CHAPTER-01

Introduction of the Study

1
1.1 Background of the Report:

Banks play the most important role in the economy. Banks collect money from the
individuals and lend them to others. Now banks offer the widest range of financial services
and perform lots of financial functions. Thus banks have proven that they are the key factor
for the business and economy as well. Concepts of financial performance of three leading
private banks and its practices in Bangladesh have a long history of banking activities. Such
activities included to measure financial position in different organizations& institutions. This
study has been prepare in the light of emerging concept of banks titled “Financial
Performance Analysis of Private Commercial Banks in Bangladesh” as a part of the
fulfillment of thesis program required for the completion of the BBA program specialized in
Accounting under the Department of Business Administration of Stamford University
Bangladesh.

1.2 Scope of the Study:

As I provide report on banking sector, my scope was limited and restricted for some purpose.
I had maintained some formality for the collection of data of my report. This study will give a
clear idea about the financial performance of these particular banks. Within the limited time
period of thesis, it is virtually impossible to cover all banking company’s financial position.
So, the scope of my report is limited only to the selected banking companies in preparing its
financial statements and the areas of financial performance.
Selected Banks for the study:
 AB Bank limited
 Dutch Bangla Bank Limited
 BRAC Bank

1.3 Objectives of the Study:

The main objectives of this study are to analyze the financial performance of the selected
banking companies. In broader sense the objectives to be covered by the study are:

 To analyze the financial performance of banking sector.

 To be introduced with banking activities.
 To increases theoretical and practical knowledge.

2
  To increases efficiency.
 To increases analytical ability.
 To find out the problems relating to financial performance of banking sector.
 To find out the area in which the banks are not meeting their expectations.
 To habituated with the corporate environment and culture.
 To make comparison among the bank’s balance sheet items.

1.4 Methodology of the Study:

Data have been collected from both primary and secondary sources. The necessary
information has been collected from annual reports of these particular banks and relevant
institutions have also been taken into consideration.

Secondary Sources:

These secondary sources are as follows-

 Procedure manual published by these selected banks.

 Annual report of these selected banks (2016, 2017).
 Information collects from different websites.

1.5 Limitation of the Study:

Any thesis work needs high degree of involvement regarding collection of information,
creation of data base, literature review and analysis of data. While doing so, many limitations
arise even though we always put our best effort to avoid them. In conducting the present
study, the following limitation has been faced are as follows-

 The personnel of the organization did not want to disclose the classified information
to the outsiders.
 Due to lack of experience, there is a chance of having some mistake in the report
though best effort has been applied to avoid any kind of mistake.
 I have faced major limitation in the financial projection as my estimate was rather
informative base than of actual one.
 Time was not sufficient to make an in depth study on such issue.

3
 CHAPTER-02
Banking Sector in Bangladesh

4
2.1 BANKING SECTOR:

The gradual improvement in the overall policy environment has enabled Bangladesh to
improve its economic performance in recent years. Successive governments in Bangladesh
have been confronted with the problem of stimulating the economic growth rate in a country
where a substantial segment of the population lives below the subsistence level. Economic
policies are still guided by five year plans. Nevertheless, some progress has been made over
the years, such as self -sufficiency in food grain production, reducing the population growth
rate, poverty alleviation and boosting export income. The GDP growth per annum has been
about 5 percent on an average from 1994-2000; Per capita GDP was $363 in 1999-2000.

The prospect of economic growth in Bangladesh in the near future will depend on the pace
of economic reforms and the quality of macroeconomic management. Accelerating the rate
of economic growth will require higher levels of investment. This will primarily come from
private flows of foreign direct investment. This can be established by reforming the
financial system and continuing the process of financial deepening.

The financial system in Bangladesh is relatively small and less developed than in most
countries in South and East Asia. The sector’s contribution to GDP has remained static at
1.5 percent during 1999-2000 periods. Commercial banks are at the heart of this financial
sector by contributing 80% of the total. The depth of the financial system, as measured by
the ratio of the broad money supply to GDP, has been growing slowly and was low at
around 32% in 1999-2000.However, as the government is often the owner and regulator as
well as the supervisor and customer of a bank, there has been ample opportunity for
mismanagement over the years. The banking sector is plagued with a lack of credit
discipline, archaic loan recovery law, corruption, inefficiency, overstaffing, etc. Several
reform measures of the financial sector have been taken to improve the situation.

Relative stability achieved by the support extended by both the central bank and the
Government of Bangladesh in the past has restored public confidence in the country’s
banking sector. Moreover, Nationalized Commercial Banks (NCBs) and old generation
Private Commercial Banks (PCBs) would have to lower the rate of NPAs in their portfolios.

5
Failure to do so would mean re-capitalization, at least for the NCBs. This may in turn lead
to a further drain on the limited resources of the Government of Bangladesh. At this time or
in the immediate future this re-capitalization would not be feasible.
With these conditions in place, the World Bank anticipates the likelihood of a situation
where the ever-increasing burden of non-performing loans and growing rate of debt
servicing would place the economy under enormous strain and result in a crisis in the
banking sector in the long term.

After liberation, the banks operating in Bangladesh (except those incorporated abroad) were
nationalized. These banks were merged and grouped into six commercial banks. Of the total
six commercial banks, Pubali Bank Ltd. and Uttara Bank Ltd. have subsequently been
transferred to the private sector with effect from January 1985. Moreover at present there
are 51 scheduled banks operating all over the country. Out of these, 9 are state-owned
(including five specialized banks), 30 are private commercial banks (including four Islami
banks) and the remaining 12 are foreign commercial banks (including one Islami bank).

2.2 Characteristics of Banking:

From the views of above authorities, we can derive the following basic characteristics of
Banking:

Dealing in money:
The banks accept deposits from the public and advancing them as loans to the needy people.
The deposits may be of different types current, fixed, savings, etc. accounts. The deposits are
accepted on various terms and conditions.

Deposits must be withdrawn able:

The deposits (other than fixed deposits) made by the public can be withdraw able by cheques,
draft or otherwise, i.e., the bank issue and pay cheques. The deposits are usually withdrawn
able on demand.

Dealing with credit:

The banks are the institutions that can create credit i.e., creation of additional money for
lending. Thus, "creation of credit' is the unique feature of banking.

6
Commercial in nature:
Since all the banking functions are carried on with the aim of making profit, it is regarded as
a commercial institution.

Nature of agent:
Besides the basic functions of accepting deposits and lending money as loans, banks possess
the character of an agent because of its various agency services.

2.3 Strategic Objectives of Banking:

• To ensure customers’ satisfaction.

•To ensure welfare oriented banking.
• To establish a set of managerial succession and adopting technological changes to ensure
successful development of a Bank as a stable financial institution.
• To prioritize the clients welfare.
• To emerge as a healthier & stronger bank at the top of the banking sector and continue
stable positions in ratings, based on the volume of quality assets.
• To ensure diversification by Sector, Size, Economic purpose & geographical location wise
Investment and expansion need based Retail and SME/Women entrepreneur financing.
• To invest in the thrust and priority sectors of the economy.

2.4 Contribution of the Banking sector in National Economy:

Economic development - of the country is executed by the contribution of various economic
sectors. Like agriculture, industries, power, transport, trade service, etc. banking sector also
has a contribution to the economic growth. In mid 80s Banking and Insurance contributed
1.69% of GDP and gradually the figure was increasing.

The maximum contribution was 2.09% of GDP in the year 1993 and it was 2.00% in 1996-
971 Average growth rate of this contribution was 1.51% of GDP, which shows a positive
trend. Again, the sector makes a positive impact on the economic development by generating
employment.

7
In the year 1980 total number of employees in this sector was 59,235 but within 15 years of
time the figure shoot approximately double to 101,444.2 the average growth rate of
employment generation was 3.76% (1980-1995). Countries like Bangladesh have a burden of
its unemployment, where as banking sector still keep certain impact on employment
generation.

2.5 List of banks in Bangladesh:

The commercial banking system dominates Bangladesh's financial sector. Bangladesh Bank
is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The
banking system is composed of -

 Four state-owned commercial banks.

 Five specialized development banks.
 Thirty eight private commercial Banks and
 Nine foreign commercial banks.

The Nobel-prize winning “Grameen Bank” is a specialized micro-finance institution, which

revolutionized the concept of micro-credit and contributed greatly towards poverty reduction
and the empowerment of women in Bangladesh.

2.5.1 Categories of Banks in Bangladesh:

1. Central bank
2 .State-owned commercial banks
3 .Private commercial banks
4 .Foreign commercial banks
5 .Specialized development banks

8
2.5.2 Central bank:

History of Bangladesh Bank:

Pursuant to Bangladesh Bank Order, 1972 the Government of Bangladesh reorganized the
Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named it
Bangladesh Bank with retrospective effect from 16 December 1971.

After the independence, banking industry in Bangladesh started its journey with 6
nationalized commercialized banks, 2 State owned Specialized banks and 3 Foreign Banks. In
the 1980s banking industry achieved significant expansion with the entrance of private banks.
Now, banks in Bangladesh are primarily of two types:

Scheduled Banks: The banks which get license to operate under Bank Company Act, 1991
(Amended in 2003) are termed as Scheduled Banks.

Non-Scheduled Banks: The banks which are established for special and definite objective and
operate under the acts that are enacted for meeting up those objectives, are termed as Non-
Scheduled Banks. These banks cannot perform all functions of scheduled bank

2.5.3 State-owned commercial banks:

State-owned are functioning as nationalized. Here is the list -

1. Agrani Bank
2. Sonali Bank
3. Rupali Bank
4. Janata Bank

2.5.4 Private commercial banks:

Private Banks are the highest growth sector due to the dismal performances of government
banks (above). They tend to offer better service and products. Here is the list –

9
Uttara Bank Limited NRB Global Bank Dhaka Bank Limited United Commercial
Limited Bank Limited
Eastern Bank Mutual Trust Bank BRAC Bank Limited Dutch Bangla Bank
Limited Limited Limited
Pubali Bank Limited IFIC Bank Limited The City Bank Prime Bank Limited
Limited
National Bank Mercantile Bank Standard Bank One Bank Limited
Limited Limited Limited
NCC Bank Limited Southeast Bank Bangladesh Jamuna Bank
Limited Commerce Bank Ltd Limited
The Premier Bank Trust Bank Limited AB Bank Limited Bank Asia Limited
Limited
NRB Commercial Farmers Bank Madhumoti Bank South Bangla
Bank Limited Limited Limited Agriculture and
NRB Global Bank Commerce Bank Ltd
Limited
Meghna Bank Midland Bank
Limited Limited

2.5.5 There are 8 Islamic Commercial Banks:

1. Islamic Bank of Bangladesh Limited

2. ShahjalalIslami Bank Limited
3. First Security Islami Bank Limited
4. Export Import Bank of Bangladesh Limited
5. Al-ArafahIslami Bank Limited
6. Social Islami Bank Limited
7. ICB Islamic Bank
8. Union Bank Limited

2.5.6 Foreign commercial banks:

Foreign commercial banks are operating in Bangladesh. These are-

1. Citibank NA
2. HSBC
3. Standard Chartered Bank
4. Commercial Bank of Ceylon
5. State Bank of India
6. Habib Bank Limited

10
 7. National Bank of Pakistan
8. Woori Bank
9. Bank Alfalah

2.5.7 Specialized development banks:

Specialized Banks (SDBs): 4 specialized banks are now operating which were established for
specific objectives like agricultural or industrial development. These banks are also fully or
majorly owned by the Government of Bangladesh.

1. Bangladesh Krishi Bank.

2. RajshahiKrishiUnnayan Bank.
3. Bangladesh Development Bank limited.
4. BASIC Bank Limited.

2.6 Regulation of the Banking Industry:

Bangladesh Bank, being the central bank exerts supervisory controls over the banking
sector. BB requires that banks have a minimum paid up capital and reserve funds and that
no person, family or company own more than 10% of bank share personally, jointly or both.
Bangladesh Bank may with prior Government approval at any time change the policy
regarding the reservation of risk-based capital of assets. BB may determine policy to control
advances by banking companies. BB has direct authority to appoint any new Managing
Director, General Manager, or CEO and BB can dismiss none so appointed without prior
approval. BB also has the power to supersede the Board of Directors of a banking company.

BB is also the official liquidator and has the power to give directions to a banking company
and also remove directors when it feels that this may be in public interest. Banking
companies in Bangladesh are not allowed to form subsidiaries, although this rule may be
amended soon.
The World Bank recently called BB as “a weak central bank” in its report entitled
‘Bangladesh: Key Challenges for the Next Millennium’.

The functions and responsibilities of BB are not clearly defined, and it lacks autonomy in
such core areas as the licensing of new banks, monetary and exchange rate policies, and the

11
supervision of NCBs. Banks are allowed to operate even though some of them suffer from
capital deficiency. Loan classification and provisioning are not fully enforced, and no
punitive measures are taken against banks that fail to implement agreed corrective
measures. BB would be unable to deal with a banking sector crisis if one were to occur.
With over 6,200 staff, of whom 1,720 are clerical, BB is significantly overstaffed relative to
the size of the financial system.

2.7 Market Entry & Exit:

Bangladesh Bank (BB), the central bank of Bangladesh, has the authority to determine the
entry and exit rules of all the banks operating in Bangladesh. BB performs the traditional
central banking roles of note issue and banker to the government and banks. It formulates
and implements monetary policies, manages foreign exchange reserves and supervises
banks and non-bank.

2.8 Overall Situation in Banking Industry:

Considering all variables regarding profit, TNBs were doing extraordinarily good operation
in this sector. Because of the policies and managements TNBs performance was better.
Keeping TNBs aside, PCBs performance comparatively better. As far as the ownership was
concerned both NCBs and SPBs were same. PCBs started their operations in 1982, before the
Government of Bangladesh controlled that total financial sector. But after allowing private
sectors to operate commercial banks, PCBs were gradually capturing the market share.
Surprisingly SPBs had negative performances in every aspect because of their negative net
profit.
The performance of the banking sector in terms of net profit varies in various groups of bank.
The study revealed that in every aspect, TNBs had a commendable performance. But
comparing among other groups of banks (NCBs, SPBs, and PCBs), PCBs had preferred
achievement aiming profit. On the other hand Specialized Banks in Bangladesh had a very
poor performance. This meager activity affected the overall banking sector's performance.
The comparison among various categories of banks has been done on the basis of the profit
with respect to some other variables. The study also revealed the relationship among the

12
dependent variable and independent variables. The equation (ii) shows the weights of the
independent variables that influences net profit of the banking sector.
Finally, the paper intended to identify the scopes and opportunities of the factors by which
over all net profit might increase, and contribute to the national economy

13
 CHAPTER-03
Background of the Selected Banks

14
3.1 Background of AB bank limited:

AB Bank Limited, the first private sector bank was incorporated in Bangladesh on 31st
December 1981 as Arab Bangladesh Bank Limited and started its operation with effect from
April12, 1982. AB Bank is known as one of leading bank of the country since its
commencement 28 years ago. It continues to remain updated with the latest products and
services, considering consumer and client perspectives. AB Bank has thus been able to keep
their consumer’s and client’s trust while upholding their reliability, across time. During the
last 28 years, AB Bank Limited has opened 77 Branches in different Business Centers of the
country, one foreign Branch in Mumbai, India and also established a wholly owned
Subsidiary Finance Company in Hong Kong in the name of AB International Finance
Limited. To facilitate cross border trade and payment related services, the Bank has
correspondent relationship with over 220 international banks of repute across 58 countries of
the World.

Mission: “To be the best performing bank in the country”

Vision:“To be the trendsetter for innovative banking with excellence & perfection”

Objective:
 Increase business turnover
 Modernize trading system
 Ensure effective relationship management
 Achieve high level of confidence & professionalism
 Engage in product and market diversification

3.2Background of Dutch Bangla Bank Limited.

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.

15
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. DBBL's other focus is Corporate Social
Responsibility (CSR). Even though CSR is now a cliche, DBBL is the pioneer in this sector
and termed the contribution simply as 'social responsibility'. Due to its investment in this
sector, DBBL 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.

DBBL 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. DBBL also operates the nation's largest ATM fleet and in
the process drastically cut consumer costs and fees by 80%. Moreover, DBBL choosing the
low profitability route for this sector has surprised many critics. DBBL 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 DBBL's banking infrastructure instead of
pursuing their own.

Even with a history of hefty technological investments and 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.

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. DBBL's essence and ethos rest on a cosmos of creativity and the marvel-magic of a

16
charmed life that abounds with spirit of life and adventures that contributes towards human
development.

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 of
esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in
banking that upholds and epitomizes its vaunted marques "Your Trusted Partner".

3.3Background of BRAC Bank Limited:

As one of the fastest growing and modern banks of Bangladesh, BRAC Bank Limited is
playing a vital role as financial intermediaries linking economic policies of the government
with rest of the economy. The bank is constantly serving people and the economy of the
country by raising aggregate demand, production and thus creating wealth for the economy.
To maintain the resilience in doing growth oriented profitable and socially responsible
business in the fiercely competitive banking industry of Bangladesh, Human Resources
Division of BRAC Bank Limited work closely with the management committee for strategic
advancement. Being a Bangladeshi bank and serving the banking needs of Bangladeshi
people, Human Resources Division of BRAC Bank Limited maintain an adaptive human
resources management strategy and the division comprises of Recruitment, Compensation &
Benefits, Learning and Development, Human Capital Department and HR Administration
Departments with a team of dynamic HR Relationship Managers who bridge HR support
with the business need.

Mission:

 Sustained growth in small and medium enterprise sector.

 Continuous low cost deposit growth with controlled growth in retail asset.

 Corporate asset to be funded through self –liability mobilization. Growth in asset

through syndications and investment in faster growing sectors.

 Continuous endeavor to increase non-funded income.

 Keep our debt charges at 12% maintain a steady profitable growth.

17
  Achieve efficient synergies between the bank’s branches, SME unit offices and BRAC
field offices for delivery of remittance and Bank’s other products services.

Visions: Building profitable and socially responsible financial institution focused on Market
and Business with Growth potential, thereby assisting BRAC and stakeholders to build a just,
enlightened, healthy democratic and poverty free Bangladesh”.

Objective:

 To ensure development of devoted and satisfied human resources.

 Engage in product and market diversification.
 To encourage sound and pro-active future generation.
 To achieve global standard.

18
 CHAPTER-04
Analysis of Commercial Private Banks in Bangladesh

19
4.1AB Bank Limited
4.1.1 Return on asset (ROA):

Year 2017 2016

Ratio 0.01 % 0.44 %

0.44%
0.50%
0.40%
0.30%
0.20%
0.01%
0.10%
0.00%
2017 2016

Ratio

Return on asset Ratio in 2014 is .51% and in 2015 is .45% which was found by dividing a company’s
net income by its total asset. From calculation of 2 years we find more ROA Ratio (.51%) in 2014.

20
4.1.2 Return on Equity (ROE)

Year 2017 2016

Ratio 0.13 % 5.68 %

5.68%
6.00%

5.00%

4.00%

3.00%

2.00%
0.13%
1.00%

0.00%
2017 2016

Ratio

Return on equity Ratio in 2014 is 6.52%, and in 2015 is 5.57 % which was found by a company’s net
income dividing by its total equity. From calculation of 2 years we find more ROE Ratio (6.52%) in
2014.

21
4.1.3 Return on Investment Ratio (ROI):

Year 2017 2016

Ratio 10.18 % 13.50 %

13.50%

10.18%

2017 2016

Return on Investment Ratio in 2014 is 9.68% and in 2015 is 10.49% which was found by a company’s
net income dividing by total investment. From calculation of 2 years we find more ROE Ratio (10.49%)
in 2015.

22
4.1.4 Earnings per Share (EPS)

Year 2017 2016

Ratio(Taka) 0.04 1.72

1.72

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4 0.04
0.2
0
2017 2016

Ratio(Taka)

Earnings per shares in 2014 is tk2.10 and in 2015 is tk2.12 which was found by earnings before interest
and taxes/ interest expense. From calculation of 2 years we find more EPS (2.12) in 2015.

23
4.1.5 Cost Income Ratio:

Year 2017 2016

Ratio 56.74 % 54.44 %

56.74%
57.00%

56.50%

56.00%

55.50%

55.00% 54.44%

54.50%

54.00%

53.50%

53.00%
2017 2016

Cost income ratio in 2014 is 43.03% and in 2015 is 52.86% which found byoperating expenses
÷operating income .From calculation of 2 years we find more Cost Income Ratio (52.86%) in 2015.

24
4.1.6 Net Asset Value per Share

Year 2017 2016

Ratio(Taka) 0.04 1.72

1.72

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4 0.04
0.2
0
2017 2016

Ratio(Taka)

Net asset value per share in 2014 is tk.32.24, and in 2015 is 38.05 which found by Net Assets /
Number of Shares Outstanding. From calculation of 2 years we find more Net Asset Value per Share
38.05 in 2015

25
4.1.7 Total Asset (Taka in millions) :

Year 2015 2014

Taka 2,346.11 2,564.1

2,564.10
2,600.00
2,550.00
2,500.00
2,450.00
2,346.11
2,400.00
2,350.00
2,300.00
2,250.00
2,200.00
2015 2014

Taka

Total asset in 2014 in 246331 million and in 2015 is 285010 million which found by the sum of long
term asset and current asset. From calculation of 2 years we find more total asset tk.285010 million in
2015.

26
4.1.8 Loan Growth (in millions):

Year 2017 2016

Taka 23,763.45 22,654.65

23,763.45

23,800.00
23,600.00
23,400.00
23,200.00
23,000.00 22,654.65
22,800.00
22,600.00
22,400.00
22,200.00
22,000.00
2017 2016

Taka

Loan growth in 2014 is tk. 177571 million and in 2015 is tk. 209725 million. From calculation of 2
years we find more loan growth tk.201925 million in 2015.

27
4.1.9 Deposit Growth (in millions)

Year 2017 2016

Taka 23595 24564

24564

24600
24400
24200
24000 23595
23800
23600
23400
23200
23000
2017 2016

Taka

Deposit growth of AB bank increase year by year from tk. 198198 million in 2014 to tk. 231819 million
in 2015. From calculation of 2 years we find more deposit growth (231819 in million) in 2015.

28
4.1.10 Loan Deposit Ratio:

Year 2017 2016

Ratio 86% 84%

86%

86%
86%
85%
84%
85%
84%
84%
83%
2017 2016

Ratio

Loan deposit ratio of AB bank in 2014 is 89.59%, and in 2015 is 90.47% which found by total amount
of loan divided by total amount of deposit. From calculation of 2 years we find more loan deposit ratio
90.47% in 2015.

29
AB Bank Limited
Statement of Financial Position (Balance Sheet)
as at 31 December 2015

AB Bank Limited & its Subsidiary

Consolidated Balance Sheet
As at 31 December 2017

2017 2016
Notes BDT BDT
PROPERTY AND ASSETS
Cash 3(a) 17,780,902,708 19,707,725,976
In hand (including foreign currencies) 3.1(a) 1,572,393,188 1,536,407,693
Balance with Bangladesh Bank and its agent bank(s) 3.2(a) 16,208,509,520 18,171,318,283
(including foreign currencies)
Balance with other banks and financial institutions 4(a) 4,241,335,582 4,655,002,507
In Bangladesh 4.1(a) 2,490,976,583 2,624,288,364
Outside Bangladesh 4.2(a) 1,750,358,999 2,030,714,143
Money at call and on short notice 5(a) 496,384,436 6,112,905,779
Investments 6(a) 46,382,136,275 49,081,759,542
Government 6.1(a) 39,732,017,188 41,903,780,261
Others 6.2(a) 6,650,119,087 7,177,979,281
Loans, advances and lease/investments 237,634,491,780 226,546,501,234
Loans, cash credits, overdrafts, etc./Investments 7(a) 235,801,195,989 225,023,967,197
Bills purchased and discounted 8(a) 1,833,295,791 1,522,534,037
Fixed assets including premises, furniture and fixtures 9(a) 4,699,245,091 4,680,967,000
Other assets 10(a) 5,863,914,006 6,383,908,169
Non-banking assets - -
Total Assets 317,098,409,881 317,168,770,207

LIABILITIES AND CAPITAL

Liabilities
Borrowings from other banks,
financial institutions and agents 11(a) 21,872,486,519 15,757,755,476
AB Bank subordinated bonds 12 6,000,000,000 6,500,000,000
Deposits and other accounts 13(a) 235,562,075,504 245,394,404,421
Current account and other accounts 21,821,895,346 22,296,581,953
Bills payable 2,251,301,559 4,865,582,322
Savings bank deposits 29,869,956,989 28,024,691,434
Fixed deposits 129,606,179,136 122,034,379,371
Other deposits 52,012,742,474 68,173,169,341
Other liabilities 14(a) 29,660,121,941 25,182,491,365
Total Liabilities 293,094,683,964 292,834,651,262

Capital/Shareholders’ Equity
Equity attributable to equity holders of the parent company 23,993,619,305 24,324,206,960
Paid-up capital 15 7,581,303,150 6,738,936,140
Statutory reserve 16 6,549,242,999 6,495,637,440
Other reserve 17(a) 2,811,305,460 3,253,395,264

30
 Retained earnings 18(a) 7,051,767,695 7,836,238,115
Non- Controlling Interest 18(b) 10,106,613 9,911,986
Total Equity 24,003,725,917 24,334,118,946
Total Liabilities and Shareholders’ Equity 317,098,409,881 317,168,770,207

AB Bank Limited
Consolidated Statement of Financial Position (Balance Sheet) as at 31 December 2017

2017 2016
Notes BDT BDT
Off-Balance Sheet Items

Contingent liabilities 19 65,450,616,147 73,478,914,136

Acceptances and endorsements 24,089,423,485 29,034,996,366

Letters of guarantee 19.1 13,525,351,128 13,920,306,922
Irrevocable letters of credit 15,836,913,326 22,005,679,984
Bills for collection 9,392,397,842 8,517,930,863
Other contingent liabilities 2,606,530,367 -

Other commitments - -

Documentary credits and short term trade-related transactions - -

Forward assets purchased and forward deposits placed - -
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -

Total 65,450,616,147 73,478,914,136

31
AB Bank Limited
Statement of Comprehensive Income (Profit and Loss Account)
for the year ended 31 December 2017

2017 2016
Notes BDT BDT
OPERATING INCOME
Interest income/profit on investments 21(a) 18,095,388,527 19,450,005,916
Interest/profit paid on deposits and borrowings, etc. 22(a) (14,937,382,065) (16,139,157,478)
Net interest income 3,158,006,462 3,310,848,438
Investment income 23(a) 4,726,135,143 5,105,865,296
Commission, exchange and brokerage 24(a) 2,994,211,871 2,855,788,192
Other operating income 25(a) 178,404,749 168,909,279
7,898,751,763 8,130,562,767
Total operating income (a) 11,056,758,225 11,441,411,205

OPERATING EXPENSES
Salary and allowances 26(a) 2,990,025,060 3,010,471,065
Rent, taxes, insurance, electricity, etc. 27(a) 747,204,508 711,166,604
Legal expenses 28(a) 8,406,763 18,571,996
Postage, stamps, telecommunication, etc. 29(a) 136,794,287 143,774,685
Stationery, printing, advertisement, etc. 30(a) 199,948,266 197,362,277
Chief executive's salary and fees 26.1 9,940,551 13,510,481
Directors' fees 31(a) 8,653,653 10,699,895
Auditors' fees 32(a) 3,781,823 5,762,139
Depreciation and repairs of Bank's assets 33(a) 537,590,602 585,870,806
Other expenses 34(a) 1,378,563,037 1,323,937,179
Total operating expenses (b) 6,020,908,551 6,021,127,128
Profit before provision (c = (a-b)) 5,035,849,674 5,420,284,078
Provision against loans and advances 35(a) 4,950,134,798 2,938,984,936
Provision for diminution in value of investments 36(a) 12,050,000 21,980,479
Other provisions 37(a) 171,752 59,558,484
Total provision (d) 4,962,356,549 3,020,523,899
Loss on disposal of AB Exchange (UK) Limited - 4,381,780
Profit before tax (c-d) 73,493,124 2,395,378,399
Provision for taxation 32,658,543 886,586,150
Current tax 1,594,023,822 1,774,806,624
Deferred tax (1,561,365,279) (888,220,474)
Net profit after tax 40,834,581 1,508,792,249
Appropriations
Statutory reserve 26,124,722 388,712,367
General reserve - -
Dividends, etc. - -
26,124,722 388,712,367
Retained surplus 14,709,859 1,120,079,882
Non- Controlling Interest 190,013 (5,944,179)
Net profit attributable to the shareholders of parent company 14,519,847 1,126,024,060
Consolidated Earnings Per Share (EPS) 39(a) 0.05 2.00

32
AB Bank Limited and its subsidiaries
Consolidated Statement of Cash Flows for the year ended 31 December 2017

2017 2016
BDT BDT
Cash flows from operating activities
Interest receipts 15,019,781,262 18,320,297,829
Interest payments (15,277,464,801) (16,125,576,572)
Dividend receipts 128,909,211 133,087,213
Fee and commission receipts 1,895,002,924 2,007,736,220
Recoveries on loans previously written off 6,286,093 23,385,264
Payments to employees (2,999,965,611) (3,023,981,546)
Payments to suppliers (199,948,266) (197,362,277)
Income taxes paid (797,656,950) (1,531,193,578)
Receipts from other operating activities 5,868,553,536 6,170,669,593
Payments for other operating activities (2,501,464,992) (2,443,034,619)
Operating profit before changes in operating assets & liabilities 1,142,032,405 3,334,027,525

Increase/decrease in operating assets and liabilities

Loans and advances to customers (11,290,321,149) (12,091,885,321)
Other assets (362,260,459) 285,323,789
Deposits from other banks (2,356,427,434) 963,238,791
Deposits from customers (7,135,818,746) 30,745,860,885
Trading liabilities (short-term borrowings) 6,230,544,019 (8,557,748,994)
Other liabilities 4,505,177,704 5,875,153,318
(10,409,106,066) 17,219,942,470
Net cash (used in)/ flow from operating activities (a) (9,267,073,662) 20,553,969,995

Cash flows from investing activities

Purchase of government securities 1,732,969,841 (14,790,747,653)
(Purchase)/Sale of trading securities, shares, bonds, etc. 527,860,194 (120,065,079)
Purchase of property, plant and equipment (335,210,688) (217,381,698)
Net cash flow from/ (used in) investing activities (b) 1,925,619,347 (15,128,194,430)
Cash flows from financing activities
Increase/(decrease) of long-term borrowings (615,812,976) 216,905,686
Dividend paid (302,045) (120,780)
Net cash (used in)/ flow from financing activities (c) (616,115,021) 216,784,906
Net (decrease)/increase in cash (a+b+c) (7,957,569,335) 5,642,560,471
Effects of exchange rate changes on cash and cash equivalents - -
Cash and cash equivalents at beginning of the year 30,479,385,462 24,836,824,990
Cash and cash equivalents at end of the period (*) 22,521,816,127 30,479,385,462

(*) Cash and cash equivalents:

Cash 1,572,393,188 1,536,407,693
Prize bonds 3,193,400 3,751,200
Money at call and on short notice 496,384,436 6,112,905,779
Balance with Bangladesh Bank and its agent bank(s) 16,208,509,520 18,171,318,283
Balance with other banks and financial institutions 4,241,335,582 4,655,002,507
22,521,816,127 30,479,385,462
Net Operating Cash Flow Per Share (NOCFPS) (12.22) 27.11

33
Dutch Bangla Bank Limited
4.2.1 Return on asset (ROA):

Year 2017 2016

Ratio 0.9% 0.7%

0.90%
1.00%
0.70%
0.80%

0.60%

0.40%

0.20%

0.00%
2017 2016

Ratio

Return on asset Ratio in 2014 is .61% and in 2015 is .70% which was found by dividing a company’s
net income by its total asset. From calculation of 2 years we find more return on asset (0.70%) in 2015.

34
 4.2.2 Return on Equity (ROE)

Year 2017 2016

Ratio 13.2% 10.3%

13.20%
15.00% 10.30%

10.00%

5.00%

0.00%
2017 2016

Ratio

Return on equity Ratio in 2014 is 9.66%, and in 2015 is 11.44% which was found by a company’s net
income dividing by its total equity. From calculation of 2 years we find more return on equity 11.44% in
2015.

35
4.2.3 Return on Investment Ratio

Year 2017 2016

Ratio 7.0% 8.0%

8.00%

8.00%
7.80%
7.60%
7.40%
7.00%
7.20%
7.00%
6.80%
6.60%
6.40%
2017 2016

Ratio

Return on Investment Ratio in 2014 is 8.47% and in 2015 is 8.61% which was found by a company’s
net income dividing by total investment. From calculation of 2 years we find more return on investment
8.61% in 2015.

36
4.2.4 Earnings per Share (EPS)

Year 2017 2016

Ratio(Taka) 12.3 8.9

2500 2017 2016

2000
1500
1000
500 12.3 8.9

0
1 2

Ratio(Taka)

Earnings per share in 2014 is tk19.92 and in 2015 is tk25.12 which was found by earnings before
interest and taxes/ interest expense. From calculation of 2 years we find more earning per share tk.25.12
in 2015.

37
4.2.5 Cost Income Ratio

Year 2015 2014

Ratio 69.3% 65.3%

69.30%
70.00%
69.00%
68.00%
67.00% 65.30%
66.00%
65.00%
64.00%
63.00%
2015 2014

Ratio

Cost income ratio in 2014 is 81.06% and in 2015 is 80.75% which found by operating expenses
÷operating income.From calculation of 2 years we find more Cost Income Ratio 81.06% in 2014.

38
4.2.6 Net Asset Value per Share

Year 2017 2014

Ratio(Taka) 97.4 88.4

97.4

98
96
94
92 88.4
90
88
86
84
82
2017 2014

Ratio(Taka)

Net asset value per share in 2014 is tk.206.14, and in 2015 is 291.63 which found by Net Assets /
Number of Shares Outstanding. From calculation of 2 years we find more Net Asset Value per Share
291.63 in 2015.

39
 4.2.7Total Asset (in millions)

Year 2017 2016

Taka 311,906.8 264,797.4

311,906.80
320,000.00

300,000.00

280,000.00 264,797.40

260,000.00

240,000.00
2017 2016

Taka

Total asset in 2014 in tk.628415.27 million and in 2015 is tk. 683157.58 million which found by the
sum of long term asset and current asset. From calculation of 2 years we find more total asset
tk.683157.58 million in 2014.

40
 4.2.8 Loan Growth (Taka in millions)

Year 2017 2016

Taka 207,257.4 173,397.8

207,257.40

210,000.00

200,000.00

190,000.00
173,397.80
180,000.00

170,000.00

160,000.00

150,000.00
2017 2016

Taka

Loan growth 2014 is tk.516010.25 million and in 2015 is tk. 349861.3 million. From calculation of 2
years we find more loan growth tk.349861.30 million in 2014.

41
 4.2.9 Deposit Growth (in millions)

Year 2017 2016

Taka 233,796.4 207,234.0

233,796.40
240,000.00
230,000.00
220,000.00 207,234.00
210,000.00
200,000.00
190,000.00
2017 2016

Taka

Deposit growth of janata bank increase tk. 516010.74 million in 2014 to tk. 568911.14 million in 2015.
From calculation of 2 years we find more Deposit growth tk. 568911.14 million in 2015.

42
 4.2.10 Loan Deposit Ratio

Year 2015 2014

Ratio 84.1 % 79.4 %

84.10%
86.00%

84.00%

82.00% 79.40%
80.00%

78.00%

76.00%
2015 2014

Ratio

Loan deposit ratio of Janata bank in 2014 is 61.97%, and in 2015 is 61.50% which found by total
amount of loan divided by total amount of deposit. From calculation of 2 years we find more loan
deposit ratio 61.97% in 2014.

43
BRAC BANK LIMITED
Balance Sheet
For the year ended 31 December 2015

2015 2014
Note Taka Taka
PROPERTY AND ASSETS
Cash 3.a 16,227,438,475 17,091,323,727
Cash in hand (Including foreign currency) 5,634,556,964 7,560,169,362
Balance with Bangladesh Bank and its agent Bank(s)
(Including foreign currency) 10,592,881,511 9,531,154,365

Balance with other banks and financial institutions 4.a 24,790,485,928 25,264,857,467
Inside Bangladesh 20,030,174,259 24,096,693,266
Outside Bangladesh 4,760,311,669 1,168,164,201
Money at call and on short notice - -
Investments 6.a 20,017,491,682 24,225,504,521
Government 14,979,456,068 20,559,303,620
Others 5,038,035,614 3,666,200,901
Loans and advances 7.a 149,934,139,696 124,299,994,135
Loans, cash credits, overdrafts, etc. 148,646,144,849 123,717,849,561
Bills purchased and discounted 1,287,994,847 582,144,574

Fixed assets including premises, furnitures and fixtures 8.a 4,038,487,515 3,553,319,037
Other assets 9.a 15,340,369,249 13,842,134,516
Non-banking assets 10 62,230,075 -
Goodwill 11 1,412,198,710 1,442,245,491
Total Assets 231,822,841,330 209,719,378,894
LIABILITIES AND CAPITAL
Liabilities
Borrowings from other banks, financial institutions and agents 12.a 24,671,834,522 9,354,167,049
Borrowings from Central Bank 13.a 4,527,813,643 2,387,403,892
Convertible subordinate bonds 14.a 3,000,000,000 3,000,000,000
Money at call and on short notice 15.a 3,780,000,000 1,220,000,000
Deposits and other accounts 16.a 142,648,188,939 146,366,349,410
Current accounts and other accounts 58,230,154,895 58,303,386,705
Bills payable 843,532,886 1,035,003,537
Savings deposits 29,105,666,315 25,820,159,618
Fixed deposits 53,409,522,433 60,785,364,555
Other deposits 1,059,312,410 422,434,995

44
Other liabilities 17.a 31,704,275,372 26,853,748,425
Total liabilities 210,332,112,476 189,181,668,776

Capital and Shareholders' equity

Paid up share capital 18.2 7,092,873,210 7,092,873,210
Share premium 18.8.a 4,781,671,715 4,781,671,715
Statutory reserve 19.a 3,470,350,332 3,470,350,332
Revaluation reserve on Government securities 20.1.a 219,539,410 176,631,280
Revaluation reserve on assets 20.2.a 516,373,535 516,373,535
Share money deposit 20.b 23,718,584 23,718,584
Surplus in profit and loss account/Retained earnings 21.a 4,088,724,423 3,189,355,328
Total Shareholders' equity 20,193,251,209 19,250,973,984

Minority Interest 22 1,297,477,645 1,286,736,134

Total equity 21,490,728,854 20,537,710,118

Total liabilities and Shareholders' equity 231,822,841,330 209,719,378,894

BRAC BANK LIMITED

Consolidated Balance Sheet
As at 31 December 2015

2015 2014
Note Taka Taka
Off Balance Sheet Items

Contingent liabilities

Acceptances and endorsements 12,967,621,606 7,433,193,266

Irrevocable letter of credits 20,193,505,068 17,331,651,842
Letter of guarantees 5,765,094,383 4,250,216,847
Bills for collection 1,810,581,090 343,486,634
Tax liability 43,700,000 43,700,000
Other contingent liabilities 9,173,220,373 8,311,105,241
Total Contingent liabilities 49,953,722,520 37,713,353,830
Other commitments
Documentary credits and short term trade related transactions - -
Forward assets purchased and forward deposits placed - -
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total other commitments - -

Total Off-Balance Sheet items including contingent liabilities 23.a 49,953,722,520 37,713,353,830

BRAC BANK LIMITED

Consolidated Profit and Loss Account
For the year ended 31 December 2015

45
 2015 2014
Note Taka Taka

Interest income 25.a 17,700,287,627 17,254,438,866

Interest paid on deposits and borrowing etc. 26.a 8,154,477,263 8,814,205,585
Net interest income 9,545,810,364 8,440,233,281
Investment income 27.a 2,496,098,709 2,486,204,875
Commission, exchange and brokerage 28.a 5,140,114,989 4,130,642,020
Other operating income 29.a 1,300,477,492 836,380,083
Total operating income (A) 18,482,501,554 15,893,460,259
Salaries and allowances 30 4,327,901,531 3,713,356,783
Rent, taxes, insurance, electricity etc. 31.a 1,055,997,672 983,240,836
Legal expenses 32 95,536,411 161,353,121
Postage, stamps, telecommunication etc. 33.a 302,584,563 251,483,787
Stationery, printing, advertisement etc. 34.a 947,981,269 484,864,049
Chief Executive's salary and fees 35 14,260,584 13,783,916
Directors' fees and expenses 36.a 2,215,239 2,842,279
Auditors' fee 37.a 5,205,567 4,864,705
Impairment of goodwill 30,046,781 30,046,781
Depreciation and repairs to bank's assets 38.a 1,287,428,444 1,303,007,699
Other expenses 39.a 2,333,765,716 1,726,783,984
Total operating expenses (B) 10,402,923,777 8,675,627,939
Profit/(loss) before provision (C=A-B) 8,079,577,777 7,217,832,320
Provision for:
Loans and advances 3,209,654,166 2,756,498,897
Diminution in value of investments 40,000,000 30,000,000
Off balance sheet items 69,673,337 102,732,266
Total provision (D) 40.a 3,319,327,503 2,889,231,163
Total Profit/(loss) before taxes (C-D) 4,760,250,274 4,328,601,157
Provision for Tax:
Current tax expense 2,387,793,214 2,203,346,998
Deferred tax expense/ (income) 37,645,493 88,517,967
Total provision for Tax 41.a 2,425,438,707 2,291,864,965
Net profit/(loss) after taxes 2,334,811,567 2,036,736,192
Appropriations:
Statutory reserve - 188,756,234
General reserve - -
- 188,756,234
Retained surplus 2,334,811,567 1,847,979,958
Attributable to:
Equity holders of BRAC Bank Limited 2,323,304,266 1,829,500,506
Minority interest 11,507,301 18,479,452
2,334,811,567 1,847,979,958
Earnings Per Share (EPS) 42.a 3.28 3.08

BRAC BANK LIMITED

Consolidated Cash Flow Statement

46
 For the year ended 31 December 2015

2015 2014
Note Taka Taka
A. Cash flows from operating activities
Interest receipts in cash 19,862,100,832 18,560,487,022
Interest payments (7,762,682,375) (8,964,890,661)
Dividends receipts 52,578,043 64,704,573
Fees and commissions receipts 5,066,755,471 3,118,301,132
Recoveries on loans previously written off 963,528,967 627,674,270
Cash payments to employees (4,224,535,624) (3,546,268,680)
Cash payments to suppliers (2,140,221,349) (6,509,665,427)
Income tax paid (1,328,803,724) (1,354,492,187)
Receipts from other operating activities 44.a 553,350,444 6,769,650,666
Payment for other operating activities 45.a (2,861,335,016) (2,070,624,377)
Operating Cash flow before changes in operating assets and
liabilities (i) 8,180,735,669 6,694,876,331

Increase/decrease in operating assets and liabilities

Loans and advances (25,503,243,742) (5,243,730,381)
Other assets (293,940,042) (106,265,661)
Deposits from other banks/borrowings 20,007,787,858 (3,446,483,856)
Deposits from customers (3,694,146,529) 13,802,614,148
Other liabilities (1,612,924,548) (2,022,931,550)
Cash utilised in operating assets and liabilities (ii) (11,096,467,003) 2,983,202,701
Net cash (used)/flows from operating activities (i+ii) (2,915,731,333) 9,678,079,032
B. Cash flows from investing activities
Treasury bills 977,394,052 2,716,068,930
Bangladesh Bank Bills (2,176,290,860) 2,059,520,259
Treasury bonds 4,924,079,205 (4,605,879,414)
Encumbured Securities 1,896,295,784 (1,413,994,704)
Sale/ (Investment) in shares (304,115,686) (190,124,877)
Investment in Bonds (1,057,546,557) (1,423,425,605)
Acquisition of fixed assets (1,287,026,515) (1,301,339,560)
Disposal of Fixed Assets 15,777,557 18,703,679
Net cash (used)/flows in investing activities 2,988,566,979 (4,140,471,292)

C. Cash flows from financing activities

Proceeds from issue of ordinary shares - -
Proceeds from issue of right shares - 2,216,522,880
Proceeds from issue of preference shares - 4,097,000
Share Premium - 3,063,935,708
Dividend paid (1,412,369,937) (435,247,946)
Net cash flows from financing activities (1,412,369,937) 4,849,307,642
D. Net increase/decrease in cash (A+B+C) (1,339,534,291) 10,386,915,382
E. Cash and cash equivalents at beginning of the year 42,359,234,694 31,972,319,312
Cash and cash equivalents at end of the year (D+E) 43.a 41,019,700,403 42,359,234,694
Cash and cash equivalents at end of the year:
Cash in hand (including foreign currency) 5,634,556,964 7,560,169,362
Balance with Bangladesh Bank and its agents bank(s) 10,592,881,511 9,531,154,365
(including foreign currency)
Balance with other banks and financial institutions 24,790,485,928 25,264,857,467
Money at call and short notice - -

47
Prize Bond 1,776,000 3,053,500
41,019,700,403 42,359,234,694

48
BRAC Bank Limited
4.3.1 Return on asset (ROA):

Year 2017 2016

Ratio 1.89% 1.13%

1.89%

2.00%
1.13%
1.50%

1.00%

0.50%

0.00%
2017 2016

Ratio

Return on asset Ratio in 2014 is 1.02% and in 2015 is 1.08% which was found by dividing a company’s
net income by its total asset. From calculation of 2 years we find more return on asset 1.08% in 2015.

49
 4.3.2 Return on Equity (ROE)

Year 2017 2016

Ratio 22.16% 13.32 %

22.16%
25.00%

20.00%
13.32%
15.00%

10.00%

5.00%

0.00%
2017 2016

Ratio

Return on equity Ratio in 2014 is 11.78%, and in 2015 is 12.94% which was found by a company’s net
income dividing by its total equity. From calculation of 2 years we find more return on equity 12.94% in
2015.

50
 4.3.3 Return on Investment Ratio

Year 2017 2016

Ratio 9.20 % 6.13 %

9.20%
10.00%
6.13%
8.00%

6.00%

4.00%

2.00%

0.00%
2017 2016

Ratio

Return on Investment Ratio in 2014 is 7.13% and in 2015 is 6.13% which was found by a company’s
net income dividing by total investment. From calculation of 2 years we find more return on investment
7.13% in 2014.

51
4.3.4 Earnings per Share (EPS)

Year 2017 2016

Ratio(Taka) 6.28 3.43

6.28
7
6
5 3.43
4
3
2
1
0
2017 2016

Ratio(Taka)

Earnings per sharesin 2014 is tk3.19 and in 2015 is tk3.43 which was found by earnings before interest
and taxes/ interest expense. From calculation of 2 years we find more earning per share tk.3.43 in 2015.

52
4.3.5 Cost Income Ratio

Year 2017 2016

Ratio 46% 48%

48%

48%
48%
47%
46%
47%
46%
46%
45%
2017 2016

Ratio

Cost income ratio in 2014 is 49.50% and in 2015 is 48.50% which found byoperating expenses
÷operating income. From calculation of 2 years we find more cost income ratio 49.5% in 2014.

53
 4.3.6 Net Asset Value per Share

Year 2017 2016

Ratio(Taka) 30.18 26.53

30.18
31
30
29
26.53
28
27
26
25
24
2017 2016

Ratio(Taka)

Net asset value per share in 2014 is tk.25.03, and in 2015 is 26.53 which found by Net Assets / Number
of Shares Outstanding. From calculation of 2 years we find more net asset value per share tk.26.53in
2015.

54
 4.3.7 Total Asset (Taka in millions)

Year 2017 2016

Taka 248,605 224,492

248,605

250,000
245,000
240,000
235,000 224,492
230,000
225,000
220,000
215,000
210,000
2017 2016

Taka

Total asset in 2014 is tk.204592 million and in 2015 is tk. 224493 million which found by the sum of
long term asset and current asset.From calculation of 2 years we find more Total asset tk.224493 million
in 2015.

55
 4.3.8 Loan Growth (Taka in millions)

Year 2017 2016

Taka 173,612 147,434

173,612
180,000
170,000
160,000 147,434

150,000
140,000
130,000
2017 2016

Taka

Loan growth in 2014 is tk. 121941 million, and in 2015 is tk. 147434 million. From calculation of 2
years we find more loan growth tk.147434 million in 2015.

56
 4.3.9Deposit Growth (in millions)

Year 2017 2016

Taka 8,402,682 7,450,231

8,402,682
8,600,000
8,400,000
8,200,000
8,000,000
7,800,000 7,450,231
7,600,000
7,400,000
7,200,000
7,000,000
6,800,000
2017 2016

Taka

Deposit growth ofBrac bank decrease tk. 1148464 million in 2014 to tk.143321 million in 2015. From
calculation of 2 years we find more Deposit growth tk.148464 million in 2014.

57
 4.3.10 Loan Deposit Ratio

Year 2017 2016

Ratio 103% 82.34%

150% 103%
82.34%
100%

50%

0%
2017 2016

Ratio

Loan deposit ratio of BRAC bank in 2014 is 82.34%, and in 2015 is 103% which found by total amount
of loan divided by total amount of deposit. From calculation of two years we find more loan deposit
ratio 103% in 2015.

58
 4.4Comparative analysis
4.4.1 Return on asset (ROA)

Name of Bank 2015 2014

AB Bank .45% .51%

Janata Bank Limited .70% .61%

BRAC Bank 1.08% 1.02%

1.20%

1.00%

0.80%
AB Bank
0.60% Janata Bank
BRAC Bank
0.40%

0.20%

0.00%
2015 2014

Return on asset (ROA) is also more of the BRAC Bank limited at year 2015
ROA is1.08% and 2014 ROA is 1.02% and less ROA is AB Bank at year
2015 ROA is .45% and 2014 ROA is .51% in these three selected bank.

59
 4.4.2 Return on Equity (ROE)

Name of Bank 2015 2014

AB Bank 5.57% 6.52%

Janata Bank Limited 11.44% 9.66%
BRAC Bank 12.94% 11.78%

14.00%

12.00%

10.00%

8.00% AB Bank
Janata Bank
6.00% BRAC Bank

4.00%

2.00%

0.00%
2015 2014

Return on Equity (ROE): BRAC Bank limited ROE is also more than other
two banks. Brac bank limited ROE is 12.94% at the year 2015 and 2014 ROE
is 11.78% and less ROE is AB Bank at year 2015 ROE is 5.57% and 2014
ROA is 6.52% in these three selected bank .

60
4.4.3 Return on Investment Ratio

Name of Bank 2015 2014

AB Bank 10.49% 9.68%
Janata Bank Limited 8.61% 8.47%
BRAC Bank 6.13% 7.13%

12.00%

10.00%

8.00%
AB Bank
6.00% Janata Bank
BRAC Bank
4.00%

2.00%

0.00%
2015 2014

Return on Investment (ROI) is also more of the AB Bank limited at year

2015 ROI is 10.49% and 2014 ROI is 9.68% and less ROI is BRAC Bank
Limitedat year 2015 ROI is 6.13% and 2014 ROI is 7.13 % in these three
selected bank.

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4.4.4 Earnings per Share (in Taka)

Name of Bank 2015 2014

AB Bank 2.12 2.10
Janata Bank Limited 25.12 19.92
BRAC Bank 3.43 3.19

30

25

20
AB Bank
15 Janata Bank
BRAC Bank
10

0
2015 2014

Earnings per Shares (EPS) is also more of the JANATA Bank limited at year
2015 EPS is 25.12% and 2014 EPS is 19.92% and less EPS is AB Bank at
year 2015 EPS is 2.12% and 2014 EPS is 2.10% in these three selected bank.

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4.2.5Cost Income Ratio

Name of Bank 2015 2014

AB Bank 52.86% 43.03%
Janata Bank Limited 80.75% 81.06%

BRAC Bank 48.5% 49.5%

90.00%

80.00%

70.00%

60.00%
AB Bank
50.00%
Janata Bank
40.00%
BRAC Bank
30.00%

20.00%

10.00%

0.00%
2015 2014

Cost income Ratio is also more of the Janata Bank limited at year 2015 Cost
income ratio is 80.75% and 2014 Cost income ratio is 81.06% and less Cost
income ratio is Brac Bank at year 2015 Cost income ratio is 48.5% and less
Cost income ratio 2014 is 43.03% of the AB Bank Limited.

63
 4.4.6 Net Asset Value per Share (in taka)

Name of Bank 2015 2014

AB Bank 38.05 32.24
Janata Bank Limited 291.63 206.14
BRAC Bank 26.53 25.03

300

250

200
AB Bank
150 Janata Bank
BRAC Bank
100

50

0
2015 2014

Net Asset Value Per Shares (NAVPS) is also more of the Janata Bank limited
at year 2015 NAVPS is 291.63 taka and 2014 NAVPS is 206.14 taka and less
NAVPS is Brac Bank Limitedat year 2015 NAVPS is 26.53 taka and 2014
NAVPS is 25.03 taka in these three selected bank.

64
4.4.7 Total asset (taka in millions)

Name of Bank 2015 2014

AB Bank 285010 246331

Janata Bank Limited 683157.58 628415.27

BRAC Bank 224493 204592

700000

600000

500000

400000 AB Bank
Janata Bank
300000 BRAC Bank

200000

100000

0
2015 2014

Total Asset is also more of the Janata Bank limited at year 2015 total asset is
683157.58 million taka and 2014 total asset is 628415.27 million taka and less
total asset is BRAC Bank at year 2015 total asset is 224493 million taka and
2014 total asset is 204592 million taka in these three selected bank.

65
 4.4.8 Loan Growth (Taka in millions)

Name of Bank 2015 2014

AB Bank 209725 177571

Janata Bank Limited 349861.30 319773.25

BRAC Bank 147434 121941

350000

300000

250000

200000 AB Bank
Janata Bank
150000 BRAC Bank

100000

50000

0
2015 2014

Loan Growth is also more of the Janata Bank limited at year 2015 loan
growth is 349861.30 million taka and 2014 loan growth is 319773.25 million
taka and less loan growth is BRAC Bank at year 2015 loan growth is 147434
million taka and 2014 loan growth is 121941 in these three selected bank.

66
 4.4.9 Deposit Growth (Taka in millions)

Name of Bank 2015 2014

AB Bank 231819 198198

Janata Bank Limited 568911.14 516010.74

BRAC Bank 143321 148464

600000

500000

400000
AB Bank
300000 Janata Bank
BRAC Bank
200000

100000

0
2015 2014

Deposit Growth is also more of the Janata Bank limited at year 2015 deposit
growth is 568911.14 million taka and 2014 deposit growth is 516010.74 and
less deposit growth is BRAC Bank at year 2015 deposit growth is 143321 and
2014 deposit growth is 148464 in these three selected bank.

4.4.10 Loan Deposit Ratio

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 Name of Banks 2015 2014
AB Bank 90.47% 89.59%
Janata Bank Limited 61.50% 61.97%

BRAC Bank 103% 82.34%

120.00%

100.00%

80.00%
AB Bank
60.00% Janata Bank
BRAC Bank
40.00%

20.00%

0.00%
2015 2014

Loan Deposit Ratio (LDR) is last year more of the BRAC Bank limited at
year 2015 LDR is 103% and 2014 LDR is 89.59% of the AB Bank Limited
and less LDR is Janata Bank Limitedat year 2015 LDR is 61.50% and 2014
LDR is 61.97% in these three selected bank.

68
Comparative Analysis Table
Ratio AB Bank Janata Bank BRAC Bank
1. Return on Asset (ROA) 0.45% 0.70% 1.08%

2. Return on Equity (ROE) 5.57% 11.44% 12.94%

3. Return on Investment (ROI) 10.49% 8.61% 6.13%

4. Earnings Per Share (EPS) (taka) 2.12 25.12 3.43

5. Cost Income Ratio 52.86% 80.75% 48.5%

6. Net Asset Value Per Share (taka) 38.05 291.63 26.53

7. Total Asset (taka in million) 285010 683157.58 224493

8. Loan Growth (taka in million) 209725 349861.30 147434

9. Deposit Growth (taka in million) 231819 568911.14 143321

10. Loan Deposit Ratio 90.47% 61.50% 103%

69
CHAPTER-05
Findings, Recommendation and Conclusion

5.1Finding of Analysis

70
To cope up with the current industry each bank takes its own strategy to sustain in the market.
Some of them stress on the deposit, some put emphasize to augment the loan size. Actually it
totally depends on the current position of the bank. So it is a bit difficult for me to give any
recommendation for the improvement of their performance with my limited experience.
However, I have come across with some findings which are as following:

 In the term of return on asset ratio and return on equity ratio BRAC bank is in a very
suitable position.

 Return on investment ratio of AB bank is higher than other two banks.

 All the selected banks are paying more or less similar earning per share for the last
consecutive five years. In terms of EPS, Janata Bank have a good position among others.

 At the same time, BRAC Bank keeps its position at advanced level in terms of deposit
growth and loan growth.

 AB Bank is also having a very praiseworthy position for loans and advances. BRAC
Bank is the youngest among these banks, but its loan and advance size is also
commendable.

 In the term of loan deposit ratio janata bank is good position during the last two years.

 BRAC Bank is not in superior position in terms of loans and advance size but also in
terms of deposit size as well.

From overall analysis it is found that, all the selected banks non funded income is decreasing
although non funded income plays an imperative role to boost up the profit of a bank. After
considering all the facts it is observable that, BRAC Bank is in a very favorable place in
banking industry among these banks. Therefore, their advertisements and marketing are done
in that way.

71
5.2 Recommendation

In order to get competitive advantage & to deliver quality service, top management should try
to modify the services. For the improvement of the service the following measures should be
taken:

 All these banks should consider more on its deposit products.

 The Banks should offer attractive interest rate to their principled customer rather than
their competitors.

 For customer’s convenience, they should provide more recruits to deliver faster
services to their principled customer.

 They should increase their net profits than previous years so that people can invest on
them.

 They should give more bonuses to their shareholders.

 They need to increase their equity rate.

 Development of human resources should be ensured to increase efficiency in work.

 Effective strategies must be undertaken against defaulter.

 All these banks must have to follow the management functions (from planning to
control) strictly in all of their business activities and also operation the bank.

 Their Branches should have a separate section to analyze the financial statement for
fining its liquidity, profitability & ownership ratios.

 Time consumed at service level should be minimized at optimum level.

 Evaluate customer’s needs from their perspective and explain logically the
shortcomings.

 Improve office atmosphere to give customers better feeling.

 Use of effective management information service.

72
  To deliver quality service top management should try to mitigate the gap between
customer’s expectation & employee’s perception

5.3Conclusion

Banks are now considered to be an integral part of the Bangladeshi economy. I have studied
the Commercial PrivateBanks, Islamic bank, and nationalized bank performance in terms of
some financial terms with which I am familiar with, but there are some other financial terms
which are also very essential for the proper measurement of performance analysis. As I am
not that expert in studying the annual report meticulously and not aware of each term of
banking industry, that is why there may be some missing terms which might be important for
the comparative analysis. Whatever analysis I have done so far, from this it is clearly visible
that any of the banks is not perfectly perfectionist; each of them has its own drawbacks. All
these banks are continuously supporting the communities with an adequate supply of credit
for all the legitimate business and consumer financial needs. Therefore, BRAC bank limited
performance is good among the selected the three bank.

73
5.4 References:

 Annual report of AB bank limited from 2011 to 2015

 Annual report of Janata bank limited from 2011 to 2015

 Annual report of BRAC bank limited from 2011 to 2015

 Text book “ Financial statement analysis”- writer GEORGE FOSTER.

 News paper and google

Ahmed, A. A. (2011). Financial Performance Evaluation of Some Selected

Jordanian Commercial Banks. International Research Journal of Finance and Economics,
6(4), 50-63.

Ali, K., Akhtar, M. & Ahmed, H. (2011). Bank-Specific and Macroeconomic Indicators of
Profitability - Empirical Evidence from the Commercial Banks of Pakistan. International
Journal of Business and Social Science, 2(6), 235-242.

Arzu, T. &Gokhan, G. (2005).Asset and Liability management in financial crises. The Journa
l of Risk Finance, 6(2), 35-49.

Brigham, E. F., & Houston, J. F. (2011).Fundamentals of Financial Management.(10th Ed.).

Ohio, USA: Thomson South Western.

74
 Appendix

BALANCE SHEET

As at 31st December 2015

FORM B02/TCTD
Unit: VND million
A. ASSETS Notes 31/12/2015 31/12/2014
I. Cash, gold, and precious stones 5 573,978 441,458
II. Deposits with the State Bank of Vietnam (“SBV”) 6 1,737,113 716,590
III. Deposits with and loans to other credit institutions 7 11,553,327 19,538,434
1. Deposits with other credit institutions 7.1 1,273,547 2,874,511
2. Loans to other credit institutions 7.2 10,279,780 16,663,923
IV. Derivatives and other financial assets 23,587 4,768
V. Loans to customers 30,530,486 25,495,490
1. Loans to customers 8 30,915,308 25,969,150
2. Provision for credit losses 9 (384,822) (473,660)
VI. Investment securities 10 15,189,676 15,004,910
1. Available-for-sale investment securities 10.1 11,661,971 10,834,698
2. Held-to-maturity investment securities 10.2 4,076,710 4,289,643
3. Provision for decline in value of investment securities 10.3 (549,005) (119,431)
VII. Long-term investments 11 568,624 516,901
1. Investments in subsidiaries 11.1 260,000 200,000
2. Investments in associates 11.2 41,905 51,905
3. Other long-term investments 11.3 268,791 268,791
4. Provision for decline in value of long-term investment 11.4 (2,072) (3,795)
VIII. Fixed assets 980,123 1,019,076
1. Tangible fixed assets 12 567,460 591,766
a. Cost 849,584 824,678
b. Accumulated depreciation (282,124) (232,912)
2. Intangible assets 13 412,663 427,310
a. Cost 541,381 533,856
b. Accumulated amortization (128,718) (106,546)
IX. Other assets 14 3,504,594 4,460,422
1. Receivables 14.1 1,964,192 2,803,919
2. Interest and fees receivables 917,926 885,140
3. Other assets 14.2 753,796 816,062
4. Provision for other assets 14.3 (131,320) (44,699)
TOTAL ASSETS 64,661,508 67,198,049

75
BALANCE
SHEET
As at 31st December 2015

Unit: VND
million
B. LIABILITIES AND EQUITY Notes 31/12/2015 31/12/2014
Borrowings from the Government and the State Bank
I. of Vietnam 15 799,795 -
Deposits and borrowings from other credit
II. institutions 9,096,176 15,308,737
1. Deposits from other credit institutions 16 1,033,719 3,310,667
2. Borrowings from other credit institutions 17 8,062,457 11,998,070
III. Deposits from customers 18 47,880,897 45,403,725
IV. Grants, entrusted funds and loans exposed to risks 19 280,328 120,782
V. Other liabilities 844,550 678,937
1. Interest and fees payables 605,492 554,954
2. Other payables 20 239,058 123,983
VI. Capital and reserves 22 5,759,762 5,685,868
1. Capital 22.1 5,247,165 5,247,165
a. Charter capital 4,798,000 4,798,000
b. Share premium 449,165 449,165
2. Reserves 22.2 306,980 294,067
3. Retained earnings 22.1 205,617 144,636
TOTAL LIABILITIES AND EQUITY 64,661,508 67,198,049

INCOME STATEMENT
For the year ended 31st December 2015
FORM
B03/TCTD
Unit: VND
million
ITEMS Notes 2015 2014
1. Interests and similar incomes 23 4,090,259 4,102,592
2. Interests and similar expenses 24 (2,430,910) (2,635,049)
I. Net interests and similar incomes 1,659,349 1,467,543
1. Fees and commission incomes 25 129,779 107,789
2. Fees and commission expenses 25 (76,575) (78,383)

76
 II. Net fees and commission incomes 25 53,204 29,406
III. Net gain from foreign currencies 26 63,679 56,687
IV. Net gain from trading securities - 561
V. Net gain from trading in investment securities 27 131,697 47,979
1. Other operating incomes 39,908 60,110
2. Other operating expenses (13,539) (24,000)
VI. Net other operating income 26,369 36,110
VII. Income from capital contribution, equity investments 28 32,278 20,544
VIII.Operating expenses 29 (1,195,719) (1,095,646)
IX. Net operating profit before provision for credit losses 770,857 563,184
X. Provision for credit losses 9 (663,198) (429,566)
XI. Profit before tax 107,659 133,618
XII. Current tax expense 30 (19,065) (26,809)
XIII.Profit after tax 88,594 106,809

CASH FLOW STATEMENT

For the year ended 31st December 2015

FORM B04/TCTD
Unit: VND million
ITEMS 2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES
1.Interest and similar incomes received 4,057,473 4,139,393
2.Interest expense and similar charges paid (2,380,372) (2,847,421)
3.Fee and commission income received 53,204 29,406
4.Net receipts from trading activities (foreign currencies and securities) 192,525 140,239
5.Other operatitng income 6,611 22,381
6.Recovery from bad debts previously written – off 20,187 13,729
7.Payments to employees and other operating expenses (1,129,159) (1,045,840)
8.Corporate income tax paid during the year - (22,347)
Net operating cash flows before changes in operating assets and liabilities 820,469 429,540
Changes in operating assets
1.Changes in deposits with and loans to other credit institutions (53,999) 2,002,764
2.Changes in trading securities (1,514,402) (3,090,733)
3.Changes in derivatives and other financial assets (18,819) (3,690)
4.Changes in loans to customers (4,992,825) (2,322,398)
5.Changes in provisions for writing off of loans, investment securities and long-term investments (183,222) (554,860)

77
6.Changes in other assets 846,993 (112,945)
Changes in operating liabilities
1.Changes in borrowings from the Government and the State Bank of Viet Nam 799,795 -
2.Changes in deposits and borrowings from other credit institutions (6,212,561) 4,955,032
3.Changes in deposits from customers 2,477,172 8,054,413
4.Changes in valuable papers issued - (3,446,620)
5.Changes in grants, entrusted funds and loans exposed to risks 159,546 57,212
6.Changes in other liabilities 81,686 47,653
7.Payment from reserves (376) -
Net cash flows (used in)/ from operating activities (7,790,543) 6,015,368

CASH FLOW STATEMENT

For the year ended 31st December 2015

ITEMS 2 015 2014

CASH FLOWS FROM INVESTING ACTIVITIES
1.Purchases of fixed assets (34,673) (220,246)
2.Proceeds from disposal of fixed assets 1,813 -
3.Payments for investments in other entities (5,000) -
4.Received from investments in other entities 10,000 -
5.Dividends receipts and profit shared from investments in other entities 32,278 9,544
Net cash flows from/ (used in) investing activities 4,418 (210,702)
CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid - (118,230)
Net cash flows used in financing activities - (118,230)
Net change in cash and cash equivalents during the year (7,786,125) 5,686,436
Cash and cash equivalents at the beginning of the year 16,085,543 10,399,107
Cash and cash equivalents at the end of the year (Note 31) 8,299,418 16,085,543

78