Page |1

Ratio Analysis of FSIBL & ICBIL

Current Ratio:
Current ratio measures a company’s current assets to pay its current liabilities. In 2011, the
current ratio of FSIBL was 1.07 means FSIBL had TK 1.07 of current assets to pay its TK 1 of
current liabilities. The current ratio of FSIBL in 2012, 2013, 2014, 2015 was 1.14, 1.05, 1.06,
1.05 respectively, which shows that the ratio is not fluctuating but it is in poor condition
compared to the current ratio of ICBIBL.

Current
Ratio 2015 2014 2013 2012 2011
FSIBL 1.051628155 1.06349943 1.05737 1.14445 1.0795832
ICBIBL 1.240577449 1.184252754 1.34339 1.27957 1.1916833

2.5

1.5

0.5

0
1 2 3 4 5

FSIBL ICBIL

Return on Equity:
ROE ratio measures profitability earned from equity capital. In 2011 ROE of FSIBL, was 13%
that means it earned TK 13 by using TK 100 equity capital? The ratio declined in the year 2013
to 13% in 2014 to 8% and remained same in 2015. On the other hand, ROE of ICBIBL was
negative in all those 5 years from 2011 to 2015 although they increased the ROE to -1% in the
year 2014 and 2015. Therefore, the overall ROE was better for FSIBL compared to ICBIBL.

ROE
2015 2014 2013 2012 2011
FSIBL 8% 8% 12% 13% 13%
ICBIBL -1% -1% -3% -4% -7%
 Page |2

0.15

0.1

0.05

0
2015 2014 2013 2012 2011
ROE
-0.05

-0.1

FSIBL ICBIL

Return on Assets:
ROA measures the profitability earned from the assets. In 2011 ROA of FSIBL was 0.64% that
means it earned TK 0.64 by using TK 100 total assets. The ROA of FSIBL was 0.59%, 0.48%,
0.32%, and 0.31% in the year 2012, 2013, 2014, and 2015 respectively. This shows that the
earnings from assets is gradually decreasing for FSIBL. On the other hand, the ROA of ICBIBL
is always negative which means they had negative income generated from their assets.

ROA
2015 2014 2013 2012 2011
FSIBL 0.31% 0.32% 0.48% 0.59% 0.64%
ICBIBL -1.16% -2.01% -2.01% -6.95% -9.86%

0.02

0
2015 2014 2013 2012 2011
-0.02
ROA

-0.04

-0.06

-0.08

-0.1

-0.12

FSIBL ICBIL
 Page |3

Net Interest Margin:

Net Interest Margin measures the net interest earned using its total assets. In 2011 the NIM of
FSIBL was 2.3% means that FSIBL earned TK 2.3 of interest using its TK 100 of assets. NIM
of FSIBL in the year of 2012, 2013, 2014, and 2015 was very close which means it had very
stable interest earning. On the other hand, NIM of ICBIBL in the year 2012 was highest at
3.3% then it declined to 1% in 2013 and was same till the year 2015.

NIM
2015 2014 2013 2012 2011
FSIBL 2.1% 2.1% 2.3% 2.3% 2.3%
ICBIBL 1.0% 1.1% 1.0% 3.3% 2.7%

0.035

0.03

0.025

0.02

0.015

0.01

0.005

0
2015 2014 2013 2012 2011
NIM

FSIBL ICBIL

Net Bank Operating Margin:

Net Bank Operating Margin net operating income (loss) compared to total assets. In 2011, the
net operating loss for FSIBL was 1.07% means it occurred loss of TK 1.07 using its TT 100 of
total assets. The loss occurred until the year 2015, which shows FSIBL was unable to cover its
operating expense with its operating income. On the contrary, ICBIBL had positive net
operating margin in the year 2011 and 2012 but after that, it went negative.

Net Bank
operating margin
2015 2014 2013 2012 2011
FSIBL -1.34% -1.35% -1.37% -1.23% -1.07%
ICBIBL -2.07% -1.49% -2.07% 0.43% 0.17%
 Page |4

0.01

0.005

0
2015 2014 2013 2012 2011
-0.005
Net Bank operating margin

-0.01

-0.015

-0.02

-0.025

FSIBL ICBIL

Asset Utilization Ratio:

Asset Utilization Ratio measures total operating revenue compared to total assets. In 2011, the
AU for FSIBL was 3.01% means it generated TK 3.01 of operating revenue from its TK 100
of total assets. Then the ratio kept declining until the year 2015 at 2.41%. The AU ratio for
ICBIBL was 3.11% in 2011 and then it increased to 4.27% in the following year and then
decreased to 1.83% in the year 2013. The AU ratio for ICBIBL is fluctuating.

Asset Utilization
2015 2014 2013 2012 2011
FSIBL 2.41% 2.50% 2.72% 2.88% 3.01%
ICBIL 1.83% 2.33% 1.83% 4.27% 3.11%

0.045
0.04
0.035
0.03
0.025
0.02
0.015
0.01
0.005
0
2015 2014 2013 2012 2011
Asset Utilization

FSIBL ICBIL
 Page |5

Earning Spread Ratio:

Earning Spread Ratio measures the difference between interest income from earning assets and
interest expense from interest bearing liabilities. In 2011 ES for FSIBL was 21.43% means it
had 21.43% more interest earning compared to its interest expense. However, the ratio
gradually declined on the following years and in 2015, it was 14.43%. On the other hand, ES
for ICBIBL was always negative except the year 2012. The negative ratio shows that it had
more interest bearing liabilities and more interest expense than it does interest earnings.

Earning Spread
2015 2014 2013 2012 2011
FSIBL 14.43% 16.66% 18.59% 23.11% 21.43%
ICBIL -0.82% -0.49% -0.82% 0.55% -0.31%

0.25

0.2

0.15

0.1

0.05

0
2015 2014 2013 2012 2011
-0.05 Earning Spread

FSIBL ICBIL

Equity Multiplier:
From this graph & given information in the annual report its shown that the equity multiplier
is increasing for FSIBL from 2011-2015 its increased, on the other hand ICBIL’s equity
multiplier is in the negative portion and they’re continuously failing to come up from this
situation.

Equity Multiplier
2015 2014 2013 2012 2011
FSIBL 26.50377826 24.49613902 25.1528 22.9029 20.211808
ICBIL -1.304978917 -1.456291333 -1.305 -1.7454 -2.3964507
 Page |6

30

25

20

15

10

0
2015 2014 2013 2012 2011
-5
Equity Multiplier
FSIBL ICBIL

Operating Efficiency Ratio:

The operating ratio shows the efficiency of a company's management by comparing operating
expense to net sales. The smaller the ratio, the greater the organization's ability to generate
profit if revenues decrease. When using this ratio, however, investors should be aware that it
does not take debt repayment or expansion into account.

Therefore, here we can see FSIBL is maintaining a smaller ratio and ICBIL is maintain a larger
ratio. FSIBL is more powerful to generate profit more than ICBIL do.

Operating Efficiency
2015 2014 2013 2012 2011
FSIBL 0.599838839 0.579459639 0.54061 0.48002 0.4189673
ICBIL 2.13077018 1.640643861 1.80198 0.89884 0.9468111
 Page |7

Employee Productivity Ratio:

Here FSIBL is continuously maintaining and increasing their productivity ratio in all those
years from 2011 to 2015, they are doing well. While ICBIL is continuously falling their
productivity ratio so that means they are going to suffer badly. It will not be easy to cope up
with this kind of situation.
Employee Productivity
Ratio
2015 2014 2013 2012 2011
FSIBL 11063319.03 8856302.644 6742503 5396942 3820884
ICBIL 488800.4372 616993.8943 560769 1040323 829183.25

Retention Ratio:
The maintenance proportion is the extent of profit kept back in the business as held income.
The maintenance proportion alludes to the rate of net wage that is held to develop the business,
instead of being paid out as profits. It is the inverse of the payout proportion, which measures
the rate of profit paid out to shareholders as profits.

On a for each share premise, the maintenance proportion can be communicated as one – (Profits
per share/EPS). Here FSIBL is under 1 in all those years and ICBIL is above 1.5 and decreasing.

Retention Ratio
2015 2014 2013 2012 2011
FSIBL 0.051931791 0.076937414 0.07809 0.07646 0.082586
ICBIL 1.744926201 1.756010208 1.7792 1.84043 1.957754
 Page |8

Net Profit Margin Ratio:

Profit margin, net margin, net profit margin or net profit ratio is a measure of profitability. Net
Profit Margin can calculated be finding the net profit as a percentage of the revenue. The profit
margin usually used for internal comparison. It is difficult to compare accurately the net profit
ratio for different entities. Individual businesses' operating and financing arrangements vary so
much that different entities are bound to have different levels of expenditure so that comparison
of one with another can have little meaning. A low-profit margin indicates a low margin of
safety: the higher risk that a decline in sales will erase profits and result in a net loss, or a
negative margin.

Here FSIBL is maintaining a good portion of net profit margin; on the other hand, ICBIL is
continuously getting a negative net profit that means loss.

Net Profit Margin

2015 2014 2013 2012 2011
FSIBL 0.129561859 0.12684174 0.17442 0.204 0.2120666
ICBIL -0.634572373 -0.860622143 -2.1003 -1.6258 -3.1715488
 Page |9

Cash Position Indicator:

A cash position represents the amount of cash that a company, investment fund or bank has on
its books at a specific point in time. The cash position is a sign of financial strength
and liquidity. In addition to cash itself, this position often takes into consideration liquid assets,
such as certificates of deposit, short-term government debt and other cash equivalents.
ICBIL’s cash positon is better than FSIBL.
Cash Position Indicator
2015 2014 2013 2012 2011
FSIBL 0.106587364 0.079654005 0.07137 0.08115 0.0785601
ICBIL 0.870942468 0.856859198 0.87094 0.81894 0.6101082

Liquid Securities Indicator:

More liquid securities is more god to an industry. Here FSIBL is increasing their liquid
securities. It increased greatly after 2012 and continuously increasing till 2015..While ICBIL
is failed to maintain this properly, their liquid securities is not much enough to cover any critical
situation.

Liquid Securities
Indicator
2015 2014 2013 2012 2011
FSIBL 0.047753205 0.048065517 0.03727 0.00657 0.0094051
ICBIL 0 0 0 0.0001 8.616E-05
 P a g e | 10

Credit risk measure:

Credit risk measure alludes to the danger of loss of vital or loss of a financial reward originating
from a borrower's disappointment in reimbursing an advance or else astute meet a legally
binding obligation. Credit risk emerges each time a borrower is looking ahead to utilize future
money courses through the installment of a present commitment. The speculators are
remunerated for assuming credit chance through the method for intrigue installments from the
backer or borrower of an obligation contract.

Moreover, Credit risk is nearly connected to a speculation's potential give back, the most
imperative being that the yields on securities correspond firmly to their assumed credit chance.
A higher Credit risk mirrors a higher loan cost requested by the financial specialists for loaning
their capital. FSIBL’ credit risk measure is in a positive portion, while ICBIL’s credit risk
measure is in negative. However, they are improving their position.

Credit risk measure

2015 2014 2013 2012 2011
FSIBL 0.003918136 0.003513115 0.00307 0.00339 0.0040613
ICBIL 0.009174387 -0.005114341 0.00917 0.07415 -0.1000129
 P a g e | 11

Provision for Loan Losses

Loan loss provision is an expense set aside as an allowance for uncollected loans and loan
payments. This provision is used to cover a number of factors associated with potential loan
losses including bad loans, customer defaults and renegotiated terms of a loan that incur lower
than previously estimated payments. Loan loss provisions are an adjustment to loan loss
reserves and can be known as valuation allowances.

Provision for loan losses

2015 2014 2013 2012 2011
FSIBL 0.103845396 0.086057749 0.07719 0.07769 0.0820857
ICBIL -0.011972382 0.00744797 -0.0446 -0.1294 0.2396759

Core deposit Ratio:

Core deposits are the deposits made in a bank's natural demographic market. Banks count on
core deposits as a stable source of funds for their lending base. Core deposits offer many
advantages to banks, such as predictable costs and a measurement of the degree of customer
loyalty.

Here FSIBL is maintain a very good portion of core deposit, as well as ICBIL is improving
their portion.

Core Deposit Ratio

2015 2014 2013 2012 2011
FSIBL 0.905252606 0.892423086 0.86218 0.84717 0.8591461
ICBIL 0.870942468 0.856859198 0.87094 0.81894 0.6101082
 P a g e | 12

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2015 2014 2013 2012 2011
Core Deposit Ratio
FSIBL ICBIL