Financial Performance Analysis of

Dutch-Bangla Bank Limited

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 Table of Content
Chapter Sub Point Page
Chapter 1 Dutch-Bangla Bank Limited 4
Brief History 5
Our Mission Statement 6
Services 7
Dutch Bangla Bank 9
Managements
Chapter 2 Credit Rating System 11
Bangladesh | Credit Rating 11
Credit Rating Scales And 12
Definitions Long Term:
Debt Instruments
Money Market 13
Capital Market 14
Primary Market 14
Secondary Market 15
Primary Vs. Secondary 15
Markets
Ratio Analysis Interpretation 16
Key Accounting Ratios 20
Chapter 3 Capital Structure Of DBBL 21
Ratio Analysis Of DBBL: 21
Chapter 4 Findings 25
Chapter 5 Recommendation 26
Conclusion 27
Bibliography 28

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Chapter 1: Company Profile

Dutch-Bangla Bank Limited

Dutch-Bangla Bank is Bangladesh's most innovative and technologically advanced bank. Dutch-
Bangla Bank Ltd stands to give the most innovative and affordable banking products to
Bangladesh. Amongst banks, Dutch-Bangla Bank is the largest donor in to social causes in
Bangladesh. It stands as one of the largest private donors involved in improving the country.
Dutch-Bangla Bank is proud to be associated with helping Bangladesh as well as being a leader
in the country's banking sector.

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Chapter 1: Company Profile

Brief History

Dutch-Bangla Bank started operation is Bangladesh's first joint venture bank. The bank was an
effort by local shareholders spearheaded by M Sahabuddin Ahmed (founder chairman) and the
Dutch company FMO.

From the onset, the focus of the bank has been financing high-growth manufacturing industries
in Bangladesh. The rationale being that the manufacturing sector exports Bangladeshi products
worldwide. Thereby financing and concentrating on this sector allows Bangladesh to achieve the
desired growth. Dutch Bangla Bank other focus is Corporate Social Responsiblity (CSR). Even
though CSR is now a cliche, Dutch Bangla Bank is the pioneer in this sector and termed the
contribution simply as 'social responsiblity'. Due to its investment in this sector, Dutch Bangla
Bank has become one of the largest donors and the largest bank donor in Bangladesh. The bank
has won numerous international awards because of its unique approach as a socially conscious
bank.

Dutch Bangla Bank was the first bank in Bangladesh to be fully automated. The Electronic-
Banking Division was established in 2002 to undertake rapid automation and bring modern
banking services into this field. Full automation was completed in 2003 and hereby introduced
plastic money to the Bangladeshi masses. Dutch Bangla Bank also operates the nation's largest
ATM fleet and in the process drastically cut consumer costs and fees by 80%. Moreover, Dutch
Bangla Bank choosing the low profitability route for this sector has surprised many critics. Dutch
Bangla Bank had pursued the mass automation in Banking as a CSR activity and never intended
profitability from this sector. As a result it now provides unrivaled banking technology offerings
to all its customers. Because of this mindset, most local banks have joined Dutch Bangla Bank
banking infrastructure instead of pursuing their own.

Even with a history of hefty technological investments and an even larger donations, consumer
and investor confidence has never waned. Dutch-Bangla Bank stock set the record for the highest
share price in the Dhaka Stock Exchange in 2008.

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Chapter 1: Company Profile

Mission Statement

Mission

Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a
commitment to social responsibility. "Profits alone" do not hold a central focus in the Bank's
operation; because "man does not live by bread and butter alone".

Vision

Dutch-Bangla Bank dreams of better Bangladesh, where arts and letters, sports and athletics,
music and entertainment, science and education, health and hygiene, clean and pollution free
environment and above all a society based on morality and ethics make all our lives worth living.
Dutch-Bangla Bank 's essence and ethos rest on a cosmos of creativity and the marvel-magic of a
charmed life that abounds with spirit of life and adventures that contributes towards human
development.

Core Objectives

Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and
satisfaction and to become their first choice in banking. Taking cue from its pool esteemed
clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and
epitomizes its vaunted marquees "Your Trusted Partner"

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Chapter 1: Company Profile

Services
PERSONAL BANKING
Electronic Banking
Dutch-Bangla Bank Life Line
Dutch-Bangla Bank Future Line

CORPORATE BANKING
Corporate Banking Services Overview
Electronic Banking For Your Business
LC Trade

DEPOSITS AND ADVANCES

Deposits
Term Deposits
Loans And Advances

DELIVERY CHANNEL
ATM Locations
Branch Locations
Merchant Locations

SME BANKING
Dutch-Bangla Bank Smart Cash Credit
Dutch-Bangla Bank Smart Term Loan
Dutch-Bangla Bank Smart Festival Loan
Dutch-Bangla Bank Smart Women Entrepreneurs Financing
Dutch-Bangla Bank Smart Distributor Financing

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Chapter 1: Company Profile

Cash Credit (Hypo) Under Small Shop Financing Scheme

MISCELLANEOUS
Dutch-Bangla Bank Web Mail
Charges And. Fees
Career Opportunity (Apply Online)
Dutch-Bangla Bank Scholarship
Dutch-Bangla Bank Tender Notice
News Room
Remittance Services For Exchange Houses
Online Remittance Status
Western Union Terms & Conditions

INVESTOR RELATIONS
Financial Statements
Interim Report
Price Sensitive Information
Risk Based Capital
Financial Inclusion And Literacy
Contact Person

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Chapter 1: Company Profile

Dutch Bangla Bank Managements

Name Designation Division

Abul Kashem Md. Shirin Managing Director --

Md. Sayedul Hasan Deputy Managing Director --

Khan Tariqul Islam Deputy Managing Director --

Khan Tariqul Islam Chief Financial Officer --

Senior Executive Vice

Md. Abul Kashem Khan Financial Inclusion Division
President

Mohammad Abdulla Al Senior Executive Vice

Office of the CAMLCO
Mamun President

Shamsul Azam Executive Vice President Marketing & Development

Abdul Hadi Gholam Sanjari Executive Vice President Credit Administration Division

Masud Hossain Executive Vice President Centralized Trade Service(CTS)

Md. Shamsuddin Yousuf

Senior Vice President Internal Control & Compliance Division
Khaled

Jalal Uddin Ahmed Senior Vice President Treasury Division (Front Office)

Md. Monirul Alam Senior Vice President Board Secretariat

Mahbub Jan Chowdhury Senior Vice President Corporate Banking Division

Md. Kamruzzaman Senior Vice President Retail Banking Division

Md. Kamruzzaman Senior Vice President e-Banking Business Division

Md. Ashraful Haque Senior Vice President Accounts Division

Mir Mominul Huq First Vice President SME Division

Mir Mominul Huq First Vice President Alternative Delivery Channel Division

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Chapter 1: Company Profile

Md. Iftekhar Uddin First Vice President Credit Monitoring & Recovery Division

Farhad Ahmed Khan First Vice President Credit Division

Mohammad Emdadul Haque

First Vice President IT Operation Division
Khan

S.M. Azharul Islam First Vice President General Service Division

International Division (Treasury Back

Abdul Monem First Vice President
Office)

Md. Sharif Al Kashem Vice President Cards Operation Division

Md. Mosharraf Hossain Vice President Human Resources Division

Md. Moazzem Hossain Khan Vice President IT Development Division

Senior Assistant Vice Management Information System

Fouzia Parvin Sultana
President Division

First Assistant Vice

Pronab Kumar Roy Risk Management Division
President

First Assistant Vice

Sk. Shakil Ahmed IT Security Division
President

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Chapter 2: Theoretical Overview

Theoretical overview
Credit Rating System
A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a
business, company or a government), predicting their ability to pay back the debt, and an implicit
forecast of the likelihood of the debtor defaulting.

An assessment of the creditworthiness of a borrower in general terms or with respect to a

particular debt or financial obligation. A credit rating can be assigned to any entity that seeks to
borrow money an individual, corporation, state or provincial authority, or sovereign
government. Credit assessment and evaluation for companies and governments is generally done
by a credit rating agency such as Standard & Poors, Moodys or Fitch. These rating agencies are
paid by the entity that is seeking a credit rating for itself or for one of its debt issues.

Bangladesh | Credit Rating

Standard & Poor's credit rating for Bangladesh stands at BB- with stable outlook. Moody's credit
rating for Bangladesh was last set at Ba3 with stable outlook. Fitch's credit rating for Bangladesh
was last reported at BB- with stable outlook. In general, a credit rating is used by sovereign
wealth funds, pension funds and other investors to gauge the credit worthiness of Bangladesh
thus having a big impact on the country's borrowing costs. This page includes the government
debt credit rating for Bangladesh as reported by major credit rating agencies. 12/6/2016

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Chapter 2: Theoretical Overview

CREDIT RATING SCALES AND DEFINITIONS LONG TERM: DEBT

INSTRUMENTS

Rating Definition

A Debt instruments rated AAA have extremely strong

capacity to meet financial commitments. These are
Triple A(Extremely Strong judged to be of the highest quality, with minimal credit
Capacity) risk.

AA1, AA2, AA3*

Debt instruments rated AA have very strong capacity to
Double-A meet financial commitments. These are judged to be of
very high quality, subject to very low credit risk.
(Very Strong Capacity)

A1, A2, A3 Debt instruments rated A have strong capacity to meet

financial commitments, but susceptible to the adverse
Single-A effects of changes in circumstances and economic
conditions. These are judged to be of high quality,
(Strong Capacity) subject to low credit risk.

BBB1, BBB2, BBB3 Debt instruments rated BBB have adequate capacity to
meet financial commitments but more susceptible to
Triple B adverse economic conditions or changing circumstances.
They are subject to moderate credit risk. Such rated
(Adequate Capacity) projects possess certain speculative characteristics.

BB1, BB2, BB3 Debt instruments rated BB have inadequate capacity to

meet financial commitments. They have major ongoing
Double B uncertainties and exposure to adverse business, financial,
or economic conditions. Such projects have speculative
(Inadequate Capacity) elements, and are subject to substantial credit risk.

B1, B2, B3
Debt instruments rated B have weak capacity to meet
Single B financial commitments. They have speculative elements
and are subject to high credit risk.
(Weak Capacity)

CCC1, CCC2, CCC3

Debt instruments rated CCC have very weak capacity to
Triple C meet financial obligations. They have very weak
standing and are subject to very high credit risk.
(very Weak Capacity)

CC Debt instruments rated CC have extremely weak

capacity to meet financial obligations. They are highly
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Chapter 2: Theoretical Overview

Double C speculative and are likely in, or very near, default, with
some prospect of recovery of principal and interest.
(Extremely Weak Capacity)

Debt instruments rated C are highly vulnerable to non-

C payment, have payment arrearages allowed by the terms
of the documents, or subject of bankruptcy petition, but
Single C have not experienced a payment default. Payments may
have been suspended in accordance with the
(Near to Default) instruments terms. They are typically in default, with
little prospect for recovery of principal or interest.

D rating will also be used upon the filing of a bankruptcy

D(Default) petition or similar action if payments on an obligation
are jeopardized.

'Money Market'

The money market is where financial instruments with high liquidity and very
short maturities are traded. It is used by participants as a means for borrowing and lending in the
short term, with maturities that usually range from overnight to just under a year.

Money market basically refers to a section of the financial market where financial instruments
with high liquidity and short-term maturities are traded. Money market has become a component
of the financial market for buying and selling of securities of short-term maturities, of one year
or less, such as treasury bills and commercial papers.

Over-the-counter trading is done in the money market and it is a wholesale process. It is used by
the participants as a way of borrowing and lending for the short term.
Description: Money market consists of negotiable instruments such as treasury bills, commercial
papers. and certificates of deposit. It is used by many participants, including companies, to raise
funds by selling commercial papers in the market. Money market is considered a safe place to
invest due to the high liquidity of securities.

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Chapter 2: Theoretical Overview

'Capital Market'

A financial market that works as a conduit for demand and supply of debt and equity capital. It
channels the money provided by savers and depository institutions (banks, credit unions,
insurance companies, etc.) to borrowers and investees through a variety of financial instruments
(bonds, notes, shares) called securities. A capital market is not a compact unit, but a highly
decentralized system made up of three major parts: (1) stock market, (2) bond market, and (3)
money market. It also works as an exchange for trading existing claims on capital in the form of
shares.

Capital market is a market where buyers and sellers engage in trade of financial securities like
bonds, stocks, etc. The buying/selling is undertaken by participants such as individuals and
institutions.

Description: Capital markets help channelise surplus funds from savers to institutions which
then invest them into productive use. Generally, this market trades mostly in long-term
securities. Capital market consists of primary markets and secondary markets. Primary markets
deal with trade of new issues of stocks and other securities, whereas secondary market deals with
the exchange of existing or previously-issued securities. Another important division in the capital
market is made on the basis of the nature of security traded, i.e. stock market and bond market.

Primary Market

Primary market can be defined as the part of capital market where the issuance of new securities
is done. The securities are offered to public and are sold for the first time. Also, sellers and
buyers can negotiate without any intermediary. This market is also known as new issues market.

Primary Market also called the New Issue Market, is the market for issuing new securities. The
main players of these markets are the private and public companies that
offer equity or debt based securities such as stocks and bonds in order to raise money for their
operations such as business expansion, modernization and so on.

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Chapter 2: Theoretical Overview

Secondary market

The market in which securities are traded after they are initially offered in the primary market.
Most trading occurs in the secondary market. The New York Stock Exchange, as well as all
other stock exchanges and the bond markets, are secondary markets. Seasoned securities
are traded in the secondary market.

The secondary market is what people are talking about when they refer to the "stock market".
This includes the New York Stock Exchange (NYSE), Nasdaq and all major exchanges around
the world. The defining characteristic of the secondary market is that investors trade among
themselves. That is, in the secondary market, investors trade previously issued securities without
the issuing companies' involvement. For example, if you go to buy Microsoft stock, you are
dealing only with another investor who owns shares in Microsoft. Microsoft (the company) is in
no way involved with the transaction.

Primary vs. Secondary Markets

It is important to understand the distinction between the secondary market and the primary
market. When a company issues stock or bonds for the first time and sells those securities
directly to investors, that transaction occurs on the primary market. Some of the most common
and well-publicized primary market transactions are IPOs, or initial public offerings. During an
IPO, a primary market transaction occurs between the purchasing investor and the investment
bank underwriting the IPO. Any proceeds from the sale of shares of stock on the primary market
go to the company that issued the stock, after accounting for the bank's administrative fees.

If these initial investors later decide to sell their stake in the company, they can do so on the
secondary market. Any transactions on the secondary market occur between investors, and the
proceeds of each sale go to the selling investor, not to the company that issued the stock or to
the underwriting bank.

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Chapter 2: Theoretical Overview

Ratio Analysis Interpretation

Financial statements provide important financial information for people who do not have access
to the internal accounts. For example, current and potential shareholders can see how much profit
a company has made, the value of its assets, and the level of its cash reserves. Although these
figures are useful they do not mean a great deal by themselves. If the user is to make any real
sense of the figures in the financial statements, they need to be properly analysed using
accounting ratios and then compared with either the previous years ratios, or measured against
averages for the industry

PROFITABILITY RATIOS

One of the most important measures of a companys success is its profitability. However,
individual figures shown in the income statement/profit and loss account for gross profit and net
profit mean very little by themselves. When these profit figures are expressed as a percentage of
sales, they are more useful. This percentage can then be compared with those of previous years,
or with the percentages of other similar companies. Changes in the gross profit percentage ratio
can be caused by a number of factors. For example, a decrease may indicate greater competition
in the market and therefore lower selling prices and a lower gross profit or, alternatively, an
increase in the cost of purchases. An increase in the gross profit percentage may indicate that the
company is in a position to exploit the market and charge higher prices for its products or that it
is able to source its purchases at a lower cost. The relationship between the gross and the net
profit percentage gives an indication of how well a company is managing its business expenses.
If the net profit percentage has decreased over time while the gross profit percentage has
remained the same, this might indicate a lack of internal control over expenses. The return on
capital employed (ROCE) ratio is another important profitability ratio. It measures how
efficiently and effectively management has deployed the resources available to it, irrespective of
how those resources have been financed. Various formulae can be found in textbooks for
calculating ROCE. The most common uses operating profit (defined as profit before interest and
taxation) and the closing values for capital employed (although using averages for the year is
more accurate). This ratio is useful when comparing the performance of two or more companies,
or when reviewing a companys performance over a number of years.

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Chapter 2: Theoretical Overview

LIQUIDITY RATIOS

Liquidity refers to the amount of cash a company can generate quickly to settle its debts. A
reasonable level of liquidity is essential to the survival of a company, as poor cash control is one
of the main reasons for business failure. The current ratio compares a companys liquid assets (ie
cash and those assets held which will soon be turned into cash) with short-term liabilities
(payables/ creditors due within one year). The higher the ratio the more liquid the company. As
liquidity is vital, a higher current ratio is normally preferred to a lower one. However, a very
high ratio may suggest that funds are being tied up in cash or other liquid assets, and may not be
earning the highest returns possible. A stricter test of liquidity is the acid test ratio (also known
as the quick ratio) which excludes inventory/stock as a current asset. This approach can be
justified because for many companies inventory/stock cannot be readily converted into cash. In a
period of severe cash shortage, a company may be forced to sell its inventory/stock at a discount
to ensure sales. Caution should always be exercised when trying to draw definite conclusions on
the liquidity of a company, as both the current ratio and the acid test ratio use figures from the
balance sheet. The balance sheet is only a snapshot of the financial position at the end of a
specific period. It is possible that the balance sheet figures are not representative of the liquidity
position during the year. This may be due to exceptional factors, or simply because the business
is seasonal in nature and the balance sheet figures represent the cash position at just one
particular point in the cycle. EFFICIENCY RATIOS Most companies offer their customers
credit in order to increase their sales. However, giving credit to customers incurs an opportunity
cost as the cash is tied up in financing receivables/ debtors, and there is also the risk of the debts
not being paid. Therefore, companies will normally seek to collect their debts as soon as
possible. The receivables/debtors collection period (in days or months) provides an indication of
how successful (or efficient) the debt collection process has been. The payables/creditors
payment period links the value of payables/creditors with the amount of goods and services that
a company is purchasing on credit. A common view is that payables/creditors provide a source of
free finance to the company, and that the payments to payables/creditors should be deferred as
long as possible. However, this view ignores the value of any cash settlements or discounts that
may be offered by suppliers. In addition, excessive delays in payment may result in a reduction
in the general terms of trade that suppliers are prepared to offer. A company needs to carefully
plan and manage its inventory/stock levels. Ideally, it must avoid tying up too much capital in

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Chapter 2: Theoretical Overview

inventory/stock, yet the inventory/stock levels must always be sufficient to meet customer
demand. The inventory/stock turnover period indicates the average number of days that
inventory/stock is held for. A change in the inventory/stock turnover period can be a useful
indicator of how well a company is doing. A lengthening in the inventory/stock turnover period
may indicate a slowing down of trading or an unnecessary build up of inventory/stock.

INVESTOR RATIOS

The earnings per share ratio of a company represents the relationship between the earnings made
during an accounting period (and available to shareholders) and the number of shares issued. For
ordinary shareholders, the amount available will be represented by the net profit after tax (less
any preference dividend where applicable). Many investment analysts regard the earnings per
share ratio as a fundamental measure of a companys performance. The trend in earnings per
share over time is used to help assess the investment potential of a companys shares. However,
an attempt should be made to take into account the effect of a company increasing its retained
earnings. Most companies retain a significant proportion of the funds they generate, and hence
their earnings per share will increase even if there is no increase in profitability. The dividend
cover ratio focuses on the security of the current rates of dividends, and therefore provides a
measure of the likelihood that those dividends will be maintained in the future. It does this by
measuring the proportion represented by current rates of dividends of the profits from which
such dividends can be declared without drawing on retained earnings. The higher the ratio, the
more profits can decline without dividends being affected. The dividend yield compares the
amount of dividend per share with the market price of a share, and provides a direct measure of
the return on investment in the shares of a company. Investors are able to use this ratio to assess
the relative merits of different investment opportunities. The price earnings ratio compares the
benefits derived from owning a share with the cost of purchasing such a share. It provides a clear
indication of the value placed by the capital market on those earnings and what it is prepared to
pay for participation. It reflects the capital market assessment of both the amount and the risk of
these earnings, albeit subject to overall market and economic considerations.

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Chapter 2: Theoretical Overview

FINANCING RATIOS

Current and potential investors will be interested in a companys financing arrangements. The
extent to which a company is financed by outside parties is referred to as gearing. The level of
gearing in a company is an important factor in assessing risk. A company that has borrowed
money obviously has a commitment to pay future interest charges and make capital repayments.
This can be a financial burden and possibly increase the risk of insolvency. Most companies will
be geared to some extent. The gearing ratio measures the companys commitments to its long-
term lenders against the long-term capital in the company. The level of gearing will be
influenced by a number of factors, for example the attitude of the owners and managers to risk,
the availability of equity funds, and the type of industry in which the company operates. The
interest cover ratio measures the amount of profit available to cover the interest payable by the
company. The lower the level of interest cover the greater the risk to lenders that interest
payments will not be met. If interest payments and capital repayments are not paid when they fall
due there can be serious consequences for a company. In the event of a default, a lender may
have the right to seize the assets on which the loan is secured and sell them to repay the amount
outstanding. Where lenders do not have security on their loan, they could still apply to the courts
for the winding up of a company so that assets can be liquidated and debts repaid.

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Chapter 2: Theoretical Overview

KEY ACCOUNTING RATIOS

Profitability Gross profit Gross profit x 100%

ratios Sales
percentage (revenue)
Net profit percentage Net profit x 100%
Sales (revenue)
Return on capital employed Operating profit x 100%
Capital employed
Liquidity Current ratio Current assets :1
ratios
Current liabilities
Quick/acid test/liquidity ratio Current assets - inventory/stock :1
Current liabilities
Efficiency Receivables/debtors Trade receivables/debtors x 365 days
ratios collection period
Sales
Payables/creditors payment Payables/creditors x 365 days
period
Purchases
Inventory/stock turnover Inventory/stock x 365 days
period
Cost of sales
Investor Earnings per share Profit after taxation, preference
ratios dividends and extraordinary items
Ordinary shares
Dividend cover Earnings per share
Dividend per (ordinary) share
Dividend yield Dividend of the share for the year x 100%
Current market value of the share
Price earnings ratio (P/E Current share price per share Earnings per
ratio) share
Earnings per share
Financing Gearing ratio Prior charge capital :1
ratios
Total capital
Interest cover Profit before interest and taxation
Interest payable

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Chapter 3: Company Analysis

Company Analysis
Capital Structure of DBBL:
Banks generally do their business with others fund, so DBBL is in exception. DBBL uses 24%
equity and 75% Debt source of capital. The capital structure is following:

Particulars Percentage

Total Shareholders Equity 25.02%

Long-term Debt ( Fixed Deposit 1 year & above) 74.98%

Total Capital 100%

Ratio Analysis of DBBL:

Ratio analysis is an analytical tool can be applied to a banks financial statements so that
management and the external users can identify the most critical problems inside each bank and
develop ways to deal with those problems. Some selected ratios are mentioned here to give an
insight about Dutch-Bangla Bank Limited.

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Chapter 3: Company Analysis

Return on Equity:
Year 2005 2006 2007 2008 2009

ROE (%) 31.01 24.07 24.02 29.89 30.28

Interpretation: In ROE of DBBL, it is analyzed that ratio is almost equal in every year that the
bank is in constant level.

Return on Assets:
Year 2005 2006 2007 2008 2009

ROA (%) 1.29 0.93 1.01 1.49 1.60

Interpretation: In the ROA it is analyzed that the banks ROA is in constantly growing which
indicating that bank is using its assets effectively than previous year.

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Chapter 3: Company Analysis

Loan Deposit ratio:

Year 2005 2006 2007 2008 2009

Loan Deposit ratio 82.93 75.93 69.82 80.85 71.41

(%)

Interpretation: The standard of loan deposit ratio is 85%. The loan deposit ratio of DBBL in
2008 and 2009 is 80.85% and 71.41%, which indicates that DBBL is not in progressive but
satisfactory.

Return on Investment:
Year 2005 2006 2007 2008 2009

ROI (%) 5.87 7.3 9.48 9.69 14.64

Interpretation: DBBLs Return on Investment is 5.87% in 2006 and in 2009 is 14.64%, which
indicates that DBBL is making progress and arrange their investment decision in effective way.

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Chapter 3: Company Analysis

Earning Per Share (EPS):

Year 2005 2006 2007 2008 2009

EPS (In Tk.) 181.97 179.18 237.37 54.78 75.85

Interpretation: The EPS of DBBL is not sustainable but EPS of 2009 is higher than 2008,
which means that the bank may generate more growth in EPS in the future.

Capital adequacy ratio:

Year 2005 2006 2007 2008 2009

Capital adequacy ratio 10.15 10.05 11.76 10.89 11.59

(%)

Interpretation: DBBLs regulatory capital as on December 31, 2008 stood at Tk. 4,616.00
million. Capital adequacy ratio as on December 31, 2009 was 10.96% as Bangladesh Banks
minimum requirement of 10%. So that DBBL performance is satisfactory.

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Chapter 4: Summary of Findings

Findings
While preparing the report, I have learned several activities of FED of DBBL regarding
financing, import, export, purchasing bill etc. this activities are summarized below:

The most important factors that have been found to play a significant role in the number of
Export L/C in a month at DBBL are Back to Back L/C and Export Cash Credit (ECC). Other
than that, Package Credit (PC) also has a big impact on the number of Export L/C in a month.

The original un-standardized equation, with statistically significant and insignificant

variables
In foreign exchange department it is required to communicate with foreign banks and
international division of DBBL frequently and quickly.
To make the process easily modern communication media for e-mail, fax, internet etc
should be used. But the bank has not so much practice of using these media.
Modern technical equipment such as computer is not sufficient in foreign exchange
department. As a result the exchange process makes delay and it is also complicated.
If any wrong information can wrote by officer in IMP form, bank will lost their
dealership and must be cancelled.
DBBL faced a challenging position in various competing banks in current market.

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Chapter 5: Recommendation & Conclusion

Recommendation
The bank should higher export who can understand the future economic situation and can take
initiative based on the forecast. Again the bank can achieve success from the economy if they
can handle the situation efficiently.

Bank should improve their research centre and training centre to enrich the knowledge
regarding Uniform Customs and Practice for Documentary Credit (UCPDC).
I recommend that the bank improve its management of international division who are
responsible for handling their foreign exchange related risk.
Again the bank should maintain correspondence relationship with the bank that will them
to settle payment and receipt regarding foreign exchange transaction.
The bank should aware about their customer to meet up their demand to maintain their
goodwill.
Bangladesh is a developing country. Many people of our country live in many countries.
So, it is important to maintain foreign exchange department in every banks.
Foreign exchange department of DBBL should enrich by new technology to make a good
competition among the banks.

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Chapter 5: Recommendation & Conclusion

Conclusion

In conclusion, Dutch-Bangla Bank Limited is one of the most potential Banks in the banking
sector. It has a large portfolio with huge assets to meet up its liabilities and management of this
bank is equipped with the export bankers and managers in all level of management. So, it is not
easy job to find out the drawbacks of this branch. I would rather feel like producing my own
opinion about the ongoing practices in Mirpur Circle -10 Branch. Over the last few decades there
have taken place dramatic transformation in the realm of foreign exchange and financing of
foreign trade. In the wake of these changes the financial experts have developed a whole range of
few ideas and techniques on management exchange rates, investment of foreign exchange
reserve and opening up the economy. Currently this sector is becoming extremely competitive
with arrival of multinational banks as well as technology infrastructure, effectively foreign trade
management, higher performance level and utmost customers satisfaction. Again the advent of a
new era of information technology has changed the ways banks handle their foreign exchange
related transaction. We know that institutional support is necessary for undertaking international
trade and foreign exchange business. On the other hand expertise regarding management of
exchange rate is essential for successful operation of foreign exchange related transaction. By
undertaking these activities efficiently DBBL will be able to maximize their profit and wealth
maximization objectives. DBBL undertake and support foreign exchange business and
management of exchange rate in different way. But some improvement regarding exchange rate
risk minimization is necessary for handling the competition that arise from competitive financial
market, as the foreign exchange division of the has an influential effect to the net operating
income and net income of the bank. Recently this division has achieved quite success as they
have achieved permission to perform most of the foreign exchange related transaction. But rival
among local and foreign banks will make the activities of the bank more competitive in the near
future. So the banks have performed the foreign exchange transaction in a more innovative way.
So Dutch- Bangla Bank Limited has to reengineer its plan and reform the service improvement
strategy to retain the higher performance level, customer satisfaction and to compete with
challenges.

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Bibliography

Bibliography

1. Annual Report of Dutch- Bangla Bank Limited 2006, 2007, 2008 &2009.
2. www.dbbl.com.bd
3. www.bangladesh-bank.org
4. Bhuiya, M. A.B, Bangladesh Laws on Banks & Banking, Dhaka; M/S Tawakkal Press,
2nd edition, 1996.
5. Dr. A.R.Khan , Bank Management. Ruby Publication, 2nd edition, chapter 4 & 6.
6. International Standard Banking Practice (ISBP).
7. Some training book of BIBM.
8. www.investopedia.com/terms/c/creditrating.asp
9. http://www.tradingeconomics.com/bangladesh/rating
10. http://crab.com.bd/credit-rating-scales-and-definitions/
11. http://economictimes.indiatimes.com/definition/money-market
12. http://finance.mapsofworld.com/primary-market/
13. http://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/13450-
primary-market.html

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