Authorized Capital

Tk. 15,000 million

Paid up Capital

Tk. 8,366 million

Legal form

A public limited company incorporated in Bangladesh on 26th

June 1983 under the companies Act 1994 and listed in Dhaka
Stock Exchange Limited on 30th November 1986 and
Chittagong Stock Exchange Limited on 15th November 1995.

Slogan

United We Achieve

Nature of business

Commercial banking with different financial services/products

Target customers

Individuals and Corporate customers

Number of branch

148

Total Employee

3679

Chairman

Mr. Anisuzzaman Chowdhury

Managing director

Mr. Muhammed Ali

1. Overview of Bank Asia and UCBL:

1.1.

Overview of UCBL:

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United Commercial Bank Limited (UCBL) is a Bangladesh based private commercial bank
which is considered as one of the first generation bank of Bangladesh that provides banking
services. The services include corporate and retail banking, loans, credit cards, online
banking and money transfer services. The bank operates in Bangladesh having its headquarter
in Gulshan, Dhaka. It was incorporated on 26th June 1983 as a public company with limited
liability under the Companies Act 1993. It obtained permission to start business from 26 June
1983 and started banking operations on 29th June 1983 with an authorized capital of Tk. 800
million. It has 138 branches all over Bangladesh. UCBL has its firm commitment towards the
society for the economic development of the country. Their position is 6th among the 48
banks which include 4 state owned banks, 5specialized banks, 9 foreign banks and 30 private
banks. So the bank has already become a significant part of our economy by serving its
clients through their personalized service, innovative practices, dynamic approach and
efficient Management. At present, UCBL is aiming to play a leading role in the economic
activities of the country, planning to establish more sustainable business relations with large
corporate groups and overcome all its deficiencies and give their competitors an edge.

1.2.

Overview of Bank Asia :

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 and its shares commands respectable premium.
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
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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.

Authorized Capital

Tk. 15,000 million

Paid up Capital

Tk. 7,229 million

Legal form

A public limited company incorporated in Bangladesh on 27th

November 1991 under the companies Act 1994 and listed in
Dhaka Stock Exchange Limited in 2003 .

Slogan

For a better tomorrow

Nature of business

Commercial banking with different financial services/products

Target customers

Individuals and Corporate customers

Number of branch

91

Total Employee

1773

Chairman

Mr. A. Rouf Chowdhury

Managing director

Md. Mehmood Husain

2. Total operating income,Expense,Asset and Equity capital of Bank

Asia and UCBL:
2.1.

Total Operating income:

Total Operating income is the sum of excess of revenues over expenses derived from
normal business operations. Operating income, representing income from ordinary
business activities, excludes expenses, such as interest and taxes.

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Figure 1 : Total operating income of Bank Asia and UCBL

From the above graph we can demonstrate that from year 2010 to 2014, UCBLs operating
income is increasing whereas over the year, Bank Asias operating income is decreasing from
2010 to 2011 and increasing from 2011 to 2014. UCBL Banks operating income followed an
overall increase tendency over the years. From 2010 to 2014 it is increasing at increasing
trend. But as we can see from the graphical representation of Bank Asias operating income
follow this increasing trend from 2011. In 2014 Bank Asias total operating is very high on
the other hand in 2011 it was very low. We can also observe that in 2014 that, both bank had
good business.

2.2.

Total operating expense:

Total operating expense is the sum of expense in carrying out an organization's dayto-day activities, but not directly associated with production. Operating expenses
include such things as payroll, sales commissions, employee benefits and pension
contributions, transportation and travel, amortization and depreciation, rent, repairs,
and taxes. These expenses are usually subdivided into selling expenses and
administrative and general expenses. It is also called non-manufacturing expenses.
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Figure 2: Total operating Expense of Bank Asia and UCBL

From the above graph we can demonstrate that from year 2010 to 2014, UCBLs operating
expense is increasing whereas over the year, Bank Asias operating expense is also
increasing. Both banks operating expense followed an upward trend over the years.

2.3.

Total assets:
Total Assets are the sum of all current and noncurrent assets that a company owns.
They are reported on the company balance sheet. The total asset figure is based on the
purchase price of the listed assets, and not the fair market value.

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Figure 3 : Total Asset of Bank Asia and UCBL

From the above graph we can demonstrate that from year 2010 to 2014, UCBL Banks total
assets are increasing whereas over the years, Bank Asias total assets are also increasing. But,
if we carry out cross-sectional analysis, then we can see that UCBL Banks total assets are
more compared to Bank Asias from the year 2010 to 2012.

2.4.

Total equity capital:

Total equity capital is a firm's total assets minus its total liabilities. Equivalently, it is
share capital plus retained earnings minus treasury shares. It is free of debt.

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Figure 4 : Total equity capital of Bank Asia and UCBL

From the above graph we can demonstrate that from year 2010 to 2014, total equity capitals
of both banks are increasing over the years. But, if we carry out cross-sectional analysis, then
we can see that UCBL Banks total equity capitals are significantly higher than Bank Asias.
On the other hand, from the year 2010 to 2014, Bank Asias total equity capital is
significantly less than UCBL Banks because of its retained earnings gathered from previous
years.

3. Ratios of Bank Asia and UCBL:

3.1.

Operating efficiency ratio:

To maximize profitability and the value of the shareholders investment in the bank, many
banking organizations recognize the need for greater efficiency in their operations.

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In a business context, operational efficiency can be defined as the ratio between the input to
run a business operation and the output gained from the business. When improving
operational efficiency, the output to input ratio improves. The operating efficiency ratio
indicates how efficiently a bank can be operated. The lower the value, the less it costs to
manage and operate the business.

Figure 5 . Operating efficency ratio of Bank Asia and UCBL

We can clearly see from the above graph that United Commercial Banks operating efficiency
ratio in 2010 is 36.75% but in 2011 its operating efficiency ratio decreased. From 2012 to
2014 its operating efficiency ratios are consistent in 43%. On the other hand, Bank Asias
operating efficiency ratio from 2010 to 2013 was consistent in 35-36%. In 2014 its operating
efficiency ratio increased to 40.34%. If we compare between two Banks then we can see
Bank Asias efficiency is better than UCBL.

3.2.

Return on Asset:

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This ratio indicates how profitable a company is relative to its total assets. The return on
assets (ROA) ratio illustrates how well management is employing the company's total assets
to make a profit. The higher the return, the more efficient management is in utilizing its asset
base. The ROA ratio is calculated by comparing net income to average total assets, and is
expressed as a percentage. Banks strive to record an ROA of 1.5% or above.

Figure 6 . Return on Asset of Bank Asia and UCBL

From above figure we can see that United Commercial Banks ROA has increased to 1.75%
in the year 2010 and then it has decreased rapidly to 0.76% in the year 2012. And 2013 to
2014 ROA is increases by 1.35% & 1.38% consistently. On the other hand, we can see that
Bank Asias ROA decreases in 2011. And in 2012 it has again decreased to 0.65%, in 2013 it
has increased to 0.89% and in 2014 to 1.21%. Thus the values of return on assets of UCBL
shows that is more profitable than Bank Asia.

3.3.

Return on equity:

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Return on equity (ROE) measures the rate of return for ownership interest (shareholders'
equity) of common stock owners. It measures the efficiency of a firm at generating profits
from each unit of shareholder equity. ROEs 15-20% are generally considered good.

Figure 7 . Return on Equity of Bank Asia and UCBL

From above figure we can see that both Banks have same conditions of Return on equity. In
2011 to 2012 consecutively decreased. In 2013 both Banks Return on equity has increased to
the year in 2014. If we compare two banks, UCBL is considered good.

3.4.

Employee productivity ratio:

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For many businesses, including most small businesses, the most significant cost is labor.
Salaries and wages comprise the major line-item expense for most retail and small-scale
manufacturing companies, but labor also tends to be responsive to productivity
improvements. To reduce employee costs, Management should consider measuring employee
efficiency and setting aggressive performance targets to get the most bang for their labor
buck.

Figure 8 . Employee productivity ratio of Bank Asia and UCBL

From above figure we can see that UCBL Employee productivity ratio has decreased to 1.71
in the year 2012 and then it has consecutively increased from 2013 to 2014. On the other
hand, in 2011 Bank Asias Employee productivity ratio has decreased to 3.18 and in 2012 it
has again increased to 3.40 and the consecutively decreased from 2013 to 2014. Employee
productivity of Bank Asia is better than UCBL.

4. Analysis & comparision

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UCBLs operating income is in increasing trend over the years, whereas Bank Asias
operating income is decreasing from 2010 to 2011 and increasing from 2011 to 2014. UCBL
Banks operating income followed an overall increase tendency. From 2010 to 2014 it is in
increasing trend. But as we can see from the graphical representation of Bank Asias
operating income follow this increasing trend from 2011. In 2014 Bank Asias total operating
is very high. On the other hand in 2011 it was very low. We can also observe that in 2014
that, both bank had good business. It is clear that the operating income of UCBL is higher
than the Bank Asia. it doesnt mean that Bank Asia is performing bad than UCBL . The
reason might be that UCBLs operation is wider than Bank Asia.
UCBLs operating expense is increasing whereas over the year, Bank Asias operating
expense is also increasing. Both banks operating expense followed an upward trend over the
years. This them because by the time both the banks business is expanding. So by the
increase of operating income, expense also increasing.
UCBL Banks total assets are increasing whereas over the years, Bank Asias total assets are
also increasing. But, if we carry out cross-sectional analysis, then we can see that UCBLs
total assets are more compared to Bank Asias from the year 2010 to 2012.
Total equity capitals of both banks are increasing over the years. But, if we carry out crosssectional analysis, then we can see that UCBL Banks total equity capitals are significantly
higher than Bank Asias. On the other hand, from the year 2010 to 2014, Bank Asias total
equity capital is significantly less than UCBL Banks because of its retained earnings
gathered from previous years.
If we compare the operating efficiency ratios of United Commercial Bank and Bank
Asia,then it is found that in last five years operating efficiency of UCBL was good in 2011
and 2010 later on efficiecy ratio decreased comparing to the prevous year. This might be
because of increasing operating expense not proportionatley to the inc5 yearreasing operating
income. On the other hand Bank Asias operating efficiency ratio was between 35-36% but in
the year 2014 it drastically increased .So comparing these two banks Bank Asias efficiency is
better than UCBL in last 5 years
Return on Assets of UCBL is 1.75% in the year 2010 and then it has decreased rapidly to
0.76% in the year 2012. In 2013 & 2014 ROA is increased to 1.35% & 1.38% consistently.
On the other hand, we can see that Bank Asias ROA decreases in 2011. And in 2012 it has
again decreased to 0.65%, in 2013 it has increased to 0.89% and in 2014 to 1.21%. The
reason behind is that the net profit has not increased proportionately to 2010 that caused the
return on asset of both the banks to be decreased. Another reason is in 2010 both the banks

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total provision has increased that decreased net profit but later on it took measures to increase
the ROA.
Both the Banks have same conditions of Return on equity. In 2011 to 2012 consecutively
decreased just because of net profit. In 2013 both Banks Return on equity has increased to
the year in 2014. If we compare two banks, UCBL is considered good.
UCBL Employee productivity ratio has decreased to 1.71 in the year 2012 and then it has
consecutively increased from 2013 to 2014. On the other hand, in 2011 Bank Asias
Employee productivity ratio has decreased to 3.18 and in 2012 it has again increased to 3.40
and the consecutively decreased from 2013 to 2014. The overall performance of Bank Asia is
better than UCBL.

5. Conclusion
We know that United Commercial Bank is one of the oldest private commercials banks in
Bangladesh which has started its journey in banking sector in the mid 1983 on the other Bank
Asia started its journey on 27th November, 1999 which is almost 16 years after UCB started.
We did both the banks comprehensive analysis based on operating efficiency .If we see the
above calculation and graphical presentation of Total operating income,Total operating
expense ,Total asstes , Total equity capital , operating efficiency ratio,Return on Assets ,
Return on equity and Employee productivity ratio of United Commercial Bank and Bank
Asia ; we can find that United commercial bank is ahead of in all the cases .

6. Reference
1.(2010-2014). Annaul Report . UCBL. http://www.ucb.com.bd/index.php?page=know-ucb
%2Fshareholder-information%2Fannual-report
2.(2010-2014). Annual Report. Bank Asia. http://www.bankasiabd.com/home/annual_reports

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Appendix

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