CHAPTER ONE

INTRODUCTION

1. Introduction
Banking represents one of the largest and most influential activities of any developed
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economy due to the strong linkages virtually existing with any part of the economic system.
Recent developments in retail banking such as the enlargement of services supplied have
often been depicted as technologically driven phenomena. The banks play an important role
in the economy of the country. The contribution of banking sector to the GDP of Bangladesh
is very impressive. In the FY 2011-2012 contribution of banking sector to the GDP was around
13.00%. However, this is not so a good sign for the overall economy of Bangladesh but also
compare to the whole world this is very satisfactory outcomes for the Bangladesh economy as
the banking sector in rest of the world was collapsed in the meantime. Therefore, without any
question we can say that the banking sector of the Bangladesh is a progressive economic sector
in our country.
According to the data of Bangladesh bank, there are 57 different banks in Bangladesh.
Among them, total number of State-owned bank is 04, specialized bank 05, private bank 31,
Islamic bank 08, foreign bank 09. As a result the commercial bank plays an important role to
develop the economy of a country like other financial institutions. Brac Bank Limited, Islami
Bank Limited, IFIC BankLimited, Trust Bank Limited, AB Bank Limited, City Bank Limited,
One Bank Limited, EXIM-Bank Limited, Dutch-Bangla Bank Limited, Bank Asia Limited are
the private commercial banks in Bangladesh which operates their banking activities with a
limited liability. The Project report has been prepared on the basis of the ratio analysis of these
ten private commercial banks based on their last five years data since 2008 till 2012.

1.1

Origin of the study

The report is the requirement of the course Bus 498 (Project) of BBA program of East West
University, for which my honorable instructor Sarahat Salma Chowdhuty assigned me to do a
research paper on the topic Ratio Analysis of Ten Leading Private Commercial Banks of
Bangladesh. For an appraisal of ratio analysis, I have selected the Annual Report from 2008 to 2012
of ten leading commercial banks of Bangladesh, those are : Brac Bank Limited, Islami Bank

Limited, IFIC BankLimited, Trust Bank Limited, AB Bank Limited, City Bank Limited,
One Bank Limited, EXIM-Bank Limited, Dutch-Bangla Bank Limited, Bank Asia Limited.

1.2 Objectives of the report

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There are mainly two objectives behind the preparation of this report such as primary
objectives and secondary objectives. These are discussed as under:
The Primary Objective:
The primary objective of preparing this report is to fulfill the partial requirements of the BBA
program and to represent the Ratio Analysis of Ten Leading Private Commercial Banks of
Bangladesh.
Secondary Objective:
There are some objectives to prepare this report. These are defined s follows To present an overview of the selected private commercial banks in Bangladesh
To evaluate the performance of the banks on the basis of ratio analysis
To present the recommendation to the development of the selected private commercial
banks

1.3 Methodology:
While I was conducting the study I have collected various types of data. Data has been collected
from different sources.
Data collection: Most of the data are collected from the secondary sources to prepare the report.

Secondary Sources: I have conducted different types of secondary data for the research
work. Secondary sources of information can be defined as follows
Selected Banks Annual Reports since 2008 till 2012
Website of the selected banks

Quantitative Analysis: Quantitative analysis like ratio analysis is done to evaluate the
performance of the selected banks. In case of quantitative analysis informations are taken from
the financial reports of the selected banks.

1.4 Limitation of the study

In the research work all data are collected from the secondary sources and after then organize
them to attain an optimal outcome of the research. Moreover there are some limitations acts as a
barrier to conduct the research.
Insuffiency of proper data
Only secondary data are used to evaluate the performance of the selected banks
To complete the research only depend on official information and annual reports
Lack of proper information

CHAPTER TWO
CHAPTER 2- AN OVERVIEW OF TEN SELECTED
PRIVATE COMMERCIAL BANKS IN
BANGLADESH

2.1 OVERVIEW OF AB BANK LIMITED (ABBL):

AB Bank Limited is the pioneer in commercial banking under private ownership in Bangladesh.
It started functioning as Arab Bangladesh Bank Ltd. on 12 April, 1982. To be the trendsetter
for innovative banking with excellence and perfection was pronounced as the banks vision. Side
by side it spoke out about its mission, To be the best performing bank in the country.

Since inception AB Bank Limited has spread over the country through 82 branches at all
economically potential locations. ABBL has established a foreign branch in Mumbai, India and a
subsidiary finance company in Hongkong.
AB Bank Limited provides all commercial banking services like Current and Savings accounts,
fund transfer, and utility bills receiving. In addition it presents a good number of deposit and
credit schemes for the clients. All its services may be classified as follows:

Retail Banking

Corporate Banking

SME Banking

NRB Banking

Islami Banking

2.1.1 Objectives of the ABBL:

Maximization of profit along with the benefits of employees is the main objective of the bank. In
addition, the order objectives are:
Bringing modern Banking facility to the doorstep of general public through
diversification of banking services, thereby arousing saving propensity among the people.
Foreign a cordial, deep-rooted and firm banker-customer relationship by dispensing
prompt and improved clients service.
Taking part in the development if the national economy through productive deployment
of the Banks resources as well as patronizing different social activities.
Connecting clients to modern banking practice by the best application of improved
information technology, so that they get encouraged to continue and feel proud of
banking with ABBL.

 Ensuring highest use of the professional workforce through enhancement of their aptitude
and competency.
Responding to the need of the time by participating in syndicated large loan financing
with likeminded Banks of the country, thereby expanding the area of investment of the
Bank.

Elevating the image of the Bank at home and abroad by sustained expansion of its activities.
Ensuring maintenance of capital adequacy, comfortable liquidity, asset quality and highest
through successful implementation of the management core risk program
2.1.2 Vision and Mission of ABBL:
Vision Statement
"To be the trendsetter for innovative banking with excellence & perfection"
Mission Statement
"To be the best performing bank in the country"

2.2 OVERVIEW OF BRAC BANK LIMITED (BBL)

BRAC Bank is the last organization to have received a commercial banking license from
Bangladesh Bank, making it the youngest private commercial bank in Bangladesh. Its
headquarters are based in the capital Dhaka. The bank is partially owned by BRAC, the largest
non-government organization in the world, International Finance Corporation, the private sector
arm of The World Bank Group and ShoreCap International.
Though BRAC Bank was formed with the aim to serve the millions of small and medium
enterprises (SMEs) in the country, having pioneered the concept of SME financing in
Bangladesh, it is the fourth largest SME bank globally. The company also provides services
within corporate and institutional banking, retail banking, as well as probashi banking, which
specifically caters to non-resident Bangladeshis abroad. Other areas include customized treasury
and foreign exchange solutions, and custody services. It ranks amongst the top banks nationally
that processes remittances from abroad.
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2.2.1 Corporate Vision and Mission of BBL

Corporate Vision
Building profitable and socially responsible financial institution focused on Market and
Business with Growth potential, thereby assisting BRAC and stakeholders to build a just,
enlightened, healthy democratic and poverty free Bangladesh.
Corporate Mission

Sustained growth in Small & Medium Enterprise sector

Continuous low-cost deposit Growth with controlled growth in retail assets.

Corporate Assets to be funded through self-liability mobilization. Growth in Assets

through syndications and investment in faster growing sectors.

Continuous endeavor to increase non-funded income

Keep our debt charges at 2% to maintain a steady profitable growth

Achieve efficient synergies between the banks branches, SME unit offices and BRAC
field offices for delivery of remittance and Banks other products and services

Manage various lines of business in a full controlled environment with no compromise on

service quality

Keep a divers, far flung team fully controlled environment with no compromise on
service quality

Keep a diverse, far flung team fully motivated and driven towards materializing the
banks vision into reality

Keep a diverse, far flung team fully motivated and driven towards materializing the
banks vision into reality

2.3 OVERVIEW OF DUTCH-BANGLA BANK LIMITED (BBBL)

Dutch-f Bank started operation is Bangladesh's first joint venture bank. The bank was an effort
by local shareholders spearheaded by M Sahabuddin Ahmed (founder chairman) and the Dutch
8

company FMO.From the onset, the focus of the bank has been financing high-growth
manufacturing industries in Bangladesh. The rationale being that the manufacturing sector
exports Bangladeshi products worldwide. Thereby financing and concentrating on this sector
allows Bangladesh to achieve the desired growth. DBBL's other focus is Corporate Social
Responsiblity (CSR). Even though CSR is now a cliche, DBBL is the pioneer in this sector and
termed the contribution simply as 'social responsiblity'. Due to its investment in this sector,
DBBL has become one of the largest donors and the largest bank donor in Bangladesh. The bank
has won numerous international awards because of its unique approach as a socially conscious
bank.
DBBL was the first bank in Bangladesh to be fully automated. The Electronic-Banking Division
was established in 2002 to undertake rapid automation and bring modern banking services into
this field. Full automation was completed in 2003 and hereby introduced plastic money to the
Bangladeshi masses. DBBL also operates the nation's largest ATM fleet and in the process
drastically cut consumer costs and fees by 80%. Moreover, DBBL choosing the low profitability
route for this sector has surprised many critics. DBBL had pursued the mass automation in
Banking as a CSR activity and never intended profitability from this sector. As a result it now
provides unrivaled banking technology offerings to all its customers. Because of this mindset,
most local banks have joined DBBL's banking infrastructure instead of pursuing their own.
Even with a history of hefty technological investments and an even larger donations, consumer
and investor confidence has never waned. Dutch-Bangla Bank stock set the record for the highest
share price in the Dhaka Stock Exchange in 2008.
2.3.1 Core Objectives of DBBL
Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and
satisfaction and to become their first choice in banking. Taking cue from its pool esteemed
clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and
epitomizes its vaunted marquees "Your Trusted Partner"

2.3.2 Corporate Vision and Mission of DBBL

Vision
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Dutch-Bangla Bank dreams of better Bangladesh, where arts and letters, sports and athletics,
music and entertainment, science and education, health and hygiene, clean and pollution free
environment and above all a society based on morality and ethics make all our lives worth
living. DBBL's essence and ethos rest on a cosmos of creativity and the marvel-magic of a
charmed life that abounds with spirit of life and adventures that contributes towards human
development.

Mission
Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a
commitment to social responsibility. "Profits alone" do not hold a central focus in the Bank's
operation; because "man does not live by bread and butter alone"

2.4 OVERVIEW OF EXIM BANK LIMITED:

Export Import Bank of Bangladesh Limited was established in the year 1999. EXIM Bank
contributes to the socio-economic development of our country. The Bank starts functioning from
3rd August, 1999 with its name as Bengal Export Import Bank Limited. On 16th November
1999, it was renamed as Export Import Bank of Bangladesh Limited.
Organizational culture is considered as an essential component of business corporations as it has
the ability to bind organizational members together. The culture and values of our bank have
been proved as a source of competitive advantage for EXIM Bank and are acting as a key
component to establish the relationship between the bank and the employees and , in turn ,
between their employees and their customers.
EXIM Bank has also been able to improve organizational performance via improving the
performance of individual contributors and also recognizes existing talents to fill up the higher
vacancies within the organization or place them in the right position, wherein the best use of their

10

abilities can be ensured. Their culture promotes sharing of common goal which ensures
harmonious relationship in the working environment.
2.4.1 Objectives of EXIM Bank:
The main objectives of the EXIM Bank are Maintain a good relationship with the customers
Try to protect the environment and go green financing
Maintain a good communication with the customer
Gives more priority in customer services
Maintain all laws and rules of the government

2.4.2 Vision and Mission:

Vision:
The gist of EXIM Banks vision is Together towards Tomorrow. Export Import Bank of
Bangladesh Limited believes in togetherness with its customers, in its march on the road
to growth and progress with service. To achieve the desired goal, there will be pursuit of
excellence at all stages with climate of continuous improvement, because, in Exim Bank,
they believe, the line of excellence is never ending. Banks strategic plans and
networking will strengthen its competitive edge over others in rapidly changing
competitive environment. Its personalized quality services to the customers with trend of
constant improvement will be the cornerstone to achieve their operational success.
Mission: The Banks mission gives emphasis to:

Provide quality financial services especially in Foreign Trade

Continue a contemporary technology based professional banking environment
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 Maintain corporate & business ethics and transparency at all levels

Sound Capital Base
Ensure sustainable growth and establish full value to the honorable stakeholders
Fulfill its social commitments and
Above all, to add positive contribution to the national economy

2.5 OVERVIEW OF ISLAMI BANK BANGLADESH LIMITED(IBBL):

Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in
commercial banking business based on Islamic Shari'ah with 63.09% foreign shareholding
having largest branch network ( total 286 Branches) among the private sector Banks in
Bangladesh. It was established on the 13th March 1983 as the first Islamic Bank in the South
East Asia.
It is listed with Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. Authorized
Capital of the Bank is Tk. 20,000.00 Million and Paid-up Capital is Tk. 14,636.28 Million having
33,686 shareholders as on 31st December 2013.

2.4.2

Vision and Mission:

Vision
Our vision is to always strive to achieve superior financial performance, be considered a leading
Islamic Bank by reputation and performance.

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 Our goal is to establish and maintain the modern banking techniques, to ensure soundness
and development of the financial system based on Islamic principles and to become the
strong and efficient organization with highly motivated professional, working for the
benefit of people, based upon accountability, transparency and integrity in order to ensure
stability of financial systems.
We will try to encourage savings in the form of direct investment.
We will also try to encourage investment particularly in projects which are more likely to
lead to higher employment.
Mission
To establish Islamic Banking through the introduction of a welfare oriented banking
system and also ensure equity and justice in the field of all economic activities, achieve
balanced growth and equitable development in through diversified investment operations
particularly in the priority sectors and less developed areas of the country. To encourage
socio-economic upliftment and financial services to the loss-income community
particularly in the rural areas.

2.6 OVERVIEW OF ONE BANK LIMITED(OBL)

ONE Bank Limited was incorporated in May, 1999 with the Registrar of Joint Stock
Companies under the Companies Act 1994, as a commercial bank in the private sector. Now
the bank has almost 60 branches in all over Bangladesh. The bank is pledge-bound to serve
the customers and the community with utmost dedication. The prime focus is on efficiency,
transparency, precision and motivation with the spirit and conviction to excel as ONE Bank in
both value and image. The name ONE Bank is derived from the insight and long nourished
feelings of the promoters to reach out to the people of all walks of life and progress together
towards prosperity in a spirit of oneness.

2.6.1 Objectives of ONE Bank limited

Be one of the best banks of Bangladesh.

Achieves excellence in customer services next to none and superior to all competitors.
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 Cater to all differentiated of Retail and Wholesale customers.

Be a high quality distributor of products and services.
Use state-of-the-art technology in all spheres of banking
2.6.2 Vision and Mission:
Vision:
To establish ONE Bank Limited as a role Model in the Banking Sector of Bangladesh.
To meet needs of our Customers, provide fulfillment for our people and create
shareholder Value.
Mission:
To constantly seek to better serve our Customers.
Be pro-active in fulfilling our Social Responsibilities.
To review all business lines regularly and develop the Best Practices in the industry.

2.7 OVERVIEW OF TRUST BANK LIMITED

Trust Bank Limited is one of the leading private commercial banks having a spread network of
62 branches and 7 SME center across Bangladesh and plans to open few more branches to cover
the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in 2012. The bank,
sponsored by the Army Welfare Trust (AWT), is first of its kind in the country. With a wide
range of modern corporate and consumer financial products Trust Bank has been operating in
Bangladesh since 1999 and has achieved public confidence as a sound and stable bank in 2001,
the bank introduced automated branch banking system to increase efficiency and improve
customer service. In the year 2005, the bank moved one step further and introduced ATM
services for its customers. Since banks business volume increased over the years and the
demands of the customers enlarged in manifold, our technology has been upgraded to manage
the growth of the bank and meet the demands of our customers. In January 2007, Trust Bank
successfully launched Online Banking Services which facilitate Any Branch Banking, ATM
Banking, Phone Banking, SMS Banking, & Internet Banking to all customers.Online Services
and Visa Electron (Debit Card), ATMs now allow customers to retrieve 24x7 hours Account
information such as account balance checkup through mini-statements and cash withdrawals.
Trust Bank has successfully introduced Visa Credit Cards to serve its existing and potential
14

valued customers. Trust Bank is a customer oriented financial institution. It remains dedicated to
meet up with the ever growing expectations of the customer because at Trust Bank, customer is
always at the center.
2.7.1 Vision and Mission:
Vision:
We aim to provide financial services to meet customer expectations so that customers feel
we are always there when they need us, and can refer us to their friends with confidence.
We want to be a preferred bank of choice with a distinctive identity.
Mission:
Our mission is to make banking easy for our customers by implementing one-stop service
concept and provide innovative and attractive products & services through our
technology and qualified human resources. We always look out to benefit the local
community through supporting entrepreneurship, social responsibility and economic
development of the country.

2.8 OVERVIEW OF BANK ASIA LIMIED:

Bank Asia has been launched by a group of successful entrepreneurs with recognized standing in
the society. The management of the Bank consists of a team led by senior bankers with decades
of experience in national and international markets. The senior management team is ably
supported by a group of professionals many of whom have exposure in the international
market. It set milestone by acquiring the business operations of the Bank of Nova Scotia in
Dhaka, first in the banking history of Bangladesh. It again repeated the performance by acquiring
the Bangladesh operations of Muslim Commercial Bank Ltd. (MCB), a Pakistani bank. In the
year 2003 the Bank again came to the limelight with oversubscription of the Initial Public
Offering of the shares of the Bank, which was a record (55 times) in our capital market's history.
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
15

noticeably opening up opportunities for enhancing income in the context of a regime of gradual
interest rate decline. Bank Asia Limited 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.

2.8.1 Objectives of Bank Asia:

The objectives of Bank Asia are Place customer interest and satisfaction as first priority and provide customized banking
products and services
Value addition to the stakeholders through attaining excellence in banking operations
Maintain high ethical standard and transparency in dealings
Be a compliant institution through adhering to all regulatory requirements
Contribute significantly for the betterment of the society
Ensure higher degree of motivation and dignified working environment for our human
capital and respect optimal work-life balance
Committed to protect the environment and go green

2.8.2 Vision and Mission:

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Bank Asia is a third generation public limited commercial bank. It received the Certificate of
Incorporation on September 28, 1999 and came to operation on November 27, 1999. The
Mission and vision of Bank Asia is Vision:
Bank Asia's vision is to have a poverty free Bangladesh in course of a generation in the
new millennium, reflecting the national dream. The vision is to build a society where
human dignity and human rights receive the highest consideration along with reduction of
poverty.

Mission:
To assist in bringing high quality service to the customers and to participate in the
growth and expansion of the national economy

To set high standards of integrity and bring total satisfaction to the clients,
shareholders and employees
To become the most sought after bank in the country, rendering technology driven
innovative services by the dedicated team of professionals

2.9 OVERVIEW OF CITY BANK LIMIED:

City Bank is one of the oldest private Commercial Banks operating in Bangladesh. It is a top
bank among the oldest five Commercial Banks in the country that started their operations in
1983. The Bank started its journey on 27th March 1983 through opening its first branch at B. B.
Avenue Branch in the capital, Dhaka city. It was the visionary entrepreneurship of around 13
local businessmen who braved the immense uncertainties and risks with courage and zeal that
made the establishment & forward march of the bank possible. Those sponsor directors
commenced the journey with only Taka 3.4 crore worth of Capital, which now is a respectable
Taka 330.77 crore as capital & reserve.
17

City Bank is among the very few local banks which do not follow the traditional, decentralized,
geographically managed, branch based business or profit model. Instead the bank manages its
business and operation vertically from the head office through 4 distinct business divisions
namely
1. Corporate & Investment Banking
2. Retail Banking (including Cards)
3. SME Banking &
4. Treasury & Market Risks.
Under a real-time online banking platform, these 4 business divisions are supported at the back
by a robust service delivery or operations setup and also a smart IT Backbone. Such centralized
business segment based business & operating model ensure specialized treatment and services to
the banks different customer segments. The bank currently has 87 online branches spread across
the length & breadth of the country that include a full fledged Islamic Banking branch. Besides
these traditional delivery points, the bank is also very active in the alternative delivery area. It
currently has 43 ATMs of its own; and ATM sharing arrangement with a partner bank
that has more then 500 ATMs in place; SMS Banking; CustomerCallCenter is going to start
operation. The bank has a plan to end the current year with 50 own ATMs.
City Bank is the first bank in Bangladesh to have issued Dual Currency Credit Card. The bank is
a principal member of VISA international and it issues both Local Currency (Taka) & Foreign
Currency (US Dollar) card limits in a single plastic. VISA Debit Card is another popular product
which the bank is pushing hard in order to ease out the queues at the branch created by its
astounding base of some 400,000 retail customers. The launch of VISA Prepaid Card for the
travel sector is currently underway.
2.9.1 Vision and Mission:
Vision:
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To be the leading bank in the country with best practices and highest social
commitment
Brand payoff line: Making Sense of Money
Mission:
To contribute to the socioeconomic development of the country.
To attain highest level of customer satisfaction through extension of services by dedicated
and motivated team of professionals.
To maintain continuous growth of market share ensuring quality.
To maximize banks profit by ensuring its steady growth.
To ensure participative management system and empowerment of HR.
To maintain the high moral and ethical standard.
To nurture an enabling environment where innovativeness and performance is rewarded.

2.10 OVERVIEW OF IFIC BANK LIMIED:

The international finance investment and commerce bank limited (IFIC bank) is a banking
company incorporated in Bangladesh with a limited liability. It was set up at the instance of the
government in 1976 as a joint venture between the government of Bangladesh and sponsors in
the private sector with the objective of working as a finance company within the country and
setting up joint ventures banks/financial institutions abroad. The government held 49% shares
and the rest 51% were held by the sponsors and general public. In 1983 when the government
allowed banks in the private sector, the IFIC was converted into a full fledged commercial bank.
The government of Bangladesh now holds 32.75% of share capital of the bank. The rest of the

19

share capital is held by some leading industrialists of the country having vast experience in the
field of trade and commerce and by general public.
All types of commercial banking services are provided by the bank within the stipulations laid
down by the bank company act, 1991 along with the directives issued by the Bangladesh bank.
The number of branches of the bank within the country stood at 97 at the end of 2010 including 6
SME branches and 2 SME service centres. The bank is listed with the Dhaka and Chittagong
stock exchange limited and traded in the bourses as an A category scrip.
2.10.1 Vision and Mission:
Vision:
We want to be the leader among banks in Bangladesh and make our indelible mark as an
active partner in regional banking operating beyond the national boundary.
Mission:
The mission of IFIC bank is to provide services to the clients with the help of skilled and
dedicated workforce whose creative talents, innovative actions and competitive edge
make their position unique in giving quality service to all institutions and individuals that
they care for.
They are committed to the welfare and economic prosperity of the people and the
community, for they derive from them their inspiration and drive for onward progress to
prosperity.
They want to be leader among the banks of Bangladesh and make their indelible mark as
an active partner in regional banking operating beyond the national boundary.
In an intensely competitive and complex financial and business environment, they
particularly focuses on growth and profitability of all concerned.

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CHAPTER THREE
Ratio Analysis

RATIO ANALYSIS
Ratio Analysis is a tool which is used as a way of analyzing the performance of any company or
organization. It is one of the most important techniques of financial analysis in which quantities
are converted into ratios for meaningful comparisons with past ratios and ratios of other firms in
21

the same or different industries. Ratio analysis determines trends and exposes strengths or
weaknesses of a firm.

TYPES OF FINANCIAL RATIOS

Ratio analysis is done to compare or evaluate the performance over the years. This analysis
mainly deals with some fields those are liquidity ratio, leverage ratio, profitability ratio, and
efficiency ratio and so on. These ratios are used to measure the short-term solvency of an
organization. These ratios show the ability of the organization to convert quickly its assets into
cash to pay its different types of short-term debts. The higher the ratios the company is more
liquid and the lower the ratios, the less liquid the company is which may experience the company
financial distress to pay its short-term debt.

3.1 LIQUIDITY RATIOS

These ratios are used to measure the short-term solvency of an organization. These ratios show
the ability of the organization to convert quickly its assets into cash to pay its different types of
short-term debts. The higher the ratios the company is more liquid and the lower the ratios, the
less liquid the company is which may experience the company financial distress to pay its shortterm debt.
3.1.1 CURRENT RATIO
The ratio is considered to observe the liquidity status of an organization. This ratio is obtained by
dividing the total current assets of a company by its total current liabilities. It expresses the
working capital relationship of current assets available to meet the company's current
obligations.
Formula for calculating current ratio:
Current Ratio = Total Current Assets/ Total Current Liabilities

No
1

Banks Name
AB Bank Limited

2008

2009

2010

2011

2012

1.0210

1.0661

1.1074

1.0510

1.0460
22

BRAC Bank Limited

1.0573

1.0554

1.0434

0.9816

0.9094

DBBL

1.3328

0.7579

1.0007

0.9898

1.0045

Exim bank

1.0374

1.0644

1.1011

1.1394

1.1264

Islami Bank

1.0501

1.0616

1.0563

1.0575

1.0568

Bangladesh Limited
6

ONE Bank Limited

1.0343

1.0611

1.0490

1.0568

1.0523

Trust Bank Limited

1.0943

1.0426

1.0180

1.0453

1.0488

Bank Asia

1.0436

1.0570

1.0029

1.0328

1.0362

City Bank

1.0142

0.9965

1.0667

1.0881

1.1151

10

IFIC Bank

1.0296

1.1969

1.0158

1.0367

1.0213

These ratios give an idea of the Banks ability to pay back its short-term liabilities (debt and
payables) with its short-term assets (cash, inventory). The higher the current ratio, the more
capable the company is of paying its obligations. A ratio under standard 1 suggests that the Bank
would be unable to pay off its obligations if they came due at that point.

If we go through time series analysis we get:

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1.40

AB Bank

1.20

BRAC Bank

1.00

DBBL
Exim bank

0.80

IBBL

0.60

ONE Bank
TBL

0.40

Bank Asia

0.20
0.00
2008

City Bank
2009

2010

2011

2012

IFIC Bank

AB Bank Limited shows current ratio more than 1in between 2008-2012. It had a better position
in 2010 that was 1.1074 and slightly poor position in 2008 which was 1.0210 but maintained an
average position in 2009,2011,2012 which was respectively 1.10661,1.0510 and 1.0460.So if we
look the current ratio of AB bank we can said that they have enough current asset to meet its
obligation.
BRAC Bank Limited shows current ratio more than 1 in between 2008-2010 and less than 1 in
2011 & 2012. It had a better position in 2008 that was 1.0573 and poor position in 2012 which
was 0.9094
DBBL shows current ratio more than 1 in between 2008, 2010, 2012 and less than 1 in 2011 &
2009. It had a better position in 2008 that was 1.3328 and poor position in 2009 and 2011 which
was respectively 0.7579 and 0.9878.So in 2009 and 2011 we saw that DBBL does not not have
enough current asset to pay out all of its current liability.
Exim bank shows current ratio more than 1in between 2008-2012. It had a better position in
2011 that was 1.1394 and slightly poor position in 2008 which was 1.0374.
Islami Bank Bangladesh Limited shows current ratio more than 1in between 2008-2012. It had
maintained a continuous position between the years. So this bank is capable to pay out all its
current liabilities through its current assets.

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ONE Bank Limited shows current ratio more than 1 in between 2008-2012. It had a better
position in 2009 that was 1.0611and slightly poor position in 2008 which was 1.0343.So through
this 5 years we saw that one bank has enough current asset to pay out its obligation.
Trust Bank Limited shows current ratio more than 1 in between 2008-2012. It had a better
position in 2012 that was 1.0488 and slightly poor position in 2010 which was 1.0180.So if we
consider the current ratio trust bank limited has maintained a constant position.
Bank Asia shows current ratio more than 1 in between 2008-2012. It had a better position in
2009 that was 1.0570 and slightly poor position in 2010 which was1.0029.So the current ratio
indicates Bank asia has enough current assets to fuifill the obligations.
City Bank shows current ratio more than 1in between 2008-2010 except 2009. It had a better
position in 2011 that was 1.0881 and poor position in 2009 which was 0.9965.
IFIC Bank shows current ratio more than 1 in between 2008-2012. It had a better position in
2009 which was 1.1969 and slightly poor position in 2012 which was 1.0213.
If we go through cross Sectional analysis we get:
In 2008 all the banks have ratio more then 1. So it is clear all that the banks are in good financial
health in 2008. But DBBL shows the height current ratio that is 1.3328 while City Bank shows
the lowest current ratio of 1.0142 So it can say that DBBL is in a better position than all other
banks and more capable to pay its obligations. On the other hand, City Bank is in slightly down
position than all other banks and not much capable to pay its obligations compare with other
banks.

25

1.40
1.20
1.00
0.80

2008
2009

0.60

2010
2011

0.40

2012

0.20

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00

In 2009 all the banks have not ratio more then 1. So it is clear that the DBBL & City Bank are
not in good financial health in 2009 (less than 1). But IFIC Bank shows the height current ratio
that is 1.1969 while DBBL shows the lowest current ratio of 0.7579 So it can say that IFIC
Bank is in a better position than all other banks and more capable to pay its obligations. On the
other hand, DBBL is not in a good position than all other banks and not capable to pay its
obligations compare with other banks.
In 2010 all the banks have ratio more then 1. So it is clear that the banks are in good financial
health in 2010. But AB Bank Limited shows the height current ratio that is 1.1074 while DBBL
shows the lowest current ratio of 1.0007 So it can say that AB Bank Limited is in a better
position than all other banks and more capable to pay its obligations. On the other hand, DBBL
is in slightly down position than all other banks and not much capable to pay its obligations
compare with other banks.
In 2011 all the banks have not ratio more then 1. So it is clear that the DBBL & BRAC Bank
Limited were not in good financial health in 2011 (less than 1). But Exim bank shows the
26

height current ratio that is 1.1394 while BRAC Bank Limited shows the lowest current ratio of
0.9816 So it can say that Exim bank is more capable to pay its obligations. On the other hand,
BRAC Bank Limited is not in a good position than all other banks and not capable to pay its
obligations compare with other banks.
In 2012 all the banks have not ratio more then 1. So it is clear that the BRAC Bank Limited is
not in good financial health in 2011 (less than 1). But Exim bank shows the height current ratio
that is 1.1264 while BRAC Bank Limited shows the lowest current ratio of 0.9094 So it can say
that Exim bank is more capable to pay its obligations. On the other hand, BRAC Bank Limited
again is not in a good position than all other banks and not capable to pay its obligations compare
with other banks.
3.1.2 QUICK RATIO
The ratio is also considered to observe the liquidity status of an organization. This ratio is
obtained by dividing the total quick assets of a company by its total current liabilities. This is an
important ratio because sometimes a company may have heavy inventory as part of its current
assets which might be obsolete or slow moving. For that reason eliminating those inventories
from current assets is doing to measure this ratio. The ratio is regarded as an acid test ratio. It
expresses the true working capital relationship which includes accounts receivables, prepaid and
notes receivables available to meet with the company's current obligations.
The formula:
Quick Ratio = Total Quick Assets/ Total Current Liabilities

No

Banks Name

1
2
3
4
5

AB Bank Limited
BRAC Bank Limited
DBBL
Exim bank
Islami Bank

6
7
8
9
10

Bangladesh Limited
ONE Bank Limited
Trust Bank Limited
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

2011

2012

0.8672
0.9299
1.1624
0.1854

0.8856
0.9248
0.6865
0.1688

0.9682
0.9222
0.8815
0.1737

0.8824
0.8662
0.8929
0.2487

0.8691
0.7632
0.9087
0.3174

0.2081

0.2206

0.1907

0.2041

0.2088

0.9072
0.9496
0.9169
0.8352
0.9059

0.8974
0.8695
0.9000
0.8444
1.0153

0.9094
0.8559
0.8677
0.9038
0.8648

0.9227
0.9041
0.8794
0.9194
0.8906

0.9252
0.8903
0.8328
0.9186
0.8738
27

Banks with ratios of less than 1 cannot pay their current liabilities and should be looked at with
extreme caution. Furthermore, if the acid-test ratio is much lower than the working capital ratio,
it means current assets are highly dependent on inventory.
If we go through cross Sectional analysis we get:
1.4
1.2
1
0.8

2008
2009

0.6

2010
2011

0.4

2012

0.2

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

Between 2008-2012, most of the time all the banks show ratios less than 1. Which means Banks
cannot pay their current liabilities and should be looked at with extreme caution. Except in 2008
DBBL shows a ratio of 1.1624 that means in that DBBL was able to pay their current liabilities
efficiently.
Again in the graph Exim bank and Islami Bank Bangladesh Limited shows very poor ratios in
those years. It indicates that these banks cannot pay their current liabilities efficiently through its
current assets.

If we go through time series analysis we get:

28

AB Bank Limited shows a constant quick ratio less than 1 around 0.85 in between 2008-2012.
So it can say that This Bank had a constant position over the periods.
BRAC Bank Limited shows quick ratio less than 1 in between 2008-2012. It had a better
position in 2008 that was 0.93 and poor position in 2012 which was 0.76.
DBBL shows quick ratio less than 1 in between 2009-2012. It had a better position in 2008 that
was 1.16 which was more then 1 and poor position in 2009 which was 0.6865 compare with
other years.
1.4
1.2

AB Bank
BRAC Bank

DBBL
Exim bank

0.8

IBBL
0.6

ONE Bank
TBL

0.4

Bank Asia
City Bank

0.2
0
2008

IFIC Bank
2009

2010

2011

2012

Exim bank shows very poor quick ratio less than 1 in between 2008-2012. It had a better
position in 2012 that was 0.3174 and poor position in 2009 which was 0.1688 compare with
other years.
Islami Bank Bangladesh Limited shows a constant poor quick ratio less than 1 around 0.20 in
between 2008-2012. So it can say that this Bank had a constant poor position over the periods.
ONE Bank Limited shows a constant quick ratio less than 1 around 0.90 in between 2008-2012.
So it can say that This Bank had a constant position over the periods.
Trust Bank Limited shows quick ratio less than 1 in between 2008-2012. It had a better position
in 2008 that was 0.9496 and slightly poor position in 2010 which was 0.8559 compare with other
years.
29

Bank Asia shows quick ratio less than 1 in between 2008-2012. It had a better position in 2008
that was 0.9169 and slightly poor position in 2012 which shows ratio of 0.8328 compare with
other years.
City Bank shows quick ratio less than 1 in between 2008-2012. It had a better position in 2011
and 2012 and poor position in 2008 which was 0.83 compare with other years.
IFIC Bank shows quick ratio less than 1 in between 2008-2012 except 2009. It had a better
position in 2009 which was 1.0153, more then 1 and poor position in 2010 which was 0.8648

3.2. LEVERAGE RATIOS

Leverage Ratios are used to measure the extent of the company's financing with debt relative to
equity and its ability to cover interest and other fixed charges. These ratios address the
company's long-term ability to meet its financial leverage. The higher the ratios the more
indebtedness the company owes. This higher results signal the possibility the company will be
unable to earn enough to satisfy its debt obligations.
3.2.1 LONG-TERM DEBT TO EQUITY RATIO
In the risk analysis this ratio is a way to determine a company's leverage. The ratio is calculated
by taking the company's long-term debt and dividing it by the total value of its preferred and
common stock. The company who has higher ratio is thought to be more risky because it has
more liabilities and less equity.
The formula:
Long-term Debt to Equity Ratio = Long-term Debt / Equity

No

Banks Name

AB Bank Limited

BRAC Bank Limited

2008

2009

2010

2011

2012

0.48

0.61

1.02

0.69

0.64

0.4193

0.3006

0.3931

0.4282

0.7451
30

DBBL

0.14

0.79

0.21

0.16

0.44

Exim bank

0.10

0.0002

0.13

0.24

0.26

IBBL

0.21

0.15

0.13

0.11

0.08

ONE Bank Limited

0.08

0.21

0.04

0.10

0.02

Trust Bank Limited

0.36

0.04

0.09

0.42

0.44

Bank Asia

0.48

0.44

0.73

0.10

0.29

City Bank

0.52

0.17

0.24

0.13

0.30

10

IFIC Bank

0.06

0.30

0.00

0.21

0.13

If a lot of debt is used to finance increased operations (high debt to equity or more then 1), the
bank could potentially generate more earnings than it would have without this outside financing.
If this were to increase earnings by a greater amount than the debt cost (interest), then the
shareholders benefit as more earnings are being spread among the same amount of shareholders.
However, high ratio (1 or more) means bank has more long term liabilities and less equity. This
can lead to bankruptcy, which would leave shareholders with nothing.
If we go through time series analysis we get:
AB Bank Limited had a poor position in 2010 that was 1.02 means their long term liability was
more than equity and a better position in 2008 which was 0.48 compare with other years.

31

1.20
1.00

AB Bank

0.80

DBBL

BRAC Bank
Exim bank
IBBL

0.60

ONE Bank
0.40

TBL
Bank Asia

0.20

City Bank
IFIC Bank

0.00
2008

2009

2010

2011

2012

BRAC Bank Limited had a poor position in 2012 that was 0.75 but their long term liability was
less than equity and a better position in 2009 which was 0.30 compare with other years.
DBBL had a poor position in 2008 that was 0.79 but their long term liability was less than equity
and a better position in 2009 which was 0.14 means their long term liability was less than equity
compare with other years.
Exim bank had a poor position in 2008 that was 0.21 but their long term liability was less than
equity and a better position in 2012 which was 0.08 means their long term liability was very low
than equity compare with other years.
Islami Bank Bangladesh Limited had a poor position in 2012 that was 0.26 but their long term
liability was less than equity and a better position in 2009 which was 0.002 means their long
term liability was very low than equity compare with other years.
ONE Bank Limited had a poor position in 2009 that was 0.21 but their long term liability was
less than equity and a better position in 2012 which was 0.02 means their long term liability was
very low than equity compare with other years.
Trust Bank Limited had a poor position in 2011 that was 0.42 but their long term liability was
less than equity and a better position in 2010 which was 0.09 means their long term liability was
very low than equity compare with other years.
32

Bank Asia had a poor position in 2010 that was 0.73 but their long term liability was less than
equity and a better position in 2011 which was 0.10 means their long term liability was very low
than equity compare with other years.
City Bank had a poor position in 2008 that was 0.52 but their long term liability was less than
equity and a better position in 2011 which was 0.13 means their long term liability was very low
than equity compare with other years.
IFIC Bank had a poor position in 2009 and a very better position in 2010 and their long term
liability was always very low than equity comparing with other years.
If we go through cross Sectional analysis we get:
1.20
1.00
0.80
2008

0.60

2009
2010

0.40

2011

0.20

2012

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00

Between 2008-2012, all the banks show ratios less than 1. Which means Banks have less long
term liabilities then equity. This indicates a better position. Moreover in 2009 AB Bank Limited
shows almost equal ratio which indicate equal long term debt and equity. After that AB Bank
Limited shows a high ratio of 1.02 in 2010 this can lead to bankruptcy, which would leave
shareholders with nothing.

However in 2012, BRAC Bank Limited, IFIC Bank in 2010 and

in 2009 Exim bank shows almost equal long term liability and equity.
From the graph it is clear that ONE Bank Limited, Islami Bank Bangladesh Limited, Exim
bank shows minimum ratios over the time period. So it can say that they have a better position
than other banks.
33

3.2.2 TOTAL DEBT TO EQUITY RATIO

This ratio is obtained by dividing the total liability or debt of a company by its total equity. The
ratio measures how the company is leveraging its debt against the capital employed by its
owners. If the liabilities exceed the net worth then in that case the creditors have more stake than
the shareholders.
The formula:
Total Debt to Equity Ratio = Total Debt / Shareholders Equity

No

Banks Name

2008

2009

2010

2011

2012

AB Bank Limited

11.5033

9.5995

8.5692

9.2987

9.8422

BRAC Bank Limited

12.3226

10.6037

11.6595

12.8713

16.1033

DBBL

13.2027

24.3801

13.3894

12.7400

13.3585

Exim bank

12.7189

11.4053

8.0639

7.9666

9.0383

Islami Bank
Bangladesh Limited

15.4204

12.8421

13.0709

12.9996

11.1376

ONE Bank Limited

12.7130

13.7180

11.0750

9.6550

10.3942

Trust Bank Limited

11.3522

13.4364

10.5965

12.7902

13.6265

Bank Asia

15.0132

12.8597

13.9007

8.4343

9.7596

City Bank

12.5424

12.0395

6.8912

5.4817

6.2481

10

IFIC Bank

13.2897

12.2141

11.1015

12.8656

15.5993

High Total Debt to Equity ratio indicate bank has more liabilities and less equity. This can lead to
bankruptcy, which would leave shareholders with nothing. So minimum ratio is better for the
Banks.
If we go through time series analysis we get:

34

18
16
14
12
10

2008

2009
2010

2011

2012

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

AB Bank Limited showed that the dependency on external fund had gradually decreased from
2008 to 2010, from 11.5033units to 8.5692 units. But AB Bank Limited has increased its
dependency again on external funding over the last two years up to 9.8422 unit.
BRAC Bank Limited showed that the dependency on external fund had increased in 2008
&20011 to 2012. Meanwhile AB Bank Limited has decreased its dependency 2009 but again it
increased in 2010.
DBBL showed that the dependency on external fund ratio was quite simeller in 2008 and 2010 to
2012. But DBBL has dramatically increased its dependency 2009 that can lead Bank
Exim bank showed that the dependency on external fund had gradually decreased from 2008 to
2011, from 12.7189 units to 7.9666 units. But Exim bank has increased its dependency again on
external funding over the last one year up to 9.0383unit.
Islami Bank showed that the dependency on external fund ratio was quite simeller in 2009 and
2011. But Islami Bank has increased its dependency in 2010 nd maximum in 2008, although a
little decreased in 2012.
ONE Bank Limited showed that the dependency on external fund had fluctuated over the five
years. The maximum rate was 13.7180 in 2009 and minimum was 10.3942 in 2011.

35

If we look at Trust Bank Limited that also showed the dependency on external fund had
fluctuated over the five years. The maximum rate was 10.5965 in 2012 and minimum was
10.5965 in 2010.
Again we look at Bank Asia that also showed the dependency on external fund had fluctuated
over the five years. The maximum rate was 15.0132 in 2008 and minimum was 8.4343in 2011.
Again we look at City Bank that also showed the dependency on external fund had fluctuated
over the five years. The maximum rate was 12.5424 in 2008 and minimum was 5.4817 in 2011.
City Bank had a poor position in 2008 that was 0.52 but their long term liability was less than
equity and a better position in 2011 which was 0.13 means their long term liability was very low
than equity compare with other years.
IFIC Bank showed that the dependency on external fund had gradually decreased from 2008 to
2010, from 13.2897 to 11.1015 units. But IFIC Bank has increased its dependency again on
external funding over the last two years up to 12.8656 from15.5993 unit.
When we go through cross Sectional analysis we get:

25
20
15

2008

10

2009
2010
20
082
01
020
12

Ba
nk

2012

Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

2011

Between 2008-2012, all the banks show very high ratios. Which means Banks have more
liabilities (Short term & long term) then equity. This indicates a very poor position.

36

Moreover in 2008 Trust Bank Limited shows a ratio of 11.35 which indicate high total debt
then equity but it was the minimum compare to other banks. Again Islami Bank Bangladesh
Limited shows a high value 15.42 in 2008.
In 2009 AB Bank Limited shows a ratio of 9.5995which was the minimum compare to other
banks. Again DBBL shows a very high value 24.38 in 2008.
Again in 2010 City Bank again shows a ratio the minimum ratio 6.8912compare to other banks.
Again Bank Asia shows a very high value 13.9 in 2010.
In 2011 City Bank shows a ratio the minimum ratio 5.48compare with the other banks. Again
Islami Bank Bangladesh Limited shows a very high value almost 13 in 2011.
In 2012 City Bank shows a ratio the minimum ratio 6.25 compare to other banks. Again BRAC
Bank Limited shows a very high value 16.10 in 2012.

3.2.3 TOTAL DEBT TO TOTAL ASSET RATIO

The debt to total assets ratio is an indicator of financial leverage. It tells the percentage of total
assets that were financed by its total debt. The debt to total assets ratio is calculated by dividing a
companys total liabilities by its total assets. The lower the result of this ratio the better off the
company is.
The formula:
Total Debt to Total Asset Ratio = Total Debt / Total Asset

No

Banks Name

2008

2009

2010

2011

2012
37

1
2
3
4
5
6
7
8
9
10

AB Bank Limited
BRAC Bank Limited
DBBL
Exim bank
IBBL
ONE Bank Limited
Trust Bank Limited
Bank Asia
City Bank
IFIC Bank

0.9200
0.9249
0.94782
0.9271
0.9391
0.9271
0.9190
0.9376
0.9262
0.9300

0.9057
0.9138
0.9466
0.9194
0.9278
0.9321
0.9307
0.9278
0.9233
0.8150

0.8955
0.9210
0.9305
0.8897
0.9289
0.9172
0.9138
0.9329
0.8733
0.9174

0.9029
0.9279
0.9272
0.8885
0.9286
0.9061
0.9275
0.8940
0.8457
0.9279

0.9078
0.9415

0.9304
0.9004
0.9176
0.9122
0.9316
0.9071
0.8620
0.9398

High Total Debt to Asset ratio indicates bank has more liabilities and fewer assets. This can lead
to bankruptcy, which would leave shareholders with nothing. So minimum ratio is better for the
Banks. It is always less than 1.
If we go through time series analysis we get:
1
0.95
0.9
2008

0.85

2009
2010

0.8

2011
2012

0.75

TB
L

IB
BL

D
BB
L

Ba
nk
Ci
ty

AB

Ba
nk

0.7

In between 2008 to 2012 AB Bank Limited shows every high ratios near to 1 that means total
debt close to total assets. It indicates the poor situation for the bank.
In between 2008 to 2012 BRAC Bank Limited shows every high ratios near to 1 that means
total debt close to total assets. It indicates the poor situation for the bank.

38

In between 2008 to 2012 DBBL shows every high ratios near to 1 that means total debt close to
total assets. It indicates the poor situation for the bank.
Exim bank shows very high

ratios In between 2008, 2009 & 2012 which are near to 1 that

means total debt close to total assets. It indicates the poor situation for the bank. But in 2010 &
2011 the ratios comparatively previous mentioned years which indicates more assets then total
Debt.
In between 2008 to 2012 IBBL shows every high ratios near to 1 that means total debt close to
total assets. It indicates the poor situation for the bank.
In between 2008 to 2012 ONE Bank Limited shows every high

ratios near to 1 that means

total debt close to total assets. It indicates the poor situation for the bank.
In between 2008 to 2012 Trust Bank Limited shows every high

ratios near to 1 that means

total debt close to total assets. It indicates the poor situation for the bank.
In between 2008 to 2012 Bank Asiaust Limited shows every high ratios near to 1 that means
total debt close to total assets. It indicates the poor situation for the bank.
City Bank shows very high ratios In between 2008 TO 2009 & which are near to 1 that means
total debt close to total assets. It indicates the poor situation for the bank. But in 2010 to 2012
the ratios comparatively less previous mentioned years which indicates more assets then total
Debt. Bank is in slightly better position comparing to other years.
IFIC Bank shows very high ratios In between 2008, 2010, 2011 & 2012 which are near to 1
that means total debt close to total assets. It indicates the poor situation for the bank. But in 2009
the ratios comparatively less previous mentioned years which indicate more assets then total
Debt. It indicates the Bank is in slightly better position comparing to other year.
If we go through cross Sectional analysis we get:

39

1
0.95
0.9

2008

0.85

2009
2010

0.8

2011

0.75

2012
Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.7

Between 2008-2012, all the banks show very high ratios near to 1. It indicates Banks have more
liabilities (Short term & long term) which were closes to total assets. This indicates a very poor
position of the banks.
In 2008 DBBL shows a ratio of which are near to 1 that means total debt close to total assets. It
indicate poor situation for the banks. Moreover, in 2009 DBBL again shows a ratio of which is
near to 1 that means total debt close to total assets.
In 2010 IBBL Bank Asia and DBBL show a ratio of which are closest to 1 that means total debt
close to total assets. In 2011 IBBL and IFIC Bank show a ratio of which are closest to 1 that
means total debt close to total assets.
In 2012 IFIC Bank Asia and BRAC Bank Limited show a ratio of 0.9398 and 0.9415
respectively but City Bank shows ratios of 0.8620 indicates more assets then total Debt.

3.2.4 TOTAL EQUITY TO TOTAL ASSET RATIO

Total Equity to Total Asset ratio used to help to determine how much shareholders would receive
in the event of companywide liquidation. The ratio is expressed as a percentage which is
calculated by dividing total equity by total assets of the company. It represents the amount of
assets on which shareholders have a residual claim.
The formula:
40

Total Equity to Total Asset Ratio = Total Equity / Total Asset

No

Banks Name

2008

2009

2010

2011

2012

AB Bank Limited

8.00%

9.43%

10.45%

9.71%

9.22%

BRAC Bank Limited

7.51%

8.62%

7.90%

7.21%

5.85%

DBBL

5.34%

5.22%

6.95%

7.28%

6.96%

Exim bank

7.29%

8.06%

11.03%

11.15%

9.96%

Islami Bank

6.09%

7.22%

7.11%

7.14%

8.24%

Bangladesh Limited
6

ONE Bank Limited

7.29%

6.79%

8.28%

9.39%

8.78%

Trust Bank Limited

8.10%

6.93%

8.62%

7.25%

6.84%

Bank Asia

6.24%

7.22%

6.71%

10.60%

9.29%

City Bank

7.38%

7.67%

12.67%

15.43%

13.80%

10

IFIC Bank

7.00%

6.67%

8.26%

7.21%

6.02%

If we go through time series analysis we get:

41

18.00%
16.00%
14.00%
12.00%
10.00%

2008

8.00%

2009
2010

6.00%

2011

4.00%

2012

2.00%

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00%

In between 2008 to 2012 AB Bank Limited shows a maximum ratio of 10.45% in 2010 it
indicate that shareholders claim 10.45% on total assets. On the other hand AB Bank Limited
also shows only 8.00% ratio in 2008. So in this case shareholder residual claim only 8.00%.
In between 2008 to 2012 DBBL shows a maximum ratio of 7.28% in 2009 it indicate that
shareholders claim 7.28% on total assets. On the other hand DBBL also shows only 5.22%ratio
in 2011. So in this case shareholder residual claim only 5.22%
In between 2008 to 2012 Exim bank shows a maximum ratio of 11.15% in 2011 it indicate that
shareholders claim 11.15% on total assets. On the other hand Exim bank also shows only
7.29%ratio in 2008. So in this case shareholders residual claim only 7.29%.
In between 2008 to 2012 Islami Bank Bangladesh Limited shows a maximum ratio of 8.24% in
2012 it indicates that shareholders claim 8.24% on total assets. On the other hand Islami Bank
Bangladesh Limited also shows only 6.09% ratio in 2008. So in this case shareholder residual
claim only 6.09%
In between 2008 to 2012 ONE Bank Limited shows a maximum ratio of 9.39% in 2011 it
indicate that shareholders claim 9.39% on total assets. On the other hand ONE Bank Limited
also shows only 6.79% ratio in 2009. So in this case shareholder residual claim only 6.79%

42

In between 2008 to 2012 Trust Bank Limited shows a maximum ratio of 8.10%in 2008 it
indicate that shareholders claim 9.39% on total assets. On the other hand Trust Bank
Limitedalso shows only 8.10% ratio in 2012. So in this case shareholder residual claim only
6.84%
In between 2008 to 2012 Bank Asia shows a maximum ratio of 10.60% in 2011 it indicate that
shareholders claim 10.60% on total assets. On the other hand Bank Asia also shows only 6.24%
ratio in 2008. So in this case shareholder residual claim only 6.24%
In between 2008 to 2012 City Bank shows a maximum ratio of 15.43%in 2011 it indicate that
shareholders claim 15.43%on total assets. On the other hand City Bank also shows only
7.38%ratio in 2008. So in this case shareholder residual claim only 7.38%
If we go through cross Sectional analysis we get:

18.00%
16.00%
14.00%
12.00%
10.00%

2008

8.00%

2009

6.00%

2010

4.00%

2011

2.00%

2012

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00%

In 2008 Trust Bank Limited shows a maximum ratio of 8.10% it indicate that shareholders
claim 8.10% on total assets. On the other hand DBBL shows only 5.34%ratio. So in this case
shareholder residual claim only 5.34%

43

In 2009 AB Bank Limited shows a maximum ratio of 9.43% it indicate that shareholders
residual claim 9.43% on total assets. On the other hand DBBL shows only 5.22% ratio. So in this
case shareholders residual claim only 5.22% on total assets.
In 2010 Exim bank shows a maximum ratio of 11.03% it indicate that shareholders residual
claim 11.03%on total assets. On the other hand Bank Asia shows only 6.71% ratio. So in this
case shareholders residual claim only 6.71% on total assets.
In 2011 City Bank 15.43%shows a maximum ratio of 11.03% it indicate that shareholders
residual claim 11.03% on total assets. On the other hand Islami Bank Bangladesh Limited
shows only 7.14% ratio. So in this case shareholders residual claim only 7.14% on total assets.
In 2012 City Bank shows a maximum ratio of 13.80%it indicate that shareholders residual
claim 13.80%on total assets. On the other hand BRAC Bank Limited shows only 5.85% ratio.
So in this case shareholders residual claim only 5.85% on total assets.

3.3 PROFITABILITY RATIOS

Profitability Ratios measure the overall earnings performance of a company and its efficiency in
utilizing assets, liabilities and equity.
3.3.1 NET PROFIT MARGIN
The Profit Margin of a company determines its ability to survive in competition and adverse
conditions like rising costs, falling prices or declining sales in the future. The ratio measures the
percentage of profits earned per taka of sales or net interest income. Thus this ratio is a measure
of efficiency of a company.
The formula:
Net Profit Margin = Net Profit after Taxation / Net interest Income

44

Banks Name

N
o

2008

2009

2010

2011

2012

AB Bank Limited

113.09%

115.63%

106.16%

55.47%

46.07%

BRAC Bank Limited

30.84%

42.07%

32.87%

31.26%

8.29%

DBBL

45.20%

55.05%

53.75%

43.44%

33.05%

Exim bank

62.03%

76.86%

96.93%

53.37%

43.17%

IBBL

36.24%

41.04%

43.36%

35.55%

31.03%

ONE Bank Limited

62.42%

70.24%

101.34%

73.96%

38.34%

Trust Bank Limited

39.50%

66.81%

86.56%

69.60%

14.16%

Bank Asia

55.64%

75.86%

65.17%

70.95%

24.68%

City Bank

26.43%

39.54%

51.75%

45.69%

15.99%

10

IFIC Bank

56.24%

81.61%

79.35%

36.64%

13.83%

If we go through time series analysis we get:

140.00%
120.00%
100.00%
80.00%

2008
2009

60.00%

2010

40.00%

2011
2012

20.00%

TB
L

IB
BL

D
BB
L

Ba
nk
Ci
ty

AB

Ba
nk

0.00%

45

In 2009 AB Bank Limited showed a maximum ratio of 115.63% comparing to other Years ,it
indicates that 115.63% of profits earned per taka of sales or net interest income. But in 2008 &
2010 ratio was 113.09% & 106.16% which were also better and quite similar to 2009 and
oppositely in 2011 AB Bank Limited net profit margin was better than the year 2012. On the
other hand in 2011 and 2008 the net profit ratio was 55.47% and 38. 46.07%.
In 2009 BRAC Bank Limited showed a maximum ratio of 42.07% comparing to other Years, it
indicates that 42.07% of profits earned per taka of sales or net interest income. But in 2008, 2010
& 2011 ratio was 30.84%, 32.87% & 31.26% which were also better and consistent performance
and oppositely in 2008 BRAC Bank Limited net profit margin ratio was 8.29% it indicates that
only 8.29% of profits earned per taka of sales or net interest income.
In 2009 DBBL showed a maximum ratio of 55.05% comparing to other Years, it indicates that
of profits 55.05% earned per taka of sales or net interest income. But in 2010 ratio was 53.75%
which was also better and quite similar to 2009 and oppositely in 2008 and 2011 DBBL net
profit margin was better than the year 2012. On the other hand in 2008,2011 and 2012 the net
profit ratio was 45.20%,43.44% and 33.05%.
In 2009 Exim showed a maximum ratio of 96.93% comparing to other Years, it indicates that
96.93% of profits earned per taka of sales or net interest income. But in 2008 & 2009 ratio was
76.86% 62.03%which were also better to earn profit margin and and oppositely in 2011 Exim
net profit margin was better than the year 2012. On the other hand in 2011 and 2012 the net
profit ratio was 53.37%& 43.17%.
In 2010 IBBL showed a maximum ratio of 43.36% comparing to other Years ,it indicates that
43.36% of profits earned per taka of sales or net interest income. But in 2008, 2009 ratio was
36.24% & 41.04% which indicted consistent in the performance consistent performance

and

oppositely in 2011 IBBL net profit margin was better than the year 2012. On the other hand in
2011 and 2012 the net profit ratio was 35.55% & 31.03%.
ONE Bank Limited In 2010 ONE Bank Limited showed a maximum ratio of 101.34%
comparing to other Years, it indicates that 101.34%of profits earned per taka of sales or net
interest income. But in 2008, 2009 & 2011 ratio was 62.42%& 70.24%& 73.96% which indicted

46

consistent in the performance

and oppositely in 2012 ONE Bank Limited showed a lowest

ratio 38.34%.
Trust Bank Limited In 2010 Trust Bank Limited showed a maximum ratio of 86.56%
comparing to other Years , it indicates that 86.56% of profits earned per taka of sales or net
interest income. But in 2009 & 2011 ratio was 66.81%
& 69.60%which were also better ratio of profit margin and oppositely in 2008 Trust Bank
Limited net profit margin was far better than the year 2012. On the other hand in 2008 and 2008
the net profit ratio was 39.50% & 14.16%.
In 2009 Bank Asia showed a maximum ratio of 75.86%comparing to other Years, it indicates
that 101.34%of profits earned per taka of sales or net interest income. But in 2008, 2010 & 2011
ratio was 55.64%, 65.17% & 70.95% which indicted the better in the performance similar to
2009 and oppositely in 2012 Bank Asia showed a lowest ratio 24.68%.
City Bank In 2010 City Bank showed a maximum ratio of 51.75%comparing to other Years, it
indicates that 51.75%of profits earned per taka of sales or net interest income. in 2009 & 2011
ratio was 39.54% &45.69% and oppositely in 2012 City Bank showed a lowest ratio 15.99%.
In 2009 IFIC Bank showed a maximum ratio of 81.61% comparing to other Years, it indicates
that 81.61% of profits earned per taka of sales or net interest income. But in 2010 & ratio was
79.35% which indicted the better in the performance and quite similar to 2009 and oppositely
in

20011 & 2012 IFIC Bank

consistently showed a lowest ratio, the was 36.64%

&13.83%.Although , 2011 IFIC Bank net profit margin was better than the year 2012.

47

If we go through cross Sectional analysis we get:

120.00%
100.00%
80.00%
60.00%

2008

40.00%

2010

2009
2011
2012
20
082
01
020
12

20.00%

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00%

In 2008 AB Bank Limited shows a maximum ratio of 113.09% it indicates that 113.09% of
profits earned per taka of sales or net interest income, compare to other Banks. On the other hand
City Bank shows only 26.43% it indicates that only 26.43% of profits earned per taka of sales or
net interest income.
In 2009 AB Bank Limited continuously shows a maximum ratio of 115.63%it indicates that
115.63% of profits earned per taka of sales or net interest income, compare to other Banks. On
the other hand City Bank again shows only 39.54%it indicates that only 39.54%of profits earned
per taka of sales or net interest income.
In 2010 AB Bank Limited always shows a maximum ratio of 106.16% it indicates that 115.63%
of profits earned per taka of sales or net interest income, compare to other Banks. On the other
hand BRAC Bank Limited shows only 32.87% it indicates that only 32.87% of profits earned
per taka of sales or net interest income.

48

In 2011 ONE Bank Limited shows a maximum ratio of 73.96% it indicates that 73.96% of
profits earned per taka of sales or net interest income, compare to other Banks. On the other hand
BRAC Bank Limited shows only 31.26% it indicates that only 31.26% of profits earned per
taka of sales or net interest income.
In 2012 AB Bank Limited shows a maximum ratio of 46.07% it indicates that 46.07% of profits
earned per taka of sales or net interest income, compare to other Banks. On the other hand
BRAC Bank Limited shows only 8.29% it indicates that only 8.29%of profits earned per taka of
sales or net interest income.

3.3.2 RETURN ON EQUITY (ROE)

Return on equity (ROE) is a measure of profitability ratio that calculates how many taka of profit
a company generates with each taka of shareholders' equity. The Return on Equity of a company
measures the ability of the management of the company to generate adequate returns for the
capital invested by the owners of a company.
The formula:
Return on Equity = Net Profit after Taxation / Equity

N
o

Banks Name

2008

2009

2010

2011

2012

AB Bank Limited

0.3422

0.3334

0.2665

0.0894

0.0897

BRAC Bank Limited

0.1790

0.1599

0.1768

0.1773

0.0532

DBBL

0.1888

0.3596

0.2859

0.2409

0.2131

Exim bank

0.2198

0.2522

0.2786

0.1387

0.1297

Islami Bank Bangladesh

Limited

0.1902

0.1693

0.1900

0.1742

0.1390

ONE Bank Limited

0.1823

0.2368

0.3880

0.2283

0.1422

49

Trust Bank Limited

0.1484

0.1627

0.2537

0.1115

0.0281

Bank Asia

0.2060

0.2679

0.2733

0.1536

0.0696

City Bank

0.0944

0.1396

0.1605

0.1130

0.0425

10

IFIC Bank

0.2054

0.2143

0.2865

0.1133

0.0565

If we go through time series

3.50%
3.00%
2.50%
2.00%

2008

1.50%

2009

1.00%

2010

0.50%

2011

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00%

In 2008, AB Bank Limited showed a maximum ratio of 0.3422 which indicates that Bank
generates 0.3422 taka of profit with each taka of shareholders' equity. On the other hand AB
Bank Limited showed a minimum ratio of 0.0897 in 2012 which indicate that Bank
generates only 0.1605taka of profit with each taka of shareholders' equity 0.0897.
In 2010, BRAC Bank Limited showed a maximum ratio of 0.1790which indicates that Bank
generates 0.1790 taka of profit with each taka of shareholders' equity. On the other hand BRAC
Bank Limited showed a minimum ratio of 0.0532 in 2012 which indicate that Bank generates
only 0.1605taka of profit with each taka of shareholders' equity .
In 2009, DBBL showed a maximum ratio of 0.3596 which indicates that Bank generates
0.3596 taka of profit with each taka of shareholders' equity. On the other hand DBBL showed
50

a minimum ratio of .1888 in 2008 which indicate that Bank generates only 0.1888 taka of
profit with each taka of shareholders' equity
In 2009, Exim bank showed a maximum ratio of 0.2786 which indicates that Bank generates
0.2786 taka of profit with each taka of shareholders' equity. On the other hand Exim bank
showed a minimum ratio of .1888 in 2008 which indicate that Bank generates only 0.1297 taka
of profit with each taka of shareholders' equity.
In 2008, Islami Bank Bangladesh Limited showed a maximum ratio of 0.1902 which indicates
that Bank generates 0.1902taka of profit with each taka of shareholders' equity. On the other
hand Islami Bank Bangladesh Limited showed a minimum ratio of 0.1902 in 2012 which
indicate that Bank generates only 0.1902taka of profit with each taka of shareholders' equity .
ONE Bank Limited In 2010, ONE Bank Limited showed a maximum ratio of 0.3880 which
indicates that Bank generates 0.3880 taka of profit with each taka of shareholders' equity. On the
other hand ONE Bank Limited showed a minimum ratio of 0.1422 in 2012 which indicate that
Bank generates only .1422 taka of profit with each taka of shareholders' equity .
In 2010, Trust Bank Limited showed a maximum ratio of 0.2537which indicates that
Bank generates 0.2537 taka of profit with each taka of shareholders' equity. On the other Trust
Bank Limited showed a minimum ratio of 0.0281 in 2012 which indicate that Bank
generates only 0.0281 taka of profit with each taka of shareholders' equity.
In 2010, Bank Asiashowed a maximum ratio of 00.2733which indicates that Bank generates
0.2733taka of profit with each taka of shareholders' equity. On the other Bank Asia showed a
minimum ratio of 0.0696 in 2012 which indicate that Bank generates only 0.0281 taka of profit
with each taka of shareholders' equity.
In 2010, City Bank showed a maximum ratio of 0.1605 which indicates that Bank generates
0.1605 taka of profit with each taka of shareholders' equity. On the other City Bank showed a
minimum ratio of 0.0425 in 2012 which indicate that Bank generates only 0.0425 taka of profit
with each taka of shareholders' equity.
In 2010, IFIC Bank showed a maximum ratio of 0.2865 which indicates that Bank generates
0.2865 taka of profit with each taka of shareholders' equity. On the other IFIC Bank showed
51

a minimum ratio of 0.0565 in 2012 which indicate that Bank generates only 0.0565 taka of
profit with each taka of shareholders' equity.
If we go through cross Sectional analysis we get:

2008
2009

2012

Ba
nk

20
082
01
020
12

2011

Ci
ty

TB
L

IB
BL

2010

D
BB
L

AB

Ba
nk

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

In 2008, AB Bank Limited shows a maximum ratio of 34% which indicates that Bank generates
0.34 taka of profit with each taka of shareholders' equity. On the other hand City Bank shows a
minimum ratio of 0.0944 which indicates that Bank generates only 0.0944 taka of profit with
each taka of shareholders' equity.
In 2009, AB Bank Limited shows similar ratio of 0.34 On the other hand City Bank again
shows a minimum ratio of 0.14 which indicates that Bank generates only 0.14 taka of profit with
each taka of shareholders' equity.
In 2010, ONE Bank Limited shows a maximum ratio of 0.3880 which indicates that Bank
generates 0.3880 taka of profit with each taka of shareholders' equity. On the other hand City
Bank shows a minimum ratio of 0.1605 which indicates that Bank generates only 0.1605taka of
profit with each taka of shareholders' equity.
In 2011, DBBL shows a maximum ratio of 0.2409 which indicates that Bank generates 0.2409
taka of profit with each taka of shareholders' equity. On the other hand AB Bank Limited shows

52

a minimum ratio of 0.0894 which indicates that Bank generates only 0.0894 taka of profit with
each taka of shareholders' equity.
In 2012, DBBL again shows a maximum ratio of 0.22 which indicates that Bank generates 0.22
taka of profit with each taka of shareholders' equity. On the other hand Trust Bank Limited
shows a minimum ratio of 0.0281 which indicates that Bank generates only 0.0281 taka of profit
with each taka of shareholders' equity.

3.3.3 RETURN ON ASSETS

The Return on Assets of a company determines its ability to utilize the assets employed in that
company efficiently and effectively to earn a good return. Return on assets measures the amount
of profit that the company generates as a percentage of the value of its total assets. A company's
return on assets (ROA) is calculated as the ratio of its net income in a given period to the total
value of its assets.
The formula:
Return on Assets = Net Profit after Taxation / Total Assets

Banks Name

2008

2009

2010

2011

2012

o
1

AB Bank Limited

2.74%

3.15%

2.79%

0.87%

0.83%

BRAC Bank Limited

1.34%

1.38%

1.40%

1.28%

0.31%

DBBL

1.01%

1.88%

1.99%

1.75%

1.48%

Exim bank

1.60%

2.03%

3.07%

1.55%

1.29%

IBBL

1.16%

1.22%

1.35%

1.24%

1.14%

ONE Bank Limited

1.33%

1.61%

3.21%

2.14%

1.25%

53

Trust Bank Limited

1.20%

1.13%

2.19%

0.81%

0.19%

Bank Asia

1.29%

1.93%

1.83%

1.63%

0.65%

City Bank

0.70%

1.07%

2.03%

1.74%

0.59%

10

IFIC Bank

1.44%

1.43%

2.37%

0.82%

0.34%

Here the height ratio indicates better position of the company. It also indicates height income
against total assets.

If we go through time series analysis we get:

3.50%
3.00%
2.50%
2.00%

2008
2009

1.50%

2010

1.00%

2011

0.50%

2012

Ba
nk

TB
L

IB
BL

D
BB
L

Ci
ty

AB

Ba
nk

0.00%

AB Bank Limited shows height ratio in 2009 that was 3.15%And a low rate in 2011 that was
0.87% and in 2012 that was 0.83%.So in 2008,2009 and 2010 the management department of AB
bank utilize their real and financial resources in a better way that help them to generate better
amount of returns.

But AB bank failed to generate better returns in 2011 and 2012, their

return on that two year is 0.87% and 0.83% respectively . So this indicates AB bank failed to
utilize their financial resources and assets which leads them to earn low rate of return.
BRAC Bank Limited shows a constant ratio over the years which is neat to 1.50% .
54

DBBL shows height ratio in 2009 that was 3.15%And a low rate in 2011 that was 0.87%.
Exim bank shows height ratio in 2010 that was 3.07% And a low rate in 2012 that was 1.29%
Islami Bank Bangladesh Limited shows a constant ratio over the years which is neat to 1.20%
ONE Bank Limited shows height ratio in 2010 that was 3.21% And a low rate in 2012 that was
1.25%
Trust Bank Limited shows height ratio in 2010 that was 2.19% And a low rate in 2012 that was
0.19%
Bank Asia shows height ratio in 2009 that was 1.93% And a low rate in 2012 that was 0.65%
City Bank shows height ratio in 2010 that was 2.03% And a low rate in 2011 that was 0.59%
IFIC Bank shows height ratio in 2010 that was 2.37% And a low rate in 2012 that was 0.34%

If we go through cross Sectional analysis we get:

3.50%
3.00%
2.50%
2.00%

2008

1.50%

2009

1.00%

2010
2011
20
082
01
020
12

0.50%

Ba
nk

2012

Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00%

In 2008, AB Bank Limited shows a maximum return on assets ratio of 2.74%which indicates
that 2.74% profit Bank can generates by using its total assets. It means that Bank efficiently and
55

effectively earn a good return. On the other hand City Bank shows a minimum return on assets
ratio of 0.70% compare with the other banks.
In 2009, AB Bank Limited shows a maximum return on assets ratio of 3.15%continiously which
indicates that 3.15%profit Bank can generates by using its total assets. It means that Bank
efficiently and effectively earn a good return. On the other hand City Bank again shows a
minimum return on assets ratio of 1.07% compare with the other banks.
In 2010, Exim bank shows a maximum return on assets ratio of 3.07% which indicates that
3.07% profit Bank can generates by using its total assets. It means that Bank efficiently and
effectively earn a good return. On the other hand IBBL again shows a minimum return on assets
ratio of 1.35% compare with the other banks.
In 2011, ONE Bank Limited shows a maximum return on assets ratio of 2.14% which indicates
that 2.14%profit Bank can generates by using its total assets. It means that Bank efficiently and
effectively earn a good return. On the other hand Trust Bank Limited again shows a minimum
return on assets ratio only 0.81%compare with the other banks.
In 2012, DBBL shows a maximum return on assets ratio of 1.48% which indicates that 1.48%
profit Bank can generates by using its total assets. It means that Bank efficiently and effectively
earn a good return. On the other hand Trust Bank Limited again shows a minimum return on
assets ratio of 0.19% compare with the other banks.

3.4 EFFICIENCY RATIOS

Efficiency Ratios demonstrate how efficiently the company uses its assets and how efficiently
the company manages its operations.
3.4.1 TOTAL ASSETS TURNOVER
Asset turnover measures a firm's efficiency at using its all assets in generating revenue and the
higher the number of ratio the company is in better position. It also indicates pricing strategy as
the company with low profit margins tends to have high asset turnover and those with high profit
margins have low asset turnover.
56

The formula:
Total Assets Turnover = Net interest Income / Total Assets

N
o

Banks Name

2008

2009

2010

2011

2012

AB Bank Limited

2.42%

2.72%

2.62%

1.57%

1.80%

BRAC Bank Limited

4.36%

3.28%

4.25%

4.09%

3.75%

DBBL

2.23%

3.41%

3.70%

4.04%

4.49%

Exim bank

2.58%

2.65%

3.17%

2.90%

2.99%

Islami Bank
Bangladesh Limited

3.20%

2.98%

3.11%

3.50%

3.69%

ONE Bank Limited

2.13%

2.29%

3.17%

2.90%

3.25%

Trust Bank Limited

3.04%

1.69%

2.53%

1.16%

1.35%

Bank Asia

2.31%

2.55%

2.81%

2.29%

2.62%

City Bank

2.64%

2.71%

3.93%

3.82%

3.66%

10

IFIC Bank

2.56%

1.75%

2.98%

2.23%

2.46%

If we go through time series analysis we get:

57

5.00%
4.50%
4.00%
3.50%
3.00%

2008

2.50%

2009

2.00%

2010

1.50%

2011

1.00%

2012

0.50%
TB
L

IB
BL

D
BB
L

Ba
nk
Ci
ty

AB

Ba
nk

0.00%

In 2010, AB Bank Limited shows a highest ratio of 2.72% compare with other years . This
higher the number of ratio indicates that the bank is in better position than other in 2010. It also
indicates that this Bank has more efficiency at using its all assets in generating revenue. On the
other hand, AB Bank Limited shows a lowest ratio 1.57% in 2011 This lowest the number of
ratio indicates that the bank is in poor position than compare with other years even It indicates
that this Bank has less efficiency at using its all assets in generating revenue.
In 2008, 2010 & 2011 BRAC Bank Limited shows quite similar and highest ratio

of 4.36% ,

4.25% &4.09% compare with other years . This higher the number of ratio indicates that the
bank is in better position than other in 2010. It also indicates that this Bank has more efficiency
at using its all assets in generating revenue. On the other hand, BRAC Bank Limited shows
3.28% & 3.75% in 2009 & 2012 which are also better ratio but slightly less then above
mentioned years.
In 2008 to 2012 DBBL shows that the asset turnover ratio increased respectively. This increasing
tend indicates that the bank has more efficiency at using its all assets in generating revenue.
In between 2008 - 2010, Exim bank shows that the asset turnover ratio increased respectively.
This increasing tend indicates that the bank has more efficiency at using its all assets in
generating revenue. Moreover in 2011 Exim bank fallen slightly bt the get back into 2012.

58

In 2012, Islami Bank Bangladesh Limited shows a highest ratio of 3.69% compare with other
years . This higher the number of ratio indicates that the bank is in better position than other in
3.69%. It also indicates that this Bank has more efficiency at using its all assets in generating
revenue. On the other hand, Islami Bank Bangladesh Limited shows a lowest ratio 2.98% in
2011 This lowest the number of ratio indicates that the bank is in poor position than compare
with other years even It indicates that this Bank has less efficiency at using its all assets in
generating revenue.
In 2012, ONE Bank Limited shows a highest ratio of 3.25%compare with other years . This
higher the number of ratio indicates that the bank is in better position than other in 2012. It also
indicates that this Bank has more efficiency at using its all assets in generating revenue. On the
other hand, ONE Bank Limited shows a lowest ratio 2.13% in 2008 This lowest the number of
ratio indicates that the bank is in poor position than compare with other years even It indicates
that this Bank has less efficiency at using its all assets in generating revenue.
In 2008, Trust Bank Limited shows a highest ratio of 3.04% compare with other years . This
higher the number of ratio indicates that the bank is in better position than other in 2008. It also
indicates that this Bank has more efficiency at using its all assets in generating revenue. On the
other hand, Trust Bank Limited shows a lowest ratio 1.16% in 2012 This lowest the number of
ratio indicates that the bank is in poor position than compare with other years even It indicates
that this Bank has less efficiency at using its all assets in generating revenue
In 2008-2012, Bank Asia shows quite similar ratio over the five years. However in 010 a
highest ratio of Bank Asia compare with other years . This higher the number of ratio indicates
that the bank is in better position than other in 2010. It also indicates that this Bank has more
efficiency at using its all assets in generating revenue. On the other hand, Bank Asia shows a
lowest ratio 2.29% in 2011 This lowest the number of ratio indicates that the bank is in poor
position than compare with other years even It indicates that this Bank has less efficiency at
using its all assets in generating revenue
In 2010, City Bankshows a highest ratio of 3.93% compare with other years . This higher the
number of ratio indicates that the bank is in better position than other in 2008. It also indicates
that this Bank has more efficiency at using its all assets in generating revenue. On the other hand,
59

Trust Bank Limited shows a lowest ratio 2.64% in 2008 This lowest the number of ratio
indicates that the bank is in poor position than compare with other years even It indicates that
this Bank has less efficiency at using its all assets in generating revenue
In 2010, IFIC Bank shows a highest ratio of 2.98% compare with other years . This higher the
number of ratio indicates that the bank is in better position than other in 2008. It also indicates
that this Bank has more efficiency at using its all assets in generating revenue. On the other hand,
IFIC Bank Limited shows a lowest ratio 1.75%in 2008 This lowest the number of ratio
indicates that the bank is in poor position than compare with other years even It indicates that
this Bank has less efficiency at using its all assets in generating revenue.
If we go through cross Sectional analysis we get:
4.50%
4.00%
3.50%
3.00%
2.50%

2008
2009

2.00%

2010

1.50%

2011

1.00%

2012

0.50%

TB
L

IB
BL

D
BB
L

Ba
nk
Ci
ty

AB

Ba
nk

0.00%

In 2008, BRAC Bank Limited shows a highest ratio of 4.36% compare with other banks. This
higher the number of ratio indicates that the bank is in better position than other in 2008. It also
indicates that this Bank has more efficiency at using its all assets in generating revenue.

60

In 2009, DBBL shows a highest ratio of 3.41% compare with other banks. This higher the
number of ratio indicates that the bank is in better position than other in 2009. It also indicates
that this Bank has more efficiency at using its total assets in generating revenue.
In 2010, BRAC Bank Limited shows a highest ratio of 4.25% compare with other banks. This
higher the number of ratio indicates that the bank is in better position than other in 2010. It also
indicates that this Bank has more efficiency at using its total assets in generating revenue.
In 2011, BRAC Bank Limited & DBBL show a highest ratio of 4.09% and 4.04% respectively
compare with other banks. These higher the number of ratio indicates that these banks are in
better position than other in 2011. It also indicates that these Banks have more efficiency at using
their total assets in generating revenue.
In 2012, DBBL shows a highest ratio of 4.49% compare with other banks. This higher the
number of ratio indicates that the bank is in better position than other in 2012. It also indicates
that this Bank has more efficiency at using its total assets in generating revenue.
3.4.2 FIXED ASSET TURNOVER
The fixed asset turnover ratio is the ratio of revenue to net fixed assets. A high ratio indicates that
a company is doing an effective job of generating sales with a relatively small amount of fixed
assets. On the other hand if the ratio is declining over time the company has either over invested
in fixed assets or it needs to issue new products to revive its sales.
The formula:
Fixed Asset Turnover = Net interest Income / Fixed Assets

Banks Name

2008

2009

2010

2011

2012

o
1

AB Bank Limited

0.8322

1.1914

0.8867

0.6212

0.7383

BRAC Bank Limited

2.1440

1.8917

2.8954

2.3183

2.5253

DBBL

1.0249

1.5421

1.2693

1.2451

1.4968
61

Exim bank

6.0229

5.7705

7.7330

8.0452

11.5392

IBBL

1.6749

1.2735

1.5254

1.9180

1.2022

ONE Bank Limited

1.6542

2.3700

3.0042

2.3566

2.5061

Trust Bank Limited

3.4242

2.3942

3.5648

2.1018

2.8356

Bank Asia

1.9156

1.7179

1.6115

0.5891

0.8140

City Bank

0.5991

0.7427

1.1145

0.7424

0.8056

10

IFIC Bank

2.2851

1.7885

1.0073

0.9264

1.1978

If we go through time series analysis we get:

14
12
10
2008

2009

2010

2011
2012

TB
L

IB
BL

D
BB
L

Ba
nk
Ci
ty

AB

Ba
nk

In between 2008-2012, only AB Bank Limited shows a highest ratio in 2009 at1.1914 compare
with other years. This higher the number of ratio indicates that the bank is in better position than
other in that period. AB Bank Limited was minimum in 2011 at 0.6212 which indicates that this
Bank is doing less effective job of generating interest with a relatively small amount of fixed
assets.
62

In between 2008-2012, only BRAC Bank Limited shows a highest ratio in 2010 at2.8954
compare with other years. This higher the number of ratio indicates that the bank is in better
position than other in that period. BRAC Bank Limited was minimum in 2009 at 1.8917 which
indicates that this Bank is doing less effective job of generating interest with a relatively small
amount of fixed assets.
In between 2008-2012, only DBBL shows a highest ratio in 2009 at 1.5421compare with other
years. This higher the number of ratio indicates that the bank is in better position than other in
that period. DBBL was minimum in 2008 at 1.0249 which indicates that this Bank is doing less
effective job of generating interest with a relatively small amount of fixed assets.
In between 2008-2012, only Exim bank shows a highest ratio in 2012 at 11.5392 compare with
other years. This higher the number of ratio indicates that the bank is in better position than other
in that period. Exim bank was minimum in 2009 at 5.7705 which indicates that this Bank is
doing less effective job of generating interest with a relatively small amount of fixed assets.
In between 2008-2012, only IBBL shows a highest ratio in 2011 at 1.9180 compare with other
years. This higher the number of ratio indicates that the bank is in better position than other in
that period. IBBL was minimum in 2009 at 1.2735 which indicates that this Bank is doing less
effective job of generating interest with a relatively small amount of fixed assets.
In between 2008-2012, only ONE Bank Limited shows a highest ratio in 2010 at 3.0042
compare with other years. This higher the number of ratio indicates that the bank is in better
position than other in that period. ONE Bank Limited was minimum in 2008 at 1.6542which
indicates that this Bank is doing less effective job of generating interest with a relatively small
amount of fixed assets.
In between 2008-2012, only Trust Bank Limited shows a highest ratio in 2010 at 3.0042
compare with other years. This higher the number of ratio indicates that the bank is in better
position than other in that period. Trust Bank Limited was minimum in 2011 at 1.6542which
indicates that this Bank is doing less effective job of generating interest with a relatively small
amount of fixed assets.

63

In between 2008-2012, only Bank Asia shows a highest ratio in 2008 at 1.9156 compare with
other years. This higher the number of ratio indicates that the bank is in better position than other
in that period. Bank Asia was minimum in 2011 at 0.5891 which indicates that this Bank is
doing less effective job of generating interest with a relatively small amount of fixed assets.
In between 2008-2012, only City Bank shows a highest ratio in 2010 at 1.1145 compare with
other years. This higher the number of ratio indicates that the bank is in better position than other
in that period. City Bank was minimum in 2008 at 0.5991 which indicates that this Bank is
doing less effective job of generating interest with a relatively small amount of fixed assets.
In between 2008-2012, only IFIC Bank shows a highest ratio in 2008 at 2.2851 compare with
other years. This higher the number of ratio indicates that the bank is in better position than other
in that period. IFIC Bank was minimum in 2011 at 0.9264 which indicates that this Bank is
doing less effective job of generating
If we go through cross Sectional analysis we get:
12
10
8
6

2008
2009

2010
2

2011
2012

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

In between 2008-2012, only Exim bank shows a highest ratio compare with other banks. This
higher the number of ratio indicates that the bank is in better position than other in that period. It

64

was maximum in 2012 at 11.5392 and minimum in 2009 at 5.7705 It also indicates that this Bank
is doing an effective job of generating interest with a relatively small amount of fixed assets.
Again in 2008 & 2009 City Bank shows minimum ratio of 0.5991 & 0.7427 that means they
keep more fixed assets to generate interest revenue. In 2010 AB Bank Limited shows minimum
ratio of 0.8867 that means they keep more fixed assets to generate interest revenue.
In 2011 Bank Asia shows minimum ratio of 0.5891 that means they keep more fixed assets to
generate interest revenue. In 2012 AB Bank Limited shows minimum ratio of 0.7383 that means
they keep more fixed assets to generate interest revenue.

3.5 MARKET VALUE RATIOS

Market Value Ratios are used for value comparison. These ratios relate the market price of the
firm's common stock and the financial statement figures.
3.5.1 Earnings per Share (EPS)
The portion of a company's profit allocated to each outstanding share of common stock. Earnings
per share serve as an indicator of a company's profitability. It is more accurate to use a weighted
average number of shares outstanding over the reporting term, because the number of shares
outstanding can change over time. Earnings per share are generally considered to be the single
most important variable in determining a share's price. It is also a major component used to
calculate the price-to-earnings valuation ratio.

EPS

65

N
o

Banks Name

2008

2009

2010

2011

2012

89.72

131.13

10.03

3.60

3.25

45

61

60.4

4.3

1.3

AB Bank Limited

BRAC Bank Limited

DBBL

54.78

75.85

10

10.8

11.6

Exim bank

32.5

50.21

5.35

1.91

2.05

Islami Bank
Bangladesh Limited

43.3

55.1

60.21

3.87

4.42

ONE Bank Limited

27.08

46.63

5.92

3.49

2.55

Trust Bank Limited

31.96

33.06

47.90

2.32

0.55

Bank Asia

32.02

61.88

4.59

3.04

1.44

City Bank

25.34

52.11

59.35

3.19

1.21

10

IFIC Bank

49.00069411

41.27

75.56

2.16

1.12

If we go through cross Sectional analysis we get:

In 2008 AB Bank Limited earn TK. 89.72 per share. While City Bank earn only TK. 25.34 per
share. It indicates that AB Bank Limited generates height earnings against to the number of
common share outstanding in the market then other banks.

66

140
120
100
80

2008
2009

60

2010
2011

40

2012

20

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

In 2009 AB Bank Limited earn TK. 131.13per share. While Trust Bank Limited earn only TK.
33.06 per share. It indicates that AB Bank Limited generates height earnings against to the
number of common share outstanding in the market then other banks.
In 2010 IFIC Bank earn TK. 75.56 per share. While Bank Asia earn only TK. 33.06 per share. It
indicates that IFIC Bank generates height earnings against to the number of common share
outstanding in the market then other banks.
In 2011 DBBL earn TK. 10.8 per share. While Exim bank earns only TK. 1.91per share. It
indicates that DBBL generates height earnings against to the number of common share
outstanding in the market then other banks.
In 2012 DBBL earn TK.11.6 per share. While Trust Bank Limited earns only TK. 0.55 per
share. It indicates that DBBL generates height earnings against to the number of common share
outstanding in the market then other banks.

3.5.2 Dividend Payout Ratio

Dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends.
The part of the earnings not paid to investors is left for investment to provide for future earnings
growth. Investors seeking high current income and limited capital growth prefer companies with
67

high Dividend payout ratio. However investors seeking capital growth may prefer lower payout
ratio because capital gains are taxed at a lower rate. High growth firms in early life generally
have low or zero payout ratios. As they mature, they tend to return more of the earnings back to
investors. Note that dividend payout ratio is calculated as dividends divided by net income.
The formula:

Banks Name
DBBL
Exim bank
IBBL

2008

2009

2010

2011

2012

0.038637

0.066887

0.14
0

0
0

0
0

0.07184
6
0
0.54

0
0.58

Here in 2008 only Exim bank provide cash dividend of TK 0.14 per share to its shareholders.
On the other hand in 2010 DBBL provide cash dividend of TK 0.04 per share to its shareholders.
In 2011 & 2012 Islami Bank Bangladesh Limited & DBBL provide cash dividend to its
shareholders but Islami Bank Bangladesh Limited provides more dividend to its shareholders.
If we go through cross Sectional analysis we get:

0.6
0.4
0.2

2009

2010

2011

2012

0
DBBL
Exim bank
IBBL

68

3.6 RISK RATIOS

3.6.1 LOAN RATIO:
The loan ratio indicates the extent to which assets are devoted to loans as opposed to other assets
which includes cash,securities and plant and equipment.The formula for calculating loan ratio are
given as below.
The formula:
Loan ratio = Net loans/Total assets

N
o

Banks Name

2008

2009

2010

2011

2012

AB Bank Limited

67%

66%

66%

62%

61%

BRAC Bank Limited

73%

68%

71%

68%

60%

DBBL

80%

51%

67%

65%

59%

Exim bank

78%

82%

83%

77%

71%

IBBL

78%

77%

80%

79%

77%

ONE Bank Limited

73%

72%

72%

71%

71%

Trust Bank Limited

71%

60%

68%

67%

57%

Bank Asia

75%

73%

76%

70%

66%

City Bank

60%

57%

66%

66%

64%

10

IFIC Bank

72%

60%

68%

71%

68%

If we go through time series analysis we get:

69

In 2008 AB Bank Limited shows a ratio of 67% which was the maximum ratio between these
years. Again, in 2012 AB Bank Limited shows a ratio of 61% which was the minimum ratio
over the year.
In 2008 BRAC Bank Limited shows a ratio of 73% which was the maximum ratio between
these years. Again, in 2012 BRAC Bank Limited shows a ratio of 60% which was the minimum
ratio over the year.
In 2008 DBBL shows a ratio of 80%which was the maximum ratio between these years. Again,
in 2009 DBBL shows a ratio of 51% which was the minimum ratio over the year.
In 2010 Exim bank shows a ratio of 83%which was the maximum ratio between these years.
Again, in 2012 Exim bank shows a ratio of 71% which was the minimum ratio over the year.
In 2010 IBBL shows a ratio of 80%which was the maximum ratio between these years. Again,
in 2009 & 2012 IBBL shows a ratio of 77% which was the minimum ratio over the year
90%
80%
70%
60%
50%

2008

40%

2009

30%

2010

20%

2011

10%

2012
TB
L

IB
BL

D
BB
L

Ba
nk
Ci
ty

AB

Ba
nk

0%

In 2008 ONE Bank Limited shows a ratio of 73%which was the maximum ratio between these
years. Again, in 2011 & 2012 ONE Bank Limited shows a ratio of 71% which was the
minimum ratio over the year.
In 2008 Trust Bank Limited shows a ratio of 71%which was the maximum ratio between these
years. Again, in 2012 Trust Bank Limited shows a ratio of 57% which was the minimum ratio
over the year.
In 2008 Bank Asia shows a ratio of 75%which was the maximum ratio between these years.
Again, in 2012 Bank Asia shows a ratio of 66% which was the minimum ratio over the year.

70

In 2010 & 2011 City Bank shows a ratio of 66%which was the maximum ratio between these
years. Again, in 2009 City Bank shows a ratio of 57% which was the minimum ratio over the
year.
In 2008 IFIC Bank shows a ratio of 7%which was the maximum ratio between these years.
Again, in 2009 IFIC Bank shows a ratio of 60% which was the minimum ratio over the year

If we go through cross Sectional analysis we get:

0.9
0.8
0.7
0.6
2008

0.5

2009

0.4

2010

0.3

2011

0.2

2012

0.1

TB
L

IB
BL

D
BB
L

Ba
nk
Ci
ty

AB

Ba
nk

In 2008 DBBL shows a ratio of 80% which was the maximum ratio between these 10 Banks
over the year. Again City Bank shows a ratio of 60% which was the minimum ratio over the
year.
In 2009 Exim bank shows a ratio of 82% which was the maximum ratio between these 10 Banks
over the year. Again DBBL shows a ratio of 51% which was the minimum ratio over the year.
In 2010 Exim bank again shows a ratio of 83% which was the maximum ratio between these 10
Banks over the year. Again City Bank shows a ratio of 66% which was the minimum ratio over
the year.
In 2011 IBBL shows a ratio of 79% which was the maximum ratio between these 10 Banks over
the year. Again Trust Bank Limited shows a ratio of 57% which was the minimum ratio over
the year.
71

In 2012 IBBL again shows a ratio of 77% which was the maximum ratio between these 10
Banks over the year. Again DBBL shows a ratio of 51% which was the minimum ratio over the
year.

3.6.2 TEMPORARY INVESTMENT RATIO:

This ratio indicates how much less funds invested in highly liquid assets by a particular bank
compared to other banks. The higher the ratio of temporary investments to total assets the greater
the banks liquidity will be.
The formula:
Temporary investments ratio = (Fed funds sold, short-term securities, cash, trading account
securities) /Total assets

N
o

Banks Name

2008

2009

2010

2011

2012

AB Bank Limited

18.4%

20.3%

16.0%

20.2%

20.6%

BRAC Bank Limited

17.3%

18.6%

19.1%

19.7%

22.4%

DBBL

27.0%

12.8%

20.9%

17.5%

20.7%

Exim bank

13.9%

13.7%

14.2%

17.4%

22.4%

IBBL

16.8%

17.5%

15.5%

14.8%

14.3%

ONE Bank Limited

19.9%

23.3%

20.8%

19.2%

20.5%

Trust Bank Limited

18.4%

22.4%

22.7%

20.1%

22.9%

Bank Asia

17.1%

19.5%

12.5%

19.5%

22.6%

City Bank

21.4%

20.6%

20.5%

20.4%

22.6%

10

IFIC Bank

18.8%

21.8%

20.4%

20.6%

22.2%
72

If we go through time series analysis we get:

In 2012 AB Bank Limited shows a ratio of 20.6%which was the maximum ratio between these
years. Again, in 2010 AB Bank Limited shows a ratio of 16% which was the minimum ratio
over the year.
In 2012 BRAC Bank Limited shows a ratio of 22.4% which was the maximum ratio between
these years. Again, in 2008 BRAC Bank Limited shows a ratio of 17.3% which was the
minimum ratio over the year.
In 2008 DBBL shows a ratio of 27.0% which was the maximum ratio between these years.
Again, in 2009 DBBL shows a ratio of 12.8% which was the minimum ratio over the year.
In 2012 Exim bank shows a ratio of 22.4%which was the maximum ratio between these years.
Again, in 2009 Exim bank shows a ratio of 13.7% which was the minimum ratio over the year.
In 2009 IBBL shows a ratio of 17.5% which was the maximum ratio between these years. Again,
in 2012 IBBL shows a ratio of 14.3% which was the minimum ratio over the year.
In 2009 ONE Bank Limited shows a ratio of 23.3%which was the maximum ratio between
these years. Again, in 2011 ONE Bank Limited shows a ratio of 19.2%which was the minimum
ratio over the year.

73

30.00%
25.00%
20.00%
2008

15.00%

2009
2010

10.00%

2011
5.00%

2012

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00%

In 2012 Trust Bank Limited shows a ratio of 22.9% which was the maximum ratio between
these years. Again, in 2008 Trust Bank Limited shows a ratio of 18.4% which was the
minimum ratio over the year.
In 2012 Bank Asia shows a ratio of 22.6%which was the maximum ratio between these years.
Again, in 2010 Bank Asia shows a ratio of 12.5% which was the minimum ratio over the year.
In 2012 City Bank shows a ratio of 22.6%which was the maximum ratio between these years.
Again, in 2011 City Bank shows a ratio of 20.4% which was the minimum ratio over the year.
In 2012 IFIC Bank shows a ratio of 22.2%which was the maximum ratio between these years.
Again, in 2008 IFIC Bank shows a ratio of 18.8% which was the minimum ratio over the year.
If we go through cross Sectional analysis we get:
In 2009 ONE Bank Limited shows a ratio of 23.3% which was the maximum ratio between
these 10 Banks over the year. Again Exim bank shows a ratio of 13.07% which was the
minimum ratio over the year.

74

30.00%
25.00%
20.00%
2008

15.00%

2009

10.00%

2010

5.00%

2012

2011

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

0.00%

In 2010 Trust Bank Limited again shows a ratio of 22.7% which was the maximum ratio
between these 10 Banks over the year. Again Bank Asia shows a ratio of 12.5% which was the
minimum ratio over the year.
In 2011 AB Bank Limited shows a ratio of 20.2% which was the maximum ratio between these
10 Banks over the year. Again IBBL shows a ratio of 14.8% which was the minimum ratio over
the year.
In 2012 Trust Bank Limited again shows a ratio of 22.9% which was the maximum ratio
between these 10 Banks over the year. Again IBBL shows a ratio of 14.3% which was the
minimum ratio over the year.

3.6.3VOLATILE LIABILITY DEPENDENCY RATIO:

The volatile liability dependency rations extremely useful in measuring the liquidity position of
an bank. The ratio is calculated as volatile liability less temporary investment divided by net
loan.
The formula:
Volatile liability dependency ratio
= (Total volatile liabilities - Temporary investments)/ Net loans and leases

75

Banks
Name

2008

200
9

2010 2011 2012

AB Bank Limited

1.29

1.27

1.18

1.34

1.42

BRAC Bank
Limited

1.23

1.29

1.19

1.31

1.51

DBBL

1.13

1.69

1.40

1.33

1.32

Exim bank

1.17

1.12

1.06

1.12

1.24

IBBL

1.19

1.19

1.15

1.17

1.18

ONE Bank
Limited

1.25

1.27

1.26

1.25

1.27

Trust Bank
Limited

1.23

1.43

1.33

1.32

1.36

Bank Asia

1.21

1.22

1.18

1.26

1.33

City Bank

1.47

1.59

1.27

1.21

1.24

10

IFIC Bank

1.28

1.32

1.34

1.29

1.36

If we go through time series analysis we get:

In between 2008-2012, AB Bank Limited shows a ratio above 1. Maximum ratio was 1.29 in
2008 and minimum ratio was 1.18 in 2010.
In between 2008-2012, BRAC Bank Limited shows a ratio above 1. Maximum ratio was 1.51 in
2012 and minimum ratio was 1.19 in 2010.
In between 2008-2012, DBBL shows a ratio above 1. Maximum ratio was 1.69 in 2009 and
minimum ratio was 1.13 in 2008.

76

1.8
1.6
1.4
1.2
1

2008

0.8

2009
2010

0.6

2011

0.4

2012

0.2

Ba
nk
Ci
ty

TB
L

IB
BL

D
BB
L

AB

Ba
nk

In between 2008-2012, Exim bank shows a ratio above 1. Maximum ratio was 1.24 in 2012 and
minimum ratio was 1.06 in 2010.
In between 2008-2012, IBBL shows a ratio above 1. Maximum ratio was 1.19in 2008 and
minimum ratio was 1.15 in 2010.
In between 2008-2012, ONE Bank Limited shows a ratio above 1. Maximum ratio was 1.27 in
2009 & 2012 and minimum ratio was 1.25 in 2008 & 2011.
In between 2008-2012, Trust Bank Limited shows a ratio above 1. Maximum ratio was 1.43 in
2009 and minimum ratio was 1.23 in 2008.

In between 2008-2012, Bank Asia shows a ratio above 1. Maximum ratio was 1.33 in 2012 and
minimum ratio was 1.18 in 2010.
In between 2008-2012, City Bank shows a ratio above 1. Maximum ratio was 1.47 in 2008 and
minimum ratio was 1.21 in 2011.

77

In between 2008-2012, IFIC Bank shows a ratio above 1. Maximum ratio was 1.36 in 2012 and
minimum ratio was 1.28 in 2008.
If we go through cross Sectional analysis we get:

1.8
1.6
1.4
1.2
1

2008

0.8

2009

0.6

2010
2011

0.4

2012

0.2

Ba
nk

IB
BL

D
BB
L

TB
L

Ci
ty

AB

Ba
nk

In 2008 all the banks shows a ratio above 1. Maximum ratio was 1.29 by AB Bank Limited and
minimum ratio was 1.13 by DBBL between these 10 Banks over the year.
In 2009 all the banks shows a ratio above 1. Maximum ratio was 1.69 by DBBL and minimum
ratio was 1.12 by Exim bank between these 10 Banks over the year.
In 2010 all the banks shows a ratio above 1. Maximum ratio was 1.40 by DBBL and minimum
ratio was 1.106 by Exim bank between these 10 Banks over the year.
In 2011 all the banks shows a ratio above 1. Maximum ratio was 1.34 by AB Bank Limited and
minimum ratio was 1.12 by Exim bank between these 10 Banks over the year.
In 2012 all the banks shows a ratio above 1. Maximum ratio was 1.42 by AB Bank Limited and
minimum ratio was 1.18 by IBBL between these 10 Banks over the year.

78

3.6.4 DOLLAR GAP RATIO:

The difference between the quantities of interest sensitive asset and liabilities is known as dollar
gap ratio.Here sensitive asset is can be defined as short term asset and sensitive liability can be
defined as short time liability whose maturity period is less than one year or this kinds of asset
and liabilities is repriced in less than one year.
The formula:
Dollar gap ratio = (Interest rate sensitive assets - Interest-rate sensitive liabilities )/Total assets

N
o

Banks Name

2008

2009

2010

2011

2012

AB Bank Limited

35.78%

26.27%

34.90%

30.88%

-17.42%

BRAC Bank Limited

52.55%

28.51%

26.55%

29.53%

23.65%

DBBL

46.40%

11.55%

16.39%

22.32%

16.95%

Exim bank

63.38%

47.20%

51.08%

44.57%

40.89%

IBBL

6.34%

5.60%

6.79%

7.49%

10.85%

ONE Bank Limited

56.42%

54.02%

54.61%

53.88%

52.98%

Trust Bank Limited

54.18%

48.93%

48.26%

49.47%

50.59%

Bank Asia

62.18%

57.21%

56.11%

51.50%

46.57%

City Bank

32.75%

31.26%

32.26%

44.44%

45.20%

10

IFIC Bank

44.23%

34.94%

39.22%

47.14%

47.03%

If interest rates increased the positive gap ratios would cause the bank profitability to
increase. The opposite effects would correspond to negative gap.
If we go through time series analysis we get:

79

In all the years of AB Bank Limited shows positive gap ratio except 2012. In 2008, The
maximum ratio of AB Bank Limited was 62% in 2008 which generated maximum profit
comparing to other years. On the other hand, in 2012 AB Bank Limited showed a negative gap
which made the loss for the bank over the year.
In all the years of BRAC Bank Limited shows positive gap ratio.. The maximum ratio was
52.55% of BRAC Bank Limited in 2008 which generated maximum profit comparing to other

years. On the other hand, BRAC Bank Limited showed minimum ratio of 23.65% in 2012 which
generated lowest profit over the year.
In all the years of DBBL shows positive gap ratio.. The maximum ratio was 46.40%of DBBL in
2008 which generated maximum profit comparing to other years. On the other hand, DBBL
showed minimum ratio of 11.55% in 2009 which generated lowest profit over the year.
In all the years of IBBL shows positive gap ratio.. The maximum ratio was 10.85% of IBBL in
2012 which generated maximum profit comparing to other years. On the other hand, IBBL
showed minimum ratio of 5.60%in 2009 which generated lowest profit over the year.
In all the years of ONE Bank Limited shows positive gap ratio.. The maximum ratio was
56.42% of ONE Bank Limited in 2008 which generated maximum profit comparing to other

years. On the other hand, ONE Bank Limited showed minimum ratio of 52.98% in 2012 which
generated lowest profit over the year.
In all the years of Trust Bank Limited shows positive gap ratio.. The maximum ratio was
54.18% of Trust Bank Limited in 2008 which generated maximum profit comparing to other

years. On the other hand, Trust Bank Limited showed minimum ratio of 48.26% in 2010 which
generated lowest profit over the year.

80

70.00%
60.00%
50.00%

20.00%

2010

10.00%

2011

0.00%

2012

AB

-20.00%
-30.00%

Ci
ty

Ba
nk

-10.00%

Ba
nk

2009

TB
L

30.00%

IB
BL

2008

D
BB
L

40.00%

In all the years of Bank Asia shows positive gap ratio.. The maximum ratio was 62.18% of Bank
Asia in 2008 which generated maximum profit comparing to other years. On the other hand,
Bank Asia showed minimum ratio of 46.57% in 2012 which generated lowest profit over the
year.
In all the years of City Bankshows positive gap ratio.. The maximum ratio was 45.20% of City
Bank in 2012 which generated maximum profit comparing to other years. On the other hand,
City Bank showed minimum ratio of 31.26% in 2009 which generated lowest profit over the
year.
In all the years of IFIC Bank shows positive gap ratio.. The maximum ratio was 47.14% of IFIC
Bankin 2011 which generated maximum profit comparing to other years. On the other hand,
IFIC Bank showed minimum ratio of 34.94%in 2009 which generated lowest profit over the
year.
If we go through cross Sectional analysis we get:
In 2008 all the banks shows positive gap ratio. The maximum ratio was 62% by Bank Asia and
minimum ratio was 06% by IBBL between these 10 Banks over the year.

81

70.00%
60.00%
50.00%
40.00%

2008

30.00%

2009

20.00%

2011

2010
2012

10.00%

-20.00%

TB
L

IB
BL

Ba
nk
Ci
ty

AB

-10.00%

D
BB
L

Ba
nk

0.00%

In 2009 all the banks shows positive gap ratio. The maximum ratio was 62% by Bank Asia and
minimum ratio was 06% by IBBL between these 10 Banks over the year.
In 2010 all the banks shows positive gap ratio. The maximum ratio was 62% by Bank Asia and
minimum ratio was 06% by IBBL between these 10 Banks over the year.
In 2011 all the banks shows positive gap ratio. The maximum ratio was 62% by Bank Asia and
minimum ratio was 06% by IBBL between these 10 Banks over the year.
In 2012 all the banks shows positive gap ratio except AB Bank Limited shows a negative gap.
The maximum ratio was 62% by Bank Asia and minimum ratio was 06% by IBBL between
these 10 Banks over the year.

82

CHAPTER FOUR
PROBLEMS SOLVING & LEARNING
PART FROM THE PROJECT

83

4.1 Some Problem investigated:

Omitting important aspects: Ratio analysis can also omit important aspects of a firm's
success, such as key intangibles, like brand, relationships, skills and culture. These are
primary drivers of success over the longer term even though they are absent from
conventional financial statements.
Single use of Ratios: If Ratio analysis is used alone it can present an overly simplistic view
of the company by distilling a great deal of information into a single number or series of
numbers that may not provide adequate context or be comparable across time or industry.
Again, changes in the information underlying ratios can hamper comparisons across time and
inconsistencies within and across the industry can complicate comparisons.
Cause of change: Ratios tell a user what happened but they do not tell him why it happened.
Again, Business owners must dig deeper into the numbers to determine why ratios are
changing from period to period. A business manager needs to find the root of the problem
before it can be solved.
Ratios Based on Book Value: This is one of the largest problems with financial ratios
analysis. Because the financial statements are prepared based on book value (largely
historical cost), they do not reflect current reality in the business. Ratios that are based on
these historical numbers may not be telling the whole story about the health of the company.
Confines between data: Ratio analysis is hampered by potential confines with accounting
and the data in the financial statements. This can include errors as well as accounting
mismanagement, which involves distorting the raw data used to derive financial ratios.
Current ratio binding: Sometime current ratio (less than 1) shows the bank is not in good
financial health, it does not necessarily mean that banks will go bankrupt, as there are many
ways to access financing although it is definitely not a good sign.
Activity ratio obligations: The most important thing to remember is that an activity ratio is
not used to demonstrate mathematical prowess (or lack of it as the case may be) but just to
provide with some information.

84

 Leverage ratio bindings: A high variable cost in financial leverage Ratio Company sees
little increase in operating income with additional output, because costs continue to be
imputed into the outputs.
Debt/equity ratio Problems: The cost of this debt financing may outweigh the return
that the company generates on the debt through investment and business activities and
become too much for the company to handle. Again the debt/equity ratio also depends on the
industry in which the company operates.
Seasonal problems in Profitability ratios: Profitability ratios are profit margin, return on
assets and return on equity. Some industries experience seasonality in their operations. The
retail industry, for example, typically experiences higher revenues and earnings for the
Christmas season. Therefore, it would not be too useful to compare a retailer's fourthquarter profit margin with its first-quarter profit margin. On the other hand, comparing a
retailer's fourth-quarter profit margin with the profit margin from the same period a year
before would be far more informative.
Problem in EPS: An important aspect of EPS that it often ignores the capital, which means
it, is required to generate the earnings (net income) in the calculation. Two Banks could
generate the same EPS number, but one could do so with less equity (investment) that bank
would be more efficient at using its capital to generate income and, all other things being
equal would be a "better" bank. Investors also need to be aware of earnings manipulation that
will affect the quality of the earnings number. It is important not to rely on any one financial
measure, but to use it in conjunction with statement analysis and other measures.
Problem in Dividend Payout Ratio: All the banks are not providing cash dividend in every
year. Most of the banks offer dividend to its shareholder after 2 or 3 years or more. In most
case, Banks like to provide stock dividend rather than cash dividend.
Management Quality Measurement: Financial ratios do not capture all of the important
information that tells stakeholders how the business is doing today and helps them predict
where it is going in the future. One of the key determinants of business success is the quality

85

and experience of the management team. This information cannot be derived directly from
financial ratios although large ratio swings can give an indication.

4.2Suggestion to solve Problems:

Government can take necessary steps to solve these problems. Like to remove financial
statement dissimilarity govt. can set a financial reporting standard for the banks.
Although we follow the rules of GAAP but it is not perfectly use in most cases.
Banks always try to skip tax burden so that they use shorter statement. Sometime they do
not enclose all the possible information that might be valuable for the users. So there
must have a standard practices which make the banks comparable by the users.
Government must set a standard equity-liability ratio for all the banks and makes it
mandatory by law. It will help the users to compare through ratio analysis.
In the time of ratio analysis, if we can consider market value rather than historical value
then it will be more effective. So there must be developed a process of which includes
historical or book value and market value both.
When current ratio shows the bank is not in good financial health then users must find out
company background as there are many ways to access financing. So banks must provide
their details background information.
The most important thing to remember is that an activity rato is used to provide some
information. It is the basis of decision taking but it is not always 100% right.
Financial Leverage Ratio show little increase in operating income with additional output,
because costs continue to be imputed into the outputs. So users must consider high
Financial Leverage Ratio in time o decision making.

86

 In time of Earnings per Share measurement, it is important not to rely on any one
financial measure, but to use it in conjunction with statement analysis and other
measures.
All the banks are not providing cash dividend in every year. It makes difficult to compare
banks by cash dividend payout ratio. So there must have a fixed time period to provide
cash dividend.
Again sometime Banks like to provide stock dividend rather than cash dividend. In time
of stock dividend company must enclosed the face value of the stocks and the amount of
stock provided.

4.3My Leanings:
A ratio analysis is just a way of forecasting and taking decision. It never said what abjectly will
happen in the future. Through the project I learn a lot of things. Such as:
I can see the valuation of different ratios. Going through this project I can understand the
ratio analysis process and what stand a ratio.
I can see the overall view of these 10 banks and their financial positions in last 5 years.
Their financial performance and reasons behind poor performance.
Different ratios stand for different meaning. But all time ratios are not perfect for
forecast. We should consider the company background also. A lot of things depend on
background performance and history.
I can realize the time series analysis and cross functional analysis process. Difference
between them as well as their graphical views.
I also learn different tools banks use to make interest revenue and compete with other
banks.
I also learn about the Banks background what stand they established and what they are
doing in the market for continuing their business.
87

 Obligations of banks in operating business, government rules and regulations, different

financial policies and the financial statement-publishing format I can learn after go
through this study.
In this study build a good skills in MS word and MS excel. It works like a little skill
developing program for me.
I also can learn a lot about the graphical view of the company performance as well as I
can analysis all the graph effectively.
In this project, I can understand financial reports standard Banks follow in our country.
Its usefulness and also the implementation in practical situation.
Different banks use different time line for their financial analysis. The time serious
problems between banks make the analysis difficult I find from this project.
I can realize that there are several way to skip tax burden to get this facilities Banks show
financial statement out of standard. It creates problems for the users to compare.
I find that in Bangladesh we have Bank financial reporting standards. However, in most
case Banks avoid this standard because of limitation in implementations.
I also find some similar tools that banks use for short-term financing and maintain their
liquidity.
Most of the Banks provides loan more than their capacity without consider their liquidity.
It is a great threat for the Banks Company I learn from this project.
I also find some solution banks use to meet their financial crisis I also can understand. In
this case, some suggestion fit with my opinions.

88

CHAPTER FIVE
Recommendations &
Conclusion

5.1 Recommendation:

89

Bangladesh is an opportunistic land, so here any form of development is possible with proper
guidance. Here our banking institutions, more precisely the ten discussed banks Brac Bank
Limited, Islami Bank Limited, IFIC BankLimited, Trust Bank Limited, AB Bank Limited, City
Bank Limited, One Bank Limited, EXIM-Bank Limited, Dutch-Bangla Bank Limited, Bank Asia
Limited can go for further development and maximize their best possible growth and wealth
maximization.
My advice will be some of the followings:

The regulatory body, that is Bangladesh Bank should focus more on their performance

analysis, so that any regulatory violating can be resulted in legal action

More formal research should be made upon this topics, like Ratio analysis, SWOT and

banks service analysis

As Ratios can derive any possible situation and measure every possible kind of

performance, this analysis should be focused more importantly by the banks

Any further students, if go for that type of research paper, should entirely depend on
authentic financial reports of the banks rather than surfing from usual or editable
websites, as many unauthentic reports might be considered unintentionally.

5.2Conclusion
Private commercial banks are playing a vital role in the development of our economy.
Government and Bangladesh Bank also play a crucial role in banking sector by regulating the
overall banking systems and setting rules and regulation in the activities of commercial banks. In
recent years of banking sector, Private commercial banks have shown better performance
comparing with state banks.
I have studied the ten private commercial banks performance through ratio analysis in terms of
some ratio terms with which I am familiar with, but there are some other ratios which are also
very essential for the proper measurement of ratio analysis. As I am not that expert in studying
the annual report meticulously and not aware of each term of banking industry, that is why there
may be some missing terms which might be important for the comparative analysis. Whatever
analysis I have done so far, from this it is clearly visible that any of the banks is not perfectly
perfectionist; each of them has its own drawbacks.

90

Last but not least, it was an opportunities for me that I have worked on this topic which gave me
proper knowledge about ration analysis. I hope, all of my research the experience of work will
help me a lot in my future professional life.

91

CHAPTER SIX

Appendix

92

LIQUIDITY RATIOS

2010

2011

2012

1.02
1.06
1.33
1.04
1.05
1.03
1.09
1.04
1.01
1.03

1.07
1.06
0.76
1.06
1.06
1.06
1.04
1.06
1.00
1.20

1.11
1.04
1.00
1.10
1.06
1.05
1.02
1.00
1.07
1.02

1.05
1.01
0.99
1.14
1.06
1.06
1.05
1.03
1.09
1.04

1.05
0.91
1.00
1.13
1.06
1.05
1.05
1.04
1.12
1.02

1.20

BRAC Bank

1.00

DBBL

0.80

Exim bank

0.60

IBBL

0.20

20
08
20
09
20
10
20
11
20
12

0.00

ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

1.40
1.20
1.00
0.80

2008

0.60

2009

0.40

2010

0.20

2011

0.00

2012
Ba
nk

AB Bank

Ci
ty

1.40

0.40

Current

Cross Sectional

IB
BL

Time series

Ba
nk

AB Bank
BRAC Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2009

AB

Ratio

2008

93

Quick Ratio

2009

2010

2011

2012

0.8672
0.9299
1.1624
0.1854
0.2081
0.9072
0.9496
0.9169
0.8352
0.9059

0.8856
0.9248
0.6865
0.1688
0.2206
0.8974
0.8695
0.9
0.8444
1.0153

0.9682
0.9222
0.8815
0.1737
0.1907
0.9094
0.8559
0.8677
0.9038
0.8648

0.8824
0.8662
0.8929
0.2487
0.2041
0.9227
0.9041
0.8794
0.9194
0.8906

0.8691
0.7632
0.9087
0.3174
0.2088
0.9252
0.8903
0.8328
0.9186
0.8738

Cross Sectional

AB Bank

BRAC Bank

0.8

DBBL

Exim bank

0.6

IBBL

ONE Bank

0.4

TBL

Bank Asia

City Bank

IFIC Bank

0.2
0
2008

2008
2009
2010
2011
2012
Ba
nk

Ci
ty

1.2

1.4
1.2
1
0.8
0.6
0.4
0.2
0
IB
BL

1.4

Ba
nk

Time Series

AB

AB Bank
BRAC Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

94

LEVERAGE RATIOS
Long-Term Debt To Equity Ratio
AB Bank
BRAC
Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

0.48

0.61

1.02

0.69

0.64

0.42
0.14
0.10
0.21
0.08
0.36
0.48
0.52
0.06

0.30
0.79
0.00
0.15
0.21
0.04
0.44
0.17
0.30

0.39
0.21
0.13
0.13
0.04
0.09
0.73
0.24
0.00

0.07
0.16
0.24
0.11
0.10
0.42
0.10
0.13
0.21

0.00
0.44
0.26
0.08
0.02
0.44
0.29
0.30
0.13

Cross Sectional

1.20

1.20

1.00

1.00

0.00
Ba
nk

IF
IC

TB
L

ba
nk

Ex
im

AB

Ba
nk

2012

2010

0.20

2011

0.00

2012
Ba
nk

2011

IF
IC

2010

0.20

2009

0.40

TB
L

2009

0.40

2008

0.60

ba
nk

0.60

0.80

Ba
nk

2008

AB

0.80

Ex
im

Time series

2011 2012

95

Total Debt To Equity Ratio

AB Bank
BBL
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

2011 2012

11.5033
12.322
6
12.322
6
12.718
9
15.420
4
12.713
11.3522
15.013
2
12.542
4
13.289
7

9.5995

8.5692

9.2987

10.6037

11.6595

12.871 17.1033

10.6037 11.65953 12.871 16.1033

11.4053

8.0639

7.9666

9.0383

12.8421
13.718
13.4364

13.0709
11.075
10.5965

13
9.655
12.79

11.1376
10.3942
13.6265

12.8597

13.9007

8.4343

9.7596

12.0395

6.8912

5.4817

6.2481

12.2141

11.1015

12.866 15.5993

Time Series

Cross Sectional

20

20
15

10

2009

Ba
nk

AB

Ba
nk
IF
IC

Ex
im

TB
L

Ba
nk

2012

ba
nk

2011

2009

2010

2008

10
20
0820
12

2008

IB
BL
Ci
ty TBL
Ba
nk

15

AB

9.8422

2010
2011
2012

96

Total Debt to Total Asset Ratio

AB
Bank
BRAC
Bank
DBBL
Exim
bank
IBBL
ONE
Bank
TBL
Bank
Asia
City
Bank
IFIC
Bank

Time Series

2008

2009

2010

2011

2012

0.92

0.9057

0.8955

0.9029

0.9249
0.9478
1

0.9138
0.9465909
6

0.921

0.9279

0.9078
0.9415319
2

0.9305

0.9272

0.9304

0.9271
0.9391

0.9194
0.9278

0.8897
0.9289

0.8885
0.9286

0.9004
0.9176

0.9271
0.919

0.9321
0.9307

0.9172
0.9138

0.9061
0.9275

0.9122
0.9316

0.9376

0.9278

0.9329

0.894

0.9071

0.9262

0.9233

0.8733

0.8457

0.862

0.93

0.815

0.9174

0.9279

0.9398

Cross Sectional

97

0.95

0.95

0.85
0.8
0.75

2009

0.85

2010

0.8
0.75
0.7
20
08

Ba
nk

2012

IF
IC

TB
L

ba
nk

Ex
im

Ba
nk

0.9

2011

0.7

AB

2008

AB Bank

BRAC Bank

DBBL

Exim bank

IBBL

ONE Bank

TBL

Bank Asia

City Bank

IFIC Bank

20
11

0.9

Total equity to total asset ratio

AB Bank
BRAC Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

Time Series

2008

2009

2010

2011

2012

0.8672
0.9299
1.1624
0.1854
0.2081
0.9072
0.9496
0.9169
0.8352
0.9059

0.8856
0.9248
0.6865
0.1688
0.2206
0.8974
0.8695
0.9
0.8444
1.0153

0.9682
0.9222
0.8815
0.1737
0.1907
0.9094
0.8559
0.8677
0.9038
0.8648

0.8824
0.8662
0.8929
0.2487
0.2041
0.9227
0.9041
0.8794
0.9194
0.8906

0.8691
0.7632
0.9087
0.3174
0.2088
0.9252
0.8903
0.8328
0.9186
0.8738

Cross Sectional

98

1.4

18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%

1.2
1
0.8

2008

2009

0.6

2009

2010

0.4

2010

2011

0.2

2011

2012

2012
Ba
nk

ba
nk

TB
L

IF
IC

AB

Ex
im

Ba
nk

Ba
nk
O
N

Ba
nk
AB

2008

PROFITABILITY RATIOS

Net Profit Margin

AB Bank
BRAC
Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

2011

2012

113.09%

115.63%

106.16%

55.47%

46.07%

30.84%
45.20%
62.03%
36.24%
62.42%
39.50%
55.64%
26.43%
56.24%

42.07%
55.05%
76.86%
41.04%
70.24%
66.81%
75.86%
39.54%
81.61%

32.87%
53.75%
96.93%
43.36%
101.34%
86.56%
65.17%
51.75%
79.35%

31.26%
43.44%
53.37%
35.55%
73.96%
69.60%
70.95%
45.69%
36.64%

8.29%
33.05%
43.17%
31.03%
38.34%
14.16%
24.68%
15.99%
13.83%

99

Cross Sectional

2010
2011

AB

Ba
nk

2010
2011
2012

O
N

E
O
N

AB

Ba
nk

2012

2009

20
08

2009

2008

Ba
nk

2008

120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%

140.00%
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%

Ba
nk

Time Series

Return On Equity (ROE)

AB Bank
BRAC
Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

2011

2012

34.22%

33.34%

26.65%

8.94%

8.97%

17.90%
18.88%
21.98%
19.02%
18.23%
14.84%
20.60%
9.44%
20.54%

15.99%
35.96%
25.22%
16.93%
23.68%
16.27%
26.79%
13.96%
21.43%

17.68%
28.59%
27.86%
19.00%
38.80%
25.37%
27.33%
16.05%
28.65%

17.73%
24.09%
13.87%
17.42%
22.83%
11.15%
15.36%
11.30%
11.33%

5.32%
21.31%
12.97%
13.90%
14.22%
2.81%
6.96%
4.25%
5.65%
100

Cross Sectional

2008
2009
2010
2011

2008
2009

Ba
nk

2010
2011
2012

O
N

AB

Ba
nk
E
O
N

AB

Ba
nk

2012

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

20
0280
12

45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

Ba
nk

Time Series

Return On Assets

AB Bank
BRAC
Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

2011

2012

2.74%

3.15%

2.79%

0.87%

0.83%

1.34%

1.38%

1.40%

1.28%

0.31%

1.01%
1.60%
1.16%
1.33%
1.20%
1.29%
0.70%
1.44%

1.88%
2.03%
1.22%
1.61%
1.13%
1.93%
1.07%
1.43%

1.99%
3.07%
1.35%
3.21%
2.19%
1.83%
2.03%
2.37%

1.75%
1.55%
1.24%
2.14%
0.81%
1.63%
1.74%
0.82%

1.48%
1.29%
1.14%
1.25%
0.19%
0.65%
0.59%
0.34%
101

Time Series

Cross Sectional

3.50%

3.50%

3.00%

3.00%

2.50%

2.50%
2008

2.00%

2008

1.50%

2009

1.50%

2009

1.00%

2010

1.00%

2010

2011

0.50%

2011

2012

0.00%
Ba
nk
AB

Ba
nk

IF
IC

TB
L

ba
nk

Ex
im

AB

Ba
nk

0.00%

2012

IB
BL
Ci
T
ty B
Ba L
nk

0.50%

20
028
01
2

2.00%

EFFICIENCY RATIOS

Total Assets Turnover

AB Bank
BRAC
Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

2011

2012

2.42%

2.72%

2.62%

1.57%

1.80%

4.36%
2.23%
2.58%
3.20%
2.13%
3.04%
2.31%
2.64%
2.56%

3.28%
3.41%
2.65%
2.98%
2.29%
1.69%
2.55%
2.71%
1.75%

4.25%
3.70%
3.17%
3.11%
3.17%
2.53%
2.81%
3.93%
2.98%

4.09%
4.04%
2.90%
3.50%
2.90%
1.16%
2.29%
3.82%
2.23%

3.75%
4.49%
2.99%
3.69%
3.25%
1.35%
2.62%
3.66%
2.46%
102

Cross Sectional

2011

2011
2012

Ba
nk

Ba
nk

AB

IF
IC

TB
L

ba
nk

Ex
im

AB

Ba
nk

2012

2010

Ba
nk

2010

2009

IF
IC

2009

2008

TB
L

2008

4.50%
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%

Ex
im

5.00%
4.50%
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%

ba
nk

Time Series

Fixed Asset Turnover

2008
AB Bank
BRAC
Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank
Time Series

2009

2010

2011

2012

0.8322

1.1914

0.8867

0.6212

0.7383

2.144

1.8917

2.8954

2.3183

2.5253

1.0249

1.5421

1.2693

1.2451

1.4968

6.0229

5.7705

7.733

8.0452

11.5392

1.6749

1.2735

1.5254

1.918

1.2022

1.6542

2.37

3.0042

2.3566

2.5061

3.4242

2.3942

3.5648

2.1018

2.8356

1.9156

1.7179

1.6115

0.5891

0.814

0.5991

0.7427

1.1145

0.7424

0.8056

2.2851

1.7885

1.0073

0.9264

1.1978

Cross Sectional

103

14

12

12

10

10

2008

2009

2011

2012

2012

IF
IC

Ex
im

Ba
nk
AB

Ba
nk

IF
IC

TB
L

ba
nk

Ex
im

Ba
nk

Ba
nk

TB
L

2011

AB

2010

ba
nk

2009

2010

2008

MARKET VALUE RATIOS

Earnings per Share (EPS)

AB Bank
BRAC
Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2008

2009

2010

2011

2012

89.72
45

131.13
61

10.03
60.4

3.6
4.3

3.25

54.78
32.5
43.3
27.08
31.96
32.02
25.34
49.0007

75.85
50.21
55.1
46.63
33.06
61.88
52.11
41.27

10
5.35
60.21
5.92
47.9
4.59
59.35
75.56

10.8
1.91
3.87
3.49
2.32
3.04
3.19
2.16

11.6
2.05
4.42
2.55
0.55
1.44
1.21
1.12

1.3

104

Time Series

Cross Sectional

140

140

120

120

100

100

80

2008

80

2008

60

2009

60

2009

2010

40

2011

20

2011

20

2012

2012

Ba
nk
IF
IC

TB
L

ba
nk

Ex
im

Ba
nk
AB

IF
IC

Ba
nk

TB
L

Ex
im

ba
nk

Ba
nk
AB

2010

40

Dividend Payout Ratio

2008
DBBL
Exim bank
IBBL

2009

2010
0.038637

2011

2012

0.071846 0.066887

0.14
0.54

0.58

Cross Sectional

105

0.6
0.5
0.4
2009

0.3

2010

0.2

2011
2012

0.1
0
DBBL

Exim bank

IBBL

Risk ratios
Loan ratio

2008
AB Bank
BRAC Bank
DBBL

200
9

2010

2011

2012

67%

66%

66%

62%

61%

73%

68%

71%

68%

60%

80%

51%

67%

65%

59%
106

Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

78%

82%

83%

77%

71%

78%

77%

80%

79%

77%

73%

72%

72%

71%

71%

71%

60%

68%

67%

57%

75%

73%

76%

70%

66%

60%

57%

66%

66%

64%

72%

60%

68%

71%

68%

Cross Sectional

2011

2011
2012

Ba
nk

IF
IC

AB

Ba
nk

TB
L

ba
nk

Ex
im

AB

Ba
nk

2012

2010

Ba
nk

2010

2009

IF
IC

2009

2008

TB
L

2008

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

Ex
im

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

ba
nk

Time Series

Temporary investments ratio

2008

2009

18.40%

20.30%

17.30%

18.60%

27.00%

12.80%

AB Bank
BRAC Bank
DBBL

2010
16.00
%
19.10
%
20.90
%

2011

2012

20.20%

20.60%

19.70%

22.40%

17.50%

20.70%
107

Exim bank
13.90%

13.70%

16.80%

17.50%

19.90%

23.30%

18.40%

22.40%

17.10%

19.50%

21.40%

20.60%

18.80%

21.80%

IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

Time Series

14.20
%
15.50
%
20.80
%
22.70
%
12.50
%
20.50
%
20.40
%

22.40%

14.80%

14.30%

19.20%

20.50%

20.10%

22.90%

19.50%

22.60%

20.40%

22.60%

20.60%

22.20%

Cross Sectional

30.00%

30.00%

25.00%

25.00%

20.00%
2008

15.00%
10.00%

2009
2010

10.00%

2012

0.00%

20.00%
15.00%

2011

5.00%

2008
2009
2010
2011

5.00%

2012
Ba
nk
Ci
ty

IB
BL

Ba
nk
AB

TB
L

Ba
nk
IF
IC

Ex
im

ba
nk

0.00%

Ba
nk
AB

17.40%

108

Volatile liability dependency ratio

2008
AB Bank
BRAC Bank
DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

2009

1.29
1.23
1.13
1.17
1.19
1.25
1.23
1.21
1.47
1.28

1.18
1.19
1.4
1.06
1.15
1.26
1.33
1.18
1.27
1.34

2012

1.34
1.31
1.33
1.12
1.17
1.25
1.32
1.26
1.21
1.29

1.42
1.51
1.32
1.24
1.18
1.27
1.36
1.33
1.24
1.36

2011

Ba
nk

2012

IF
IC

TB
L

ba
nk

2012

2010

TB
L

2011

2009

ba
nk

2010

2008

Ex
im

2009

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
Ba
nk

2008

Ex
im

Ba
nk

2011

Cross Sectional

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

AB

1.27
1.29
1.69
1.12
1.19
1.27
1.43
1.22
1.59
1.32

AB

Time Series

2010

109

Dollar gap ratio

2008

2009

2010

2011

2012

AB Bank
BRAC Bank

35.78%

26.27%

34.90%

30.88%

-17.42%

52.55%

28.51%

26.55%

29.53%

23.65%

DBBL
Exim bank
IBBL
ONE Bank
TBL
Bank Asia
City Bank
IFIC Bank

46.40%

11.55%

16.39%

22.32%

16.95%

63.38%

47.20%

51.08%

44.57%

40.89%

6.34%

5.60%

6.79%

7.49%

10.85%

56.42%

54.02%

54.61%

53.88%

52.98%

54.18%

48.93%

48.26%

49.47%

50.59%

62.18%

57.21%

56.11%

51.50%

46.57%

32.75%

31.26%

32.26%

44.44%

45.20%

44.23%

34.94%

39.22%

47.14%

47.03%

Time Series

Cross Sectional

70.00%

70.00%

60.00%

60.00%

50.00%

50.00%
40.00%

2008

30.00%

2009

30.00%

2009

20.00%

2010
2011

20.00%

2010

10.00%
0.00%

2012

2012

-20.00%

Ba
nk

Ba
nk

-10.00%

IB
BL

0.00%

Ci
ty

-30.00%

2011

10.00%

AB

AB

-20.00%

Ci
ty

Ba
nk

-10.00%

Ba
nk

2008

IB
BL

40.00%

110

References
To prepare this report I collect data mainly from annual reports of selected ten private
commercial banks, different books regarding ratio analysis, the websites of BB and others
websites about ratio analysis. The references are given below

Annual Reports
Annual Report of AB Bank Limited 2008-2012
Annual Report of BRAC Bank Limited 2008-2012
Annual Report of DBBL 2008-2012
Annual Report of Exim bank Limited 2008-2012
Annual Report of IBBL 2008-2012
Annual Report of ONE Bank Limited 2008-2012
Annual Report of Trust Bank Limited 2008-2012
Annual Report of Bank Asia Limitd 2008-2012
Annual Report of City Bank Limited 2008-2012
Annual Report of IFIC Bank Limited 2008-2012

Books
Stanley, B. b., & Geoffrey, A. H. (2008 - 2009). Foundation of Financial Management.
International: McGraw-Hill.
Brigham, E. F., & Gapenski, L. C. (1995). Intermediate Financial Management (Fifth ed.).
International: The Dryden Press.
Madura, J. (2008). Finencial Market and Institution. USA: Thomson South- Western.

111

Websites
http://www.bangladesh-bank.org/fnansys/bankfi.php
http://www.activemedia-guide.com/busedu_banking.htm
http://www.shkfd.com.hk/glossary/eng/RA.htm

112