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20th October, 2012 Shamil M Al-Islam Lecturer, ECN School of Business Independent University, Bangladesh (IUB) Subject: Letter

of Transmittal.

Dear Sir, I would like to take this opportunity to thank you for the guidance and support you have provided me with during the course of this report. Without your help, this report would not have been possible to complete. With deep gratitude, I also acknowledge the help provided by Kazi Mashiur Rahman Jayhad, Manager, First Security Islami Bank Limited, Banani Branch , for providing me with utmost supervision during my internship in the Bank. I would really appreciate if you would enlighten me with your thoughts and views regarding the report. Also, if you wish to enquire about an aspect of my report, I would gladly answer your queries. Thank you again for your support and patience. Yours Sincerely,

. Md. Momin Sagor ID # 0820465

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Every creative task to be finished successfully needs shared efforts from individuals and institutions. It is a great pleasure and humble opportunity for me that I am assigned for doing my internship in First Security Islami Bank Ltd. (FSIBL). I express my gratitude to all of them who help me in completing my internship I also acknowledge their help with heartfelt thanks. I want to convey my heartfelt respect and cordial thanks to Mr. Shamil M Al-Islam, Lecturer, Independent University, Bangladesh, to give an opportunity to carry out my internship and I also like to thank for his generous cooperation and constant guidance that made me really confident about the desired outcome of my internship project. I am grateful to Kazi Mashiur Rahman Jayhad, Manager, First Security Islami Bank Limited, Banani Branch for his invaluable support and guidance that led to the successfully completion of my internship project. My special thanks go to the whole team of FSIBL for their continuous support, inspiration and giving me the opportunity to deal with different suppliers. Finally, all praise and indebtness to the Almighty Allah, the Lord of Glory and Honor and his Friend our Prophet Mohammad (SM), for all the blessing showers upon me to make such a success.

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1.0 2.0 Introduction Overview 2.1 2.2 2.3 3.0 Vision Mission Customer Service Quality 1

Types of Banking 3.1 3.2 3.3 3.4 Retail Banking SME Banking Corporate Banking Islamic Banking

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Executive Summary

This report Measuring banking Performance using profitability model is prepared to fulfill the partial requirement of Internship Working report of Business Administration Program of Independent University, Bangladesh. The topic of dissertation was selected upon consultation with my course instructor of respective department. The main aim of this report is to find out the profitability of the seven Islamic banks in Bangladesh. These seven Islamic banks are First Security Islami Bank Ltd., Social Islami Bank Ltd., Al-Arafah Islami Bank Ltd., Islami Bank Bangladesh Ltd., Shahjalal Islami Bank Ltd., EXIM Bank Ltd. & ICB Islamic Bank Ltd . It is tried to rank those bank by measuring its five years financial performance and comparing with each other. The performance is measured by using profitability model. The profitability of the banks can be measured using the following indicators:

(i) Return on asset (ROA) (ii) Return on equity (ROE) (iii) Profit margin ratio (PM)

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The growth of Islamic banking institutions has been phenomenal over the years. Today there are more than 500 Islamic banks and financial institutions world-wide with an asset base of about US$1 trillion (The Banker, 2009). The significance of Islamic banks in enhancing economic development is undeniable. Their role as shareholders and creditors of firms has increased the popularity and viability of Islamic banking in many countries, including Western ones. The size of Islamic banking operations in growing rapidly across the globe, at an estimated rate of 15% percent annually. This demonstrates the acceptance of the Islamic finance model throughout the world. Generally, investors in conventional banks are primarily concerned with making profits, irrespective of Shariah principles. However, this not the case with investors in Muslim Islamic Finance. According to Shahul et al. (2003), most Muslim investors are not only concerned with the dividend and capital return from their investment, but also with the whereabouts of their investment, including where it has been invested. Such concern is in line with the Shariah principles (or Islamic law) which promotes justice and social welfare through obedience to Gods commandments. Wealth needs to be shared in a fair manner among the Muslims. In this study seven Islamic bank in Bangladesh First Security Islami Bank Ltd., Social Islami Bank Ltd., Islami Bank Bangladesh Ltd., EXIM Bank Ltd., ICB Islamic Bank Ltd., Shahjalal Islami Bank Ltd. and Al-Arafah Islami Bank Ltd. have taken. It is tried to find out which one is the heights profitable bank. And the position of First Security Islami Bank Ltd. among them.

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Chapter 1
1.1 Company Overview: First Security Islami Bank Ltd. (FSIBL) is a financial institution operating based on the principles of Islamic Shariah. FSIBL was incorporated in Bangladesh on 29 August 1999 as a banking company under Companies Act 1994 to carry on banking business. It obtained permission from Bangladesh Bank on 22 September 1999 to commence its business. First Security Islami Bank Ltd. provides all kinds of commercial banking services to its customers through its branches in Bangladesh. The Bank carries banking activities through its 92 branches in the country. The commercial banking activities of the bank encompass a range of services, including accepting deposits, making loans, discounting bills, conducting money transfer and foreign exchange transactions, and performing other related services, such as safe keeping, collections and issuing guarantees, acceptances and letter of credit. The Banks product and services include deposit scheme, investment scheme, online banking, short message service (SMS) banking, automated teller machine (ATM) banking, utility bills and locker services. As of December 31, 2010, FSIBL held 51% interest in First Security Islami Capital & Investment Ltd. First Security Islami Exchange Ltd. Is a wholly owned subsidiary of the Bank. Vision: To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver excellence in Banking. Mission: To contribute the socio-economical development of the country. To attain highest level of satisfaction through extension of services by dedicated and motivated professional. To maintains continuous growth of market share ensuring quality. To ensure ethics and transparency in all levels. To ensure sustainable growth and establish full value of the honorable shareholders and
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Above all, to add effective contribution to the national economy.

Corporate Slogans: Green In Living Corporate Information: Name of the Company Chairman Vice Chairman Managing Director Company Secretary Legal Status Date of Incorporation Date of Commencement of Business Date of Permission from Bangladesh Bank Date of Opening of First Branch Corporate Head Office Registered Office Line of Business Authorized Capital Paid up Capital Date of Consent of IPO Branches in the Country Phone Fax E-mail Website First Security Islami Bank Ltd. Mohammad Saiful Alam Alhaj Mohammad Abdul Maleque A.A.M. Zakaria Abdul Hannan Khan Public Limited Company August 29, 1999 August 29, 1999 September 22, 1999 October 25, 1999 House-SW(I) 1/A, Road-8, Gulshan-1, Dhaka 23, Dilkusha, Dhaka-1000, Bangladesh Banking Tk. 4,600 Million Tk. 3,740 Million 04 June, 2008 92 Branches 88-02-9560229 (Hunting), 9550334,7171029-30 88-02-9561637 bcs@fsiblbd.com, info@fsiblbd.com www.fsiblbd.com

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Organ Gram of First Security Islami Bank Limited:

Board of Directors

Executive Committee of the Board

Board Audit Committee

Board Secretariat

Shariah Council

Managing Director

Senior Executive Vice President


Corporate Affairs Division

Research & Development

Marketing Division Investment Division International Division Treasury Unit


Credit Committee


General Service Division

Public Relation Division

Monitoring & Inspection Division

Computer Division Page 8 of 32

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Managerial Hierarchy of the Branch: Executive Vice President (EVP) - 1 Person I worked with this person

First Assistant Vice President (FAVP) - 1 Person

Senior Executive Officer (SPO) - 3 Persons

Principal Officer (PO) - 1 Person

Senior Officer (SO) - 3 Persons

Officer - 2 Persons

Junior Officer - 1 Person

Assistant Officer - 6 Persons

Trainee Assistant Officer - 4 Persons

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Products & Services:

First Security Islami Bank has two type of product. Deposit Schemes Investment Schemes FSIBL also provide some services. 1.4.1 Online Banking SMS Banking ATM Banking Utility Bills Locker Services etc.

Product under Deposit Schemes: Al-Wadiah Current Deposit Mudarabah Savings Deposit Mudarabah Short Term Deposit Mudarabah Term Deposit o One Month o Three Months o Six Months o Twelve Months o Twenty Four Months o Thirty Six Months Foreign Currency Deposit Mudarabah Savings Scheme o Monthly Savings Scheme o Monthly Profit Scheme o More than Double the deposit in 6 years Consumer Finance Scheme To Diversify portfolio in both retail & wholesale markets
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Products under Investment Scheme: Investment /Deployment of Funds o Bai-Murabaha (Deferred Lump Sum /Installment Sale) o Bai-Muajjal (Deferred Installment /Lump Sum Sale) o Ijara (Leasing) o Musharaka (Joint-Venture Profit-Sharing) o Mudaraba (Trustee Profit-Sharing) o Bai-Salam (Advance Sale & Purchase) o Hire-Purchase o Direct Investments o Post Import Investment o Purchase & Negotiation of Export Bills o Inland Bills Purchased o Murabaha Import Bills o Bai-Muajjal Import Bills o Pre Shipment Investment o Quard-ul-Hasan (Benevolent Investment) Letter of Guarantee o Tender Guarantee o Performance Guarantee o Guarantee for Sub-Contracts o Shipping guarantee o Advance Payment guarantee o Guarantee in lieu of Security Deposit o Guarantee for exemption of Customs Duties o Others Letter of Credit (L/C) / Back to Back Letter of Credit (L/C) Specialized Schemes o Consumer Investment Scheme
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o SME Investment Scheme o Lease Investment Scheme o Hire Purchase o Earnest Money Investment Scheme o Mortgage Investment o Employees House Building Scheme o ATM, VISA Investment Card, EEF, etc.

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Chapter 2
My Job Responsibilities as an Intern: My internship at First Security Islami Bank Ltd., Banani Branch on 18th September, 2012 and it ended on 17th December, 2012. During these 3 months I was assigned at the Banani Branch. During the internship period in the FSIBL, I was given the duties of different division to perform and to gather some valuable knowledge. Also I had a lot of fun, but more importantly I finally understood working by actually being there. This practical orientating is necessary for the development and preparation of a person in the job world. The things that I have learned at First Security Islami Bank Ltd. are Meaning of Responsibility Necessity of Commitment Punctuality and regularity is very important Ability to interact with different sorts of people First Security Islami Bank Ltd. has a prepared internship program for internees. Although it is rarely followed, it served as a guide for me. I was rotated across all 4 different departments in the past 3 months. 2.1 The Nature of the jobs and my Specific Responsibilities: The first three week I was in the Account Department. I was under Khondoker Abdur Rob, who was very intellectually intriguing. I learned the following from this department: Voucher attach with GL Voucher serialing Voucher writing Clean Cash Typing other documents given by my incharge Use the photocopy machine Then I was assigned to Clearing Department. Here I was under Kamal Uddin, Principal Officer. I learned the following from this department:
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Scanning Cheque Error Correction Data Entry Cheque Register Entry Voucher, LBC, OBC etc writing Then I was assigned to Cash Department. Banks dont usually put interns in this department but I was lucky to see firsthand what happens behind the counter. I did not have much responsibility in that department as I was not to mess with their hectic and hasty transactions, but they eventually did give me some work. My responsibilities in this department were just to assist them in any small way possible. I learned the following from this department: Counting money in various ways Use the counting machine Checking the individual EOD (End of day journal report) of each cashier
Learn about PCbank & Bank Ultimus software

Although these activities were small, they helped me understand the nature of the work. Then I was assigned to front desk. I spent the next two weeks here. It was very arduous, but very fruitful. I was under Sunjida Akther (SO). I had a wide variety of responsibilities at front desk: Bringing out the Cheque books for the customers, verifying them, receiving them from the courier. Writing and later on printing pay orders
Sometimes I did the FD (Fixed Deposits) & DPS (Deposit Pension Scheme), but it

was under strict supervision. Finding the FD, DPS and old account opening forms Opening account for new customers and aiding them in the process Opening FD and DPS for new customers Checking the EOD Preparing the bill for the branchs expenditure for that day
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Inputting information onto the PCbank & Bank Ultimus Making bank solvency certificates Keeping things in order and at arms length The work was really hard at front desk. I also had to hear a lot of complaints from the customers. As first I was demoralized. But later on I learned how to deal with it. The last four weeks I was posted in the foreign trade department. I did not have to deal with the customers that much but there were a lot of responsibilities that I had. Such as: Processing a new LC (Letter of Credit) - Fill up the LCAF forms - Calculating the VAT, commission, margin etc - Printing the SWIFT message
- Filling up the CF-7 forms

- Putting seals - Taking signatures

- Numbering the LCs

-Learned about the foreign regulation act 1947 Doing the similar things for BTB (Back-to-Back) LCs and Local LCs Preparing the LC for CPC (Control Processing Center) Filling up the IMP forms Putting the LC and IMP into their following registers Learning to put different types of seals Printing cover letters, letters etc Picking up the phone, calling up customers for missing information Preparing T&M (Travel and Miscellaneous) for Bangladesh Bank

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Taking necessary papers from customers such as taking photocopy of National ID card, Passport, Trade License etc. Photocopying was a major activity in this departments Learned how to receive mail and send out mail via courier Learning the basics of these softwares Flexcube corporate, Western Union, PCbank, Bank Ultimus, First Security Bank Foreign Trade (for other remittances other than Western Union)
Giving out Western Union, Placed, Money Gram, Xpress Money etc. forms to customers

2.2 Observation: It was very interesting working at First Security Islami Bank. The people there are really nice and talented. The things that I have noticed and observed are: Work is never left pending for the next day unless it is absolutely necessary The work process could be made faster with better computers and operating systems A good job performance is rarely praised, hence lacking motivation of the employees
There is always a rush of customers so there is no standard on what the employees do

throughout the day. The work activities of an employee are set, but what to do when varies along the day.
The work activities are always set and divided for each of the employees. This is the way it

should be, but when I saw it first-hand it was remarkable. Each and every employee has a certain set of responsibilities. He/she carries out those responsibilities throughout the day. It is also easy to assign duties that way. Even though this is the case, I often saw other staff members helping each other out.

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Chapter - 3 3.1 Literature Review: Bank performance in general can be evaluated using financial ratios such as liquidity ratios, profitability ratios and others. However, evaluating Islamic banks performance is far more complex and demanding as these banks performance is not only tested by their profitability level but also their relative compliance with Shariah principles. Competition in the Islamic banking sector has intensified, mainly due to various internal factors (such as the banks management policy, firm ownership structure, investment and expenditure policies) and external factors (such as political environment, technological advancement and deregulation policies). Such competition influences the growth and performance of these banks. A diligent measurement or monitoring of the financial performance of Islamic banks can help to determine the banks potential capacity and prospects. This is vital for managerial and regulatory purposes as well. Bank regulators, depositors and managers have different needs and objectives. For example, depositors are concerned about the financial stability of a bank since a financially unsound bank does not guarantee good returns. Return On Assets (ROA) is considered one of the most popular ratios used to measure financial performance in the banking industry, it shows the ability of management to acquire deposits at a reasonable cost and invest them in profitable investments. This is reflected in the ROA, since investments and loans are the largest portion of banks assets, while interest on loans resembles the largest portion of the banks revenue and returns (Simpson and Kohers, 2002: 103,104,108). Some studies even go as far as to claim that ROA is the most meaningful financial indicator in the banking industry (Reger, Duhaime and Stimpert, 1992: 195). ROA has the advantage that it can be used for small firms which have a very small equity base, in which case ROE may be a bit misleading compared to ROA (Reger et al., 1992: 195). ROA is considered to be highly correlated with ROE in the banking sector, where both give thesame indication of performance in terms of the direction of financial performance movement, but differ in magnitude and interpreted analysis (Simpson and Kohers, 2002: 98, Castelli, Dwyer and Hasan, 2006: 9,10, Karr, 2005: 56-59). Return On Equity (ROE) is one of the most commonly used bank financial performance measure. It can be found in much of the research surrounding bank performance as well as analyst reports and company financial results (Lindblom and Von Koch, 2002: 52,56). It is also seen as a simple method to calculate and measure past performance while giving a fairly good indicator of future ROE (Wilcox, 1984). Hopkins et al. (1997: 642) states that the ultimate measure of the strength of any financial institution is the ROE. It also helps to compare banks differing in size and structure. Use of ROE as a measure is primarily based on the assumption that customer value creation is positively correlated to the financial performance [measured as ROE] of the bank (Lindblom et al., 2002: 48). Page 17 of 32 ID# 0820465

Using sets of ratios is highly preferred rather than using individual ratios. Sets of ratios allow managers to gain fruitful insight and information regarding factors affecting bank financial performance. A number of ratio sets, systems and schemes are based on ROE and aim to trace ROE into its component ratios to achieve the benefits of a complete picture of the banks performance. Most of these systems are based on the Dupont System of Financial Analysis but with slight modifications or adaptations. One of these systems is Schierenbecks Basic ROE Scheme (further referred to as the ROE Scheme or ROE Analysis Tool). This model has been chosen for its overall ability to combine a complete image of the banks performance, as well as the ease of obtaining the information needed to calculate its ratios. It also has the advantage of including the ROA in its Analysis thus combining both previously mentioned measures and their advantages. The Conventional ROE Analysis is presented here as shown in Kalhoefer and Salem (2008). 3.2 Hypothesis : Exim Bank is performing better than SEBL and SIBL. 3.3 Methodology: Data collection: In this report secondary data is collected. Secondary data is collected from the annual report of these three banks from the year 2007 to 2011. 3.4 Analysis: I the analysis ROA (Return on Asset), ROE (Return on Equity), and profit margin is used to find out the profitability. And Investment income, Investment expense, deposit, loans and advance, non performing investment is used to find the banks performance. ROA: Return on asset determines the amount of net income produced on a firms asset by relating net income to total ROA = Net Income Total Assets X 10 0

ROE: The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROE = Net Income Shareholder's Equity X 100

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Net Profit Margin: Net Profit Margin measures the net income of a firm as a percent of its revenue. Net Profit Margin = Net Income Net Operating Income X 100

Investment income for the Islamic bank is the income bank generates by loan out or Islamic investment. Investment Expense is the expense Islamic bank pay out to its depositor. Deposit is the investment, an Islamic bank get from its customers. Loans and Advance is the money bank took from other financial institution. Nonperforming Investment is the difference between classified and unclassified investment for the bank.

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Chapter 4 Findings
4.1 Profitability Measurement: 4.1.1 Profitability Model, ROA: Table-1 Name of the Bank First Security Islami Bank Ltd. Social Islami Bank Ltd. Al-Arafah Islami Bank Ltd. Islami Bank Bangladesh Ltd. Shahjalal Islami Bank Ltd. 2007 0.11% 0.61% 1.63% 1.14% 2.28% 2008 0.33% 0.68% 1.80% 1.16% 1.81% 2009 0.68% 1.08% 1.77% 1.22% 1.82% Year 2010 0.86% 1.17% 2.55% 1.35% 2.63% 2011 0.64% 1.28% 1.71% 1.63% 1.09% Average 0.53% 0.96% 1.89% 1.30% 1.93%

Line graph of profitability model ROA: Chart 1

In here three banks five year average is 1.58%. EXIM bank is in the top position then South East bank, and SIBL is in the bottom position. But SIBLs ROA is up warding where both EXIM and SEBLs ROA went down in 2008. So, it can be said EXIM bank is doing well in here.

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4.1.2 Profitability Model, ROE: Table-2

Name of the Bank First Security Islami Bank Ltd. Social Islami Bank Ltd. Al-Arafah Islami Bank Ltd. Islami Bank Bangladesh Lt.d Shahjalal Islami Bank Ltd.

2007 2.70% 9.01% 22.60% 17.92% 23.21% 2008 4.11% 10.82% 24.70% 19.02% 22.68% 2009 11.41% 12.14% 24.10% 16.93% 21.73% 2010 13.99% 15.31% 24.55% 19.00% 30.71% 2011 12.89% 11.51% 18.47% 6.72% 14.76% Average 9.02% 11.76% 22.88% 15.92% 22.62%

Line graph of profitability model ROE: Chart 02

In here three Banks five years average is 17.36%. Once again EXIM Bank is doing well comparing with other two Banks. SIBL and SEBLs ROE went down in 2008 when EXIM Bank also maintaining the top position.

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4.1.3 Profit Margin from 2007 to 2011: Table 03 Name of the Bank First Security Islami Bank Ltd. Social Islami Bank Ltd. Al-Arafah Islami Bank Ltd. Islami Bank Bangladesh Ltd. Shahjalal Islami Bank Ltd. Year 2009 2010 24.62% 26.31% 25.12% 24.42% 32.56% 42.77% 27.61% 28.51% 36.70% 42.72%

2007 7.39% 16.62% 28.01% 19.55% 39.72%

2008 18.21% 15.64% 30.76% 23.07% 35.20%

2011 21.21% 26.13% 34.58% 61.35% 25.23%

Average 19.55% 21.59% 33.73% 32.02% 35.92%

Line graph of Profitability Model Profit Margin: Chart 03

In here three banks average is 29.00%. Once again EXIM bank is doing better. Both SIBL and SEBLs Profit margin went down in 2008 and 2010 where EXIM Bank is maintaining up warding trends. So, after measuring the profitability model it can be said that EXIM Bank is maintaining top profitability position comparing SEBL and SIBL. So it is profitable to invest money in EXIM bank Limited.

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4.2 Performance Measurement 4.2.1 Deposit Collection Table 04 Name of the Bank 2007
First security Islami Bank Ltd. 23,504.04
(Taka in million)


Year 2009




Social Islami Bank Ltd.

Al-Arafah Islami Bank Ltd.







Islami Bank Bangladesh Ltd.

Shahjalal Islami Bank Ltd.

166,325.2 202,115.45 9
22,618.00 34,280.00

244,292.1 291,934.60 4
47,459.00 62,965.00

341,853.6 7


Deposit collection of Column Diagram: Chart 04

In here three banks average deposit collection is 54353.55 million taka. According to the graph EXIM is collecting heights amount of deposit rather than other two banks. Though three banks deposit collection is up warding, EXIM is in the top position. So EXIM is performing well in here.

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4.2.2 Net Income by the Banks: Table 05 Name of the Bank First security Islami Bank Ltd. Social Islami Bank Ltd. Al-Arafah Islami Bank Ltd. Islami Bank Bangladesh Ltd. Shahjalal Islami Bank Ltd. Year 2007 30.63 150.04 418.01 2,014.27 646.99 2008 104.28 202.07 668.24 2,674.80 817.71 2009 326.84 431.52 858.99 3,403.55 1,070.57 2010 548.60 643.02 1,919.90 4,463.47 2,072.34 2011 580.16 1,083.42 1,772.06 4,841.45 1,168.44 Average 318.10 502.01 1,127.44 3,479.51 1,155.21
(Taka in million)

Net Income by the Banks of Line Graph: Chart 05

In here three banks average net income is 1135.237 million taka. Both EXIM and SEBL are maintaining almost same net income in here. But SEBLs expense is getting higher that is why EXIM came out in the top position in the year 2010.

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4.2.3 Investment Income by the Bank: Table 06 Name of the Bank 2007 First security Islami Bank Ltd. Social Islami Bank Ltd. Al-Arafah Islami Bank Ltd. Islami Bank Bangladesh Ltd. Shahjalal Islami Bank Ltd. 2,180.31 2,092.95 2,243.15 14,572.1 9 10,108.0 0 2008 3,141.80 2,732.26 3,456.34 19,543.8 4 6,416.00 Year 2009 4,348.67 3,078.98 4,004.54 21,370.5 3 5,531.00 2010 5,547.05 3,886.18 4,306.62 24,766.2 5 4,236.00 2011 8,747.76 6,922.21 9,481.01 32,019.5 3 2,973.00
(Taka in million)

Average 4,793.12 3,742.51 4,698.33 22,454.47 5,852.80

Investment Income by the Bank of Column Diagram: Chart 06

In here three banks average investment income is 5669.058 million taka. SEBL is in the top position. EXIM Bank is in the second position but up warding and very close to SEBL. So EXIM Bank is developing in here.

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4.2.4 Investment Expense by the Banks: Table 07

(Taka in million)

Investment Expense by the Banks of Column Diagram: Chart 07

In here three banks average expense is 4047.677 million taka. SEBL were in the top position till 2009 but went in second position in 2010. But EXIM bank is maintaining a linear slope. It means EXIM banks expense is controlled.

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4.2.5 Non-Investment Income by the Banks: Table 08

(Taka in million)

Non-Investment Income by the Banks of Column Diagram: Chart 08

In here three banks noninvestment income is 2085.759 million taka. SEBL is doing very well in here. EXIM Bank is in the second position.

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4.3 Risk & Return: By Analyzing ROA 4.3.1 Risk & Return from ROA: Table 09

Risk & Return from ROA of Line Diagram: Chart 09

By analyzing ROA it is seen that EXIM banks risk is 0.73% where its return is 2.26%. Difference between risk and return is 1.53%. SEBLs risk is 0.46% where its return is 1.74%. Difference between risk and return is 1.28%. SIBLs risk is 0.37% where its return is 0.75%. Difference between risk and return is 0.38%. So, it can be said that EXIM Banks is ahead in this profitability race.

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By Analyzing ROE 4.3.2 Risk & Return from ROE: Table 10

Risk & Return from ROE of Line Diagram: Chart 10

By analyzing ROE it is seen that EXIM banks risk is 2.7% where its return is 23.82%. Difference between risk and return is 21.12%. SEBLs risk is 3.1% where its return is 17.17%. Difference between risk and return is 14.07%. SIBLs risk is 3.3% where its return is 11.08%. Difference between risk and return is 7.78%. So, it can be said that EXIM Banks is ahead in this profitability race. So it is Hypothesis is proved.

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Conclusion: By observing overall performance and profitability of three banks, EXIM Bank is in the top position. Then SEBL is in the second position, SIBL is in the third position. EXIM banks both investment income and noninvestment income is good and the expenses are controlled. That is why EXIM Bank is maintaining top position. In year after year they are trying to improve themselves by establishing a sound capital base. They are trying to make their products and services more attractive to the customers. Also, they are rewarding their shareholders by enhancing their wealth and attracting more investors by their bank performance.

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