August 25, 2009 Mr. Shahriyar Anam Course Instructor, Business Communication Skills Department of Business Administration The University of Asia Pacific Building # 84, Road # 7A, Dhanmondi R/A, Dhaka – 1209 Dear Sir, I am very pleased to submit the report on the common products of the three commercial banks of Bangladesh assigned by you. After conducting interview with the key personnel of each bank, surfing the net and analyzing relevant information I have concluded that the commercial banks like HSBC Bank, Prime Bank and Standard Chartered Bank are playing a significant role in the business sector of Bangladesh. This report will help you to have a transparent idea about various common products/services of these commercial banks. I am very grateful to you for giving me a unique opportunity to make a comprehensive report on these commercial banks.
Transcript
August 25, 2009
Mr. Shahriyar Anam
Course Instructor, Business Communication Skills
Department of Business Administration
The University of Asia Pacific
Building # 84, Road # 7A,
Dhanmondi R/A, Dhaka – 1209
Dear Sir,
I am very pleased to submit the report on the common products of the three commercial banks of Bangladesh assigned by you.
After conducting interview with the key personnel of each bank, surfing the net and analyzing relevant information I have concluded that the commercial banks like HSBC Bank, Prime Bank and Standard Chartered Bank are playing a significant role in the business sector of Bangladesh.
This report will help you to have a transparent idea about various common products/services of these commercial banks.
I am very grateful to you for giving me a unique opportunity to make a comprehensive report on these commercial banks.
Sincerely yours,
---------------------------------
Md. Meherul Islam
SynopsisHSBC is one of the largest banking and financial service organizations in
the world. HSBC's international network comprises over 9,800 offices in 77
countries and territories in Europe, the Asia-Pacific region, the Americas,
the Middle East and Africa. HSBC provides a comprehensive range of
financial services: personal financial services; commercial banking;
corporate, investment banking and markets; private banking; and other
activities. The HSBC Group is named after its founding member, The
Hongkong and Shanghai Banking Corporation Limited, which was
established in 1865 to finance the growing trade between China and
Europe.
Prime Bank Ltd. was created and commencement of business started on 17th
April 1995. The sponsors are the reputed personalities in the field of
commerce and their stake ranges from shipping to textile and finance to
energy etc. They constantly focus on understanding and anticipating
customer needs. Prime bank Ltd. has already made significant progress
within a very short period of its existence. The bank has been graded as a
top class bank in the country through internationally CAMEL rating. Prime
Bank Ltd. offers all kinds of Commercial Corporate and personal Banking
services covering all segments of society within the framework of Banking
Act and rules and regulations laid down by our central bank.
The bank’s current capital adequacy ratio of 12.43% is in the market and
much above the stipulated line of 8%. In spite of complex business
environment and default culture, quantum of classified loan in the bank is
very insignificant and stood at less than 1.48%.
Standard Chartered employs 38,000 people in 950 locations in more than
50 countries in the Asia pacific Region, the South Asia, the Middle East, the
Africa, the UK & the Americas. It serves both consumers and wholesale
banking customers. Consumer banking provides Credit Cards, Personal
Loan, Mortgages, Deposits taking and Wealth Management services to
individuals and small to medium size enterprises. Wholesale banking
provides corporate and institutional clients with services in Trade Finance,
capital Market and Corporate Finance. Standard Chartered is well-
established in growth markets and aims to be the right partner for its
customers. The bank is trusted across its network for its standard of
governance and corporate responsibility as well as its commitment to
making a difference in the communities in which it operates.
Commercial banks are playing a significant role in the field of our economy.
They are helping us to raise our current endowment by borrowing against
our future consumption or our future endowment by lending our current
consumption. After analyzing all of the above banks, we can conclude that
in terms of the given products provided by the mentioned banks, HSBC
Bank would be the most attractive and preferable for any individuals or
organizations.
The reasons behind that is their high loan amount given, lowest interest rate and
the flexible expected payback periods those are not likely available compared to
the other two banks. So, from my point of view, people should choose the
HSBC Bank first as whenever they would like to have or consume those
products.
--------------------------------
Table of Contents
Page No.
1. Introduction 01
1.1 Origin of the report 02
1.2 Purpose of the Report 02
1.3 Sources of information 02
1.4 Methodology 02
1.5 Scope of the report 03
1.6 Limitations 03
2.The Organizations 04
2.1 HSBC Bank
05
2.2 Prime Bank05
2.3 Standard Chartered Bank 07
3. Findings & Analysis 08
3.1 Common Products 09
3.2 Findings 09
3.2.1 HSBC Bank 09
3.2.2 Prime Bank 10
3.2.3 Standard Chartered bank 10
3.3 Analysis 11
3.3.1 House Building loan 11
3.3.2 Car Loan 12
3.3.3 Travel Loan 12
3.3.4 Marriage loan 12
3.3.5 Credit card 13
4. Recommendations & Conclusions 14
5. Bibliography
6. Appendix
INTRODUCTION
1.1 Origin of the report
This report on various products/services of commercial banks which is titled
as “A Comparative Study on the Common Products of 3 Commercial Banks” has
been prepared in partial fulfillment of requirement for the “Introduction to
Managerial Finance” (FRL-301), which is a course of our BBA program. It
has been made under the direction of our course instructor Mr. Kamrul
Hasan in response to the assignment given by him on the class dated on July
14, 2005.
1.2 Purpose of the Report
There are mainly two purposes of preparing this report, which are as
follows –
Primary purpose - To know about various products & their features of
the commercial banks of Bangladesh.
Secondary Purpose – To fulfill the requirement of the course
“Introduction to Managerial Finance” as the course instructor
assigned.
1.3 Sources of Information
For preparing the report, we have used both the primary and secondary
sources of information as described below –
Primary source – we collect information by interviewing executive
officers of the commercial banks.
Secondary source – we use commercial banks’ prospectus, and
regarding web sites as our secondary sources.
1.4 Methodology
This report is based on information gathered from the commercial banks.
We have relied on prospectus and web sites in most cases. But for more
clarification and better understanding, we have manipulated primary data
that gathered through depth interview and productive group discussion
among our group members.
1.5 Scope of the report
In preparing the report, we have considered three commercial banks
namely HSBC Bank Ltd., South East Bank Ltd., and Prime Bank Ltd. and
their various products only.
1.6 Limitations
Although we have tried our best to give a complete picture of our assigned
commercial banks, our effort was restricted to some extent due to the
confidentiality of the banks’ policies. Commercial banks did not provide us
the total information that was needed to explore the current features of the
products.
The Organizations
2.1 HSBC Bank Ltd.
This is termed as the world's local bank.
Headquartered in London, HSBC is one of the largest banking and financial
services organizations in the world. HSBC's international network
comprises over 9,800 offices in 77 countries and territories in Europe, the
Asia-Pacific region, the Americas, the Middle East and Africa.
With listings on the London, Hong Kong, New York, Paris and Bermuda
stock exchanges, shares in HSBC Holdings plc are held by nearly 200,000
shareholders in some 100 countries and territories. The shares are traded
on the New York Stock Exchange in the form of American Depositary
Receipts.
Through an international network linked by advanced technology, including
a rapidly growing e-commerce capability, HSBC provides a comprehensive
range of financial services: personal financial services; commercial banking;
corporate, investment banking and markets; private banking; and other
activities.
The HSBC corporate character defines the values and principles inherent in
all our everyday dealings.
The HSBC Group has an international pedigree, which is unique. Many of its
principal companies opened for business over a century ago and they have a
history, which is rich in variety and achievement. The HSBC Group is
named after its founding member, The Hongkong and Shanghai Banking
Corporation Limited, which was established in 1865 to finance the growing
trade between China and Europe.
2.2 Prime Bank Ltd.
In the backdrop of economic liberalization and financial sector reforms, a
group of highly successful local entrepreneurs convinced an idea of floating
a commercial bank with different outlook. For them, it was competence,
excellence and delivery of reliable service with superior value products.
Accordingly, Prime Bank Ltd. was created and commencement of business
started on 17th April 1995. The sponsors are the reputed personalities in the
field of commerce and their stake ranges from shipping to textile and
finance to energy etc.
As a fully licensed commercial bank, Prime bank Ltd. is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so is the bank and repositioned itself in the market condition.
Prime bank Ltd. has already made significant progress within a very short
period of its existence. The bank has been graded as a top class bank in the
country through internationally CAMEL rating. The bank has already
occupied an enviable position among its competitors after achieving success
in all areas of business operation.
Prime Bank Ltd. offers all kinds of Commercial Corporate and personal
Banking services covering all segments of society within the framework of
Banking Act and rules and regulations laid down by our central bank.
Diversification of products and services include Corporate banking, Retail
Banking and Consumer Banking right from industry to agriculture, and real
state to software.
The bank has consistently turned over good returns on Assets and Capital.
During the year 2002, the bank has posted an operating profit of Tk. 747.84
million and its capital funds stood at Tk.1664.31 million. Out of this, Tk.700
million consists of paid up capital by shareholders and Tk.964.31 million
represents reserves and retained earnings. The bank’s current capital
adequacy ratio of 12.43% is in the market and much above the stipulated
line of 8%. In spite of complex business environment and default culture,
quantum of classified loan in the bank is very insignificant and stood at less
than 1.48%.
Prime Bank Ltd., since its beginning has attached more importance in
technology integration. In order to retain competitive edge, investment in
technology is always a top agenda and under constant focus. Keeping the
network within a reasonable limit, its strategy is to serve the customers
through capacity building across multi delivery channels. Its past
performance gives an indication of its strength. It is better placed and
poised to take its customers through fast changing times and enable them
compete more effectively in the market they operate.
2.3 Standard Chartered Bank Ltd.
Standard Chartered employs 38,000 people in 950 locations in more than 50 countries in the Asia pacific Region, the South Asia, the Middle East, the Africa, the UK & the Americas. Standard Chartered is one of the world most international banks, with employees representing 80 nationalities.
Standard Chartered’s PLC is listed on both London Stock Exchange and the
Stock Exchange of Hong Kong and is in the top 25 FTSE-100 companies by
market capitalization. It serves both consumers and wholesale banking
customers. Consumer banking provides Credit Cards, Personal Loan,
Mortgages, Deposits taking and Wealth Management services to individuals
and small to medium size enterprises. Wholesale banking provides
corporate and institutional clients with services in Trade Finance, Cash
Management, Lending, Securities Services, Foreign Exchange, Debt capital
Market and Corporate Finance.
Standard Chartered is well-established in growth markets and aims to be
the right partner for its customers. The bank combines deep local
knowledge with global capability.
The bank is trusted across its network for its standard of governance and corporate responsibility as well as its commitment to making a difference in the communities in which it operates.
Findings & Analysis3.1 Common products
House Building Loan Car Loan Travel Loan Marriage Loan Credit Cards
Interest Rate : 2.5% per month (with 15-45 days interest free)
Validity : 2 Years
3.3 Analysis
3.3.1
House Building Loan
Particulars
HSBC Bank Prime BankStandard Chartered Bank
Loan Amount
7.5 lacs - 1 crore
5 lacs - 80 lacs 10 lacs - 75 lacs
Interest Rate
13.50% 15.00% 13.50%
Terms 5 Years – 15 Years
5 Years – 15 Years
5 Years – 15 Years
# After analyzing the above banks, we can say that HSBC Bank would be
the best for borrowing money in terms of House Building because it offers the highest amount of loan amount (1 crore) with the lowest interest rate (13.50%) & with the same loan payback period (5-15 years) compared to the other two banks.
3.3.2
Car Loan
ParticularsHSBC Bank Prime Bank Standard
Chartered Bank
Loan Amount
1 lacs – 80 lacs 1 lac – 40 lacs
2 lacs - 50 lacs
Interest Rate 13.50% 15.00% 13.00%
Terms 1 Year – 5 Years 1 Year – 5 Years
1 Year – 5 Years
# After analyzing the above banks, we can say that Standard Chartered
Bank would be the most attractive for someone to borrow money in terms of Car Loan because although it offers the medium highest of loan amount (50 lacs) but with the lowest interest rate (13.00%) & with the same loan payback period (1-5 years) compared to the other two banks.
3.3.3
Travel Loan
ParticularsHSBC Bank Prime
BankStandard Chartered Bank
Loan Amount
50 thousand – 50 lacs
2 lacs 8x of the borrower’s income
Interest Rate 13.50% 15.00% 18.00%
Terms 1 Year – 4 Years 3 Years 1-5 Years
# After analyzing the above banks, we can say that HSBC Bank would be
the most preferable for someone to borrow money in terms of Travel Loan because it offers the highest amount of loan (50 lacs) but with the lowest interest rate (13.50%) & with the moderate loan payback period (1-4 years) compared to the other two banks.
3.3.4
Marriage Loan
ParticularsHSBC Bank Prime
BankStandard Chartered Bank
Loan Amount5 thousands – 10 lacs
3 lacs 8x of the borrower’s income
Interest Rate 13.50% 15.00% 18.00%
Terms 1 Year – 4 Years 3 Years 1-5 Years
# After analyzing the above banks, we can say that HSBC Bank would be
the most choiceable for someone to borrow money in terms of Marriage Loan because it offers the loan amount of (50 lacs) but with the lowest interest rate (13.50%) & with the moderate loan payback period (1-4 years) compared to the other two banks, even after the Standard Chartered Bank might give higher loan amount than HSBC.
3.3.5
Credit Cards
Particulars
HSBC Bank Prime Bank Standard Chartered Bank
Credit Limit
50 thousands – 2 lacs
50 thousands – 3 lacs
10 thousands- 8 lacs
Interest Rate
2.50% per month
2.50% per month
2.50% per month
Validity 2 Years 2 Years 2 Years
# After analyzing the above banks, we can identify that Standard
Chartered Bank would be the most preferable for someone to subscribe Credit Cards because it offers the highest amount of credit (8 lacs) but with the same interest rate (2.50% per month) & with the same card validity of 2 years compared to the other two banks.
Recommendations
& ConclusionsCommercial banks are playing a significant role in the field of our economy.
Actually they are facilitating both the individuals and organizations in terms
of financing, capital management, cash management, securities services
and so on. They are helping us to raise our current endowment by
borrowing against our future consumption or our future endowment by
lending our current consumption. Without the assistance of the Commercial
Banks, our business sector can bloom just a very little. After analyzing all of
the above banks, we can conclude that in terms of the given products
provided by the HSBC Bank, Prime Bank and Standard Chartered Bank,
HSBC Bank would be the most attractive and preferable for any individuals
or organizations. The reasons behind that are their high loan amount given,
lowest interest rate and the flexible expected payback periods. It has a huge
financial backup because of being the world’s largest bank from its other
regions. So, from my point of view, people should choose the HSBC Bank
first as whenever they would like to have or withdraw those loans. But of
course, from where to get the loans, it depends totally to the discretion of
