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1.0 Introduction:
In general sense we mean Bank as a financial institution that deals with money. There are
different types of banks like Central bank, State- owned Commercial bank, Private Commercial
bank or Merchant bank, Foreign Commercial bank, Specialized Development bank, etc. But
when we use the term bank it generally means commercial bank that collects the deposit from
surplus unit of the society and then lends the deposits to the deficit units of the society. But the
new thing is that how it operates and presenting its activities for the purpose of serving customer
requirements to increase their well-being in the sense of wealth. Banks also provide many
services for clients to make their life easy in this busy environment. In this competitive
environment in todays world, the entire bank increases their facilities in favor of their customers
to retain them and capture more share of the market to be leader. Interest is one of the main
factors in attracting customers. So, it can be said that conventional banking systems are interestbased system. This report is an attempt to gain the knowledge of Overall Banking Activities of
ARAB BANGLADESH BANK Ltd. in terms of productivity and effectiveness. Also, analyze
and discuss the five years performance from fiscal year 2008- 2012 to evaluate the position of
ARAB BANGLADESH (AB) BANK Ltd.
Personal Observation.
2
Unpublished data
1.5 Limitations:
There are some problem regarding preparing this project.
Those problems are as follows:
Lack of availability of information and data, some time there are some back dated
information.
The record system of the annual report of some of the banks is not efficient.
Banking sector is a very vast sector where I have a little knowledge about it which
limits my report.
It is one of the retail banking product its type is Savings account with maximum returns.
Features is -
Its rate of return is 0% to 9% if the deposit amount is less than Tk 50000 interest rate is 0%,
if the deposit amount is 5000000 or above they will pay the highest interest rate 9% and
between 50000 and 5000000 interest rate is varied 5% to 8% depends on the deposit amount.
In additional facility Customer will be privileged by following facilities upon maintaining
average balance of 50,000.00 and above (Free cheque book, Free Debit card, No ledger fee.)
Monthly installment based savings scheme with fixed maturity value of BDT. One
million (10,00,000).
Scope of initial investment to reduce monthly installment.
Installment size varies with tenor and initial investment.
Account can be opened for 3, 4, 5 or 6 years.
Rate of interest : 12.00%
Loan/overdraft facility may be allowed up to 90% of the deposited amount subject to
minimum BDT.15, 000.
(without collateral),30% of the value of the total cost. Charge for the loan is Application fee Tk.
500,Processing fee 1.5% on the approved loan amount. Tenor is Min 12 Months, Max 60
Months. Rate of interest is 18.00% p.a - 21.00% p.a (to be determined by ALCO from time to
time). Guarantee is Personal guarantee of spouse/parents only.
3.2.8 Education Loan (for executive):
Purpose of the loan is To assist executives pursue Higher studies/professional qualification at
local/overseas institutions.. Loan limit is Minimum Tk. 50,000,MaximumTk10,00,000 (without
collateral),30% of the value of the total cost. Charge for the loan is Application fee Tk. 500,
Processing fee 1.5% on the approved loan amount. Tenor is Min 12 Months, Max 60 Months.
Rate of interest is 18.00% p.a - 21.00% p.a (to be determined by ALCO from time to time).
Guarantee is Personal guarantee of spouse/parents only.
( N.B: in the education loan(disbursed to parents/guardian) and (for executive) everything is
same accept the purpose of the loan. )
3.2.9 Home Loan:
This Loan is providing for multiple purposes, the purpose of the Loan is to 1. Purchase of
apartment/house within the Municipal areas of town/cities in Bangladesh. 2. Purchase of
Flat/Apartment/independent house not more than 15 years old. 3. Completion of construction of
a new house. 4. Loan takeover facility of Home Loan from other banks at a preferential rate.
Limit of the Loan is Min BDT 500,000 and Max70% of the value of the flat or construction cost
for completion but not more than Tk. 1,00,00,000. Charge for the loan is Application fee: Tk.
500 and Processing fee: 1.5% on the approved loan amount. Lone tenor is Min: 3 Years
Max: 15 Years. Insurance coverage under Property insurance for Earthquake and Fire. Rate of
interest is 15.00% - 18.00% p.a (to be determined by ALCO from time to time). The purpose of
security is to Registered mortgage of property along with registered IGPA to sell the property.
Guarantee for the loan is Personal guarantee of spouse/parents / legal heir only.
10
Bank aim to provide tailored financing solutions with a dedicated team who can rapidly respond
to client needs.
Following are some of the products and financial tools of Corporate Banking:
Project Finance
Trade Finance
Cash Management
Agro machinery
Poultry
Animal Feed
Dairy Product
11
Fruit Preservation
Hotel & Restaurants
Garments Accessories
Leather products
Plastic product
Furniture : Wooden & Metal
Ink
Paint
Printing & Packaging
Wire & Cable
Aluminum
Cement and Lime Plaster
Clinics and Hospitals
Engineering & Scientific Instruments
In order to cater the demand of client AB Bank has segmented its portfolio in terms of
loan size. As per this segmentation any loan over Tk. 10.00 Crore falls under the purview
of Large Loan Unit.
In AB Bank, there is also a separate Project Finance unit who evaluate the business. The
unit is entrusted to handle the portfolio in a focused manner. AB Bank is always in fore
front to support establishment of new projects of diverse nature which will help to
broaden the manufacturing arena vis--vis to generate to employment.
At the moment AB Bank s exposure in Large Loan & Project Finance portfolio is
distributed in the following sectors:
12
SL Sector
ABBL Exposure
(Limit)
(Fig. in Lac Tk.)
Agro- Business
12,717.56
38,691.92
Consumer Products
21,855.00
Edible Oil
36,057.53
18,106.42
Financial Institution
Hotel
2,505.26
Health Care
3,928.62
1,414.70
27,044.24
11,867.61
11 Real Estate
10,451.49
12 Micro-finance
5,763.15
13 Export
9,441.63
94,826.13
15 Ship Breaking
18,029.20
16 Steel
42,824.97
11,479.89
18 Trading
77,579.89
444,585.21
51,560.29
3930,24.92
AB Bank, the first bank in the private sector also took initiative to adapt to this growing
concept.
In 1997, AB Bank for the first time arranged a club financing with Dhaka Bank Ltd to
raise Tk. 6700 lac - out of which ABBL financed Tk. 5700 Lac and Dhaka bank financed
Tk. 1000 Lac.
In 1999, AB Bank arranged its second syndicated credit facility with IPDC to raise Tk
3563 Lac.
Since 1997 to 2007 (till date), AB Bank has raised total Tk. 25989.56 Lac as Lead
Arranger. The following banks from time to time have been our partners in these
syndications : Dhaka Bank, IPDC, EXIM Bank, Bank Asia, Oriental Bank, NCC Bank,
The City Bank, Trust Bank, Bank Asia.
AB Bank has also participated in different syndications arranged by other Banks, out of
which till date 6 (six) syndication has successfully been completed. AB Bank exposure in
these completed syndications was Tk. 4700 Lac.
ABBL Participation
(Fig. in Lac Tk.)
Textile
9,533.57
Micro-finance
3,000.00
Cement
7,990.00
11,997.00
Glass
900.00
Sugar
900.00
14
Steel Mills
9081.72
Paper
1158.00
10 Chemical
1,500.00
Total
51,560.29
Products
Mid Rate
(Previous)
Mid Rate
Interest rate
w.e.f January
01, 2013
13.00%
13.00%
13.00%
7.00%
7.00%
7.00%
14.00%
14.00%
12.50%-15.50%
16.50%
15.50%
14.00%-17.00%
14.00%
14.00%
12.50%-15.50%
b) Small Industries
16.50%
16.50%
14.00%-17.00%
15.50%
15.50%
14.00%-17.00%
b) Small Industries
16.50%
16.00%
14.50%-17.50%
7) Housing Loans
16.50%
16.00%
14.50%-17.50%
8) Consumer Credit
19.50%
19.50%
18.00%-21.00%
5) Working Capital
6) Commercial Lending
9) Credit Card
16.50%
15.00%-18.00%
16.50%
16.50%
15.00%-18.00%
16.75%
16.75%
15.25%-18.25%
10.00%
10.00%
10.00%
15
16.50%
16.50%
15.00%-18.00%
14.00%
14.00%
12.50%-15.50%
17.50%
17.50%
16.00%-19.00%
Notes:
1. For lending against ABBL FDR, the rate is minimum 3.00% above the rate of the
instrument.
2. Exposure under cash collateral of other banks requires clearance from FI & Treasury.
3. For taking exposure on "Digun Loan" under Special Scheme, the rate will be 8% above
the instruments' rate; subject to maximum 20% p.a.
4. For Women Entrepreneur (above Tk. 50.00 lac), the rate will be 15.00%-18.00%.
Products
Interest Rate
Savings Deposits
6.00%
8.00%
4.00%
1,00,00,001 to 25,00,00,000
5.00%
25,00,00,001 to 50,00,00,000
6.00%
50,00,00,001 to 100,00,00,000
7.00%
Above 100,00,00,000
8.00%
FC & RFCD (Minimum balance USD 1000 or Rate as per Daily FX rate
GBP 500 or its equivalent for other currency &
minimum tenor one month)
Fixed Deposit (Time Deposits)
1 (One) Month
7.00%
3 (Three) Months
Below 10 Crore
10.25%
10.50%
6 (Six) Months
Below 10 Crore
11.00%
11.25%
1 (One) Year
Below 10 Crore
11.25%
11.50%
2 (Two) Years
11.50%
NFCD: We issued Foreign Currency Fixed Term Deposit in USD/GBP/EUR with different
tenure. Interest is paid in respective Foreign Currency. Rates of Interest are published in our
daily Exchange Rate.
17
Wage Earners Development Bond: These Bonds can be issued from the balance of the FC
account with tenure for five years. Rate of interest is 11.80% p.a. in BDT.
USD Premium Bond: These Bonds can be issued from the balance of the FC account with a
tenure for Three years. Rate of interest is 7.5% p.a. in BDT.
USD Investment Bond: These Bonds can be issued from the balance of the FC account with a
tenure for Three years. Rate of interest is 6.5% p.a. in USD.
In addition to the above, we also have Drawing Arrangements with 20 (Twenty)
Exchange/Money Transfer Remittance Houses all over the globe to facilitate fast, reliable and
hassle-free inward remittance to the expatriate Bangladeshis around the world.
Dubai, United Arab Emirates. 17. Wall Street Exchange Centre LLC, 1103,1104-Twin Towers,
Baniyans Road, P.O. Box 3014, Dubai, U.A.E. 18. Continental Exchange Solutions, (Ria
Financial Services), 13825 Cerritos Corporate Drive Suite C'' Cerritos, California, USA. 19. Al
Zaman Exchange WLL, P O Box: 23497, Souq Najada Doha, Qatar. 20. Brac Saajan Exchange
ltd, 147 Lozells Road, Birmingham, West Midlands, B19 2TP, United Kingdom, Tel: +44
(121)515 4008.
To give assistance in launching welfare oriented economic system under Islamic values
Under this wing AB Bank extends the following Islamic banking services:
Deposit services
Investment services
19
20
3.14 Cards:
AB Bank Ltd. introduces VISA debit card facility. Under this System card holder can reload and
refunded money from Banks designated Branches Card holder also can pay utility Bills and
purchase goods from different POS (point of sale).Bank has also joined Electro ways
Transactions Network (ETN) commonly known as E-cash, recently. This new platform will
enable the Card Division to go for mass-based card programs in the future.
21
22
23
Amount
53375000000
68560000000
83087000000
95702000000
116152000000
140026000000
Growth Rate
28%
21%
15%
21%
21%
2008
2009
2010
2011
2012
28%
21%
15%
21%
21%
When someone opens a bank account and makes a deposit to the bank, the cash becomes an asset
of the bank; the account becomes a liability. AB Bank has the highest deposit growth rate in
2008 which is 28% in that year.
24
Deposit
Ratio
2008
68560000000
56709000000
83%
2009
83087000000
70880000000
85%
2010
95702000000
88002000000
92%
2011
116152000000
94638000000
81%
2012
140026000000
106066000000
76%
Loan to Deposit
2009
2008
83%
2010
2009
85%
2011
2012
2010
92%
2011
81%
2012
76%
Loans in the numerator of the formula are investments or assets for a bank. Deposits in the
denominator of the formula can be considered the same as debt as the individual depositors are
essentially granting monies to the bank with a return equal to the deposit rates and that can be
called upon at any time. In these respects, the loan to deposit ratio is similar to a liquidity ratio
and debt ratio. Here we have seen in year 2010 AB Bank has a height Deposit ratio that is 92%.
25
Net Income
Ratio
2008
2301000000
73802000000
3.12%
2009
3363000000
95483000000
3.52%
2010
3696000000
119801500000
3.08%
2011
1328000000
142827000000
0.93%
2012
1439000000
163402500000
0.88%
4.0000%
2008
3.0000%
2009
2010
2.0000%
2011
1.0000%
2012
0.0000%
2008
2009
2010
2011
2012
In 2009, this bank has a highest Return on Asset that is 3.52%. The return on assets ratio can be
helpful in comparing the profitability of different-sized Banks because it allows investors to see
how efficiently a Bank works with what it has, regardless of how big the Bank is. If a Bank has
30 million in net income and 100 million in total assets, its return on assets would be 30%.
Return on assets is calculated by dividing a company's net income usually annual income by its
total assets, and is displayed as a percentage.
26
Net Income
Ratio
2008
2301000000
5617500000
40.96%
2009
3363000000
8440500000
39.84%
2010
3696000000
12012500000
30.77%
2011
1328000000
14360000000
9.25%
2012
1439000000
20443500000
7.03%
2008
40.0000%
2009
30.0000%
2010
20.0000%
2011
10.0000%
2012
0.0000%
2008
2009
2010
2011
2012
This ratio indicates how profitable a Bank is by comparing its net income to its average
shareholders' equity. The return on equity ratio (ROE) measures how much the shareholders
earned for their investment in the Bank. The higher the ratio percentage, the more efficient
management is in utilizing its equity base and the better return is to investors. In 2008, AB Bank
has a highest Return on Equity that is 40.96%.
27
Net Income
2008
2301000000
EPS
2009
3363000000
442500000
7.6
2010
3696000000
442105263
8.36
2011
1328000000
442666667
2012
1439000000
442769231
3.25
5.2
2008
2009
2010
2011
2012
0
2008
2009
2010
2011
2012
Here we seen that the height EPS of AB Bank is in 2010 and the amount is 8.36. The portion of a
Bank's profit allocated to each outstanding share of common stock. Earnings per share serves as
an indicator of a Bank's profitability. When calculating, it is more accurate to use a weighted
average number of shares outstanding over the reporting term, because the number of shares
outstanding can change over time.
28
Loan
56709000000
70880000000
88002000000
94638000000
106066000000
Growth Rate
24.98%
24.15%
7.54%
12.07%
Growth of Investment
30.0000%
2009
20.0000%
2010
2011
10.0000%
2012
0.0000%
2009
2010
2011
2012
We see in the invest growth ratio AB Bank investment was reducing year to year, in 2009 we see
they had the highest investment which is 24.98%, bank also invest similar amount in 2010 but in
2011 they invest very small amount 7.54% which is so much narrow investment between 20092012.
29
Total Asset
Times
2008
84054000000.00
6723000000.00
12.50
2009
106912000000.00
10158000000.00
10.52
2010
132691000000.00
13867000000.00
9.56
2011
152963000000.00
14853000000.00
10.29
2012
173842000000.00
26034000000.00
6.67
Equity Multiplier
2008
15
2009
10
2010
2011
0
2008
2009
2010
2011
2012
2012
This ratio shows a Bank's total assets per Taka of stockholders' equity. A higher equity multiplier
indicates higher financial leverage, which means the Bank is relying more on debt to finance its
assets. The height multiplier is 12.50 times in 2009 of AB Bank which means higher financial
leverage in that year. This Bank equity multiplier of 2009 and 2011 are quit equal to 2008.
30
2008
5.2
Price Earnings
Ratio
15.76
2009
118
7.6
15.52
2010
158
8.36
18.89
2011
68
22.66
2012
34
3.25
10.46
25
20
15
10
5
0
2009
2010
2011
2012
2008
2009
2010
2011
2012
The Price earnings is sometimes referred to as the "multiple", because it shows how much
investors are willing to pay per Taka of earnings. If a Banks were currently trading at a multiple
(Price earnings) of 20, the interpretation is that an investor is willing to pay Taka 20 for Taka 1
of current earnings. It is important that investors note an important problem that arises with the
Price earnings measure, and to avoid basing a decision on this measure alone. The earningss is
based on an accounting measure of earnings that is susceptible to forms of manipulation, making
31
the quality of the Price earnings only as good as the quality of the underlying earnings number.
AB Bank height price earnings ratio is 22.66 in 2011 among last 5 years.
Amount
Growth Rate
2008
2301000000
2009
3363000000
0.461538462
2010
3696000000
0.099018733
2011
1328000000
-0.640692641
2012
1439000000
0.083584337
2008
2009
0
2008
-0.5
2009
2010
2011
2012
2010
2011
2012
-1
Net income is calculated by starting with a Bank's total revenue. From this, the cost of sales,
along with any other expenses that the Bank incurred during the period, is removed to reach
earnings before tax. Tax is deducted from this amount to reach the net income number. Net
income is susceptible to manipulation through such things as aggressive revenue recognition or
by hiding expenses. When basing an investment decision on net income numbers, it is important
to review the quality of the numbers that were used to arrive at this value. Here we have seen that
the height growth of net income of the AB Bank in 2009 that was .46 and in 2011 it was
negative.
32
EBIT
Interest Expense
Ratio
2008
4298000000
697000000
6.16
2009
5802000000
597000000
9.71
2010
7409000000
1052000000
7.04
2011
4312000000
1355000000
3.18
2012
4363000000
1173000000
3.72
2008
2009
2010
2011
2012
0
2008
2009
2010
2011
2012
The lower the ratio, the more the Bank is burdened by debt expense. When a Banks interest
coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. An
interest coverage ratio below 1 indicates the Bank is not generating sufficient revenues to satisfy
interest expenses but between 2008-2012 AB Bank interest coverage ratio never been comes
below 3.5.
33
Ratio
2008
2034000000
58894000000
3.45%
2009
2908000000
77674000000
3.74%
2010
3481000000
98610500000
3.53%
2011
2394000000
117751000000
2.03%
2012
3123000000
134608000000
2.32%
2009
2010
2.0000%
2011
1.0000%
2012
0.0000%
2008
2009
2010
2011
2012
For example, AB Bank has a return on investment of Taka 10,00,000, an interest expense of
Taka 20,00,000 and average earning assets of Taka 1,0000,000. AB Bank net interest margin
would be -10%. This would mean that AB Bank has lost more money due to interest expenses
than was earned from investments. In this case, AB Bank would have been better off if it had
used the investment funds to pay off debts instead to making an investment, but AB Bank
interest margin is always positive in 5 years.
34
Assets
growth rate
63550000000
84054000000
106912000000
132691000000
152963000000
173842000000
32.26%
27.19%
24.11%
15.27%
13.64%
Growth in Assets
40.0000%
2008
30.0000%
2009
20.0000%
2010
10.0000%
2011
0.0000%
2008
2009
2010
2011
2012
2012
AB bank has highest asset in 2008, after that the asset of the bank decrease at a increasing rate
even it becomes half in 2012 compare to 2008. In 2008 asset growth rate is 32.26% which is
highest between five years. With the reducing rate of asset bank strength also reducing, now in
2012 asset growth becomes 13.64% if this scenario continue growth rate might be in single digit.
AB bank not only face the reduction rate of asset bank also face the reduction rate of asset
utilization, if bank has bank can be utilize so here the only solution is to make more asset.
35
Authorized capital
growth rate
2007
2000000000
2008
3000000000
50.00%
2009
6000000000
100.00%
2010
6000000000
0.00%
2011
6000000000
0.00%
2012
6000000000
0.00%
50.00%
0.00%
2008
2009
2010
2011
2012
According to the scenario we have seen AB Bank Limited has a height growth in 2009, which is
100%. It showed this Bank has moved with our economic growth. If we look back to 2009-2010
and 2010- 2011 fiscal years, where our economy had experienced pace in its all indicators. That
was good news for our economy. Another thing is investors invest in a Bank that time, when
they saw Bank is well managed by the board.
36
Paid up capital
growth rate
2007
743000000
2008
2230000000
200.13%
2009
2564000000
14.98%
2010
3205000000
25.00%
2011
3686000000
15.01%
2012
4423000000
19.99%
100.00%
50.00%
0.00%
2008
2009
2010
2011
2012
Paid up capital shows the total price of the share outstanding in the market. Here we have seen
this Bank has the height growth in 2008 which is 200.13%. A growth in paid up capital is
happened by two events. First one is trust among the individual investors and second one is a
better situation in stock market. If we looked bank to the stock market situation in 2008-2009
fiscal year, almost all Bank stocks gained near about four times in price that means individual
investors had 200% capital gain in all stocks.
37
year
employment generation
2007
1725
2008
1804
79
2009
1952
148
2010
2008
56
2011
2096
88
2012
2070
-26
Employment Generation
200
150
100
employment generation
50
0
-50
2008
2009
2010
2011
2012
A good economic situation, where nominal inflation rate ensure investors not to lose their
investments, which ensures better employment generation. In 2009 AB Bank generate 148
vacancy for their vacant position. According to managerial body, employment generation is fully
dependent with economical growth and there has some rules to increase number of branches too.
In 2012 the Bank sac 26 employees also.
38
year
2007
72
2008
73
2009
78
2010
82
2011
86
2012
87
2
0
2008
2009
2010
2011
2012
This scenario is also depending on economic growth and policies of Bangladesh Bank. When a
Bank has a growth in investment deposit and customer satisfaction. A growth in market economy
that means growth in socio economy encouraged, a Bank to open new branches in remote areas.
Here we have found in 2009 they opened height 5 branches in different areas and in 2010 and
2011 Bank opened 4 branches in every year.
39
Growth Rate
securities
2007
2008
2009
2010
2011
2012
8885000000
11396000000
16369000000
14563000000
21556000000
26115000000
28.26%
43.64%
-11.03%
48.02%
21.15%
20.00%
0.00%
-20.00%
2008
2009
2010
2011
2012
When a Bank sells or provide loan upon their collected deposits in more widely known as
investment in banking. Invest is the major area of earnings for a Bank. All other factors of a
annual financial report are depend on their specific term. Find out investors and provide lone
those activities are not the end of the task it is actually the beginning of their task. Here Bank
need advice, look after and manage the fund they had provided. Otherwise there have good
chance to lose their investment as bad debt. Here we have seen in 2011, this bank has a highest
investment growth of 48.02%. in 2010 their investment goes in negative which is -11.03.
Investment data are also reflecting some external factors like stable economical environment,
economical growth, political situations etc.
40
218.95
-24.34%
2010
452.2
106.53%
2011
673.4
48.92%
2012
1034.54
53.63%
150.00%
100.00%
50.00%
0.00%
-50.00%
2009
2010
2011
Investment in share and securities is a part of portfolio management of a Bank. Bank would like
to invest in different types stokes and bonds for risk minimization. Here we have seen in 2010
AB Bank has a height growth that is 106.53% and 2009 the bank was in negative investment that
is -23.34% in investment in share and securities.
41
Year
Growth Rate
2007
48441000000
2008
70041000000
44.59%
2009
65956000000
-5.83%
2010
9751000000
-85.22%
2011
79463000000
714.92%
2012
100373000000
26.31%
Import Business
1000.00%
500.00%
Import Business
0.00%
2008
2009
2010
2011
2012
-500.00%
Year
Growth Rate
2007
20677000000
2008
28937000000
39.95%
2009
30640000000
5.89%
2010
41686000000
36.05%
2011
57592000000
38.16%
2012
65782000000
14.22%
Export Business
50.00%
40.00%
30.00%
Export Business
20.00%
10.00%
0.00%
2008
2009
2010
2011
2012
When production exceeds domestic demands the surplus product could be sold out the some
other countries where demands for those products have. In 2008, this bank produces highest
number of foreign currency earnings from export. 39.95% growth in single indicator is a brilliant
achievement for a bank where external factors are highly correlated. In Bangladesh RMG is the
main export item, along with this we export jute items, leather items and so on.
43
year
Growth Rate
2007
156000000
2008
164000000
5.13%
2009
182000000
10.98%
2010
210000000
15.38%
2011
250000000
19.05%
2012
217000000
-13.20%
0.00%
-10.00%
2008
2009
2010
2011
2012
-20.00%
Remittance word reflects the foreign currency earnings by Bangladeshi people in outside of our
territory. Here main source of foreign currency is Middle East. According to the data AB Bank
has a height growth of 19.05% in remittance in 2011. This statistics make as a bit confused
because as we know in 2010-2011 Bangladesh experienced a massive slowdown in their
economy and for that Bank remittances growth is negative in 2012 is -13.20% after that there is a
statistics shown here is a reflection of increases of number of branches in remote area and open
up more new account by the nonresident Bangladeshi.
44
Year
Growth Rate
2007
3325000000
2008
4298000000
29.26%
2009
5802000000
34.99%
2010
7409000000
27.70%
2011
4312000000
-41.80%
2012
4363000000
1.18%
2008
2009
2010
2011
2012
-40.00%
-60.00%
Operating profit is a calculation that shows amount of profits that were not deducted by interest,
tax and retain earning. This is a connection and reflector of companys earnings before interest
and tax payment. In 2009 AB Bank has a height growth that is 34.99% and in 2011 Bank has
negative growth that is -41.80%.
45
Revenue
Ratio
2008
2301000000
73802000000
3.11%
2009
3363000000
95483000000
3.52%
2010
3696000000
119801500000
3.08%
2011
1328000000
142827000000
0.92%
2012
1439000000
163402500000
0.88%
2008
3.0000%
2009
2.0000%
2010
2011
1.0000%
2012
0.0000%
2008
2009
2010
2011
2012
In 2009 AB Bank has the height asset utilization ratio that is 3.52%. With an asset utilization
ratio of 3.52%, that means Bank earned 0.0352 for each Taka of assets held by the Bank.
Increasing asset utilization means the Bank is being more efficient with each Taka of assets it
has.
46
The AB Bank has the limited number of branch over the country as a result every people
cannot able to take the banking facilities of AB Bank.
ATM booth is limited compare to the other Banks that is why their ATM service is
limited.
In 2011 AB Bank faced net loss as a result customer can come back from the bank for
their own safety.
Recently they reduce interest rate on the customer deposit as a result customer can leave
the bank and deposit their money to the other bank. Because of this bank can face the
liquidity crisis.
Although the foreign exchange business loading day by day there are also some obstacles
around the bank.
The invest little amount in the agricultural sector, but it is not the better decision for our
country.
AB Bank takes 100% margin for the new importer to avoid the risk. Lack of enthusiastic
scheme for exporter & importer.
47
5.2 Suggestion:
There have some suggestions for the AB Bank to develop their banking activities and customer
satisfaction. These are following:
The entire department should be well informed regarding their goal and objectives. It is
essential to execute company objective into individual target.
The bank should take initiative to develop an effective research and development. Centre
to get innovative ideas to capture the competitive market.
Diversified schemes for export and import with fewer margins for L/C should introduce
by the bank for small entrepreneur to target a different segment to increase volume of
export and import.
Efficient and attractive marketing strategy and appearance of the bank in the printing
media and electronic media would also increase knowledge of people about foreign trade.
This is very much useful for increase transactions in foreign exchange department of this
bank.
Tight rules and requirements for opening foreign currency account should be relaxed and
make it easy and simple.
ATM service should be available in every corner of the country for the customer that will
help the customer withdraw the money any time anywhere.
48
5.3 Conclusion:
The commercial banking system dominates Bangladesh's financial sector. There is huge number
of nationalized and foreign bank operating their banking in Bangladesh, The Arab Bangladesh
Bank Limited is promising one among these banks. The growing competition bound AB Bank
not only to compete with the other commercial bank but also with the public banks. For the
future planning and the successful operation in achieving its prime goal in this current
competitive market, this can be helpful in international trade financing that suggested mostly for
the betterment of country. Foreign Exchange Business is the main source of the expansion of our
economy. This is why, the importance of the effective involvement of Bank in our economy in
financing Import, Export & Remittance business is enormous.
After analysis the whole performance and Bank activities, we can see that Banks import and
export volume and the amounts of remittance are increasing year by year. And through this, the
Comparative profit volume of the bank is also increasing. The increasing demand of the
imported and exported goods and friendly relation with customer by the bank are the main
reasons of this growth.
49
5.3 References:
To prepare this report I have collected data mainly from annual reports of AB Bank, different
books regarding ratio analysis, the websites of Bangladesh Bank and DSE and others websites
about ratio analysis. The references are given below:
Source:
Websites:
http://www.abbl.com
http://www.investinganswers.com/financial-dictionary/businesses-corporations/returnassets-roa-1627
http://www.investopedia.com/terms/p/profitabilityratios.asp#axzz2Bji4kVcT
http://en.wikipedia.org/wiki/Net_interest_margin
http://www.bangladesh-bank.org/
http://www.bangladesh-bank.org/pub/publictn.php?cat_id=0&pub_id=2
http://www.bangladesh-bank.org/econdata/index.php
51