FINANCIAL PERFORMANCE EVALUATION of

AGRANI BANK LTD.

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 FINANCIAL PERFORMANCE EVALUATION of
AGRANI BANK LTD.

Submitted to:
Nusrat Jahan
Senior Lecturer
School of Business
Uttara University

Submitted by:
Md. Sazzadur Rahman
ID: M21321113011
Batch: 31st Cc
School of Business
Uttara University

Date of Submission:
30th March 2017

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 Letter of Transmittal

30 March 2017
To
Nusrat Jahan
School of Business
Senior Lecturer
Uttara University

Subject: Submission of Internship Report.

Dear Mam,
I am pleased to submit this report. The compilation of the report is as per your requirement as
well as the requirement set by Agrani Bank Ltd. The three months which I have spent in this
organization has helped me to learn a lot. This experience has also helped me understand the
practical implementation of the theories as well. This report is based on the experience which
I have gained during my time here at Agrani Bank Ltd.

The entire report is based on calculations, analysis and evaluation of financial ratios of
Agrani Bank Ltd. for the past five financial years. This data which has been used for
calculations have been collected from the Banks annual reports. In spite of all the challenges
faced while preparing this report, I have tried to be as thorough as possible. If you need any
further elaboration on any issue, I will be very glad to oblige.

Yours Sincerely,

Md. Sazzadur Rahman

ID# M21321113011
Batch: 31st Cc
School of Business
Uttara University

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 Students Declaration

I, Md. Sazzadur Rahman, hereby declare that the presented report of internship entitled
Financial Performance Evaluation of Agrani Bank ltd. Is uniquely prepared by me after the
completion of three months work at Mirpur Branch of Agrani Bank Ltd.

I also confirm that, the report is only prepared for my academic recruitment not for any other
purpose. It might not be used with the interest of opposite party of the corporation.

Sincerely

Md. Sazzadur Rahman

Id# M21321113011
Batch: 31st Cc
School of Business
Uttara University

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 Supervisors Declaration

This is to certify that Md.Sazzadur Rahman student ID- M21321113011, Department of

Business Administration (DBA), UttaraUniversity, Major in Finance, has completed the
internship report entitled Financial Performance Evaluation of Agrani Bank Limited under
my supervision as the partial fulfillment for the award of BBA degree. He has done his job
according to my supervision and guidance. He has tried his best to do this report successfully.

I think this program will help him in future to build up his career wish his success and
prosperity.

_____________
Nusrat Jahan
Senior Lecturer
School of Business
Uttara University

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 ACKNOWLEDGEMENTS

This internship report has prepared through continuous study during my internship period for
three months. This work would not be possible without the cooperation and assistance of
some generous hands. Without which this would have not been possible.

Firstly I would like to give special thanks to one of my favorite teacher who gave me the
chance to do my internship at a reputed Government organization, Agrani Bank Ltd.

I specially want to acknowledge Md. Enamul Kabir, AGM of Mirpur branch, and Head of
Branch, Sharmin Akter, Principle Officer, for their tremendous support, guidance and
patience. Without their kind supervision, preparing this report would have been very difficult.
They provide me the guidance and counseling during my entire internship program. Their
continuous and well-thought feedback enabled me to make this report a comprehensive one.

I also would like thank Monira Nasim, Senior Officer of Mirpur Branch, Agrani Bank Ltd.

I would like to express my sincere gratitude to my academic supervisor Nusrat Jahan,

Senior Lecturer, Depertment of Business Adminirtration, Uttara University, for his constant
guidance, supervision and feedbacks which enabled me to prepare a well-executed report.

I am also grateful to my parents and family members for their long encouragement patience,
sacrifice and tolerance showed to me during my study period.

Above all, I want to acknowledge and most grateful almighty God, the most merciful blessing
me with patience and tenacity of mind to complete the requirements for the degree
successfully.

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 EXECUTIVE SUMMARY

Banks and other financial institutions play a vital role in forecasting the economic and social
condition of a country. Banks in Bangladesh now constitutes the core of the countrys
organized financial system. Agrani Bank Limited, a leading commercial bank with 932
outlets strategically located in almost all the commercial areas throughout Bangladesh,
overseas Exchange Houses and hundreds of overseas Correspondents, came into being as a
Public Limited Company on May 17, 2007 with a view to take over the business, assets,
liabilities, rights and obligations of the Agrani Bank which emerged as a nationalized
commercial bank in 1972 immediately after the emergence of Bangladesh as an independent
state. Customer satisfaction is very important for the reflections of the succession toward
progress and expansion for any service institution. Excellence in customer service helps an
organization to build a good position in the market and retain more customers. To keep the
customers satisfied, ABL provides various types of service to its customers. ABL Principal
Branch has three departments. These are: General Banking Department, Foreign Exchange
Department and Credit Department. Through these three departments they serve their
customers. The major purpose of this report is to evaluate in ratio analysis and financial
performance of the year 2016, 2015, 2014, 2013, and 2012, of Agrani Bank. Here also
calculate financial ratios like Liquidity, Asset Management, debt Management, Profitability,
Market Value. Other objectives are to figure out the liquidity, solvency, profitability and asset
utilization ratios. Finally find out significant issues and put some relevant
recommendations.Agrani Bank Limited is operating efficiently with its existing products and
services. In service oriented industry, it is very difficult to set a standard rule to satisfy the
customer. Several factors shape up the decision of taking the service from an organization.
The services which the Bank provides to their clients are very prompt and quality one
compare to other private or foreign banks. The bank made satisfactory progress in all areas of
business operation. So Agrani Bank Limited is the bank which will go on in the banking
sector of the world with their slogan "Committed to serve the nation.

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Table of Content
No. SL NO. Sub Sl. Particulars Page
No. No.
1 Cover Page 2
2 Letter of Transmittal 3
3 Students Declaration 4
4 Supervisors Declaration 5
5 Acknowledgements 6
6 Executive Summery 7
7 Tables of Contents 8-9
8 List of Tables 9
9 List of Figures 10
10 Chapter 1- Introduction 11
11 1.1 Background of the Study 12
12 1.2 Objectives of the Studies 12
13 1.2.1 Broad Objectives 12
14 1.2.2 Specific Objectives 12
15 1.3 Company Profile 13-14
16 1.3.1 Brief profile of the Agrani Bank ltd. 13-14
1.3.2 Vision 15
1.3.3 Mission 15
1.3.4 Values 15
1.3.5 Motto 15
1.3.6 Product & Services 15-19
1.3.7 Management hierarchy of ABL 20
1.3.8 Description of section where I worked 21
18 1.4 Major difficulties faced for accomplishing 21
Internship
19 Chapter 2- Description of the Topic 22
20 2.1 Internship Topic 23
2.2 Topic Related Theories 23-29
2.2.1 Profitability ratios 24-25
2.2.2 Liquidity ratios 25-26
2.2.3 Credit risk & solvency ratios 26-27
2.2.4 Efficiency ratios 27-28
2.2.5 Asset management ratios 28-29
22 2.3 Study Framework 30
23 Chapter 3- Data Collection & 31
Processing
24 3.1 Data Description 32
25 3.2 Ways of Data Collection 32
26 3.3 Data Processing Models 33
27 Chapter 4- Results & Discussion 34
28 4.1 Financial highlights 35
4.1.1 Interest Income, Total Expenses and Net Profit 35

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29 4.1.2 Deposits and Total Loans & Advances 36
4.1.3 Assets and Shareholders Equity 37
4.2 Ratio Analysis 38
4.2.1 Profitability Ratios 39-42
4.2.2 Credit Risk and Solvency Ratios 43-46
4.2.3 Efficiency Ratios 47-49
4.2.4 Asset Management Ratios 50-51
4.2.5 Liquidity Ratios 52-54
30 Chapter 5- Conclusions 55
31 5.1 Findings 56
32 5.2 Recommendations 57
5.3 Conclusion 57
33 Chapter 6- Internship Experience 58
34 6.1 Work, workflow & people met 59
35 6.2 Significant pleasant & unpleasant incidences 60
36 Bibliography 61
37 Appendices 62-63

List of Tables
No. Particulars Page no.
1 Tables of Contents 8-9
2 List of Tables 9
3 List of Figures 10
4 Employing ratios 23
5 Study Frame work 30
6 Return on Assets 39
7 Return on equity 40
8 Profit to expenses ratio 41
9 Return on deposit 42
10 Debt to equity ratio 43
11 Debt to total assets 44
12 Equity multiplier 45
13 Non-Performing Loans to Total Loan Ratio 46
14 Asset Utilization 47
15 Income to expense Ratio 48
16 Operating Efficiency 49
17 Total Asset Turnover Ratio 50
18 Fixed Asset Turnover Ratio 51
19 Loan to Deposit Ratio 52
20 Cash Deposit Ratio 53
21 Loan to Asset Ratio 54
22 Financial Highlights 62
23 Ratio Analysis 62-63

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 List of Figures

No. Particulars Page no.

1 Product & Services 15
2 Management Hierarchy of Agrani Bank Ltd. 20
3 Study Frame work 30
4 Interest Income, Total Expenses and Net Profit 35
5 Deposits and Total Loans & Advances 36
6 Assets and Shareholders Equity 37
7 Return on Assets 39
8 Return on equity 40
9 Profit to expenses ratio 41
10 Return on deposit 42
11 Debt to equity ratio 43
12 Debt to total assets 44
13 Equity multiplier 45
14 Non-Performing Loans to Total Loan Ratio 46
15 Asset Utilization 47
16 Income to expense Ratio 48
17 Operating Efficiency 49
18 Total Asset Turnover Ratio 50
19 Fixed Asset Turnover Ratio 51
20 Loan to Deposit Ratio 52
21 Cash Deposit Ratio 53
22 Loan to Asset Ratio 54
23 Return on Assets 39
24 Return on equity 40
25 Profit to expenses ratio 41
27 Return on deposit 42
27 Debt to equity ratio 43
28 Debt to total assets 44

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Chapter One
Introduction

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1.1 Background of the Study

As a student of Bachelorof Business Administration (BBA) everyone has to conduct a

practical orientation in any organization fulfilling requirement of the 12 weeks internship
Program. The main purpose of the program is exposing the student to the real world situation.
This report is done as a partial requirement of the internship program for the BBA students.
This report is prepared for the internship program consisting of a major in depth study of the
total banking business of Agrani bank limited. Practical knowledge is fundamental for the
application of theoretical intelligence. Bearing this in mind and internship program was being
included in the BBA curriculum. The goal of this analysis is to expose the student in the
organizational work situation and also to provide an opportunity for applying classroom
learning in practice.
This report is a compulsory component of the successful completion of Internship program
assigned in BBA of Uttara University. My opportunity to complete my internship was in
Agrani Bank Limited. After the practical part of internship, I am assigned to prepare this
report on the basis of my experiences. I prepared this report on a specific topic of- Financial
Performance Evaluation of AgraniBank Limited. This is a reflection of academic knowledge
through practical work experience. Thus this project report aims to reflect the professional
view of real world working environment. This paper includes the financial data of Agrani
Bank Limited and analysis is based on financial theories and my knowledge.
Since, I was an intern in Agrani Bank Ltd., my greatest binding was to gather information
from the different department to complete my internship report but I am Thankful to my
Supervisor and whole Agrani Bank Ltd. who helped me through this internship.

1.2 Objectives of the Study

Objective of this report includes two types of objectives. They are broad objective and
specific objectives. A broad objective and some specific objectives are included in this report.
They are:

1.2.1 Broad Objective

To focus on the financial performance of Agrani Bank Ltd.

1.2.2 Specific Objectives

The specific objectives of this report are given below:
To know the liquidity Ratios of Agrani Bank Ltd.
To know the Profitability Ratios of Agrani Bank Ltd.
To know the Risk and solvency Ratios of Agrani Bank Ltd.
To know the Efficiency Ratios of Agrani Bank Ltd.
To know the Asset Management Ratios of Agrani Bank Ltd.

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1.3 Company Profile

Agrani Bank is a state-owned commercial bank of Bangladesh stablished in 1972. Its

headquarters is situated at Motijheel in Dhaka, the capital city of Bangladesh.
Agrani Bank Limited, a leading commercial bank with 930 outlets strategically located in
almost all the commercial areas throughout Bangladesh, overseas Exchange Houses and
hundreds of overseas Correspondents, came into being as a Public Limited Company on May
17, 2007 with a view to take over the business, assets, liabilities, rights and obligations of the
Agrani Bank which emerged as a nationalized commercial bank in 1972 immediately after
the emergence of Bangladesh as an independent state.
Agrani Bank Limited started functioning as a going concern basis through a Vendors
Agreement signed between the ministry of finance, Government of the People's Republic of
Bangladesh on behalf of the former Agrani Bank and the Board of Directors of Agrani Bank
Limited on November 15, 2007 with retrospective effect from 01 July, 2007.
Agrani Bank Limited is governed by a Board of Directors consisting of 12 members headed
by a Chairman. The Bank is headed by the Managing Director & Chief Executive Officer;
Managing Director is assisted by Deputy Managing Directors and General Managers. The
bank has 11 Circle offices, 34 Divisions in head office, 62 zonal offices and 930 branches
including 27 corporate and 40 AD (authorized dealer) branches.

1.3.1 Corporate Profile:

Agrani Bank Limited (ABL) was incorporated as a State Owned Commercial Bank on 17
May 2007 under the CompaniesAct 1994. Agrani Bank emerged as a nationalized
commercial Bank following the Bangladesh Banks (Nationalization)Order 1972 vides
Presidents Order No. 26 of 1972. On a going concern basis ABL took over the business,
assets, liabilities,rights and obligations of Agrani Bank through a vendors agreement signed
on 15 November 2007 between the Ministryof Finance of the Peoples Republic of
Bangladesh and the Board of Directors of ABL with retrospective effect from 1 July
2007.

Legal Status : Public Limited Company (business conducted as per the Bank
Companies Act 1991)

Shareholding Pattern : 100 percent share owned by Government of the Peoples

Republic of Bangladsh

Chairman : Dr. Zaid Bakht

Managing Director & CEO : Dr. Syed Abdul Hamid, FCA

Company Secretary : Khandaker Sajedul Haque

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Registered : Office 9/D Dilkusha, Dhaka 1000, Bangladesh (1 crore =10
Million)

Authorised Capital : Tk. 2,500.00 Crore

Total Deposits : Tk. 43,997.55 crore

Paid up Capital : Tk. 2,072.29 Crore

Loans & Advances : Tk. 24,480.18 crore

Operating Profit : Tk. 877.47 Crore

Total Equity : Tk. 4,467.59 Crore

Tax Identification No. : 0022001223

Vat Registration No. : 19011031730

Employee : 13,396 (officer 10,737, staff 2,659)

Branch : 930
Circle Office : 11
Zonal Office : 62
Corporate Branch : 27
Authorised Dealer Branch : 40

Foreign Correspondent : 322 Foreign Remittances/ Exchange House 62

Outlook : Stable

Phone : +88-02-9566160-9, +88-02-9566153-4, +88-02-9566074-5

Fax : +88-02-9562346, +88-02-9563662, +88-02-9563658

SWIFT Code : AGBKBDDH Website www.agranibank.org

E-mail : agrani@agranibank.org, info@agranibank.org
MDs E-mail : mdagrani@agranibank.org
Website :www.agranibank.org

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1.3.2 Vision
To become the best leading state owned commercial bank ofBangladesh opera ng at
international level of efficiency,quality, sound management, excellentcustomer service and
strong liquidity

1.3.3 Mission
To operate ethically and fairly within thestringent framework set by ourregulators and to
assimilate ideas and lessons from best practices toimprove our business policiesand
procedures to the benefitof our customers andemployees

1.3.4 Values
We value in integrity, transparency,accountability, dignity, diversity,growth and
professionalism toprovide high level of service to allour customers andstakeholders inside
andoutside the country.

1.3.5 Motto
To adopt and adapt modernapproaches to stand supremein the banking arena ofBangladesh
with globalpresence.

1.3.6 Product & Services

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 1. Deposit
A) Taka Account
Current Deposit (CD)
Savings Deposit (SB)
Fixed Deposit (FDR)
Special Notice Time Deposit (SNTD)
Non-Resident Special Taka Account (NRTA)
Non-Resident Investors Taka Account (NRIT)
Agrani Bank Pension Scheme (APS)
Agrani Bank Bishesh Shanchay Scheme (ABS)
Students Savings A/C (School Banking)
Small Life Insurance Policy Holders A/C
Ten Taka Farmers A/C
Freedom Fighters A/C
Other Beneficiaries A/C under Social SecuritysProgram

B) Foreign Currency Account

Foreign Currency (FC) A/C
Non-Resident Foreign Currency Deposit (NFCD)A/C
Resident Foreign Currency Deposit (RFCD) A/C
Exporters Retention Quota (ERQ) A/C

D) Small and Medium Enterprise Loan

Service Sector Loan

Trading Sector Loan
Manufacturing Sector Loan
Women Enterpreneurs Loan
Agrani Bidesh Jawar Loan (ABJL)

E) Import Finance

Loan Against Imported Merchandise (LIM)

Loan Against Trust Receipt (LTR)
Payment Against Document (PAD)

F) Export Finance
Export Cash Credit
Packing Credit (PC)
Local / Foreign Bills Purchased (FBP)
Loan against Export Development Fund (EDF)
Advance against Cash Incentive (Subsidy, Assistance)

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 2. Loans & Advances

A) Continuous Loan
Cash Credit (Hypo)
Cash Credit (Pledge)
Secured Overdraft (SOD)

B) Term Loan
Industrial Credit (IC)
Housing Loan (General & Commercial)
Consumer Credit
Loan for Overseas Employment
Weavers Credit

3. Treasury

A) Money Market
Maintaining CRR and SLR
Call Money Transaction
Term Placement (FDR)
Treasury Bills
Treasury Bonds
Secondary Trading of Govt. Securities
Repo
Reverse Repo
Custodian Services
Other Investments

B) Foreign Exchange Market

Selling Foreign Currency for Import Payment
Buying Foreign Currency against Export Proceeds
Fixation of Exchange Rate
Foreign Currency Buying and Selling
SWAP Transactions
Forward Transaction
Term Placement

4. Letter of Credit

Letter of Credit - Sight

Letter of Credit - Usance
Back to Back L/C

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 5. Letter of Guarantee

Advance Payment Guarantee

Bid Bond
Performance Guarantee
Shipping Guarantee
Guarantee - Others
Standby Credit

6. Other Foreign Exchange Service

Documentary Bill Collection

Advanced Payment for Import & Export
Foreign Remittance (Incoming & Outgoing)
Foreign Currency Endorsement against Passport
Issuance of Draft, TT
Collection of Draft, Cheque, TC
Opening of Student File, Medical File

7. Cash Service

ATM Service
Cheque Encashment
Foreign Currency

8. Fund Transfer

Inter-Branch Money Transfer

SWIFT
Telegraphic Transfer (TT)
Issuing Foreign Draft
Encashing Foreign Draft
Bangladesh Electronic Fund Transfer Network (BEFTN)
Bangladesh Automated Clearing House (BACH)
Online Deposit to Accounts
Real Time Gross Settelment (RTGS)

9. Value Added Service

Locker Service
Utility Bill Collection
Arm forces Pension Payment

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 10. Merchant Banking Service

Issue Management
Underwriting
Portfolio Management
11. Islamic Banking Service

A) Deposit
Al Wadiah Current A/C
Mudaraba Savings A/C
Mudaraba STD A/C
Mudaraba Term Deposit
Mudaraba Special Scheme Deposit

B) Investment
Bai Murabaha (Pledge)
Bai Muazzal (Hypo)
Higher purchase Shirkatul Meilk
Bai Sal

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1.3.8 Management Hierarchy of Agrani Bank Ltd.

The bank is be managed and operated by a group of highly educated and professional team
with diversified experience in financing and banking. The management is constantly focuses
on understanding and anticipating customers need. The scenario of banking business is
changing day by day, so the bank's responsibility is to device strategy and new products to
cope with the changing environment

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1.3.8 Description of section where I worked

I got an opportunity to learn and work at Agrani Bank Ltd., 43years old public sector bank as
an intern for the SpringSemester. It started on 1st February, 2017 with me reporting at the
Regional Office Mirpur. The Manager welcomed us and asked for a brief introduction of
myselves.
Then the manager introduces me to all the permanent employees of Agrani Bank. Specially
my supervisor Sharmin Akter Principle Officer (PO) working in the customer service
department. Its a great experience & pleasure for me to work as a intern in Agrani Bank Ltd.

1.4 Major Difficulties faced for accomplishing Internship

Didnt have access in loan and treasury dept.

In my internship I was working in the customer service department since last three month.
They didnt sent me to any other department like Loan & treasury department. So thats why
I didnt have access in loan & treasury dept.

Lack of time
The time period of this study is very short. I had only 12 weeks in my hand to complete this
report, which is not enough.

Lack of experience

There was lack of experience in collecting information. Because I never work before in a
bank.

Problem in data collection

There were not enough data available for prepare this report.I asked about the latest annual
report but, they said they dont have. I also searched there website but there is no latest data
available which I need to prepare this report.

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 Chapter Two
Description of the Topic

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2.1 Internship Topic
My Internship topic is Financial Performance Evaluation of Agrani Bank Ltd.
Financial performance is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues.
This study was conducted under the title Financial performance evaluation: A Internship on
Agrani Bank Ltd. (ABL). Its main objective was to compare and examine empirically the
performance of the liquidity; profitability; credit risk & solvency and efficiency for the period
of 2012-20016.
This study was employing ratios such as Return on Asset (ROA), Return on Equity (ROE),
Profit Expense Ratio (PER), Return On Deposit (ROD), Net Interest Margin (NIM), Loan to
Deposit ratio (LDR), Cash To Deposit Ratio (CDR) Loan to Assets Ratio (LAR), Debt to
Equity Ratio (DER), Debt to Total Asset Ratio (DTAR); Equity Multiplier(EM),
Nonperforming Loans to Total Loans, Asset Utilization (AU), Income to Expense ratio (IER)
and Operating Efficiency(OE).

2.2 Topic Related Theories

Financial performance is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues.
The analysis of bank performance concentrates on the following four types financial
Ratios:
(a) Profitability ratios;
(b) Liquidity ratios;
(c) Risk and solvency ratios; and
(d) Efficiency ratios
(e) Asset Management Ratios

This study was employing ratios such as

Return on Asset (ROA), Earnings Per Share (EPS)

Return on Equity (ROE),
Profit Expense Ratio (PER),
Return on Deposit (ROD),
Net Interest Margin (NIM),
Loan to Deposit ratio (LDR),
Cash to Deposit Ratio (CDR)
Loan to Assets Ratio (LAR),
Debt to Equity Ratio (DER),
Debt to Total Asset Ratio (DTAR);
Operating Efficiency (OE).
Income to Expense ratio (IER)
Asset Utilization (AU),
Equity Multiplier (EM),
Nonperforming Loans to Total Loans,
Inventory Turnover Ratio
Total Asset Turnover Ratio
Fixed Asset Turnover Ratio

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2.2.1 Profitability Ratios

Profitability ratios are generally considered to be the basic bank financial ratio in order
to evaluate how well bank is performing in terms of profit. For the most part, if
anprofitability ratio is relatively higher as compared to the competitor(s), industry
averages, guidelines, or previous years same ratios, then it is taken as indicator of better
performance of the bank. In the banking literature, different scholars in measuring bank
performance have used many profitability ratios .
The mainperformance indicators computed for banks are:

Return on assets (ROA)

Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives an idea as to how efficient management is at using its assets to generate
earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is
displayed as a percentage. Sometimes this is referred to as "return on investment".
The formula for return on assets is:
ROA = Net Profit after Tax / Total Asset.
Note: Some investors add interest expense back into net income when performing this
calculation because they'd like to use operating returns before cost of borrowing.

Return on equity (ROE)

Return on equity (ROE) is 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 is expressed as a percentage and calculated as:
ROE = Net profit after tax / Shareholders Equity
Net income is for the full fiscal year (before dividends paid to common stock holders but
after dividends to preferred stock.) Shareholder's equity does not include preferred shares.

Profit to Expenses Ratio (PER)

It measures the operating profitability of the bank with regards to its total operating
expenses. Operating profit is defined as earnings before taxes and operating expenses
means total non-interest expenses. The ratio measures the amount of operating profit
earned for each dollar of operating expense. A higher PER means bank is cost efficient
and is making higher profits .PER is calculated as under:

PER = Profit before tax/ Operating Expenses

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Net interest margin (NIM)
Net interest margin is a performance metric that examines how successful a
firm's investment decisions are compared to its debt situations. A negative value denotes that
the firm did not make an optimal decision, because interest expenses were greater than the
amount of returns generated by investments.

NIM= (Interest Income Interest Expense)/Total Asset

Return on Deposit (ROD)

To most financial analysts, Return on Deposit (ROD) is one of the best measures of bank
profitability performance. This ratio reflects the bank management ability to utilize the
customers deposits in order to generate profits have used this ratio as
a profitability measurement. ROD is calculated as under:

ROD = Net Profit after Tax / Total Deposit

2.2.2 LIQUIDITY RATIOS

These ratiosmeasure ability of the firm to meet its short-term obligations, maintain cash
position,and collect receivables. In general, sense, the higher liquidity ratios mean bank has
larger margin of safety and ability to cover its short-term obligations. Because saving
accounts and transaction deposits can be withdrawn at any time, there is high liquidity
risk for both the banks and other depository institutions. Banks can get into liquidity
problem especially when withdrawals exceed new deposit significantly over a shortperiod of
time There are several measures for liquidity

Cash to Deposit Ratio (CDR)

Cash Deposit ratio (CDR) is the ratio of how much a bank lends out of the deposits it has
mobilized. It indicates how much of a banks core funds are being used for lending, the main
banking activity. It can also be defined as Total of Cash in hand and Balances with RBI
divided by Total deposits.
CDR = Cash/Deposit

Loan Deposit Ratio (LDR)

Loan to deposit is the most important ratio to measure the liquidity condition of the
bank. Bank with Low LDR is considered to have excessive liquidity, potentially lower
profits, and hence less risk as compared to the bank with high LDR. However, high LDR
indicates that a bank has taken more financial stress by making excessive loans and
shows risk that to meet depositors claims bank may have to sell some loans at loss. LDR
is calculated as under:

LDR= Loan/Deposit

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Loan to Assets Ratio (LAR)
The loans to assets ratio measure the total loans outstanding as a percentage of total assets.
The higher this ratio indicates a bank is loaned up and its liquidity is low. The higher the
ratio, the more risky a bank may be to higher defaults

LAR = Loan / Asset

2.2.3 CREDIT RISK & SOLVENCY RATIOS

The risk and solvency ratios measure the extent to which a firm relies on debt financing
rather than equity financing. These ratios are also referred to as gearing, debt, or
financial leverage ratios. These ratios determine the probability that the firm default on
its debt contacts. The more the debt a firm has the higher is the chance that firm will
become unable to fulfill its contractual obligations. The following ratios measure for risk
and solvency were used for the study.

Debt to Equity Ratio (DER)

Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage, calculated
by dividing a companys total liabilities by its stockholders' equity. The D/E ratio indicates
how much debt a company is using to finance its assets relative to the amount of value
represented in shareholders equity.
The formula for calculating D/E ratios can be represented in the following way:
Debt - Equity Ratio = Total Liabilities / Shareholders' Equity

Debt to Total Asset Ratio (DTAR)

Total debt to total assets is a leverage ratio that defines the total amount of debt relative to
assets. This enables comparisons of leverage to be made across different companies. The
higher the ratio, the higher the degree of leverage, and consequently, financial risk. This is a
broad ratio that includes long-term and short-term debt (borrowings maturing within one
year), as well as all assets tangible and intangible.

DTAR = Total Debt / Total Assets

Equity Multiplier (EM)

The equity multiplier is calculated by dividing a company's total asset value by total net
equity, and it measures financial leverage. Companies finance their operations with equity or
debt, so a high equity multiplier indicates that a larger portion of asset financing is attributed
to debt. The equity multiplier is a variation of the debt ratio, and its definition of debt
financing includes all liabilities.
EM =Total Asset / Total Shareholders Equity

Page-26
Nonperforming Loans to Total Loans
Nonperforming loans, or NPL, are loans that are no longer producing income for the
bank that owns them. Loans become nonperforming when borrowers stop making
payments and the loans enter default. The exact classification can vary from institution
to institution, but a loan is usually considered to be nonperforming after it has been in
default for three consecutive months.
Banks often report their ratio of nonperforming loans to total loans as a measure of the
quality of their outstanding loans. A smaller NPL ratio indicates smaller losses for the
bank, while a larger (or increasing) NPL ratio can mean larger losses for the bank as it
writes off bad loans.

NPTL = Non-performing Loans/Total Loans

2.2.4 EFFICIENCY RATIOS

These ratios measure how effectively and efficiently the firm is managing and
controlling its assets. These ratios indicate the overall effectiveness of the firm in
utilizing its assets to generate sales, quality of receivables and how successful the firm is
in its collections, the promptness of payment to suppliers by the firm, effectiveness of
the inventory management practices, and efficiency of firm in controlling its expenses.
Higher value of these ratios is taken as good indicator, which means firm is doing well.
Ratios used to measure efficiency of the bank are Asset Utilization (AU), Income to
Expense Ratio (IER), and Operating efficiency (OE)

Asset Utilization (AU)

The asset utilization ratio calculates the total revenue earned for every dollar of assets a
company owns.

For example, with an asset utilization ratio of 52%, a company earned $.52 for each dollar of
assets held by the company. An increasing asset utilization means the company is being more
efficient with each dollar of assets it has.

This ratio is frequently used to compare a company's efficiency over time.

Asset Utilization = Revenue / Average Total Assets

(Note: YCharts calculates this value using Asset Utilization = TTM Revenue / Average
of Total Assets from Last Four Quarters)

Page-27
Income Expense Ratio (IER)
Income to expense is the ratio that measures amount of income earned per dollar of
operating expense. This is the most commonly and widely used ratio in the banking
sector to assess the managerial efficiency in generating total income vis--vis controlling
its operating expenses . High IER is preferred over lower one as
this indicates the ability and efficiency of the bank in generating more total income in
comparison to its total operating expenses. Total income in the study is defined as net
spread earned before provisions plus all other income while the Other Expenses in the
income statement are treated as total operating expense for the study. IER is calculated
as under

IER = Total income / Total Operating Expenses

Operating Efficiency (OE)

Unlike IER, which measures the amount of income earned per dollar of operating?
Expense, OE is the ratio that measures the amount of operating expense per dollar of
operating revenue. It measures managerial efficiency in generating operating revenues
and controlling its operating expenses. In other words, how efficient is the bank in its
operations. Lower OE is preferred over higher OE as lower OE indicates that operating
expenses are lower than operating revenues. Operating revenue is defined as net spread
earned before provisions plus fee, brokerage, commission, and for ex income. Other expenses
is defined same as we defined in the
previous ratio.

OE=Total Operating Expenses / Total Operating Revenue

2.2.5 ASSET MANAGEMENT RATIOS

Asset Management Ratios attempt to measure the firm's success in managing its assets to
generate sales. For example, these ratios can provide insight into the success of the firm's
credit policy and inventory management. These ratios are also known as Activity or
Turnover Ratios.

Inventory Turnover Ratio

Inventory turnover is a ratio showing how many times a company's inventory is sold and
replaced over a period of time. The days in the period can then be divided by the inventory
turnover formula to calculate the days it takes to sell the inventory on hand. It is calculated as
sales divided by average inventory.

Inventory Turnover Ratio = Cost of Goods Sold / Inventories

Page-28
Total Asset Turnover Ratio
Asset turnover ratio is the ratio of the value of a companys sales or revenues generated
relative to the value of its assets. The Asset Turnover ratio can often be used as
an indicator of the efficiency with which a company is deploying its assets in generating
revenue.

Asset Turnover = Net Sales or Revenues / Total Assets

Fixed Asset Turnover Ratio

The fixed-asset turnover ratio is, in general, used by analysts to measure operating
performance. It is a ratio of net sales to fixed assets. This ratio specifically measures how able
a company is to generate net sales from fixed-asset investments, namely property, plant and
equipment (PP&E), net of depreciation. In a general sense, a higher fixed-asset turnover ratio
indicates that a company has more effectively utilized investment in fixed assets to generate
revenue.

The fixed-asset turnover ratio= Net Sales / Net Poperty, Plant, Equipment

Page-29
2.3 Study Frame work

Back Cover
Page
Appendices
Reference
s
Scope for
Further 1
Research 2
Scope &
Limitations 11
Conclusions &
Recommendati
ons 10
Findings &
Analysis/Intern
ship
Experience 9
Methodology 8
Literature
Review/Com
p. Profile 7
Rationale of
the Study 6
Objectives of
the Study 5
Introduction/Prob
lem Statement 4
Executive
Summary 3
List of Figures 2
Table of Contents 1
Preface/Acknowledge
ments vi
Letter of
Authorization v
Letter of
Transmittal iv
Inner
Cover iii
Cover
Page ii
i

Page-30
 Chapter Three
Data Collection & Processing

Page-31
 Methodology

3.1 Data Description

The study methodology included observation of their work procedure, analysis of their
information input forms and their output documents, face-to-face communication with the
clients, interviews of relevant ABL officials. As per study objectives mentioned, the
information used in this study has been received from the following sources:

3.2 Ways of Data Collection

Secondary sources:
Research, brochures, and various publications of Agrani Bank Limited.
Annual report Agrani Bank Ltd.
Official data book.
Internet.
Newspaper.
E- Paper
Official Website of Agrani Bank Ltd.

Page-32
3.3 Data Processing Method

3.1.1Data Analysis& Processing Methods

The research is based on quantitative study.
The main focus of the study is
Riskand return analysis.
The liquidity indicator,
The profitability indicator,
The solvency indicator,
Asset Management indicator
Equity indicator has taken to evaluate its performance and prospect.

Pie Chart
a graphic representation of quantitative information by means of acircle divided into sectors, i
n which the relative sizes of the areas (orcentral angles) of the sectors correspond to the relati
ve sizes orproportions of the quantities.
Also called circle graph, pie graph.

Bar Chart
A graph using parallel bars of varying lengths, as to illustratecomparative costs, exports, birth
-rates, etc.
Also called bar chart.

3.1.2 Tools used

To prepare this project I have used M/S Word-2013, M/S Excel-2013

Page-33
 Chapter Four
Results & Discussion

Page-34
In this part of the paper, detail discussions and analysis of the study findings are
presented. The financial performance evaluation obtained by thoroughly analyzing the
companys financial statements. Each financial performance indicator (financial ratio) is
presented independently in a graph or a table. The analysis is presented in the following
sequence; first the Financial Highlights of the companys followed by the ratios analysis.

4.1 Financial Highlights

4.1.1 Interest Income, Total Expenses, and Net Profit

4.1.1.1 Diagram of Interest Income, Total Expenses, and Net Profit. Taka in Crore.

Interest Income Total Expense Net Profit

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2011 2012 2013 2014 2015

The diagram we see that in the year 2012-2013 net profit of the Agrani bank Ltd. is higher
than the other years. In the year 2015-2016 Total expenses is higher than the other years.In
the year 2011-2012 Interest income is higher than the other others year. In the year 2015-
2016 Net profit & Interest income is lower the other years.

Page-35
4.1.2 Total Deposits and Total Loans & Advances

4.1.2.1 Diagram of Total Deposit and Total Loans & Advance.

Taka in Crore Loan & Advances Total Deposit

24,480
2015 43,998

23,509
2014 38,392

20,297
2013 34,868

21,266
2012 29,243

19,409
2011 25,221

0 10,000 20,000 30,000 40,000 50,000

In the Bar diagram we see that Loan & advances & Total deposit in the year 2011-2012 is
lower than the other years & in the year 2015-2016 the loan & advances & total deposit is the
higher than the other others years.

Page-36
4.1.3 Total Assets and Shareholders Equity

Figure 4.1.3.1 : Bar Diagram of Total Assets and Shareholders Equity Taka in Crore.

Total Shareholders Equity Total Asseets

2015

2014

2013

2012

2011

0 10,000 20,000 30,000 40,000 50,000

In the year 2013-2014 Total Asset & Shareholders Equity is higher than the other year & the
year 2011 total asset is lower than the other year. The Shareholders equity is lower in
theyear 2015.

Page-37
 4.2 Ratio Analysis
As it was already mentioned, a banks balance sheet and income statement are valuable
information sources to evaluate financial strengths and weaknesses of a bank and its
business trends. Although the birr amounts found on these statements provide valuable
insights into the financial performance and condition of the bank, the researcher
typically use data from them to develop financial ratios to evaluate the bank financial
performance. In all of the remainder of this chapter, the researcher undertakes key ratios
commonly used by bank analysts to evaluate different dimensions of financial
performance of Awash International Bank S.C., including liquidity, profitability,
efficiency, and credit risk & solvency in comparison with the industry average over
seven years. Since there are twelve commercial banks started operation until 2009, so
the researcher first calculated, ratios from consolidated financial statements to compute
industry average and then compare this ratios with ratio of Awash International Bank in
each year.

Page-38
 4.2.1 Profitability Ratios

Return on Assets (ROA):

ROA = Net Profit after Tax / Total Asset.

Financial 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

Year
ROA 0.004582295 0.049326999 0.02071991 0.00415532 0.001218371

ROA

0.049326999

0.02071991
0.004582295
0.00415532
2011/2012 0.001218371
2012/2013
2013/2014
2014/2015
2015/2016

4.2.1.1 Diagram of Return On Asset

In this graph we see that, Return on Asset (ROA) are more fluctuated to the previous years.In
the year 2012-2013 Agrani Bank Ltd ROA position was better than the other years and in the
2015-2016 ROA position was lower than other years.

Page-39
 Return on equity (ROE):
ROE = Net profit after tax / Shareholders Equity

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

ROE 0.062329568 2.97611465 0.259656047 0.052204764 0.015470852

ROE
2.97611465

0.259656047
0.062329568 0.052204764 0.015470852

2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

4.2.1.2 Diagram of the Return on Equity

In the Diagram we see that Return on Equity was better positon in the year of 2012-
2013. Another year are more fluctuatedto make corporations profitability.

Page-40
 Profit to Expenses Ratio (PER)

PER = Profit before tax/ Operating Expenses

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

PER 1.00466563 2.555403557 0.869512195 0.204395604 0.041775457

P/ER
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

1%
4%
21%
19%

55%

4.2.1.3 Diagram of Proft to Expenses Ratio

To the point of view we see that in the year of 2012-2013 Profit to Expenses Ratio (PER) was
higher position to make cost efficient and is making higher profits.

Page-41
 Return on Deposit (ROD)

ROD = Net Profit after Tax / Total Deposit

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

ROD 0.006356774 0.064085859 0.026480736 0.005375923 0.001570859

ROD
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

2%
5% 6%

25%

62%

4.2.1.4 Diagram of Return on Deposit

In the year of 2012-2013 Return on Deposit (ROD) was good enough profitability
performance. In yhe years of 2011,2013,2014,2015 performances was low to generate profit
Agrani Bank Ltd.

Page-42
 4.2.2 Credit Risk and Solvency Ratios

Debt to Equity Ratio (DER)

Debt - Equity Ratio = Total Liabilities / Shareholders' Equity

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

DER 2.849056604 0.688193744 12.53171694 12.5633553 12.69798206

DER

DER
14 12.69798206
12
10
8
6
4
2
DER
0
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

4.2.2.1 Diagram of Debt to Equity Ratio (DER)

In the years of 2013,2014,2015 we see that Debt to Equity Ratio (DER) was
more similer to generate companys financial leverage. Another yearindicates
to low capability bygenerating financial leverage.

Page-43
 Debt to Total Assets Ratio (DTAR)

DTAR = Total Debt / Total Assets

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

DATR 0.555030501 0.557086302 0.449088864 0.471709531 0.429484576

DATR
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

17% 23%

19%

23%

18%

4.2.2.2 Diagram of Debt to Total Asset ratio

In the Diagram we see that the Total debt to total assets is a leverage ratio that
indicates to in the years of 2012, 13, 14,&15Was average capability to asses leverage
performance by previous to recent years.

Page-44
 Equity Multiplier (EM)

EM =Total Asset / Total Shareholders Equity

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

EM 13.60225945 55.55718475 12.53171694 12.5633553 12.69798206

EM

2015/2016 12.69798206

2014/2015 12.5633553

2013/2014 12.53171694

2012/2013 55.55718475

2011/2012 13.60225945

4.2.2.3 Diagram of Equity Multiplier

In the year of 2012-2013 was good indicate to measuring financial leverage& the
others tings that the companys are good indicates that the Equity Multiplier are large
portion of asset financing from the other years.

Page-45
 Non-Performing Loans to Total Loan Ratio (NPTL)
NPTL = Non-performing Loans/Total Loans
Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016
NPLT 0.960681115 0.973232897 0.973349364 0.9766517 0.980676726

NPLT

2015/2016 0.980676726

2014/2015 0.9766517

2013/2014 0.973349364

2012/2013 0.973232897

2011/2012 0.960681115

4.2.2.4 Diagram of Non-Perfoming Loans to Total Loan

Agrani Bank Ltd. Non-performing loans are sequently increasing by the year 2012 to 2015.
NPL ratio can mean larger losses for the bank as itwrites off bad loans. In the recent years
2015-2016 were larger losses .

Page-46
 4.2.3 Efficiency Ratios

Asset Utilization (AU)

Asset Utilization = Revenue / Average Total Assets

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016
AU 0.064094854 0.062866192 0.053565804 0.047100353 0.041777762

AU

0.07

0.06

0.05

0.04

0.03

0.02

0.01

0
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016
AU 0.064094854 0.062866192 0.053565804 0.047100353 0.041777762

4.2.3.1Diagram of Asset Utilization

Agrani Bank Ltd. Asset Utilization is good position in the year of 2011-2012 & bad
position is the year of 2015-2016. By the next different year are frequently lower
indicates tower asset utilization.

Page-47
 Income to expense Ratio (IER)
IER = Total income / Total Operating Expenses

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

IER 3.300155521 2.381668947 2.326829268 2.21978022 1.778067885

IER
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

15%
27%

19%

20%
19%

4.2.3.2 Diagram of Income Expense Ratio

Year 2011-2012 is the Higher Income Expense Ratio which is widely generating the total
income by the controllingits operating expenses .In the recent years 2015-2016 Income
Expenses ratios is the lowest one .

Page-48
 Operating Efficiency (OE)
OE=Total Operating Expenses / Total Operating Revenue

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

OE 0.303016023 0.419873636 0.429769392 0.45049505 0.562408223

OE
0.6

0.5

0.4

0.3
OE
0.2

0.1

0
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

4.2.3.3 Diagram of Operating Effiency Ratio

Year 2015-2016 is the Higher Operating Effiency Ratio which is widely generating the
operating revenues by the controllingits operating expenses .In the recent years 2011-2012
Operating Efficency ratios is the lowest one .

Page-49
 4.2.4 Asset Management Ratios

Total Asset Turnover Ratio:

Asset Turnover = Net Sales or Revenues / Total Assets

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

TTR 0.06 0.05 0.04 0.04 0.03516625

Total Asset Turnover Ratio

2015/2016

2014/2015

2013/2014

2012/2013

2011/2012

0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07

The Asset Turnover ratio indicate that the year 2011-2012 indicate the efficiency with which
a company is deploying its assets in generating revenue.

Page-50
 Fixed Asset Turnover Ratio

The fixed-asset turnover ratio= Net Sales / Net Property, Plant, Equipment

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

The fixed-asset 927,800 3,088,228 5,284,589 10690417 8920853
turnover ratio

The Fixed-Asset Turnover Ratio

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

In the year 2014-2015higher fixed-asset turnover ratio indicates that a company has more
effectively utilized investment in fixed assets to generate revenue.

Page-51
 4.2.5 Liquidity Ratios
Loan to Deposit Ratio (LDR)
LDR= Loan/Deposit

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

LDR 0.769964243 0.72376903 0.573950546 0.610271667 0.553739328

LDR
0.9

0.8

0.7

0.6

0.5

0.4 LDR

0.3

0.2

0.1

0
2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

4.2.5.1 Diagram of Loan to Deposit Ratio

The liquidity condition of thebank. Bank with Low LDR in year 2013-2014 considered to
have excessive liquidity, potentially lowerprofits, and hence less risk as compared to the bank
with high LDR. However,in the year 2011-2012 high LDRindicates that a bank has taken
more financial stress by making excessive loans andshows risk that to meet depositors
claims bank may have to sell some loans at loss

Page-52
 Cash Deposit Ratio (CDR)
CDR = Cash/Deposit

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

CDR 0.075367501 0.071080785 0.075848189 0.079177432 0.077177006

Cash Deposit Ratio (CDR)

0.079177432

0.077177006
0.075848189
0.075367501

0.071080785

2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

4.2.5.2 Diagram of Cash Deposit Ratio

In the year 2014-2015 CDR is considering by Higher indicates to the liquity

condition have to excessive liquidity
In the year 2012-2013 CDR is considering by lower indicates to the liquity
condition have to insufficent liquidity

Page-53
 Loan to Asset Ratio (LAR)
LAR = Loan / Asset

Financial Year 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

LAR 0.555030501 0.557086302 0.449088864 0.471709531 0.429484576

Loan to Asset Ratio

0.555030501 0.557086302

0.471709531
0.449088864
0.429484576

2011/2012 2012/2013 2013/2014 2014/2015 2015/2016

4.2.5.3 Diagram of Loan to Asset Ratio (LAR)

Total loan to total assets is a leverage ratio that indicates to in the years of
2012,13,14,&15Was average capability to asses leverage performance by previous to
recent years.In the year 2012-2013 higher this ratio indicates a bank is loaned up and
its liquidity is low. The higher the ratio, the more risky a bank may be to higher
defaults

Page-54
 Chapter Five
Conclusion & Recommendations

Page-55
 1.1 Findings
At this point, the financial analysis has been made in attempting to draw some rough One of
the main points to understand about the financial analysis is that all the information that
would be conclusive judgment about what is going on in the company is found in the
financial statements conclusions on the performance of ABL.

1. Performance Evaluation of Agrani Bank Ltd. In Profitability ratio: Return On

Asset (ROA), Return on Equity (ROE), Profit to Expenses Ratio (PER), Return
On Deposit (ROD), all are in the higher position year 2012-2013 & the position is
good. We also find that the position isnt good enough in the recent year 2015-
2016.

2. Performance Evaluation of Agrani Bank Ltd. In Credit Risk and Solvency Ratios:
Debt to Equity Ratio (DER), Non-Performing Loans to Total Loan Ratio (NPTL),
is increasing in the year 2015-2016& the position is bad. We also find that Debt to
Total Assets Ratio (DTAR) is average inall years.&Equity Multiplier (EM) in the
year of 2012-2013 is good indicates from the other years.

3. Performance Evaluation of Agrani Bank Ltd. Findings In Efficiency Ratios: Asset

Utilization (AU)is good position in the year of 2011-2012, Income to expense
Ratio (IER)generating the total income by the controlling its operating expenses in
the year 2011-2012, other hand the ratio is decreasing year by year. In the year
2015-2016 Operating Efficiency (OE)operating revenues by the controlling its
operating expenses.

4. Performance Evaluation of Agrani Bank Ltd. Findings In Asset Management

Ratios: Total Asset Turnover Ratio indicate that the year 2011-2012 indicate
the efficiency with which a company is deploying its assets in generating revenue,
Fixed Asset Turnover Ratio In the year 2014-2015 higher fixed-
asset turnover ratio indicates that a company has more effectively utilized
investment in fixed assets to generate revenue.

1. Performance Evaluation of Agrani Bank Ltd. Findings In Liquidity Ratios: Loan

to Deposit Ratio (LDR) Bank with Low LDR in year 2013-2014 & in the year
2011-2012 high LDR indicates that a bank has taken more financial stress by
making excessive loans and shows risk, Cash Deposit Ratio (CDR) In the year
2014-2015 CDR is considering by Higher indicates to the liquity condition have to
excessive liquidity In the year 2012-2013 CDR is considering by lower indicates
to the liquity condition have to insufficent liquidity Loan to Asset Ratio (LAR)
Total loan to total assets is a leverage ratio that indicates to in the years of 2012,
13, 14, &15 is average, In the year 2012-2013 higher this ratio indicates a bank is
loaned up and its liquidity is low.

Page-56
 1.2 Recommendations
There are some recommendations of ABL in below:

1. Overall, Profitability ratios are decreasing, Credit Risk and Solvency Ratios are
incresing , Efficiency Ratios are decreasing , Asset Management Ratios are
increasing, Liquidity Ratios are are decreasing. All are ratios are decreasing year by
year & the performance of Agrani Bank isnt good. So bank should work on it and
move towards good return because this is the means to assure its survival in the
market.

2. The number of commercial banks has been increasing from time to time. The
intensive and continuous increasing competition in the financial service market
creates a need for an access to information that would allow evaluating commercial
banks operating in this market. In Bangladesh there is no adequately compiled data
and bench marks to evaluate the performance of commercial banks. The regulatory
body (Bangladesh Bank) or other concerned bodies have to take the responsibility.

3. Finally, the financial performance indicators, i.e. financial ratios, independently are
not enough to measure the performance of commercial banks.

1.3 Conclusion
Agrani Bank limited is a state owned commercial bank. It is committed to provide high
quality financial services/ products to contribute to the growth of G.D.P. of the country
through stimulating trade & commerce, accelerating the pace of industrialization, boosting up
export, creating employment opportunity for the educated youth, raising standard of living of
limited income group and overall sustainable socio-economic development of the country.
In the end I can say it was a lifetime achievement for me to work in a place and gather
knowledge. Agrani Bank Ltd. as a organization tried to establish so they can improve their
financial position.

Page-57
 Chapter Six
Internship Experience

Page-58
6.1 Work, workflow, People Met & my own Experience

As a BBA student, I was granted the opportunity as part of my degree program to complete
an internship at Agrani Bank Ltd. of my choice. The internship had a few requirements
including working 35 hours per week, for a minimum of 12 weeks. The majority of my work
would be real work like the organizations employees, as opposed to filing papers and
refilling coffee cups all day for three months.

The internship was beneficial to me for a number of reasons. To begin with, I learned basic
responsibilities of a job such as being on time, keeping a near perfect attendance record, and
knowing that if I did not finish my work there were real consequences. I learned to be my
own boss; the responsibility was now on my shoulders. This was very different from
completing assignments for classes in college because in college you get a syllabus, you have
friendly reminders from your Teachers, Madam and classmates, and you are generally given
extra time if something comes up. In the internship, I got a little taste of how that all ends
when you get a real job; everyone expects you to be an adult by then and delegate your time
properly. Time management is a necessary skill that develops through internships.

First day of internship was an induction program where I was introduced to AGM of Mirpur
branch, my mentor Sarmin Akter Principle officer (PO) and some other employees with
whom I had to work. I was very excited after my first meeting with my mentor as he is very
inspirational, work oriented and I always looked forward for an interaction with him.

I worked in Customer service section of Agrani Bank Ltd. Mirpur branch, Dhaka. In
customer service section I opened customers accounts & writing the deposit slip, writing the
Bank Draft cheque, & credit voucher of customers.

I also take cheque requisition & provide the cheque book to the customer. A Cheque
requisition can also be attached to a vendor invoice where it is necessary to alert Accounts
Payable of any special instructions pertaining to that invoice, such as special mailing
instructions or special payment requirements (i.e. wire transfers).

As mentioned earlier, an internship does so many things at once, and by the time you finish
yours and look back, the distance you would have traveled along this journey will only just
have begun to become clear. The growth, grit, and drive that you will develop from this
exposure cannot be learned in a classroom. It comes from falling down without anyone there
to pick you up, but not with your career on the line. It seems scary, and it is at times, but the
growth you experience is priceless. Internships help secure future jobs, build lasting
networks.

Page-59
6.2 Significant pleasant & unpleasant incidence

Unpaid internships

If unpaid internships are the key to better jobs and bigger salaries, should we be concerned
about the millions of lower-class students who can't afford to work for free?., not only do
students pay internship credits, pay for housing, they pay for the skill to work for free. That's
wrong.

Lack of time
The time period of this study is very short. I had only 12 weeks in my hand to complete this
report, which is not enough.

Helpful colleagues
Unfortunately, in some working environments, your colleagues may not always be helpful
but, my mentor are different she is very helpful & others colleague also very helpful.

Lack of experience

There was lack of experience in collecting information.

NOT ENOUGH WORK

Part of the reason you took the internship in the first place was to gain valuable work
experience, so it can be extremely frustrating when you arent getting that especially if you
arent being paid! Interns are often faced with the problem of not having enough work, or
being given busy work that doesnt really add value to the company.

A New Lifestyle
If youre a recent college graduate, you may be getting used to a new lifestyle that can be
quite jarring. Instead of waking up at ten and going to a few classes a day, youre sitting at a
desk 9 to 5. You might be living at your parents' to save money. The hours and the new living
situation clearly make socializing more difficult than before.

Insufficient Data
There were not enough data available for prepare this report.

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 Bibliography
1. Annual report of ABL
a. 31st December for the ended 2011.
b. 31st December for the ended 2012.
c. 31st December for the ended 2013.
d. 31st December for the ended 2014.
e. 31st December for the ended 2015.
2. Bangladesh Bank Annual Report
3. http://www.agranibank.org/
4. http://en.wikipedia.org/wiki/Agrani_Bank
5. http://www.facebook.com/pages/AgranBank
6. http://www.banglapedia.org/httpdocs
7. Essential of Financial Management.

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 Appendix

Financial Highlights
2011 2012 2013 2014 2015
Income 3301 3700 4113 4170 4286
Total Expenses 1827 2693 3049 3096 3408
Net Profit 250 (1862) 905 199 65
Total Deposits 25221 29243 34868 38392 43998
Total Loans & Advances 19409 21266 20297 23509 24480
Net Interest Income 1046 407 141 134 85
Total Assets 34882 37871 44415 49487 56535
Shareholders Equity 2594 716 3564 3956 4467

Ratio Analysis
2011 2012 2013 2014 2015
Profitability Ratio
ROA =
160/34917 1869/37890 921/44450 206/49575 69/56633
NPAT/TA
0.004582295 0.049326999 0.02071991 0.00415532 0.001218371
ROE =
NPAT/SE 160/2567 1869/628 921/3547 206/3946 69/4460
0.062329568 2.97611465 0.259656047 0.052204764 0.015470852
PER =
PBT/OE 646/643 1868/731 713/820 186/910 48/1149
1.00466563 2.555403557 0.869512195 0.204395604 0.041775457
ROD =
NPAT/TD 160/25170 1869/29164 921/34780 206/38319 69/43925
0.006356774 0.064085859 0.026480736 0.005375923 0.001570859
Liquidity Ratio
CDR = Cash/
Deposit 1897/25170 2073/29164 2638/34780 3034/38319 3390/43925
0.075367501 0.071080785 0.075848189 0.079177432 0.077177006
LDR =
Loan/Deposit 19380/25170 21108/29164 19962/34780 23385/38319 24323/43925
0.769964243 0.72376903 0.573950546 0.610271667 0.553739328
LAR =
Loan/Asset 19380/34917 21108/37890 19962/44450 23385/49575 24323/56633
0.555030501 0.557086302 0.449088864 0.471709531 0.429484576

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 Credit Risk & Solvency Ratio
DER =
TL/SE 2567/901 682/991 44450/3547 49575/3946 56633/4460
2.849056604 0.688193744 12.53171694 12.5633553 12.69798206
DTAR =
TD/TA 19380/34917 21108/37890 19962/44450 23385/49575 24323/56633
0.555030501 0.557086302 0.449088864 0.471709531 0.429484576
EM =
TA/TSE 34917/2567 37890/682 44450/3547 49575/3946 56633/4460
13.60225945 55.55718475 12.53171694 12.5633553 12.69798206
NPLT =
NPL/TL 18618/19380 20543/21108 19430/19962 22839/23385 23853/24323
0.960681115 0.973232897 0.973349364 0.9766517 0.980676726
Efficiency Ratio
AU =
Revenue/
ATA 2238/34917 2382/37890 2381/44450 2335/49575 2366/56633
0.064094854 0.062866192 0.053565804 0.047100353 0.041777762
IER =
TI/TOE 2122/643 1741/731 1908/820 2020/910 2043/1149
3.300155521 2.381668947 2.326829268 2.21978022 1.778067885
OE =
TOE/TOR 643/2122 731/1741 820/1908 910/2020 1149/2043
0.303016023 0.419873636 0.429769392 0.45049505 0.562408223
Asset Management Ratios
TATR = 2104.67/349,17 1709.04/378,90 1845.29/444,50 1949.96/495,75 1991.57/566,33
NS/TA
0.06 0.05 0.04 0.04 0.03516625

FATR = 927,800 3,088,228 5,284,589 10690417 8920853

NS/P,P,E

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