Internship on

Evaluation of Financial Performance of Social

Islami Bank Limited, Jubilee Road Branch

Prepared by
Name: Nusrat Islam
ID: B-161291
Program: BBA

Department of Business Administration

Faculty of Business Studies
INTERNATIONAL ISLAMIC UNIVERSITY CHITTAGONG 1
 Introduction
Financial performance analysis is the process of evaluating businesses, projects,
budgets and other Finance-related entities to determine their performance and
suitability. Typically, financial analysis is used to analyze whether an entity is stable,
solvent, liquid or profitable enough to warrant a monetary investment. When looking
at a specific company, a financial analyst conducts analysis by focusing on the income
statement, balance sheet and cash flow statement.

This study investigates financial performance of Social Islami Bank Limited from the
year 2014 to 2018.The study used ratio analysis for easily measurement of liquidity
position, solvency condition, profitability of the SIBL for performance evaluation.
 Objectives of the Study
General Objective :-
The general objective of the study is to evaluate the Financial Performance of Social Islami

Bank Limited, Jubilee Road Branch.

Specific Objectives :-
• To present an overview of Social Islami Bank Limited.

• To know the theoretical aspects of ratios for the evaluation of financial performance.

• To evaluate the financial performance of SIBL, Jubilee road branch.

• To find out findings and provide recommendations regarding financial performance of SIBL.
 Methodology of the Study
Methodology describes the manner in which data is collected, analyzed and
interpreted. To conduct the overall study at first I explored the sources of primary
and secondary data. Different files of the department and statement prepared by the
senior officer of the bank helped me to prepare this report. To present numerical data
I used the branch record of SIBL from 2014 to 2018. For preparing this report, I have
used some representation to find out different types of analytical and interpretation.
Data Collection Method
This report is prepared based on information collected from two sources i.e. Primary
sources and Secondary sources.
Sources of Data
I have collected the information/data from the following sources, which helped me to make this report .The source is
divided into two parts:
a)Primary Source b) Secondary Source.

Primary Source Secondary Source

• Official record of SIBL. • Annual Reports of SIBL.
• Face to face conversation with the • Official website of SIBL.
respective officers and clients. • Some related articles of SIBL Ltd.
• Practical work experience on different • Previous report of SIBL.
department of the bank.
• Guidelines and suggestions from all
the senior employees in charge of
SIBL.
 Data Processing and Analysis

For the “Financial Performance Evaluation of Social Islami Bank Limited, Jubilee

Road Branch” I mainly used Secondary data. Besides this, I also collected some

information by taking expert opinion from the officers and direct observation while

doing the internship program at the bank.

Instruments Used For Analysis

Ratio Analysis: The quantitative (such as ratio analysis) tools are used to analyze the

gathered data and different types of computer software are used for reporting the

gathered information from the analysis such as- Microsoft Word, Microsoft Excel etc.
Social Islami Bank Limited at a glance
Name of The Bank
Motto
Corporate Head Office
Date of Incorporation
Commercial Operation
Type
Chairmen
Managing Director& CEO
Number of Branch
Number of Employees
Authorized Capital
Paid up capital
Number of Shares
SWIFT Code
Website
Social Islami Bank Ltd
The motto of SIBL Bank is "Utkorshoobiram". These
two words are Bengali words that denote “Journey
towards Excellence” on the organization.
City Center, Level: 19-22, 28 and 29 90/1, Motijheel
Commercial Area Dhaka-1000 Bangladesh
5 th July 1995
22nd November 1955
Private Limited Company
Prof. Md. AnwarulAzimArif
Md. Quazi Osman Ali
161
2847
Taka 10,000,000,000 (2018)
Taka 812,12,85,060 (2018)
812,128,506 (2018)
SOIVBDDH
http://www.siblbd.com/
7
 Analysis
1.1 Profitability of Social Islami Bank Ltd, Jubilee Road Branch, Chattogram
1.1.1 Net Income to Equity (ROE):
Amount million in Taka
Formula Particulars
2014 2015 2016 2017 2018
Net Income to Net income (NPAT) 700 1339 2037 2340 4062
Equity=(Net
Shareholder’s Equity 11474 13876 20611 21518 23739
Income/Shareholder
’s Equity)×100 Net Income to Equity 6.10% 9.65% 9.88% 10.87% 17.11%
1.1.2 Return on asset (ROA)
Formula Particulars Amount Million in Taka
2014 2015 2016 2017 2018
ROA=(Net Net income 700 1339 2037 2340 4062
Income/Total (NPAT)
Assets)×100 Total Assets 180396 185579 209719 231602 268324
Return on Asset 0.38% 0.72% 0.97% 1.01% 1.51%
1.1.3 Return on Capital Employed (ROCE)

Particulars 2014 2015 2016 2017 2018

Earnings before interest 2176 3207 4393 4765 7049
and tax
Capital employed 12752 14325 19718 20375 23095
ROCE (%) 17.06% 22.38% 22.28% 23.38% 30.52%

6
1.1.4 Net interest margin (NIM)
Particulars Amount Million in Taka
Formula
  2014 2015 2016 2017 2018
Interest income 16714 18134 16794 17373 17842
Net Interest Margin=(Net Interest Expense 10195 11283 9192 8699 7036
Interest Income/Total Total Asset 173677 179713 204592 224492 248605
Asset)×100 Net Interest
3.75% 3.81% 3.72% 3.86% 4.35%
margin
1.1.5 Net Non-Interest Margin (NNIM)
Particulars 2014 2015 2016 2017 2018
Non Interest Revenue 3396 4304 4967 6438 7111
Non Interest Expense 6350 8266 8676 10354 11586
Total Asset 180396 185579 209719 231602 268324
Net Non-Interest Margin (%) 1.64% 2.13% 1.77% 1.69% 1.67%
1.2.2 Liquid security indicator
Particulars 2014 2015 2016 2017 2018
Govt. securities 21858 19365 20559 14979 17045
Total Asset 180396 185579 209719 231602 268324
Liquid Security 12.12% 10.43% 9.80% 6.47% 6.35%
 1.3 Solvency Ratio

1.3.1 Current Ratio

Particulars 2014 2015 2016 2017 2018

Current Assets 158885 165576 181475 208248 240057
Current Liabilities 93923 109626 125397 146775 160896
Current Ratio 1.69 1.51 1.45 1.42 1.49
1.3.2 Cash ratio

Particulars 2014 2015 2016 2017 2018

Cash 13581 17162 17091 16227 15827
Current Liabilities 93923 109626 125397 146775 160896
Cash Ratio 0.14 0.16 0.14 0.11 0.09
1.3.3 Net Working Capital
Particulars 2014 2015 2016 2017 2018
Current Assets 158885 165576 181475 208248 240057
Current Liabilities 93923 109626 125397 146775 160896
Net working capital 64962 55950 56078 61473 79161
 Findings
1. ROE and ROA of SIBL increased over the year which means that the bank is efficient enough
to in using its assets and equity capital to generate profit.

2. ROCE of SIBL, Jubilee road branch is in increasing trend, which shows that there is chance
of better use of capital.

3. There is decreasing trend of Net non-Interest margin. The higher NNIM is in 2015 which is
2.13% which is decreased over the year in a significant rate.

4. Liquid security indicators decreased over the year.

5. Current ratio of SIBL, Jubilee road branch decreased till 2017 and slightly increased in 2018.

6. Cash ratio of SIBL, Jubilee road branch decreased over the years.

7. Net working capital of Social Islami Bank, Jubilee road branch increased slowly.
 Recommendations
1. Though SIBL is maintaining a good the ROE and ROA, the bank has to maintain it. ROA can be
maintained by using more financial leverage, increasing profit margins, improve asset turnover,
distributing idle cash, lower taxes. ROA can be maintained by reducing asset costs, increasing
revenues, reducing expense.
2. ROCE of SIBL can be maintained properly by Improve the top line (i.e. increase operating profit)
without a corresponding increase in capital employed and maintain operating profit but reduce
the value of capital employed.
3. To change the decreasing trend of Net non-interest margin of SIBL, the bank should identify the
common sources of net non-interest income (such as Overdraft and nonsufficient funds charges,
which are highly scrutinized, and Gains on sales of loans and investment securities) improve
collections. stay on top of the market, consider relationship value pricing, obtain professional
advice.
 Recommendations
4. The liquid security indicator should maintain upward trend management .Thus the changes in
government policy affecting the financial performance of every bank in Bangladesh.

5. To maintain the good current ratio in the upcoming year SIBL should pay off current liabilities,
improve current Asset by rising shareholder's funds.

6. Cash ratio of SIBL is very low and the management should improve cash ratio by either
increasing its current assets or lower its current liabilities.

7. To maintain good net working capital, the bank should have improved liquidity, operational
efficiency, increased profits.
Thank You….