a) 338,002,470 346,312,464
OPERATING EXPENSES
Salary and allowances 13,190,755 15,355,626
Rent, taxes, insurance, electricity, etc. 15,980,320 14,945,599
Legal expenses 65,687 251,400
Postage, stamps, telecommunication, etc. 9,100,531 10,518,225
Stationery, printing, advertisement, etc. 2,514,864 2,132,236
Auditors' fees 573,080 641,381
Depreciation and repairs of Bank's assets 6,275,591 7,991,578
Other expenses 101,760,381 100,131,516
Total operating expenses (b) 149,461,208 151,967,560
Profit before provision (c = a-b) 188,541,263 194,344,904
Provision against loans and advances 10,500,000 -

Other provisions 40,209,500 -
Total provision (d) 50,709,500 -
Profit before taxation (c-d) 137,831,763 194,344,904
Provision for taxation 74,148,100 80,101,240
Current tax 74,212,703 80,372,664
Deferred tax (64,603) (271,425)
Net profit after taxation 63,683,663 114,243,664
100
Annexure-G
AB BANK LIMITED
Balance Sheet
31.12.2016 31.12.2015
Taka Taka
PROPERTY AND ASSETS
Cash in hand 270,140,394 304,786,207

Cash in Hand (Including foreign currencies) 4,300,384 5,204,533
Balance with Bangladesh Bank and its Agent Banks (Incl. FC) 265,840,010 299,581,674
Balance with Other Banks and Financial Institutions 2,415,566,470 2,021,892,911
In Bangladesh 2,415,566,470 2,021,892,911
Outside Bangladesh - -
Placement with other Banks & Financial Institutions - -
Investment in shares & other financial institutions 248,500,000 240,000,000
Government (BGIIB For SLR) 248,500,000 240,000,000
Others - -
Investments 4,422,979,996 3,818,966,701
General Investments etc. 4,422,979,996 3,812,021,764
Bills Purchased & Discounted - 6,944,937
Fixed Assets 9,251,533 10,524,959
Other Assets 26,517,395 46,338,286

Non-Banking Assets - -
7,392,955,787 6,442,509,063
Liabilities
Placement from Banks (BGIIB)& Other Financial Institutions - -
Deposits and Other Accounts 7,311,296,055 6,386,950,395

Mudaraba Savings Deposits 106,811,149 90,687,440
Mudaraba Term Deposits 4,081,262,744 3,627,855,408
Other Mudaraba Deposits 3,000,929,470 2,589,538,328
Al-Wadeeah Current and Other Deposit Accounts 116,562,265 74,753,543
Bills Payable 5,730,426 4,115,676
Other Liabilities 81,659,732 55,558,668
Deferred Tax Liabilities/(Assets) - -
101
31.12.2016 31.12.2015
Taka Taka
Contingent Liabilities
Acceptances & Endorsements 380,418,216 -

Letter of Guarantee 130,000,000 319,340,442
Irrevocable Letters of Credit (including Back to Back Bills) 332,550,279 230,995,056
Inland Bills for collection - -
Other Contingent Liabilities - -
Total 842,968,495 550,335,498
Other Commitments
Documentary Credits and short term trade related transactions - -

Undrawn formal standby facilities, credit lines and other-commitments - -
Total Off-Balance Sheet items including Contingent Liabilities 842,968,495 550,335,498
102
Annexure-G-1
AB BANK LIMITED
2016 2015
Taka Taka
Investment Income 583,877,086 672,381,561
Profit paid on Deposits 385,240,147 507,677,489
Net Investment Income 198,636,940 164,704,072
Income from Investments in Shares/Securities 475,476 1,896,353
Commission, Exchange and Brokerage 34,601,038 24,202,361
Other Operating Income 695,741 3,655,032
Total Operating Income 234,409,194 194,457,818
Operating Expenses
Salaries and Allowances 33,161,266 31,913,422
Rent, Taxes, Insurance, Electricity etc. 1,491,079 1,345,771
Legal Expenses - -
Postage, Stamps, Telecommunication etc. 556,819 408,694
Stationeries, Printing and Advertisement etc. 473,596 766,043
Directors' Fees & Expenses - -
Shariah Supervisory Committee's Fees & Expenses 155,087 137,963
Auditors' Fees - -
Charges on investment Losses - -
Depreciation and repair to Bank's Assets 2,938,660 2,902,387
Zakat Expenses - -
Other Expenses 7,456,303 8,209,179
Total Operating Expenses 46,232,809 45,683,460
Operating Profit 188,176,385 148,774,358
103
Annexure-H
AB Bank Limited
Profit paid on deposits
Profit and loss of Islami Banking Branch is calculated annually as at 31 December in every year. More than 60% of
investment income is distributed among the different types of Mudaraba depositors following weightage system and
the remaining portion is retained by the bank to meet administrative expenses and investment loss offsetting reserve.
Provisional profit rates are applied to the different types of deposit A/Cs as decided by the Bank from time to time
commensurate with weightage taking into consideration of the industry trend and that of the rates of other Islamic
banks in the Country.
In the year 2016 final profit has been paid to the depositors as per following weightage and rates:
Types of Deposit Weightage Rate of Profit (%)
1. Mudaraba Savings Deposits 0.29 - 0.33 3.50 - 4.00
2. Mudaraba Special Notice Deposits

a. General 0.25 3
b. Inter - Bank 0.25 - 0.33 3.00 - 4.00
3. Mudaraba Term Deposits

a. General
· 24 Months 0.50 - 1.00 6.00 - 12.00
· 12 Months 0.50 - 0.79 6.00 - 9.50
· 6 Months 0.48 - 0.73 5.75 - 8.75
· 3 Months 0.46 - 0.60 5.50 - 7.25
· 1 Month 0.33 - 0.35 4.00 - 4.25
b. Inter - Bank
· 1 Month 0.39 4.75
4. Mudaraba Probable Millionaire Scheme 1.04 - 1.11 12.50 - 13.34
5. Mudaraba Quarterly Profit Paying Scheme 0.81 9.75
6. Mudaraba Hajj Deposit Scheme 0.75 - 1.11 9.00 - 13.34
7. Mudaraba Pension Deposit Scheme 0.66 - 1.04 8.00 - 12.50
8. Mudaraba Monthly Profit Payment Scheme 0.58 - 1.11 7.00 - 13.34
9. Mudaraba Cash WAQF Deposit 0.66 - 1.04 8.00 - 12.50
A competent Shariah Supervisory Committee consisting of Islamic scholars, Ulema, Fuqaha and Islamic bankers
headed by Mr. M. Azizul Huq, a prominent Islamic scholar and banker guides the Islamic banking operations of the
Bank. During the year 2016, Shariah Supervisory Committee met in 05 (Five) meetings (Full Committee 03+Sub-
Committee 02) and reviewed different operational issues. The Committee also audited the branch through it’s
Muraquib and reviewed the audit report in it’s regular meeting. Shariah Supervisory Committee observed that both the
officials and clients of the Branch became more cautious about the compliance of Shariah Principles.
104
Annexure- I
AB Bank Limited
Custodian Wing
Balance Sheet
31.12.2016 31.12.2015
Taka Taka
ASSETS
Non-Current Assets
Property, Plant and Equipment 26,375 36,925
Intangible Assets - -
Total Non Current Assets 26,375 36,925
Current Assets
Cash and Bank Balances - -

Advance, Deposit and Prepayments - -
Accounts Receivables 30,975,447 17,159,327
Total Current Assets 30,975,447 17,159,327
Total Assets 31,001,822 17,196,252
LIABILITIES
Non-Current Liabilities - -
Current Liabilities
Payable to AB Bank 13,505,085 13,515,635
Accounts Payable 17,470,287 3,654,167
Provision for Audit Fees 26,450 26,450
Total Current Liabilities 31,001,822 17,196,252
Total Liabilities 31,001,822 17,196,252
0 -
105
Annexure- I-1
AB Bank Limited
Custodian Wing
2016 2015
Taka Taka
Operating Income
Commission, exchange and brokerage 937,500 937,500
Total Operating Income (a) 937,500 937,500
Operating Expenses
Rent, taxes and insurance 16,500 16,400
Auditor's fees 26,450 26,450
Depreciation and repair of bank's assets 10,550 10,550
Other expenses 347,891 12,430
Total operating expenses (b) 401,391 65,830
Operating Profit 536,109 871,670
106
Annexure-J
AB Bank Limited
Balance Sheet
31.12.2016 31.12.2016 31.12.2015 31.12.2015

PROPERTY AND ASSETS Taka USD Taka USD
Cash - - - -
Balance with Other Banks and FIs' 103,481,273 1,314,697 15,624,068 199,032
In Bangladesh 734,297 9,329 221,870 2,826
Outside Bangladesh 102,746,976 1,305,368 15,402,198 196,206
Money at call and on short notice

2,212,965,725 28,115,040 2,287,498,742 29,140,000
(Placement)
Loans and Advances: 11,361,144,011 144,339,795 14,696,619,255 187,217,364

Loans & Advances - Regular 11,361,144,011 144,339,795 14,696,619,255 187,217,364
Bills Purchased & Discounted - - - -
Premises and Fixed Assets (WDV) 1,842,866 23,413 3,243,127 41,314
Other Assets: 30,308,004 385,054 47,192,181 601,172

Accrued Interest 416,408 5,290 242,607 3,091
Pre-paid Advances 165,957 2,108 204,019 2,599
Miscellaneous 29,725,640 377,655 46,745,555 595,482
Total Assets 13,709,741,880 174,177,999 17,050,177,372 217,198,882
Liabilities:
Borrowing from Bank & FIs' 13,351,236,403 169,623,298 15,676,272,977 199,696,982
In Bangladesh 7,838,504,785 99,585,761 6,264,632,788 79,803,934
Outside Bangladesh 5,512,731,619 70,037,538 9,411,640,189 119,893,047
Deposits and Other Accounts 71,688,147 910,776 1,283,381,876 16,348,751

Demand Deposits 21,473,619 272,816 1,219,275,859 15,532,117
Demand Deposits - Others 50,214,528 637,960 64,106,017 816,634
Other Deposits - - - -
Other Liabilities 101,454,560 1,288,949 - -
Total Liabilities 13,524,379,110 171,823,023 16,959,654,853 216,045,733
Capital and Shareholders' Equity

Retained Earnings 185,362,770 2,354,976 90,522,520 1,153,149
Total Shareholders' Equity 185,362,770 2,354,976 90,522,520 1,153,149
Total Liabilities and Shareholders'
13,709,741,880 174,177,999 17,050,177,372 217,198,882
Equity
107
Annexure-J-1
AB Bank Limited
2016 2016 2015 2015

Taka USD Taka USD
Interest income 713,013,393 9,095,495 551,864,037 7,068,271

Interest paid on deposits and borrowing etc. 511,963,149 6,530,814 452,733,405 5,798,607
Net Interest income 201,050,244 2,564,680 99,130,632 1,269,665
Commission, exchange and brokerage 2,811,089 35,859 1,379,529 17,669
Other operating income 53,727 685 198,445 2,542
Total operating income (A) 203,915,059 2,601,225 100,708,606 1,289,875
Salaries and allowances 5,786,944 73,821 7,410,975 94,920
Rent, taxes, insurance, electricity etc. 42,927 548 67,054 859
Legal expenses 62,961 803 - -
Postage, stamps, telecommunication etc. 321,596 4,102 254,565 3,260
Stationeries, printing, advertisement etc. 46,442 592 11,673 150
Depreciation and repair of bank's assets 757,294 9,660 1,356,248 17,371
Other expenses 12,285,761 156,722 1,574,577 20,167
Total operating expenses (A) 19,303,925 246,249 10,675,092 136,727
Operating Profit 184,611,134 2,354,976 90,033,514 1,153,149
108
Annexure-K
AMANA BANK PLC (PB 3618 PQ)
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
RUPEES IN THOUSAND
AS AT 31.12.2016 AS AT 31.12.2015
Assets
Cash and Cash Equivalents 5,686,924 5,016,459
Balances with Central Bank of Sri Lanka 2,816,770 2,292,888
Derivative Financial Assets 59,483 61,037
Placements with Banks 4,662,466 3,624,929
Placements with Licensed Finance Companies 21 954,528
Financial Investments-Held for Trading 45,182 59,474
Financing and Receivables to Others Customers 38,451,662 33,073,596
Financial Investments-Available for Sale 394,775 432,056
Financial Investments-Held to Maturity - -
Other Financial Assets 307,322 315,749
Other Non Financial Assets 227,059 257,217
Property, Plant and Equipment 1,247,591 1,271,732
Intangible Assets 269,376 236,503
Differed Tax Assets 146,356 145,703
Total Assets 54,314,987 47,741,871
Liabilities
Due to Banks 751,964 2,955,278
Derivative Financial Liabilities 98,341 67,405
Due to Other Customers 46,915,290 38,467,461
Other Financial Liabilities 566,565 341,598
Other Non Financial Liabilities 112,175 113,063
Retirement Benefit Liability 82,606 74,071
Shareholder's Funds
Stated Capital 5,866,808 5,866,808
Statutory Reserve Fund 17,258 15,231
Revaluations Reserves 527,800 527,800
Other Reserves (243,795) (261,525)
Retained Earnings (380,027) (425,318)
Total Equity 5,788,044 5,722,996
Total Liabilities and Shareholder's Equity 54,314,987 47,741,871
109
Annexure-K-1
AMANA BANK PLC (PB 3618 PQ)
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2016
RUPEES IN THOUSANDS
2016 2015
Financing Income 4,039,624 2,885,932
Financing Expenses (2,115,335) (1,405,259)
Net Financing Income 1,924,289 1,480,673
Net Fee and Commission Income 246,568 168,556

Net Gain/(Loss) from Trading 257,455 390,235
Net Other Operating Income 4,961 27,659
Total Operating Income 2,433,273 2,067,123
Impairment Revesal / (Charge) for Financing

and Receivables to Other
Customer and Other Losses
Individual Impairment (40,156) 255
Collective Impairment (27,830) (3,073)
Others (149,192) -
Net Operating Income 2,216,095 2,064,305
Personal Expenses 1,025,032 908,237

Depreciation of Property, Plant and Equipment 162,621 150,818
Amortisation of Intangible Assets 78,635 40,881
Other Operating Expenses 678,729 593,404
Total Operating Expenses 1,945,017 1,693,340
Operating Profit Before Value Added Tax &
Nation Building Tax 271,077 370,964
value Added Tax on Financial Services & Nation
Building Tax (168,266) (152,248)
Profit Before Tax 102,811 218,716
Tax (Expenses)/ Reversal (62,171) (60,087)
Profit for the Period 40,640 158,629
110
Annexure-L
AB Investment Limited
(A Subsidiary of AB Bank Limited)
Statement of Financial Position (Balance Sheet)
31.12.2016 31.12.2015
BDT BDT
Assets
Non- current assets
Property, plant and equipment 597,167,511 613,817,114
Investment in shares 721,255,054 686,571,505
Office renovation - 320,882
Total non- current assets 1,318,422,565 1,300,709,501
Current assets
Loans to clients 7,229,768,195 6,990,517,740
Advances, deposits and prepayments 23,461,147 21,168,843
Receivable from brokers 33,238,412 12,764,599
Advance income tax 235,957,025 216,951,177
Cash and cash equivalents 614,394 432,792
Total current assets 7,523,039,173 7,241,835,151
Total assets 8,841,461,738 8,542,544,652
Equity and Liabilities
Capital and reserve

Share capital 6,149,428,410 2,988,568,250
Share money deposit - 2,199,999,000
Retained earnings 635,065,186 544,469,448
Total capital and reserve 6,784,493,596 5,733,036,698
Non-current liabilities
Provident fund, gratuity fund and recreation club fund 7,794,251 7,207,993
Deferred tax 23,681,668 18,945,456
Total non-current liabilities 31,475,919 26,153,449
Current liabilities
Borrowing from banks, etc. 1,203,940,032 2,127,542,960
Liabilities for expenses 4,264,012 5,420,218
Payable against sale proceeds of shares 33,238,412 11,896,586
Provision for taxation 348,436,278 267,770,486
Provision for unclassified loans and investment 338,145,182 338,145,182
Credit balance with clients' accounts 97,468,307 32,579,073
Total current liabilities 2,025,492,223 2,783,354,505
Total liabilities 2,056,968,142 2,809,507,954
Total shareholders' equity and liability 8,841,461,738 8,542,544,652
111
Annexure-L-1
AB Investment Limited
(A Subsidiary of AB Bank Limited)
Statement of Profit or Loss and Other Comprehensive Income
(Profit and Loss Statement)
2016 2015
BDT BDT
Operating income
Interest income 412,045,652 393,372,052
Management fee 16,349,835 17,941,568
Transaction/ settlement fee 26,191,962 26,199,160
Investment income 7,902,899 252,437
Total operating income (A) 473,897,899 446,523,441
Operating expenses
Salary and allowances 15,160,710 17,278,034
Audit and consultancy fees 250,700 615,700
Administrative expenses 30,474,024 30,724,379
Financial expenses 36,395,889 144,722,697
Total operating expenses (B) 82,281,323 193,340,810
Net operating income (C=A-B) 391,616,576 253,182,631
Profit before provision for
loans and investment 391,616,576 253,182,631
Provision for loan - 3,864,130
Provision for investment - 40,000,000
Net profit before tax for the year 391,616,576 209,318,501
Income tax expense 151,592,428 94,943,487
Current tax 146,856,216 89,292,367
Deferred tax 4,736,212 5,651,120
Net profit after tax for the year 240,024,148 114,375,014
Earnings per share (EPS) 0.69 0.36
112
Annexure-M
Statement of Financial Position
31.12.2016 31.12.2015
Taka Taka
I. Sources of Fund
A) Shareholders' Equity 515,091,961 486,920,300
Share Capital 246,750,000 246,750,000
Revaluation Reserve 102,024,360 102,024,360
Retained Earnings 166,317,601 138,145,940
B) Non Current Liabilities 384,579,863 382,988,078

Liabilities for Other Finance 370,263,485 370,263,485
Deferred Liability-Gratuity 5,147,975 4,755,802
Provision for Provident Fund 9,168,403 7,968,791
Total Source of Fund (A+B) 899,671,824 869,908,378
II. Application of Fund

A) Non Current Assets 5,868,249 6,041,058
Property, Plant & Equipment 3,157,231 3,516,188
Deferred Tax Assets 2,711,018 2,524,870
B) Investments 172,865,988 168,598,202
C) Current Assets 1,341,210,825 1,203,834,593

Cash and Cash Equivalents 301,783,395 165,340,364
Advance, Deposit & Prepayment 3,301,145 2,522,241
Advance Income Tax 48,848,463 33,273,206
Accounts Receivable 29,535,114 12,397,949
Margin Loan 957,742,708 990,300,833
D) Current Liabilities and Provisions 620,273,237 508,565,474

Accounts Payable 233,669,082 120,530,747
Bank Overdraft 253,621,766 284,303,246
Liabilities for Expense 4,956,087 1,251,195
Provision for Income Tax 58,629,199 41,548,183
Other Liabilities 69,397,103 60,932,103
E) Net Current Assets (C-D) 720,937,587 695,269,118
F) Total Application of Fund (A+B+E) 899,671,824 869,908,378
113
Annexure-M-1
Statement of Comprehensive Income
For the Year Ended 31 December 2016
2016 2015
Taka Taka
A) OPERATING INCOME 105,997,994 80,983,089

Brokerage Commission 43,504,521 45,853,762
Interest Income 49,427,639 30,730,786
Investment Income 10,978,747 1,435,989
Other Operating Income 2,087,087 2,962,552
B) OPERATING & OTHER EXPENSE 53,431,466 55,631,218
Operating Expenses 51,327,321 50,536,793
Other Financial Expenses 804,138 935,196
Depreciation on Property, Plant & Equipment 1,300,007 4,159,229
C) Profit Before Provision (A-B) 52,566,529 25,351,871
D) Provision 7,500,000 3,000,000

For Diminution in Value of Investments 1,287,725 1,585,941
For Diminution in Value of Loan 6,212,275 1,414,059
E) Profit Before Taxation (C-D) 45,066,529 22,351,871
F) Provision for Taxation 16,894,868 14,486,961

Current Tax 17,081,016 15,136,821
Deferred Tax (186,148) (649,860)
Net Profit After Taxation (E-F) 28,171,661 7,864,910
Earnings Per Share (EPS) 1.14 0.32
114
Annexure-N

31.12.2016 31.12.2015
Taka Taka
ASSETS
Non Current Assets

Property, Plant and Equipment 104,508 177,188
Investment in ETN - 101,600,000
104,508 101,777,188
Current Assets
Cash and Bank Balances 2,667,656 1,166,305
Investment in FDR 32,500,000 -
Investment in Share 431,639 23,506,275
Current Account with ETN - 71,566,239
Advance, Deposit & Prepayment 37,794,461 30,746,918
Accounts Receivable - 491,217
Other Receivable 214,030 60,000
73,607,785 127,536,954
Total Assets 73,712,293 229,314,146
EQUITY AND LIABILITIES

Equity
Share Capital 238,000,000 238,000,000
Share Money Deposit 4,200,000 4,200,000
Retained Profit/(Loss) (185,493,383) (125,801,178)
56,706,617 116,398,822
Liabilities
Non-current Liabilities
Long term loan 9,742,006 -
Current Liabilities
Accrued Expenses 172,500 115,000
Provision for Taxation 7,091,170 1,728,657
Short Term Loan - 106,741,029
Provision for decrease in market value of investment in Share - 4,307,246
VAT Deducted at Source - 23,392
7,263,670 112,915,323
Total Equity and Liabilities 73,712,293 229,314,146
115
Annexure-N-1

Statement of Profit or Loss and Other Comprehensive Income
2016 2015
Taka Taka
Revenue 123,290,014 77,327,792

Less: Operating Expenses - 13,715
General and Administration Expenses 613,081 1,067,708
Net Operating Profit 122,676,933 76,246,369
Add: Other Income 1,470,187 336,312
Non-Operating Loss (182,813,810) (756,799)
(58,666,690) 75,825,883
Less: Other Expenses 525 520
Profit Before Provision (58,667,215) 75,825,363
Provision for Decrease in Market Value of Investment in Share (4,307,246) 3,324,850
Profit Before Taxation (54,359,970) 72,500,513
Income Tax Expenses 5,332,235 230,722
Net Profit After Tax (59,692,205) 72,269,791
Other Comprehensive Income - -
Total Comprehensive Income (59,692,205) 72,269,791
116
Annexure-O

Balance Sheet
31.12.2016 31.12.2015
HK$ HK$
NON-CURRENT ASSETS
Property, plant and equipment 15,803 8,922
CURRENT ASSETS
Discounted bills receivable 87,683,696 90,154,751
Deposits, prepayments and other receivable 2,310,366 454,565
Cash and bank balances 636,227 2,021,503
90,630,289 92,630,819
CURRENT LIABILITIES
Accrued liabilities and other payables 4,134,050 3,819,557
Deferred interest income 818,675 772,063
Provision for long service payments 520,256 516,050
Due to ultimate holding company 68,200,000 70,835,000
Tax payable 70,689 165,197
73,743,670 76,107,867
NET CURRENT ASSETS 16,886,619 16,522,952
16,902,422 16,531,874
EQUITY
Share capital 1,000,000 1,000,000
Retained earnings 563,904 563,904
Proposed final dividend 7,776,559 7,406,011
Capital Reserve 7,561,960 7,561,960
16,902,422 16,531,874
117
Annexure-O-1

2016 2015
HK$ HK$
Interest income 4,721,731 6,120,785
Interest expenses (571,215) (573,322)
Net interest income 4,150,516 5,547,463
Total operating income 14,233,694 13,854,084
Staff costs (2,538,848) (2,787,988)

Depreciation (8,853) (11,310)
Provision for long service payments (4,206) (6,561)
Other operating expenses (2,393,778) (2,201,453)
Total operating expenses (4,945,685) (5,007,312)
Profit before taxation 9,288,009 8,846,772
Income tax (1,511,450) (1,440,761)
Profit for the year 7,776,559 7,406,011
Retained earnings at start of the year 563,904 563,904
Dividends (7,776,559) (7,406,011)
Retained earnings at the end of the year 563,904 563,904
118
Annexure-P
AB Exchange (UK) Limited (ABEL)

Balance Sheet
As at 15 November 2016
15.11.2016 31.12.2015
GBP GBP
FIXED ASSETS
Tangible Assets - 9,203
- 9,203
Current Assets
Debtors 359 18,559
Cash at Bank and in Hand 67 11,763
426 30,322
Creditors
Amounts falling due within one year 45,793 23,638
Net Current Assets/(Liabilities) (45,367) 6,684
Total Assets less Current Liabilities (45,367) 15,887
CREDITORS
Amounts falling due after more than one year - 5,500
Net Assets (45,367) 10,387
CAPITAL AND RESERVES (45,367) 10,387

Called up share capital 400,000 400,000
Profit and loss account (445,367) (389,613)
(DEFICIT)/SHAREHOLDERS' FUND (45,367) 10,387
119
Annexure-P-1
AB Exchange (UK) Limited (ABEL)

Profit and Loss Statement
For the period from 01 January 2016 to 15 November 2016
2016 2015
GBP GBP
Turnover - 19,450
Administrative expenses 54,021 82,257
Operating Loss (54,021) (62,807)
Interest payable and similar charges 1,733 -
Loss on ordinary activities before taxation (55,754) (62,807)
Tax on loss on ordinary activities - -
Operating loss for the financial year (55,754) (62,807)
120
Annexure- Q

31.12.2016 31.12.2015
Taka Taka
ASSETS
Non Current Assets 40,488,576 41,179,450

Property, Plant & Equipment 40,487,576 13,543,492
Investment at cost in equity share of ABIL 1,000 1,000
Advances to Police Plaza Concord - 27,634,958
Current Assets 565,679,203 547,618,044

Loan to ABSL 350,000,000 350,000,000
Investment in FDR 34,541,836 32,596,376
Accrued income 12,725,169 37,668
Advance Tax 114,829,710 114,384,675
Cash and Cash equivalents 53,582,488 50,599,325
TOTAL ASSETS 606,167,779 588,797,494
EQUITY AND LIABILITIES

Shareholders' Equity 488,794,866 476,488,783
Share Capital 20,000,000 20,000,000
Retained Earnings 468,794,866 456,488,783
Non-Current Liabilities
Advance Rent 1,145,400 1,597,426
Current Liabilities 116,227,510 110,711,285

Provision for Income Tax 115,522,482 110,012,157
Advance Rent 452,028 452,028
Provision for expenses 253,000 247,100
TOTAL EQUITY AND LIABILITIES 606,167,779 588,797,494
121
Annexure -Q-1

Statement of Comprehensive Income
2016 2015
Taka Taka
Income
Operating Income 30,475,881 36,671,887
Interest Income 29,571,829 36,370,536
Rental Income 904,052 301,351
Non Operating Income - 468,656

Other Income - 468,656
Less : Operating & Other Expenses 12,659,472 9,793,397

Operating expenses 3,087,272 496,497
Other expenses 9,572,200 9,296,900
Profit / (Loss) before Tax 17,816,409 27,347,146

Less: Provision for Tax 5,510,325 9,571,501
Profit / (Loss) carried forward 12,306,083 17,775,645
122
Name of the Directors and entities in which had interest
Name of Firms / Companies in which interested
Sl.
Name Status as pro-proprietor/partner/director/managing
No.
agent/guarantor/employees etc.
1 Mr. M. Wahidul Haque Chairman Chairman:
1. AB Bank Limited
2. AB Investment Limited
3. AB Securities Limited
4. Cashlink Bangladesh Limited
5. AB Exchange (UK) Limited, London, UK
Managing Director:
6. Deundi Tea Company (UK) Ltd.
7. Noyapara Tea Co. Limited.
2 Mr. Salim Ahmed Vice- 1. AB Bank Limited
Chairman 2. Super Refinery (Pvt.) Ltd.
3. Super Sea Fish (Pvt.) Ltd.
4. Super Share & Securities Ltd.
5. Supertel Ltd.
6. Super Silica Bangladesh Ltd.
7. Elite Super Plastic Ind.(Pvt.) Ltd.
8. Elite Properties Management Ltd.
9. Elite Paint & Chemical Industries Ltd.
10. Elite International Ltd.
11. Hexagon Chemical Complex Ltd.
Nominated by AB Bank Limited in the Board of:
12. AB Securities Ltd, Director
13. AB Investment Ltd, Director
14. CashLink Bangladesh Ltd, Director
3 Mr. Feroz Ahmed Director 1. AB Bank Limited

Chairman:
2. AB Internaltonal Finance Ltd., Hong Kong,
Nomnated by AB Bank Ltd.
3. Hexagaon Chemical Complex Ltd.
4. Elite Paint & Chemical Ind. Ltd.
Managing Director:
5. Elite International Ltd.
6. FDN Energy Ltd.
7. Ahemd Securities Services Ltd.
Managing Partner:
8. Universal Shipping & Trawling Company
Shareholder:
9. Bangladesh Generel Insurance Company Ltd.
10. Holy Crescent Hospital
4 Mr. M. A. Awal Director 1. AB Bank Limited

2. AB International Finance Ltd., Hong Kong, Director,
nominated by AB Bank Ltd.
5 Mr. Faheemul Huq, Director 1. AB Bank Limited
Barrister-at-Law 2. Amana Bank PLC, Colombo, SriLanka, nominated by
AB Bank Limited.
123
Name of the Directors and entities in which had interest
Name of Firms / Companies in which interested
Sl.
Name Status as pro-proprietor/partner/director/managing
No.
agent/guarantor/employees etc.
6 Mr. Syed Afzal Hasan Director 1. AB Bank Limited

Uddin, Barrister-at-Law 2. AB Exchange (UK) Ltd, Director, nominated by AB
Bank Ltd.
3. Syed Ishtiaq Ahmed & Associates, Partner
4. Square Textiles Ltd, Independent Director
5. Color City Ltd, Independent Director
6. Managewell Media Ltd, Nominee Director
7. Forward Air Avation Ltd, Nominee Director
8. Managewell Holdings Ltd.
9. Managewell Investment Ltd.
10. Managewell Service Ltd.
7 Mr. Shishir Ranjan Independent 1. S .R. Bose & Co., Chartered Accountants, Proprietor
Bose, FCA Director 2. Therapeutics (Bangladesh) Ltd, Independent Director
Nominated by AB Bank Limited in the Board of :
3. AB Securities Ltd, Indepandent Director
4. Cashlink Bangladesh Ltd, Independent Director
5. AB Exchange (UK) Ltd, Independent Director
6. AB International Finance Limited (ABIFL), Hong
Kong
8 Mr. Md. Mesbahul Director 1. AB Bank Limited
Hoque 2. Therapeutics (BD) Ltd, Managing Director
3. GlaxoSmithKline Bangladesh Limited, Independent
Director
9 Prof. Dr. M. Imtiaz Independent 1. AB Investment Ltd, Indepandant Director,

Hossain Director nominated by AB Bank Ltd.
2. Professor, Bangladesh University of Engineering and
Technology (BUET)
10 Mr. Syed Golam Kibria Director 1. AB Bank Limited

2. North East University Bangladesh, Telihaor,
Sheikhghat, Sylhet-3100 – Director Finance &
Registrar (Acting)
11 Mr. Asish Baran Sarkar Director 1. AB Bank Limited

2. Pacific Bangladesh Telecom Ltd
12 Mr. Shamim Ahmed President & 1. AB Securities Ltd, Director
Chaudhury Managing 2. Cashlink Bangladesh Ltd, Director, nominated by AB
Director Bank Ltd
124

AB Bank LTD 2016

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AB Bank Limited

AB Bank Limited and its Subsidiaries

LIABILITIES AND CAPITAL (142,839,772)

Total 73,478,914,136 68,649,158,866

-Sd- -Sd- -Sd- -Sd-

-Sd- -Sd- -Sd- -Sd-

Cash Flows from Financing Activities

-Sd- -Sd- -Sd- -Sd-

-Sd- -Sd- -Sd- -Sd-

Total Liabilities 291,721,430,830 262,218,029,375

Total 73,478,914,136 68,649,158,866

The annexed notes form an integral part of these financial statements.

-Sd- -Sd- -Sd- -Sd-

Earnings Per Share (EPS) 39 1.94 1.89

The annexed notes form an integral part of these financial statements.

-Sd- -Sd- -Sd- -Sd-

The annexed notes form an integral part of these financial statements.

-Sd- -Sd- -Sd- -Sd-

-Sd- -Sd- -Sd- -Sd-

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1.1 The Bank and its activities

Mumbai Branch, India

Islami Banking Branch

Amana Bank Limited as Associates

AB Investment Limited (ABIL)

AB Securities Limited (ABSL)

AB International Finance Limited (ABIFL)

AB Exchange (UK) Limited

Arab Bangladesh Bank Foundation (ABBF)

Use of estimates and judgments

Foreign currency transactions

Foreign currency translation

Translation gain and losses

Statement of changes in equity

Cash and cash equivalents

Loans and advances

Consumer Financing Loans to Off Balance

The valuation methods of investment used are:

Held to Maturity (HTM)

Held for Trading (HFT)

Value of investments has been enumerated as follows:

Investment class Initial recognition Measurement after initial Recording of changes

Investment in listed securities

Investment in unlisted securities

Investment in unlisted securities is reported at cost under cost method.

Category of asset Rate of depreciation

Deposits and other accounts

Provision for taxation

Retirement benefits to the employees

Profit on investment (Islami Banking Branch)

Dividend income on shares

Interest paid on deposits and borrowings

Profit paid on deposits (Islami Banking Branch)

Other operating expenses

1.6 Reconciliation of books of account

1.7 Earnings Per Share (EPS)

Diluted earnings per share

1.8 Off-balance sheet items

1.9 Memorandum items