Foreign exchange performance and bank’s profitability: an evaluation of Standard Bank Limited
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of banking system in a country is growing day by day. It is quite impossible for any country to expand in commercial and industrial sector without sound banking system in modern economic era. Standard Bank Limited (SBL) is a third generation bank in Bangladesh. Standard Bank has incorporated on May 11,1999 in head office at 122-124 Motijheel ,Chamber building, Dhaka, Bangladesh as a public limited company with the permission of the Bangladesh Bank. The founder of SBL is committed to “setting a new standard of banking”. The Authorized capital of the bank is BDT 1500.00 crore and the Statutory Reserve stood at BDT 291.15 crore as on 2013. The bank provides a broad range of financial services to its customers and corporate clients in retail banking, corporate banking, and international trade. The whole banking activities are divided into three parts, General banking, Loan & Advances and Foreign Exchange. One of the largest businesses carried out by the commercial bank is foreign trading. Foreign exchange operation is one of the significant functions of the bank. It plays a vital role in overall economy of the country. Through import, export and foreign remittances Foreign Exchange department of the banks earns their profit. Banks are the intermediary of all import, export and remittance activities. Import sector is the most profitable sector in foreign exchange department of SBL. The import earning sectors are- commission for L/C opening, Amendment of local L/C Service charges, Collection of credit report of the beneficiary. From commission for L/C opening and service charge, import department earns most. The export department deals with export L/C, Amendment of L/C, Transfer of L/C, EXP issue charge. When the L/C amounts have to be changed, then the amendments of L/C are needed. The expense sectors of export are –Courier/mailing cost, Stationary cost, Printing cost, Salary of the employee. But here to analyze the actual earning of export, I’ve to find out the total expenses to operate export department. The expense of export, import, and remittance is almost the same. Foreign Exchange Market allows currencies to be exchanged to facilitate international trade and financial transactions. After passing a lot of phases, present foreign exchange market has established and performing to benefit all the parties incorporated here. There are basically three players in the foreign exchange market of Bangladesh. Those are the Bangladesh Bank, authorized dealers, and customers. This paper discussed regarding the related issues of foreign exchange activities of Standard Bank Limited.