Académique Documents
Professionnel Documents
Culture Documents
1. Introduction .......................................................................................................................................... 1
1.1. Origin of the Report ...................................................................................................................... 1
1.2. Purpose ......................................................................................................................................... 1
1.3. Scope of the Report ...................................................................................................................... 1
1.4. Background ................................................................................................................................... 1
1.4.1. Global Economy .................................................................................................................... 1
1.4.2. Bangladesh Economy ............................................................................................................ 1
1.5. Methodology................................................................................................................................. 2
1.6. Limitations..................................................................................................................................... 2
The main limitations are collecting the data from the website. All data are not properly decorated here. 2
2. Performance of the Bank - Comparative analysis:................................................................................ 3
2.1. Accounting policies and estimation for preparation of financial statements: .................................. 4
2.2. Changes in accounting policies and estimation: ................................................................................ 5
3. Economic Impact................................................................................................................................... 5
3.1. Maintaining adequate capital ............................................................................................................ 7
3.2. Risk Management .............................................................................................................................. 7
3.3. Sustainable Dividend Policy ............................................................................................................... 7
3.4. Maintenance of Liquidity ................................................................................................................... 8
3.5. Utilization of resources ...................................................................................................................... 8
3.6. Value Added Statement ................................................................................................................... 11
Value Added Statement (VAS) for the year ended 31 December 2018.................................................. 11
3.7. Economic Value Added (EVA) Statement ........................................................................................ 13
EVA Statement for the year ended 31December 2018 .......................................................................... 13
3.8. Market Value Added (MVA) ............................................................................................................. 14
Market Value Added (MVA) Statement for the year ended 31 December 2018 ................................... 14
4. Conclusion ........................................................................................................................................... 14
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1. Introduction
1.1. Origin of the Report
Savings, Investment, production, distribution, consumption of goods and service, and
employment generation are essential parts of an Economic System. As a financial intermediary,
Bank plays an important catalytic role in the mobilization of resources like saving and allocation
thereof in productive investments, consumptions and development of trading activities locally
and internationally.
1.2. Purpose
AB being a responsible corporate citizen and a dynamic financial institution has created value in line
with its mission “To be the best performing bank in the country”. Toward this value creation AB has put
in place an organizational and operational framework which is based on transparent and ethical conduct
of business. Bank has systems, processes, and procedures to create value with appropriate risk
management (validation) system in order to ensure sustainable value addition to stakeholders. It has
not been a case of bottom line enhancement alone but creation of value conducive to socio-
economic development.
1.4. Background
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recovering after weather-related disruptions in Financial Year 2018, which should also boost
consumption; industry and services remain strong.
Import growth is likely to be moderate in Financial Year 2019, after having surged to 25.2% in
Financial Year 2018 on higher demand for capital goods, export-related intermediate goods and
food grains. While capital-goods imports are likely to remain high, it is expected imports of
intermediate goods to moderate after substantial inventory build-up last year. Export growth
picked up to in H1- Financial Year 2019 driven by higher garment exports.
1.5. Methodology
The report is generated according to the secondary data. Data is collected from the website of the
ABbank. For more accurate value some information is collected from different research paper.
Analysis
Conclusion
1.6. Limitations
The main limitations are collecting the data from the website. All data are not properly decorated
here.
2
2. Performance of the Bank - Comparative analysis:
Business Position
BDT in Crore
Particulars 2018 2017 2016 2015 2014
Loans & Advances 24,107.01 22,964.73 21,876.95 20,972.52 17,757.08
Deposit 23,544.48 23,595.43 24,564.08 21,381.89 19,818.92
Export 7,345.00 7,511.00 7,605.00 7,298.20 7,725.20
Import 8,963.00 10,492.00 11,579.00 11,124.52 11,222.00
Remittance (crore USD) 33.00 30.00 25.00 27.99 29.93
Equity Position
BDT in Crore
Particulars 2018 2017 2016 2015 2014
Paid-up capital 758.13 758.13 673.90 599.01 532.46
Retained earnings 590.52 601.19 680.96 683.09 676.83
Statutory reserve 662.34 654.92 649.60 611.12 558.24
Other reserves 254.07 262.87 307.02 385.99 163.82
Total 33.00 30.00 25.00 27.99 29.93
3
Cash flow Movement
BDT in Crore
Particulars 2018 2017 2016 2015 2014
Net cash flow from operating (681.26) (918.36) 2,045.86 (2.21) 493.77
activities
Net cash flow from investing 226.47 166.69 (1,511.2 (147.78) (242.83)
activities 3)
Net cash flow from financing 264.90 (61.61) 21.68 422.90 219.95
activities
Net Operating Cash Flow Per (8.99) (12.11) 26.99 (0.04) 8.24
Share (NOCFPS)
Key Ratios
BDT in Crore
Particulars 2018 2017 2016 2015 2014
Capital to Risk Weighted 10.03% 10.80% 10.79% 11.09% 10.32%
Assets Ratio
Loan Deposit Ratio 91.09% 86.24% 83.67% 96.80% 89.60%
Cost income ratio 64.44% 56.74% 54.44% 52.86% 43.03%
Return on investment (ROI) 9.58% 10.18% 13.50% 10.49% 9.68%
Return on assets (ROA) 0.01% 0.01% 0.44% 0.48% 0.54%
Return on equity (ROE) 0.08% 0.13% 5.68% 6.03% 6.95%
Assets Utilization Ratio 66.61% 85.86% 86.59% 87.71% 87.56%
The financial statements cover a full set of financial statements which comprise of consolidated
and separate Balance Sheets, Profit or Loss Accounts, cash flow statements, statements of
changes in equity, liability statements and relevant notes and disclosures.
4
The financial statements have been prepared under historical cost convention except investments
categorized under held for trading and in accordance with Bank Company Act, 1991
(amendment up to 2018); BRPD circular no. 14 dated 25 June 2003, the Companies Act, 1994;
the Securities and Exchange Ordinance 1969, Securities and Exchange Rules 1987 and other
laws and rules applicable for the Bank.
Estimates and underlying assumptions have been reviewed considering business realities.
Revisions of accounting estimates have been recognized in the period in which the estimates
have been revised and in the future periods affected, if applicable.
All intergroup balances, transactions, income and expenses are fully eliminated while preparing
the consolidated financial statements.
3. Economic Impact
Economic impact related to a bank as an institution and ordained activities of a bank extends
beyond the boundaries of any single organization and is linked to both environmental and social
development. By analyzing economic impact we seek to understand how a company adds value
to society. Bank’s direct contributions to the economy would comprise of creation of
employment opportunities, collection of taxes on behalf of the government etc. including
harnessing the savings habits among the members of the community and improvement of socio-
economic and environmental performance in client organizations through banking services could
be considered as indirect contributions.
Bank as an institution is woven in to the socio- economic fabric involving numerous sector of the
society which together are identified as stakeholders of a bank. Shareholders provide much
needed capital depositors and investors invest money, borrowers obtain credit facility, employees
put their effort for the bank to serve customers and government provides financial infrastructure
by way of regulatory, systems, supervisions etc. Financial services thus provided lead to creation
of wealth which is bound to be distributed among stakeholders in different forms of distribution
like Dividend, Interest, Tax, Salaries etc.
5
Source of Income 2018 2017
(Crore Taka) (Crore Taka)
Interest income 1,947 74% 1,757 70%
Total
Investment income 428 16% 478 19%
Commission, exchange and 233 9% 278 11%
brokerage
Other operating income 13 0.5% 11 0.4%
Total 2,621 100% 2,524 100%
Income Sources
0.50%
9%
Interest income
6
To Retained Earnings -7.70 -0.29% 0.35 0.01%
Total 2,621 100% 2,524 100%
Income Distribution
Interest paid on deposits and
borrowing etc.
Salaries and allowances
To Statutory Reserve
AB has taken following measures to create, sustain and deliver value which are as follows:
7
3.4. Maintenance of Liquidity
Bank maintains liquid assets to carry out the day-to-day operations and fulfill the statutory
requirements in relation to business as imposed by the regulator from time to time. Asset &
Liabilities Committee (ALCO) of the Bank monitors the evolving business situation and
provides direction to maintain an optimum trade- off between liquidity and profitability. AB
maintains positive mismatch in interest earning assets and interest bearing liabilities. Bank has
detailed laid down plan for business inflow- outflow to manage liquidity profile and also ensure
generation of profitability.
Total Deposit
In Crore BDT
30000
24564
25000 23545 23595
21382
19819
20000
15000
Total Deposit (In Crore BDT)
10000
5000
0
2018 2017 2016 2015 2014
8
Total Loans & Advances
In Crore BDT
30000
24107
25000 22965
21877 20973
20000 17757
15000
Total Loans & Advances
10000
5000
0
2018 2017 2016 2015 2014
95.00%
90.00%
80.00%
75.00%
2018 2017 2016 2015 2014
9
Assets Utilization Ratio
100.00%
85.86% 86.59% 87.71% 87.56%
90.00%
80.00%
70.00% 66.61%
60.00%
50.00%
Assets Utilization Ratio
40.00%
30.00%
20.00%
10.00%
0.00%
2018 2017 2016 2015 2014
Total Equity
In Crore BDT
2,400
2311
2,300 2,265 2,277 2279
2,200
2,100
Total Equity (In Crore BDT)
2,000
1931
1,900
1,800
1,700
2018 2017 2016 2015 2014
10
Contrubution to the National Exchecuer
In Crore BDT
460 472
500
428
450
400
337
350 320
300
Contrubution to the National
250
Exchecuer
200
150
100
50
0
2018 2017 2016 2015 2014
Value Added Statement (VAS) for the year ended 31 December 2018
The Value Added Statement for the Bank shows how the value is created and distributed among
different stakeholders of the Bank.
11
Distribution of added value
6%
3% 15%
To Government
To employees
To statutory reserve
To expansion and Growth
77%
12
Distribution of Value Addition 2017
10% -6%
1%
To Government
To employees
To statutory reserve
To expansion and Growth
95%
13
3.8. Market Value Added (MVA)
Market Value Added (MVA) Statement for the year ended 31 December 2018
Market Value Added (MVA) is the difference between the current market value (based on the
quoted price in the main bourse) of a company and the capital contributed by investors. A high
MVA indicates the company has created substantial wealth for the shareholders.
The share market value of AB stood at Taka 910crore whereas the book value of the
Shareholder's Equity stood at Taka 2,265crore, resulting in a negative Market Value of Taka
1,355crore as on 31 December 2018. The calculation of Market Value is given below:
4. Conclusion
AB Bank Limited is a well reputed Bank in the industry, upholding its position as one of the
largest banks in Bangladesh. In its successful operation of long 37 years, the bank has proved
itself as ‘First of Many Firsts’. The Bank is always keen to upload its brand image through
customer satisfaction by mitigating risk factors at all levels.
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