International Islamic University Chittagong

Performance Analysis of A Bank on the Basis of Ratio & SWOT Analysis:

A Study on Shahjalal Islamic Bank Limited (SJIBL)

An Intership Report prepared for the fulfillment of the

degree of Bachelor of Business Administration

Prepared Under the Supervision of:

Md.Abul Kalam Azad

Assistant Professor of Finance
Department of Business Administration
International Islamic University Chittagong
Dhaka Campus

Prepared By :

Ahammed Riaz
ID No.B081624
Major in Finance & Banking
International Islamic University Chittagong
Dhaka Campus

Department of Business Administration

International Islamic University Chittagong (IIUC)
July 14, 2012
 LETTER OF TRANSMITTAL

10th July,2012

Md.Abul Kalam Azad

Assistant Professor of Rinance
Department of Business Administration
International Islamic University Chittagong ,Dhaka Campus.

Subject: Submisson of Internship Report.

Dear Sir,
With due respect ,I am hereby presenting my internship report on ``Preformance
Analysis of A Bank on The Basis of ratio & SWOT Analysis : A Study on Shahjalal
Islamic Bank Limited (SJIBL)’’,as the requirement of the BBA program major in
Finance & Banking, International Islamic University Chittagong. The rationale of this
paper is to investigate quantitatively and also at micro level the claim that Islamic
Banking offers high performance and Stability.Writing this report has been great pleasure
& an interesting experience. This study helped me tremendously to understand the
implication of my test book knowledge in the practical field. It has also shaped some of
my basic view how to communicate and carry oneself in the business world.

I am extremely grateful to you for valuable guidance, diligent effort & awareness
whenever it was required.I tried my best to follow your instruction schedule, format &
discipline obediently & sincerely.

Thanking You

Sincerely yours,

_______________________
Ahammaed Riaz
ID No:B081624
BBA, 26th Batch
Major in Finance & Banking
International Islamic University Chittaging, Dhaka Campus.
 LETTER OF ACCEPTANCE

I am glad accept the report “Performance Analysis of A Bank on The Basis of Ratio &
SWOT Analysis : A study on shahjalal Islami Bank Limited (SJIBL)” prepared by
Ahammed Riaz, ID:B081624 under my supervision.

I also would like to wish Mr.Ahammed Riaz for every success of this life.

Thanks

__________________
Md.Abul Kalam Azad
Assistant Professor of Finance
Department of Business Administration
International Islamic University Chittagong
Dhaka Campus.
 LETTER OF ENDORSEMENT

10th July,2012

Professor Dr.S.M.Shafiqul Islam

Head,
Department of Business Administration
International Islamic University Chittagong, Dhaka Campus.

Subject: Solicitation for acceptance of the ‘’Internship Report’’.

Dear Sir,
I am pleased to submit my internship report after successful completion of internship
program on “Performance Analysis of A Bank on The Basis of Ratio & SWOT
Analysis :A Study on Shahjalal Islamic Bank Limited (SJIBL)”. This report is an
outcome of the internship program I have undergone. The Preparation of this formal
report is of an integrated part of our B.B.A program. It was a great experience for me and
though I am on the learning curve but, this report has put an impression on my mind all
the matters of the efficient management of one’s time ,skills, experience, knowledge, and
finally reality. Apart from the academic knowledge gained, this internship program and
preparation of report has given me the opportunity to know Measuring & Evaluating of
Employee Job Satisfaction. I Strongly believe that this sort of knowledge is an invaluable
asset in my life.

I will be glad if this report can contribute to its targeted purpose to some extent. I will
also be obliged to provide you with any further explanation if required.

Thanking You

Sincerely yours,

______________
Ahammed Riaz
ID No:B081624
BBA,26th Batch
Major in Finance & Banking
International Islamic University Chittagong ,Dhaka Campus.
 ACKNOWLEDGEEMENT

At the very beginning, I would like to express my deepest gratitude to the almighty Allah
for giving me the strength and the ability to finish the task within the scheduled time. A
single individual can achieve no noble objective. Completion of anything requires
supports from various sources. I am very much fortunate to get the sincere guidance and
supervision from a number of people.

I am deeply indebted to our honorable Professor Dr. S.M. Shafiqul Islam, Head DBS,
IIUC, for providing such an opportunity. I also would like mention the internship
supervisor Md. Abul Klam Azad, assistant professor of Finance, DBS, IICU, for his
continuous guidance, individual suggestions, continuous encouragement and unfailing
enthusiasm throughout the process of completion of this report which helped me a lot to
prepare the report in a well-organized manner. I, in regard, would like to extend my
sincere appreciation all of my teacher for the individual contribution and cooperation in
advancing this report and thereby complete my BBA program ultimately.
 EXECUTIVE SUMMARY

Bangladesh banking sector has the largest assets of both Islamic and conventional banks.
Conventional and Islamic banks are operating side by side in the market. However, the
rapid growth of Islamic banking system in Bangladesh creates intensive competitions in
the industry. Each bank tries to be more financially feasible than others are by increasing
activities and innovating some products to gain higher market share. Shahjalal Islami
bank Ltd. one of the most growing Islamic banking system in Bangladesh. Therefore,
there is need to make performance analysis of Shahjalal Islami Bank. The objective of
this paper is to provide financial performance. Shahjalal Islami Bank is financially
analyzed between 2005 and 2011. The methodology is used including ratio analysis.

The report is divided into the following six parts- Introduction, Company Overview,
Theoretical and Literature Review, Internship Duties & Responsibilities, Analysis &
Findings and Recommendation & Conclusion. Introduction section deals with some
elementary issues regarding the background and the process of preparing this report. The
next section following the Introduction helps to know the brief history of Shahjalal Bank.
Further, it focuses on its performance analysis with its current activities.

Financial Performance Analysis is the most imperative section, which covers the focal
findings of the study. Financial highlights, common size financial statements, key
financial rations tools are applied to assess the financial performance of the bank. I have
used financial rations analysis tools by applying MS Excel software package to determine
the degree of relationship between variables with their significance.

The study finds that almost all the performance measures show good performance on the
part of Shahjalal Bank . Through the result of the investigation can be used as a partial
but quantitative explanation to the arguments whether the profit sharing concept of
Islamic banking the results can achieve a higher profitability and lower risk than
conventional commercial banks.
 TABLE OF CONTENT

Letter of Transmittal I
Letter of Acceptance II
Letter of Endorsement III
Acknowledgement IV
Executive Summary V
Table Of Content VI

CHAPTER ONE:INTRODUCTION
1.1 Statement of the problem ………………………………………………………1
1.2 Rational or study ………………………………………………………………..2
1.3 Objective of the study …………………………………………………………..3
1.4 Methodology of the study ………………………………………………………4
1.5 Limitation of the study …………………………………………………………4

CHAPTER ONE: INTRODUCTION

2.0 Historical Bracground of SJIBL ………………………………………………5
2.1 Objectives of the Organization ………………………………………………...6
2.2 Present Programs of the Organization ………………………………………..8
2.3 Management Hierarchy ………………………………………………………10
2.4 Corporate Information ………………………………………………………..11
2.5 Roles in Economic Development ……………………………………………...12
2.6 Divisions of SJIBL ……………………………………………………………..13

CHAPTER THREE:THEORETICAL & LITERATURE REVIEW

3.1 Theorietical aspect of Profit Earnings and Islamic Banking ……………….14
3.2 Literature Review ……………………………………………………………...18

CHAPTER FOUR: RATIO ANALUSIS

4.1 Financial Ratio Analysis ……………………………………………………...23
4.2 Profitability Ratio Analysis …………………………………………………...29
4.3 Efficiency Ratio ………………………………………………………………..34
4.4 Capital Adequacy Ratios ……………………………………………………..37
4.5 Ragulatory Ratios ……………………………………………………………..39

CHAPTER FIVE: SWOT ANALYSIS FINDINGS

5.1 SWOT Analysis ………………………………………………………………40
5.2 Findings ………………………………………………………………………...41

CHAPTER SIX: RECOMMENDATION & CONCLUSION

6.1 Recommendations …………………………………………………………….43
6.2 Conclusion ……………………………………………………………………..44
6.3 References . ……………………………………………………………………46

CHAPTER –1

Introduction
1.INTRODUTION

1.1 Statement of the Problem

Economic prose pays a great deal of interest to the performance of banks, articulated in
terms of competition, concentration, efficiency, productivity and profitability, All sorts of
economic and financial activities rotate around the bank. Financial institutions are the
financial intermediaries linking the savers and borrowers of fund. These intermediaries
are interposed between the ultimate borrowers and lenders permitting them efficient
transfer of funds. Individual having surplus funds can lend them for reasonable return to
entrepreneurs who need funds to take the pro of economically and financially viable
investment opportunities. The existence of financial institutions facilitates such exchange
of resources. As a result, both the borrowers and lenders are better off than they would
have been without financial institutions intermediaries. Thus, these financial institutions,
such as banks, have a positive character in financing and investment activities that are
multidimensional process involving the complexity of many interrelated and
interdependent factors of diversified nature. It is difficult to levy the contribution of each
factor independently. Profit is considered to be an catalog of success of bank. People
judge the performance of a bank based on profits earned by it. Profit is the driving force
behind every business. So bank is not different from other business. If bank performance
is high and financial ratios are good then people are inspired to send their money to the
bank. In this way, bank collects money and invests to productive sectors for growth of the
economy. Profit is the incentive for undertaking the risk of business. Profit is essential for
the survival of business amd it ensures the continuity of banks and their performance. In
the absence of proper performance, a bank will eat up its own capital and ultimately close
down. With the help of prefect performance, bank can invest money in productive sector
and can open new branches and thereby maintain its capacity to create wealth.

A bank Cannot live to tell the tale without profit just as a person cannot live without food.
However, profits cannot be the sole purpose of bank business just as eating is not the aim
of life. However, now a days there are many banks that provide almost same services.
Only a few banks can make their profit because of their outstanding performance in the
sector. A bank can only insure their profit if their performance is good.
However, profit must be earned by satisfying the wants of customers and after paying
employees their dues. Economic and social objective of bank are not clashing. They go
hand in hand in the long ran. No bank can earn profits without satisfying customers and
other sections of society. Similarly , bank cannot render service without earning profits.
Thus , the real objective of bank is to earn profit by serving the interests of consumers,
employees, investors, Government and the society as a whole.

1.2 Rationale of Study

The rationale behind this study is to explore performance of Shahjalal Islamic Bank Ltd.
that is reflected on its financial statements, and to provide some comments to improve its
banking business. This study is carried out by observing several financial ratios,
analyzing trends of various elements of Shahjalal bank’s past seven years performance
results. Obviously, banks play very important roles in the economy life of the nation. The
health of an economy is closely related to the soundness of its banking system. A
commercial bank is a financial institution that accepts demand deposits and makes loans
and provides others service for the public, provides checking and savings accounts.

Presently, performance appraisal is one of the most active areas under discussion in
theory and practice of bank management, from which various methods and theories have
been put forward one after another. Face the complicated internal and external bank
environment, how to make performance appraisal fair and impartial, meanwhile to avid
the unilateral pursuits for indexes and ignorance of total benefit, become a key to succeed
in competition. In this paper, contingency theory is adopted in analyzing the performance
appraisal system, and bank performance appraisal processes is proposed based on
environment analysis, and think that only this way could structural differences in
competitiveness be constructed accordingly. This paper finds the development, growth
and performance of Shahjalal bank Ltd. one of the commercial banks in Bangladesh. The
report reveals commercial banks investment, profit earnings etc. Commercial bank are
considered as a back one to the survival of the economy in the country. They are the main
players in the financial system and the most active sector in the economy. Commercial
banks are to make a profit by intermediating between depositors and borrowers. In
achieving this goal banks requires a good management team to enable them to segregate
between different level of liquidity, maturity, and risk preferences. However, every year
Govt. changes or modifies banks rules & regulations and this effects in banking
performance. So Government needs to make a paper rules and regulations for banking
sector for maintaining a healthy and stable economy. Finally, I have worked and gathered
a lot of knowledge about banking sector activity that is why I left to make a study about
it.
1.3 Objective of the study

The main purpose of this study is descriptive analysis which is Performance Analysis of
SJIBL on the basis of ratio analysis.

This study also covers following areas’

I. To analyze the previous & present financial condition of SJIBL
II. To analyze various ratio of SJIBL and compare its performance of different
years.
III. To evaluate Strength, Weakness, Opportunity, and Threat of SJIBL.

1.4 Methodology of the Study

This part of the report illustrates the methodology to be employed to conduct the study. In
the organization part, information has been collected from bank annual report, brochures
and web sites. Generally, an intern wants to study the dependence level of the variable.
Financial ratios analysis is a well-recognized methodology to analyze bank performance.
In analysis part, MS Excel is used to analyze various ratio.

 No primary sources have been used rather based on secondary sources using
financial statements, credit-rating report etc.

 This analysis uses operational variables related to items of balance sheet and
income statement in financial ratios analysis etc.
1.5 Limitation of the study

No doubt every study has its own exclusive drawback, and it works on to reduce the
degree of certainty about the results reliability. The limitations of the present study cannot
be summarized in a single line. Lack of experience acted as constraints in the way of
exploration on the topic as a fresher in research field. The organization were also failed to
give some important information in there websites.

Some specific information are not available in bank’s annual report or websites, it has no
required annual reports or full annual reports. Availability of annual reports is given in
appendix. Finally, the study does not justify bank performance of the results of the bank
with that limited information.

During the study, I have faced the following limitations:

 Three months time is not enough for such an extensive study. It is very difficult to
collect all the required information in such a short period.

 The bankers are very busy with their jobs, which lead a little time to consult with.

 It was not an easy way to get actual data about bank.

 CHAPTER-2

A Short Profile of Shahjalal Islami Bank Ltd.

2 SHAHJALAL ISLAMI BANK LTD. & ITS PROFILE.

2.0 Historical Background of SJIBL

Shahjalal Islami bank limited is based on Islami Shariah. SJIBL is named after the name
of a saint Hajrat Shahjalal who dedicated his life for the cause of preaching Islam in the
east-north part of the subcontinent. It was incorporated as a public limited company on 1 st
April 2001 under companies’ act 1994. It started its banking operation on May 10, with
the 1st branch opened at 58, Dilkusha C/ A, Dhaka, obtaining the license of Bangladesh
Bank, for upliftment of financial condition of its customers as well as to contribute to
sustainable economic growth and development in trade and industry of the country. Its
corporate head quarter is situated at 10, Dilkusha, C/A, Jiban Bima Bhaban,
Dhaka –1000, Bangladesh. Now it has 74 branches. The sponsors of SJIBL are leading
business personalities and renowned industrialists of the country.

Shahjalal Islami Bank Limited (SJBIL) commenced its commercial operation in

accordance with principle of Islamic Shariah on the 10th May 2001 under the bank
Companies Act, 1991. During last ten years SJIBL has diversified its service coverage by
opening new branches at different strategically important locations across the country
offering various service product both investment & deposit. Islamic Banking, in essence,
is not only INTEREST FREE banking business, it carries deal wise business product
thereby generating real income and thus boosting GDP of the economy. Board of
Directors enjoys high credential in the business arena of the country. Management Team
is strong and supportive equipped with excellent professional knowledge under
leadership of a veteran Banker Mr. Md. Abdur Rahman Sarker. Alhaj Anwer Hossain
khan is the present Chairman of the bank.

]
 2.1 Objectives of the Organization

From time immemorial Banks principally did the functions of moneylenders or

‘’Mohajans’’ but the functions and scope of modern banking are now a day’s very wide
and different. They accept deposit and lend money like their ancestors, nevertheless, their
role, as catalytic agent of economic development encompassing wide range of services is
very important. Business commerce and industries in modern times cannot go without
banks. There are people interested to abide by the injunctions of religions in all sphere of
life including economic activities. Human being is value oriented and social science is
not value-neutral.

Shahjalal Islami Bank believes in moral and material development simultaneously.

“Interest” or “ Usury” has not been appreciated and accepted by “ the Tawrat” of Prophet
Moses, ‘’the Bible’’ of Prophet Jesus and ‘’the Quran’’ of Hazrat Muhammad (SM).
Efforts are there to do banking without interest Shahjalal Islami Bank Limited avoids
‘’interest’’ in all its transactions and provides all available modern banking services to its
clients and want to contribute in both moral and material development of human being.
No sustainable material well being is possible without spiritual development of mankind.
Socio-economic justice and brotherhood can be implemented better in a God-fearing
society.

Other Objectives Of Shahjalal Islami Bank Include :

 To establish interest-free and welfare oriented banking system.

 To help in poverty alleviation and employment generations.

 To contribute in sustainable economic growth.

Vision
To be the unique modern Islami Bank in Bangladesh and to make significant contribution
to the national economy and enhance customers’ trust & wealth, quality investment,
employees’ value and rapid growth in shareholders’ equity.
Mission

 To provide quality services to customers.

 To set high standards of integrity.

 To make quality investment.

 To ensure sustainable growth in business.

 To ensure maximization of Shareholders’ wealth.

 To extend customers innovative services acquiring state-of-the-art technology

blended with Islamic principles.

 To ensure human resource development to meet the challenges of the time.

Strategies

 To strive for customers best satisfaction & earn their confidence.

 To manage & operate the bank in the most effective manner.

 To identify customers needs & monitor their perception towards meeting those
requirements.

 To review & updates policies, procedures & practices to enhance the ability to
extend better services to the customers.

 To train & develop all employees & provide them adequate resources so that the
customer’s needs are reasonably addressed.

 To promote organizational efficiency by communicating company plans, polices

& procedures openly to the employees in a timely fashion.

 To cultivate a congenial working environment.

 To diversity portfolio both the retail & wholesale markets.

 2.2 Present Programs of the Organization

 Account Services

SJIBL provides Savings account and Current account as a commercial bank. In

addition it provides Term deposit and Short notice deposit accounts for its clients.
Mudaraba Term deposit account is for duration of 3 months and its multiple periods.
Mudaraba short notice deposit account requires a notice of minimum 7 days for
withdrawal of money. The profit for these accounts is decided in compliance with
Shariah.

 Deposit Schemes

Shahjalal Islami Bank gives special importance on savings. The objectives and principles
of the savings policy are:

*To encourage people to save for self and for the country as a whole.

*To develop a sustained savings habit among the people.

*To mobilize deposits through the operation of the following accounts:

 Mudaraba Savings Account

 Mudaraba Term Deposit Receipt

 Mudaraba Special Notice Account

 Mudaraba Special Savings (Pension)Scheme

 Mudaraba Hajj Saving Scheme

 Mudaraba Savings Bond Scheme

 Mudaraba Foreign Currency Deposit (Savings) Scheme

 Mudaraba Monthly Profit Deposit Scheme

*To operate Current Account on Alwadia principle and all other deposit accounts on
Mudaraba principle of Islamic Shariah.

*The bank distributes minimum 65% of its investment income, earned through
deployment of Mudaraba deposits, among the Mudaraba Depositors.
Investments Modes

Shahjalal Islami Bank offers loan to deserving candidates in different professions.

Small and medium entrepreneurs, small businessman, Doctors, Executives are in the
priority list. Car and CNG conversion, House and Household durables are also in the
list to invest. Overseas employment seekers and people going to be married may ask
for a loan to meet up the ensuring expenses. The terms are quite reasonable. In addion
to the above, SJIBL provide Remittance service and Debit Card service to its
customers.

Above all SJIBL presents all the services in compliance with Islamic Shariah. To
provide interest-free Banking, Shahjalal Islami Bank Limited has adopt the following
modes of investment:

 Musharaka (equity participation on the basis of sharing profit and loss )

 Mudaraba (Sharing of profit and loss in business where one of the partners
provides expertise and management and other partner provides capital remaining
inactive)

 Murabaha (buying and selling of commodities, goods etc. with profit)

 Bai-Muajjal (Credit sale with profit)

 Ijara (leasing for rent)

 Hire purchase or Shirkatul Melk

 Bi-Salam (purchasing of agricultural products while in production and providing

advance money to the producers)

 Istisna (purchasing of industrial products while in production and providing

advance money to the producers)

 Quard

Computer Services

Shahjalal Islami Bank Limited introduced a few schemes, which are very popular:

 Online services, Any Branch Banking

 Automated Accounting
 Integrated System
 Signature Verification
2.3 Management Hierarchy

Chairman

Broad of Director

Managing Director

Deputy Managing Director

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

Senior Executive officer

Executive officer

First Executive officer

Management Trainee officer

Senior officer

Assistant officer
2.4 Corporate Information

Name of the Company Shahjalal Islami Bang Limited

Legal From A public limited company incorporated in Bangladesh.1st
April 2001 under the companies Act 1994 and listed in
Dhaka Stock Exchange Limited and Chittagong Stock
Exchange.

Commencement 10th May 2001

Head Office Uday Sanz, Plot No. SE (A). 2/B
Glushan South Avenue, Gulshan-1 Dhaka 1212.
Telephone No 88-02-8825457, 8828142, 8824736, 8819385, 881837.
Fax No. 88-02-8824009
SWIFT SJBL,BD DH
E-mall Sblho@shahjalalbank.com.bd.
Chairman Alhaj Anwer Hossain Khan
Managing Director Md. Abdur Rahman Sarker
Legal Advisor Hasan & Associates
Chamber of Commerce Building (6th floor) 65-66
Motijheel C/A, Dhaka
No. of Branches 74
No. of ATM Booth 15
No. of SME Centers 06
Off-Shore Banking Unit 01
No. of Employees 1671
Stock Summary: Tk.6,000 million
Authorized Capital
Paid up Capital Tk. 4452.655 million
Face Value Per Share Tk. 10

Source: .Annual report of SJIBL

2.5 Roles in Economic Development

*Business Roles of Shahjalal Islamic Bank Limited

*Achieve business vision through quality and customer acceptance by providing

financial services.

*Maintain highest financial services.

*Customer focus- a perspective of quality through.

*The entire organization or each department and bank.

*Compliance-with regulatory requirements.

*Added value-through continuous improvements to benefit customers and the bank.

Roles to the Customers

Although, Shahjalal Islami Bank Limited is new in the Banking industry, it tries its best
to satisfy its customers through developing the efficiency of its function and to reach its
ultimate goal of: Winning Client Satisfaction. Customer can enjoy withdrawal, transfer
and pay utility bills from anywhere in Bangladesh from any of the thirteen branches.
More over the bank has started PC banking facility to reduce the time to deliver the
service to its customer. Moreover, it charges competitive rate of service to its customers.

* Controlling

Shahjalal Islami Bank Limited does not believe in the traditional banking. It still believes
Islamic System Base banking. It tries to increase and maintain its market share in the
private banking sector through two types of control techniques:

* Feed Forward Control

*Feedback Control

*Roles Towards Ethics & Society

Shahjalal Islami Bank Limited strongly believes in banking ethics and social
responsibilities. Although it is a profit making organization by Mudaraba way, it tries not
to harm the society in any of its activities. It is fully devoted to fulfilling the satisfaction
of the customer as well as it employees. It performs its social responsibilities through
involving in different type of social development activities to develop socio-economy of
the country.
2.6 Division of SJIBL

The Head Office of SJIBL has eight major divisions and each comprising of various
departments. The major divisions in the Head Office are as follows:

I. Investment Division
This division has the authority to determine the party or the client who will get the
credit facility from the bank. The credit clients are selected according to the criteria
of credit policy. This division has the full authority to take any decision against or
favor the client and these divisional works is supported by the Credit Services
Division .

II. Financial Administration Division

This division can handle the credit proposal, disbursement, monitoring and
credit recovery position that is given by all branches. Each branch has their own
credit division and all branch-wise activities are reported to the head office credit
services division.

III. Audit & Inspection Division

This division can control all the financial position, activities of overall organization.
They provide the total budgetary limitation to every department for the respective
year. They also carry out the financing activities with the access and operational
activities.

IV. Marketing & Public Relation Division

This division mainly works for improving the marketing network throughout the
country, implementing the marketing strategies and the concept of Trade Marketing,
improving the procedure which is ultimately provide date regarding to competition
and relative market.

V. Common Services Division

This division can handle all the general activities except the credit and financial
sector. All the administration activities are designed and implemented by this
division.

VI. Human Resource Division (HRD)

This division deals with the employees as the resources of the organization. They
mainly emphasize on the recruitment of employees and the employee benefits &
services.
 Chapter-3
Theoretical & Literature Review
3 THEORETICAL & LITERATURE REVIEW

3.1 Theoretical aspect of Profit Earnings and Islamic Banking

3.1.1 Performance Analysis

Performance analysis involves gathering formal and informal data to help customers and
sponsors define and achieve their goals. Performance analysis uncovers several
perspectives on a problem or opportunity, determining any and all drivers towards or
barriers to successful performance, and proposing a solution system based on what is
discovered.

A performance analysis (PA) is a systematic and periodic process that assesses an

individual employee’s job performance and productivity in relation to certain pre-
established criteria and organizational objectives. Other aspects of individual employees
are considered as well, such as organizational citizenship behavior, accomplishments,
potential for future improvement, strengths and weaknesses, etc. To collect PA data, there
are three main methods: objective production, personnel, and judgmental evaluation.
Judgmental evaluations are the most commonly used with a large variety of evaluation
methods. A PA is typically conducted annually. The interview could function as
“providing feedback to employees, counseling and developing employees, and conveying
and discussing compensation, job status, or disciplinary decisions”. PA is often included
in performance management systems. Performance management system are employed “to
manage and align” all of an organization’s resources in order to achieve highest possible
performance. “How performance is managed in an organization determines to a large
extent the success or failure of the organization. Therefore, improving PA for everyone
should be among the highest priorities of contemporary’’ organizations.
Some applications of PA are performance improvement, promotions, termination, test
validation, and more. While there are many potential benefits of PA, there are also some
potential drawbacks.
3.1.2 A lighter definition is:

Performance analysis is the front end of the front end. It is what we do to figure out what
to do. Some synonyms are planning, scoping, auditing, and diagnostics.

A. Financial Analysis
Financial analysis (also referred to as financial statement analysis or accounting analysis
or analysis of finance) refers to an assessment of the viability, stability and profitability of
a business, sub-business or project.

It is performed by professionals who prepare reports using ratios that make use of
information taken from financial statements and other reports. These reports are usually
presented to top management as one of their bases making business decisions.

B. Financial Ratio
A financial ratio (or accounting ratio) is a relative magnitude of two selected numerical
values taken from an enterprise’s financial statements. Often used in accounting, there are
many standard ratios used to try to evaluate the overall financial condition of a
corporation or other organization. Financial ratios may be used by managers within a
firm, by current and potential shareholders (owners) of a firm, and by a firm’s creditors.
Financial analysis use financial ratios to compare the strengths and weaknesses in various
companies. If shares is in a company are traded in a financial market, the market price of
the shares is used in certain financial ratios.

Ratios can be expressed as a decimal value, such as 0.10, or given us an equivalent

percent value, such as 10%. Some ratios are usually quoted as percentages, especially
ratios that are usually or always less than 1, such as earnings yield, while others are
usually quoted as decimal numbers, especially ratios that are usually more than 1.

Simply we can say that, Ratios analysis is used to evaluate relationships among financial
statement items. The ratios are used to identify trends over time for one company or to
compare two or more companies at one point in time. Financial statement ratio analysis
focuses on three key aspects of a business: liquidity, profitability, and solvency.

C. Data Analysis
The process of evaluating data using analytical and logical reasoning to examine each
component of the data provided. This form of analysis is just one of the many steps that
must be completed when conducting a research experiment. Data from various sources is
gathered, reviewed, and then analyzed to form some sort of finding or conclusion. There
are a variety of specific data analysis method, some of which include data mining, text
analytics, business intelligence, and data visualizations.
 D. Business Analysis.
Business analysis is the discipline of identifying business needs and determining
solutions to business problems. Solutions often include a systems development
component, but may also consist of process improvement, organizational change or
strategic planning and policy development. The person who carries out this task is called
a business analyst or BA.

3.1.3 Islamic Banking Concepts

Islamic Banking is a banking system whose operation is based on Islamic principles of

which profit and loss sharing is major feature, ensuring justice and equity in the economy.
That is why Islamic banks are often known as profit and loss sharing banks.

The General Secretariat of the Organization of Islamic Conference (OIC) in its Foreign
Ministers Conference held in Senegal in 1978 approved the definition of Islamic Bank as
“a financial institution whose statutes rules and procedures expressly state its
commitment to the principles of Islamic Shariah and to the banning of the receipt and
payment of interest on any of its operations.”

The main Objectives of Islamic banking are:

 To establish participatory banking instead of banking on debtor-creditor

relationship.

 To invest through different modes permitted under Islamic Shariah.

 To accept deposits on profit-loss sharing basis.

 To extend co-operation to the poor, the helpless and the low-income group for
their economic enlistment.

 To play a vital role in human development and employment generation.

 To contribute towards balanced growth and develop of the country through

investment operations particularly in the less developed areas.

 To contribute in achieving the ultimate goal of Islamic economic system.

3.1.4 Islamic Banking Movement throughout the World

There has been large scale growth in Islamic finance and banking in Muslim countries
and around the world during the last twenty years. The expansion and unfolding of
Islamic banking is and inseparable part of Islamic economy. During fifties it was only a
subject matter of research and was limited to the writings of scholars and philosophers.
During the sixties actual experiments were made and in the seventies Islamic banking
institutions started gaining strength. The eighties and nineties are the periods of
consolidation and now Islamic banking is coming up as the only welfare banking system
of the modern world.

Ahmad al Najjar had played the pioneering role for the establishment of the first Islamic
bank in the modern world in 1963 at Mitgamar, Egypt.
3.2 Literature Review

With respect to the performances of Commercial Banking sector, foreign and national
experts undertook number of studies.

Bhattacharya (2007) pointed out that six major recent policy measures include reduction
of bank rate and lending rate, linking classified loans to large loan sanctioning;
rationalization and merger of bank branches, measures for loan recovery, and
demarcation of responsibilities between the management and the board and decision on
cash reserve ratio.

Chowdhury and Islam (2007) stated that deposits and loan advances of Nationalized
Commercial Banks (NCBs) are less sensitive to interest changes than those of Specialized
Banks (SBs). So SBs should not make abrupt change in lending or deposit rates by
following the NCBs. If NCBs change their lending or deposit rates, their deposits or loans
and advances will be affected less than those of SBs. Moreover, deposits of NCBs have
higher volume and higher volatility than those of SBs. On the other hand, loans advances
of NCBs show a higher volume and higher volatility than those of SBs.

Jahangir, Shill and Haque (2007) stated that the traditional measure of profitability
through stockholder’s equity is quite different in banking industry from any other sector
of business, where loan-to-deposit ratio works as a very good indicator of banks’
profitability as it depicts the status of asset-liability management of banks. But banks’
risk is not only associated with this asset liability management but also related to growth
opportunity. Smooth growth ensures higher future returns to holders and there lies the
profitability which means not only current profits but future returns as well.

Chowdhury (2002) observed that the banking industry of Bangladesh is a mixed one
comprising nationalized, private and foreign commercial banks. Many efforts have been
made to explain the performance of these banks. Understanding the performance of banks
requires knowledge about the profitability and the relationships between variables like
market size, bank’s risk and bank’s market size with profitability.

Indeed the performance evaluation of commercial banks is especially important today

because of the fierce competition. The banking industry is experiencing major transition
for the last two decades. It is becoming imperative for banks to endure the pressure
arising from both internal and external factors and prove to be profitable.

Siddique and Islam (2001) pointed out that the Commercial Banks, as a whole, are
performing well and contributing to the economic development of the country. The
average profitability of all Bangladeshi banks collectively was 0.09% during 1980 to
1995, which means that a profit of TK 0.09 was earned by utilizing assets of TK 100. In
every aspect of profits, banking sector contributes the national economy as well as to the
individual organization. Despite overall growth of the banking sector being positive, the
performances of different categories of Banks were not equally attractive.
According to Al-Shamrnari and Salirni (1998) profitability ratio especially return on
equity (ROE) signals the earning capability of the organization. They also suggest that
higher return on equity (ROE) ratio is appreciable as it is the primary indicator of bank’s
profitability and functional efficiency.

Avkiran (1997) stated that the details the process whereby multivariate interdisciplinary
measures of potential to perform are integrated with performance measures to develop
modes of retail performance for bank branches. The predictive models use the key
business drives of a major trading bank as dependent variables. Independent variables
explaining business drives are the theorized potential variables that measure the capacity
to generate retail business. The modes allow a comparison between the predicted and
actual levels of key business diverts, thus measuring unrealized performance. Findings
can assist decision making during restructuring, branch closures or downsizing. The
variables presented shout be regarded as examples rather than universally accepted
measures of branch performance.

Bhatt & Ghosh (1992), observed that the profitability of commercial banks depend on
several factors some of them are endogenous and some exogenous. The endogenous
factors represent control of expenditure, expansion of banking business, timely recovery
of loans and productivity. The exogenous factors consist of direct investments such as
SLR (Statutory Liquidity Ratio), CRR (Cash Reserve Ratio) and directed credit programs
such as region wise, population wise guidelines on lending to priority sectors. The
regulated and restricted regime in the operation of banking system in terms of investment,
credit allocation, branch expansion, interest rate determination and internal management
eroded the productivity and profitability of commercial banks.

Hossain and Bhuiyan (1990) stated that there is no universally accepted operational
definition of performance measures. In broad sense performance level of an enterprise
can be measured by the extent of its organizational effectiveness. In the context of
services rendered towards public the performance of an organization can be viewed as
‘the extent to which its work is carried out within established specifications for goods
and services produced, to the general satisfaction of the clientele served, within given
cost and time constraints, and in such a manner as to support or contribute to the
achievement of the organization objectives.

Al-Obaidan (2008) suggests that large banks are more efficient than small banks in the
Gulf region. Tarawneh (2006) found that the bank with higher total capital, deposits,
credits, or total assets does not always mean that has better profitability performance.
Financial performance of the banks was strongly and positively influenced by the
operational efficiency and asset management, in addition to the bank size.
Jahangir, Shill and Haque (2007) stated that the traditional measure of profitability trough
stockholder’s equity is quite different in banking industry from any other sector of
business, where loan-to-deposit ratio works as a very good indicator of banks’
profitability as it depicts the status of asset-liability management of banks. But banks’
risk is not only associated with this asset-liability management but also related to growth
opportunity. Smooth growth ensures higher future returns to stockholders and there lies
the profitability which means not only current profits but future returns as well. So,
market size and market concentration index along with return to equity and loan-to-
deposit ratio grab the attention of analyzing the banks’ profitability.

X. Chen et all (2005) applies frontier analysis (X-efficiency) using DEA to examine the
cost, technical and a locative efficiency of 43 Chinese banks over the period 1993 to
2000. In this paper the input used are interest expenses, non-interest expenses (which
includes the price of labor), price of deposits (interest paid on deposits divided by
deposits), and the price of capital (non-interest expenses are divided by fixed assets).
Outputs used are loans, deposits and non-interest income. Results show that the large
state-owned banks and smaller banks are moiré efficient than medium sized Chinese
banks. In addition, technical efficiency consistently dominates the locative efficiency of
Chinese banks.

Fadxlan sufian (2006) applied DEA window analysis approach to examine the long-term
trend in the efficiency of 29 Singapore banking groups during the period of 1993-2003.
In this paper, the input vector includes (x1) Total Deposits, which includes deposits from
customers and other banks and (x2) Fixed Assets while (y1) total loans, which includes
loan to customers and other banks and (y2) other income, which consists of fee and
commission incomes and other non-interest operating income are the output vectors. The
results suggest that the Singapore banking groups have exhibited mean overall or
technical efficiency of 88.4 percent. It was found that the Singapore banking groups’
overall efficiency was on a declining trend during the earlier part of the studies, before
increasing dramatically during the later period.

(Maghyereh, 2003) Jordan undertook major financial sector liberalization starting in the
early of 1990s. The effect of this reform on the efficiency of the banking sector is
evaluated. A non parametric method of Data Envelopment Analysis (DEA) has been used
to arrive at the efficiency sectors for a panel data sample covering eight Jordanian
commercial banks over the period 1984 to 2001. The findings suggest that liberalization
program was followed by an observable increase in efficiency. Another finding of the
study is that banks large banks demonstrated the faster productivity growth during the
liberalization. The study has important implications such as guiding the government
policy regarding deregulation and liberalization.

Bashir (2000) examines the determinants of Islamic bank’s performance across eight
Middle Eastern countries for 1993-1998 periods. A number of internal and external
factors were used to predict profitability and efficiencies. Controlling for macroeconomic
environment, financial market situation and taxation, the results show that higher
leverage and large loan to asset ratios, lead to higher profitability. The paper also reports
that foreign-owned banks are more profitable than the domestic one. There is also
evidence that taxation impacts negatively on bank profitability. Finally, macroeconomic
setting and stock market development have a positive impact on profitability.

Bassett and Brady’s (2002) study found that small banks grew more rapidly than large
banks from 1985-2001 with profitability remained at a high level. While interest costs
increased, this was more than offset by higher returns on earning assets.

Based on the above literature, we can say that there are some studies about banks in
Bangladesh; however, on in depth study has ever been done because of probably lack of
sufficient information. Like any other study, this study is also not without its limitations.
In measuring performance level of a bank Swami and Vasudevan (1985) used per
employee, deposits, advances, investment, profits, etc.
4 RATIO ANALYSIS
4.1 Financial Ratio Analysis
One of the most common ways of analyzing financial date is to calculate ratios from the
date compare against those of other companies or against company’s own historical
performance. For example, return on assets is a common ratio used to determine how
efficient a company is a at using its assets and as a measure of profitability.
4.1.1 Total Assets Turnover
This ratio measures that how much turnover is generated by the total assets of the
organization. This calculated by the given formula,

Interpretation: The high ratios would be better for the business but, Shahjalal bank’s
total Assets turnover showing a mixed trend of increase and decrease in past seven years
In 2011 it is low at 1.26% as compare to 2009 at 2.08% but is even less of the highest
value of 3.01% in 2010. Last seven years, we can see that SJIBL’s ratio is above the
industry average, indicating that the company is generating a sufficient volume of
business given its total assets investment. As a results bang is going to the good position.

4.1.2 Return on Investment

This ratio is calculated by dividing operating profit by the average of operating assets as
shown by the formula,

Return on Investment = Net Income/Investment

Interpretation: The answer of this ratio should be high or should be shown a

positive increasing trend for better and favorable results. Shahjalal bank’s ROI
showing a average trend over the past six years except lowest in 2011 in 1.30%.

4.1.3 Deposit turnover ratio

This ratio measures the return on deposits by the total deposits of the organization
obtained by dividing net income after taxes to total as shown by the formula,

Interpretation: As this ratio shows the total return which business gains from
the total deposits, so it should be high which will be better for the business.
Shahjalal banks deposit ration is much lower than the industry average of 09
times. This suggests that bangs is holding to much inventory. Excess deposits is,
of course. Unproductive and it represents and investment with a low or zero of
return. Bank showing decreasing deposit in 2011 which is 1.42% which is goods
for the bank.
4.1.4 Fixed Assets Turnover

This ratio measures the efficiency of using fixed assets in generating income. It is
the ratio of total income to total fixed assets as given by the formula,

Interpretation: The result of this ratio should always be high for favorable
business environ ratio shows that business is investing more efficiently in fixed
assets for gone 2005 to 2007 banks ratio was above industry average rate. Which
means it was favorable for 2007 it was continuously fall. It is indicating that the
bank the bank is not using its fixed assets about other firms in its industry.

4.1.5 Current Ratio:

Current ratio indicates the liquidity position of the business that whether business
can fulfill its obligation or not. It is the raiio of current assets to current liabilities
as,

Current Ratio = Current Assets /Current Liabilities

Interpretation: The current ratio should be in reasonable range. It should no be too

high or too low, both conditions are not favorable. In this case of Shahjalal bank, is
showing a increasing trend which is favorable for the business it may pose easy for
the bank to fulfill its current obligations. But bank’s current ratio is below of
industry average 4.2, so its liquidity position is relatively weak.

4.1.6 Debt to Equity Ratio:

This ratio tells about the financial leverage of the organization that what
proportion of debt and what proportion of equity is being used by the organization
for financing its avalible assets. It is calculated by dividing long term debt to total
capitalization as shown by the given formula.
Debt Equity = Total Liabilities/ Shareholder Equity

Interpretation: A higher value of debt equity ratio is much favorable for the
business as its high value tells about the efficiency of the business to using its
available debt for financing. Shahjalal bank’s debt equity ratio is showing a
average trend over the past four years but as compare t 2007 it is decrease then
2006 but it is still lower as compare to highest level of 18.46 in 2005.

4.2 Profitability Ratio Analysis

A class of financial metrics that are used to assess a business’s ability to generate
earnings as compared to its expenses and other relevant costs incurred during a
specific period of time. For most of these ratios, having a higher value relative to a
competitor’s ratio or the same ratio from a previous period is indicative that the
company is doing well. Three common profitability ratios include return on
investment, return on total assets and return on income. Return on investment
measures the return on funds invested by the owners of the business. Return on
total assets measures how efficiently profits are being generated from assets
employed in the business. Return on income or net profit margin is a measure of
overall business success.
4.2.1 Net Profit Margin
This ratio is mostly used for the internal comparison. This ratio shows the percentage of
net profit after tax to the total income/revenue. A higher profit margin ratio indicates a
higher margin safety and lower for the organization and vice versa.
Interpretation: It is showing a good trend from 2005 to 2009 and in 2010 trend is high
but onward showing a decreasing trend which is not better for the business. It is
indicating a greater risk and low margin safety for the business. Bu all ratio is above
industry average.

4.2.2 Operating Profit Margin

This ratio tells us about the percentage of operating profit to total income. It is calculated
by the following formula .

Interpretation: Its high value is favorable for the business. It is overall showing a good
trend from 2005 to 2008 Except a decrease in 2009 and in 2010 it increase but as
compare to 2011 which is even then low. It is not favorable for the business.

4.2.3 Return on Total Assets (ROA)

This ratio tells the percentage of net profit/earnings which business is attaining by using
its total available assets. It is calculated by dividing net profit to total assets as shown by
the given formula.
Interpretation: Higher ROA is favorable for the business which shows better use of
assets by the business for generating profits. Bank Shahjalal ROA is showing a average
trend over past six years except in 2010 with a highest value of 3.00%.

4.2.4 Return on Equity:

This ratio shows a relationship between net income after taxes and shareholder’s equity
and measures the efficency of the organization of generating profits by using
shareholder’s equity. It is calculated by dividing net income taxes to shareholders equity
as shown by the given formula.
ROE = Net Income After Tex/ Shareholder Equity
Interpretation: It should be high for fever results. This ratio of Bank Shahjalal’s is
showing a decreasing trend expect in 2005, 2006 and 2010 over past 7 years.

4.2.5 Gross Profit margin ratio:

The gross profit margin ratio is used as one indicator of a business’s financial health. It
show how efficiently a business is using its materials and labour in the production
process and gives an indication of the pricing, cost structure, and production efficiency of
your business. The higher the gross profit margin ratio the better.
Gross Profit Margin Ratio = Gross Profit/Income
Interpretation;
This ratio is used to determine the amount of profit remaining from each income take
after subtracting the cost if goods soal. The high ratios would be better for the business
but, Shahjalal Bank’s profit margin showing a mixed trend of increase and decrease in
past seven years. Example: a gross profit margin of 24.22% in 2011 indicates that 24.22%
of income revenue is left to use for purposes other than the cost of goods soal.

4.3 Efficiency Ratio

These ratios tell about the efficient use of the assets and liabities of the business, which is
calculated by the following ratios.

4.3.1 Bank Efficiency Ratio

The bank efficiency ratio is a quick and easy measure of a bank’s ability to turn
resources into revenue. The lower the ratio, The better (50% is generally regarded as the
maximum optimal ratio). An increase in the efficiency ratio indicates either increasing
costs or decreasing revenues.

Bank Efficiency Ratio = Expenses / Revenue

Interpretation:
This ratio is used to determine that bank expenses continuously increase every year. This
ratio of SJIBL’s showing a increasing trend. For that reasons bank revenue is decrease. In
2011 revenue decrease and expense increase as compare as 2010.

4.3.2 Investment to Total Assets Ratio (ITA):

This ratio tells about the percentage of investment of assets calculated by dividing
investment to assets as shown by the following formula,

Investment to Total Assets Ratio = Investment / Assets

Interpretation:
This ratio should be in high figures for Favorable results of the business. Shahjalal banks
ITA is showing a mixed trend of increasing and decreasing over the past seven years. In
2010 it is high at 77.97% as compare to 2009 at 76.60%, which is favorable. But bank
should try to keep it high by making better policies.

4.3.3 Deposits to Total liabilities:

It is calculated by dividing total deposits to total liabilities as shown by the given
formula,

Deposits to Total Liabilities = Total Deposits / Total liabilities

Interpretation:
It is showing a mixed trend of increase and decrease over past years. As it is decreased in
2011 to 83 % from 87 % in 2010 which is not favorable.

4.3 Capital Adequacy Ratios

4.4.1 Equity to deposits ratio:
This ratio of total shareholder’s equity to total deposits and is calculated by the following
formula,

Equity to deposits ratio = Total Shareholder’s Equity/ Total Deposits

Interpretation:
It is showing an average increasing trend over past seven years but compare as 2011 is
decrease than 2010.

4.4.2 Equity to Assets Ratio:

This is the ratio of total ahareholder’s equity to total assets and is calculated by the
following formula,
Equity to Assets Ratio = Total Shareholder’s Equity/Total Assets

Interpretation: It is showing an increasing trend except in 2011 decreased trend but

overall it is increasing which is favorable is for the business.

4.4 Regulatory Ratios

4.5.1 Cash to Deposit Ratio:
This ratio tells about the percentage of cash available as compare to the deposit. It is
calculated by dividing cash on hand and with other banks total deposit as shown by the
given formula,
Cash to Deposit Ratio = Cash on hand and with other banks/ Total Deposit
Interpretation:
As this ratio tells about the liquidity status of the bank. It si showing an decreasing trend
from 2005 to 2008.

5 SWOT ANALYSIS AND FINDINGS

5.1 SWAT ANALYSIS

Strengths:
 Very attractive Brand name
 Continuous and phenomenal growth in profitability as its age is increasing.
 The support of the Bangladeshi Government.
 Workforce is very energetic because most of the workforce consists of the
young./Employees.
 Highly trained, skilled and professional HR
 Branch location is very ideal
 Attractive buildings of bank
 Less cost of funds as compare to competitors
 Training schedule of employees is better than other banks
Weaknesses:
 Inexperienced workforce
 Small age of bank
  Lack foreign network
 Work overload on employees
 Less banking experience
 Lack of professionally trained staff at head quarters
 Lack of Proper Motivation
 Absence of strong marketing activities
 Outdated Software and Hardware
Opportunities:
 Increasing demand of consumer banking
 Increasing branch network in Bangladesh
 Increasing branch network at International level
 Growing Islamic Banking branch network
 Increased rate of profile
 Huge population
 Experienced managers
Threats:
 Adverse economic conditions
 Privatization
 Upcoming Banks/Branches
 Similar products are offered by other banks
 Industrial Downturn

5.2 FINDINGS
In the report it was tried to find out the performance of SJIBL. There are some indices for
measuring performance of a bank. The indices are financial ratio, Efficiency ratio,
profitability ratio and liquidity ratio analysis and Capital Adequacy ratio analysis.

 Profit, net income, deposit rate is positive to increase.

 Bank’s total asset has no sufficient power to generate income.
 Bank’s ROI indicates that the level of investment is appropriate in regard to bank
income.
 The deposit turnover ratio indicates that the bank deposit return does not well.
 The fixed asset turnover ratio indicates that the bank don’t use its fixed asset
properly.
 SJIBL’s current ratio is showing trend, which is favorable for the business because
it may pose easy for the bank to fulfill its current obligations. In Shahjalal bank’s
current ratio is above 1, which is good.
 Shahjalal bank’s debt equity ratio is showing a average trend over the past four
years but as compare to 2007 it is decrease in 2006.
 SJIBL showing a good trend from 2005 to 2009 and in 2010 trend is high. A net
profit margin in 2010 is 33.90% indicates that of each revenue taka 33.90%
remains after all expenses are paid.
 SJIBL’s operating profit margin ratio showing overall good trend from 2005 to
2008 except a decreased in 2009. An operating profit margin of 48.42 % in 2010
indicates that after subtracting all operating expenses 48.42 % of revenues remain.
  SJIBL’s ROA shows better use of assets by the business for generating profits.
 Bank’s ROE shows a decreasing trend past few years.
 Shahjalal bank’s profit margin showing a mixed trend of increases and decreases
in past seven years.
 Bank Efficency ratio shows bank expenses increase every year and revenue is
decrease.
 Shahjalal banks Investment Total Assets Ratio is showing a mixed trend of
increasing and decreasing over the past seven years.
 Deposit to total liabilities ratio showing a mixed trend of increase and decrease
over past years.
 Equity to Deposit Ratio showing an average increasing trend over past seven
years.
 Equity to Asset Ratio it is showing an increasing trend except in 2011.
 Cash to Deposit Ratio tells about the liquidity status of the bank. It is showing an
decreasing trend.
 Branches activity is increase profit and deposit is positive and income this bank
need to expand its new branches.
 The need to more focus on their investment and return.

Some Other Findings

 The Bank had also extended long-term loan to a number of projects under
syndicated financing arrangement with banks and financial institutions.
 The Bank provide incentive bonus to its employees based on profit earned during
the year. This year the Bank provides six time’s basic salary as the incentive
bonus to its employees to perform their activities effectively and efficiently.
 The employees of the Bank are Young, energetic, cooperative and friendly. Their
dealings with the client are cooperative and friendly which creates attractive
perception about the client and interest to do business with the bank.
 Because of the strong marketing effort of Shahjalal bank is the deposits amount
has increased. For this even when competition has increased due to the intrusion
of some new local banks, Shahjalal has become successful to keep its strong
position in credit division.

6 RECOMMENDATION & CONCLUSION

6.1 Recommendations
SJIBL is a well-established Bank in Bangladesh. It is providing maximum services to the
customer. However, it has some limitations. I want to give some suggestion to remove
these problems or reduce these problems SJIBL should increase manpower. Not only
Dhanmondi branch but also other branches need more employees to provide maximum
service. At least general banking department and cash department the Bank should
provide sufficient employee.

The concluding remarks on the above-mentioned topic, its discussions, analysis and
evaluation are as follows with recommendation:
 Expand their investment in different area and profitable Preoject.
  Utilize bank resource at the optimum level and to ensure the best possible service
towards the customers.
 Their deposit collection is good but they need more focus on deposit collection.
 Bank’s need to more focus on their money return and take necessary step for it.
 Management need to ore focus to use bank assets for generate sufficient profit.
 Shahjalal bank also going to the liquidity problem so, they need necessary step to
overcome it.
 They must reduce unnecessary cost; like administrative, operational, departmental
etc.
 They need to focus invest their money in rural area because there have lots of
opportunity to make profit. Moreover, serve the national interest.
 Management need to handle their materials and increase work force to better
service.
 If the bank wants to provide services to the customer easily and comfortably, it
should increase the number of branch in suitable place.
 Bank is somewhat slow in launching new products. So bank should review its
policies of launching new products in short and reasonable time.
 The people in our country exactly do not know about Islamic concept. The
advertising of bank and bank’s products are not exposed to people. Therefore
Bank should hire some of the skilled of the marketers who can design creative and
attractive advertisements to make every person aware of the bank’s updates about
old and new products and services. Moreover Islamic banking product.
 Management can use debt for more financing.
 Foreign branch network should be increased in order to capture profits from all
over the world.
 They can use more efficiently their materials and man power to increase the gross
profit.

6.2 Conclusion
The “bank” is actually an institution, which accepts or collects the money or deposits from those
who have surplus of it and lend it to those who have in need of it or have capital in deficit, it
actually acts as a financial intermediary, which connects persons with surplus money to those
who have shortage of money. In this process, bank needs a good performance for connecting
these people. We moved a long way from the time when the banks were deposit taking and
money-lending institution. The old concepts, attitudes and methods in banking have undergone a
marked change all over the world. In this time, there are many banks doing their banking activity.
So it is a challenge for every bank to maintain its own place in market. Therefore, they need a
higher performance to face this challenge and deliver a quality service to their customer. Modern
Banking is an outcome development driven by changing financial activities and lifestyle.
Bangladesh has not lagged behind. Banks are required to participate in the nation building
activities and act as agent for bringing about socioeconomic changes.

Entering as a new bank in private banking scenario of Bangladesh, Shahjalal Bank is constantly
try to cross the obstacles regarding typical business oriented ideas and come up with innovative to
its consumers need to harvest maximum benefit for them. Shahjalal Bank Limited is a third
generation bank with a mission,
To develop & diliverthe most innovative products, manage customer experience, deliver quality
services that contributes to brand strength, establishes a competitive advantage and enhances
profitability, thus providing value to the stakeholders of the bank.
In the world of global economy, banking needs have become more diverse and exotic than ever
before. In this regard, Shahjalal Bank promises to fulfill every possible Customer needs with high
performance. This success has resulted from the dedication, commitment & dynamic leadership
of its management over the periods. To become market leader in providing banking services,
introduction of sophisticated banking instruments i.e.,on line banking services, ATM services is a
demand of time. Shahjalal bank shoes that the bank management is skilled enough because they
are providing innovative products to customers and are delivering quality services which has
strengthened the brand name of the bank and are getting high profits which is shown by their
mission statement. So the bank is on its way to achieve its missions and objectives very
enthusiastically and energetically in this age of high and tough business environment with the
passage of time.

Shahjalal bank is maintaining its competitiveness by leveraging on its on line Banking Software
and modern IT infrastructure. It is the pioneer amongst the local banks in introducing innovative
products like SMS Banking, Phone Banking, and Internet Banking and so on.
Though having some drawbacks the bank’s overall performance is satisfactory. Last but not be
least; Shahjalal bank has all the capabilities for coping with the changing business environment,
bed economic conditions and political condition of the bank. If the bank will keep on moving on
its way like this with the help of their unique business policies then the time is near when
Shahjalal bank will be the top profitable bank and best services provider bank.

6.3 Reference
Annual Report of Shahjalal Islamic Bank Limited 2005-2011
http:/tutor2u.net/business/gcse/finance—profit.htm
http:// wiki.answer.com/Q/Importance_of_profit_in_business
http://answer.ask.com. /Society/NonProfit/why_is_profit_important
http://www.ask.com./ans?q=Why+Is+Profit+Important
%3F&qsrc=2987&0=15732&1=dir&gc=1
http://tutor2u.net/business/gcse/finance/_profit_how_used.html
http://www.investopedia.com/terms/f/financial-analysis.asp#ixzz1xIKGQxu
http://www.businessdictionary.com/definition/profitability-ratio.html#ixzz1x7x1UPRa
http://www.invettopedia.com/terms/p/profitabilityratios.asp#ixzz1x8PR3av1