Table of Contents - CIHAN BANK Report 2013.pdf · New Headquarter Building Page 11 Account Policy of the Bank Page 11 External Auditor Report (Grant Thornton) Page 15 2 3. CIHAN BANK

Table of Contents

Cihan Bank in Brief Page 5

Capital of the Bank Page 6

Board of Directors Page 6

Major Shareholders Page 7

The Goals of the Bank Page 7

Banks Revenue Page 7

Achievements and Activities During 2013 Page 8

Trade Finance Operations Page 9

International Relationship Page 9

New Headquarter Building Page 11

Account Policy of the Bank Page 11

External Auditor Report (Grant Thornton) Page 15

32

CIHAN BANK IN BRIEF:

Cihan Bank for Islamic Investment and Finance was established in June 2008 and started operating on 01/04/2009 in the general headquarters of its administration in Erbil and followed by opening many branches upon the approval of Central Bank of Iraq (CBI). The branches are in Erbil (Bajger Branch) and in other provinces like Sulaymaniah, Zakho, Duhok; this is as for the Kurdistan Region. As well, Cihan Bank has opened branches each in Mosul, Kerkuk, two branches in Baghdad (Baghdad Branch and Jamila Branch) and as for the middle and south region, there is Najaf Branch and Basra Branch. Cihan Bank has plans to open a branch in Kalar district in Sulaymaniah Province and Soran district in Erbil Province after obtaining primary approvals from the Central Bank of Iraq as well approvals to open other branches in Hila, Karbala, Emara and Rumadi Provinces.

Cihan Bank has been established based on the terms of Islamic Law as shows in the name Cihan Bank for Islamic Investment and Finance and all its banking transactions are committed to the terms of Islamic law. There is an Islamic Committee formed by Islamic Scientists who audit, control and instruct all the work/business done by the bank which has a wide range of customers who agree and favor working with such bank.

After a short time, the bank has been ranked the third place among the Iraqi private banks under the assessment of the CBI in accordance with the standard CAMEL due to the good reputation and the good commitment to CBI laws and instructions. Since Cihan Bank provides all the statistics and data required by CBI, the bank aims to be one of the best Islamic banks known internationally. Cihan Bank is proud to be awarded Gold Medal by Tatweej-Islamic Institution in 2013 in the field of excellence and quality in Islamic banking among the Arab world.

Board of Directors Annual Report for the Bank's ActivitiesFor the Period of 1 / 1 / 2013 to 31 / 12 / 2013

554

CAPITAL OF THE BANK:

The Bank was established with 25 billion Iraqi dinars as a start and the capital increased up to 50 billion Iraqi dinars at the end of 2009. Then it was increased to 100 billion dinars during the year 2010 and to 150 billion dinars by 2012. As well, on 30/06/2013 the capital of the bank has reached 255 billion Iraqi dinars and our auditor notices the large mutations in the bank capital since Cihan Bank carried out all the Central Bank’s directives to the private banks to increase their paid up capital to 250 billion Iraqi dinars within a timeframe as it was mentioned in the CBI letter No. 9/3/1358 dated 30/10/2013.

BOARD OF DIRECTORS:

The Board of Directors is composed of seven members, including the General Manager as follow:

Name Position

Mr. Azad Yahya Saeed Bajger Chairman

Dr. Nawzad Yahya Saeed Bajger Vice Chairman

Mr. Talat Yahya Saeed Bajger Member

Mr. Sabah Yahya Saeed Bajger Member

Mr. Muaffak Tahir Al-Chalaby Member (General Manager)

Mrs. Suzan Sharif Muhammad Member

Mrs. Nawal Jamal Abdulla Member


MAJOR SHAREHOLDERS (more than 5%):

Mr. Azad Yahya Saeed Bajger

Dr. Nawzad Yahya Saeed Bajger

Mr. Talat Yahya Saeed Bajger

Mr. Sabah Yahya Saeed Bajger

Mrs. Suzan Shareef Mohammad

Ms. Nawal Jamal Abdullah

Mrs. Sharmeen Musa Abdulnabi

Mrs. Nawroz Salah Saeed Bajger

Mr. Mustafa Talat Yahya

THE GOALS OF THE BANK:

The bank continues in providing banking services based on the terms of Islamic Laws to its customers and works in fulfilling all their needs which helped in the increase of customer number. The bank's customers can be individuals, companies, governments or public institutions and the bank has made a good balance be-tween the amount of deposits, its capital and the granted credit which helped in offering job opportunities in different investments projects which are real estate, trades, agricultural and industrial. As well, the bank is very eager to apply the laws and regulations issued by financial and regulatory entities and especially that concerns to money laundering while maintaining the basis of how to maximize its financial resources and reduce the cost of banking operations with a commitment to implement the policy of distributing risks to maintain its assets and the quality of the assets in order to achieve a good return to the owner of investment accounts and shareholders. The bank has already distributed the returns on saving accounts of %9.30.

BANKS REVENUES:

Total bank revenue for the year 2013 is 65,229 billion Iraqi dinars and the total of deposits is 346,306 million Iraqi dinars. The bank is keen to apply the accounting standards prescribed under the unified accounting system. The total net profit of the bank for the same year is 44,139 billion Iraqi dinars as of 31/12/2013 which is a rate of %17.3 of the paid up capital.

Year IQD Profit Ratio USD Profit Ratio

2009 8% 8%2010 8.5% 8.5%2011 9.15% 8.1%2012 9.25% 8.15%

2013 9.3% 8.2%


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ACHIEVEMENTS AND ACTIVITIES DURING 2013:

1 Opening 3 new branches: Duhok Branch in Duhok Province, Basra Branch in Basra Province and Najaf Branch in Najaf Province.

2 Injecting 105 Billion IQD to increase the paid up capital of the bank.

3 Increasing the bank’s assets from 897 Billion IQD (2012) to 1,160 Trillion IQD (2013).

4 Organizing a lottery consisted of 10 prizes including cash money, car and white furniture every year for the people who have saving accounts in USD and IQD in condition that the balance during six months is not less than five million dinars or five thousand dollars. In order to encourage the individuals to depos-its their money in the bank.

5 Creating job for youth in Islamic Investment with the product Murabaha Taxi cars.

6 Providing Murabaha Private Car facility for the clients.

7 Providing Murabaha Private Car facility for the employees of Cihan Bank & Cihan Group with special conditions.

8 Financing Small Medium Sized Enterprises (SME) banking in all Cihan Bank branches. 5 Billion IQD was assigned for financing SMEs.

9 Increasing the trade finance operations’ volume of the bank.

10 Giving a seminar in Dubai on Dec 2013 in order to present the potential business in Iraq and Kurdistan region and to introduce Cihan Bank’s activities and services to the Gulf region.

11 Establishing correspondent banking relationship with foreign banks in Turkey, Jordan, Lebanon, Bah-rain, China, France, Germany, Belgium, Italy, Japan, Pakistan, Romania, Singapore, UAE, United Kingdom and Ukraine.

12 Installing automated banking system for the new opened branches.

13 Becoming a principle member of Master Card to deliver the best services to the clients.

14 Installing sms Banking system which will send messages to the clients’ mobile for every transaction made on their account/s and notify the customers about the due dates for their installments.

15 Installing internet Banking system so that our clients will have access to their accounts from everywhere in the world.

16 Installing Card Management System (Switch) in house so that the bank’s cards management will be done by the bank itself.

17 Installing ATM machines in Erbil, Baghdad, Suleymania, Kerkuk, Musol, Zakho & Duhok.


TRADE FINANCE OPERATIONS:

The below statistical chart shows the level of activity of the international division in head quarter through the implementation of foreign transactions as letter of credits, counter letters of guarantee and foreign re-mittances, as follow: (all values in Iraqi Dinar)Type of Transaction # of Transaction Amount / (Million IQD)

Cihan Bank L/C 96 335,477

L/C (with TBI) 33

Letters of Guarantee 66 239,996

Remittances 2960 1,151,551

INTERNATIONAL RELATIONSHIP:

The bank has an extensive network of correspondent banks and has exerted its efforts in this direction for the purpose of expanding its foreign activities to cover the Middle East and European countries. As for 2014, we are targeting to expand the banking relationships in America and Southeast Asia as well as the Gulf States. During 2013, the bank has established correspondent relationship with the below mentioned banks:

BBAC BEIRUT – LEBANON

FRANSABANK BEIRUT – LEBANON

INTERCONTINENTAL BANK (IBL) BEIRUT – LEBANON

FIRST NATIONAL BANK BEIRUT – LEBANON

BANK OF BEIRUT BEIRUT – LEBANON

CREDIT LIBANAIS BEIRUT – LEBANON

BYBLOS BANK BEIRUT – LEBANON

FRANSA LIBANAIS BANK BEIRUT – LEBANON

KUVEYT TURK BANK ISTANBUL – TURKEY)EUR&USD)

IS BANK ISTANBUL – TURKEY

VAKIF BANK ISTANBUL – TURKEY

ALBARAKA TURK BANK ISTANBUL – TURKEY

BANK ASYA ISTANBUL – TURKEY

AKTIF BANK ISTANBUL – TURKEY (EUR&USD)


98

YAPI KREDI BANK ISTANBUL – TURKEY

ALTERNATIVE BANK ISTANBUL – TURKEY

DENIZ BANK ISTANBUL – TURKEY

ZIRAAT BANKASI A.S. ISTANBUL – TURKEY

TURKIYE FINANS BANK ISTANBUL – TURKEY

HOUSING BANK FOR TRADE & FINANCE AMMAN – JORDAN

JORDAN AHLI BANK AMMAN – JORDAN

UNION BANK AMMAN – JORDAN

ARAB BANK AMMAN – JORDAN

COMMERZBANK FRANKFURT.GERMANY (EUR&USD)

BANCA UBAE SPA ROMA –ITALY

UBAF FRANCE

BACB BANK UK (EUR), (GBP) & (USD)

KUVEYT TURK BANK DUBAI -UAE

ENBD(Emirates National Bank of Dubai) DUBAI – UAE

ABU DHABI ISLAMIC BANK ABU DHABI – UAE

Al BARAKA ISLAMIC BANK MANAMA – BAHRAIN

ITHMAAR BANK MANAMA – BAHRAIN

Cihan Bank will have future relationships with the following banks:

1- Mashreq Bank

2- Byblos Bank (Europe)

3- AlUbaf Bank


NEW HEADQUARTER BUILDING:

1- Our new head quarter building which is located in one of the most famous roads in Erbil, Gulan Street, is currently under interior constructions and decorations. The Constructional work is almost done and the bank will move to the new building by this year 2014.

2- The bank has agreed with Cihan Motors to assign a special place for a new bank branch in the company building on 100m street (Car Dealers Street).

ACCOUNT POLICY OF THE BANK:

The bank depends on consolidated accounting system based on accounting standards which provide the basis requirements from the regulators as the Central Bank of Iraq.

Cihan Bank depends on the following basics:

1- Implementation of the accrual basis to record income and expenses and stock investment revenue is dated based on the date of receipt of profits.

2- Calculation of depreciation on a fixed settlement.

3- Implementation of exchange rate given by the CBI.

4- Returns on saving accounts are deducted from the profit and loss accounts.

God Bless!

Muwaffak Taher Al-Chalabi Azad Yahya Saeed BajgerGeneral Manager Chairman


1110

Annual Report

Annual Report

AuditorReport&BalanceSheet2013

Auditor's report

1514

The Balance Sheet as of 31 December 2013


1716



1918



2120



2322



2524



2726



2928



3130



3332



3534



3736



3938



4140


Head Quarter / Main BranchAddress: Kerkuk Road – Cihan Plaza Bldg. - Erbil - Iraq, P.O. Box: 0116-17Tel: +964 66 226 2816 | Email: [email protected]

Bajger BranchAddress: Near Sirwan Market Bldg. 25/13 Erbil - IraqTel: +964 750 745 0095 | Email: [email protected]

Baghdad BranchAddress: End of Al-Nedal St. Near The National Theater, Baghdad - Iraq Tel: +964 770 464 0520 | Email: [email protected]

Jamila BranchAddress: Jamila Market Near Husseinia Al Naser Baghdad - IraqTel: +964 770 477 1199 | Email: [email protected]

Sulaymaniyah BranchAddress: Chwarbakh Kaso Blgg. Sulaymaniyah - IraqTel: +964 53 326 1024 | Email: [email protected]

Zakho BranchAddress: Cihan Group Plaza Bld Ibrahim Alkhalil Road Zakho - IraqTel: +964 62 673 8875 | Email: [email protected]

Mosul BranchAddress: Al Dirkazliya opposite Alnabi younes Market Mosul - IraqTel: +964 770 380 0019 | Email: [email protected]

Kerkuk BranchAddress: Al Madina Str. Next to Turkmeneli TV Channel Kerkuk - IraqTel: +964 770 132 2692 | Email: [email protected]

Basra BranchAddress: Al Jazaer Str. Near The Al- Ishar Str. Basra - IraqTel: +964 780 140 7030 | Email: [email protected]

Najaf BranchAddress: Mohammad Mahdi Al-Jawahiry Street (Previously: Al-Rawan Street), Al-Najaf - IraqTel: +964 770 6826045 | Email: [email protected] Duhok BranchAddress: Korek Street, Near Meer Hotel. Duhok - IraqTel: +964 750 4501369 | Email: [email protected]

Branch Addresses

Documents

Table of Contents - CIHAN BANK Report 2013.pdf · New Headquarter Building Page 11 Account Policy of the Bank Page 11 External Auditor Report (Grant Thornton) Page 15 2 3. CIHAN BANK