Corporate Social Responsibility

1. Term Paper
On
Impact of Corporate Social Responsibility on
firm’s financial performance: Dutch-Bangla Bank
Ltd.
Submitted To:
Meharun Nahar
Lecturer
Department of Finance & Banking
Dhaka Commerce College
Submitted By:
Abdullah-Al-Mamun
Reg.: 12132206713
Session: 2012-2013
BBA (Hon's), 2nd
Year
Department of Finance & Banking
Dhaka Commerce College
Date of Submission: 05 January, 2016
National University
Letter of Transmittal

2. 2
Date:05 January, 2016
To
Meharun Nahar
Lecturer
Department of Finance & Banking
Dhaka Commerce College
Subject: Submission of the Term Paper.
Dear Sir
Here I present my Term Paper Impact of Corporate Social Responsibility on firm’s
financial performance: Dutch-Bangla Bank Ltd., with due gratitude and appreciation.
As per partial fulfillment of the requirements for the BBA (Hon's) Degree, I have
completed the Term paper.
The term paper program has given me the opportunity to learn about different aspects of
a reputed organization. Before facing the real business world, I have gathered a pre idea
about the organization culture.
To prepare this report both the primary and secondary data have been used. A survey was
conducted for getting real information from the customers who have already taken the
Institute However; I have gathered all the facts that I could within this short period &
have tried my best to present them clearly and logically. Despite of limitations, I
sincerely hope that my report will meet the requirements that you set for me.
For further query please do contact with me. Yours faithfully
...............................
Abdullah-Al-Mamun
Reg.: 12132206713
Session: 2012-2013
BBA (Hon's), 2nd
Year
Department of Finance & Banking
Dhaka Commerce College

3. Acknowledgement
At first I would like to express my gratitude to the almighty Allah. It is the part and
parcel of BBA program to submit a Term Paper. As a student of BBA (Hon’s) 2nd
year
program of Dhaka Commerce College. I have to submit a Term Paper report. My Term
Paper topic is 'Impact of Corporate Social Responsibility on firm’s financial
performance: Dutch-Bangla Bank Ltd.. I have completed this Term Paper with the
supervision of Meharun Nahar, Lecturer & Mohammad Ibrahim Khalil, Associate
Professor, Department of Finance & Banking, Dhaka Commerce College. His cordial
assistants and advice influenced me much to complete this task.
I would like to express my sincere gratitude to all my teachers of Department of Finance
& Banking, Dhaka Commerce College, who have conveyed all the knowledge and.
necessary, information to makes enable to complete my Term Paper successfully and
provide me the opportunity to prove myself in the vigorously competitive modern area.
I would like to delivery my special thanks to all of my classmate and my entire well
wisher for their inspiration without which I would not he enable to complete this Term
Paper report.

4. 4
Students Declaration
I do hereby declare that this report titled ‘Impact of Corporate Social Responsibility on
firm’s financial performance: Dutch-Bangla Bank Ltd’ Has been written by me
during year of 2016 under the valuable guidance of Meharun Nahar. Department of
Finance & Banking, Dhaka Commerce College in fulfillment of the requirements for the
award of BBA (Hon’s), 2nd
Year .1 am also declaring that I have not submitted this report
for any degree, diploma and title recognition before.
................................
Abdullah-Al-Mamun
Reg.: 12132206713
Session: 2012-2013
BBA (Hon's), 2nd
Year
Department of Finance & Banking
Dhaka Commerce College

5. Certificate of Supervisor
This is to certify that Abdullah-Al-Mamun a student of BBA (Hon's), 2nd
Year,
successfully completed his term paper Program on Impact of Corporate Social
Responsibility on firm’s financial performance: Dutch-Bangla Bank Ltd., under my
supervision as the partial fulfillment for the award of BBA degree. He has done his job
according to my supervision and guidance. He has tried his best to do this successfully. I
think his program will help him hi the future to build up his career. I wish his success and
prosperity.
Meharun Nahar Mohammad Ibrahim Khalil
1st
Examiner 2nd
Examiner
Lecturer Associate Professor
Department of Finance & Banking Department of Finance & Banking
Dhaka Commerce College Dhaka Commerce College

6. 6
Executive Summary
The Topic of the report is “Corporate Social Responsibility- A Case Study on
Dutch-Bangla Bank Limited”. Through the study the general functions performed
in the management CSR program is identified and the performance of different
types of facilities based on some features were identified.
To sum-up the business case for CSR both critics of role of business in society
argument and supporters of a more market based approach arguments are
cross-checked. After discussion the business case for CSR this report starts with
the perception of Dutch-Bangla Bank Limited on Corporate Social Responsibility.
To provide greater benefit to the society the Board of Directors continued its
contribution amounting to 5.00% of Bank’s profit after charging loan loss
provision to Dutch-Bangla Bank Foundation (DBBF). Under this foundation the
CSR activities are performed and can broadly be categorized under two heads:
Continuous and Need Basis. Under Continuous program Concern for health,
Support and Improvement of Education and Poverty Alleviation are important.
The Need Basis program consists of Donation to several welfare organizations.
The major concern of Dutch-Bangla Bank Limited in CSR program is based on
Health and education sector. So far in total contribution on CSR 51% in
Education sector and 39% in Health sector. The total asset increased 1.81 times,
total revenue increased 1.81 times and total expense increased 1.69 times from
the year 2002 to the year 2005. On the other hand the increase in Contribution
to DBBF is 3.65 times (Tk 7.78 million in 2002 and Tk 36.2 million in 2005). Most
significant on this regard is that The Board of Directors is now considering to
perform only the Continuous program using the full 5.00% of profit under the
DBBF and managing funds from operations for the Need Basis program.
Some recommendations regarding SMEs and disclosure of Social-Responsibility
Policies are also included in this report. Before drawing any conclusion based on
this report it may be noted that the report was prepared based on different
publications and information collected from interviews and there may some lack
of data. But still the report may be useful for designing any further study to
evaluate the CSR program provided by the banks.

7. Table of Contents
1. Introduction 8-10
1.0 Introduction
1.1 Origin of the Report
1.2 Objectives of the Report
1.3 Methodology
1.4 Scope of the Report
1.5 Report Organization
1.6 Limitation of the Study
2. Overview of the Organization 11-16
2.1 Introduction
2.2 Background
2.3 Mission, Vision & objective of Dutch-Bangla Bank Limited
2.4 Company Milestone
2.5 SWOT Analysis of Dutch-Bangla Bank Limited
3. Theoretical Overview of the Bank 17-22
3.1 Corporate Social Responsibility
3.2 Development and Analysis
3.3 Other Perspectives
3. 4 Corporate Social Responsibility of Dutch-Bangla Bank Limited
4. Data Analysis 23-32
4.1 Performance Analysis
5 Finding Recommendation and Conclusion 33-35
5.1 Findings and Recommendations
5.2 Conclusion
Bibliography 36

8. 8
Chapter-1
Introduction
1.0 Introduction
Social responsibility is a concept well known in the corporate world and beyond that.
Business all over the world have practiced only profit making actions at past but not for
long as the enterprise started to develop complexities and wideness in size and actions so
was their reach getting bigger and bigger. As every person has his own social
responsibilities towards the society so does the business firms. The idea is that, the
business has social obligations and above and beyond making a profit is corporate social
responsibility. However, it is regretful that though internationally it is being practiced
widely, Bangladesh is still lagging behind. The difference between the world standard
and the practice in Bangladesh shows the lacking here and the scope for development.
1.1Origin of the Report
This on “Corporate Social Responsibility-A Case Study on Dutch-Bangla Bank Ltd.”
was initiated as part of' the Term Paper Program which is a BBA Degree requirement of
the Department of Business Administration. A 12-week Term Paper at the Dutch-Bangla
Bank Ltd, Kawran Bazar Branch, Dhaka preceded the preparation of the under the
supervision of Meharun Nahar, Department of Business Administration (DBA), and
was submitted to the Chairman, Term Paper Placement Committee, DBA.

9. 1.2 Objectives of the Report
There are two main objectives behind this. The Primary Objective of the study is to
fulfill the partial requirement of the BBA program. In the final semester of our BBA
program one Term Paper is to be submitted, which is bearing some credit of our BBA
program. A presentation will be held on this.
The secondary objectives of the study are to provide
i. To demonstrate the experience of the twelve week Term Paper program at
DBBL.
ii. To get a broader overview of Corporate Social Responsibility.
iii. Importance of CSR from an organization perspective
iv. To identify the activities serve by Dutch-bangle bank to perform the CSR
1.3 Methodology:
In order to make the study more meaningful and presentable, two sources of data and
information will be used widely. The sources of data are
The Primary Sources:
 Face-to-face conversation with the respective officials.
 Informal conversation as well as a direct interview with officials of DBBF.
 Practical work experience on different desks of the unit.
 Relevant file study as provided by the officers concerned.
The Secondary Sources:
 Annual and periodical publications
 Different publications, Newspapers and Journals.
 The internet will also be used as a theoretical source of information
The activities performed under Corporate Social Responsibility were identified through
informal interviews with the officials and from different publications.

10. 10
1.4 Scope of the :
The scope of the is limited under two major heads Continuous and need basis. Present
practices of the bank are concerned with Health and education sector in continuous
program. On the other hand, the need base donations and subscriptions are extended to
those areas, where it is needed most. Poverty alleviation, another category of continuous
program was less highlighted; as this program is of less concern of the bank. So the total
activities perform under the head Corporate Social Responsibility are mainly concerned
with Health sector, support and improvement of education and donations to those areas
where it is needed most.
1.5 Report of Organization
The consists of mainly two broad parts, The Organization part and The Project part. The
Organization part includes a description of Dutch-Bangla Bank Limited, its background,
history, financial performance, description of the facilities provided by the Bank and
SWOT analysis of the organization.
The Project part consists of different activities performed by Dutch-Bangla Bank under
the head Corporate Social Responsibility and summarizing the total contribution to
perform those activities.
1.6 Limitations of the Study:
The following limitations are apparent in the —
 Limitation of this is, for security reason Bank’s policy of not to disclose all data
and information.
 The bank’s employees were very much busy in banking hour. So it was very
difficult to have them for equitable long time.
 As this is based on information only, it does not include any research. So, any lack of
adequacy or authenticity of may hamper the contents of the . Different sources of data has
been using in this, which may hinder the harmony of the writing and may reflect biasness.

11. Chapter-2
Overview of the Bank
2. Overview of the Organization
2.1 Introduction:
All over the world the dimension of Banking has been changing rapidly due to
Deregulation, Technological innovation and Globalization. Banking in Bangladesh has to
keep pace with the global change. Now Banks must compete both as local institution and
foreign one. The declaration of the Government's bold and far-sighted decisions to allow
banks in the private sectors to play its due role in the economy of Bangladesh, have
started the process of creating new and dynamic financial institutions. One such
institution is the Dutch-Bangla Bank Ltd. (DBBL).
2.2 Background:
Dutch-Bangla Bank Limited is a Bangladesh –Netherlands joint venture scheduled
commercial bank established under the Companies Act-1991 and incorporated as a public
limited company under the Companies Act-1994 in Bangladesh. The Bank is listed with
Dhaka Stock Exchange limited and Chittagong Stock Exchange Limited.
The emergence of Dutch-Bangla Bank Ltd. is an important event in the private banking
arena of Bangladesh. The Netherlands Development Finance Company (FMO) of the
Netherlands is the international sponsor of the Bank. The FMO is the Dutch development
bank of the Netherlands specialized in the financing of private enterprises in Asia, Africa,
Latin America and Eastern Europe.
Dutch-Bangla Bank Ltd. came into existence with joint venture as a public limited
company incorporated in Bangladesh on June 26, 1995 with the primary objectives to
carry on all kinds of banking business in and outside of Bangladesh. DBBL has started its
business with foreign bank. DBBL commenced its business as scheduled bank with effect
from July 04, 1995 with one branch-Motijheel Branch, Dhaka, with a motto to grow as a
leader in the banking arena of Bangladesh through better counseling and effect service to
clients and thus to revitalize the economy of the country. The bank is having an
authorized capital of Tk. 1000 million and paid up capital Tk.700 million sponsored by
22 members of board of directors.

12. 12
In addition to its banking activities, Dutch-Bangla Bank Limited takes part in different
national activities like promoting sports, culture, social awareness, etc. Participation in
these activities as sponsors is part of its business development policy.
2.3. Mission, Vision and Objective of Dutch-Bangla Bank Limited
 Mission
Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a
commitment to social responsibility. "Profits alone" do not hold a central focus in the
Bank's operation; because "man does not live by bread and butter alone".
 Vision
Dutch-Bangla Bank dreams of better Bangladesh, where arts and letters, sports and
athletics, music and entertainment, science and education, health and hygiene, clean and
pollution free environment and above all a society based on morality and ethics make all
our lives worth living. DBBL's essence and ethos rest on a cosmos of creativity and the
marvel-magic of a charmed life that abounds with spirit of life and adventures that
contributes towards human development.
 Core Objectives
Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer
needs and satisfaction and to become their first choice in banking. Taking cue from its
pool esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in
banking that upholds and epitomizes its vaunted marques "Your Trusted Partner".
2.4 Company Milestones
Particulars Date
 Memorandum and Articles of Association signed by the sponsors: June 26,1995
 Incorporation of the Company : July 04,1995
 Commencement of Business : July 04,1995
 License obtained from Bangladesh Bank : July 23,1995
 License obtained from opening first Branch(local Office) : December 21,1995
 Opening of the first Branch of the Bank (Local Office) : June 03,1996
 Floating of Initial Public Offering(IPO) of shares

13.  Publication of Prospectus : December 24, 2000
 Subscription Opened : January 15, 2001
 Subscription Closed : January 24, 2001
 Lottery held : February 24, 2001
 Allotment of Shares : February 28, 2001
 First trading of shares in Dhaka Stock Exchange Limited : March 21,2001
 Formation of Dutch Bangla Bank Foundation : June 03,2001
 First trading of shares in Chittagong Stock Exchange Limited : June 06,2001
 First dividend declared (at the 5th
AGM) : February 20,2001
 Signing Agreement with Vendors for Truly Online Banking : September 30,2011
 Launching of DBBL Industrial Bond : December 03,2011
 Launching of Truly On-Line Banking Project : December 30,3004
2.5 SWOT Analysis of Dutch-Bangla Bank Limited
SWOT Analysis
SWOT analysis is a widely used technique through which managers create a quick
overview of a company’s strategic situation. SWOT stands for a company’s internal
Strength & Weaknesses and its environmental Opportunities & Threats.. It is based on
the assumption that an effective strategy derives firm a sound “fit” between a firm’s
internal resources (strengths and weaknesses) and its external situation( Opportunities
and Threats). A good fit maximizes firm’s strengths and opportunities and minimizes its
weaknesses and Threats. The Dutch-Bangla Bank’s SWOT analysis matrix can be as
follows;

14. 14
Figure 5: SWOT Analysis Diagram
Strength:
 DBBL’S Capital Adequacy Ratio (CAR) as on December 31, 2013 stood at
10.16% as against Bangladesh Bank’s minimum requirement of 9.00%.
 DBBL’S Regulatory capital as on December 31, 2013 stood at TK. 190.93 crore.
 DBBL maintains general provision on unclassified Loans and Advances @ 2.86%
instead of minimum requirement of 1 % as set forth by Bangladesh Bank’s
regulatory provision.
 DBBL provides 28% of its total advances as Term Loan and a substantial amount
as working capital loan to support industrial development and boost up export
earnings of the country.
 DBBL distributes up to 2.50% of its annual profit among its employees as profit
sharing for motivating and bringing sense of belongingness.
 DBBL Directors and/or their family members do not maintain any sort of bank
account with DBBL, since its inception.
 DBBL Directors do not avail of any facility or even any fee/remuneration from
the Bank for attending Meetings of the Board/ Executive Committee/ Audit
Committee.
 DBBL is providing free internet banking service.
Weaknesses
Strengths
Threats
DBBL
Opportunities

15.  DBBL gives Daily interest on the deposits.
 DBBL offers free DBBL debit card for every account
 DBBL has a large number of POS
Weakness:
 DBBL does not have sufficient number of branches. Since its establishment it has
only 32 branches, but in the last ten years it should had more branches all over the
country.
 DBBL gives waiver to pay order, DD, charges for their customers. This might
bring more and more customers, but DBBL are also losing a lot of money.
 DBBL does not have moderate loan programs to compete with the current
banking competitors (for example; car-loan, home-loan, personal loan, education
loan etc.).
 DBBL’s interest rate for the savings account and fixed deposit scheme is not
sufficient.
 Lack of initiative to develop and expand new product.
 Lack of enthusiastic scheme for export & import, loans & advances.
 Lack of medium and short-term loan.
 Not to ensure Retail Banking.
Opportunities:
 DBBL has a large and possibly the largest ATM network in the country
 DBBL can diversify its operation to the insurance business and in other areas.
 DBBL can introduce Tele-banking.
 DBBL can introduce more practical investment
 Increasing number of population
 Restrictions of Bangladesh Bank
Threats:
 The emergence of multinational banks and their rapid expansion becomes a threat
to DBBL.

16. 16
 Frequent changes of banking rules by the Central Bank
 Market pressure for lowering of lending rate
 Diversified services offered by FCBs and other PCBS.
Future Plan of Dutch-Bangla Bank Limited 2014:
The Strategic direction for the Bank has been clearly identified and laid down in the
corporate plan of the Bank and its annual budget. The corporate plan and the budget of
the Bank, spells out the goals and objectives for each business unit of the Bank. The
annual budget has contributed not only in building up a target driven culture in the bank
but also helps to bring out the best among different units for which the bank have in place
a wide array of incentive benefits for the achievers.
The Budget 2014 envisages a challenging growth of 56% in terms of operating profit
from that of previous year. Deposits and loans are projected to increase by 48% and 44%
respectively. Import and expert businesses ate expected to rise by 62% and 66%
respectively. The Bank is also contemplating to introduce a number of new products,
notable among which is the launching of widely accepted credit and debit cards of Visa
and Master Card brand in addition to DBBL Nexus debit cards now already in the market
and gaining momentum.

17. Chapter-3
Theoretical Overview of the Bank
3.1 Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a concept that suggests that commercial
corporations have a duty of care to all of their stakeholders in all aspects of their business
operations. A company’s stakeholders are all those who are influenced by, or can
influence, a business’s decisions and actions. These can include not limited to employees,
customers, suppliers, community organizations, subsidiaries and affiliates, joint venture,
local neighborhoods, investors, community, individual, group and shareholders etc.
CSR requires that businesses account for and measure the actual or potential economic,
social and environmental impacts of their decisions. In some cases the application of a
strong CSR policy by a business can involve actions being taken which exceed the mere
compliance with minimum legal requirements. This can sometimes give a company a
competitive/reputational advantage by demonstrating that they have the interests of
society at large as an integral part of their policy making. CSR goes beyond simple
philanthropy and is more about corporate behavior than it is about a company's charitable
donation budget.
CSR is closely linked with the principles of Sustainable Development which argue that
enterprises should be obliged to make decisions based not only on financial/economic
factors (e.g. Profits, Return on Investment, dividend payments etc.) but also on the social,
environmental and other consequences of their activities.
3.2 Development and Analysis
Today’s heightened interest in the role of businesses in society has been promoted by
increased sensitivity to awareness of environmental and ethical issues. Issues like
environmental damage, improper treatment of workers, and faulty production leading to
customers inconvenience or danger, are highlighted in the media. In some countries
government regulation regarding environmental and social issues has increased, and
standards and laws are also often set at a supranational level (e.g., by the European

18. 18
Union). Some investors and investment fund managers have begun to take account of a
corporation’s CSR policy in making investment decisions (so called "ethical investing").
Some consumers have become increasingly sensitive to the CSR performance of the
companies from which they buy their goods and services. These trends have contributed
to the pressure on companies to operate in an economically, socially and environmentally
sustainable way.
It is important to distinguish CSR from charitable donations and "good works"
Corporations have often, in the past, spent money on community projects, the endowment
of scholarships, and the establishment of foundations. They have also often encouraged
their employees to volunteer to take part in community work and thereby create goodwill
in the community which will directly enhance the reputation of the company and
strengthen its brand. CSR goes beyond charity and requires that a responsible company
take into full account their impact on all stakeholders and on the environment when
making decisions. This requires them to balance the needs of all stakeholders with their
need to make a profit and reward their shareholders adequately.
A widely quoted definition by the World Business Council for Sustainable Development
states that "Corporate social responsibility is the continuing commitment by business to
behave ethically and contribute to economic development while improving the quality of
life of the workforce and their families as well as of the local community and society at
large." This holistic approach to business regards organizations as being full partners in
their communities, rather than seeing them more narrowly as being primarily in business
to make profits and serve the needs of their shareholders.
Auditing
To demonstrate good business citizenship, firms can compliance with a number of CSR
standards, including:
 Accountability’s AA1000 standard, based on John Elkington's triple bottom line
(3BL)
 Global Initiative's Sustainability Guidelines

19.  Social Accountability International's SA8000 standard
 The ISO 14000 environmental management standard
Some nations require CSR though agreement on meaningful measurements of social and
environmental performance is difficult. Many companies now produce externally audited
annual s that cover Sustainable Development and CSR issues, but the s vary widely in
format, style, and evaluation methodology (even within the same industry). Critics
dismiss these s as lip service, a charge that carries some weight given notable examples:
Enron's yearly "Corporate Responsibility Annual " and tobacco corporations' social s.
The Business Case for CSR
The benefits of CSR to businesses vary depending on the nature of the enterprise, and are
difficult to quantify, though there is a large body of literature exhorting business to adopt
measures beyond financial ones. Orlizty, Schmidt, and Rynes found a correlation
between social/environmental performance and financial performance. However,
businesses may not be looking at short-run financial returns when developing their CSR
strategy.
The definition of CSR used within business can vary from the strict "stakeholder
impacts" definition used in this and will often include charitable efforts and
volunteering. CSR may be based within the human resources, business development or
PR departments of a company, or may be given a separate unit ing to the CEO or in
some cases directly to the board. Progressive companies do not have a CSR department
or function at al; the concept is so ingrained in the company itself that employees
implement the company's values directly.
The business case for CSR within a company will likely rest on one or more of these
arguments:

20. 20
 Human Resources
Corporate Social Responsibility can be an important aid to recruitment and
retention, particularly within the competitive graduate market. Potential recruits
are increasingly likely to ask about a firm's CSR policy during an interview and
having a comprehensive policy can give an advantage. CSR can also help to build
a "feel good" atmosphere among existing staff, particularly when they can
become involved through payroll giving, fundraising activities or community
volunteering.
 Risk Management
Managing risk is a central part of many corporate strategies. Reputations that take
decades to build up can be ruined in hours through incidents such as corruption
scandals or environmental accidents. These events can also draw unwanted
attention from regulators, courts, governments and media. Building a genuine
culture of 'doing the right thing' within a corporation can offset these risks.
 Brand Differentiation
In crowded marketplaces companies strive for 'X Factors' which can separate
them from the competition in the minds of consumers. Several major brands, such
as The Co-operative Group and The Body Shop are built on ethical values.
Business service organizations can benefit too from building a reputation for
integrity and best practice.
Those operating away from their home country can make sure they stay welcome
by being good corporate citizens with respect to labor standards and impacts on
the environment.
3.3 Other Perspectives
Some would argue that it is self-evidently “good” that businesses should seek to
minimize any negative social and environmental impact resulting from their economic

21. activity. It can also be beneficial for a company’s reputation to publicize (for example)
any environmentally beneficial business activities. A company which develops new
engine technology to reduce fuel consumption will be able (if it chooses) to promote its
CSR credentials as well as increase profits.
Some commentators are cynical about the true level of commitment of corporations to
ideas like CSR and Sustainable Development, and their actual motivations for responsible
behavior. (Corporations that create the appearance of acting responsibly just for its public
relations value are said to be "green washing.")
Such commentators also say, citing Friedman's dictum, that the idea of an “ethical
company” is an oxymoron, since the corporation is by its nature compelled to maximize
its own interest, whatever the external price. Corporate executives and employees in turn
have strong incentives to internalize the corporation's statutory obligations to maximize
profits, sometimes to the extent that they abdicate their individual moral and ethical
obligations as human beings. This tendency is, of course, encouraged by the desire to
keep one's job, and by a system that judges and rewards performance strictly by bottom-
line returns. The results of this tendency were clearly seen in the many corporate scandals
of the late twentieth and early twenty-first centuries.
So the CSR movement may perhaps be understood as an attempt not so much to regulate
the activities of corporations per se, as to remind the people who constitute these
corporations that they nonetheless have other responsibilities beyond the corporate ones.
3. 4 Corporate Social Responsibility of Dutch-Bangla Bank Limited
It is important that citizens of a society enjoy the full benefits that society offers. A
society, in turn, flourishes when its citizen can contribute their fullest potential. The well-
being of individuals is jeopardized when normal developmental processes are interrupted
by personal crisis, poverty, unemployment, poor health and inadequate education. Dutch-
Bangla Bank Limited (DBBL) addresses social concerns that threaten the structure of
society and redress social conditions that adversely affect the well-being of people and

22. 22
society. DBBL practice thus encompass the professional activities of helping individuals,
families, groups, organizations, and communities to enhance or restore their capacity for
optimal social functioning and of creating societal conditions favorable to this goal,
Dutch-Bangla Bank Foundation (DBBF) was established on 3rd June, 2001 to carry out
its activities under the overall supervision and funding from the bank to perform
humanitarian works like rehabilitation of the destitute and neglected portion of the
society especially grassroots level poor in right track
The ethos of DBBL for pursuing its activities in social arena has got further momentum
with people’s enthusiasm and support. Dutch-Bangla Bank Foundation (DBBF) is
consistently pursuing its objective of being active in those social areas where it is needed
most. The Dutch-Bangla Bank Foundation carries out diverse social and philanthropic
activities in the field of education, health, conservation of nature, creation of social
awareness, rehabilitation of distressed people and such other programs to redress human
sufferings. It also promotes different socio-cultural and sports activities. The Board of
Directors in order to discharge its corporate social responsibilities in a greater perspective
continued its contribution amounting to 5.00% of Bank's profit after charging loan loss
provision to Dutch-Bangla Bank Foundation (DBBF).
The CSR activities of the bank can broadly be categorized under two heads: Continuous
and Need basis. The continuous programs are mostly of permanent nature, which the
foundation contemplates to carry out years together.

23. Chapter-4
Data Analysis
4.1 Performance Analysis:
FINANCIAL RATIO OF DBBL can be shown from different angles with the help of
some charts and diagrams. Which are shown below.
Deposit:
Year 2010 2011 2012 2013 2014
Figure(million) 42110.2 51575.7 67788.5 83244.8 100711.0
As per the above table and bar diagram, Deposits showed an increasing trend during the
study period. Bank’s total deposit as on 31.12.2014 stood at Tk. 100711.0 million
registering 82.66% growth over the last year’s figure of Tk.83244.8 million.
0
50000
100000
150000
2010 2011 2012 2013 2014
Deposit(million)
Deposit(…
Sectoral Distibution of Deposit 2014
Current Deposit 20.8%
Savings Deposit 37.2%
Short Notice Deposit
9.0%

24. 24
The above chart shows sectoral distribution of Deposits which were 20.8% Current
Deposit, 37.2% Savings Deposit, 9% Short Notice Deposit and 33% Fixed Deposit
Investment:
Year 2010 2011 2012 2013 2014
Figure(million)
5909.3 5322.3 9685.9 11001.6 10897.7
The above table and diagram showed increasing trend of investment during 2012, 2013&
2014.But it went down in 2011 compared to 2010 investment. As on 31st
December 2014
Bank’s investment stood at Tk. 10897.7(million) recording a decrease of 0.99% over last
year’s Tk. 11001.6( million). Generally, Bank invests its fund in Government Treasury
Bill in order to maintain statutory liquidity requirement (SLR) besides yielding good rate
of return.
Foreign Exchange Business:
The following table and bar diagram shows the bank’s import & export business in
BDT million.
Import
Year 2010 2011 2012 2013 2014
Figure(million) 35667.7 43999.4 53088.7 87662.6 83434.4
0
5000
10000
15000
Investment(million)
Investme…

25. Export
Year 2010 2011 2012 2013 2014
Figure(million) 34060.3 40083.1 41162.5 73499.5 92412.4
The above table and bar diagram show an increasing trend in import business with a fall
in 2013.
From the above table and bar diagram it can be inferred that the export business of DBBL
showed an increasing trend .As usual, Bank’s Foreign Exchange Business contributed
largely to its profitability in 2013 also. The Management of the Bank is careful in
catering to the Banking needs of the exporters and importers and as such always tries to
depute competent officers having required expertise in the field. As a result, Bank’s
foreign trade witnessed impressive development during last few years.
During 2014, the Bank handled export and import business for Tk.83434.4 million and
Tk. 92412.4 million respectively.
0
20000
40000
60000
80000
100000
20102011201220132014
Import(million)
Import(…
0
20000
40000
60000
80000
100000
2010 2011 2012 2013 2014
Export(million)
Export(mil…

26. 26
Operational Profit:
The following table shows the banks operational profit during the study period.
Year 2010 2011 2012 2013 2014
Figure(million)
1022.3 1776.1 2154.4 3739.1 4547.7
Operational profit of the bank increased gradually from 2010-2014 and reached a peak
point in 2014.
Loans and Advances:
Under its declared credit policy the bank operates through a number of conventional and
various credit schemes including Small Business Loan, Housing Loan and Festival Loan
which help the bank to play effectively in the market and to ensure steady earnings for
the Bank. Banks Leasing Unit and Syndicated Loan have also contributed to the income
during the year as before. The bank’s Agri-credit Scheme sustained its viability by
contributing to the profitability.
During the year 2014 total Advance stood at TK. 79660.7 million. Loan and advance
also showed an upward trend during the study period as shown by the following table and
bar diagram:
0
1000
2000
3000
4000
5000
2010 2011 2012 2013 2014
Operational Profit(million)
Operational…

27. Year 2010 2011 2012 20010 2014
Figure(million)
29403.1 41698.3 48411.0 67657.7 79660.7
4.2 Financial Analysis with Some Ratios:
Financial analysis is so much essential for each and every business institution as well as
for the Banking institutions to assess their past financial performance and to identify the
sources where the necessary actions are needed in order to perform better in future and to
meet the future challenge by taking effective business strategy. Using the information of
some financial statements such as Balance Sheet, Profit & Loss Account, Statement of
Cash Flows etc, the ratio analysis of DBBL is presented below:
Liquidity Ratio
It measures a firm's ability to meet up or satisfy its short term obligations, as they become
due. The commonly used liquidity ratios are:
 Current Ratio
Current Ratio measures a firm’s liquidity by measuring the portion of its current assets
relative to its current liabilities and the higher the ratio, the higher the liquidity of the
firm. It shows the level of current assets that a particular firm has against per Taka of
current liabilities of that firm. The Standard is 2:1. So the equation becomes:
0
50000
100000
2010 2011 2012 2013 2014
Loans and Advances (2010-
2014)Figure in million

28. 28
“Current Ratio= Current Assets/Current Liabilities”
Year 2010 2011 2012 2013 2014
Current Ratio 1.04 1.05 1.05 1.07 1.07
Interpretation
The graph shows that the Bank’s CR increased but in an irregular way. So, liquidity
position of the Bank is more or less satisfactory.
Profitability Ratio
These ratios help us to evaluate the firm's profits with respect to operating income, assets,
or equity. Ratios are:
 Return on Assets (ROA)
ROA measures the overall effectiveness of management in generating profit with its
available assets. The ratio is calculated as follows:
“Return on Assets (ROA) = Net Profit after Tax/ Total Asset”
Year 2010 2011 2012 2013 2014
Return on Assets 1.0 1.5 1.6 2.2 1.9
1.02
1.03
1.04
1.05
1.06
1.07
1.08
2010 2011 2012 2013 2014
Current Ratio
Serie…

29. Interpretation
This figure shows that ROA of DBBL is fluctuating and the Bank generated maximum
return in 2013(2.20%) and minimum in 2010(1%). But it shows a slow gradual increase
in return on assets.
 Return on Equity(ROE)
ROE measures the return earned by the funds invested by the common stockholders. The
ratio is calculated as follows:
“Return on Equity (ROE) = Net Profit After Tax/Shareholder’s Equity”
Year 2010 2011 2012 2013 2014
ROE 24.0 29.9 30.3 35.3 27.0
0.00%
1.00%
2.00%
3.00%
2010 2011 2012 2013 2014
Return on Assets(ROA)
Return on…
0.00%
10.00%
20.00%
30.00%
40.00%
2010 2011 2012 2013 2014
Return on Equity(ROE)
Return on…

30. 30
Interpretation
This figure shows that ROE of DBBL is fluctuating and the Bank generated maximum
Return on Equity (ROE) in 2013(35.30%) and minimum in 2010 (24%). Return on equity
showed an increasing trend from 2010-2013 but came down in 2014 (27%).
Debt Ratio
The ratio analyzes a firm’s debt position, which indicates the amount of other people’s
money being used in the bank to generate profits by measuring the portion of total assets
financed by the firm’s creditors. The ratio is calculated as follows:
“Debt Ratio=Total Liabilities/Total Assets”
Year 2010 2011 2012 2013 2014
Debt Ratio 40.1 45.0 34.8 20.2 15.1
Interpretation:
This figure shows that DBBL has financed on an average 31.04% of its total assets with
debt in every year. The Bank’s lowest Debt position was in 2014 (15.10%). Dept Ratio
was 40.1% in 2010 and rose to 45% in 2011. But the same declined in subsequent there
years.
Market Ratios
Market ratios reflect a particular firm's market value (which is value of the firm to the
investors), as measured by its shares current market price to certain accounting values
and the ratios are:
0.00%
20.00%
40.00%
60.00%
2010 2011 2012 2013 2014
Debt Ratio
Debt…

31. EPS:
 "Earnings per share Ratio = Net profit/No. of Share"
Year 2010 2011 2012 2013 2014
EPS (10 tk.) 237.4 54.8 56.9 10.0 10.8
Interpretation:
The above and bar diagram shows EPS for 5 years under study.
The banks earnings per share were tk.237.4, tk.54.8, tk.56.9, tk.10.0. Tk.10.8 respectively
during the study period 2010-2014. The graph represents that the EPS increased in 2010
but fell in subsequent years the lowest EPS was recorded in 2013.
 Price-Earnings (P/E) Ratio
It measures the amount that the investors are willing to pay for per taka of firm's return. It
is calculated as follows:
"P/E Ratio = Market Price of Per Share/Earnings per Share"
Year 2010 2011 2012 2013 2014
P/E Ratio 28.5 78.7 34.42 22.9 15.0
0
50
100
150
200
250
2010 2011 2012 2013 2014
Earnings per share(10tk)
Earnings per…
0
20
40
60
80
100
2010 2011 2012 2013 2014
Price Earnings(P/E) Ratio
Price…

32. 32
Interpretation
Price Earnings ratio of DBBL ranged between 28.5 to 15.0 during the study period. The
highest price earnings ratio was registered in 2011 due to share market boom. In the
(years it showed more or less down ward trend. The graph represents that the P/E
increase) in 2011 but fell in 2012, 2013 & 2014.

33. Chapter-5
Finding Recommendation and Conclusion
5.1 Findings and Recommendations
Recommendation to Disclosure of Social-Responsibility Policies
 Companies should be required as part of their listing requirement to disclose in
their annual or annually in information circulars their approach to corporate
social responsibly, assess the extent to which these practices conform to “CSR
Guidelines” set out in listing rules and explain any discrepancies. These CSR
Guidelines should be developed by the responsible governments with reference to
established indexes of corporate social responsibility.
 Since privately held companies ought also to be encouraged to meet corporate
social-responsibility standards, corporate laws should be amended to require
annual disclosures for private companies of a certain size, as determined by a size
threshold that exempts small and medium-sized businesses while including large
private firms and large wholly owned subsidiaries of foreign multinationals.
 Large public and private companies should be obliged, as part of their corporate-
law requirements, to produce annual “social audits.” Given the undeveloped
nature of social auditing at this point, only the very largest of companies should
be obliged to undertake these audits, though others should be encouraged to
complete them on a voluntary basis.
 Governments must work diligently to ensure that existing corporate, securities,
consumer, health and safety, criminal, environmental, food, water, and other rules
are properly enforced.
 The Government should actively promote the development of a “social clause” in
trade agreements requiring adherence to minimum international human rights
principles, including core labor rights, and incorporating consumer protection and
environmental standards as a prerequisite to membership in trade organizations
such as the World Trade Organization.

34. 34
 Companies should have governance structures facilitating the development of a
corporate culture supportive of corporate social responsibility. In particular, a
committee of the board of directors should be assigned responsibility for
corporate social-responsibility matters. A senior executive should be appointed
corporate social-responsibility ombudsperson and have direct access to the chair
of that committee.
 Courses focusing on corporate social responsibility should be developed at all
business schools and should be mandatory for all business and business-related
degrees (e.g. management, accounting, etc.). There is a need for business students
to see the behavior of corporations and the making of profits within a moral and
ethical context. CSR courses should have a practical, vocationally oriented focus.
 Further, instructors in other business and business related courses should be
encouraged to weave ethical themes into each of their courses, insuring that the
social-responsibility issues that have become commonplace in many leading
companies become equally so in business teaching.
 In order to ensure that public institutions and public policy continue to reflect a
broad public interest, governments should review their guidelines on government
ethics, lobbying, and the participation of company and industry groups at
domestic and international meetings and negotiations to guard against both the
appearance and existence of improper influence.

35. 5.2 Conclusion
The banking sector of any country plays a vital role in the economic activities. The
banking sector has been transferred from labor intensive to capital intensive; it requires a
huge commitment of capital equipment in order to automate the production and delivery
of financial services.
Now-a-day commercial corporations have a duty of care to all of their stakeholders in all
aspects of their business operations. So CSR requires that businesses account for and
measure the actual or potential economic, social and environmental impacts of their
decisions. This can sometimes give a company a competitive/reputational advantage by
demonstrating that they have the interests of society at large as an integral part of their
policy making. CSR goes beyond simple philanthropy and is more about corporate
behavior than it is about a company's charitable donation budget. CSR is also closely
linked with the principles of Sustainable Development which argue that enterprises
should be obliged to make decisions based not only on financial/economic factors (e.g.
Profits, Return on Investment, dividend payments etc.) but also on the social,
environmental and other consequences of their activities.
Dutch-Bangla Bank is also renowned for its so named CSR activities. As a result Dutch-
Bangla Bank Limited was the recipient of The 3rd
Annual Asian CSR Awards, Asia’s
Premier Award Program on Corporate Social Responsibility given by Asian Institute of
Management. Besides, organized by the Television Dorshak Forum (TDF) and voted
nationwide through submission of newspaper cutting by 2, 56,517 general television
viewers, the bank was selected the best organization in 2012.
So the CSR movement may perhaps be understood as an attempt not so much to regulate
the activities of corporations per se, as to remind the people who constitute these
corporations that they nonetheless have other responsibilities beyond the corporate ones.

36. 36
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ratio-analysis-importance-of-ratio.
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