INDEPENDENT UNIVERSITY

BANGLADESH

Report on: CAMELS Rating of

BRAC Bank

Submitted to:

Mr. Saquib Shahriar

Lecturer, School of Business
FIN 401: Banking and Finance
Independent University, Bangladesh

Submitted by:Md.Ikramul
Hakim#1020023Ahmed
Saumik#1020296Taijul
Islam#0920555Tawhiduzza
man#0910015Hafijur
rahman#0910055

Introduction
The CAMELS ratings or Camels rating is a supervisory rating system to classify a bank's
overall condition. The ratings are assigned based on a ratio analysis of the financial statements.
The components of a bank's condition that are assessed:

(C)apital adequacy
(A)ssets

(M)anagement Capability

(E)arnings

(L)iquidity (also called asset liability management)

(S)ensitivity (sensitivity to market risk, especially interest rate risk)

BRAC Bank's Condition

Capital Adequacy
The bank has increased its total capital rapidly year by year but in 2005 the
capital has increased little more. On the other hand, total capital of the
industry has also increased. The average capital adequacy of the bank within
5 years is 10,391.80 and average capital adequacy of industry within 5 years
is 9,554.20. So, we can see that the bank has the more capital comparing to
the industry average.
Asset quality
The bank has increased its total asset rapidly year by year compare to the
industry average. The classified loan to total assets of the Brac bank was
also increasing but in 2004 it was decreased by 3%. On the other hand, the
industry has the increased classified loans to total assets year by year.
Average asset of the bank within 5 years is 1, 18,349 and Total average asset
of the industry within 5 years is 98,263.89. So, we can see that the bank has
the more asset than industry average.
2

Management
Average cost of deposit of the bank within 5 years is 7.92% and Total
average cost of deposit of industry within 5 years is 9.12%. So, we can see
that the bank has the less cost of deposit than the industry average.
Earnings
Return on investment of the bank has increased in 2008, 2009, 2011 but in
2012 it has decreased enough. On other hand, return on investment of the
industry average has increased rapidly. Average net income of the Brac bank
within 5 years is 1,237.80 and Total average net income of industry within 5
years is 1,405.27. So, there is bank has the less net income than the industry
average.
Liquidity
Average cash of the Brac bank within 5 years is 9,269.43 and average cash
of industry within 5 years is 6,293.64. So, there is bank has the more cash
than the industry average.
Sensitivity to market risk
average net interest margin of the bank within 5 years is 3.74% and average
net interest margin of the industry within 5 years is 2.70%. So, there is bank
has the more net interest margin than the industry average.

Rating
Bank

Industr
y

Capital

8.5

Asset

8.5

Managem
ent

7.5

Earnings

8.5

Liquidity

6
3

Sensitivity

Weighted

8.08

7.41

Capital adequacy
We rated the bank 8.5 because the bank has the more capital comparing to
the industry average. And we rated the industry 8.
Asset quality
We rated the bank 9 because that the bank has the more asset than industry
average. And we rated industry 8.5 because it has fewer assets.

Management
We rated the bank 7.5 and industry 8 because the bank has the less cost of
deposit than the industry average.
Earnings
we rated the bank 8.5 and industry 8 because bank has the more return on
investment than the industry average. We rated the industry 8 because it
has more net income than the Brac bank.
Liquidity
We rated the bank 8 and industry 6 because Brac bank has more cash than
the industry average.
Sensitivity to market risk
We rated the bank 7 and industry 6 because Brac bank has the more net
interest margin than the industry average.

Ratio Analysis
Capital adequacy ratio: (in percentage)

Analysis:

In this graph on average bank has a more or sometimes similar

adequacy than industry. This means bank has a capital more than industry on
average. In 2011 industry has a little bit higher than bank but in 2012 it looks
similar. Before that in 2008 to 2011 bank is good capitalized than industry. In
percentage bank and industry both are in 10 on average.
Deposit Ratio: (in percentage)

Analysis: In this situation of graph bank and industry are likely similar in deposit
ratio. On average both are above 8 or similar. But in 2012 it becomes down to 7.7 of
bank and 8 on industry. So it shows that the ratio of deposits of bank and industry
likely similar on average. But most probably bank has an easy position on deposit.
5

Cost of Deposit: (in percentage)

Analysis: In 2008 to 2009 bank and industry both have similar ratio in cost of
deposit. But after 2009 it looks much higher on industry than bank but both are
under situation than before. In 2011 and 2012 it looks much raise in industry which
cost of industry must increase.
Return On Investment: (in percentage)

Analysis: Return on investment that last five years of bank and industry look
very complexes. In 2008 to 2009 bank is more than industry on return but after
2010 industry has a higher situation than bank on return. But both are likely
downward in 2012.So it causes an effect on economy as well.
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Return on asset: (in percentage)

Analysis:

Return on assets is likely complex on bank and industry both. On

graph it shows that on 2010 industry has better return on assets than bank. On
average industry is higher as well in return on asset. On first 2008 bank grown up
but after it comes to down a year to year. But industry got upper to down as well on
return on asset.
Return on equity: (in percentage)

Analysis:

This graph shows that in 2008 industry has much more return on
equity than bank. Which is half of industry .But later it much downfall of industry
.That not so well. But bank has real converse on year to year. On 2012 it falls again
both bank and industry.
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Net Interest Margin: (in percentage)

Analysis: On net interest margin bank has more suitable position than industry.
Interest situation is ore applicable in bank. So that bank has up situation than
industry has. But industry has a good margin at their situation. On 2010 it goes up
for both bank and industry.

Overall Situation:

Theres something are preferred for bank and

something for industry at their own situation. Such as in equity return industry has
well situation also in asset. But bank of interest margin and cost of deposit situation
as well. So in compare situation bank is more suitable position than industry at their
situation. And the cost of deposit is higher than bank of industry, which does not,
seems well. It affect on industry total situation.