Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

87
“Marketing activities of products and services of The City Bank Limited” Submitted to: ……………………………. Lecturer Department Of Marketing University Of Dhaka. Submitted By: ………………………. E.M.B.A Roll NO: Department Of Marketing University Of Dhaka.

Transcript of Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Page 1: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

“Marketing activities of products and services of

The City Bank Limited”

Submitted to:

…………………………….

Lecturer

Department Of Marketing

University Of Dhaka.

Submitted By:

……………………….

E.M.B.A

Roll NO:

Department Of Marketing

University Of Dhaka.

Date of submission:

Page 2: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Date:

…………………….

Lecturer ,

Department of Marketing,

University Of Dhaka.

Subject: Submission of Internship Report.

Sir,

It is a great pleasure and privilege to present the internship report titled “ Marketing activities

of products and services of The City Bank Limited”, which was assigned to me as a partial

requirement for the completion of Masters of Business Administration degree.

It is my great pleasure to work for a private commercial bank and gain an in-depth knowledge on

lending process and monitoring techniques. Throughout the study I have tried with the best of

my capacity to accommodate as much information and relevant issues as possible and tried to

follow the instructions as you have suggested. I tried my best to make this report as much

informative as possible.

I am grateful to you for your guidance and kind cooperation at every step of my Endeavour on

this report. I shall remain deeply grateful if you kindly take some pen to go through the report

and evaluate my performance.

Sincerely Yours,

……………………..

E.M.B.A., Roll: ……

Department of Marketing

University Of Dhaka.

i

Page 3: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

ACKNOWLEDGEMENT

First of all I would like to thank my honorable supervisor Md. Razib Alam who helps me select a

nice topic for my internship report according to my job. I am highly grateful & like to express

my sincere thanks to Mr. Abdus Salam Bhuiyan Head of Human Resources of the City Bank Ltd

who permitted me to Internship on such a prestigious organization.

I am preparing the report “ Marketing ativities of products and services of The City Bank

Limited”. I am very much obliged for cordial cooperation from executive’s officers and staffs of

The City Bank Ltd, of Jessore branch. I want to express my whole – hearted gratitude to them

for their precious cooperation without which, it would not been possible to bring the report in

present form.

I would like to thanks Mr. M. A. Quiyum (Manager) internship supervisor. I could not prepare

this report without his help. Thanks to him very much.

I am very much grateful to everybody to give me the opportunity to work in such a friendly

environment and proper guidance me by his own.

Department Of Marketing

University Of Dhaka.

ii

Page 4: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Executive summary

Banks are raising their game across the board and across the globe. Banks are developing and

adapting their distribution channels to meet the needs of increasingly demanding customers,

branches are more attractive and better designed, Web sites are more secure, and call centers

offer quicker solutions to customers’ problems. One of the most remarkable success stories of

last 50 years’ banking industry globally has been the conceptualization and innovative execution

of banking with individual customers, their friends & families. The industry has termed it as

Retail Banking or Personal Banking or Consumer Banking; and it has now - at a very rapid pace

become the major revenue line for most of the top banks in the world. City Bank too, recently

has started its journey new different sectors and new offers to the customers. The present study

focuses on evaluation of the marketing activities of products and services of the City Bank

limited. Their marketing strategies, environment, services expand day by day. This report

focuses on their different weaknesses and steps which they take for in the near future.

The City Bank Limited is one of the oldest banks in Bangladesh. So it is not a new entrant in this

sector. But it may have faced some difficulties in the increased level of competition in the

industry they are operating. Expectations from banks are increasing day-by-day. People now

expect more of promotional activities from the commercial banks in order to make themselves

different from their competitors. Customers are now very good at comparing and contrasting

close competitors in the market and whoever wins in this battle will be the preference of the

customers.

For significant performance, the bank has earned national and international recognition. The City

Bank Limited was one of the twelve Bangladeshi banks among the five hundred banks in Asia

for its assets, deposit and profit as evaluated by “Asia Week” in the year 2000. Besides that bank

received “Top Ten Company Award” from the Prime Minister of the People’s Republic of

Bangladesh in the year 1992-1993 which was declared by Securities and Exchange Commission.

Needless to mention that continuous support and extended by our valued clients, shareholders,

sponsors, business associates and well wishes played a vital role behind these operating results

and the Board of Directors express felicitation to them in this regard. Consequently, the directors

acknowledge with gratitude the valuable guidance and co-operation received from the Ministry

of Finance, Bangladesh Bank and Securities and Exchanges Commissions.

iii

Page 5: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Table of Contents

Particulars Pages

Chapter 1: Introduction 1-6

Introduction 1

Origin of the Report 3

Broad Objective: 3

Scope of Study: 4

Objectives of The City Bank Ltd 4

Data Sources 5

Methodology 6

Limitations 6

Chapter 2: Overview of City Bank Ltd. 7-15

Background of City Bank Limited 7

Organizational hierarchy of City Bank Limited 9

Management of the City Bank Limited 10

SWOT Analysis of The City Bank Limited 11

Performance of the Bank 13

Chapter 3: Products and Services of City Bank 16-26

Products of The City Bank Limited 16

The City Bank Limited Treasury and Market Risk Division 20

iv

Page 6: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Information Technology in Banking Operation 26

Chapter 4: Marketing aspects and strategies of The City Bank Ltd. 27-51

Target Customer and Market 27

Market Analysis and Opportunity of city bank limited 28

Marketing mix or 9 P’s affecting the City Bank Ltd. 33

Complementary Services 34

Factors affecting the willingness to buy 39

Findings about the Organization 49

Chapter 5: Conclusion and Recommendations 52-53

Acronyms 54

v

Page 7: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Chapter 1: Introduction

Until the beginning of the eighties, the banking business in Bangladesh was only restricted to the

nationalized sector in addition to two or three foreign banks. It is only in 1983 that the

Government changed its policy on the banking sector paving the way for setting up new banks

with private sector. In fact, 1983 saw the emergence of local banks with private entrepreneurship

of which The City Bank limited stands out prominently. It came on stream on the 27th March

1983.

The City Bank Limited is the first private sector Bank in Bangladesh. The Bank has been

operating since 1983 with an authorized capital of more than TK. 1.75 Billion under the

entrepreneurship of 13 prominent and leading businessman of the country. The noble intention

behind starting this Bank was to bring about qualitative changes in the sphere of Banking and

Financial management. Today The City Bank Limited serves its customers at home with 87

branches spread over the country and about three hundred overseas correspondences covering all

the major cities and business centers of the world.

The services encompass wide diversified areas of trade, commerce and industry which tailored to

the specific needs of the customers and are distinguished by an exceptional level of prompt and

personal attention. Over the year the Bank has expanded the spectrums of Its Services. The

extensive and ever growing domestic network provides and carries various product and service

to the doorsteps of millions. The City Bank Limited has already introduced some new Banking

Products like duel currency Credit Cards, ATM and Online services which has created attraction

among the clients. The Bank is going to introduce real time Internet, SMS and Phone Banking

systems with all modern delivery channels at an early date. For significant performance, the bank

has earned national and international recognition.

The City Bank Limited was one of the twelve banks of Bangladesh among the five hundred

banks in Asia for its asset, deposit and profit as evaluated by “Asia Week” in the year of 2000.

Other hand, The City Bank Limited received the “Top Ten Company” award from the Prime

Minister of the People’s Republic of Bangladesh.

1

Page 8: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

We have a distinguished Board of Directors which consists of thirteen successful and reputed

businessmen. Mr. Aziz Al-Kaiser, a top leading businessman, industrialist, pioneer personality

and entrepreneur of private sector bank of Bangladesh, is the Chairman of the Bank. Mr. Kazi

Mohmood Sattar a dynamic, nationally and internationally reputed banker is the Managing

Director and CEO of the Bank. The City Bank Limited recently won The Asian Banker “The

Strongest Bank in Bangladesh-2007” Award. The birth of The City Bank Limited as back as

1983 created a sensation on the financial sector and raised new hopes among the banking

population. Within few years of its launching the bank made tremendous impact in the economy

and showed immense potentialities. Success after success was streaming. The bank was adorned

with prestigious honors like one of the top ten companies, large tax payer, one of the top five

hundred banks in Asia. From 1984 through 1992 the bank earned profits consistently and the

performance was remarkable. The bank, however, ran into rough waters from 1993 due to

multiple events like business slump, default culture, rigorous provisioning etc.

The City Bank Limited has so far been highly successful in keeping its clients satisfied with its

high quality service, while counting its expansion to reach more people around the country. The

City Bank Limited conducts all types of commercial banking activities. It is involved in most of

the areas of commercial banking operations. The core business of the bank comprises of trade

finance, term finance, working capital finance and corporate finance. The City Bank Limited has

acted as the lead arrange in raising term loan for a number of projects under syndicated finance

and also participated in some cases under such financing arrangement. The bank is also

providing personal credit, services related to local and foreign remittances and several other

products. The City Bank Limited’s program under “Poverty Alleviation Scheme” delivered

through rural branches in the form of micro credit is playing an important role towards socio

economic development of the poor people in the rural areas. The City Bank Limited entered the

market at a time when economic policy environment of the country is balanced for higher levels

of business activities and growth. The prevailing macroeconomic management and the

government’s determination to carry on reforms in the banking sector provide a supporting and

encouraging environment.

2

Page 9: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Origin of the Report:

This report is the partial accomplishment of the course requirement of the MBA program and my

honorable supervisor has advised me to do a report on “Marketing activities of products and

services of The City Bank Limited” Thus I joined in “City Bank Ltd.” at Jessore Branch and

worked with high degree of competence and lastly suitably submitted this report within due date.

Broad Objective:

The broad objective of the study is to analyze marketing activities of products and services of

City Bank Ltd at Jessore Branch.

Specific objectives:

To know the basic activities of City Bank Ltd Jessore Branch.

To compare pros and corns of banking services.

Marketing activities and services of the bank

Financial conditions of the bank

Products offered by the bank

To appreciate the organizational environment.

To know the official rules and regulations.

Follow-up code and conduct

To search the problems and proper prospects of the bank

To know about the different banking sectors in Bangladesh by knowing about The

City Bank Ltd.

The SWOT analysis of The City Bank Ltd.

The personal loan files assessment procedure and disburse management process.

The target customer and market for the personal loan.

The market analysis and opportunities of personal loan named City Solution.

To make recommendations regarding the Bank’s credit management activities.

3

Page 10: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Scope of Study:

The report done on the basis of banking activities of City Bank Ltd. of Jessore Branch of year

2007. Banking activities consists of general banking, deposit, retail loan, debit card, credit card,

and foreign remittance. It also covers the organizations structure, different department of City

Bank Ltd. The main part of the report consists of the “ Marketing activities of products services

of City Bank Ltd”. The effort of The City Bank Limited is focused on delivery of quality service

in all areas of banking activities with the aim to add increased value to shareholders investment

and offer highest possible benefits to the customers.

Vision:

The financial supermarket with a winning culture, offering enjoyable experiences.

Mission:

Offer wide array of products and services that differentiate and excite all customer segments.

Be the “Employer of choice” by offering an environment where people excel and leaders are

created.

Continuously challenge processes and platforms to enhance effectiveness and efficiency.

Promote innovation and automation with a view to guaranteeing and enhancing excellence in

service.

Ensure respect for community, good governance and compliance in everything we do.

Objectives of the City Bank Limited

The City Bank’s objectives are reflected in the following areas:

Highly personalized service.

4

Page 11: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Customer-driven focus.

Total commitment to quality.

Contribute in the economy.

Quality of human resources.

Commitment to its clients at each level.

The company believes that communication with, and feedbacks from its clients help it achieve its

goal of providing world-class products and services. The City Bank Ltd regularly conducts client

satisfaction .surveys and make immediate accommodations and adjustments where needed. It

also constantly monitors its standards, and strives to meet clients’ requirements.

Data Sources:

Primary data

Secondary data

Primary data:

Primary data are measurements observed and recorded as part of an original study. For the

completion of this report, the primary sources of data are measurements, observed and recorded

as part of an original study. For the completion of this report, the primary sources of data are-

Discussion with officials of the City Bank Ltd.

Face to face interviews

Expert opinion and comments,

Observations of the officials.

Secondary Data:

The data which has already been collected by others, such data are called Secondary data. For

this internship report, the secondary data are collected from the below sources-

Published of different products

Home page of CBL; Intranet-http://click.thecitybank.com

Website of the CBL; www.citybank.com

5

Page 12: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Annual reports of the CBL from year 2006-2007

Methodology

Both primary and secondary sources are used in the collection of information for preparing this

report. In THE City Bank LTD., we routed through each of the departments and spent few days

according to the schedule given at the beginning of this report. We interviewed managers and

officers of the relevant departments and observed their activities. Every now and then engaged in

conversation with the management. This is basically how we gathered information through

sources. We also went through relevant annual reports of THE City Bank LTD. for collecting

information.

Limitations

Although we have been in this organization for about 2 months and was oriented to the different

departments in the inception stage of our report, but due to very short period of meeting with

department heads, our information regarding the nature of job of different departments, the

structure, employee performance and other aspects may not be a thorough one. The employees

were always under tremendous work pressure, so they could not able to extend their proper co-

operation.

Chapter 2: Overview of City Bank Ltd.

6

Page 13: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Background of City Bank Limited:

City Bank Ltd started its operations on 28 March 1983 with an authorized capital of Tk 200

million divided into 2,000,000 ordinary shares of Tk 100 each and paid up capital of Tk 34

million, of which Tk 30 million was paid up by its promoters and the remaining amount by the

government of the People’s Republic of Bangladesh. In 2000, the bank’s paid up capital rose to

Tk 160 million, of which Tk 80 million was subscribed by the sponsors/promoters and the

remaining amount by the general public. On 31 December 2000, the bank’s reserve fund was Tk

263.1 million as compared to Tk 125.22 million in 1995. But there was shortfall in total capital

adequacy ratio of the bank during 1997-2000 as per BIS (Bank for International Settlement)

standards to be followed by banks operating in Bangladesh.

The management of the bank is vested in a 13-member board of directors. That includes the

chairman and a vice-chairman. The managing director is the chief executive. Three deputy-

managing directors, three executive vice presidents, fourteen vice presidents, fifty-four assistant

vice presidents and some other employees of different categories assist him. The total number of

employees of the bank stood at 1,845 at the end of business year 2000. That time the bank had 87

branches throughout the country. Sixty-one of them were urban and 15 were rural. It had 9

regional offices established at the 6 divisional towns/cities.

At the end of the initial year of its operations in 1983, the total deposits were Tk 320.2 million,

which rose to Tk 11,603.2 million in 2000. Total and net loans and advances of the bank

amounted to Tk 9,964.6 million and Tk 7,698.2 million respectively in December 2000. The

broad economic sectors in which the bank provides lending are agriculture (0.80%), term loans

to large and medium scale industries (18%), housing (1.75%), working capital and commercial

lending (35%), import (9.9%), export (10.5%) and others (24.05%).

The quality of the bank’s lending assets deteriorated due to huge non-performing loans. The ratio

of its classified loans was 43% in 1997, 40.85% in 1999 and 39.57% in 2000. Total assets of the

bank including off-balance sheet items accounted for Tk 30,806.9 million in 2000, when its gross

earning assets and liquid assets were valued at Tk 14,884.3 million and Tk 6,430.8 million

respectively. In 1999, the total foreign exchange business handled by the bank stood at Tk

7

Page 14: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

9,838.3 million (import 87%). Dealings in foreign remittances were only Tk 815 million during

1999. Out of its 76 branches, 19 are now authorized to deal in foreign exchange. The bank has

correspondent relationships with 255 bank/bank offices and other financial institutions abroad.

Total investment of the bank at the close of the year 1999 was Tk 1,492.8 million, of which Tk

1,140 million was in Treasury bills. Other investments included those in shares and securities.

Organizational hierarchy of City Bank Limited:

8

Page 15: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Management of the City Bank Limited

9

Chairman

Vice-Chairman

Board of Directors

Managing Director & CEO

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

First Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

Snr. Exc. Officer

Executive Officer

Senior Officer Officer

Junior Officer

Page 16: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Boards of directors are the sole authority to take decision about the affairs of the business. Now

there are 13 directors in the management of the bank. All the directors have good academic

background and have huge experience in business. Mr. Aziz Al-Kaiser is the chairman of the

bank. The board of directors holds meetings on a regular basis. There are different committees in

the bank for the efficient management of the bank.

Board of Directors

Policy Committee: This committee deals with any policy matters related to the banks new

products, new business development and any sort of policy related to The City Bank Limited. It

seats fortnightly.

Executive Committee: it seats weekly.

Credit Committee. All these committees meet on a regular basis for discussing various issues

and proposals submitted for decisions.

The City Bank Limited has following departments.

Human Resources Division

Finance Division

Audit and Inspection Division

Internal Control and Compliance

Marketing Division

Corporate Banking Division

Consumer Banking Division

Trade Service and Correspondent Banking Division

Logistic and Support Division

Information Technology Division

Credit Division

Treasury Division

10

Page 17: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

SME Division

Credit Admin and Monitoring Division

Corporate Affairs Division

Card Division

Recovery and Legal Division

Human Resources Management of The City Bank Limited

To cope with the consumer”s need The City Bank Limited is committed to developing individual

professional and technical skills through educational opportunities and wide range of internal and

external manpower development and job related training programs. The banks human resources

policy emphasize on providing job satisfaction, growth opportunities. To improve the efficiency

of the employee performance, The City Bank Limited has placed the utmost importance on

continuous development of its human resources, identify the strength and weakness of the

employee to assess the individual training needs, they are sent for training for development. To

orient, enhance the banking knowledge of the employees PBL organize both on-house and

external training. Year 2005 2006 2007 Human Resources 1829 2076 2183

SWOT Analysis of The City Bank Limited

Every organization is composed of some internal strengths and weaknesses and also has some

external opportunities and threats in its whole life cycle. This following will briefly introduce the

customer to The City Bank Limited”s internal strengths and weaknesses, and external

opportunities and threats.

Strengths

11

Page 18: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Stable source of fund

Strong Liquidity position

Concentrated market

Wide network of branches

Well-furnished and Air-conditioned

Experienced top management

Diversified product line

Satisfactory IT infrastructure

American Express Credit Card

City Bank wins The Asian Banker

Weakness

Asset infection rate is still high

Deposit is lower than advance.

Officer has limited experience and not enough trained

Small market shares in Banking-business

Long-term credit is not sufficient

Relatively high overhead expanse

Opportunity

Regularity environment favoring

Private sector development

Credit card business

SME and Agro based industry loan

Can increase the advertising of the Bank

Has introduced three short term new schemes knows as “City Onayash”, “City Ichapuron”,

“City Notun Projonmo”

Already launched the new loan product- “City Solution”, “City Drive” and “City Express

Loan”.

Threats

12

Page 19: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Deposit as well as quality assets

Market pressure for lowering the interest rate

Shrinkage in export, import and guarantee

Business due to economic slump and war

Frequency Currency Devaluation

Emergence of Competitors

Govt. pressures to reduce interest rate.

New rules and regulations imposed by the Bangladesh Bank.

Values Considered as Guiding Factors

All the activities and decisions of The City Bank Limited are based on, and guided by, these

values:

Placing the interesting of clients and customers first.

A continuous quest for quality in everything the company does.

Treating everyone with respect and dignity

Conduct that reflects the highest standards of integrity

Teamwork – from the smallest unit to the enterprise as a whole

Being good citizens in the communities, in which they live and work.

Performance of the Bank

Profit and operation Result the Bank earned as operating profit Tk. 2255.63 million during 2007

After all provisions including the 1% general provision on unclassified Loans and Advances.

Provision for income tax for the year amounted to Tk. 569.33 million resulting into a net profit

after tax of Tk. 818.71 million. The growth in net profit over the previous year was 105.64%.

Table1: Performance at a Glance (amount in million TK.):

13

Page 20: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Particulars 2001 2002 2003 2004 2005

Authorized Capital 400.00 400.00 400.00 1750.00 1750.00

Paid-up- Capital 160.00 240.00 240.00 480.00 720.00

Statutory Reserve 160.00 173.10 213.81 378.42 604.61

Other Reserve 103.12 240.60 240.60 240.60 240.60

Retained Earnings 80.00 130.00 102.78 78.43 33.17

Total Shareholders’ Equity 503.12 783.70 797.21 1417.47 1958.40

Deposits 17183.98 19683.30 20046.31 22236.96 30647.83

Loans and Advance 12729.22 13884.90 14778.55 17027.84 23326.34

Import 13503.20 12262.60 17292.74 17909.94 21363.21

Export 3982.10 6213.50 7719.70 12198.69 18218.97

Investment 1977.95 2511.40 3379.26 3161.38 3648.27

Total Asset 20726.40 24481.60 23698.56 26375.56 35303.74

Total Income 1749.07 2120.89 2475.04 2707.84 3476.85

Total Expense 1341.68 1569.66 1799.17 1785.79 2227.99

Profit Before Provision 407.39 551.23 675.87 922.05 1248.86

Total Provision 1840.80 485.60 472.41 99.00 117.93

Profit Before Tax 222.59 65.63 203.46 823.05 1130.93

Provision for Tax 142.59 52.30 190.00 442.79 590.00

NET Profit After Tax 80.00 13.33 13.46 380.26 540.93

Return on Equity (%) 17.27% 2.07% 1.70% 34.34% 32.05%

Return on Asset 0.42% 0.06% 0.06% 1.52% 1.75%

14

Page 21: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Capital adequacy Ratio (%)

6.63% 8.16% 6.56% 9.78% 9.63%

Credit Deposit Ratio 74% 71% 74% 77% 76%

EPS (TK.) 50.00 5.55 5.61 79.22 75.13

Book Value Per Share (TK.)

314.45 326.54 329.37 230.70 272.00

Market Value Per Share(TK.)

266.80 300.00 227.65 877.75 770.75

No. of employee 1688 1751 1692 1803 1829

Executive 141 142 164 178 203

Officers 958 1011 943 1032 1022

Staffs 589 598 585 593 604

No. of Branches 76 76 77 77 77

A/D Branches 20 20 20 20 20

No. of Shareholders 3256 3027 3247 3486 5678

Source: Annual Report 2005

Capital & Reserve

CBL as a first generation bank has strengthened its capital base by raising the authorized capital

to TK. 1750 million and paid up capital to Tk.720 million. The capital adequacy ratio was 9.65 at

the end of 2005.

Deposits

The deposit as at 31st December 2005 rose to Tk.30648 million registering a growth of 38% over

preceding year (Tk.22236 million).

Table 2: Deposit mix of bank as on 31st Dec. 2005 stood as follows:

15

Page 22: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

S.L No Type of Deposit Amount in million Tk. % of share

1. Current and others 5090.48 16.61

2. Savings 5820.42 18.99

3. Short term 2324.90 7.59

4. Fixed deposit 12451.65 40.63

5. Scheme 4960.38 16.18

Total 30647.83 100%

Source: Annual reports of CBL, 2005

Loans and advances

The Bank continued to reengineering process to raise its assets portfolio by implementing new

credit policy with diversified and well-structured asset portfolio and separation of responsibilities

and segmentation of divisions. The outstanding amount of loans and advances as on 31st

December 2005 stood at Tk.23326 million with a record growth of Tk.6298 million (37%). The

outstanding amount at the same period of previous year was Tk.17027 million.

Chapter 3: Products and Services of City Bank

Products of city bank limited:

Retail Banking

One of the most remarkable success stories of last 50 years banking industry globally has been

the conceptualization and innovation execution of banking with individual customers, their

friends and families. The industry has termed it as Retail Banking or Personal Banking or

16

Page 23: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Consumer Banking; and it has now at a very rapid pace-become the major revenue line for most

of the top banks in the world. The City Bank Limited recently has started its journey in Retail

Banking as well. “City Retail – add a little city to their life”

NRB:

City Bank’s Foreign Remittance unit meets growing customer needs for fast, secure & easy

money transfers to an extensive range of destinations. Being a committed bank to its customers,

CBL go all the lengths to remit your hard earned money safely to your loved ones. With CBL,

apart from a range of high-class modem remittance solutions, you will get peace of mind which

we believe counts to most.

Product preference of City retail:

Following graph shows the best offer from City Bank in retail banking segment. We see 42%

customer think retail deposits like City Onayash, City Shomridhdhi, City Projonmo and City

Ichchapurun are the best offer from City Bank with normal deposit products. Again 24%

customer think retail loans such as City drive, City express and City solution are the most

attractive offer in retail banking. On the other hand 18% customers on remittance and 16%

customers’ voted for credit card respectively (See figure 1).

17

Page 24: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Figure1: Products preferences of customers

Source: Annual reports of CBL

Visa Debit Card:

Visa Debit Card of City Bank designed with Visa Electron branded that becomes hassle-free and

safe; which makes customers proud owner of a meaningful plastic card.

City Credit Card:

City Bank is the first bank to issue Dual Currency Credit Card in Bangladesh. This card enables

customer’s simultaneous usage of card both in home and in abroad. Customers do not need to

carry two different cards for the same purpose.

18

Page 25: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Loan Section:

Another vital function of retail banking is providing loan to its customers. As a consumer

banking retail banking has launched retail loans for individuals. City Bank has launched

attractive loan products including life style loan, car loan, salary loan, and professional loan is

currently in the bank’s product offerings under 3 different names such as:

1. City Drive

2. City Solution

3. City Express

Following elaborately described these three loans offer:

City Drive:

Owning a car is no longer a luxury. Car for family is now a matter of fulfilling a necessity.

Appreciating that basic need, City Bank introduces City Drive, a tailor-made auto loan scheme

for individuals.

City Solution:

City solution is an exclusive offer for consumer. It accepts loans on different purpose such as:

1. Vacation Loan

2. Study Loan

3. Medical treatment Loan

4. wedding Loan

5. House renovation Loan

6. Car loan

19

Page 26: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Whatever the occasion or requirement may be, City Solution - any personal loan from City

Bank- is there to solve all customers problems and to fulfill all dreams. Customers can access

this facility from bank’s selected branches across the country.

City Express:

City Express Cash is a fully secured and revolving facility for any legitimate purpose. The

security for the loan should be ideally City Bank Ltd. Fixed Deposit Rate. Bank would finance

against clients CBL FDR or other bank security. City Express Loan is a fully secured and

terminating loan facility for any legitimate purpose. Bank would finance against clients CBL

FDR or other bank security. This is any purpose secured loan for any legitimate purpose.

Corporate Banking

The City Bank Limited is a major player in Bangladesh wholesale banking industry to offer the

full scope of innovative, customized solution and services. It offers service at the highest level.

Its focus is not on short-term profit, but on building long-term relationships and standing by its

clients whenever needed. The bank have a unique business focus on enabling project financing,

trade, investment and supply chain financing for clients. The bank aims to be a one-stop gateway

for corporate and financial institutions looking to facilitate its clients‟ growing trade and

investment flows and supply chain financing needs across our business footprint. It focuses

exclusively on corporate and institutional clients conducting business in our footprint, offering

clients access to our extensive branch network and award-winning suite of the art services. The

City Bank Limited fully understands the importance of time, convenience and efficiency to the

success of their business. The bank makes easy the complex financial world for the customers

and helps them to maximize every opportunity.

20

Page 27: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

SME Banking

SME Banking of The City Bank Limited is assuming a new and modern dimension. It is entering

in to a wider horizon. The philosophy of extending banking services to SME s of the country is

to meaningfully push every one of then up to the next level of respective business operations.

The upward push would be meaningful as they would be business wise competitive for a

sustainable future. It, therefore, would be turning in to an abode of SME‟s to grow to the next

level. Hence, the bank has named it City Business – for taking SME‟s to the next level. For the

first time in the history of The City Bank Limited, SME Banking business processes are going to

be driven through a centralized platform model. This is a fundamental move away from a 25

years legacy system of decentralized geography based branch banking model. We all know this

transformation process and momentum is already in place. This would be completed by 2008.

The City Bank Limited Treasury and Market Risk Division

The City Bank Limited has a dedicated Treasury team who is capable of providing all treasury

Solutions. Through the foreign correspondent business partners, The City Bank Limited is

providing a wide range of Treasury products. In The City Bank Limited Treasury, there are four

teams who are specialized in their own area to ensure the best possible solution to customer

requirement. The City Bank Limited has following teams in the Treasury:

1. Foreign Exchange

2. Money Market

3. Corporate Sales

4. ATM and Market Research

Each team is dedicated to provide best solution to their respective areas. Though these four

dedicated team the bank provide the following services:

01. Client Solution and Risk Management

21

Page 28: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

02. Hedging solutions against market movement

03. Advice on efficient hedging policy

04. Structured products to match customers” needs

05. Corporate Advisory Services

Services of city bank limited

Current Account:

Most businessmen maintain Current Deposit accounts in order to make their daily business

activities. This account’s funds change most frequently than any other accounts because

customers use to withdraw and deposit funds in regular basis. Current Deposit Account may be

opened by individual, firm, company and club, association, body corporate etc.

Savings Account:

This account is primarily for small scale saver. Any adult and mentally smooth person can open

this type of account through the fulfillment of required conditions. Saving account is convenient

for the people of the lower and middle classes who wish to save a part of their current incomes to

meet their future needs and also intend to earn an income from their savings. However account

holders can not withdraw money more than two times in a week but he can deposit any time as

he/ she wishes. If any customers want to withdraw large amount of money he have to notice the

bank early.

Short Term Deposit Account (STD):

Deposits held in this account are payable on short notice. Normally corporate bodies, bank and

financial organizations invest their funds temporarily. Now-a-days, private individuals having

sound financial means also open this type of deposit accounts.

22

Page 29: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Foreign Exchange Business

International Trade constitutes the main stream of business activities of The City Bank Limited

Ltd. We offer a full range of trade finance and services namely, issue, advise and shipment and

post-shipment finance negotiation and purchase of export bills discounting bill of exchange,

collection of bills, inward and outward remittance letter of credit etc.

Fixed Deposit Account:

Fixed deposits helps customers for long-term investments and wish to earn higher interests on

customer’s savings, fixed deposit assist customers to reserve money for long time and get

attractive interest from the reserve amount of money. Interest rates of deposits are given below:

Table3: Fixed Deposit Interest Rate

Duration Rate

One month 4.00%

Three months 6.00%

Six month 7.00%

One year 8.50%

One year City Nokshi 7.00%

Source: The City Bank Brochure

Other activities:

Demand Draft:

23

Page 30: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Among different financial instruments Demand Draft is most significant and useful. Generally

demand draft issued by a particular Branch to another Branch on behalf of customer to pay a

certain amount of money.

Telegraphic Transfer:

Due to technological advancement it is possible to transfer money over telegraphic modes.

Sometimes customers need money urgently on that circumstances they ask for telegraphic

transfer. There are some common modes for this type of transfer such as Telegram, Telephone,

Telex and Fax. Though Telegraphic Transfer is expensive but it is fast and convenient.

Customers need to pay for this service according to the rate determined by the central bank.

Telegraphic Transfer commission calculates as per Bangladesh bank rate min. Tk. 25 and telex

charge to be taken as Tk. 30 per minute.

Pay Order:

Basically pay order means order to pay a certain amount of money to a specific parties

mentioned on the Pay Order. Once upon a time Pay Order would issue only to effect banks own

local payment but situation has been changed now Pay Order issues on behalf of customers as

well. Pay Order is not transferable and there is no chance to be dishonored like check does.

Basically can be purchased by three different modes such as: Pay order (PO) is a current

liability for the bank and it required to be discharge against payment either in cash or through an

account.

SMS Banking

City SMS gives you 24-hour access to the key financial information of your City Bank Account.

It is the simplest way of finding out your account's daily/month-end balance. With City SMS you

neither have to wait for your statement to arrive through mail nor have or call up branches to

24

Page 31: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

inquire about your balance and last few transactions. Once you become a member of SMS

Banking you will have 24-hour access to the key financial inform

City Shomridhdhi:

City Shomridhdhi is an exceptional DPS product that is distinctively more attractive than the

prevalent DPS products in the market. Customers will receive a hefty sum at the end of the term

against monthly deposit of small installments. It's a perfect way to secure financial future for

customers. City Shomridhdhi Interest rate Three year 8.5% Five years 8.5% Seven years 8.5%

Ten years 8.5%

City Ichchapurun:

“Great opportunity to earn against your savings every month” This product allows you to earn

interest and enjoy interest every month that accrues in your fixed deposit account, no matter what

the term of the deposit is. It helps make your financial planning more disciplined, and your life

more organized. While your fixed deposit remains untouched and well-kept for future, you keep

on getting the profit on a monthly basis. What better way to take care of your monthly recurring

expenses like children’s education or school fees, house tutor’s remuneration, utility bill

payments.

City Projonmo:

City Projonmo – “financial safety for your future generations backed by complete immense

protection” City Projonmo is a unique monthly deposit scheme that you open for your kids to

safeguard their future against all uncertainties and risks. As a guardian of the child customers can

open this account which builds great & unmatchable savings over the years. By the time child is

25

Page 32: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

past his or her school age, there is this sufficient cash in hand to take care of his / her higher

education, marriage or other such large expenses.

City Cards:

City Bank currently has more than ten lack customers those who retain debit cards and credit

cards including dual currency cards. Recently City Bank have launched new product called Visa

American Express card.

Eligibility:

Bangladeshi Nationals

Age range for primary card holder is 18 years to 60 years

Age range for supplementary card holder is 18 year to 60 years

Age bar can be relaxed for secured cards

Minimum Gross Monthly Income (GMI) for silver card Tk 15,000

Minimum Gross Monthly Income (GMI) for gold card Tk 30,000

Minimum 6 month permanent employment for salaried executives (this indicates

total length of service as a total of all companies he or she has

On-line Banking

The bank has set up Wide Area Network (WAN) across the country within its branches to

provide on-line branch banking facility to its valued customers. The service named “Financial

Core” has opened up several possibilities of improved customer services. Under this facility

client of one branch are able to do banking transaction at any other branch of the bank. The bank

26

Page 33: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

hosted its Web Site (www.thecitybank.com) to facilitate dissemination of information about the

banking services and facilities of The City Bank Limited all over the world.

Information Technology in Banking Operation

The City Bank Limited has adopted automation in banking operation from few months ago. The

main objective of this automation is to provide efficient and prompt service to its valued clients.

At present all the branches of the bank are computerized under 37 branches are operated through

Financial Core operating system to provide best security to the information.

SWIFT Service

The City Bank Limited is one of the first few Bangladesh Banks to obtain membership of

SWIFT (Society for Worldwide Inter-bank Telecommunication). SWIFT is a member’s owned

cooperative which provide a first and accurate communication network for financial transaction

such as Letter of Credit, Fund Transfer etc.

Correspondence Relationship

The City Bank Limited established local correspondent arrangements with Uttara Bank”s sixty

four branches, thus covering almost the entire country and facilitating the ability to meet taka

transaction requirement for the customers. The bank established correspondent relationships with

a number of foreign banks, namely CITI Bank N.A, Bank of Tokyo, Standard Chartered Bank, in

New York, Tokyo, Calcutta and London. During this period the Bank has set up letter

reimbursing banks. The bank maintains a need based correspondents as advising and reimbursing

banks. The bank maintains a need corresponding relationship policy, which is gradually

expanses services.

27

Page 34: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Chapter 4: Marketing aspects and strategies of The City Bank Ltd.

Target Customer and Market

Target Customer The name list of the target market includes:

i. Salaried Executive:

Corporate executives of Multinationals, UN bodies, Large Local corporate, Medium and Small

corporate bodies, diplomatic houses, government bodies, Private entities etc.

ii. Businessperson:

Applicants may be proprietor of sole proprietorship firm, partner of partnership firm and/or

director of a private and public limited company.

iii. Self Employed:

Individuals making a living from their technical expertise, i.e. medical practitioner, engineers,

architects etc and free lancers like consultants, landlords etc, who have an established source of

income.

iv. Non Target Customers:

THE CITY BANK LIMITED Negative listed individuals

Journalist of reasonable lower level and non-reputed publications and Lawyers

Employees of the firm which has a poor repayment history on business loan with us

Officials of law known criminal records

28

Page 35: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Politicians and Individuals having politically affinity

Travel agents of lower level

Defense officials below major level and Mariners

Individuals whose personal and business loan performance is poor

Public Figures and media personality

Customers Orientation

01. Direct Sales Team

02. Branch

03. Retail Finance Center

04. Card Division

05. Collection Department

06. Distribution

07. In case of credit card

08. In case of loan

09. Dealing with repayment

Out of Area Customer Loans are offered only to applicant’s whose office or residence or located

at cities where the bank has branch representation. However, this may be waived for salaried

executives whose salary account is with the bank, but office and residence is located outside

cities with the bank’s branch representation. On Resident Customer Loans to nonresident

Bangladesh (i.e. wage earners) are allowed for 100% cash covered facilities

Market Analysis and Opportunity of city bank limited

Back ground over the last few years, there has been change in the mindset our consumers. Retail

Credit, once considered unreachable, is today a means of fulfilling the growing aspirations of

Bangladeshi middle class, especially the growing population of the 25-44 age groups. The

29

Page 36: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

decline in corporate credit off take forced banks to increase their presence in the retail finance

market. The rise in income levels, together with fall interest rates and growing competition, has

increased the affordability of loans for borrowers. Today, some in the country are emerging as

leaders in the retail finance market. Moreover, retail banking it has now, at a very rapid pace,

become the major revenue line for most of the top banks in the country. The City Bank Limited

always wants to offer the best-in-class services, innovative lending products and financial

solutions for customers to meet their personal financial requirement. To meet personal needs of

any credit worthy individuals, the bank has launched the City Solution, any purpose unsecured

personal loan. Customers like to enjoy personal loan to accommodate the personal financial

requirement. Consequently, personal loan got substantial momentum in the market. Most of the

banks are focusing this product for increasing core retail lending base of the bank. This product

is one of most vital lending products for retail lending.

The relevant market

The relevant market is the set of products and /or services that, management considers being

strategically important. Defining the relevant market of The City Bank Ltd. we have to consider

where competition is primarily coming from, i.e., the degree of substitutability.

For The City Bank Ltd. case, the management perspective should be to introduce new more

branches at different suitable area where they don’t have any other branches and where the

competitors did not enter yet. So that, the company could be the pioneer of banking in those

areas. We know that the pioneer has the greater opportunity to build up brand loyal in the

consumer’s minds.

Even though, the major competitors of THE CITY BANK LTD. are some foreign banks who are

doing the same types of job, it has to face competition from some substitute organizations, like

7th Mutual Fund, Shadharan Bima Insurance Co. Ltd., Islami Insurance of Bangladesh for Loans

and Deposits as well. And other government departments like GPO Shanchaya Bima,

Bangladesh Bank Shanchaya Bima etc. work as highly competitors to the Banks as they are

paying higher interest rates to the Depositors than that of Banks.

30

Page 37: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Market Structure:

In the market Structure, the first step is need and which is financing. The main job of the bank is

to fulfill the financial need in the economy and the own financial need as well. To fulfill the

stated needs the bank usually goes through two processes or classes.

They are: Deposit and Loan.

Through Deposit the bank fulfill theirs’ own needs. They collect money from Depositors

promising them to give a certain interest rate and lend this money to the creditor at a higher

interest rate. The difference between two is their income. Besides that they have other incomes

as service charges providing different services to the clients. The deposit has three forms in THE

CITY BANK LTD. like Fixed deposit, Savings bank deposit and Current & Contingency deposit

considering the time. Three types of loans are also formed in THE CITY BANK LTD.

considering the time.The interest rates also vary according to the time a higher rate has to be paid

for long-term loans rather than mid- term and short-term loans. Loans are made through

different. Finally, Brand represents the competitors in the figure.

Brand

The City Bank Ltd.

Shilpa Bank Ltd.

Sonali Bank.

Prime Bank Ltd

31

Page 38: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

South East Bank Ltd.

GPO Shanchaya scheme

Bangldesh bank Shanchaya scheme.House Building

Delta Brac Housing

 Pubali bank ltd.

Agrani bank ltd.

Trust bank ltd.

Janata Bank.

South East Bank Ltd.

Standard & Chartered Bank The City Bank Ltd.

Prime Bank Ltd

Eastern Bank Ltd.

Dutch Bangla Bank Ltd

Mercntile bank ltd.

Islami bank ltd.

Bank Asia ltd.

Primary demand analysis:

32

Page 39: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Primary demand is the demand for the product form, sub-form or class that has been defined as

the relevant market. Primary demand is analyzed in order to identify growth opportunities for

product form/class.

Primary demand for this banking service is organizational rather than consumer in nature. THE

CITY BANK LTD. needs to be involved more in promotional activities. So that, the consumers

could be aware about the advantages of THE CITY BANK LTD.

Buyer Identification:

Buyer Characteristics: Consumers who have income sources are the buyers for the company.

Those who have idle money, even though they are not the earning person, are also would be

considered as the buyer. Generally, buyer characteristics depend on the followings.

Age: People of 18 and over could be the buyer of THE CITY BANK LTD., as people of that

age, usually in Bangladesh, earn money or maintain accounts at the bank. People of under that

age are students and need not to obtain loan from the bank. Besides that, there is no provision of

student loan in the banking system of Bangladesh. In addition, there is age limitation for

obtaining loan from bank.

Income: Those who are capable of maintaining the required margin of the bank are the buyer of

the bank. Generally, Service holder, Industrialists, House-wives are in this panel. The people

who are hand-to-mouths are not in the panel.

Occupation: Business-people, Service-people, House-wives etc are buyer of the bank.

Location: Even though most of the people live in villages, the banks’ target locations are urban

and sub–urban areas. Because, usually villagers do not deposit their money in the bank for

collection complexity.

Demographics and Life Style: The potential users are aged 18 and above who own homes. This

includes families, single business people, professional couples and the elderly. Medium to high-

income households primarily dominate the market as they have expendable income for getting

deposit and loan services from THE CITY BANK LTD.

33

Page 40: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Buying Center: The buying center is composed of “all those individuals and groups who

participate in the purchasing decision-making process, who share some common goals and the

risk arising from decision.” The buying center includes all members of the organization who play

any of seven roles in the purchase decision process.

1. Initiators: Accounts Department if the money needs to be deposited.

2. User: The employees of the bank who are holding their accounts in the bank for  drawing

their salaries. The employees of any other organization who holding their accounts in this

bank are also users.

3. Influencers: Financial Analysts are the influencers of the company’s buying decision.

The accountants and the auditors of that company could also be influencers.

4. Deciders : People who decide on service requirements or on providers. The Governing

body of any large organization, Managing Director of Mid-level organizations and Sole

proprietor of small organizations are the deciders of the companies.

5. Approvers :  Administration and The Governing Body.

6. Buyers : The Accounts Officers, Employees, House-wives (sometimes).

7. Gatekeepers : Pay’s, Administration

Customer Turnover: Customer Turnover refers to the rate at which an organization must

replace all or a substantial part of the individuals in its market because of a change in some

aspect of the buyer’s characteristics. It is clearly seen that the customer turnover is low for The

City Bank Limited, as in this year the deposited money is Tk. 19683.30 million whereas, in the

last year it was Tk. 17183.98 million. Besides that, this bank never in loss position, always they

make profit.

Marketing mix or 9 P’s affecting the city bank:

Product

34

Page 41: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Price

Place

Promotion

People

Productivity & Quality

Period

Physical evidence

Process

Product:-

The following are attributes of financing services within The City Bank Limited of Bangladesh:

01. Long term Viability

02. Reputation

03. Stability

04. Proven Reliability

05. Proven capacity to provide customer the most satisfaction.

06. Attentive Employees

07. Price

Complementary Services

Businesses are principally concerned with two main aspects of financial service providers that

the determinant attributes identified fall under. They must:

a) Have a record of reliable service performance. Businesses want to know that, their financial

support will be provided on time and in a presentable manner.

35

Page 42: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

b) Be stable and have long-term viability. Businesses want to know that their financial service

provider is going to be around for a long time so they do not have to worry about finding new

financial service provider if the business goes under.

The product / services of The City Bank Ltd. are backed by a moderate level of computerization.

The Bank is presently using Local Area Network (LAN) for banking operation, which is capable

of generating daily-consolidated statement of affairs of all the branches.

In The City Bank Limited, The benefit of the services to the customer is illustrated below:

Credit Service

THE CITY BANK LTD’s credit portfolio includes term, continues and exports related loans.

THE CITY BANK LTD’s credit facilities are also reasonably better than other local banks. Its

interest rate ranges from 10% to 16.5%. Although the rate is little bit higher than other

Nationalized Commercial Banks, but average customers are ready to pay such interests because

of their faster and quality services.

Agency and Other

Clearing / collection of cheaques and other instruments on behalf of the customers.

Locker service at selected branches.

Three (3) sizes of lockers are available: small, medium, and large, annual charges ranging from

Tk. 1500 to Tk. 4000 is applicable.

Deposit

The category of services includes:

36

Page 43: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

1. Current Deposit.

2. City Bank Sanchaya Scheme.

3. Short Term Deposit (STD).

4. Fixed Deposit (FDR).

5. Bonus Deposit scheme.

6. Deposits in Foreign Currency.

7. Deposit Pension Scheme.

8. Deposit from Banks.

9. Bearer’s Certificates of Deposits (BCD).

10. Sundry Deposits.

Fund transfers

The following functions / instruments are included in this category:

Telegraphic Transfer (TT).

Demand Draft (DD).

Mail Transfer (MT).

Payment Order (PO).

Traveler’s cheaques.

Export

The export business includes the following services:

37

Page 44: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

1. Bill purchase / discounts.

2. Bill negotiation.

3. Bill collection.

4. Letter of credit advising and confirming.

Import

Import business includes:

1. Opening letter of credit (L/C).

2. Retirement of import documents.

3. Issuance of shipping guarantee.

Guarantees

1. Bid bonds.

2. Performance bonds and advance payment guarantees

3. Guarantees against foreign counter guarantees.

Securities

          It includes the following:

1. Sales and encashment of government securities

2. Banker to the issue for IPO.

Price

38

Page 45: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Price plays both an economic and a psychological role in the service sectors. In country

like ours the middle class, upper middle class income groups (target customer for the

bank) are very price sensitive. So, price should be comparative. The City Bank Limited

should go for a parity pricing because, the bank have to set their interest rate at or near

competitive levels. If bank sets the interest rate at lower to that of the competitors’ levels,

the bank will have fewer depositors and more creditors. The reverse could be happened if

the bank sets their interest rate at higher of the competitor’s level. So, in the both cases

the bank won’t make profit.

Place

The sale should be direct because there is no scope to sale their service through any

media.

Sales and Distribution should be exclusively selective because it is not possible to give

loans to everybody.

Sales should be through single channel.

Promotion

As intangible dominating product, services are not easily advertised. The intangible is difficult to

depict in advertising, whether the media is print, television or radio. Service advertising should

thus emphasize tangible cues that will help the customers understand and evaluate the service.

The advertising cues in different media should be presented physical forms to symbolize

the service itself.

Personal selling is potentially powerful in services. Customer service personnel should be

trained to use this opportunity to reduce customer uncertainty to give reassurance and

promote the reputation of the organization.

39

Page 46: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Customers tend to value word-of-mouth communications more than organization

sponsored communication, because services are experiential in nature. So, The City Bank

Ltd. should attempt to stimulate word-of-mouth communications.

Productivity & Quality

The city bank provided good quality service which can earn to new customer. In that case they

flow various productive way to assure the quality of service.

Period

Mainly the city bank working hour is Sunday to Thursday 9.00 am to 5.00 pm

Friday and Sat day holiday.

Physical evidence

 It means an environment which can explain that the basic characteristics of bank. It could be the

interior decoration, the technology using etc. The city bank use world class furniture and relative

technology to provide online banking.

Process

Payment of customer’s monthly bills. The existing offer can be revised by adding some

extra service like payment of customer’s monthly telephone, electricity etc. bills from

their current or savings accounts.

24 hour outside withdrawal services (ATM) should be installed.

24-hour phone banking relationship based marketing to sustain and create loyalty among

the existing customers.

High technology utilization to provide improved services at low cost. Continued

evaluation of the problems of the customer.

40

Page 47: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Factors affecting the willingness to buy:

There are five factors that generally have an influence on willingness to buy these are:

1. Perception of Utility: To deposit money in a bank or to borrow money from a

bank is necessity because of seeking security and fund availability. So, people

have to utilize the service of the bank.

2.  Related Products and Services: People want to invest their money borrowing

from    the bank rather invest from their own funds. Besides that, in order to

involve in foreign trade the exporter or importer has to open an L/C

3. Usage Problem: People will prefer the services, which have less usage problems.

4. Value or experience compatibility: This is not relevant in the market for

banking business, as the service does not require a change in purchase or usage

behavior. Banking is a familiar and non-threatening service and has been popular

for a long time.

5. Perceived Risk: The willingness to buy a product form or product class will also

depend on types of risks perceived by potential buyer. In general, the perceived

risk for this financing service will be low as it is a very established form of

deposit and loan in Bangladesh. Specifically, there are 4 types of risk that may

exist when purchasing a product form or class.

1. Economic or financial Risks: This will usually be high as there is a possibility whether

the creditors could be able to return the amount that they borrow from the bank. The

financial effect could be a risk for this.

2. Time or convenience risks:  This will vary depending on the kinds of businesses. The

short-term loan has less and Long-term loan has high time risk.

3. Performance risks: The speed of processing to approve a loan is relating to this risk.

Longer processing time to approve a loan might result in dissatisfaction among the

customers.

41

Page 48: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

4. Physical/Social/Psychological risks: Change in Government policy, religious awareness

can pose a threat to this kind of business. (e.g. interest is forbidden in Islam. So, it will

affect the willingness to buy.

Factors affecting ability to buy:

Cost Factor: If the interest rate and other service charges offered to the customers is

competitive, it will cause to the customers to be incapable.

Spatial Ability:  The number of branches throughout the country will increase the

accessibility of the customers.

Changes in primary demand over the past two years:

The Government in order to make-up the fiscal deficit had resorted to bank borrowing from the

public by way of issuing bonds at higher rates of interest. This has naturally affected bank’s

traditional source of deposit mobilization because the depositors find investment in bonds more

attractive for the reason of higher tax-free rates of interest. In spite of such major economic

dictates the total deposit rose to Taka 10,509.85 million as on 31st December 2002 showing a

substantial increase of near about 24% in comparison to that of last year. The significant growth

in deposit enabled the bank to expand its business and performing assets and also had an impact

on the profit of the bank.

Table 4: Deposit Mix of THE CITY BANK LTD. in 2005 and 2006

Year 2005 2006

Deposits Amount Percentage Amount Percentage

42

Page 49: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

(Tk. In million) Distribution (Tk. In million) Distribution

Fixed Deposit 2,249.85 26.5 % 2,711.23 25.8 %

Savings Bank

Deposit

1,843.79 21.7 % 2,142.59 20.4 %

Contingency &

Current Deposit

4,408.44 51.8 % 5,656.03 53.8 %

Total 8,502.08 100% 10,509.85 100%

Source: Annual Report

Selective demand analysis: 

Selective demand is the demand for a specific brand or supplier within the relevant market.

Analysis of selective demand will help us to understand how buyers make choices from the

alternatives. The demand for the each service is analyzed separately comparing to the same

services offered by the competitors.

The decision making process of the buyer:

High-Low involvement purchase: Purchase is high for the commercial buyers, as they earn

money more, deal with bank more and need more loans.

Routine response/ modified rebuy/ New task purchase : Routine response is high for the

existing clients and they can switch to other forms of services (e.g. From saving accounts to

current accounts.).

43

Page 50: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Method of communication with customers/ how company disseminate info to the target

consumer: Monthly financial Statement is sent to the each individual customer so that, they

aware of their balance.

Market segmentation:

A market segment consists of a group of customers whose requirements for satisfaction are

similar. The relevant market comprises four market segments. These segments combine

needs/end benefits, purchase behavior, vaue and lifestyles.

1. Needs and Desired end benefits: The needs and desired end benefits of the customers are to

satisfy financial needs and obtaining securities for their funds. So, the market could be

segmented in terms of who wants loan and who wants to deposit. The combination of both could

be segmentation.

2. Purchase Behavior: In The City Bank Limited, the market would segment in terms of

usage basis into Long-term, Mid-term and Short-term creditors or depositors.

3。Value & Lifestyles: The market could be segmented in terms of customers values and their

lifestyles. Those who have accounts in this bank depositing more than Tk. 5,000,000 could one

segment calling them V.I.P clients and those who have less than Tk. 5,000,000 could be another

segment.

Table 5: Demographic segments based on Client identification analysis

Basis for Segmentation Major Segments Identified

44

Page 51: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Gender Both men and Women

Age 18+

Education Level Tertiary education

Income Level Above average income

Family Lifecycle Young Couples

Location All over Bangladesh.

Source: Survey Data, 2007

Competitive analysis

Industries Characteristics:

Porter’s Five Forces Analysis:

Power of buyers:

 The power of buyer in this market is fairly high as there are no real switching costs, little

differentiation. There are many competitors to choose from.

Power of suppliers:

The power of suppliers in the consumer financing services industry is relatively low. Because

The City Bank Ltd. is not only the one bank who provide this service, all Govt. banks and many

of the private banks can provide this service.

Threat of  Substitutes:

45

Page 52: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

The threat of substitutes in this market is high and it is increasing day by day. Some of the

mutual funds, insurance companies and other organizations relating to this are being introduced

in Bangladesh.

Threat of New entrants:

The threat of new entrants is highly increased particularly in private sectors. In Bangladesh, new

private banks are being introduced.

Degree of Competitive rivalry:

Competitive rivalry in the banking services industry has increased from a monopoly situation

into a highly competitive; rapidly evolving industry where companies must constantly be

expanding their service offering in order to stay competitive, competition is based on service

charge and brand image. Almost all banks provide same kinds of offer to the customer the

porter’s five forces analysis reveals that the major threat is from new entrants and bargaining

power of buyers. To compete with new entrants The City Bank Ltd. need to set up strong barriers

to entry. To reduce the bargaining power of buyers and threat of new entrants they will need to

create switching costs by emphasizing differentiation and superior service and quality. Out of

five forces as analyzed by porter, one is not relevant for The City Bank Limited and that is why

rest four forces are discussed here.

Competitor Profiling:

The main competitors for The City Bank Ltd. are Prime Bank, AB bank and Dutch Bangla Bank

etc. There are many other banks that provide financial support. But these three are their main

competitor.

The City Bank Limited

Strengths:

1. The City Bank Ltd. has gained reputation through clean and posh interior design of lay

out. It also provides prompt services with higher degree of secrecy.

46

Page 53: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

2. It has a good management team and disciplined work force.

3. The City Bank Ltd. abides a set of core values-

4. Responsive to customer’s needs.

5. Professional in manager striving for excellence.

Installation of good communication system that enables the Bank to have on time

communication with all branches which reduces excessive paper work and saves time for valued

customer’s transaction.

Weakness:

1. Service charge in some areas is higher than that of the nationalized banks, which

discourage middle class customers.

2. There in no overtime allowance for employees who have to stay in the bank till 8 p.m. It

denominates those employees.

3. Now a day most of the customers expect personalized service, which The City Bank Ltd. 

Can provide during the business hour.

Opportunities:

1. Opportunity retail banking lies in the fact that the country’s increased population is

gradually learning to adopt consumer finance. So, the retail lending products have

opportunities to tap the market of middle class service holders.

2. Bangladesh is a developing country. The investment potential of Bangladesh is attracting

foreign investors. So, The City Bank Ltd. has opportunity of expansion in business.

Threats:

Some foreign banks and private banks are threat to The City Bank Ltd. like Dhaka Bank, Prime

Bank, Dutch-Bangla Bank etc.

47

Page 54: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

AB BANK:

Strengths:

1. AB bank charge low interest on loan.

2. They provide large amount of loan.

3. They provide their service through 67 branches which covering maximum districts.

4. Their standard monitoring system helps them to provide better service.

5. Their website is decorative with rich information.

6. Effective and unique television commercials and many other alternative ways to

communicate with customers. Which drive huge levels of brand awareness among the

core target customers

7. They maintain long-term relation with their clients.

8. Their staffs are very friendly and efficient.

9. Their all staffs are highly educated and qualified.

Weakness:

1. Service sometimes poor due to large amount of clients.

2. Because of communication gap sometimes long-term relationship is break-up.

3. If any one takes this service he/she need personal guarantee.

 Dutch-Bangla Bank

 Strengths:

1. High brand awareness (easily identified name and logo).

2. They don’t want any kind of personal guarantee for their loan.

3. Website and e-mail.

48

Page 55: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

4. Attractive advertisement.

5. Their offices are well furnished and decorated.

Weakness;

1. They charge high interest on loan.

2. They provide small amount of loan.

3. Their monitoring system is not well for this reason their service is hampered.

4. They have limited branches that does not cover maximum of target customers.

Prime Bank Ltd:

Strengths:

1. Their banks are well-reputed and established bank.

2. Vast and innovative advertisement.

3. Website and e-mail.

4. They have smart and well-behaved staffs.

Weakness:

1. They charge high interest on loan.

2. They provide small amount of loan.

3. They have limited branches for this reason they are not able to fulfill their clients wants

and needs.

4. Their monitoring system is not well.

49

Page 56: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

5. If any one takes this service he/she need two personal guarantees.

Market measurement:

The relevant industries data are as follows:

1. The Average bank interest rate on credit scheme is 12%.

2. The average customer age from 18 to 18+.

3. Their customers are divided in two section:

1. VIP customer (Those who has minimum balance on their accounts of Tk.5,

000,000).

2. Those who has balance on their accounts of less than Tk.5, 000,000.

Among the four market segment the ‘purchase behavior’ is the most popular one as there is a

scheme for housing loan which is a market niche. As they are the monopoly among the banks,

they will have more customers for that scheme. So, the bank must focus on this scheme.

Target markets

1. Officers or Executives of different private/multinational Companies, Corporations, banks,

Insurance companies.

2. Officers or Executives of different Government or semi-Government or Autonomous

Bodies, NGOS, International Aid Agencies and UN Bodies.

3. Teachers of Educational Institution.

Strategies of CBL:

CBL believes in the practice of Market-Oriented Strategic Planning, developing and maintaining

a viable fit between the organization’s objectives, skills and resources. The aim of such approach

50

Page 57: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

is to shape and reshape the bank’s businesses and services so that they yield target profits and

growth. The strategic planning of CBL consists of two organizational levels, which are

Location Based Strategy

Business Level Strategy

Location Based Strategy:

Since the growth and profits of banking business largely depend upon the locations of branches

where large concentration of other businesses and industries are involved, CBL Main Strength is

its location based strategy.

The 87 branches of CBL are divided into six different regions, which are:

1. Dhaka Division, comprising 35 branches.

2. Chittagong Division, comprising 15 branches

3. Comilla Division comprising 09 branches

4. Sylhet Division, comprising 08 branches

5. Bogra Division, comprising 08 branches

6. Khulna Division, comprising 11 branches

The concentration of businesses and lifestyles of the people are not the same in these six areas.

So, the strategies of the six areas differ from one another; but they are designed with distinctive

51

Page 58: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

local touch. Head office constantly monitors the progresses of all the six areas. The bank is not

interested in launching more branches. Currently CBL is focusing in strengthening the existing

branches.

Business Level Strategy:

The business strategy of the Bank is to strengthen its retail business, following a conservative

lending approach. But the Bank’s major portion of the profit generates from its Retail banking

and SME Banking.

Findings about the Organization:

Understanding customers’ savings trend and market demand the bank launched four new

deposit products which are: City Onayash, City Ichchapurun, City Projonmo and City

Shomridhdhi.

At present CBL has enormous number of credit cards in the market but the bank is

planning to enrich its City Debit Card with all dynamic features.

Most of the users of credit card are male.

26 ATMs are in operation and City Bank customers now can use the Dutch Bangla

Bank’s large ATM fleet and also Q-cash marked ATM booths.

42 % customer think retail deposits are the best offer from City Bank whereas 24%

customer thinks retail loans are the attractive offer in retail banking.

Accordingly large number of customers are using deposit product right now.

Major portion of customer think cash withdrawal facility provided by the bank is good

In terms of fees and charges customers are satisfied with current fees and charges.

Account opening procedure is comparatively critical.

City Bank has covered huge number of debit cards in the market.

Lengthy lending process due to lack of more automation for loan processing.

Interest rate and processing fee charged by the bank is higher than that of other banks. So,

the EMI is high as well.

52

Page 59: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

The service quality is not satisfactory compared to what they are charging to the

customers. Consumers are happy with the time limit for repayment the loan which is one

of the key factors which lead the success of City Solution.

Business persons are not that happy with the product. But salaried persons and

professionals are satisfied with the product.

Lack of Documentation

Lack of monitoring of credits

Shortage of efficient manpower

Lack of calm and systematic work environment to operate all the activities of RFC.

The product appraisal is done on the customer base not any comparison is done with

other product.

Most of the customers profiles are not standard so that most application decides to

decline. The suppliers influence is overlooked.

53

Page 60: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Chapter 5: Conclusion and Recommendations

Conclusions:

The RFC of City Bank Limited has been performing very well. The RFC is running with steady

growth in almost every sphere. They are reducing nonperforming loan. They are committed to be

a leading Bank in Bangladesh within two years. No doubt this is the sign of good management.

Though the appraisal and proposal system of the City Bank is said to the best one in this kind

certain factors are overlooked.

In appraisal system the competitive position analysis is not focused while doing the appraisal

system.

It is revealed from the above presentation that in 2007, the bank has achieved remarkable success

in various financial activities as well as in bank’s business. During the year under report the bank

has earned commendable operating profit and also attained capital adequacy. Substantial amount

has been recovered from classified loan because of appropriate action in this regard.

For significant performance, the bank has earned national and international recognition. The City

Bank Limited was one of the twelve Bangladeshi banks among the five hundred banks in Asia

for its assets, deposit and profit as evaluated by “Asia Week” in the year 2000. Besides that bank

received “Top Ten Company Award” from the Prime Minister of the People’s Republic of

54

Page 61: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

Bangladesh in the year 1992-1993 which was declared by Securities and Exchange Commission.

Needless to mention that continuous support and extended by our valued clients, shareholders,

sponsors, business associates and well wishes played a vital role behind these operating results

and the Board of Directors express felicitation to them in this regard. Consequently, the directors

acknowledge with gratitude the valuable guidance and co-operation received from the Ministry

of Finance, Bangladesh Bank and Securities and Exchanges Commissions.

The directors place on record their depth appreciation for the dedicated services rendered by the

executives, officers and staff members of the bank.

As borrower selection is the key to successful retail lending, The City Bank Limited should focus

on the selection of true borrower. But at the same time it must be taken into account that right

borrower selection does not mean that The City Bank Limited has to adopt conservative lending

policy but rather it means that compliance with the KYC or Know Your Customer to ascertain

the true purpose of the loan.

Recommendations

The interest rate for personal loan in The City Bank Limited is now 17%-19%, which is very

high for the customers. Interest rate should be reduced.

1. The disbursement time in The City Bank Limited is very time consuming. It should be

reduced and the customers should get their service at a minimum.

2. To expedite the lending process, board credit committee meeting should be held twice

a month instead of once a month.

3. The City Bank Ltd should facilitate online loan application submission and personal

credit processing.

4. The application process time is very lengthy. The time required for the applications

should be reduced.

5. The employees of RFC should be more cooperative with the customers especially the

MIS sector over phone when applicants are looking for the necessary information.

6. Sales team should be trained to increase the efficiency

7. Debt burden ratio should be relaxed especially in access of highly potential and

successful business personnel.

55

Page 62: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

8. The early settlement fee and processing fee should be reduced.

9. At the branch level credit department must be adequately capable of collecting the

correct and relevant information and analyzing the financial statements quickly and

precisely.

10. Monitoring of a loan should be conducted at regular interval.

11. Reporting of all loans should be periodically made to Bangladesh Bank

12. Government should give all necessary information about applicant to the bank using

Voter ID no. That will be very useful for assessing a loan file.

Acronyms

ALM Asset Liability Management

ATM Automated Teller Machine

BB Bangladesh Bank

C&I Corporate & Investment

CAMEL Capital, Asset, Management, Earning, Liquidity and Sensitivity

CBL The City Bank Limited

CD City Drive

EMI Equated monthly installment

EOL Excess over limit

FC Foreign Currency

FDR Fixed Deposit Rate

GMI Gross Monthly Income

ICB Investment Corporation of Bangladesh

IDLC Industrial Development Leasing Company

IT Information Technology

L/C Letter of Credit

SME Small and Medium Enterprises

SMS Short Message Service

SS Saving Schemes

56

Page 63: Marketing-activities-of-products-and-services-of-The-City-Bank-Limited.doc

STD Short Term Deposit

References:

1. Annual reports of the city bank ltd.

2. Marketing Management by “Philip Kotler”

3. Company Website: www.thecitybank .com

4. Brochures of the bank

5. Bangladesh Bank: http://www.bangladesh- bank.org/mediaroom/corerisks/albsrisks.pdf

6. Practical participation in the city bank ltd.

7. Informal face to face conversation with officials.

57