> Afghanistan International Bank:
At Work, Building Afghanistan’s Future Since its foundation in 2004 at the instigation of prominent Afghan business groups and the Asian Development Bank, Afghanistan International Bank (AIB) has been recognised as a pioneering leader in the country’s banking sector. Now, more than a decade later, the bank has become firmly established as Afghanistan’s most trusted and respected financial institution.
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inning the Bank of the Year award for the fourth successive time underlines the validity of AIB’s mission to remain the most reputable financial institution and the bank of choice in Afghanistan. In doing so, AIB consistently strives to adhere to international best practices in corporate governance, and financial and risk management – including anti-money laundering and knowyour-customer processes – customer service, operations, information technology, and internal controls. AIB is committed to fostering economic development in Afghanistan, acting as a catalyst for growth, and ultimately contributing to the prosperity of the country and its people. AIB’s 35 branches give the bank a presence in all main business areas and provide comprehensive coverage across the country, serving more than 100,000 customers. To meet growth requirements, the bank is building a 12-storey head office with 23,000m² of floor space and incorporating high-security protection. The new head office is scheduled for opening later this year. AIB is banker to most leading Afghan business houses and to the United Nations, American and NATO Forces, the Asian Development Bank, World Bank, Nokia Siemens, Ericsson, United States Agency for International Development, Deutsche Gesellschaft für Technische Zusammenarbeit, Japan International Cooperation Agency, Danish Committee for Aid to Afghan Refugees, the Korean International Cooperation Agency, and the embassies of the United States, the United Kingdom, and Denmark. Despite Afghanistan’s challenging environment, AIB’s financial performance and its specific
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“AIB is committed to fostering economic development in Afghanistan, acting as a catalyst for growth, and ultimately contributing to the prosperity of the country and its people.” investments in people and infrastructure have made the bank a positive emblem for achievement and transformation. This status is underlined by having two major international clearing banks as correspondents – Standard Chartered Bank in New York and Commerzbank in Germany. The bank’s repeated successes in the Best Corporate Governance award category reflects its commitment and adherence to the highest industry standards and global best practices. As AIB forges ahead into its second decade, the bank remains committed to enabling a better future for Afghanistan, proud to play a role in shaping the opportunities that lie ahead. Since its founding, the bank has built an enduring business that combines international expertise with local knowledge, giving it a deeprooted understanding of customer needs. Over the past several years the bank has undertaken a number of initiatives aimed at building and reinforcing its institutional edifice. These are focused on four areas: corporate governance, operational excellence, customer satisfaction, and financial stability. In aggregate, the objectives of these undertakings are twofold: (1) to build the leading financial CFI.co | Capital Finance International
institution in Afghanistan; and (2) to ensure that AIB possesses both the structure and competence to meet the challenges that Afghanistan and the bank might well face over the next several years. The board has instituted a number of governance improvements that include the defining of clear responsibilities for shareholders, board of supervisors and management. The board has been expanded to seven members, four of whom are independent directors. The board also created four committees to address, in depth, issues concerning compensation and succession, strategy and planning, and investments and risk. The committees are headed by board members with vast experience in each of these fields. The bank has also strengthened its planning process, which now includes specific business objectives with the corresponding assignment of responsibilities to individual executives through a goal-setting mechanism, as well as preparation of financial budgets. Bonuses paid to executives are closely tied to the bank’s overall performance and each executive meeting his own goals. REMARKABLE ACCOMPLISHMENTS AIB is now Afghanistan’s best performing and most respected financial institution. The bank has recorded substantial gains across all of the most important performance indicators with sound fundamentals in capital, liquidity, profit margins and returns. The main ratings agencies continue to assign ‘investment grade’ status to the bank’s AFN 11.8 billion bond portfolio, of which more than 63% matures in three years or less. Total capital increased from AFN 3.07 billion to AFN 3.4 billion. The bank’s capital adequacy ratio of 13.59% and 87% liquidity