1.

1 The origin of the report:

This term paper is prepared for Quazi Sagota Samina, Senior Lecturer, Department of Business Administration of East West University. This term paper is prepared as a partial requirement of FIN-380 (Management of Commercial Banks) course for the semester of spring 2012.

1.2. Objective of the study

Here we have only looked at the Banks profitability and managerial expenses. So the specific objectives are To give detailed information about some particular Banks. Banks profitability and managerial expenses. To focus on the major financial items and their impacts on the organization. To know briefly about their rules and regulation. And Their performance in our country.

1.3. Scope of the study

As we are focusing on four particular giant Banking institutions in our country i.e. Exim Bank, EBL, FSIB, and IBBL, the scope of the study is huge. Among these giants few are focusing on the transparent operation, so that they let the general people to know about them from a very close point of view. Here we discuss about the basic idea of these banks along with that we will discuss about the performance of these four giant Banking Institutions and then we will analyze few item as well as about some extra-ordinary features of these four giants.

1.4. Methodology
The report is based on information collected from secondary source of data, by using web sites and annual report of these four giants published. Along with that we consulted with our Hon able course instructor. The data collected from the some other sources too. These ares Dhaka Stock Exchange library. Financial Journals.

 Annual Report Exim Banks 2005-2010 EBLs 2005-2010 FSIBs 2005-2010 IBBLs 2005-2010

1.5. Limitations of the study

The major limitations encountered are: Lack of experience has acted as constraints in the way of meticulous exploration on the topic. Time wasnt enough to complete such a complicated topic. Relevant papers and documents were not available sufficiently. In many cases up to date information is not available.

EXIM Bank Limited

This Bank starts functioning from 3rd August, 1999 with its name as Bengal Export Import Bank Limited. On 16th November 1999, it was renamed as Export Import Bank of Bangladesh Limited with Mr. Alamgir Kabir as the Founder Advisor and Mr. Mohammad Lakiotullah as the Founder Managing Director respectively. Under the leadership of Mr. Lakiotullah, the Bank has migrated all of its conventional banking operation into Shariah Based Islami Banking in the year July 2004. In the year 2006, Mr. Kazi Masihur Rahman became the Managing Director of the bank when Mr. Lakiotullah left the bank after completion of his successful 7 years as MD. Mr. Kazi served in the bank for next five years. Under his leadership, the bank has been placed on a state of the art centralized IT platform with two modern data centers where world renowned core banking software TEMENOS T24 is running along with some alternate delivery channels like ATMs and SMS banking. In 25th August, 2011, Mr. Md. Fariduddin Ahmed has joined in the bank as Managing Director. OUR VISION The gist of our vision is Together Towards Tomorrow. Export Import Bank of Bangladesh Limited believes in togetherness with its customers, in its march on the road to growth and progress with services. To achieve the desired goal, there will be pursuit of excellence at all stages with a climate of continuous improvement, because, in EXIM Bank, we believe, the line of excellence is never ending. Its personalized quality services to the customers with the trends of constant improvement will be cornerstone to achieve our operational success. OUR MISSION To be the most caring and customer friendly and customer oriented bank. To create a technology based most efficient banking environment for its customers. To ensure sustainable growth and establish full value to the honorable stakeholders and To ensure ethics and transparency at all levels. Finally, above all, to add effective contribution to the national economy.

FIVE YEARS AT A GLANCE

(BDT in millions)

Sl.

Particulars

2005

2006

2007

2008

2009

01.

Authorized Capital

100.00

350.00

350.00

350.00

1000.00

02.

Paid-up Capital

87.90

171.38

214.22

267.78

337.40

03. 04. 05. 06. 07.

Reserve Fund Deposits Investment (General) Investment ( Shares on Bonds) Foreign Exchange Business a) Import Business

57.00 2831.90 2604.63 163.30 7294.00 4143.20

81.09 3503.20 3264.13 223.33 9617.51 4959.67

113.46 4154.66 4019.52 245.77 11790.01 6139.94

153.26 5758.70 5363.77 289.40 15643.46 7854.05

209.30 7383.55 6860.99 216.94 16260.46 8391.15

b) Export Business c) Remittance 08. Operating Profit

3128.50 22.30 117.58

4623.46 34.38 137.87

5579.04 71.03 190.82

7646.56 142.85 251.84

7624.08 245.23 318.18

09.

Investment as a % of total Deposit

91.97%

93.18%

96.75%

93.14%

92.92%

10.

No. of Foreign Correspondent

222

246

246

278

333

11.

Number of Employees

934

1020

1104

1312

1440

12.

Number of Branches

28

30

35

42

52

13.

Return on Assets before tax

3.49%

3.94%

4.39%

4.45%

4.14%

Eastern Bank Limited

EBL knows its target customers and as such offers new products and services to cater to their contemporary taste and need. In the past couple of years the Bank came up with several exciting products and service propositions: Some of them are a first of its kind in Bangladesh. Priority Banking, Travel related products, life insurance covered DPS, Platinum Credit Card, SME Debit Card to name a few. EBL is one of the first banks in Bangladesh to launch Mobilebased remittance service marking a new era of banking services among the unbanked population of the country. In EBL's journey to excellence, a great achievement has been added. Centralized Trade Services of EBL have achieved Quality Management Systems Certificate as per ISO 9001:2008 standard awarded by Bureau VERITAS Certification under accreditation from the UK Accreditation Services (UKAS). Later, the whole centralized (Corporate, Consumer, SME and Treasury) operations of the bank have achieved Quality Management Systems Certificate as per ISO 9001:2008 standard. EBL is the first Bangladeshi Bank to achieve the recognitions for Its commitment to quality delivery. MISSION We will deliver service excellence to all our customers, both internal and external. We will ensure to maximize shareholders' value. We will constantly challenge our systems, procedures and training to maintain a cohesive and professional team in order to achieve service excellence. We will create an enabling environment and embrace a team based culture where people will excel. VISION

To become the most valuable brand in the financial services in Bangladesh creating long-lasting value for our stakeholders and above all for the community we operate in by transforming the way we do business and by delivering sustainable growth.

GROUP CORPORATE STRUCTURE OF EBL

COMPANY MILESTONES

DATE
8 August 1992 16 August 1992 Date of incorporation.

Milestones

Date of commencement of banking operations.

20 March 1993 12 November 1998 17 July 2003 19 May 2004 11 September 2004

Listed with Dhaka Stock Exchange Ltd. First dividend declared for income First online banking operations across all the branches. Commencement of operation of Offshore Banking Unit, Bangladesh. Listed with Chittagong Stock Exchange Ltd.

FIVE YEARS AT A GLANCE OF EBL

ACHIEVEMENTS OF EBL

First Security Islamic Bank Limited

OUR VISION To be the unique modern Islami Bank in Bangladesh and to make significant contribution to the national economy and enhance customers trust and wealth, quality investment, employees value and rapid growth in shareholders equity. OUR MISSION To be the most caring and customer friendly and service oriented bank. To create a technology based most efficient banking environment for its customers. To ensure ethics and transparency in all levels. To ensure sustainable growth and establish full value of the honorable shareholders and Above all, to add effective contribution to the national economy. OUR STRATEGIES To strive our customers best satisfaction & win 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 & updated policies, procedures & practices to enhance the ability to extend better customer services. To train & develop all employees & provide them adequate resources so that the customers needs reasonably addressed. To promote organizational efficiency by communicating company plans policies & procedures openly to the employees in a timely fashion. To ensure a congenial working environment. To diversify portfolio in both retail & wholesale markets.

CSR PROGRAMME OF THE FSIB LIMITED FSIBL donated Tk 50, 00,000/- for Liberation War Museum

FSIBL donated Tk 30, 00,000/- to Prime Ministers Relief & Welfare Fund

Assistance for family members of the martyred Army Officers killed in BDR carnage

Assistance for Cyclone Aila Victim To mitigate the sufferings of Aila victims, First Security Islami Bank Limited has donated Tk 10,00,000/- only to Prime Ministers Relief Fund. Mr. AAM Zakaria, Managing Director, First Security Islami Bank Limited handed over a cheque amounting tk 10,00,000/- to Prime Minister Sheikh Hasina.

FINANCIAL PERFORMANCE OF FSIB BANK IN YEAR 2006-2007

IBBL at a Glance
Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in commercial banking business based on Islamic Shari'ah with 58.03% foreign shareholding having largest branch network (236 Branches & 30 SME/Krishi Branches i.e. total 266 Branches) among the private sector Banks in Bangladesh. It was established on the 13th March 1983 as the first Islamic Bank in the South East Asia. Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in commercial banking business based on Islamic Shari'ah with 57.36% foreign shareholding having largest branch network (196 branches & 10 SME Service Centres) among the private sector Banks in Bangladesh. It was established on the 13 March 1983 as first Islamic Bank in the South East Asia. It is listed with Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. Authorized Capital of the Bank is Tk.10,000 million and Paid-up Capital is Tk.4,752 million having 33,686 shareholders.

MISSION
To establish Islamic Banking through the introduction of a welfare oriented banking system and also ensure equity and justice in the field of all economic activities, achieve balanced growth and equitable development in through diversified investment operations particularly in the priority sectors and less developed areas of the country. To encourage socio-economic upliftment and financial services to the loss-income community particularly in the rural areas.

VISION
Our vision is to always strive to achieve superior financial performance, be considered a leading Islamic Bank by reputation and performance. Our goal is to establish and maintain the modern banking techniques, to ensure soundness and development of the financial system based on Islamic principles and to become the strong and efficient organization with highly motivated professional, working for the benefit of people, based upon accountability, transparency and integrity in order to ensure stability of financial systems.

CORE VALUES

Trust in Almighty Allah Strict observance of Islamic Shariah Highest standard of Honesty, Integrity & Morale Welfare Banking Equity and Justice Personalized Service Adoption of Changed Technology Proper Delegation, Transparency & Accountability.

MILESTONES OF THE IBBL Date

13 March, 1983 30 March, 1983 12 August, 1983 1985 1985 1996 1996 2000 2003 26 November, 1991 12 June, 1997 29 December, 2004

Milestones
Establishment of the Bank. Opening of their First Branch. Formal Opening of their company. Went for the IPO. Listed in the Dhaka Stock Exchange. Listed in the Chittagong Stock Exchange. Issuance of 1st Right Share. Issuance of 2nd Right Share. Issuance of 3rd Right Share. Issuance of 4th Right Share. Opening of their 50th Branch. Opening of their 150th Branch.

FIVE YEARS AT A GLANCE

FIRST SECURITY ISLAMI BANK LIMITED

INFORMATIONS

Total Year Net Income After Tax 2005 2006 2007 2008 2009 2010 (157020387) (117224177) 30630728 104282064 326837749 548600731 18408060625 20448667971 26941780871 31239393418 47978552952 63619797799 Total Asset Operating Expense 188525911 219330994 286000759 383179206 576795959 881607207 Salary And Allowances 103350430 114460635 142977355 186903693 254153482 418301777

Managing Director Salary 4838000 5440000 6880000 8310000 10027500 9916130

PERCENTAGE CHANGE IN INFORMATION Salary expense as a % of Operating Expense 54.82% 52.19% 49.99% 48.78% 44.06% 47.45% % Change of Salary Expense Over The Year (5.04%) (4.40%) (2.48%) (10.71%) 7.14% MDs Salary as a % of Operating Expense 2.57% 2.48% 2.41% 2.17% 1.74% 1.12% % Change of MDs Salary Expense Over The Year (3.63%) (2.90%) (11.06%) (24.71%) (55.36%)

Year

ROA

% Change Over The Year

2005 2006 2007 2008 2009 2010

0.008530 0.00573 0.001137 0.00338 0.006812 0.008623

48.87 603.96 66.36 50.38 21

EASTERN BANK LIMITED

INFORMATIONS Total Year Net Income After Tax 2005 2006 2007 2008 2009 2010 546496236 513197846 419142202 797774068 1454541675 2514201697 27399954469 35970642294 40203682476 54598268072 69870738519 82488576181 Total Asset Operating Expense 535794923 753174899 951622488 1318463870 1649402237 2109399625 Salary And Allowances 219876465 333362759 411556905 600073608 870246424 1161751421 Managing Director Salary 9304224 11275944 10481265 9940258 10574284 12615162

PERCENTAGE CHANGE IN INFORMATION Salary expense as a % of Operating Expense 41.04% 44.26% 43.25% 45.51% 52.76% 55.07% % Change of Salary Expense Over The Year 7.28% (2.34%) 4.97% 13.74% 4.19% MDs Salary as a % of Operating Expense 1.74% 1.50% 1.10% .75% .64% .60% % Change of MDs Salary Expense Over The Year (16%) (36.36%) (46.67%) (17.19%) (6.67%)

Year

ROA

% Change Over The Year

2005 2006 2007 2008 2009 2010

0.019945 0.014267 0.010425 0.014611 0.020818 0.030479

39.80 36.85 28.65 29.82 31.70

EXIM BANK LIMITED

INFORMATIONS Total Operating Expense 435806139 635283277 838293388 1030942700 1273070086 Managing Director Salary 3150000 3919032 4221052 5329800 7569300 9885700

Year 2005 2006 2007 2008 2009 2010

Net Income After Tax 555335174 650292342 820698355 1096627046 1682990615 3458015132

Total Asset 33716699328 41793540962 52804042985 68446464000 86203931939

Salary And Allowances 231722416 330992966 442004999 544058922 648943840 1014492899

113047466849 1841506068

PERCENTAGE CHANGE IN INFORMATION

Year

ROA

% Change Over The Year 5.85 12 3.00 17.51 36.51

Salary expense as a % of Operating Expense 53.17% 52.10% 52.73% 52.77% 50.97% 55.09%

% Change of Salary Expense Over The Year (2.05%) 1.19% .08% (3.53%) 7.48%

MDs Salary as a % of Operating Expense .72% .62% .50% .52% .59% .54%

2005 2006 2007 2008 2009 2010

0.016471 0.015560 0.015542 0.016022 0.019423 0.030590

% Change of MDs Salary Expense Over The Year (16.13%) (24%) 3.85% 11.86% (9.26%)

ISLAMI BANK LIMITED

INFORMATIONS

Year 2005 2006 2007 2008 2009 2010

Net Income After Tax 1125821683 1400591591 1427362414 2674796768 3403551874 4463471909

Total Asset 12288034822

Total Operating Expense 1833192601

Salary And Allowances 1168135352 1848280506 2034596246 2834358181 3149068585 4285461029

Managing Director Salary 6576314 8109777 8372181 8669347 8028938 9648845

150252820801 2703669981 191362349717 3126575311 230879135344 4115805498 278302839706 4545974409 330586118276 6087318956

PERCENTAGE CHANGE IN INFORMATION

Year

ROA

% Change Over The Year 833.05 24.93 35.63 5.23 9.41

Salary expense as a % of Operating Expense 63.73% 68.36% 65.07% 68.87% 69.27% 70.40%

% Change of Salary Expense Over The Year 6.77% (5.06%) 5.52% .58% 1.61%

MDs Salary as a % of Operating Expense .36% .30% .27% .21% .18% .16%

2005 2006 2007 2008 2009 2010

0.09162 0.00932 0.00746 0.01159 0.01223 0.01350

% Change of MDs Salary Expense Over The Year (20%) (11.11%) (28.57%) (16.67%) (12.5%)

FIRST SECURITY ISLAMI BANK LIMITED

Correlations
Cor relations Total Managing operating Salary and direc tors ex pense allow nc e salary -.430 -.419 -.369 .470 .483 .541 5 5 5 1.000 .996** .866 . .000 .058 5 5 5 .996** 1.000 .829 .000 . .082 5 5 5 .866 .829 1.000 .058 .082 . 5 5 5

Return on ass et(ROA )

Total operating expens e

Salary and allow nc e

Managing directors salary

Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N

Return on as set(ROA ) 1.000 . 5 -.430 .470 5 -.419 .483 5 -.369 .541 5

**. Correlation is s ignif icant at the 0.01 level (2-tailed).

INTERPRETATION: Correlation Between ROA & Total Operating Expense: Correlation between ROA and total operating expense is -.430. So it is weak negatively correlated. It means if ROA increase the total operating expense will be decreased. And if ROA decreases the total operating expense will increase. Correlation Between ROA & Salary and allowance: Correlation between ROA and & Salary and allowance is -.419.So it is weak negatively correlated. It means if ROA increase Salary and allowance will be decreased. And if ROA decreases Salary and allowance will increased. Correlation Between ROA & Managing Director Salary: Correlation between ROA and & Managing Director Salary is -.369.So it is weak negatively correlated. It means if ROA increase Managing Director Salary will be decreased. And if ROA decreases Managing Director Salary will increase.

EASTERN BANK LIMITED

CORRELATIONS
Cor relations Total Managing operating Salary and direc tors ex pense allow nc e salary -.714 -.654 .192 .176 .231 .757 5 5 5 1.000 .995** .524 . .000 .365 5 5 5 .995** 1.000 .585 .000 . .300 5 5 5 .524 .585 1.000 .365 .300 . 5 5 5

Return on ass et(ROA)

Pearson Correlation Sig. (2-tailed) N Total operating expens e Pearson Correlation Sig. (2-tailed) N Salary and allow nc e Pearson Correlation Sig. (2-tailed) N Managing directors salary Pearson Correlation Sig. (2-tailed) N

Return on as set(ROA) 1.000 . 5 -.714 .176 5 -.654 .231 5 .192 .757 5

**. Correlation is s ignif icant at the 0.01 level (2-tailed).

INTERPRETATION: Correlation Between ROA & Total Operating Expense: Correlation between ROA and total operating expense is -.714. So it is strong negatively correlated. It means if ROA increase the total operating expense will be decreased. And if ROA decreases the total operating expense will increase. Correlation Between ROA & Salary and allowance: Correlation between ROA and & Salary and allowance is -.654.So it is strong negatively correlated. It means if ROA increase Salary and allowance will be decreased. And if ROA decreases Salary and allowance will increase. Correlation Between ROA & Managing Director Salary:

Correlation between ROA and & Managing Director Salary is .192.So it is weak positively correlated. It means if ROA increase Managing Director Salary will be increased. And if ROA increases Managing Director Salary will increase.

EXIM BANK LIMITED

CORRELATIONS
Cor relations Total Managing operating Salary and direc tors ex pense allow nc e salary .900* .908* .897* .037 .033 .039 5 5 5 1.000 .998** .984** . .000 .002 5 5 5 .998** 1.000 .974** .000 . .005 5 5 5 .984** .974** 1.000 .002 .005 . 5 5 5

Return on ass et(ROA)

Pearson Correlation Sig. (2-tailed) N Total operating expens e Pearson Correlation Sig. (2-tailed) N Salary and allow nc e Pearson Correlation Sig. (2-tailed) N Managing directors salary Pearson Correlation Sig. (2-tailed) N

Return on as set(ROA) 1.000 . 5 .900* .037 5 .908* .033 5 .897* .039 5

*. Correlation is s ignif icant at the 0.05 level (2-tailed). **. Correlation is s ignif icant at the 0.01 level (2-tailed).

INTERPRETATION: Correlation Between ROA & Total Operating Expense: Correlation between ROA and & Total Operating Expense is .900.So it is strong positively correlated. It means if ROA increase Total Operating Expense will be increased. And if ROA decreases Total Operating Expense will decrease. Correlation Between ROA & Salary and allowance: Correlation between ROA and & Salary and allowance is .908.So it is strong positively correlated. It means if ROA increase Salary and allowance will be increased. And if ROA decreases Salary and allowance will decrease. Correlation Between ROA & Managing Director Salary:

Correlation between ROA and & Managing Director Salary is .897.So it is strong positively correlated. It means if ROA increase Managing Director Salary will be increased. And if ROA decreases Managing Director Salary will decrease.

ISLAMI BANK LIMITED

CORRELATIONS
Cor relations Total Managing operating Salary and direc tors ex pense allow nc e salary -.610 -.578 -.391 .274 .308 .515 5 5 5 1.000 .999** .788 . .000 .114 5 5 5 .999** 1.000 .784 .000 . .117 5 5 5 .788 .784 1.000 .114 .117 . 5 5 5

Return on ass et(ROA)

Pearson Correlation Sig. (2-tailed) N Total operating expens e Pearson Correlation Sig. (2-tailed) N Salary and allow nc e Pearson Correlation Sig. (2-tailed) N Managing directors salary Pearson Correlation Sig. (2-tailed) N

Return on as set(ROA) 1.000 . 5 -.610 .274 5 -.578 .308 5 -.391 .515 5

**. Correlation is s ignif icant at the 0.01 level (2-tailed).

INTERPRETATION: Correlation Between ROA & Total Operating Expense: Correlation between ROA and total operating expense is -.610. So it is strong negatively correlated. It means if ROA increase the total operating expense will be decreased. And if ROA decreases the total operating expense will increase. Correlation Between ROA & Salary and allowance: Correlation between ROA and & Salary and allowance is -.578.So it is strong negatively correlated. It means if ROA increase Salary and allowance will be decreased. And if ROA decreases Salary and allowance will increase. Correlation Between ROA & Managing Director Salary:

Correlation between ROA and & Managing Director Salary is -.391.So it is weak negatively correlated. It means if ROA increase Managing Director Salary will be decreased. And if ROA decreases Managing Director Salary will increase.

CONCLUSION
Banking system plays a very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. In a developing country like Bangladesh the banking system as a whole play a vital role in the progress of economic development. A bank as a matter of fact is just like a heart in the economic structure and the Capital provided by it is like blood in it. As long as blood is in circulation the organs will remain sound and healthy. If the blood is not supplied to any organ then that part would become useless. So if the finance is not provided to agriculture sector or industrial sector, it will be destroyed. Loan facility provided by banks works as an incentive to the producer to increase the production. Banking is now an essential part of our economic system. Modern trade and commerce would almost be impossible without the availability of suitable banking services. First of all, banking promotes savings. All manner of people, from the ordinary laborers and workers to the rich land owners and businessmen, can keep their money safely in banks and saving centers. Secondly, banking promotes investments. Banks easily invest the money they get in industry, agriculture and trade. They either invest it directly or advance loans to other investors. Thirdly, it is most through banks that foreign trade is carried on. Whether we export or import, it is through banks that money is transferred from one country to another. For example, bills of exchange and letters of credit are the regular ways banks use to transfer money. A number of recent studies, however, indicate that the banking sector plays a more important role than it was believed earlier (World Bank, 1996; Almeyda).So far we have discussed about 4 commercial bank of our country. They are EXIM bank, First Security Islamic Bank, Eastern Bank Ltd and Islamic Bank Bangladesh Ltd. We have discussed about the correlation of different variables and some financial interpretation about these banks. In a developing country like Bangladesh the banking system as a whole play a vital role in the progress of economic development. In this paper we have tried to analyze the development and growth of Selected Private Commercial Banks of Bangladesh. It is observed that all the selected private commercial banks are able to achieve a stable growth of

branches, employees, deposits, loans and advances, net income, earnings per share during the period of 2005-2010.

References
www.Islamic bank-bd.com Bangladesh Bank Publications Annual Report of NCC Bank Ltd. 2008 www.bangladesh-bank.com www.google.com www.seribd.com www.roc.gov.bd Newspaper: Financial Express Annual Report of Eastern Bank Ltd. 2006 Annual Report of Eastern Bank Ltd. 2007 Annual Report of Eastern Bank Ltd. 2008 Annual Report of Eastern Bank Ltd. 2009 Annual Report of Eastern Bank Ltd. 2010 Annual Report of Islamic Bank Ltd. 2006 Annual Report of Islamic Bank Ltd. 2007 Annual Report of Islamic Bank Ltd. 2008 Annual Report of Islamic Bank Ltd. 2009 Annual Report of Islamic Bank Ltd. 2010 Annual Report of First Security Islamic Bank Ltd. 2006 Annual Report of First Security Islamic Bank Ltd. 2007 Annual Report of First Security Islamic Bank Ltd. 2008 Annual Report of First Security Islamic Bank Ltd. 2009 Annual Report of First Security Islamic Bank Ltd. 2010 Annual Report of EXIM Bank Ltd. 2006 Annual Report of EXIM Bank Ltd. 2007 Annual Report of EXIM Bank Ltd. 2008 Annual Report of EXIM Bank Ltd. 2009 Annual Report of EXIM Bank Ltd. 2010