NORTH SOUTH UNIVERSITY

Finance 637 (Section 1)

Financial Ratio Analysis
BRAC BANK limited
Prepared B (!ro"p # $)%
Kazi Tashkin Huda 093 0430 060
Tahmeda Akhta !!! 0"!# 060
$ $oinul Ahsan !!! 0"!9 060
$d% $a&sudul Hu& !0'0#((060
Asha)
Prepared For%
&r' H' (' (o)aro* Ho))ain
Bac+,ro"nd
As a e&uiement to the couse content* the +u+ose o) this +a+e is to +otay the
technical im+lication o) the theoy o) Financial Ratio Analysis in eal ,old scenaio
in +om+tly ascetainin- the .nancial sta/ility and condition o) a com+any% This
+a+e )ocuses on analyzin- the .nancial as+ects o) a local +i0ate /ank BRAC BANK
1imited%
Note2 All .-ues ae de+icted in Taka 3a-e '
-o.pan Pro/0e
-orporate Vi)ion
The co+oate 0ision o) this leadin- +i0ate /ank in Ban-ladesh is s+elled /y2
"Building proftable and socially responsible fnancial institution focused on Market
and Business with Growth potential, thereby assisting BRAC and stakeholders to
build a just, enlightened, healthy deocratic and po!erty free Bangladesh"
-orporate (i))ion
4ustained -o,th in 4mall 5 $edium 6nte+ise secto
Continuous lo,7cost de+osit 8o,th ,ith contolled -o,th in etail assets%
Co+oate Assets to /e )unded thou-h sel)7lia/ility mo/ilization% 8o,th in
Assets thou-h syndications and in0estment in )aste -o,in- sectos%
Continuous endea0o to incease non7)unded income
Kee+ the de/t cha-es at '9 to maintain a steady +o.ta/le -o,th
Achie0e e:cient syne-ies /et,een the /ank;s /anches* 4$6 unit o:ces
and BRAC .eld o:ces )o deli0ey o) emittance and Bank;s othe +oducts
and se0ices
$ana-e 0aious lines o) /usiness in a )ull contolled en0ionment ,ith no
com+omise on se0ice &uality
Kee+ a di0es* )a <un- team )ully contolled en0ionment ,ith no
com+omise on se0ice &uality
Kee+ a di0ese* )a <un- team )ully moti0ated and di0en to,ads
mateializin- the /ank;s 0ision into eality
Note2 All .-ues ae de+icted in Taka 3a-e 3
-ore Va0"e)
The /ank li0es unde a )e, coe 0alues% As s+elled /y them2
""ur #trength eanates fro our owner $ BRAC% &his eans, we will hold the
following !alues and will be guided by BRAC as we do our work%"
=alue the )act that one is a mem/e o) the BRAC )amily
Ceatin- an honest* o+en and ena/lin- en0ionment
Ha0e a ston- custome )ocus and /uild elationshi+s /ased on inte-ity*
su+eio se0ice and mutual /ene.t
4ti0e )o +o.t 5 sound -o,th
>ok as team to se0e the /est inteest o) ou o,nes
Relentless in +usuit o) /usiness inno0ation and im+o0ement
=alue and es+ect +eo+le and make decisions /ased on meit
Base eco-nition and e,ad on +e)omance
Res+onsi/le* tust,othy and la,7a/idin- in all that ,e do%
Besides /ein- one o) the leadin- +i0ate /anks in the county* BRAC Bank li0es u+
to the 0alues in tems o) +e)omance and es+onsi/ility /oth socially and as ,ell
as economically% 4ome o) thei emaka/le achie0ements in the last cou+le o) yeas
ae hi-hli-hted /elo,2
BR1- Ban+ a2arded pre)ti,io") FT S")taina30e Ban+ o* t4e Year 5616
BRAC Bank has /een a,aded as the 4ustaina/le Bank o) the ?ea '0!0 at the FT
4ustaina/le Bankin- A,ads '0!0% The a,ad ,as @ointly announced /y Financial
Times ne,s+a+e and AFC at the a,ad ceemony on 3d Bune '0!0 in 1ondon%
The FT 4ustaina/le Bankin- A,ads is +esented /y the 1ondon7/ased intenational
ne,s+a+e Financial Times and AFC* a mem/e o) the >old Bank 8ou+% No, in
thei .)th yea* the a,ads eco-nize /anks and othe .nancial institutions that
ha0e sho,n leadeshi+ and inno0ation in inte-atin- social* en0ionmental and
co+oate -o0enance consideations into thei o+eations% BRAC Bank has /een
Note2 All .-ues ae de+icted in Taka 3a-e 4
announced as the ,inne o) the '0!0 FT 4ustaina/le Bank A,ad )om 6me-in-
$akets in Asia%
&H7#&ai0 Star Ban,0ade)4 B")ine)) 12ard) 5668
BRAC Bank ecei0ed the +esti-ious Business A,ad styled CH17Caily 4ta
Ban-ladesh Business A,ads '00# as Best Financial Anstitution o) the ?ea )o its
inno0ation in +oducts* se0ices* .nancial +e)omanceD +oducti0ity* com+any
mana-ement and conti/ution to Ban-ladesh;s de0elo+ment% BRAC Bank is a )ull
<ed-ed commecial /ankE yet* it has si-ni.cantly conti/uted in the de0elo+ment
o) 4$6 secto /y ceatin- a uni&ue model o) collateal )ee 4$6 lendin-* ,hich
ena/led the 4$6 ente+eneus Fthe missin- middleG to -et easy access to .nance%
Futhemoe* ,ith its ,ide disti/ution net,ok* BRAC Bank eached the -eate
+o+ulation e0en at the distant cones o) Ban-ladesh%
BR1- Ban+ recei9ed Nationa0 12ard a) t4e Hi,4e)t V1T paer *or t4e
/nancia0 ear 5667#5668
BRAC Bank 1imited has ecently ecei0ed the +esti-ious a,ad )o /ein- the
hi-hest =AT +ayin- o-anization in national le0el in se0ice industy%
BR1- Ban+ recei9ed I-1B Nationa0 12ard
BRAC Bank 1imited has /een a,aded ACAB National A,ad )om Anstitute o)
Chateed Accountants o) Ban-ladesh FACABG )o one o) the Best 3u/lished
Accounts 5 Re+ots '00" ecently%
-orporate Socia0 Re)pon)i3i0it
4ince the ince+tion as a es+onsi/le co+oate /ody BRAC Bank 1td% has
undetaken 0aious initiati0es considein- the inteest o) customes* em+loyees*
shaeholdes* communities and en0ionment% These initiati0es -o /eyond the
statutoy o/li-ationDmandatoy com+liances to 0oluntay acti0ities that +omote
sustaina/le de0elo+ment% BRAC Bank;s 0ision ,hich )ocuses on dou/le /ottom line
Note2 All .-ues ae de+icted in Taka 3a-e (
that it should make decisions /ased not only on +o.t /ut also /ased on social and
en0ionmental conse&uences is closely linked to the +inci+les o) C4R%
Co+oate 4ocial es+onsi/ility FC4RG is a )undamental +at o) the ,ay BRAC Bank
does /usiness% At;s an o++otunity to /uild /ette elationshi+s ,ith all stakeholdes
/y +ayin- close attention to ho, ,e )ul.ll the /ank;s social* economic*
en0ionmental and ethical es+onsi/ilities% C4R allo,s us to ali-n the /ank;s
o+eations ,ith standads and eH+ectations that ae inceasin-ly im+otant to ou
shaeholdes* em+loyees* customes and communities ,hee the /ank o+eates%
Note2 All .-ues ae de+icted in Taka 3a-e 6
Financia0 Ratio 1na0)i)
Financial atio analysis is the calculation and com+aison o) atios ,hich ae
dei0ed )om the in)omation in a com+any;s .nancial statements% The le0el and
histoical tends o) these atios can /e used to make in)eences a/out a com+any;s
.nancial condition* its o+eations and attacti0eness as an in0estment% The /asics
o) such a +om+t sna+shot +o0ide /oth the in0estos and the o,nes an o0eall
+es+ecti0e o) the com+any in tems o) li&uidity* -o,th and +o.ta/ility o) the
/usiness% Fo the +u+ose o) this assi-nment +a+e* ,e shall no, look into a
com+aati0e analysis o) the /elo, mentioned atios o0e a +eiod o) .0e yeas and
a++ly analytical and deducti0e @ud-ment to ascetain the condition o) the com+any%
7i:"idit Ratio)% measue the a0aila/ility o) cash to +ay de/t%
1))et (ana,e.ent Ratio)% measues a com+any;s e:ciency in usin- its
assets%
&e3t (ana,e.ent Ratio)% measue a com+any;s a/ility to mana-e loans and
o/li-ations%
Pro/ta3i0it Ratio)% measues /usiness;s a/ility to -eneate eanin-s
(ar+et Va0"e Ratio)% measues the economic status o) you com+any in the
,ide maket+lace
E;cienc Ratio)% measues ho, eIecti0ely com+any is utilizin- the assets
in -eneatin- income
Based on each o) the Ratios and the coes+ondent )omulas /ein- used* ,e ha0e done a
com+ehensi0e atio analysis o) Bac Bank .nancials )om '00" J '0!! co0ein- a an-e o)
( yeas duin- ,hich ,e ha0e calculated and inte+eted the atios as de+icted /elo,% >e
ha0e also deduced a com+ehensi0e =etical and Hoizontal Analysis o) data )ollo,ed /y
su/se&uent inte+etations o) the same% A)te conductin- details o) the atio analysis* ,e
Note2 All .-ues ae de+icted in Taka 3a-e "
ha0e selected a )e, atios )o tend analysis )o easie inte+etations as ,ell% The ,okin-
.les ae attached hee )o e)eence%
Ratio Analysis
F4na+shot 5 Tend AnalysisG%HlsH

Ratio Analysis $ain
File%HlsH
Note2 All .-ues ae de+icted in Taka 3a-e #
FOR(U71 5611 5616 566< 5668 5667
7i:"idit Ratio)
Cash Ratios F9G FCash K $aketa/le 4ecuitiesGD Cuent 1ia/ilities 0%6# 0%64 0%#' !%49 !%3(
Cuent Ratio FLG Cuent AssetD Cuent 1ia/ilities 0%#0 0%"3 0%#" !%(' !%3#
1oans to Ce+osit Ratio 1oanDCe+osit 94%0( 9#%'! #6%!6 90%#! #6%#"
1oans and Ad0ance to
Asset F1oans 5 Ad0anceGD Total Asset 69%!" "0%(0 6"%#0 "'%"' 69%99
1))et (ana,e.ent Ratio)
6&uity to Asset Ratio 9 4tock holdes 6&uityD Total Asset "%'! #%0' #%#3 "%(! 6%6'
FiHed Asset Tuno0e 9 4ales Re0enue D FiHed Asset "%4# #%"# #%09 "%4! 6%4#
&e3t (ana,e.ent Ratio)
Ce/t Ratio 9 Total Ce/tD Total Asset 9'%(6 9!%4! 90%6" 9'%49 93%3#
Ce/t to 6&uity Ratio 9 Total Ce/tD Total 6&uity !'%#4 !!%39 !0%'6 !'%3' !4%!0
TA6 atio M+eatin- AncomeD Anteest eH+ense 0%60 0%94 0%63 0%6( 0%"6
6&uity $ulti+lie Total AssetD Common 6&uity !3%#" !'%46 !!%3' !3%3' !(%!0
Pro/ta3i0it Ratio)
Basic 6anin- 3e 4hae NA a0aila/le )o C4 holdesD N o) C4 outstandin- (%49 "6%"0 66%3( (#%(0 4'%30
Ci0idend ?ield C34D $aket 3ice +e shae 0%00 0%00 0%00 0%00 0%00
Ci0idend 3e 4hae
Amount o) common di0idend declaedD no% o) C4
outstandin- 0%00 0%00 0%00 0%00 0%00
Ci0idend 3ay out atio C34D 634 0%00 0%00 0%00 0%00 0%00
Retention Ratio !7C3R !%00 !%00 !%00 !%00 !%00
Book =alue 3e shae
Common 6&uityD no% o) common shaes
outstandin- 3!%63 36#%0( 40(%90 343%'# '!6%6!
RM6 9
NA a0aila/le )o Common 4tock holdesDCommon
6&uity !" '! !6 !" '0
RMA 9 Net Ancome D Total Assets !%'9 !%69 !%4( !%34 !%33
Net Anteest Ancome Anteest Re0enue 7 Anteest 6H+ense
(*63#*046*6
(3
(*!4!*630*'
!0
3*!'9*!!(*4
3(
3*!(6*009*#
69
'*06'*!!0*3
40
Net non Anteest income Not inteest e0enue 7 non inteest eH+ense
F'*4'3*9"(*#
0"G
F!*6"(*(6"*4
0'G
F90'*0(#*!6
'G
F!*!3'*((9*0
39G
F"9"*""4*"0
3G
Net Anteest $a-in 9 Net inteest incomeD Total Asset 4%00 4%!9 3%3! 4%36 4%4(
Net non Anteest $a-in
9 Net Non inteest incomeD Total Asset 7!%"' 7!%36 70%9( 7!%(6 7!%"'
M+eatin- Risk Ratio
FNon inteest eH+7 non inteest incomeGDNet
inteest ma-in
60*(#6*90#*
(!3
40*0!#*"4#*
4'3
'"*'"(*6!'*
#!4
'(*996*344*
93'
!"*944*!"!*
3(0
M+eatin- 6:ciency
Ratio
Non inteest eH+D FNet inteest income K not
inteest incomeG 0%"0 0%6" 0%"0 0%66 0%64
3o0ision )o loan loss 9 FAmount o) loan loss7+o0isionGD Total Asset !%09 !%49 !%6' !%(" !%44
Net 3o.t $a-in 9 Net incomeD Total Asset !%'9 !%69 !%4( !%34 !%33
(ar+et Va0"e Ratio)
36 Ratio $aket 3ice +e shaeD 634 #%3' !!%!6 9%9! !4%!( 3#%!!
$aket to Book 0alue
atio $aket =alue +e shaeD Book 0alue +e shae !%44 '%!" !%6' '%4! "%44
E;cienc Ratio
Asset utilization Ratio 9 M+eatin- Ancome D Total Asset 3%69 4%49 4%0' 4%3# 4%!9
Note2 All .-ues ae de+icted in Taka 3a-e !0
As ,e can see* )o all the atios calculated a/o0e thee is a noticea/le tends )o all
o) the atios calculated that can /e .-ued out 0ia a tend analysis o) the same% Fo
the +u+ose o) the +o@ect ,e ha0e hi-hli-hted selected )e, atios that could /e
used to /ette undestand the +osition o) the com+any )om +es+ecti0e o)
3o.ta/ility* 1i&uidity* Asset 5 Ce/t mana-ement and e:ciency%
7i:"idit%
Both the cash and cuent atio has sho,n to see a do,n,ad tend in the yeas
)om '00" to '0!!* as it can /e in)eed that the Cash and Cuent Asset +osition
duin- these .0e yeas has educed o0e time% Ho,e0e it can /e noted that a)te
'0!0 /oth the atios ha0e seen a sli-ht ise in .-ues indicatin- a /ette and
ston-e +osition in com+aison to the sha+ )all in '009% At is to /e ascetained that
all /anks and .nancial institutions should al,ays make a -ood /alance /et,een the
amount o) cash and cuent asset holdin-s so that an o+timization can /e
maintained to ensue that the thee is eithe no eHcess cash lyin- aound esultin-
in o++otunity costs and no de.cit amount o) cuent asset so that lia/ility cannot
/e met in time% An /oth the atios* Cash and Cuent Assets ae less than the cuent
lia/ilities* and hence Cash and Cuent Assets cannot )ully co0e )o the total cuent
lia/ilities* ,hich is ,hee the Bank needs to look into )o +o+e o+timization%
Mne o) the ma@o atios that ensues +o+e utilization o) )unds and mana-ement o)
li&uidity is 0ia this 1oan to Ce+osit atio o+timization% Banks in -eneal couse o) its
o+eation should al,ays look )o /ette sco+es )o usin- the amount o) Ce+osits
Flia/ility to the /ankG that they ha0e to /e utilized a++o+iately )o -eneatin- moe
1oans Fassets to the /ankG and e0entually make /ette tade oI% BankOs -eneation
o) income come diectly )om ho, eIecti0ely and e:ciently they mana-e thei
asset and lia/ility +osition o) 1oans dis/used a-ainst the Ce+osits /ou-ht )o,ad%
The atios sho, an im+o0in- tend duin- the yeas '00"7'0!!* as utilization o)
Ce+osts seems to ha0e inceased u+ to 949 in '0!! ,hich sho,s -ood si-n o)
im+o0ement o0e the +ast yeas o) '00# and '00"* as la-e +o+otion o) loans
has /een dis/used as o++osed to de+osits eaned%
Note2 All .-ues ae de+icted in Taka 3a-e
1))et (ana,e.ent Ratio)%
As it can /e in)eed )om the a/o0e tend analysis* the e&uity to asset atio .-ue
has taken a +eak and then )ell to "%'!9 sho,in- )all in o0eall com/ination o)
6&uity in the /alance sheet% 1ess +otion o) e&uity states that a la-e +otion o)
de/t is +esent to +o0ide le0ea-e in doin- /usiness as o++ose to utilization o)
assets% 4o this tend sho,s that Bac /ank is /ein- )ocused on le0ee-in- its
o+eations to -eneate the o+timum income duin- the ecent yeas%
&e3t (ana,e.ent Ratio%
Note2 All .-ues ae de+icted in Taka 3a-e
As it can /e de+icted )om the
.-ues o) the Ce/t7Asset and
Ce/t76&uity Ratio* the .-ues
ha0e )aily emained sta/le
o0e the yeas sho,in- that
the /ankin- /usiness
+e)omed /y Bac is
de+endent hea0ily on de/t*
,hich is nomal )o /anks as
thei main souce o) .nancin-
is thou-h the de+osits +ut in
/y the customes* ,hich they e0entually use )o -eneatin- /usiness 0ia loans%
Mthe atios like TA6 atio .-ues ha0e inceased u+ to '0!0 and )ell duin- '0!!
sho,in- that the o+eatin- income .-ues ha0e not /een 0ey ,ell mana-ed ,ith
inteest eH+ense%
Pro/ta3i0it Ratio)%
The B634 that ,e can see has seen a massi0e do,n,ad )all duin- the yea '0!!%
This has /een atti/uted /y the )act that Bac /ank has /een seein- a steady
incease in thei num/e o) shaes outstandin- o0e the yeas '00"7'0!0 statin-
)om aound !4 million to aound '" million shaes% Ho,e0e* the /ankOs total
oustandin- shaes shot u+ to 3'! million duin- '0!! sho,in- si-ns o) ne, e&uity
issuance% As a esult o) this* the B63 .-ue has sho,s to )all )om the +eak o) "6%"
to (%49% Fom the +es+ecti0e o) an inde+endent in0esto* this is not a 0ey -ood
Note2 All .-ues ae de+icted in Taka 3a-e
si-n )o the /usiness since the +o.ta/ility o) the com+any in com+aison has not
e0ol0ed as much as to the num/e o) shaes issued ,hich has educed the o0eall
B634% This mi-ht ha0e also /een one o) the easons that could conti/ute to the )all
in maket shae +ice duin- '0!! ,hen the shae +ice o) Bac )ell )om Tk #(6 to
Tk 4(%"
The RM6 .-ue sho,s that the /usiness in -eneal is doin- )aily sta/le o0e the
yeas in tems o) -eneatin- o) etuns as o++osed to its e&uity% Althou-h thee is a
)all )om the +eak o) '!9* /y the -o,th o) /usiness it is eH+ected to /e &uite
steadie in the )utue as ,ell% 4ame stoy -oes )o RMA* as the yeas +assed /y the
RMA took a +eak duin- '0!0 sho,in- a -ood +ositi0e tend in incease in
+o.ta/ility o) the /usiness and +o+e utilization o) assets% The do,n)all duin-
'0!! can only /e atti/uted to nomal couse o) /usiness ,hich mi-ht ha0e caused
the same% Ho,e0e* any o-anization shold al,ays as+ie to -eneate moe etuns
Note2 All .-ues ae de+icted in Taka 3a-e
)o the stock holdes /y -eneatin- moe RM6 and /ette etuns as o++ose to Asset
in0estment FRMAG%
The Net inteest income has -o,n o0e the yeas Tk '%! /illion to Tk (%64 Billion
,hich is emaka/le duin- the ( yeas o) o+eation +eiod% This is a +ositi0e si-n to
the com+anyOs +o.ta/ility in the lon- un and also in the couse o) doin- its
/usiness% Based on the cuent
tend* it is eH+ected that the /ank
,ill do e0en /ette in the yeas to
come /ased on the taction o) doin-
/usiness in mass maket and
selected maket in 4$6 and
Co+oate%
The Net inteest ma-in atio sho,s that the
/anks is )aily steady in tems o) -eneatin-
income ,ith e-ads to in0estments in assets%
At is to /e noted that the /ankOs assets ha0e
-o,n emaka/ly )om Tk 46 /illion to Tk !4!
/illion o0e the ( yeas time* ho,e0e the
/usiness has also -o,n su/stantially o0e the
yeas as ,ell* as de+icted )om the net inteest income% The )all o) '009 ,as due to
a steady e0enue )om inteest Fas de+icted )om a/o0e -a+hG cou+led ,ith the
-o,in- assets ha0e o0eall educed the Net inteest ma-in% Ho,e0e des+ite this*
the o0eall asset utilization )o -eneatin- +o.ts ,as the key sten-th to the
/usiness in this case%
Note2 All .-ues ae de+icted in Taka 3a-e
As it can /e undestood )om the M+eatin- 6:ciency Ratio* the lo,e the .-ue ,ill
/e * /ette it is% Ho,e0e the M+eatin- e:ciency has <actuated o0e the yeas
/et,een 0%64 to 0%"0% This ,as mainly due to the )act that com+anyOs non inteest
eH+ense has inceased su/stantially o0e the yeas )om TK '%' /illion to "%6 /illion
on a steady manne% Ho,e0e /oth the non inteest income and net inteest income
has seen com+aati0ely less stee+e -o,th ate duin- the same +eiod% The sha+
)all in '0!0 ,as due to a sudden hike in non inteest income duin- the yea o) '0!0
,hen thee ,as almost a '39 incease in the same% Mn the same time* the net
inteest income has also seen a la-e hike o) 6(9 duin the yea o) '0!0 and this
cou+led ,ith the incease in non inteest income* educed the 0alue o) M+eatin-
e:ciency atio sho,in- that the com+any ,as /ecomin- moe e:cient in mana-in-
its income )om the non inteest /eain- eH+enses held in '0!0%
Amount o) loan +o0ision has /een
)aily sta/le duin- the yeas and
<actuated /et,een !%09 to !%44%
This is )aily sta/le o0e the yeas
statin- that the +o0isionin- o) /ad
loansD loan loss has /een ke+t u+ to
a descent amount and unde
contolla/le manne% This is
im+otant )o the e-ula o+eation
Note2 All .-ues ae de+icted in Taka 3a-e
o) the /usiness and to ensue that all the contols ae o+eatin- ,ell and &uite as
,ell ,ithin the tolleance le0el -i0en the /ankin- o+eational le0el in Ban-ladesh%
Mne o) the most im+otant indicatos o) +o.ta/ility come ,ith e-ads to ho,
e:ciently and eIecti0ely does a /usiness utilizes its asstets in -eneation o)
income% Fom the a/o0e tend it can /e seen that thee ,as a +atten o) steady
-o,th o) Net +o.t ma-in and a sha+ decline duin- '0!! +eiod% This ,as due to
the )act that althou-h thee ,as a !49 incease o) asset .-ues duin- the '0!0 to
'0!! +eiod* the a)te taH +o.ts declined /y aound !39* and the eduction o) the
a)te taH +o.ts ,ee due to incease in o+eatin- eH+enses duin- '0!! as
com+aed to '0!0% This esulted in o0eall eduction o) the Net 3o.t ma-in Ratio%
This is an im+otant indicato )o the in0estos and the shaeholdes since declinin-
o) a)te taH +o.ts o0e a +eiod o) time does not send a -ood si-nal to the
mana-ement and the o,nes o) the com+any e-adin- its +o.ta/ility% Bac needs
to mana-e its eH+enses such that this does not ha0e ad0ese eIect in lon- tem
+o.ta/ility o) the o-anization%
Note2 All .-ues ae de+icted in Taka 3a-e
(ar+et Va0"e Ratio)
Mne o) the ma@o indicatos in this case as ,e can +ecei0e is ho, sha+ly /oth 36
and $aket7Book 0alue atio has )ell o0e time% The maket +ice +e shae has
)allen dastically o0e the yeas +eakin- )om Tk !*6!' to Tk 4(%" ,hich has
e0entually esulted in eduction o) /oth the atios o0e the +eiod o) .0e yeas% This
is not a 0ey -ood indication o) the +e)omance o) the com+any altou-h the )act
emains that shae maket +ice in /an-ladesh is not 0ey +edicta/le* and ae
cou+led ,ith a num/e o) uncetainties%
1))et "ti0i=ation Ratio
Asset utilization atio sho,s that
o+eatin- income has <actuated
o0e the yeas and has e0entually
)allen and ,ith the incease in total
asset .-ues* asset utilization has
not /een 0ey -ood duin- the
Note2 All .-ues ae de+icted in Taka 3a-e
ecent yeas% This is an aead ,hee Bac /ank needs to +e)om /ette in the )utue
as ,ell%
-o..on Si=e> Vertica0 1na0)i)
A method o) .nancial statement analysis in ,hich each enty )o each o) the thee
ma@o cate-oies o) accounts Fassets* lia/ilities and e&uitiesG in a /alance sheet is
e+esented as a +o+otion o) the total account% The main ad0anta-es o) 0etical
analysis is that the /alance sheets o) /usinesses o) all sizes can easily /e
com+aed% At also makes it easy to see elati0e annual chan-es ,ithin one /usiness%
>e ha0e com+uted the Common size analysis )o Bac Bank and it is com+uted
/elo,2
Balance 4heet 5
Ancome 4tatement Analysis F=eticalG%HlsH
Ba0ance )4eet

561
1
561
6
566
<
566
8
566
7
PROPERTY 1N& 1SSETS
-a)4%
An hand 3? 3? 5? 1? 1?
Balance ,ith Ban-ladesh Bank and its a-ent /ank 6? @? @? @? 6?
Ba0ance 2it4 ot4er Ban+ and /nancia0
in)tit"tion)% 6? 6? 6? 6? 6?
An Ban-ladesh 5? 5? 6? $? 6?
Mutside Ban-ladesh 6? 1? 6? 6? 6?
TOT17 -1SH
11
?
11
?
13
?
16
?
13
?
$oney at call and on shot notice 6? 6? 1? 6? 6?
In9e)t.ent)% 6? 6? 6? 6? 6?
8o0enment secuities 7? 8?
11
?
11
?
11
?
Mthe in0estments2 3? 3? 6? 1? 6?
Note2 All .-ues ae de+icted in Taka 3a-e
TMTA1 CPRR6NT A446T4
55
?
55
?
5@
?
55
?
5$
?
7oan) and ad9ance)% 6? 6? 6? 6? 6?
1oans* cash cedits* o0eda)ts etc%
6<
?
76
?
68
?
73
?
76
?
Bills +uchased and discounted 6? 6? 6? 6? 6?
FiHed assets includin- +emises* )unitue and
.Htues 5? 5? 5? 5? 5?
Mthe assets 6? 6? @? $? $?
Non7/ankin- assets 6? 6? 6? 6? 6?
8ood,ill 1? 6? 6? 6? 6?
Total Non7cuent Assets
78
?
78
?
7@
?
78
?
76
?
Tota0 a))et)
166
?
166
?
166
?
166
?
166
?
7I1BI7ITIES 1N& -1PIT17
7ia3i0itie)%
Boo,in- )om othe /anks* .nancial institutions
and a-ents $? $? 3? 3? @?
$oney at call and on shot notice 6? 6? 6? 6? 6?
Cuent de+osits and othe accounts
53
?
5@
?
56
?
11
?
15
?
Bills +aya/le 1? 1? 6? 1? 1?
TMTA1 CPRR6NT 1AABA1ATA64
57
?
36
?
5<
?
1$
?
18
?
Boo,in- )om cental /ank 1? 1? 6? 6? 6?
con0eti/le su/odinate /onds 5? 5? 6? 6? 6?
4a0in-s /ank de+osits
13
?
17
?
1$
? 6? <?
FiHed de+osits
37
?
5<
?
38
?
66
?
@<
?
Mthe de+osits 6? 6? 6? 3? 6?
Mthe lia/ilities
15
?
11
? <? <? 8?
TMTA1 NMN7CPRR6NT 1AABA1ATA64
6@
?
61
?
65
?
78
?
76
?
TOT17 7I1BI7ITIES
<3
?
<1
?
<1
?
<5
?
<3
?
6? 6? 6? 6? 6?
-apita0>)4are4o0der)A e:"it% 6? 6? 6? 6? 6?
3aid u+ ca+ital 5? 5? 5? 5? 3?
Redeema/le +e)eence shae ca+ital 6? 6? 1? 1? 1?
4hae +emium 1? 1? 5? 5? 1?
4tatutoy ese0e 5? 5? 1? 1? 1?
Re0aluation ese0e 6? 1? 5? 6? 6?
Note2 All .-ues ae de+icted in Taka 3a-e
4hae $oney de+osit 6? 6? 6? 6? 6?
6Hchan-e e&ualisation ese0e 6? 6? 6? 6? 6?
Retained eanin-s 5? 5? 1? 1? 1?
$inoity Anteest 6? 1? 6? 6? 6?
TMTA1 4HAR6HM1C6R4; 6QPAT? 7? 8? <? 8? 7?
Tota0 0ia3i0it and )4are4o0der)A e:"it
166
?
166
?
166
?
166
?
166
?
Inco.e State.ent)

561
1 5616 566<
566
8 5667
Anteest Ancome
166
?
166
?
166
?
166
?
166
?
inteest +aid on de+osits* /oo,in-s
etc 61? @3? 66? 61? @@?
Net inteest income 3<? $7? 3$? 3<? $@?
Ancome )om in0estment 11? 56? 51? 11? 1@?
Commission* eHchan-e and /okea-e 55? 5@? 5@? 5$? 17?
Mthe o+eatin- income 3? 5? 1? 6? 6?
Tota0 operatin, inco.e (!ro))
Pro/t> Inco.e) 76? <$? 86? 7@? 76?
4alaies and allo,ances 18? 1<? 1<? 18? 17?
Rent* taHes* insuance* electicity etc $? @? $? 3? 5?
1e-al eH+enses 6? 6? 6? 6? 6?
3osta-e* stam+s* telecommunication*
etc% 1? 5? 5? 5? 5?
4tationey* +intin- and
ad0etisement etc% 5? 3? 3? 3? 3?
$ana-in- Ciecto 5 C6M;s salay and
)ees 6? 6? 6? 6? 6?
Ciecto;s )ees and eH+enses 6? 6? 6? 6? 6?
Auditos )ess 6? 6? 6? 6? 6?
Note2 All .-ues ae de+icted in Taka 3a-e
Ce+eciation on and e+ais to /ank;s
assets 6? 6? @? $? $?
Mthe eH+enses 7? <? 6? 7? 6?
M+eatin- eH+enses 3<? $$? 3<? 36? 3$?
Pro/t 3e*ore pro9i)ion)
(Operatin, Inco.e) 36? @6? $1? $6? $5?
Pro9i)ion *or Ite.) (non
Operatin, eBpen)e) 6? 6? 6? 6? 6?
1oans and ad0ances 11? 17? 17? 1$? 1$?
Ciminution in 0alue o) in0estments 3? 1? 6? 6? 6?
MI /alance sheet items 6? 5? 6? 6? 6?
Mthes 6? 6? 6? 6? 6?
Tota0 Pro9i)ion)>non Operatin,
eBpen)e 1$? 1<? 17? 1$? 1@?
Pro/t 3e*ore taB (EBIT > EBT) 53? 31? 5$? 5@? 57?
Pro9i)ion *or taB% 6? 6? 6? 6? 6?
Cuent 11? 1$? 13? 1@? 17?
CeIeed #1? 5? #3? 5? 3?
TOT17 16? 13? <? 13? 1$?
Pro/t a*ter taB (E1T) 13? 1<? 1@? 15? 13?
1ppropriation)% 6? 6? 6? 6? 6?
statutoy ese0e $? @? @? @? @?
8eneal ese0e 6? 6? 6? 6? 6?
3o+osed di0idend 6? 6? 6? 6? 6?
Retained 6anin-s 8? 1$? 16? 7? 8?
Tans)e to $inoity inteest 6? 6? 6? 6? 6?
Net Retained Earnin,) 8? 6? 16? 6? 6?
Ba)ic earnin,) per )4are 6? 6? 6? 6? 6?
Hori=onta0 1na0)i)
A +ocedue in )undamental analysis in ,hich an analyst com+aes atios o line
items in a com+any;s .nancial statements o0e a cetain +eiod o) time% The analyst
,ill use his o he discetion ,hen choosin- a +aticula timelineE ho,e0e* the
decision is o)ten /ased on the in0estin- time hoizon unde consideation%
Hee ,e ha0e com+uted the hoizontal analysis )o Bac Bank2
Balance 4heet 5
Ancome 4tatement Analysis FHoizontalG%HlsH
Ba0ance )4eet
561 561 566 566 566
Note2 All .-ues ae de+icted in Taka 3a-e
1 6 < 8 7
PROPERTY 1N& 1SSETS
-a)4%
An hand
!00
9 9#9 4(9 '(9 !49
Balance ,ith Ban-ladesh Bank and its a-ent /ank
!00
9 "(9 609 4!9 3!9
Ba0ance 2it4 ot4er Ban+ and /nancia0
in)tit"tion)%
An Ban-ladesh
!00
9 9"9
!"3
9 939 9'9
Mutside Ban-ladesh
!00
9
!40
9 3"9 449 '#9
TOT17 -1SH
!00
9 #"9 "#9 4#9 399
$oney at call and on shot notice
!00
9 09
'"!
9 09 '!9
In9e)t.ent)%
8o0enment secuities
!00
9 949
!00
9 ""9 4#9
Mthe in0estments2
!00
9 "99 39 #9 '9
TMTA1 CPRR6NT A446T4
!00
9 #"9 "#9 (!9 3"9
7oan) and ad9ance)%
1oans* cash cedits* o0eda)ts etc%
!00
9 #99 669 (49 339
Bills +uchased and discounted
!00
9 6'9 !"9 39 49
FiHed assets includin- +emises* )unitue and
.Htues
!00
9 "!9 649 ("9 369
Mthe assets
!00
9 #49 (39 309 '09
Non7/ankin- assets
8ood,ill
!00
9 ''9 ''9 09 09
Total Non7cuent Assets
!00
9 #"9 649 ('9 3'9
Tota0 a))et)
166
?
87
?
67
?
@1
?
33
?
7I1BI7ITIES 1N& -1PIT17
7ia3i0itie)%
Boo,in- )om othe /anks* .nancial institutions
and a-ents
!00
9 949 469 439 439
$oney at call and on shot notice
Note2 All .-ues ae de+icted in Taka 3a-e
Cuent de+osits and othe accounts
!00
9 949 "69 '49 !"9
Bills +aya/le
!00
9
!33
9 (99 ((9 (39
TMTA1 CPRR6NT 1AABA1ATA64
!00
9 969 "!9 '"9 '!9
Boo,in- )om cental /ank
!00
9
!!9
9 09 09 09
con0eti/le su/odinate /onds
!00
9
!00
9 09 09 09
4a0in-s /ank de+osits
!00
9
!!(
9 "09 '(9 ''9
FiHed de+osits
!00
9 699 "09 #49 (39
Mthe de+osits
!00
9 #09
!3(
9
(#3
9 3"9
Mthe lia/ilities
!00
9 #39 (49 4!9 ''9
TMTA1 NMN7CPRR6NT 1AABA1ATA64
!00
9 #'9 649 6'9 3#9
TOT17 7I1BI7ITIES
166
?
86
?
66
?
@1
?
33
?
-apita0>)4are4o0der)A e:"it%
3aid u+ ca+ital
!00
9 #39 649 499 3"9
Redeema/le +e)eence shae ca+ital
!00
9
!43
9
!43
9
!43
9
!43
9
4hae +emium
!00
9
!00
9
!00
9 9!9 '39
4tatutoy ese0e
!00
9 "69 (39 369 '09
Re0aluation ese0e
!00
9
"49
9
96"
9 "39 09
4hae $oney de+osit
!00
9 409 09 09 09
6Hchan-e e&ualisation ese0e
Retained eanin-s
!00
9 #69 (#9 409 '39
$inoity Anteest
!00
9
'!"
9
!4"
9 09 09
TMTA1 4HAR6HM1C6R4; 6QPAT?
!00
9 9"9 #'9 (49 309
Tota0 0ia3i0it and )4are4o0der)A e:"it
166
?
87
?
67
?
@1
?
33
?
Note2 All .-ues ae de+icted in Taka 3a-e
Inco.e State.ent)

561
1
561
6
566
<
566
8
566
7
Anteest Ancome
!00
9 ""9 649 (69 3'9
inteest +aid on de+osits* /oo,in-s
etc
!00
9 6#9 "09 (69 309
Net inteest income
166
? <1? @@? @6?
37
?
Ancome )om in0estment
!00
9
!3#
9
!!"
9 ((9 4'9
Commission* eHchan-e and /okea-e
!00
9 ##9 "'9 6'9 '49
Mthe o+eatin- income
!00
9 6'9 '39 (9 49
Tota0 operatin, inco.e (!ro))
Pro/t> Inco.e)
166
? <6? 6<? @6?
33
?
4alaies and allo,ances
!00
9 #(9 "09 ("9 3'9
Rent* taHes* insuance* electicity etc
!00
9 ##9 ('9 3'9 !"9
1e-al eH+enses
!00
9
!''
9 ("9 '!9 !(9
3osta-e* stam+s* telecommunication*
etc%
!00
9 #99 #!9 "49 4#9
4tationey* +intin- and
ad0etisement etc%
!00
9 949 #09 6!9 399
$ana-in- Ciecto 5 C6M;s salay and
)ees
!00
9 699 "49
!94
9 "(9
Ciecto;s )ees and eH+enses
!00
9 "#9 349 !99 !!9
Auditos )ess
!00
9 469 439 3"9 309
Ce+eciation on and e+ais to /ank;s
assets
!00
9 "'9 (49 3#9 '!9
Mthe eH+enses
!00
9
!0'
9 ("9 (!9 '"9
M+eatin- eH+enses
166
? 87? 6$? @1?
5<
?
Pro/t 3e*ore pro9i)ion)
(Operatin, Inco.e)
166
?
166
? 73? 61?
37
?
Pro9i)ion *or Ite.) (non
Operatin, eBpen)e)
1oans and ad0ances
!00
9
!!9
9
!00
9 "49 449
Ciminution in 0alue o) in0estments
!00
9 !39 09 09 09
MI /alance sheet items
!00
9
4'!(
9
9'(
9
'9#
9
3!3
9
Mthes
Tota0 Pro9i)ion)>non Operatin,
eBpen)e
166
?
163
? 7<? @8?
3$
?
Pro/t 3e*ore taB (EBIT > EBT)
166
?
168
? 6<? 63?
3<
?
Pro9i)ion *or taB%
Cuent
!00
9 999 "39 ""9 499
CeIeed
!00
9 79(9
!"'
9 79#9
7
699
TOT17
166
? <<? 61? 7@?
$6
?
Pro/t a*ter taB (E1T)
166
?
11$
? 76? @$?
3$
?
1ppropriation)%
statutoy ese0e
!00
9 9(9 "09 669 4!9
8aneal ese0e
3o+osed di0idend
Retained 6anin-s
166
?
15@
? 7<? $8?
31
?
Tans)e to $inoity inteest
Net Retained Earnin,)
166
?
15@
? 76? $8?
31
?
Ba)ic earnin,) per )4are
166
?
15$
5?
117
5?
113
@?
776
?
Reco..endation C -onc0")ion
The )e, ma@o takea,ays )om the .nancial analysis has /een @otted do,n /elo, )o /ette
e)eence2
1i&uidity Ratio2 Cash and Cuent Asset +osition ,ith e-ads to Cuent lia/ilities is an
aea the /ank needs to ,ok u+on since it is im+otant that a /ank has enou-h li&uidity to
su++ot its daily couse o) /usiness% The /ank should ty to e0entually incease its asset
standin-s% >ith e-ads to 1oan to Ce+osit mana-ement* the /ank is doin- a -ood @o/%
Asset $ana-ement Ratio2 The asset mana-ement atio sho,s that the /ank is hea0ily
de+endent on Ce/t .nancin- )o /usiness +u+ose* ,hich is not uncommon )o a /ank*
since /anks ae in the /usiness o) /in-in- in money )om de+ositos ,hich ae teated as
1ia/ilities%
Ce/t $ana-ement Ratios2 The /ank is hea0ily de+endent on Ce/t .nancin- )o /usiness
+u+ose* ,hich is not uncommon )o a /ank* since /anks ae in the /usiness o) /in-in- in
Note2 All .-ues ae de+icted in Taka 3a-e '"
money )om de+ositos ,hich ae teated as 1ia/ilities% Ho,e0e the /ank needs to
o+eate /ette in tems o) -eneatin- /ette o+eatin- income in the )utue as ,ell%
3o.ta/ility Ratios2 A la-e 0olume o) shaes ha0e /een <oated in the maket ,hich has
esulted in eduction o) shae +ices and also on the stockholde;s e&uity as ,ell% Both RMA
and RM6 has seen a do,n)all duin- '0!! a)te a +eak in '0!0 ,hich -i0es an indication
that the /ank needs to o+eate moe +o.ta/ly in the )utue% Non inteest /eain-
eH+enses has inceased duin- '0!! as ,ell ,hich has esulted in educed e:ciency ,ith
e-ads to o+eations o) the /usiness% Althou-h loan +o0isionin- amounts ,ee not
su/stantially <uctuatin-* the main concen o) the /usiness ,as ,ith e-ads to the
o+eatin- income /ein- -eneated duin- '0!! ,hich sho,s a -ood do,n)all )om the
inceasin- tends /et,een '0097'0!0% The /ank needs to undetake a dee+7di0e and a
detailed oot cause analysis to ascetain the main easons /ehind eduction o) a)te taH
net income ,hich does not send a -ood si-nal to the in0estos and shaeholdes o) the
com+any%
$aket =alue Ratios2 The maket 0alue o) the com+any has )allen duin- the o0eall +eiod
o) ( yeas% Althou-h it is tue that the Ban-ladesh stock maket has many im+e)ections
and still /eyond all these im+e)ections* it is im+otant )o the /ank to take necessay
ste+s incease the net shaeholde;s ,ealth%
Hence /ased on ou o0eall analysis o) the .m* the com+any has /een sho,in- -ood
noticea/le tends into the )utue* /ut thee ae some loo+holes that needs to /e addessee
and .Hed ,ith eH+enses ti-htened and inceasin- +o.ta/ility o) the /usiness they ,ould
su0i0e and thi0e the tides o) tyant times o) cental /ank e-ulations and the ti-htenin-
+o.t +otential o) the o0eall /ankin- industy%
Note2 All .-ues ae de+icted in Taka 3a-e '#