Dear Shareholders

I welcome you on behalf of the Board of Directors to the 27th Annual General Meeting of United Finance Limited. I take this opportunity to brief you on the economy, the financial services sector and the performance of your Company during 2015.


During the fiscal year 2014-15, the country achieved a GDP growth of 6.51%, with 5.83% growth in services from 5.62% in last year and 9.6% in industry from previous year’s 8.16%. However, agricultural sector declined to 3.04% from 4.37% during 2015.

Annual average inflation has gradually decreased throughout 2015 and reached 5.72% from 6.44% from previous year.

Bangladesh Bank successfully continued efforts to restrain excessive fluctuations in the exchange rate which remained largely market based and at the same time controlled inflation.

Financial Services Sector

Bangladesh bank, through prudent policy measures, has been able to have lower inflation, reduce interest rate and maintain stability of exchange rate during the year. The year ended with a foreign exchange reserve balance of more than 26 Billion dollars. The investment stimulant monetary stance of the central bank was successful.

Bangladesh bank continued its monitoring of the banking sector to reduce vulnerability that became apparent in the previous years. Banking sector repayment and profitability indicators have shown signs of stability in 2015 as with only 0.2% increase in the NPL ratio, whereas total domestic credit increased by 10.06%.

The performance of the capital market continued to be sluggish in 2015, mainly due to lack of shareholders’ participation in the capital market.

Company Performance

I am pleased to inform you that your Company has registered growth in operating revenue. Your company registered 6.00% growth in net profit over the previous year.

Earnings Per Share (EPS) on the basis of current number of shares, increased by 6.00% (from Taka 2.10 in 2014 to Taka 2.22 in 2015). Net Asset Value (NAV), on the basis of current number of share, increased by 1.15% (from Taka 17.29 in 2014 to Taka 17.49 in 2015).


Deposit Products

During the year deposit portfolio grew by 10.82%. The deposit product offerings of your Company are quite diversified and appeals to a wide range of customers. Like previous years, deposit collection was sufficient to support the financing activities of the Company and its cost of fund remained competitive throughout the year.

Asset Products

You would be pleased to know that your Company continued to deliver financial services in all 64 districts of the country through its 19 offices. Despite the heavy challenges during 2015, asset products portfolio achieved a growth of 11.30% from Tk. 10.73 Billion to Tk. 11.94 Billion. The portfolio consists of both short term revolving working capital solutions and mid to long term asset financing options.

Working Capital Solutions

Working capital solution products allow your Company to further diversify risks by penetrating into wider sectors and client bases. It also complements the long term product clients by providing valuable working capital support which is the life blood of any business. The demand for working capital financing is growing due to the built-in tangible services inherent in the products. Short term working capital financing portfolio now constitutes more than 25% of the total asset products portfolio, standing at Tk. 3.17 Billion.

Agricultural Financing

In 2014 your Company introduced seasonal cash flow based agricultural financing. You would be pleased to know that, through this financing, your Company has been able to improve livelihood of 9,205 farmers, helped employment generation of 44,332 seasonal agricultural labours and created 335 agricultural input businesses. Agricultural financing portfolio reached Tk. 298.5 Million in 2015. Further opportunities could be explored for expansion.

Asset Financing Options

Long term portfolio of your Company consists of lease financing, affordable home loan and term loans, to meet financing requirements for various types of assets of its clients. Your Company provides support for own construction of buildings for individuals and procurement of machinery, equipment, vehicles and business expansion for businesses.

Affordable Home Loan

Affordable Home Loan is a housing finance solution for the low to middle income group to improve their living standard and to fulfil their dreams of owning a home in mostly the underserved housing markets. During the year the portfolio reached Tk. 520 Million.

Cost Administration

Deposit rates continually came down during the last year due to excess liquidity. Your Company collected deposits at a rate comparatively lower than the market. Though the deposit portfolio grew by more than 10.82%, the financial cost in 2015 only registered a 2.27% growth.

Salary and allowances increased by 19.03% and rent increased by 16.07%, both due to new additions in 2015 and full year’s impact of human resources, rent on branch and office spaces added during 2014 and upward revision as per agreement of some branches. Other costs increased to accommodate the needs of growing business volume and impact of inflation. In all, total operating costs increased by 11.34%.

Risk Management

The developments and activities of Company's three risk management components during 2015 were as follows:

Pre-emptive Risk Management

Operational Risk Management continued to increase efficiency while reducing risks through its review, restructure and strengthening of operational processes. This enabled your Company to achieve growths in the focused areas.

Human resource department continues to improve resource quality through better screening of applicants, appropriate staffing and continuous training. Your Company now focuses on reducing the time required to hire resources. During the year the Company provided a total of 1260 man-days of training to 299 employees.

Contemporaneous Risk Management

Collection department has been restructured and collection, recovery and litigation teams have been independently strengthened, which resulted in high collection of dues. Non-performing loan ratio was maintained at below 5.05%.

Post-facto Risk Management

Advisory services conducted regular customer satisfaction surveys to understand clients’ perceptions on the services of your Company. It also helps to modify services to further improve customer experience and thereby create a loyal client base.

Continuous analysis of the Risk Grading Model is done to make it more effective in understanding risk profiles of clients and appropriately assign risk grades before financing.

During 2015 your Company improved quantification of employee performance measurement, which helped in managing the large employee base by establishing accountability and creating standardised benchmarks. Management Information Systems department further improved its existing reporting to facilitate the actions of the senior management team and aid mid level managers.

Both Compliance and Internal Audit departments have been strengthened to create better checks and balances and to identify non-compliances and other out of the ordinary issues. Audit and compliance reports were regularly placed to the Audit Committee of the Board for its review and recommendations.

Sustainability Initiatives

Your Company gives importance to environmental sustainability, which is reflected in both its financing and own activities. A separate sustainability report has been prepared and included in this Annual Report.

Post Balance Sheet Date Events

Subsequent to the balance sheet date, the Directors recommended 1 share for every 10 shares held and cash dividend of Tk. 0.50 per share. There were no circumstances in the Company in which non-disclosure affected the ability of the users of the financial statements to make proper evaluation and decisions.


The challenges of 2016 for the country would be to ensure economic growth. GDP growth in 2016 is projected at 6.0% and private consumption is expected to remain stable and contribute to GDP growth. Exports are expected to perform better, particularly in the second half of the year. The Government is stepping up project implementation to improve public investment in infrastructure. Several downside risks could, however, affect the GDP growth projection.

Bangladesh Bank is expected to continue to focus on keeping inflation low while providing sufficient scope to encourage investments. The financial services sector will be under strict scrutiny of the central bank as it would continue to take measures to reduce irregularities.

Your Company is well prepared to take on the challenges in 2016. Competition will intensify as the overall liquidity in the market will continue to drive down interest rates, both on the deposit and the lending side. Achieving growth, while maintaining the portfolio quality and collection of receivables would be the major challenge for your Company. Your Company will focus on various financing opportunities and it is expected that service quality, coupled with cost advantage, would help your Company to expand its client base and portfolio across all product ranges.


We wish to thank our valued customers, shareholders, regulators, lenders and the international agencies for their continuous support and cooperation.

I take the privilege of thanking my colleagues in the Board of Directors of the Company for their contribution towards development of the Company and the support rendered to me during the year in conducting the meetings of the Board of Directors.

Last but not the least, I express my gratitude to all the employees of the Company for their sincere and dedicated services to the growth of the Company.