Bank Saderat Iran (BSI)

P r o f i l e

O b j e c t i v e s

C o r e V a l u e s

V i s i o n

M i s s i o n

Bank Saderat Iran (BSI) was established in 1952 as one of Iran’s leading private banks. Whilst its operations were initially commenced with the aid of only 20 employees, BSI was quick to rapidly expand its branch network and to penetrate Iran’s market.

By 1961, BSI launched its international operations by establishing its first overseas branch in Hamburg, Germany, which was followed by other overseas branches in a number of countries such as the UK, Greece, France, UAE, etc.

Along with other Iranian private banks, BSI became nationalized following the 1979 revolution and was privatized once again as of March 2010. Today, from its humble beginnings BSI has emerged as a credible popular bank, supported by an intensive network of more than 2,795 branches, employing over 32 thousand people and providing high quality services to millions of Iranians.

Our main objectives are to:

• Maximize profitability• Boost capital returns• Further develop the scope of modern

banking services • Increase productivity• Further develop our links with customers• Further commit ourselves to social

responsibilities• Enhance our human resource

management

Our mission is to offer all kinds of high quality banking services to individuals and companies in Iran and abroad. This mission is founded upon the principles of creating wealth for our shareholders, customer orientation, social accountability and with a focus on our human capital.

Our vision is to become the number one bank within Iran.

• Professional conduct• Loyalty to our clients• Paying a special attention to our

employees• Organizational commitment

H u m a n R e s o u r c e sAt Bank Saderat Iran, we firmly believe that human resources play a vital part in determining the success of organizations. Therefore, we pay a special attention towards selecting qualified and experienced personnel.

O r g a n i z a t i o n a l C h a r t

Board of Directors

Risk Management High Committee

Managing Director

Audit & Internal Control Committee

Other Committees

Managing Director’s Special Inspectors

Managing Director’s Advisors

Inspection & Internal Audit Department

Anti-Money Laundering Department

Research & Planning

Department

Organization & Methods

Department

RiskManagement Department

Branches & Marketing

Affairs

Management Communications

& Services Affairs

Information Technology

Affairs

Financial Affairs

Investment Affairs

Credit Affairs

Security Affairs

Support & Services Affairs

Marketing & Customer Services

Department

Tehran & Provincial

Branch Management

Branches & Independent

Sectors

Management Accounting &

Statistics

Accounting Department

Projects Supervision Department

Overseas Branches

Training Department

Projects Assessment Department

Forex Accounting Department

Information Technology

Security Department

Excess Properties

Sales Department

Sepehr Voice

Public Relations

Department

Modern Banking Services

Department

Shareholders & General

Assemblies Department

Welfare Department

Recovery Department

Forex Department

Physical Surveillance Department

Building & Engineering Department

Treasury

Management Department

Information Technology Department

Financial Accounting Department

Investment Department

Personnel Affairs

Department

Credit Department

Foreign Department

Supply Department Security

International Division

Human Resources

Development Affairs

LegalDepartment

Bank Saderat Iran (BSI)

B r a n c h N e t w o r kWith over 2,700 domestic branches, Bank Saderat Iran has the largest network of branches among all Iranian banks. This reflects upon the fact that BSI is among the dominating banks within the Iranian market. The extensive branch network also enables BSI to provide its services to people in the remotest corners of Iran. However, in order to further optimize productivity and to reduce operational expenses, the Bank’s management has in the recent years decided to reduce the number of its branches. The following chart demonstrates BSI’s falling number of branches in the recent years:

Number of Branches

2012-2013

2,79

5

2013-2014

2,71

4I n t e r n a t i o n a l B a n k i n g & F o r e x S e r v i c e s In order to support the growing trade between Iranian and European merchants, BSI began to provide trade finance through its branch in Hamburg, over half a century ago. To further expand its international operations, BSI management was quick to recognize the need for an appropriate geographic structure as a means to provide a strong platform for its mentioned trade finance. Hence, other overseas branches were established in carefully situated locations at the heart of dynamic markets such as London, Paris, and Persian Gulf States such as the UAE etc.

Today, with over 21 overseas branches, 3 regional offices, 2 independent banks, BSI has the largest network of international branches among other Iranian banks.

Although trade finance is the core business of BSI international operations, a wide variety of foreign currency related services are also offered through its overseas units and some of its branches at home. These services include: opening different type of accounts, granting credit facilities, issuing guarantees, forex services, opening letters of credit etc.

A w a r d s & D i s t i n c t i o n s

C o m p l i a n c e & A n t i - M o n e y L a u n d e r i n g M e a s u r e s

Due to the high quality of services rendered, BSI has received a number of international awards and distinctions, some of which are as follows:

• Brand Valuation Certificate & ISO 10668:2010 from ICS Group – Canada

• ISO 9001 Quality Management Standard Certificate

• International Certificate on Clients Trust in the Banking Industry from ICS Group – Canada

At BSI, we are particularly dedicated to combatting money laundering, not only due to the fact that we are bound by requirements as set forth by regulatory bodies such as the Central Bank of the Islamic Republic of Iran, the Ministry of Economic Affairs & Finance, High Council of Anti-Money Laundering or legal mandates set by the Labour and Commercial Codes and other relevant laws, but also as a financial institution we feel it our moral duty to contribute in riding society of such criminal activities.

Some of our numerous measures taken in this regard include: organizing training sessions in order to familiarize our employees with AML rules and regulations; notifying all our units with AML instructions; designing and installing the latest and state-of-the-art AML systems, constantly updating the list of persons suspected of carrying out money laundering and submitting it to all users at our branches, providing cash transaction reports (CTR) to the Financial Information Centre of the Ministry of Economic Affairs & Finance on transactions exceeding the legal daily limit, etc.

• Good Recruitment Practice Certificate awarded by ICS Group - Canada

• Banking Security Services Certificate awarded by ICS Group – Canada

• Majestic Five Continents Award for Quality & Excellence – Switzerland

• Obtaining a 259th ranking among the world’s top 1,000 banks in terms of capital, from the Banker

Bank Saderat Iran (BSI)

C a p i t a l A d e q u a c y R a t i o

Capital adequacy ratio (CAR), is a ratio of a bank’s capital against risk. By calculating and determining CAR, Iran’s national regulator, which is the Central Bank of the Islamic Republic of Iran (CBI) aims to protect the depositors, the shareholders and the banks themselves, by ensuring that they are capable of withstanding a reasonable amount of

F i n a n c i a l P e r f o r m a n c e i n B r i e f

22,3

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2011

2011

2011

2012

2012

2012

2012

2013

2013

2013

2013

Investments

Income

Assets

Net Profits

billion IRR

billion IRR

billion IRR

billion IRR

loss. If the ratio is too high, then the bank is not optimizing its resources and if too low, it becomes more vulnerable to risk. The CBI requires the CAR of Iranian banks to be at least 8%.

The capital adequacy ratio of BSI was 8.28% during the reporting financial period.

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Bank Saderat Iran (Public Joint Stock)Consolidated Profit & Loss Statement

For the Fiscal Year Ended March 20, 2014

20.03.2014 20.03.2013

million IRR million IRR million IRRJoint incomes:Profit from granted facilities 45,852,239 33,221,841

Profit from investments & deposits 20,281,292 21,420,874

Bank’s income from joint investments 66,133,531 54,642,715

On-account profit of investment deposits (59,762,450) (41,913,521)

Difference in final profit & investment on-account deposits - (1,115,881)

Depositors’ profit quota (59,762,450) (43,029,402)

Bank’s quota from joint incomes (include attorney fee) 6,371,081 11,613,313

Non-joint incomes:Commission income 5,223,443 4,843,073

Result of Forex transactions 106,191 525,716

Other incomes 38,219,637 26,421,884

Non-joint incomes 43,549,271 31,790,673

Total incomes 49,920,352 43,403,986

Less:

General & administrative expenses (23,708,688) (17,803,475)

Dues value decrease expenses (3,753,014) (7,624,779)

Financial expense (2,894,886) (1,711,714)

Commission expense (3,045,071) (2,447,013)

Other expenses (5,163,306) (4,808,441)

Total expenses (38,564,965) (34,395,422)

Profit before tax 11,355,387 9,008,564

Tax (1,467,090) (1,120,622)Net profit 9,888,297 7,887,942

Minority interest from profit of the current year 117,827 73,910

Base profit of each share - IRR 171 136

Flow of Consolidated Retained Profit AccountNet Profit 9,888,297 7,887,942

Retained profit at the beginning of the year 6,207,779 3,554,503

Prior years’ adjustment 5,989,007 (363,808)

Retained profit at the beginning of the year – Adjusted 12,196,786 3,190,695

Allocable profit 22,085,083 11,078,637

Consolidated prior years’ adjustment 613,494 3,295,068

Capital increase (6,501) -

Legal Reserve (1,169,180) (1,027,590)

Dividend (2,313,338) (1,145,308)Bonus of the Board of Directors (Group member companies) (2,251) (4,021)

Profit allocation (3,491,270) (2,176,919)

Retained earnings at the end of the year 19,207,307 12,196,786

Minority interest from retained earnings 141,839 133,878

Bank Saderat Iran (Public Joint Stock)Consolidated Cash Flow Statement

For the Fiscal Year Ended March 20, 2014

2013-2014 Restated 2012-2013

million IRR million IRR million IRROperating activities:

Net cash inflow from operating activities 21,456,792 31,726,073Investment returns and interest paid for financing: Profit paid for financial facilities received (2,894,886) (1,711,714)

Dividend received 1,956,683 793,778

Dividend paid to shareholders (2,375,299) (3,185,784)Net cash inflow (outflow) from investment returns (3,313,502) (4,103,720)

Income tax:

Income tax paid (504,181) (930,320)

Investment activities: Funds paid for direct investment & legal participation (1,557,465) (1,146,992)

Funds received from direct investment & legal participation 2,298,939 4,410,562

Funds paid for purchasing fixed tangible assets (2,323,061) (439,728)

Funds received from sales of fixed tangible assets 1,050,717 380,488

Net cash inflow (outflow) from investment activities (530,870) 3,204,330

Net cash inflow (outflow) before financing activities 17,108,239 29,896,363

Financing activities:Increase (decrease) in financial facilities received (141,563) (11,680,804)

Foreign currency exchange profit (loss) 15,928 78,858

Net cash inflow (outflow) 16,982,604 18,294,417

Cash balance at beginning of the year 21,529,671 3,235,254

Cash balance at end of the year 38,512,275 21,529,671

Non-cash transactions 2,358,787 17,570,084