Beruflich Dokumente
Kultur Dokumente
Introduction
Objective Methodology Rationale of the Report Scope and Limitation
Section 1
Section 2
Company Information
Islami Bank Bangladesh Ltd AB Bank Ltd
Section 3 Section 4
Section 5
Section 6
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1.0 Introduction:
Banking is very important part of any economy to build up its financial sector. Its main activity is to channel the fund of surplus units to the deficit units that speed up the financial sector by increasing investment, production, employment etc. Like that it is playing the same role in our economy. Both the conventional and Islamic banking have active participation in our financial sector. Islamic Banking means conducting banking business following Islamic shariah. Conventional bank is doing its business on the basis interest. In fact both are doing same thing but in a different manner. Day by day Islamic banking has become an extreme critical issue because of its superiority over conventional banks. For this reason the conventional banks are launching Islamic banking wing to increase market share and increase profit. This statement reveals the difference between the overall performance of an Islamic bank and a conventional bank. Performance of Islamic banking in our country was a bit poor at the beginning of Islamic Banking era of our country but the scenario has changed and Islamic banking has gained popularity. Both types of bank are diversifying their products to satisfy the need of the customers. Here our concern is to evaluate the overall performance of Arab Bangladesh Bank Limited (AB Ltd) and Islamic Bank Bangladesh Limited (IBBL).
1.1 Objective
We have prepared this term paper related to the overall performance of AB Bank Limited and IBBL in the perspective of Bangladesh. Our objectives of preparing the term paper are as follows:
Evaluate the performance of these two selected bank. Make a comparative analysis between the banks. Focus on the problems of the banks. Focus on the potentials of the banks.
1.2 Methodology
Collection of information: We have collected required information from both Primary sources and Secondary sources as well as Information about banks performance from annual report of last five years. We analyze 5 years financial statement. Secondary source of information also
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collected from internet. We tried to show the overall performance of the two types of banks, their challenges & prospect in near future in Bangladesh. Using method: We have used the collected information with visual chart and table to evaluate the performance related to banks.
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4.0 Analysis:
4.1 Total Asset Position:
Total asset position indicates that in which extent a company has different sorts of asset. It shows the companys strength to pay off the debt obligation. The total asset of a bank comprises of cash, balance with other banks and financial institutions, money at call and short notice (Not existed in Islamic Bank), Investments, Loans and Advances, Fixed assets including premises, furniture and fixtures, other assets and Non-banking assets. In our analysis we have compared the total asset position of Islamic Bank Bangladesh Ltd and AB Bank ltd.
2008
230,879.14 84,053.61
2007
2008
The financial statements of IBBL indicate that total asset is increasing day by day and that shows the growth of the business. On the other hand the financial statements of AB Bank indicate that the total asset is increasing day by day and that shows the growth of the bank. In the first two years of our five years analysis the assets of AB Bank had not been growing significantly compared to the next years.
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2004
6,691.12
2008
18,572.00 6722.51
From the above scenario it can easily be commented that the overall equity position of both banks have increased in year to year. So it indicates that common equity, preferred stock as well as retained earnings geared up periodically. Here Islami Bank Bangladesh Ltd is in the better position than the AB Bank Ltd.
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2008
88,452.18
From the above graph it is evidenced that the deposit position of both banks have enhanced in year to year which meaning that the confidence of customer is very high towards it as bank mobilizes its deposit to its best and also show the better position in market. In case of AB Bank in 2005 the deposit position was decreased. Overall IBBL is in the better position here.
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ROA indicate the amount that could be generate by using assets of the organization. The higher the rate of return on assets the higher the asset utilized of the firm that indicates the firms efficiency to invest its maximum asset. In our analysis we have compared the ROA of Islamic Bank Bangladesh Ltd and AB Bank ltd.
2004
1.1
2007
0.87 3.41
2008
1.27 3.12
Return on Asset(Figure in %)
4 3.5 3 2.5 2 1.5 1 0.5 0 1.1 0.28 2004 1 0.5 2005 2006 1.31 1.03 1.27 0.87 IBBL ABBank 3.41 3.12
2007
2008
Return on Asset shows the Banks efficiency to use its assets to gain profit. Islami Bank Bangladesh Limited has good return on assets in the year of 2008 which is important for this Bank. Because we see from the graph that ROA has a decreasing trend with fluctuation in the
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recent years from 2004 to 2007. On the other hand AB Bank has a very good return in 2007 and 2008. But in the prior years this growth was not significant.
2004
15.15
2007
13 53.66
2008
19.02 40.96
Islami Bank Bangladesh limited has shown a good improvement in using equity to earn profit as in the year of 2008 over 18 was the return despite decreasing movement in the past few years.
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On the other hand AB Bank has shown a consistent good return on equity from year 2004 to 2007 despite a decreasing movement in the year 2008.
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2004
518.59
2008
56.29 103.18
From the above graph it can be seen that there is a dramatic fall in the earning per share
of IBBL in the year of 2007 because of split of share in that year. After that in the year of 2008 EPS tend to increase. On the other hand the EPS of AB Bank has been increased through year to year despite a light decrease in the year of 2007.
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2004
9.32
2008
10.78 7.97
P/E ratio is in ups and down mode in the recent years which ended with in declining ratio in the year of 2008. On the other hand the P/E ratios of AB Bank have been declined through the years from 2004 to 2008.
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Annual reports of IBBL from year 2004 to 2008. Annual reports of AB Bank ltd from year 2004 to 2008. www.abbank.com.bd www.dse.gov.bd www.ibbl.com.bd www.investopedia.com
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