Letter of Transmittal

19 September, 2017

Sharmeen Akter
Lecturer of
School of Business Studies
Southeast University

Subject: Submission of the Internship Report.

Dear Mam,

With due respect, I would like to inform you that it is a great pleasure for me to submit the report
on “Performance Analysis of Non-Banking Financial Institutions’’. “A Study on Uttara Model
Town Branch” as a mandatory requirement for MBA (Internship) program. While conducting the
working report, I have gathered extensive knowledge on Performance Analysis of Non-Banking
Financial Institutions for IDLC, UTTARA FINANCE & LANKA BANGLA FINANCE. Despite
various constraints, I finished this working report at my best effort given where I was. It would be
a great honor for me if you would add your opinions and suggestions for the future.

Thank you once again for supervising me during this difficult transitional time of my career.

Sincerely Yours,

………………….

Akhi-Tun-Alia Papry
ID: 2016210004023
Batch: 25th
 Acknowledgement

The successful accomplishment of this Internship Report is the outcome of the contribution and
involvement of a number of people, especially those who took the time to share their thoughtful
guidance and suggestions to improve the report. It’s difficult for me to thank all of those people
who have contributed something to this report. There are some special people who cannot go
without mention.

First of all, I would like to thank our honorable academic supervisor Sharmeen Akter, Lecturer of
School of Business Studies and Southeast University. I am thankful to her for continuous support
and supervision, suggestions and providing me with valuable information that was very much
needed for the completion of this presentation.

Finally, my sincere gratitude goes to my family, friends and classmates who helped me whenever
I needed.
 TABLE OF CONTENTS
Serial No. Contents Page no.
A Cover page 01
B Letter of Transmittal 02
C Acknowledgement 03
D TABLE OF CONTENTS 04
F Executive Summary 05
1 Chapter 1: Introduction 07-10

2 Chapter 2: Company Background 12-16

3 Chapter 3: Product & Development 18-24

4 Chapter 4: Financial Performance 26-30

5 Chapter 5: Corporate Social Responsibility (CSR) 32-33
6 Chapter 6: Recommendation and Conclusion 35-36
 Executive Summary

An internship program is very important & essential for acquiring experience through learning
and spreading the scope of knowledge. Internship program has done in ,IDLC ,Uttra Finance &
LankaBangla Dhaka. This internship Report is aimed at providing a comprehensive picture to
the areas of “Performance Analysis of Non-Banking Financial Institutions”. The Report has
been divided into Six Parts. These Are: 1) Introduction of The Report, 2) Over View of 3 non-
financial instructions, 3) Product & Development 4) Financial Performance 5) Corporate Social
Responsibility (CSR).6) Recommendation and Conclusion.

Methodology of the Report

Type of Research:

This report is a descriptive type of research which briefly reveals the overall activities performed
by IDLC, Uttra Finance & LankaBangla . It has been mainly administered by collecting
secondary data. Annual reports of IDLC,Uttra Finance & LankaBangla were the major
secondary data sources in this regard. Ratio analysis have been used as major tools for the
financial performance analysis. The study is performed based on the information extracted from
different sources collected by using a specific methodology. This report is analytical in nature.

Sources of data:

To prepare this report all the necessary information collected from mainly secondary sources of
data including annual reports, prospectus, websites, journals, articles, previous reports of the
organization.

Scope of the report

The scope of this study is to find out the efficiency and loopholes of IDLC ,Uttra Finance &
LankaBangla based on their financial data. I have used secondary data to complete my report.

Limitations of the report

The limitations I have face while preparing this Report are listed as follows:
Time Limitation: To complete the study, time was limited. It was really very short time to know
details about an organization like. IDLC, Uttra Finance & LankaBangla

Lack of Record: Large-scale research was not possible due to constrains and restrictions posed
by the organization. Unavailability of sufficient written documents as required making a
comprehensive study. In many cases, up-to-date information was not available.

Lack of experiences: Lack of experiences has acted as constraints in the way of meticulous
exploration on the topic.
 Chapter 2: Company Background

Uttara Finance
Uttara Finance and Investments Limited, a joint venture leasing and financing company,
registered as a non-banking financial institution under the Financial Institutions Act 1993 and the
Companies Act 1994 with licence from Bangladesh Bank to operate and transact all kinds of
business as provided under the relevant laws.

Uttara Finance and Investments Limited upholds its commitment towards the development of
financial service sector by offering high quality services to the local entrepreneurs. The
Company always focuses to the ever changing and challenging business environment and thus it
endeavors to diversify into other financial services which have long-term prospects. With its
continuous drive to improve, Uttara Finance and Investments Limited is well on track to be
considered as one of the leading leasing companies of the country.

There are three branches of Uttara Finance and Investments Limitedlocated in Chittagong,
Gulshan (Dhaka) & Bogra. The corporate branchof the Company and its registered office is
located in Dilkusha, Dhaka& extended head office is located in its own premises at Uttara
Centre, in the Tejgaon area.

Nature
Uttara Finance and Investments Limited extends lease finance for all types of machinery,
equipment, vehicle and household durable for the purpose of industrial, commercial and personal
use in Bangladesh and allows temporary finance to its clients within purview of the law as well
as all kind of Merchant Banking services. The Company also maintains Term Deposit of general
public on attractive terms.

Ultimate goal
 To maximize the stakeholders' value in the long run
 To develop long term strong relationship with clients
 To be a pioneer for providing financial services
 To create employment opportunity by investment in labour intensive
 Projects

Corporate attitude
To provide dedicated service to our clients with the highest integrity.
Vision
To serve the nation through participation in the development of the economy as a leading
company of Bangladesh.

Mission
 To be an outstanding company of motivated people with excellent team work spirit.
 To provide quality services and ensure steady growth of the company.
 To bring about a qualitative improvement in the life style of our people.
 To provide lease finance to professional and technicians on attractive terms.
 To encourage continuous technological development and creation of employment
opportunities.
 To ensure human resource development to meet the challenges of the time.

Objective
The objective of Uttara Finance and Investments Limited is to ensure sustainable operational
growth to maximize the benefits for the valued shareholders. To achieve the desired targets
through the skilled, trained, experienced and motivated management working hard with
responsibility in financially disciplined environment to ensure satisfactory customer service.

LankaBangla

LankaBangla Finance Limited" was originally established as a joint venture company between
Bangladesh and Sri lanka with the name "Vanik Bangladesh Limited" in the year 1996. But with
multinational collaboration it entered into new dimension with fresh equity investment from
Singapore and Kingdom of Saudi Arabia. In the year 2005 it was renamed LankaBangla Finance
Limited and went public in the following year. It was established with 1Ll intention to operate in
all the area of activities of an NBFI. The success factor of a 5nancial institution is it's
trustworthiness among customers and sound implication of Competitive strategies. To be a
profitable entity to invest in overall performance of the FI need to be satisfactory at a glance.
LBFL is trying to build a good image among all classes of Customer thus been able to improve
its performance to a greater extent \1y internship report on LBFL is titled "Credit & Investment
Management of LankaBangla Finance Limited". To construct the report I have tried to collect as
much as related information. First I gave an overview of the company. I included a brief
discussion of overall activities to get a preliminary idea of the services of the company. Though
the topic is not based on overall activities it has a origination in this sector. The functions of
treasury operation, corporate finance, brokerage services, merchant banking has important
implication on the credit & investment management of the company. In order to get idea of the
performance of the bank I tried to show how the company manages its financing products. My
concentration was to show the whole process of credit & investment management. As a major
part of the report overall financial performance analysis is done. Performance analysis included
operating performance, asset performance, financial risk analysis and other product
performances. A regression analysis is done to show the impact of sources of profit on the net
profit of the firm through which we are able to know the future level of profit Finally a study on
loan quality across different sectors is added. It is a Credit & Investment Division case study
based on term loans namely Home Loan, Lease Finance and Loan. To know the loan quality
two-sample t-test assuming unequal variance is done.

IDLC

IDLC Finance Limited started its journey, in 1985, as the first leasing company of the country
with multinational collaboration and the lead sponsorship of the International Finance
Corporation (IFC) of the World Bank Group. Technical assistance was provided by Korean
Development Leasing Corporation (KDLC), the largest leasing company of the Republic of
South Korea.IDLC which has now emerged as Bangladesh’s leading multi-products financial
institution, has amongst its external share-holders, international development agencies such as
Aga Khan Fund for Economic Development (AKFED) and German Investment and
Development Company (DEG) besides the IFC. The other foreign sponsors including Kookmin
Bank of the Re public of Korea in addition to KDLC and all these institutions together hold
47.3%% of the company’s shares. Five Bangladeshi financial institutions-The City Bank Ltd,
SadharanBima Corporation, Mercantile Bank Ltd, Eskayef Bangladesh Ltd, Reliance
insurance Ltd and the general public hold the remaining 52.7%. IDLC is the listed member of
Dhaka Stock Exchange.
The unique institutional shareholding structure comprising mostly of financial institutions helps
the company to constantly develop through sharingof experience and professional approach at
the highest policy making level.IDLC offers a diverse array of financial services and solutions to
institutional and individual clients to meet their diverse and unique requirements. The product
offerings include Lease Finance, Term Finance, real estate Finance, Short term Finance,
Corporate Finance, Merchant Banking, term Deposit Schemes, Debentures, and Corporate
Advisory Services. The vision of IDLC Finance Limited is to become the best performing and
most innovative financial solutions provider in the country. To achieving this vision and goal it is
important to taking due care of all of our constituents, particularly the shareholders, customers
and work forces. The corporate philosophy is discharge their functions with proper
accountability for actions and results and blind themselves to the highest ethical standards.

Vision:
We will be the best financial brand in our country.

Mission:
We will focus on quality growth, superior customer experience and sustainable business
practices.
 PRODUCT AND SERVICE

IDLC PRODUCT AND SERVICES:

Loan Products

 Lease Finance;

 Domestic Factoring of account receivables;

 Real Estate Developer Finance;

 Home Equity Finance;

 Personal Lone;

 Business Lone;

 Term Finance;

 Bill/ Invoice Discounting;

 Corporate Real Estate Finance;

 Home loan with home lone shield;

 Car lone for individuals;

 Machinery lone;

Investment Products

 Common equity products;

 Bonds;

 Preferred Equity investment;

Liability Products

 Term Deposit schemes;

 Debentures;

 Securitized Bonds;

Corporate Services

 Project Finance Appraisal;

 Working Capital arrangements;

 Refinancing arrangements;

 Securitization of Receivables;

 Personal Supports to SMEs;

Merchant Banking and Portfolio Management Services

 Cap Investment;

 IPO;

 Underwriting;

 Placement of Equity, Debentures, Bonds;

 Maximum capital Investment;

 Issue Management;

 Investment advisory
UTTARA FINANCE PRODUCT & SERVICES:

Loan Products:

• Lease Finance
• Term Finance
• Documentary Credit
• Merchant Banking

Transportation
Auto Loan
Household Durables
Medical Equipment’s
Marine Equipment’s
Industrial Equipment’s
Agricultural Equipment’s
Official flourishes/ Equipment’s

FOR INDIVIDUAL CORPORATION:

1. Lease agreement
2. DP Notes
3. Schedule of Payments
4. P.G.
5. Land Security/Personal Guaranty
6. Cheques 1. Corporate Guaranty
2. Board approval
3. P.G. of Board
4. Articles and Associations.
5. CIB Report (Provide Bangladesh Bank)
6. Cheques

Merchant banking unit of UFIL renders the following services:

1. Underwriting
2. Portfolio Management
 3. Bridge financing
4. Facilities through Syndication/Consortia
5. Investment in Capital Market Through Investors’ account

LANKA BANGLA FINANCE PRODUCT AND SERVICES:

Loan Products:

1. Term Loan
2. Lease Finance
3. Short Term Loan
4. Bridge Finance
5. Revolving Finance
6. Club Finance
7. Project Finance
8. Syndicated Finance
9. TDR Loan

10. Personal Lone

11. Business Lone
12. Home loan
13. Auto Loan
 FINANCIAL PERFORMANCE

Ratio Analysis:

ITEM IDLC UTTARA FINANCE LANKA BANGLA

Debt equity ratio 8.03 4.00 4.61

(Times)
Financial expenses 1.48 1.23 1.26
coverage ratio (Times)
Return on 20.95 3.53 6.59%
shareholders’ equity
(%)
Earnings per share* 6.19 1.55 2.02
(Taka)
Net asset value per 32.46 43.21 31.75
share of Tk. 10
Debt equity ratio (Times)
Financial expenses coverage ratio (Times)

FINANCIAL EXPENSES COVERAGE RATIO (TIMES)

1.48

1.26
1.23

IDLC UTTARA FINANCE LANKA BANGLA

Return on shareholders’ equity (%)

Earnings per share* (Taka)

Net asset value per share of Tk. 10

LankaBangla

Corporate Social responsibility (CSR) of LankaBangla is a form of corporate self-regulation

integrated into our business model based on the objective of good business for good society.
LankaBangla in its core management concept and corporate responsibility integrated CSR with
focus on social and environmental concerns in all business operations and interactions with its
stakeholders including shareholders, customers, employees, suppliers, business partners, local
communities and other organizations.
With these CSR policies & principles, our organization believes in achieving a balance of
economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”) besides
safeguarding interest of stakeholders. We have also considerably achieved efficient business
operations and conscience corporate governance and compliance to facilitate smooth and effective
business. As a result, we have been able to contribute for our sustainable society. LankaBangla
through its Foundation extends its support for underprivileged people of the community in
particular to ensure their education, health and living

CSR activities of 2015 of LankaBangla Foundation:

Supporting education of underprivileged brilliant students:

LankaBangla Foundation always stands beside the underprivileged brilliant students to pursue
their higher education. Scholarship program of the Foundation for these students is a platform to
ease the challenges to reach their aim in life. We extend this continuous financial support to make
their dreams come true. Supporting education sector for building an enlightened society is not new
for LankaBangla. Journey started from 2010 and continues till to date with an immense priority on
education for building knowledge based society.

We provide financial support to SSC completed poor brilliant students to continue their HSC and
graduation with an objective to help them to become self-sufficient in life. Scholarship program is
one of the sustainable programs of CSR of LankaBangla Foundation. Voices from some of the
scholarship holders who achieved their aim-in-life with the support from Foundation indicate that
CSR initiatives from LankaBangla significantly contributed to build a sustainable society.

In 2015, a total number of 64 students received financial assistance of BDT 2.1 million to pursue
their higher education. At the end of 2015 total 5 nos. of students completed their graduation.
Three of them are already in their professional life and other 2 students are still pursuing further
higher education. Moreover, 5 students are pursuing their education in different Medical Colleges.

Financial Assistance for education for Children of deceased Ex-Officios

LankaBangla Foundation continued its support for education as part of its CSR activities. This
support is extended to two female students who are daughters of two deceased officials of sister
concerns of LankaBangla Finance Limited.
 Foundation contributed an amount of BDT 164,000.00 (in two installments - for one-year
support) to Ms. Nora Sumlina (daughter of Late M. Shakil Islam Bhuiyan, Ex-CEO,
LankaBangla Investments Limited) to continue her studies.
 Foundation also contributed an amount of BDT 363,655.00 (in two installments) to Ms.
Auritree Ahmed (daughter of Late Mr. Golam Faruk, Ex-Managing Editor of the Daily
BonikBarta) to continue her studies.

Protecting Environmental & Ecological Degradation through Tree Plantation

Another core area of CSR of LankaBangla Foundation is to extend support to protect

environmental & ecological degradation through tree plantation every year. In 2015,
the Foundation undertook tree plantation program on 25 August 2015 at Daudkandi Upazila. In
total 1,500 saplings of fruit-bearing, wood-trees & medicine-trees were planted at the premises of
different institutions and distributed among students of different institutions of the Upazila. The
plantation & distribution was supported by the local government of Daudkandi Upazila.

Support for local community to protect from Cold Wave

In Bangladesh, during winter ultra-poor people fight against cold every year and LankaBangla
Foundation distributes blankets every year to facilitate better comfort to the ultra-poor people. This
year the Foundation distributed more than 4,000 blankets among the cold victim’s poor people of
different districts. Beside the tradition, we have distributed small number of blankets to different
orphanages of Gazipur, Sirajganj, Dhaka Cantonment and among hindu community of Loknath
Shrine of Narayanganj.

Support for Renovation and Modernization of Library

LankaBangla Foundation donated additional financial support of BDT 210,980 to renovate &
modernize Library of different Colleges. Last year for the same purpose Foundation donated an
amount of BDT 2,115,956.

Creativity and Cultural Development of children is an integral part of CSR of LankaBangla

Foundation

Creativity and cultural development of children is an integral part of CSR of LankaBangla

Foundation. The Foundation organizes art competition for the school children every year with
focus on psychological and cultural development. Our endeavor is to help the children to become
familiar with our rich cultural heritage and also to explore their hidden creativityIn 2015,
LankaBangla Foundation arranged 3rd Art Competition for children in Chittagong. “Six-seasons
of Bangladesh” was the theme of art competition. LankaBangla Finance Limited selected top 12
arts works and printed in the calendar of 2016 of LankaBangla with caption of the respective names
of the children and his/her schools. This unique facilitation definitely boosts up the children who
won the competition and also keep alive the intention of others to compete in future.

IDLC

Our Corporate Social Responsibility (CSR)

At IDLC, we believe in the concept of sustainable business – a business that integrates good
governance, environmental issues and social concerns with its business strategies to create
maximum value for its stakeholders. IDLC’s sustainability model is based on the 3P approach
– People, Planet and Profit:

People, our stakeholders with whom we engage for our business, and the community where we
live in; Planet, our surrounding environment and Profit, our profit-generating capacity for long-
term sustenance.

Accordingly, IDLC has aligned its CSR (Corporate Social Responsibility)

initiatives to deliver on this commitment, and aid community empowerment
and responsible environmental management in a sustainable manner.

REGULATORY BODIES AND MEMBERSHIPS

IDLC’s CSR activities are regulated by the Green Banking and CSR (GB and CSR) Department
of the Bangladesh Bank. We are also members of the United Nations Global Compact (UNGC),
the United Nations Environment Programme Finance Initiative (UNEP FI) and the CSR Center
(local network of UNGC in Bangladesh). IDLC is the first and only signatory to UNEP FI from
Bangladesh till date. We have also adopted their guiding principles in upholding human rights
labor standards, responsible environmental management, and anti-corruption policies and
practices.

FOCUS AREAS
IDLC has identified its CSR focus areas in resonance with its organizational vision, mission,
values and expertise. With its CSR initiatives, IDLC is aiding socio-economic transformation of
the underprivileged through better education, capacity development, income-generating
opportunities and other forms of assistance leading to empowerment; providing health and
hygiene facilities for the rural and urban poor; financing environment-friendly projects;
undertaking green banking initiatives in terms of both in-house management and external activities
such as tree plantation; engaging people through environmental awareness campaigns and
contributing to philanthropic initiatives such as blanket distribution, blood donation,
emergency disaster relief and one-on-one donations, among others.

SOCIO-ECONOMIC TRANSFORMATION OF THE UNDERPRIVILEGED

Bangladesh, being a highly populated nation, is in a challenging position to ensure quality

education, healthcare, accommodation and other facilities for all its citizens. Many people still live
below the poverty line, and yet another large group, consisting mostly of youths, join the number
of unemployed people every year. Thus, a large portion of the 160 million population remains
unemployed. To address these challenges with sustainable solutions, coordinated efforts from both
public and private sectors is necessary. Besides focusing on quality education and healthcare
facilities, efforts should be made to popularize and mainstream technical and vocational training
as well – thus developing skilled manpower and transforming them into human resources. It is
with this conviction that IDLC’s CSR strategy priorities capacity
development initiatives in terms of education, healthcare, technical and vocational training leading
to job creation, and other areas that contribute to socio-economic transformation of the
underprivileged people.

EMPOWERING WOMEN, BUILDING SUSTAINABLE ECONOMY

In a country burdened with overpopulation, it is nothing short of an irony that lack of skilled
manpower is one of the major challenges faced by businesses and industries today. To reduce this
demand-supply gap and create a win-win solution for the industries and the community alike,
IDLC launched a project in June 2013 targeting skills development of marginal women and their
subsequent placement in the RMG (Ready-Made Garments) sector as Machine Operators he
project satisfies IDLC’s commitment to:

 Contribute to socio-economic empowerment of women for an equitable society; and

 Establish a replicable model to address the demand-supply gap of skilled manpower in

Bangladesh.

Project Partners
IDLC followed a public-private partnership approach for this project, in partnership with:

 Fareast Knitting and Dyeing Industries Limited from the RMG sector as Industry Partner;

 Gazipur Technical School and College (GTSC) under the Directorate of Technical
Education, Government of Bangladesh as Training Partner;

 TVET (Technical and Vocational Education and Training) Reform Project of ILO as
Technical Consultant; and

 Care Bangladesh, with support from Shiree, as Community Partner in North Bengal.

Besides concept development and execution, IDLC is also responsible for day-to-day management
and coordination of the project, while acting as the common contact point for all partners.

EDUCATION AND HEALTHCARE FOR UNDERPRIVILEGED CHILDREN

IDLC has partnered with a number of NGOs in providing better education and healthcare facilities
to underprivileged children. In 2014, IDLC supported:

 SEID Trust, working with over 400 children with physical and mental disabilities,
including autism; and

 Shishu Bikash Chhaya, an orphanage based in Old Dhaka, housing around 30 children

TECHNICAL AND VOCATIONAL TRAINING SUPPORT

A large number of youth groups enter the job market of Bangladesh every year after completion
of their education. However, it is not possible to create job opportunities for everyone, thus giving
rise to large-scale unemployment. Paired with academic education, technical and vocational
education and training can play an important role in creating income-generating opportunities for
a large number of this young population – thus reducing the demand-supply gap of skilled
manpower both in the domestic and international markets. Hence, besides educational support,
IDLC has also extended its assistance to provide technical and vocational training to
underprivileged youth groups, after completion of primary and secondary education. In this regard,
IDLC has signed a MoU with SEID Trust in January 2015 to develop technical skills of 30 children
from SEID Trust. These children, having autism, Cerebral Palsy (CP), Down’s Syndrome,
intellectual and multiple disabilities are often deprived of their fundamental rights. This project
will not only facilitate social rehabilitation and acceptability of these children, but will also
empower them with income-generating skills. The 12-month training will focus on two areas:
tailoring (cutting and sewing) and embroidery; and block/ batik/ tie-dye. After completion of the
training, an exhibition will be arranged with products made by these children to create more
awareness about their capabilities. IDLC is also supporting Ahsania Mohila Mission by sponsoring
two female students who have enrolled for an Honours degree in Bangla and a diploma course in
Nursing. The Mission houses underprivileged girls and supports their education up to completion
of HSC (Higher Secondary Certificate).

CRICKET TEAM FOR THE PHYSICALLY-CHALLENGED

IDLC sponsored sporting gears for the Bangladesh Cricket Association for the Physically-
challenged, to help them prepare for the T-20 Tournament held in India in June 2014. The 23-
member team won the series, and were commemorated at the Prime Minister’s Office upon their
return to Bangladesh.

ENVIRONMENTAL INITIATIVES

IDLC’s environmental initiatives are conducted under the banner of both CSR and Green Banking.
Whereas CSR is more focused on external initiatives such as awareness campaigns, tree plantation,
public events and the like, Green Banking is more aligned with green financing, EandS risk
management, and in-house environmental management, in coordination
with different departments (detailed under the section “Green Banking at IDLC”).

TREE PLANTATION

To minimize its carbon footprint, IDLC regularly conducts plantation activities across regions of
the country. In 2014, IDLC, with support from the CREL Project of Winrock International (an
USAID project), has sponsored a homestead tree plantation program in the Chittagong Hill Tracts.
A total of 3,750 saplings of fruit-bearing trees have been planted across 250 marginal households
across ten villages, with the objective of increasing their household income by selling proceeds
from the grown-up trees. Dudpukuria Co-management Organization, a voluntary co-managed
organization endorsed by the forest department and under the network of CRELProject, is acting
as the implementing body for this plantation program. This project not only contributes to better
environmental management by reducing dependency on forest resources by these households, but
also allows income generation by selling proceeds from the grown-up trees. IDLC also sponsored
another plantation program whereby 1,000 saplings were planted at Trishal, Mymensingh, with
support from Jatio Kobi Kazi Nazrul Islam University, and Toru Pallab, a voluntary organization
managed by renowned environmentalists in Bangladesh.