FIN464: Bank Management

(Section: 3)

Report on Bank Performance Analysis of:

AB Bank Limited
Bank Asia Limited
Mercantile Bank Limited

Submitted to:
Ms. Saima Tahsin [SAT]
Lecturer, Department of Finance and Accounting North
South University

Submitted by: Group2

Sabbir Mahmud Arman (1511042030)
Tanvir Raihan Khan Topu 1711015030
Jahid Hasan (1520104030)

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 Letter of Transmittal

3rd December, 2018

Ms. Saima Tahsin

Lecturer, Department of Accounting and Finance

North South University

Dear Ma’am,

First of all, we would like to thank our honourable faculty for giving us such nice directions and
guidelines. The topics of the project are very knowledgeable and interesting. We have learnt
many things while doing the project. We believe that the experience that we have collected from
this project will help us in our future endeavours. We would like to thank all of our group
members for their coordination, cooperation, and effort that they have given to complete the
project well and in due time.

With due respect and humbleness we are submitting the report on Bank analysis performance of
Bank Asia Limited, Mercantile Bank Limited and AB Bank Limited. We hope you find this report
satisfactory.

Yours sincerely,

Sabbir Mahmud Arman (1511042030)

Tanvir Raihan Khan Topu 1711015030
Jahid Hasan (1520104030)

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 Acknowledgement
First and foremost, we would like to thank the Almighty for giving us the moral integrity,
devotion, patience, and the ability to carry out this project.

We are greatly indebted to our course instructor Ms. Saima Tahsin, for giving us the opportunity
to work on this Term Project of the course FIN464. His direction, encouragement, guidance, in
particular has been invaluable for the improvement of this assignment.

This report has enabled us to apply all that we have learned in class. And In our course, our
instructor has given us practical experience on Ratio Analysis, which is the basic of this project.

We have done the Ratio analysis on AB Bank, Bank Asia and Mercantile Bank with the help of
their financial statements and annual reports.

We are also genuinely thankful to all our friends and class mates, who have been co-operative in
every aspect. Our each and every group member has given almost equal dedication to this project.
All the other group leaders have also been equally supportive. It was indeed pleasurable working
in the friendly environment.

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 Table of Contents

Introduction .............................................................................................................................. 4

Executive Summary .................................................................................................................. 5

Overview of Bank Profiles ........................................................................................................ 6

Bank Performance Analysis with Ratios .................................................................................. 8

Reasons of ROE Changes ....................................................................................................... 32

Credit Rating and CAMELS Rating ...................................................................................... 33

Capital Adequacy Ratio (CAR) .............................................................................................. 34

Conclusion and Recommendations ........................................................................................ 35

References ............................................................................................................................... 36

Introduction

This report contains the performance analysis of AB Bank, Bank Asia and Mercantile Bank from
the year 2014 until 2017. The data have been collected from the respective bank’s audited
unconsolidated financial statements. The performance has been summarized and recommendations
have been given based on the time-series and cross-sectional analysis of the data. Finally, excel
workings have been shown in the appendix section towards the end.

Objectives of the report

• To gain a financial insight on bank’s financial statements

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 • To measure three individual bank’s performance in terms of: (i) Liquidity (ii) Financial
Risk (iii) Efficiency (iv)Profitability (v) Market Position over the past four years.
• To compare and contrast among AB Bank, Bank Asia and Mercantile Bank
performances using the data obtained from their audited financial statements and ratio
analysis.

Executive Summary

We have analyzed the historical data of AB Bank, Mercantile Bank and Bank Asia from 2014 to
2017. Based, on the analysis of the date we can determine the overall performance of the three
banks. We measured their Liquidity, Efficiency, Profitability, Market Position, Financial Risk
ratios and also gather information of their Credit Risk, CAMELS Rating and Capital adequacy
Requirements. These empirical data analysis helped us to understand the position of the three
banks over the four year period and the issues that need to be solved.

Using our information we did both time-series and cross-sectional analysis of the three banks,
and decided which one is the better performer in the different aspects. Moreover,
recommendations for each of the respective banks have been provided at the end of the report.
We can hope that the performance analysis of the banks help to overcome the problems/issues
that are present and develop a better banking operations and sector in the country and for each
banks.

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 Overview of Bank Profiles

AB Bank (formerly Arab Bangladesh Bank) is a leading private sector bank in Bangladesh
established in 31st December 1981. This was the first joint venture private bank in Bangladesh.
Arab Bangladesh Bank as formerly known started its effective operation from 12th April, 1982
with the mission to be the best performing bank of the country. On 14th November 2007
Bangladesh bank approved the name change to AB Bank from Arab Bangladesh Bank. With an
ambition to secure its place as the leading service provider, creating lasting value for its
clientele, shareholder, and employees and particularly for the community it operates in, AB has
formulated a golden heritage and an envious legacy that may not be imitated by many.
Achieving plenty of milestones and incorporating numerous changes over the last 32 years, AB
has always been authentic to its desire of being the technology driven innovative bank of
Bangladesh. To excel this new era of technological triumph, AB has successfully introduced
internet banking, SMS banking, cutting edge ICT, state-of-art network solution, 24/7 ATM
service and many other eproducts. AB has extensively widened its services over the last three
decades in both home and abroad. AB offers a wide range of depository and loan products to
cater virtually for every customer segment. From Student Banking to Priority Banking AB
approximately has all banking products in its repertoire. The product gallery is rich in content
and innovative products and services are introduced in the field of Small and Medium Enterprise
(SME) credit, Women’s Entrepreneur, Consumer Loans, Debit and Credit cards (Local and
international), ATMs,
Internet and SMS Banking, Remittance Services, Treasury Products and Services, Structured
Finance for Corporate, strengthening and expanding its Islamic Banking activities, Investment
Banking, specialized products and services for NRBs, Priority Banking and Customer Care. AB
has high quality products and services and dedicated Relationship Managers who are committed
to financial health management, preserve lifestyle and maintain priorities of the customers
wherever life takes them.

Bank Asia Limited is a private sector commercial bank in Bangladesh. It received the

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Certificate of Incorporation on 28th September, 1999 and came to operation on 27th November,
1999. Bank Asia has been launched by a group of successful entrepreneurs with recognised
standing in the society. The asset and liability growth has been remarkable. Bank Asia has been
actively participating in the local money market as well as foreign currency market without
exposing the Bank to vulnerable positions. The Bank’s investment in Treasury Bills and other
securities went up noticeably opening up opportunities for enhancing income in the context of a
regime of gradual interest rate decline. Bank Asia started its service with a vision to serve people
with modern and innovative banking products and services at affordable charge. Being parallel to
the cutting edge technology the Bank is offering online banking with added delivery channels like
ATM, Tele-banking, SMS and Net banking. And as part of the Bank’s commitment to provide all
modern and value added banking service in keeping with the very best standard in a globalize
world.

Mercantile Bank Limited was established on 20th May 1999; and commenced commercial
banking operation on 2nd June 1999. It is a public limited company with limited liability under
the bank companies act, 1991. A group of 27 renowned businessmen of different sectors were the
sponsors of Mercantile Bank Limited. Mercantile Bank emerged as a new commercial bank to
provide efficient banking services and to contribute socio-economic development of the country.
Its shares are listed in Dhaka Stock Exchange and Chittagong Stock Exchange. The bank
provides products and services in retail banking, corporate finance, Islamic finance, Asset
management, Equity brokerage and security. The bank provides a broad range of financial
services to its customers and corporate clients. Fixed deposits, Scheme deposits, Savings
deposits, Short-term deposits from the customers remained the core deposits of the Bank.
Besides traditional trading, manufacturing, import-export business, Mercantile Bank introduced a
few banking products like Double Benefit Deposit Scheme, Monthly Savings Scheme, Monthly
Benefit Deposit Scheme, Special Savings Scheme, two specially designed loan schemes, ie
Consumer Credit Scheme, Small Loan Scheme for the lower and middle income group without
collateral security at the time of inception. MBL maintains a strong network with the Overseas
Exchange Companies and Banks to ensure quicker and safer remittance services. It has also
signed International Representation Agreement with globally reputed Money Transfer Company
‘Western Union Services’.

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Competitors in the Banking sector: United Commercial Bank, HSBC, South East bank, Union Bank
Limited, Standard Chartered Bank Limited, Premier Bank Limited, City Bank Limited, NRB Global
Bank, National Bank Limited.

Bank Performance Analysis with Ratios

LIQUIDITY RATIOS:

We can get to know that ratios give us a sense of a bank’s financial position whether they can
pay debt obligations are liquidity ratios. The ratios of Bank Asia, Mercantile Bank and AB Bank
are given below:

Liquidity security multiplier:

0.11233046
2017 0.083971706
0.125298696

0.118377452
2016 0.141691933
0.132118242
Mercantile
Bank Asia
0.15680345
2015 AB Bank
0.193725684
0.097234004

0.175753371
2014 0.189275125
0.098537412

0 0.05 0.1 0.15 0.2 0.25

Time series analysis:

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Mercantile Bank limited: Mercantile Bank limited suffered quite a remarkable volatility from
2015-16. In 2014, it had ratio of 0.175 but it took a downfall to 0.112 in 2017. In the last couple
of years it getting worse and did not spiked up till 2017.

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Bank Asia: Bank Asia was doing better than other two banks from 2014-16. But in 2017 it had a
big downfall from 0.18 to 0.08 in 2017. This bank did great in 2015 and went up to 0.19 but
started decreasing from then and ended up at 0.08 in 2017.

AB Bank: AB Bank showed extreme leveraged position from 2014-2015. This bank spiked from
0.09 to 0.13 and in 2017 it ended up at 0.12. So, AB Bank made a great turnover from 0.09 to
0.13.

Cross Sectional Analysis: Bank Asia hold a very powerful position of maintaining ratios with
other banks and ranging ratios great from 2014 to 2016 whereas ended up badly. Mercantile bank
hold an average ratio throughout the 4 years. AB Bank was doing bad over the last few years,
though as it is seen that the management has been trying to cut down the margin and trying to do
better. AB bank limited is in a very good position compared to other two banks at the end of year
2017.

Capacity ratio:

1.478552102
2017 1.32206796
1.493024478

1.439699995
2016 1.273164216
1.423754514 Mercantile

Bank Asia
1.330872161
2015 AB Bank
1.190255083
1.500865493

1.344843957
2014 1.258904011
1.427779391

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6

Time series analysis:

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Mercantile bank limited: Mercantile bank limited hold an average ratio through the past 4 years.
In 2014 they had the number of ratio of 1.34 it went down to 1,33 in 2015 but they spiked to 1.47
at the end of the year 2017.

Bank Asia: Bank Asia was not that good over the last couple of years in capacity ratios. They
had the lowest number of ratios. In 2014 they had 1.25 which went down in 2015 and went up to
1.32 in 2017 but that was not good enough compared to other banks.

AB Bank: AB Bank limited did great in capacity ratio over the last couple of years. In 2014 they
had the number of ratio of 1.42 and in 2017 they had 1.49 which is better than the other two
banks.

Cross Sectional Analysis: AB Bank holding the better amount of ratio than the other two banks
from 2014-2017. On the other hand mercantile bank was average throughout the 4 years and
bank Asia was bad compared to the other 2 banks from 2014-2017.

Cash Position Indicator:

0.059989774
2017 0.061637527
0.056073768

0.060973044
2016 0.062714173
0.062136401 Mercentile Bank
Bank Asia
0.071967296
2015 0.05526317 AB Bank
0.059366555

0.076252239
2014 0.059490055
0.05432121

0 0.02 0.04 0.06 0.08 0.1

Time Series Analysis:

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Mercantile bank limited: Mercantile bank limited holds on to a very large chunk of the cash
position indicator. They had the ratio of 0.076 in 2014 which was far better than other two banks.
Though it decreased to 0.05 in 2017 but it holds a very good number of ratios over the last few
years.

Bank Asia: in 2014 Bank Asia was average number of ratio with 0.059 but it rose to 0.061 in
2017 which was the highest number of ratio in 2017. It made a great turnover from 2014 to 2017
though it went down in 2015.

AB Bank: AB Bank limited had the average amount of ratio from 2014-2017. It had the number
of 0.05 in 2014 though it made a huge increase in 2015 but again did badly in 2017.

Cross Sectional Analysis: In cash position indicator Mercantile Bank limited was better than the
other two banks over the couple of years. Though they got decreased from 2014 to 2017 but the
difference was too much in the earlier year. On the other hand Bank Asia was great to keep
consistency.

Hot Money Ratio:

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 0.11362804
2017 0.20968744
0.130365842

0.133181405
2016 0.184875542
0.165997041 Mercentile Bank
Bank Asia
0.163757996
2015 0.158191305 AB Bank
0.165909226

0.155157663
2014 0.123177702
0.149705641

0 0.05 0.1 0.15 0.2 0.25

Time series analysis:

Mercantile Bank limited: Mercantile Bank limited was better side in 2014 with the number of
ratio of 0.155 and started decreasing in 2016 and ended up with a very bad number of 0.11.

Bank Asia: Bank Asia made an unbelievable turnover from 2014 to 2017. In 2014 they had 0.123
and in 2017 they had 0.209 which had a big difference with the other two banks. They started
rising in the year of 2015 and at the end of the year 2017 the made a huge difference with others.

AB Bank: AB Bank started with an average number of ratio but in 2017 they went down to the
last. They started with 0.149 in 2014 and in 2017 they had the number of ratio with 0.13.

Cross sectional analysis: In this section mercantile bank limited was better than bank asia and
AB Bank limited. On the contrary Bank Asia was worse than other two banks. And AB Bank
limited was average throughout the 4 years.

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 EFFICIENCY RATIOS: Efficiency ratios measure estimates the how proficiently play
out the bank. By using this ratio, we can find out efficiency of the bank.

Operating efficiency ratio:

0.450244
2017 0.43958135
0.544545556

0.561882
2016 0.43952259
0.526257384 Mercentile Bank

Bank Asia
0.507677
2015 0.42729573 AB Bank
0.514916063

0.454018
2014 0.412253566
0.422975242

0 0.1 0.2 0.3 0.4 0.5 0.6

Time Series Analysis:

Mercantile bank limited: Mercantile Bank was good over the last couple of years in operating
efficiency ratio. In 2014 and 2016 they were the better side than than the other two banks. In
2014 they had the number of ratio with 0.45 which went up in 2015 and 2016 but decreased in
2017.

Bank Asia: Bank Asia was average throughout the last 4 years. They had a consistency with
number of ratios. In 2014 they had 0.41 and in 2017 they end up with 0.43.

AB Bank: AB Bank made a great turnover from 2014 to 2017. They had bad amount in 2014 but
started rising from 2015 and ended up with the most number of ratios in 2017.

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Cross Sectional Analysis: In this section of operating efficiency ratio Mercantile Bank and AB
Bank had a good competition but AB Bank did better here than the other two banks. They are
doing good strategically and the employers of this bank working hard to do better.

Tax Management Efficiency:

0.453179
2017 0.3046563
0.008108777

0.495159
2016 0.2657095
0.278360364 Mercentile Bank
Bank Asia
0.354261
2015 0.42323781 AB Bank
0.270795546

0.265718
2014 0.348676025
0.203648103

0 0.1 0.2 0.3 0.4 0.5 0.6

Time Series Analysis:

Mercantile bank limited: Mercantile Bank limited made a great turnover from 2014 to 2017.
They started with 0.26 and ended up with 0.45 in 2017. They started increasing in 2015 and
made a huge difference in 2016 and 2017.

Bank Asia: Bank Asia was average throughout the last four years. They were great in 2014 but
went down in 2016 with the number of 0.27.

AB Bank: AB Bank was disaster in this section from 2014 to 2017. In 2014 they had 0.20 it rose
in 2015 and in 2017 they had 0.008 which was a big disaster for them.

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Cross Sectional Analysis: Mercantile Bank was again the best side in this section too. They took
care of their faults and made a great turnover which made a huge difference. On the other hand
AB Bank was very bad in this section especially at the end of the year 2017 they were very bad.

Expense Control Efficiency:

0.266355
2017 0.29851049
0.193730188

0.216438
2016 0.2657095
0.196525465 Mercentile Bank
Bank Asia
0.199468
2015 0. 27743669 AB Bank
0.194260402

0.226588
2014 0.280474113
0.261101227

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35

Time series analysis:

Mercantile bank limited: Mercantile Bank kept quite consistency from 2014 to 2017. In 2014
they had the number of 0.22 and in 2017 they had the number of 0.26. Again they made a
turnover in 2017 which was from 0.22 to 0.26.

Bank Asia: Bank Asia was great throughout the last four years in this section. In 2014 they
started with 0.28 and in 2017 they ended up with 0.298. They were the best side all four years
and had a good difference with the other two banks.

AB Bank: in 2014 the number of ratio of this bank was 0.26 and it started decreasing from 2015
.in 2017 they had the lowest number of ratio of 0.193 and they did not rise up after 2014.

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Cross Sectional Analysis: Bank Asia was the better side all the four years from 2014 to 2017 in
expense control efficiency. Their management was trying hard and they did very well in this
expense control efficiency and mercantile bank also did well here. On the other hand AB Bank
was average. They had a competition with mercantile bank in 2015 and they were better in 2014.
But they did not keep it for longer.

Asset Utilization:

0.095713
2017 0.07982331
0.081974994

0.101389
2016 0.08493693
0.086958652 Mercentile Bank
Bank Asia
0.108017
2015 0.09623618 AB Bank
0.09654672

0.115094
2014 0.111787733
0.109961404

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14

Time series analysis:

Mercantile bank limited: Mercantile Bank did well in utilizing asset properly. Their highest
number of ratio was in 2014 which was 0.11 and in 2017 it decreased in 0.09 though it was
higher than the other two banks.

Bank Asia: Bank Asia was also good in asset utilizing ratio, in 2014 they had 0.11 and in 2017
they had the lowest 0.07 which made them lower than the other two banks. They decreased
continuously from 2014 to 2017.

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AB Bank: just like Bank Asia this bank also made a continuous flow of decreasing the number of
ratio.in 2014 they had 0.1099 and in 2017 they had 0.08.

Cross sectional analysis: Mercantile Bank again was the best side and all the four years this bank
was the better side than the other two banks. The management and employees of mercantile bank
limited tried hard to keep this consistency to do better in asset management on the other hand AB
Bank limited needs to improve more and they need a strategic move to do better in asset
utilization.

Fund Management Efficiency:

14.85651
2017 13.8984776
13.21594737

12.19081
2016 13.5111165
13.03922347 Mercentile Bank
Bank Asia
11.8452
2015 12.0701033 AB Bank
12.17080873

12.51723
2014 11.08858833
13.69012821

0 2 4 6 8 10 12 14 16

Time series analysis:

Mercantile bank limited: in 2014 they had the number of 12.51 and in 2015 it got decreased. It
spiked to 12.19 in 2016 and started improving till the last of 2017.

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Bank Asia: in 2014 this bank had the number of 11.088 which did not go down till the end of
2017. They are increasing continuously from 2014 to 2017.

AB Bank: like the other two bank thus bank also did great in fund management efficiency. They
started improving from 2014 and in 2016 they were better though in 2017 despite of improving
they were below mercantile bank.

Cross Functional Analysis: In fund management efficiency there was a great competition among
all three banks. Mercantile bank was better than AB Bank and Bank Asia for in 2017 but AB
Bank was better in 2014 and 2015 and in 2016 Bank Asia had the highest number of ratio.

PROFITABILITY RATIO:

A profitability ratio is a measure of profitability, which is a way to measure a company's

performance. Profitability is simply the capacity to make a profit, and a profit is what is left over
from income earned after you have deducted all costs and expenses related to earning the
income.

Return on Equity, ROE:

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 0.171641
2017 0.10089432
0.001701893

0.132465
2016 0.08715623
0.062028425 Mercentile Bank
Bank Asia
0.090414
2015 0.13639477 AB Bank
0.061813419

0.08674
2014 0.12122307
0.080045528

0 0.05 0.1 0.15 0.2

Time Series Analysis:

Mercantile bank limited: in 2014 this bank had the amount of 0.08 and started improving from
2014. In 2017 it went up to 0.171.The flow of improvement was huge in 2016 and 2017.

Bank Asia: in 2014 Bank Asia had the highest number of 1.121 and it continued in 2015. But
they started decreasing in 2016. The number went down to 0.087 though they started improving
again in 2017 but that was not good enough.

AB Bank: AB bank was very bad in return on equity. In 2014 they had the number of ratio with
0.08 but started decreasing. In 2017 they had 0.001 and it was the lowest amount of ratio. The
decreasing of the price of their share can be a reason of it.

Cross Sectional Analysis:

Bank Asia and mercantile bank had a good amount of net income returned as a percentage of
shareholders' equity .where AB bank was very bad here to earn as a percentage of shareholders
equity, the bank needs to improve their management and they need to look after it

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Return on Asset, ROA:

0.011553
2017 0.00725938
0.000128776

0.010866
2016 0.00645071
0.004757064 Mercentile Bank
Bank Asia
0.007633
2015 0.01130022 AB Bank
0.005078826

0.00693
2014 0.010932236
0.005846952

0 0.002 0.004 0.006 0.008 0.01 0.012 0.014

Time series analysis:

Mercantile bank limited: like the previous one Mercantile Bank limited made a turnover again
and in 2014 they had 0.006 where in 2017 they ended up with the amount of 0.011.they started
improving from 2014 and continuously they kept their improvement.

Bank Asia: Bank Asia was good in 2014-2015. In 2014 they had 0.010 and it rose to 0.011 in
2015 which decreased in 2016 and became 0.006 though it spiked to 0.007 again in 2017.

AB bank: just like return on equity this bank has a similar type of ratio in return on asset. They
did bad continuously from 2014 and the flow of getting lower became huge n 2017. From 0.006
in 2016 it became 0.0001 in 2017.

Cross sectional analysis: Like the previous one Mercantile Bank and Bank Asia was better in the
percentage of profit earned from overall resources. Whereas AB bank was not that bad in making

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a good amount of profit. Return on asset is lower than the other two banks of AB Bank. The
management needs to take care of it.

Net Interest Margin:

0.013124
2017 0.01953538
0.009959074

0.015742
2016 0.01643079
0.010438759 Mercentile Bank
Bank Asia
0.013718
2015 0.01217791 AB Bank
0.016101165

0.015224
2014 0.0174095
0.025150223

0 0.005 0.01 0.015 0.02 0.025 0.03

Time series analysis:

Mercantile bank limited: in this section Mercantile Bank limited did not do well in 2014 and
2017. Their overall performance was average throughout the whole four years.

Bank Asia: Bank Asia was also average in net interest margin. They are doing good investment
in comparison to its fund. They has a consistency from 2014 to 2017 though it got increased in
2016 and decreased in 2015.

AB bank: AB bank was good in 2014. They had a big difference with the other two banks. In
2015 the amount of investment got decreased and the decreasing continued. At the end of the
year 2017the amount was 0.0099.

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Cross sectional analysis: AB bank was good in 2014 and 2015 in this section. But Bank Asia
started doing well from the year off 2016 and in 2017 bank Asia continued their improvement.
Mercantile Bank on the other hand was average in investing throughout the last four years.

Net Non-Interest Margin:

0.033248
2017 0.022983
0.024909465

0.034346
2016 0.02688458
0.025634815 Mercentile Bank
Bank Asia
0.007828
2015 0.01452154 AB Bank
0.00265404

0.010855
2014 0.013944065
0.003560834

0 0.005 0.01 0.015 0.02 0.025 0.03 0.035 0.04

Time series analysis:

Mercantile bank limited: in 2014 this bank had a lower amount with 0.01 and in 2015 it decreased
to 0.0078 but in 2016 the amount became up to 0.03 made a huge difference from the previous
year. In 2017 it continued improvement.

Bank Asia: this bank did well in this section in 2014. They made improvement from 2014-2016
but in 2017 they decreased from 0.026 to 0.022. in a word they were good in net non-interest
margin.

AB bank: in 2014 they had a small amount with 0.003 which got decreased in 2015 but grew up
in 2016 to 0.025 and again went down to 0.024 but these 2 years they made huge difference from
2015.

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Cross sectional analysis: All 3 banks made a huge turnover in 2016 in net non-interest margin.
But the turnover of mercantile bank made a huge difference with the other 2 banks. Bank Asia
ended up bad again in 2017 so the management should look after it.

Net Operating Margin:

3.89
2017 2.14
0.05386222

3.01
2016 1.87
2.238917563 Mercentile Bank
Bank Asia
1.9
2015 3.04 AB Bank
2.432841581

1.59
2014 2.64
2.820089337

0 1 2 3 4 5

Time series analysis:

Mercantile bank limited: in a dollar of sells profit made by Mercantile Bank became higher from
2016. In 2014 it was 1.59 and in 2015 1.9 which was lower than the other two banks but from
2016 they made a huge profit and that made a huge difference with the other two banks.

Bank Asia: in 2015 Bank Asia made the highest number of profit with 3.04 which got decreased
in 2016 with 1.87 that grew up in 2017 with 2.14.

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AB bank: like return on equity and asset AB bank had a huge disaster in net operating margin in
2017 where in 2014 they had the highest amount of profit in a dollar sale. In 2016 they had 2.238
but all on a sudden in 2017 it went down to 0.05.

Cross sectional analysis: AB bank made a big downfall in 2017 but in 2014-2016 they were
good. On the other hand mercantile bank limited made a turnover again in 2016 and bank Asia
made an average amount of profit throughout the 4 years.

Earnings per Share, EPS:

0.046373
2017 0.04251838
0.034868539

0.050088
2016 0.04331537
0.036073574 Mercentile Bank
Bank Asia
0.043764
2015 0.04661996 AB Bank
0.038663834

0.047765
2014 0.053345394
0.049757064

0 0.01 0.02 0.03 0.04 0.05 0.06

Time Series Analysis:

Mercantile bank limited: Mercantile Bank kept consistent amount of earning per share ratio. In
2014 they had 0.047 which got decreased in 2015 that spiked to 0.05 in 2016 and kept this
improvement in 2017.

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Bank Asia: in 2014 the amount of EPS was the most for Bank Asia which got decreased
continuously from 2015.

AB Bank: AB bank has the lowest amount of EPS over the couple of years. In 2014 it was 0.04
and at the end of 2017 it ended up with 0.038.

Cross Sectional Analysis: Mercantile Bank and Bank Asia were good in EPS. In 2014-15 bank
asia and in 2016-17 mercantile bank was better side on EPS. The amount for AB bank
consistently is lower than the other two. Return on equity and asset were also lower here. The
management needs to make strategic change to make it better.

Net Profit Margin:

0.120707
2017 0.0909431
0.001570915

0.107171
2016 0.07594701
0.0547049 Mercentile Bank
Bank Asia
0.070664
2015 0.1174217 AB Bank
0.052604852

0.060208
2014 0.097794599
0.053172769

0 0.02 0.04 0.06 0.08 0.1 0.12 0.14

Time series analysis:

Mercantile bank limited: Mercantile Bank did a tremendous turnover here again in net profit
margin. In 2014 they had 0.060 and in 2017 they ended up with 0.120.

Page | 26
Bank Asia: Bank Asia had an average amount of ratio in last four years. Though they decreased
in 2016. In 2014 they had 0.097 and in 2015 they spiked to 0.117 where they went down again in
2016 and grew again in 2017.

AB bank limited: AB bank was keeping consistency from 2014-2016 but in 2017 all on a sudden
they went down from 0.05 to 0.001.

Cross sectional analysis:

Again mercantile bank and bank Asia was better in net profit margin and AB bank made a big
downfall in 2017.in 2014 and 2015 Bank Asia and in 2017 and 2018 mercantile bank made good
in net profit margin.

Dividend per Share, DPS:

-1.42817
2017 0
-0.000398408

-1.19836
-1.4319514 2016
-0.000179227 Mercentile Bank
Bank Asia
-1.0016
-0.4547927 2015 AB Bank
-0.000654441

-0.71639
2014 0
-0.449019939

-1.6 -1.4 -1.2 -1 -0.8 -0.6 -0.4 -0.2 0

Time series analysis:

Page | 27
Mercantile bank limited: Mercantile Bank limited had -0.71 dividends per share in 2014 and at
the end of 2017 it ended up with -1.428 which is the lowest amount of dividend.

Bank Asia: in 2014 Bank Asia had 0 dividends as well as in 2017.The had the lowest in 2016
with -1.431.and became 0 again in 2017.

AB bank: AB bank had 0 dividends almost 3 years of last 4 years. In 2014 they had -0.44 and in
2015 it became 0 and continued till 2017 though in 2017 they had -0.0003 number of dividend.

Cross sectional analysis: Mercantile bank had the lowest number of dividend than the other two
banks. Though Bank Asia had lower dividends in 2015 and 2016; but AB bank had 0 from
20152017.

MARKET RATIOS: Market position ratios evaluating current market situation and
indicating whether company generate profits or loss in the market.

Price Earnings P/E Ratio:

6.100257
2017 9.67757009
406.5929687

4.046512
2016 7.63636364
8.932888075
Mercentile Bank
Bank Asia
3.642105
2015 3.66447368 AB Bank
6.79041337

6.056604
2014 4.155303031
7.545860239

0 100 200 300 400 500

Page | 28
Time series analysis:

Mercantile bank limited: Mercantile Bank has a consistency from 2014 to 2017.in 2014 they had
6.05 which decreasingly became 3.64 in 2015 and grew up to 6.1 in 2017.

Bank Asia: just like Mercantile Bank, Bank Asia had a consistency though it is increasing from
2015. In 2014 the number was 4.15 and at end of the year 2017 it was 9.67.

AB Bank: in 2014 AB bank had the ratio of 7.54 which was consistent till 2016. In 2017 it
became 406.59 which made a huge difference from the previous year which was 8.93 in 2016.

Cross sectional analysis: From year 2014-2016 the measure of the share price was almost same
among the three banks but in 2017 surprisingly AB bank had the biggest turnover from 8.93 to
406.59.

Market to book ratio:

1.046758
2017 0.97642621
0.691943128

0.535385
2016 0.66697805
0.55401662 Mercentile Bank
Bank Asia
0.329681
2015 0.5 AB Bank
0.419715447

0.526805
2014 0.504136029
0.604030656

0 0.2 0.4 0.6 0.8 1 1.2

Page | 29
Time series analysis:

Mercantile bank limited: in 2014 Mercantile Bank had 0.05 market to book value ratio and it
decreased in 2015 but grew up in 2016 and started improving till the end of the year 2017.

Bank Asia: Bank Asia was good in maintaining market to book value ratio. From 2014 it grew up
in 2017 and became 0.97 from 0.50 back in 2014.

AB Bank: just like other two banks AB bank also did good in finding the value by comparing the
book value with the market value. In 2014 this was highest with 0.60 which went down in 2015
and grew up again in 2016.

Cross sectional analysis: All three banks were quite same with the number of the market to book
value ratio. Mercantile bank did better in 2017 and AB Bank in 2014 but Bank Asia did better in
2015 and 2016.

FINANCIAL RISK RATIO: Risk related to the financing activities of the company is
called as financial risk. Debt to Total Capital. This ratio is used to measure company's
total debt with its capital

Leverage Ratio

Page | 30
 0.932496
2017 0.92804967
0.924301967

0.917725
2016 0.92598687
0.923277065 Mercentile Bank
Bank Asia
0.915291
2015 0.91715067 AB Bank
0.917843983

0.919799
2014 0.909817195
0.926991439

0.895 0.9 0.905 0.91 0.915 0.92 0.925 0.93 0.935

Time series ratio:

Mercantile bank limited: in 2014 Mercantile Bank had a number of ratios with 0.919 and
decreased in 2015 but grew up again in 2016 with the number of 0.932.

Bank Asia: Bank Asia had a lower amount of leverage ratio in 2014 but it started increasing from
2015 and at the end of the year 2017 it ended up with the amount of leverage ratio with 0.92

AB bank: AB bank had a big leverage ratio back in 2014 but it decreased in 2015 and again grew
up which ended up with 0.92 in 2017.

Cross sectional analysis: Bank Asia made a turnover in this section. They had lower in 2014 but
went up in 2017. Mercantile bank also had a big debt in 2017. On the other hand AB bank had a
lower leverage ratio compared to other two in last two years.

Equity Multiplier:

Page | 31
 14.85651
2017 13.8984776
13.21594737

12.19081
2016 13.5111165
13.03922347 Mercentile Bank
Bank Asia
11.8452
2015 12.0701033 AB Bank
12.17080873

12.51723
2014 11.08858833
13.69012821

0 2 4 6 8 10 12 14 16

Time series analysis:

Mercantile bank limited: Mercantile Bank limited had a quite consistency in equity multiplier in
2014 they had 12.57 and ended up with 14.85 in 2017.

Bank Asia: Bank Asia had a similar type of ratio throughout the four years. In 2014 they had
11.08 and in 2017 they ended up with 13.89.

AB bank: like the other two bank AB bank also kept consistency in equity multiplier over the last
four years. In 2014 they had 13.69 which was the highest and at the end of the years 2017 they
had 13.21.

Cross sectional analysis: All three banks kept consistency in measuring their financial leverage. In
2014-15 AB bank had the highest rate but in 2016 bank Asia and in 2017 mercantile bank had the
highest rate.

Reasons of ROE change

Page | 32
The ROE of AB Bank Limited has decreased from 0.0800 in 2014 to 0.0618 in 2015 as the Net
Profit Margin has decreased from 0.0531 to 0.0526, Asset Utilization has decreased from 0.11 to
0.10 and Equity Multiplier also decreased from 13.69 to 12.17. The ROE also decreased because
of changes in Tax Management Efficiency, Expense Control Efficiency, Asset Management
Efficiency and Funds Management Efficiency. Tax Management Efficiency increased from
2014 to 2015 but Expense Control Efficiency, Asset Management Efficiency and Funds
Management Efficiency has decreased from 2014 to 2015. The ROE has decreased from 0.0620
in 2016 to 0.0017 in 2017 due to changes in NPM, AU and EM and also Tax Management
Efficiency, Expense Control Efficiency, Asset Management Efficiency and Funds Management
Efficiency.
The ROE of Mercantile Bank Limited has increased from 0.0867 in 2014 to 0.0904 in 2015. Net
Profit Margin increased from 0.0602 in 2014 to 0.0707 in 2015, Asset Utilization decreased from
0.1151 in 2014 to 0.1080 in 2015 and Equity Multiplier decreased from 12.52 in 2014 to 11.85 in
2015. The ROE increased due to increase in Net Profit Margin. The ROE has also increased due
to increase in Tax Management Efficiency from 0.2657 in 2014 to 0.3543 in 2015. The ROE
increased from 0.1325 in 2016 to 0.1716 in 2017 due to increase in Net Profit Margin and Equity
Multiplier. It also increased due to increase in Expense Control Efficiency and Funds
Management Efficiency.

The ROE of Bank Asia Limited has increased from 0.1212 in 2014 to 0.1364 in 2015 due to
increase in Net Profit Margin and Equity Multiplier. It also increased due to increase in Tax
Management Efficiency and Funds Management Efficiency. The ROE increased from 0.0872 in
2016 to 0.1009 in 2017 due to increase in Net Profit Margin and Equity Multiplier. It also
increased due to increase in Tax Management Efficiency, Expense Control Efficiency and Funds
Management Efficiency.

Credit Rating and CAMELS Rating

A credit rating is an evaluation of the credit risk of a prospective debtor, predicting their ability
to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. Credit
Rating Agency of Bangladesh Limited (CRAB) has affirmed ‘A1’ rating in the long term and

Page | 33
‘ST-2’ rating in the short-term to AB Bank Limited. Commercial banks rated ‘A’ have strong
capacity to meet their financial commitments but are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than Commercial Banks in higher-
rated categories. A is judged to be of high quality and are subject to low credit. Commercial
Banks rated in this category are considered to have strong capacity for timely repayment.
Commercial Banks rated ‘ST-2’ category are characterized with commendable position in terms
of liquidity, internal fund generation, and access to alternative sources of funds is outstanding.
Mercantile Bank Limited is rated ‘AA3’ in the long term and ‘ST-2’ in short term. ‘AA3’ means
very strong capacity to meet its financial commitments and a very good track record and have no
readily apparent weakness. ‘ST-2’ is a strong capacity to meet its financial commitments in a
timely manner.
Bank Asia Limited is rated ‘AA2’ in the long term which is a very high quality and very low
credit risk. ‘ST-2’ in short term which means strong repayment capacity and commendable
liquidity.

CAMELS Rating is a numerical rating assigned to a bank based on examiner’s judgement about
six dimensions of performance. They are capital adequacy, earnings quality, asset quality,
liquidity position, management quality and sensitive to market risk. AB Bank Limited,
Mercantile Bank Limited and Bank Asia Limited are rated ‘2’ or ‘Satisfactory’ or ‘B-Class’
Banks according to Camels Rating.

Capital Adequacy Ratio (CAR)

Capital Adequacy Ratio (CAR) is a measure of a bank’s available capital expressed as a

percentage of a bank’s risk weighted credit exposures.

In 2016 CAR of AB Bank Limited was 10.79% and in 2017 it was 10.80%. There was an
increase of 0.01% which means it is safe and likely to meet its financial obligations.

Page | 34
In 2016 CAR of Mercantile Bank Limited was 8.35% and in 2017 it was 7.91%. There was a
decrease of 0.44% which means the bank is unable to meet its short term financial obligations
thereby putting depositor’s funds at risk.

In 2016 CAR of Bank Asia Limited was 12.42% and in 2017 it was 14.89%. There was an
increase of 2.47% which means it is safe and likely to meet its financial obligations.

Conclusions and Recommendations

We have done a detailed analysis of the performance over AB Bank, Bank Asia and Mercantile
Bank from various aspects such as asset, liquidity, efficiency etc. from year 2014 to year 2017.

1. From investment perspective if an investor has to invest then Mercantile and Bank Asia
would be a good choice over AB Bank because Mercantile and Bank Asia has higher
profitability ratios.

2. From liquidity perspective Bank Asia and Mercantile hold a strong position than AB with
enough liquidity arrangements like hot money, Liquidity Securities Indicator etc. kept
significantly higher than AB proportion to their liabilities. So, AB Bank should increase their
liquidity position.

3. When it comes to efficiencies like asset management efficiency Mercantile is much better
than AB and Bank Asia. Fund management efficiency AB and Mercantile are doing well over
Bank Asia, Bank Asia should focus on these efficiencies. But in terms of controlling expenses
Bank Asia and AB has shown a greater efficiency over Mercantile.

4. When it comes to talk about leverage ratio all the three banks have a growing amount of
leverage or loans over the years. However, the amount increased very rapidly for Mercantile, and
more controllably for AB and Bank Asia So we can say that the bank need to decrease their
borrowings and pay out their loans.

Page | 35
5. Finally when it comes to market ratio the three banks had share prices near to 20 taka in
2017. In this case AB bank and Bank Asia share prices were consistent and higher than
Mercantile Bank, indicating the portfolio managements are working on increasing the wealth of
shareholders. Mercantile Bank struggles to maintain its P/E ratio and has a very high M/B Ratio.
We can see unlikely increase of P/E Ratio of AB Bank in 2017 which if possible is a good
indicator; however, Bank Asia and Mercantile Bank must increase their share prize.

References

• http://abbl.com/reports
• http://lankabd.com/dse/stock-market/ABBANK/ab-bank-
limited/financialstatements?companyId=1&goToHomePageParam=true&stoc
kId=1
• http://lankabd.com/dse/stock-market/MERCANBANK/mercantile-
banklimited/financial-
statements?companyId=26&goToHomePageParam=true&stockId=26
• http://lankabd.com/dse/stock-market/BANKASIA/bank-asialimited/financial-
statements?companyId=14&goToHomePageParam=true&stockId=14
• https://www.investopedia.com
• http://www.investing.com

Thank you!

Page | 36
Appendix:
AB Bank Limited
Balance Sheet (2014-2017)

Year 2014 2015 2016 2017

Cash 13,950,476,378 17,034,569,843 19,707,725,976 17,780,902,708.00

In hand (Including foreignr 1,140,708,758 1,205,441,602 1,536,407,693 1,572,393,188.00

cur
Balances with Bangladesh 12,809,767,620 15,829,128,241 18,171,318,283 16,208,509,520.00
ban
Balance with other banks 6,555,722,117 4,752,701,128 4,655,002,507 4,241,335,582.00
and
In Bangladesh 4,214,889,208 2,196,851,448 2,624,288,364 2,490,976,583.00

Outside Bangladesh 2,340,832,909 2,555,849,680 2,030,714,143 1,750,358,999.00

Money at call and short 2,456,985,298 4,566,844,263 7,633,213,824 496,384,436.00

notice
Investment in shares &t 31,717,883,909 34,054,553,461 47,561,451,498 46,382,136,275.00
securi
Government 25,305,839,814 27,900,211,389 41,903,780,261 39,732,017,188.00

Others 6,412,044,095 6,154,342,072 5,657,671,237 6,650,119,087.00

Loans and 184,737,891,930 216,364,880,127 226,546,501,234 237,634,491,780.00

advances/Investme
Loans, cash credits, 181,936,611,502 214,291,708,326 225,023,967,197 235,801,195,989.00
overdrafts
Bills discounted and 2,801,280,428 2,073,171,801 1,522,534,037 1,833,295,791.00
purchase
Land, building, furniture and 4,940,112,222 4,819,543,816 4,680,967,000 4,699,245,091.00
f
Other assets 12,455,465,235 5,345,737,331 6,383,908,169 5,863,914,006.00

Total assets 256,814,537,089 286,938,829,969 317,168,770,208 317,098,409,878

Borrowings from other 11,385,667,525 24,098,598,784 15,757,755,476 21,872,486,519.00

banks,
Deposits and other accounts 198,116,757,715 213,671,723,838 245,394,404,421 235,562,075,504.00

Current /Al-Wadeeah 17,645,003,388 20,050,332,586 22,296,581,953 21,821,895,346.00

current
Savings deposits/Mudarabaa 19,427,515,775 3,699,973,387 28,024,691,434 29,869,956,989.00
S

Page | 37
Mudarabba/ Term and Fixed 117,532,923,933 111,741,032,463 122,034,379,371 129,606,179,136.00
d
Other Deposits/ Mudarabba 42,316,260,501 22,573,067,458 68,173,169,341 52,012,742,474.00
D
Bearer certificates of -- 55,607,317,944 -- --
deposits
Bills payable 1,195,054,118 -- 4,865,582,322 2,251,301,559.00

Other liabilities 26,062,452,063 19,094,756,031 25,182,491,365 29,660,121,941.00

Subordinated 2,500,000,000 6,500,000,000 6,500,000,000 6,000,000,000

Debt/Mudaraba
Total liabilities 238,064,877,303 263,365,078,653 292,834,651,262 293,094,683,964

Shareholders' equity 18,759,103,870 23,575,987,130 24,324,206,960 23,993,619,301

Minority Interest -9,444,084 -2,235,814 9,911,986 10,106,613.00

Total liabilities and 256,814,537,089 286,938,829,969 317,168,770,208 317,098,409,878

sharehold
Book Value Per Share 35.23 39.36 36.1 31.65

Paid up capital 5,324,591,520 5,990,165,460 6,738,936,140 7,581,303,150

Risk weighted assets 223,746,284,916 -- -- --

Non-performing loan 6,754,587,357 -- -- --

Total provisioning 4,853,671,957 -- -- --

Cost of deposits/funds 0.11 -- -- --

Interest earning assets 193,750,599,345 225,684,425,518 238,834,717,565 242,372,211,798

No. of Employees 2,220 -- -- --

No. of Branches 93 -- -- --

No. Common Stockn 532459152 599016546 673893614 758130316

Outstandi
Market price per share 21.28 16.52 20 21.9

AB Bank Limited
Income Statement (2014-2017)
(Year) 2014 2015 2016 2017

Page | 38
Interest income 21,920,292,843 21,228,897,178 19,450,005,916 18,095,388,527.00
Interest paid on 15,461,349,909 16,608,847,742 16,139,157,478 14,937,382,065.00
depos
Net interest 6,458,942,934 4,620,049,436 3,310,848,438 3,158,006,462
income
Income from 2,807,058,380 3,281,987,184 5,105,865,296 4,726,135,143.00
investme
Commission, e3,338,084,877 2,964,436,043 2,855,788,192 2,994,211,871.00
exchang
Other operating 174,251,078 227,682,558 168,909,279 178,404,749.00
incom
Total operatinge 12,778,337,269 11,094,155,221 11,441,411,205 11,056,758,225
incom
Salaries, n2,690,415,930 2,905,505,487 3,011,081,546 2,990,025,060.00
allowances a
Other operatingn2,714,504,364 2,807,053,243 -3,011,081,546 -2,990,025,060.00
expe
Total operatings5,404,920,294 5,712,558,730 6,021,127,128 6,020,908,551
expen
Profit before 7,373,416,975 5,381,596,491 5,420,284,077 5,035,849,674
provision
Total provision 2,992,764,874 2,311,504,430 3,020,523,899 4,962,356,549
Extraordinary d 0 0 4,381,780 0
gains an
Profit before tax 4,380,652,101 3,070,092,061 2,395,378,398 73,493,125
Current Tax 2,849,439,168 2,015,720,840 1,774,806,624 1,594,023,822.00
Deferred tax 29,630,556 -402,941,140 -888,220,474 -1,561,365,279.00
Provision for tax 2,879,069,724 1,612,779,700 886,586,150 32,658,543.00
Net profit after 1,501,582,377 1,457,312,361 1,508,792,248 40,834,582
tax
Audited EPS 2.82 2.43 2.24 0.05
Dividend paid -239,084,776 -392,021 -120,780 -302,045.00

Page | 39
 Bank Asia Limited
Balance Sheet (2014-2017)

Year 2014 2015 2016 2017

Cash 10951752735 12470996852 15983718054 17933208773

In hand (Including fore 1334530665 1691680962 2079897416 1994978583

Balances with Banglad e 9617222070 10779315890 13903820638 15938230190

Balance with other ban 832167816 8779031163 13615107372 30077880452

In Bangladesh 693456017 8000106067 10983805427 29087820840

Outside Bangladesh 138711799 778925096 2631301945 990059612

Money at call and shor t 300000000 3230000000 4870000000 0

Investment in shares & 38892515061 47162324547 39711806539 28145350291

Government 34844385059 43717224029 36112473144 24431255000

Others 4048130002 3445100518 3599333395 3714095291

Loans and advances/In 1.1989E+11 1.39005E+11 1.6654E+11 2.00328E+11

Loans, cash credits, ov e 1.11866E+11 1.29595E+11 1.57947E+11 1.84322E+11

Bills discounted and pu 8023532590 9409554946 8593408568 16006102273

Land, building, furnitu r 5237641931 5092815069 5263148467 5344230907

Non-Banking Assets 7989760255 -- -- --

Goodwill -- 9925844072 -- --

Other assets -- -- 8882423376 9117178529

Total assets 1.84094E+11 2.25666E+11 2.54866E+11 2.90946E+11

Borrowings from other 8459915794 12335454278 18978976940 30465558247

Deposits and other acc 1.40681E+11 1.70146E+11 1.91573E+11 2.07284E+11

Current /Al-Wadeeah c 21323479108 29928959572 34554219481 42242103482

Page | 40
Savings deposits/Mud a 16547202983 21174184061 27793803978 34496938426

Mudarabba/ Term and 1.01002E+11 1.15106E+11 1.24322E+11 1.26576E+11

Bills payable 1808032594 3936675238 4902979613 3968967652

Other liabilities 17901674358 21172640859 22253446818 24170500633

Subordinated Debt/M u 449036430 3315440646 3197214016 8092588885

Total liabilities 1.67492E+11 2.06969E+11 2.36003E+11 2.70013E+11

Shareholders' equity 16602099104 18696244934 18863438836 20933679331

Minority Interest -- -- -- --

Total liabilities and sha 1.84094E+11 2.25666E+11 2.54866E+11 2.90946E+11

Book Value Per Share 21.76 22.28 21.41 21.21

Paid up capital 7629955940 8392951530 8812599100 9870110990

Regulatory Capital -- -- -- --

Risk weighted assets -- -- -- --

Non-performing loan -- -- -- --

Total provisioning -- -- -- --

Cost of deposits/funds -- -- -- --

Interest earning assets 1.21022E+11 1.51014E+11 1.85025E+11 2.30406E+11

No. of Employees -- -- -- --

No. of Branches -- -- -- --

No. of Common share o 762332355 838838827 879179811 986957637

Market price per share 10.97 11.14 14.28 20.71

Bank Asia Limited

Income Statement (2014-2017)

Page | 41
(Year) 2014 2015 2016 2017
Interest 13963856420 13944811681 14795577265 16537474861
income
Interest paid one10758874679 11196675728 10607924671 10853728866
d
Net interest 3204981741 2748135953 4187652594 5683745995
incom
Income froms 4035196622 4900921059 3548303241 2535391259
inve
Commission, 2009023109 2289683222 2620174212 3346784283
exch
Other operating 571357099 581780321 683489936 804643551
in
Total operatingc 9820558571 10520520555 11039619983 12370565088
in
Salaries, e 1878784873 2221879869 2403117832 2595054425
allowanc
Other x 2169775416 2273493601 -2403117832 -2595054425
operating e
Total operating 4048560289 4495373470 4852162381 5437869714
ex
Profit before 5771998282 6025147085 6187457602 6932695374
prov
Total provision 1744222699 1909742462 2745348756 2735934074
Profit before 4027775583 4115404623 3442108846 4196761300
tax
Current Tax 1964118166 1550073235 1735042600 2043171957
Deferred tax 51100000 15261354 63000000 41500000

Page | 42
Provision for 2015218166 1565334589 1798042600 2084671957
tax
Net profit afterx 2012557417 2550070034 1644066246 2112089343
ta
Audited EPS 2.64 3.04 1.87 2.14
Dividend paid 0 -381,497,797 -1,258,942,730 0

Mercantile Bank Limited

Balance Sheet (2014-2017)

Year 2014 2015 2016 2017

Cash 12894309930 13226236073 12501632123 15680966260

In hand (Includin 1430510899 1398277602 1724292311 2008127286

Balances with Ba 11463799031 11827958471 10777339812 13672838974

Balance with oth 754524728 4099692248 3752891993 934312772

In Bangladesh 368830617 3816461041 3394173928 688461599

Outside Banglad 385694111 283231207 358718065 245851173

Money at call an d 0 800000000 0 100000000

Investment in sh 32414084966 34059461147 30200687897 35602149655

Government 29720024802 28817526390 24271567529 29362506727

Others 2694060164 5241934757 5929120368 6239642928

Loans and advan 1.17241E+11 1.26624E+11 1.54116E+11 2.0294E+11

Loans, cash credi 1.10173E+11 1.17965E+11 1.41073E+11 1.83544E+11

Bills discounted 7068088827 8658813655 13042844643 19396197965

Land, building, f u 3229353467 3348176820 3199089093 3082427810

Other assets 2567367706 1623585687 1264942686 3053717095

Page | 43
Total assets 1.69101E+11 1.83781E+11 2.05035E+11 2.61394E+11

Borrowings from 3692368038 552848144 8804043480 7056119495

Deposits and oth 1.35001E+11 1.47709E+11 1.55784E+11 2.09074E+11

Current /Al-Wad 21844985397 30452897558 34728064236 49465778859

Savings deposits 10534217297 12739771915 16601527469 19511485925

Mudarabba/ Ter m 46057219028 42028786930 36776569142 77056698640

Other Deposits/ 55176862109 60852621850 65255562966 60446146361

Bills payable 1387228039 1634654462 2421841947 2594349058

Other liabilities 13845780155 16951728792 20578455563 25218275725

Subordinated De 3000000000 3000000000 3000000000 2400000000

Total liabilities 1.55539E+11 1.68213E+11 1.88166E+11 2.43749E+11

Shareholders' e q 13509436942 15515249055 16818844936 17594576292

Minority Interes t 52641124 52641911 50484252 50556961

Total liabilities a 1.69101E+11 1.83781E+11 2.05035E+11 2.61394E+11

Book Value Per S 18.28 20.99 22.75 22.67

Paid up capital 7391567010 7391567010 7391567010 7761145370

Risk weighted as -- -- -- --

Non-performing -- -- -- --

Cost of deposits /-- -- -- --

Interest earning -- -- 1.57869E+11 2.03975E+11

No. of Employee -- -- -- --

No. of Branches -- -- -- --

No. of Common s 736985003 738309758 740167861 776334762

Market price per 9.63 6.92 12.18 23.73

Page | 44
 Mercantile Bank Limited
Income Statement (2014-2017)
(Year) 2014 2015 2016 2017
Interest 13959793130. 14329579494. 13746142871. 16327975923.
income 00 00 00 00
Interest p11385387903. 11808553787. 10518542200. 12897323225.
paid on de 00 00 00 00
Net e 2574405227. 2521025707. 3227600671.0 3430652698.0
interest 00 00 0 0
incom
Income 2796034926. 2664396534. 2931908528.0 3498040797.0
from invest 00 00 0 0
Commissio 1639270591. 1765210576. 1967056164.0 2747572036.0
n, excha 00 00 0 0
Other 1067400996. 1092376366. 2143194233.0 2445292648.0
operating 00 00 0 0
inc
Total o 8077111740. 8043009183. 10269759596. 12121558179.
operating 00 00 00 00
inc
Salaries, 1815704997. 1825092491. 2492476735.0 2528199741.0
allowance 00 00 0 0
Other p 1851447013. 2258161295. - -
operating 00 00 2492476735.0 2528199741.0
ex 0 0

Page | 45
Total 3667152010. 4083253786. 5770389490.0 5457656067.0
operating 00 00 0 0
exp
Profit s 4409959730. 3959755397. 4499370106.0 6663902112.0
before 00 00 0 0
provi
Total 2128064054. 1298169685. 984077542.00 2317846431.0
provision 00 00 0
Profit 2281895676. 2661585712. 3515292564.0 4346055681.0
before tax 00 00 0 0
Current 1145120442. 1264011981. 1292248341.0 1380571440.0
Tax 00 00 0 0
Deferred -35030921.00 -5214809.00 -4861038.00 -54457982.00
tax
Provision 1110089521. 1258797172. 1287387303.0 1326113458.0
for tax 00 00 0 0
Net profit 1171806155. 1402788540. 2227905261.0 3019942223.0
after tax 00 00 0 0
Audited 1.59 1.90 3.01 3.89
EPS
Dividend -527,969,073 -739,491,268 -886,988,041 -
paid 1,108,735,052.
00

Page | 46