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Our Approach to Economic responsibility

As a leading financial institution that often sets the benchmark for the industry, we are well aware of our responsibility towards all our stakeholders. The economic policy of the Bank is developed and applied with due attention to stakeholder interests in a manner consonant with sustainable performance and growth.

Our Policy Commercial Bank is committed to delivering sustainable economic performance and growth to all stakeholders.

Goals and Performance

The goals and objectives of the Bank are set out in a comprehensive Corporate Plan and Budget, which set directions and targets for all business units. Prepared annually, these two documents are based on a rolling five-year planning period. In addition to these core documents, monthly management accounts are prepared, in which variances are identified, analysed and reported to the Board of Directors along with action plans to improve performance.

Core strategies are formulated and discussed at regular meetings of the Board and at various management committee meetings. Functional strategies and targets arising from them are communicated to the appropriate staff as needed. The functions of the Bank are thus closely linked to overarching strategy, the guiding principles of which are expressed in the ‘Vision and Mission Statements’.

All financial data presented in this Section have been extracted from the Audited Financial Statements of the Bank which have been prepared as per the provisions of the all applicable statutes.

The Board approved Corporate Plan provides the core strategies and direction for the Bank. There are six Board Sub-Committees functioning at the Bank of which four are

mandatory. In addition, as depicted in the ‘Governance Structure’, There are nine Management Committees headed by the Managing Director.

The strategic business units of the Bank consist of Corporate Banking, Personal Banking, Treasury and International Operations. Details on the performance of these units are discussed in detail in the ‘Management Discussion and Analysis’.

Information on the Bank’s key financial goals and achievements in the year under review is found here.

More information is available in the following sections of the report:

• Operating and Financial Highlights.
• Investor Relations.

Detailed information will also be found in the Audited Financial Statements and the accompanying Notes.

Key Performance Indicators of Economic Responsibility

Creation and Distribution of Economic Value

The economic performance of the Bank can be measured by a variety of indicators. We have selected the following as being most relevant in the context of a sustainability report. Data has been provided covering a five-year period to facilitate performance comparisons and assessment.

Economic Value Added (EVA)

A measure of profitability that takes into consideration the cost of total invested equity and provides an accurate indication of true economic value generated by the Bank as opposed to accounting profits. Commercial Bank is deeply conscious of delivering optimum and consistent value to its shareholders. The Bank’s economic value creation during 2011 amounted to Rs. 5.361 Bn., while the total over the past five years amounted to Rs. 11.458 Bn.

Sources and Distribution of Income

Portrays the principal sources of income of the Bank and how it was distributed amongst various stakeholders.