Revenue rose by 26 percent to $26.8 million (2010: $21.3 m), loans by 31 percent to $101 million ($77m), deposits by 59 percent to $611 million ($385 m), and fee and foreign exchange income by 28 percent to $10.6 million ($8.3 m) – contributing 40 percent of total revenue.
The 30 percent net profit margin for the year equates to earnings per share of $0.27 and 18.7 percent return on equity. The Bank’s net asset value per share now stands at $1.437.
With a capital adequacy ratio of 22 percent, and 85 percent liquidity, AIB is believed to score the highest of all Afghan banks in its ‘CAMEL’ rating – the acronym for the five key components of a bank’s condition: Capital adequacy, Asset quality, Management, Earnings, and Liquidity.
Network expansion continued in 2011 with the addition of eight new branches in Kabul and four in the provinces, further reinforcing the Bank’s coverage in all major cities and provinces. The volume of ATM transactions increased by 20 percent during the year, with 29 machines now installed and operational. This reflects the growing customer base, up to a total of 63,800 from 34,500 the previous year. The number of corporate clients increased from 8,200 to 12,500 and individual customers from 26,300 to 51,300.
The growth in numbers is also indicative of the 2011 emphasis on improving customer service, a top priority for the year. New initiatives implemented included a payroll system that simplifies work for employers, piloting a security token for online banking, faster IT links to most branches thus reducing customer waiting time, and a pilot SMS project to advise customers of transactions.
The growth in customer numbers and the focus on customer service requires corresponding priority on staff recruitment and training. The employee complement grew from 410 to 530 during the year, a 30 percent increase. Female staff now account for roughly nine percent of total numbers. Three staff members – one female – were selected for external and internal training in 2010 under the Bank’s fast-track executive management program and completed their overseas training in 2011 with two months in India. A further 15 employees completed three months’ induction training with the National Institute of Banking and Finance Pakistan.
Specialist training in banking and IT took place in India and Dubai, with six employees undertaking 50 cumulative training days. Courses run by the Afghan Institute of Banking and Finance were attended by 61 employees (a total of 160 training days and 34 courses), while two staff members (one female and one male) were sponsored for MBA study at the American University of Afghanistan.
Sustained growth also requires top-quality information technology and AIB has installed platforms that comply with global best practice requirements for banks. The software used meets the international standard set up by the Wolfsberg Group of 11 international banks for anti-money laundering (AML) monitoring. This includes an automated filtering system to check new accounts and inward and outward transactions against the requirements of OFAC (Office of Foreign Assets Control of the US Department of the Treasury that administers and enforces economic and trade sanctions based on US foreign policy and national security goals). AIB is believed to be the only bank in Afghanistan to operate such a system.
Business continuity was also a 2011 priority for IT capability enhancement and development. To this end, a disaster recovery site (DRS) was established overseas as backup to the domestic DRS, the rationale being that a domestic site could be vulnerable to the same natural hazard as head office. The business contingency plan was tested and established that the Bank could operate for a number of months from its domestic disaster recovery center. Further work on IT security involved the introduction of a new Symantec system that controls and monitors USB ports as well as providing virus protection.
Recognizing the Bank’s commitment to good corporate citizenship, AIB has undertaken several projects that reach out to the communities where it operates. Afghanistan having had an unusually harsh winter, AIB distributed blankets, footwear and food to refugee camps. Donations were also made for the restoration of the Blue Mosque in Mazar, to Radio Voice of Women, to the School for Orphans for food and educational materials, and to the Afghan Red Crescent.
In closing, I extend my congratulations to the Management Board and staff for all their hard work and dedication during 2011 and the performance achieved on behalf of the Bank.
Khalilullah Sediq
Chief Executive Officer