Theisis on comparative bank performence

8/12/2019 Theisis on comparative bank performence

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Comparative Analysis of State Owned Bank's Performance in

Bangladesh & India

Prepared For

Muhammad Shahin Miah

Lecturer

Department of International Business

Faculty of Business

University of Dhaka.

Prepared By

Muksudul Hakim Md. Mustakim

Roll No: 13

Session: 2008-09

Department of international Business

B.B.A 15th batch

Date of Submission

20th

August, 2013


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August 20, 2013


Lecturer

Department of international business

University of Dhaka

Sub: Submission of Thesis Report

Sir,

First of all I would like to consider myself lucky for getting the chance to report named

Comparative Analysis of State Owned Bank's Performance in Bangladesh & India which I have

been assigned as a part of my BBA completion program.

Working on this report was very constructive to me. I had little knowledge regarding the Banks

performance in Bangladeshbefore starting working on this report. I thank you for giving me the

scope of developing a humble insight on this important area. I appreciated the assignment. I have

given my best efforts in preparing this report and to make it as comprehensive and informative as

possible. Due to various constraints, there may be some mistakes for which I beg your apology.

I hope this report will be able to meet the requirement of the course & should also be able to

satisfy your requirements.

Sincerely yours,

.......................................


Roll No. 13

BBA 15th

Batch & IB 2nd

Batch


University of Dhaka


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Certification letter

This is to certify that the report on Comparative Analysis of State Owned Bank's Performance

in Bangladesh & India as a part to fulfill the requirement of Bachelor of Business

Administration, (B.B.A) degree from the Department of International Business, University of

Dhaka has been carried out by Muksudul Hakim Md. Mustakim, student ID# 13 a student of

BBA 15th

Batch under my supervision. No part of the report has been submitted for any degree

diploma, title, or recognition before.

Date:


Lecturer


University of Dhaka


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Students Declaration

I declare that the report on the topic of Comparative Analysis of State Owned Bank's

Performance in Bangladesh & Indiais only prepared for the requirement of BBA degree and

embodies the results of my own practical and individual research works pursued under the close

supervision of my supervisor Muhammad Shahin Miah, Lecturer of Department of International

Business, University of Dhaka. This report is a descriptive one where only narrative description

has been made on the topic based on the collected information from Balance Sheets. I have tried

my best to analyze the topic and to fulfill the study by highlighting the major aspects of it.

I acknowledge with thanks all valuable suggestions received from my honorable supervisor for

preparing the report successfully. I further affirm that the work reported in this report is original

and no part or whole of this report has been submitted, in any form, to any other university or

institution for any other degree or any other purpose in the past.

Yours faithfully

----------------------------------------


Roll No. 13

BBA 15th

Batch & IB 2nd

Batch


University of Dhaka


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Acknowledgement

At first I would like to express my deepest gratitude to Almighty Allah for giving me the

strength and composure to finish the task.

I would like to express my deep sense of thankfulness and appreciation to all those who are

always a source of inspiration for their contribution, unconditional assistance and support in all

my academic activities. Without their encouragement, I would not be able to do my academic

works. I am indebted to all of them.

I would like to express my deepest gratitude to my advisor, supervisor Muhammad Shahin Miah,

Lecturer of Department of International Business, University of Dhaka., for his excellent

guidance, caring, patience, and providing me with an excellent atmosphere for doing research. I

would like to acknowledge her guidance and support that I needed throughout the time. Her

untiring cooperation, valuable suggestion and inspirations of creating a unique report enabled me

to overcome all the problems during the course of my internship program and while preparing

this report.


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ContentsExecutive Summary ....................................................................................................................................... 7

Chapter 1: Introduction ................................................................................................................................ 8

1.1 Introduction: ................................................................................................................................. 8

1.2 Background: .................................................................................................................................. 8

1.3 Research Objective: .................................................................................................................... 10

1.4 Scope of the Research:................................................................................................................ 10

Chapter 2: Contextual Framework .............................................................................................................. 12

2.1 Context: ....................................................................................................................................... 12

2.2 Economic Scenario of Bangladesh: ............................................................................................. 12

2.3 Economic Scenario of India: ........................................................................................................ 12

2.4 Comparison Between these two countries:................................................................................ 132.5 Summary: .................................................................................................................................... 18

Chapter 3 Research Methodology .............................................................................................................. 19

3.1 Research Methodology: .............................................................................................................. 19

3.2 Research Paradigm: .................................................................................................................... 19

3.3 Research Method: ....................................................................................................................... 21

3.3.1 Data collection: ................................................................................................................... 21

3.3.2 Ratio Analysis: ..................................................................................................................... 21

3.3.3 Performance comparison & Interpretation: ....................................................................... 21

Chapter 4: Analysis & Findings .................................................................................................................... 22

Ratio Analysis: ......................................................................................................................................... 22

Result of the Analysis: ............................................................................................................................. 37

Limitations of This Study: ........................................................................................................................ 37

Chapter 5: Suggestion and Conclusion ....................................................................................................... 38

5.1 Suggestion: .................................................................................................................................. 38

5.2 Conclusion: ................................................................................................................................. 39

References: ................................................................................................................................................. 40

Bibliography: ............................................................................................................................................... 40

Appendix: .................................................................................................................................................... 41


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Executive Summary

The broad objective of this study is Performance Evaluation. This paper finds the development and

growth picture of state owned commercial banks in Bangladesh. Data from the balance sheets was used

for the research. The study reveals all the state owned commercial banks in Bangladesh are not able to

achieve a stable growth, net profit, return on equity, return on assets but they are capable to achieve a

stable growth of deposit, loan and advances, equity.

Current Ratio and Quick Ratios are indicating how vulnerable our banks are to claims; Loans to Deposit

Ratios are indicating how efficiently liabilities are being converted to assets. Return on credit indicating

how much the given loans are earning.

ROE indicates that a bank convert its equity into net earnings. The higher ratio indicates higher abilityand indicates that the ROE of all the SCB are fluctuating from year to year. It is also indicates that all the

banks fail to maintain a satisfactory ROE. ROA indicates that a bank convert its assets into net earnings.

The higher ratio indicates higher ability and indicates that the ROA of all the state banks are fluctuating

from year to year. It is also indicates that all the banks fail to maintain a satisfactory ROA.

Finally net profit margin is indicating the profit scenario.

This report also indicates several suggestions that might be help our banks to perform like the Indian

banks with consistency.

However this study too has some limitations as for simple comparisons we have only compared 4Bangladeshi with 4 Indian banks. Amount of data tested was also little, only 5 years. More elaborate

study could indicate better results and conclusions.


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Chapter 1: Introduction

1.1 Introduction:

Banks especially state owned banks play a vital role in the development of a nation's

economy. Good performance of the state owned banks ensures that private banks are

kept in check with high service levels. That also ensures the healthy growth of economy

and indicates efficient use of the currency held by a nation. It is highly suggested to

monitor the performance of the state owned banks so that it helps the economic

strength of the country to grow.

India, our neighbor country is doing really good in economic terms. Their state owned

banks are doing really good when we see their annual reports. Those banks are strong

pillars of their economy. We need to compare performances of our banks with them to

understand where we stand in terms efficient banking.

1.2 Background:

Standard arguments for state intervention in the banking sector can be broadly

classified into four groups: (i) maintaining the safety and soundness of the banking

system;

(ii) Mitigating market failures due to the presence of asymmetric information;

(iii) Financing socially valuable (but financially unprofitable) projects; and

(iv) Promoting financial development and giving access to competitive banking services

to residents of isolated areas.

The first group of reasons has to do with the fact that banks are inherently fragile

institutions due to their maturity transformation role (namely, the funding of illiquidloans through short-term deposits), a situation that can lead to self-fulfilling bank runs

and widespread bank failures. However, banking fragility by itself would not justify

government intervention aimed at guaranteeing the stability of the banking system,

unless bank failures generate large negative externalities. It is precisely in this sense that

banks are special because, besides intermediating credit, they also provide two services

that have a public-good nature: they are the backup source of liquidity for all other


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institutions and the transmission belt for monetary policy. The need for state

intervention also arises from the fact that, due to the large leverage ratios that

characterize financial institutions in general, bank managers and owners may have

strong incentives to pursue investment activities that are riskier than the ones that

would be preferred by depositors.

The second set of explanations concerns the fact that financial markets in general, and

banking in particular, are informational intensive activities. It is generally accepted that

the stock of information gathered by banks plays a role in increasing the pool of

domestic savings that is channeled to available investment opportunities. However, as

information has some public-good characteristics (non-rivalries in consumption and

costly excludability), it would be undersupplied by competitive markets and, to the

extent that information entails a fixed acquisition cost, it would lead to imperfectcompetition in the banking system. Moreover, information can be easily destroyed,

increasing the cost of bank failures as customers of the failed bank may lose access to

credit. In addition, asymmetric information may lead to credit rationing, that is, a

situation in which good projects are underfinanced (or not financed at all) due to the

lack of verifiable information.2 A similar case can be made for the relationship between

depositors and banks: lack of bank-specific information can dissuade savers from

depositing in banks, particularly in incipient banking systems where long-standing

customer relationships are still to be built.

The third group of reasons has to do with the fact that private lenders may have limited

incentive to finance projects that produce externalities. In this line, direct state

participation would be warranted to compensate for market imperfections that leave

socially profitable (but financially unattractive) investments underfinanced.

A last argument, often invoked by supporters of state intervention in the banking sector,

points out that private bank may not find it profitable to open branches in rural and

isolated areas and that state intervention is necessary in order to provide banking

services to residents of these areas. Underlying this argument are the beliefs that

granting access to banking services may increase financial development with positiveexternalities on growth or poverty reduction, and that access to financial services is, at

any rate, a right and that the state should make an effort to guarantee its universal

provision. Along similar lines, the presence of public banks has also been advocated as a

means to guarantee competitive behavior in an otherwise collusive banking sector. This

rationale, however, is likely to be relevant only when the regulatory and monitoring

capacity of the public sector is limited and prone to capture.


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Apparently for these reasons it is essential for ourselves to know how we are doing in

our public or state owned banking sector. This paper focuses on the performance

analysis of four state owned banks, in each country.

1.3 Research Objective:

In order to evaluate the performance of state-owned bank, it is important to have a

clear idea of what state-owned banks are expectedto do, The social view would indicate

that state-owned banks should be more active in sectors where market failures are

likely to be more prevalent, namely, those associated with information asymmetries,

intangible assets, large external financing needs, and significant spillovers.

Candidates would include agriculture (plagued by asymmetric information and

aggregated shocks), R&D-intensive sectors like the pharmaceutical industry (with a large

share of intangible assets and potentially large spillovers), or capital intensive industries

with long start-up periods with negative cash-flows (like the aerospace industry, for

instance). It is also plausible that politicians may want to use public banks to limit

employment volatility. Therefore, one should expect them to lend to labor-intensive

sectors, particularly during recessions and in the presence of high unemployment rates.

This study will deal with following objectives-

Performance comparison using ratio analysis of financial statements.

Constructive recommendations for our state owned banks.

Establishing a benchmark for our state owned banks operations.

Suggest strategies, and modifications in current strategies.

Using unused techniques which growing countries are using.

Required government initiative.

1.4 Scope of the Research:

As banks serve as the pillars of economy in modern economic system our primary focus

should be on developing the banks. Specially state owned banks, which are not

performing well. To develop state owned banking first we need to find current status of

our state owned banking sector. The better way is to compare its status with the

successful neighbor India.


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Trade patterns, volume etc are different in these two countries, this causes the

problem. But if we consider ratio analysis of financial statements, that gives us a clear

idea about a fair comparison and indication about our current capabilities. This study

will investigate and bring out the current performances of our state owned banks,

compared to the state owned banks of India. It will also indicate what should be done

to improve our condition.So this can serve as a future guideline.


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Chapter 2: Contextual Framework

2.1 Context:

Bangladesh and India highly populated two countries. These two countries are

destination for MNCs (Multi National Company) as economy of these two countries are

growing. Banking business has grown in to in these two countries over the years. It is

proven that the state owned banks play a vital role in the development in the economy.

It appears that our neighbor India is doing very good in their state banking sector. It is

our need to find out what our state owned banks are doing in comparison to Indian

state owned banks.

2.2 Economic Scenario of Bangladesh:

In real terms Bangladesh's economy has grown 5.8% per year since 1996 despite political

instability, poor infrastructure, corruption, insufficient power supplies, and slow implementation

of economic reforms. Bangladesh remains a poor, overpopulated, and inefficiently-governed

nation. Although more than half of GDP is generated through the service sector, 45% of

Bangladeshis are employed in the agriculture sector with rice as the single-most-important

product. Bangladesh's growth was resilient during the 2008-09 global financial crisis and

recession. Garment exports, totaling $12.3 billion in FY09 and remittances from overseas

Bangladeshis, totaling $11 billion in FY10, accounted for almost 12% of GDP.

2.3 Economic Scenario of India:

India is developing into an open-market economy, yet traces of its past autarkic policies

remain. Economic liberalization, including industrial deregulation, privatization of state-

owned enterprises, and reduced controls on foreign trade and investment, began in the

early 1990s and has served to accelerate the country's growth, which has averagedmore than 7% per year since 1997. India's diverse economy encompasses traditional

village farming, modern agriculture, handicrafts, a wide range of modern industries, and

a multitude of services. Slightly more than half of the work force is in agriculture, but

services are the major source of economic growth, accounting for nearly two-thirds of

India's output, with less than one-third of its labor force. India has capitalized on its

large educated English-speaking population to become a major exporter of information


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technology services and software workers. In 2010, the Indian economy rebounded

robustly from the global financial crisis - in large part because of strong domestic

demand - and growth exceeded 8% year-on-year in real terms. However, India's

economic growth began slowing in 2011 because of a tight monetary policy, intended to

address persistent inflation, and a decline in investment, caused by investor pessimismabout domestic economic reforms and about the global situation. High international

crude prices have exacerbated the government's fuel subsidy expenditures, contributing

to a higher fiscal deficit and a worsening current account deficit. In late 2012, the Indian

Government announced reforms and deficit reduction measures to reverse India's

slowdown. The outlook India's medium-term growth is positive due to a young

population and corresponding low dependency ratio, healthy savings and investment

rates, and increasing integration into the global economy. India has many long-term

challenges that it has not yet fully addressed, including poverty, inadequate physical and

social infrastructure, limited non-agricultural employment opportunities, inadequate

availability of quality basic and higher education, and accommodating rural-to-urban

migration.

2.4 Comparison Between these two countries:

Overall Statistical Comparison Between these two countries1:

Attribute India Bangladesh

GDP (purchasingpower parity)

$4.735 trillion (2012 est.)$4.492 trillion (2011 est.)$4.205 trillion (2010 est.)note:data are in 2012 US dollars

$305.5 billion (2012 est.)$288.1 billion (2011 est.)$270.5 billion (2010 est.)note:data are in 2012 US dollars

GDP - real growthrate

5.4% (2012 est.)6.8% (2011 est.)

10.1% (2010 est.)

6.1% (2012 est.)6.5% (2011 est.)

6.4% (2010 est.)

GDP - per capita(PPP)

$3,900 (2012 est.)$3,700 (2011 est.)$3,500 (2010 est.)note:data are in 2012 US dollars

$2,000 (2012 est.)$1,900 (2011 est.)$1,800 (2010 est.)note:data are in 2012 US dollars


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GDP -composition bysector

agriculture: 17%industry:18%services:65% (2011 est.)

agriculture: 17.3%industry:28.6%services:54.1% (2012 est.)

Population belowpoverty line

29.8% (2010 est.) 31.51% (2010 est.)

Householdincome orconsumption bypercentage share

lowest 10%: 3.6%highest 10%:31.1% (2005)

lowest 10%: 4%highest 10%:27% (2010 est.)

Inflation rate(consumer prices)

9.2% (2012 est.)8.9% (2011 est.)

8.8% (2012 est.)10.7% (2011 est.)

Labor force 498.4 million (2012 est.) 77 millionnote:extensive export of laborto Saudi Arabia, Kuwait, UAE,Oman, Qatar, and Malaysia;workers' remittances were $10.9billion in FY09/10 (2012 est.)

Labor force - byoccupation

agriculture: 53%industry:19%services:28% (2011 est.)

agriculture: 45%industry:30%services:25% (2008)

Unemploymentrate

9.9% (2012 est.)9.8% (2011 est.)

5% (2012 est.)5% (2011 est.)note:about 40% of thepopulation is underemployed;many participants in the laborforce work only a few hours aweek, at low wages

Distribution offamily income -Gini index

36.8 (2004)37.8 (1997)

33.2 (2005)33.6 (1996)

Budget revenues: $171.5 billionexpenditures:$281 billion (2012est.)

revenues: $13.98 billionexpenditures:$19.62 billion(2012 est.)


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Industries textiles, chemicals, food processing,steel, transportation equipment,cement, mining, petroleum,machinery, software,pharmaceuticals

jute, cotton, garments, paper,leather, fertilizer, iron and steel,cement, petroleum products,tobacco, drugs andpharmaceuticals, ceramic, tea,

salt, sugar, edible oil, soap anddetergent, fabricated metalproducts, electricity and naturalgas

Industrialproductiongrowth rate

4.8% (2011 est.) 7.4% (2011 est.)

Agriculture -products

rice, wheat, oilseed, cotton, jute,tea, sugarcane, lentils, onions,potatoes; dairy products, sheep,goats, poultry; fish

rice, jute, tea, wheat,sugarcane, potatoes, tobacco,pulses, oilseeds, spices, fruit;beef, milk, poultry

Exports $309.1 billion (2012 est.)$305 billion (2011 est.)

$25.79 billion (2012 est.)$24.56 billion (2011 est.)

Exports -commodities

petroleum products, preciousstones, machinery, iron and steel,chemicals, vehicles, apparel

garments, knitwear, agriculturalproducts, frozen food (fish andseafood), jute and jute goods,leather

Exports - partners UAE 12.7%, US 10.8%, China 6.2%,Singapore 5.3%, Hong Kong 4.1%(2011)

US 19.4%, Germany 16.5%, UK10%, France 7.3%, Italy 4.4%,Spain 4.2%, Netherlands 4.2%(2011)

Imports $500.3 billion (2012 est.)$490 billion (2011 est.)

$35.06 billion (2012 est.)$32.58 billion (2011 est.)

Imports -commodities

crude oil, precious stones,machinery, fertilizer, iron and steel,chemicals

machinery and equipment,chemicals, iron and steel,textiles, foodstuffs, petroleumproducts, cement

Imports -partners

China 11.9%, UAE 7.7%, Switzerland6.8%, Saudi Arabia 6.1%, US 4.9%

China 18.2%, India 13.5%,Malaysia 4.9% (2011)


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(2011)

Debt - external $299.2 billion (31 December 2012est.)

$287.5 billion (31 December 2011est.)



Exchange rates Indian rupees (INR) per US dollar -53.17 (2012 est.)46.671 (2011 est.)45.726 (2010 est.)48.405 (2009)43.319 (2008)

taka (BDT) per US dollar -82.17 (2012 est.)74.152 (2011 est.)69.649 (2010 est.)69.04 (2009)68.554 (2008)

Fiscal year 1 April - 31 March 1 July - 30 June

Investment (grossfixed)

30% of GDP (2012 est.) 25.1% of GDP (2012 est.)

Public debt 51.9% of GDP (2012 est.)50.5% of GDP (2011 est.)note:data cover centralgovernment debt, and exclude debtinstruments issued (or owned) bygovernment entities other than the

treasury; the data include treasurydebt held by foreign entities; thedata exclude debt issued bysubnational entities, as well asintra-governmental debt; intra-governmental debt consists oftreasury borrowings from surplusesin the social funds, such as forretirement, medical care, andunemployment; debt instrumentsfor the social funds are not sold atpublic auctions

32% of GDP (2012 est.)33.9% of GDP (2011 est.)

Reserves offoreign exchangeand gold

$287.2 billion (31 December 2012est.)$297.9 billion (31 December 2011est.)



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Current AccountBalance

-$80.15 billion (2012 est.)-$46.91 billion (2011 est.)

-$941.9 million (2012 est.)$243.6 million (2011 est.)

GDP (official

exchange rate)

$1.947 trillion (2012 est.) $118.7 billion (2012 est.)

Stock of directforeigninvestment - athome



Stock of directforeigninvestment -abroad


$93.9 million (31 December 2012est.)$92.9 million (31 December 2011est.)

Market value ofpublicly tradedshares

$1.015 trillion (31 December 2011)$1.616 trillion (31 December 2010)$1.179 trillion (31 December 2009)

$23.55 billion (31 December2011)$15.68 billion (31 December2010)$7.068 billion (31 December2009)

Central bankdiscount rate

5.5% (31 December 2010 est.)6% (31 December 2009 est.)

note:the Indian central bank'spolicy rate - the repurchase rate -was 8% during December 2012

5% (31 December 2010 est.)5% (31 December 2009 est.)

Commercial bankprime lendingrate

10.8% (31 December 2012 est.)10.19% (31 December 2011 est.)

13.3% (31 December 2012 est.)13.25% (31 December 2011 est.)

Stock of money $278.8 billion (31 December 2009)$239.8 billion (31 December 2008)

$10.35 billion (30 September2009)$8.444 billion (31 December2007)

Stock of quasimoney

$853.4 billion (31 December 2009)$687.7 billion (31 December 2008)

$45.23 billion (30 September2009)$37.98 billion (31 December2008)


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2.5 Summary:

In short from these comparisons we can understand in spite some differences both

countries have similar traits. That is why the comparison between these two countries

sate owned banking sector can clarify how well Indian state owned banks are doing?,

How well our banks are doing?& What should be our benchmark performance?

Stock of domesticcredit

$1.402 trillion (31 December 2012est.)$1.249 trillion (31 December 2011est.)


Stock of narrowmoney



Stock of broadmoney

$1.451 trillion (31 December 2012est.)$1.293 trillion (31 December 2011est.)


Taxes and otherrevenues

8.8% of GDP (2012 est.) 11.8% of GDP (2012 est.)

Budget surplus(+) or deficit (-)

-5.6% of GDP (2012 est.) -4.8% of GDP (2012 est.)

Unemployment,youth ages 15-24

total: 10.5%male:10.4%female:10.8% (2004)

total: 9.3%male:8%female:13.6% (2006)


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Chapter 3 Research Methodology

3.1 Research Methodology:

Research methodology is a systematic way to solve a problem. It is also defined as the study of

methods by which knowledge is gained. Its aim is to give the work plan of research. This paper

studies the performance analysis of four state owned banks of Bangladesh and four state owned

banks of India. The methodology of the research shows the research paradigm, the design of the

research, the data collection method, the source of data and the process of analyzing the data.

In this chapter, methods followed to analyze data and its collection method is discussed to

structure the further analysis.

3.2 Research Paradigm:

A paradigm is a matrix of beliefs and perceptions. According to Taylor, Kermode, and

Roberts (2007,), a paradigm is a broad view or perspective of something. Additionally,

Weaver and Olsons (2006)definition of paradigm reveals how research could be

affected and guided by a certain paradigm by stating, Paradigms are patterns of beliefs

and practices that regulate inquiry within a discipline by providing lenses, frames and

processes through which investigation is accomplished.

According to Weaver and Olson (2006), the paradigms most commonly utilized in

nursing research are positivist, post-positivist, interpretive, and critical social theory.

The quantitative methodology shares its philosophical foundation with the positivist

paradigm (Weaver and Olson).The positivist philosophy argues that there is one

objective reality. Therefore, as a consequence, valid research is demonstrated only by

the degree of proof that can be corresponded to the phenomena that study results

stand for (Hope and Waterman, 2003).

The term post positivism, refers to the thinking after positivism, challenging thetraditional notion of the absolute truth of knowledge (Phiillips and Burbules, 2000) Post

positivism reflects deterministic philosophy in which causes probably determine effects

or outcomes. Thus, the problems studied by post-positivist reflect a need to examine

causes that influence outcomes, such as issues examined in experiments. It is also

reductionist in that the intent is to reduce he ideas into a small, discrete set of ides to

test, such as the variable that constitute hypotheses and research questions. The


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knowledge that develops through a post positivist lens is based on careful observation

and measurement of the objective reality that exists out there in the world. Thus,

developing numeric measures of observations and studying the behavior of individual

become paramount for a post positivist.

According to Cresswell (1994) "A qualitative study is defined as an inquiry process of

understanding a social or human problem, based on building a complex, holistic picture,

formed with words, reporting detailed views of informants, and conducted in a natural

setting. The basis of qualitative research lies in the interpretive approach and also

known as interpretative approach. Qualitative researchers appear to undertake the very

suspect course of seriously studying the sentiments of their human subjects. Rather

than treating peoples utterances about themselves and their world as inaccurate

accounts of social reality, or as outcomes determined by environmental forces, or as

manifestations of cognitive processes, the qualitative researcher listens carefully to the

utterances. The researcher moves about in the lives of certain people, and subjects and

researcher become familiar to each other: they as something more than human

subjects, and he or she as possibly something less than a researcher. (Lindlof 1995, 9)

Mixed methods research has been established as a third methodological movement

over the past twenty years, complementing the existing traditions of quantitative and

qualitative movements (Tashakkori&Teddlie, 2003, Teddlie&Tashakkori, 2009). The term

mixed methods has come to be used to refer to the use of two or more methods in a

research project yielding both qualitative and quantitative data (e.g. Cresswell& Plano

Clark, 2007;Greene, 2007; Teddlie&Tashakkori, 2009). Mixed research is a synthesis thatincludes ideas from qualitative and quantitative research.

As this paper analyses and compares the performance of the state controlled banks.

This will require first the ratio analysis of the individual banks. Then based on the results

interpretations and comparative conclusions will be drawn. So both qualitative and

quantitative methods will be used.


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Chapter 4: Analysis & Findings

Ratio Analysis:

Ratio Analysis is a tool used by individuals to conduct a quantitative analysis of

information in a company's financial statements. Ratios are calculated from current year

numbers and are then compared to previous years, other companies, the industry, or

even the economy to judge the performance of the company.

There are many ratios that can be calculated from the financial statements pertaining to

a company's performance, activity, financing and liquidity.

To compare between the state owned banks of India and Bangladesh a number of ratio

analysis has been conducted over 5 years of Data, ranging from 2007 to 20011. Mainlythe balance sheet items and some profit and loss account items have been considered.

The comparative analysis begins with traditional current ratio analysis.

1. Current Ratio: This ratio is mainly used to give an idea of the company's ability to

pay back its short-term liabilities (debt and payables) with its short-term assets. The

higher the current ratio, the more capable the company is of paying its obligations. A

ratio under 1 suggests that the company would be unable to pay off its obligations if

they came due at that point. While this shows the company is not in good financial

health.

But it does not necessarily mean that it will go bankrupt - as there are many ways to

access financing - but it is definitely not a good sign.

The current ratio can give a sense of the efficiency of a company's operating cycle or

its ability to turn its product into cash. Companies that have trouble getting paid on

their receivables or have long inventory turnover can run into liquidity problems

because they are unable to alleviate their obligations. Because business operations

differ in each industry, it is always more useful to compare companies within thesame industry.


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Formula:

Situation in Bangladesh-

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

2007 2008 2009 2010 2011

Current Ratio

Shonali Bank

Janata Bank

Agrani Bank

Rupali Bank


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Situation in India-

Interpretation:

As the charts indicate as per the current ratio is concerned, Indian banks are close to

the ideal standard of current ratio to 1. Though none of the banks have achieved the

ideal score but Bangladeshi banks are definitely are not much adept. It indicates

they are performing in a much more risky environment. Indian banks have shown

consistent development regarding Current Ratio.

2. Quick Ratio: The quick ratio is more conservative than the current ratio, a more well-

known liquidity measure, because it excludes inventory from current assets.Inventory is excluded because some companies have difficulty turning their

inventory into cash. In the event that short-term obligations need to be paid off

immediately, there are situations in which the current ratio would overestimate a

company's short-term financial strength.

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

2007 2008 2009 2010 2011

Current Ratio

Andhra Bank

Bank Of India

Indian Overseas Ba

Punjab National Ba


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Formula:


Situation in India-

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

2007 2008 2009 2010 2011

Quick Ratio

Shonali Bank

Janata Bank

Agrani Bank

Rupali Bank

0

0.020.04

0.06

0.08

0.1

0.12

0.14

2007 2008 2009 2010 2011

Quick Ratio

Andhra Bank Bank Of India Indian Overseas Bank Punjab National Bank


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Interpretation-

Again we see that Indian banks are performing more consistently where

Bangladeshi banks are facing fluctuations in their Quick Ratio achievement.

3. Working Capital: A measure of both a company's efficiency and its short-term

financial health. This ratio indicates whether a company has enough short term

assets to cover its short term debt. But as the institutions are bank it means it assets

will always increase with debts. So it will always generate a negative figure if

calculated for a bank.

The more the figure is negative it will it indicate the more money this bank is able to

collect from its customers.

Formula:


-500000000000.00

-400000000000.00

-300000000000.00

-200000000000.00

-100000000000.00

0.00

2007 2008 2009 2010 2011

Working Capital

Shonali Bank

Janata Bank

Agrani Bank

Rupali Bank


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Situation in India-

Interpretation:

Scenario is a little different here. As we see, our banks and Indian banks are performing

in very close distance. In some years our banks are better. As we can see Punjab bank

the one with highest negative figure is lower than the highest negative figure of our

banks the Shonali Bank.

4. Interst Margin: it is a performance metric that examines how successful a firm's

investment decisions are compared to its debt situations. A negative value denotesthat the firm did not make an optimal decision, because interest expenses were

greater than the amount of returns generated by investments.

Formula:

Interest Margin= Interest Income Interest Expenses

-3500000000.00

-3000000000.00

-2500000000.00

-2000000000.00

-1500000000.00

-1000000000.00

-500000000.00

0.00

2007 2008 2009 2010 2011

Working Capital

Andhra Bank

Bank Of India

Indian Overseas Bank

Punjab National Bank


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Situation in India-

Interpretation-Here we observe that the Indian banks are consistently generating profit from their

investments. But our state owned banks are having trouble in making efficient

investment decisions.

-2000000000.00

0.00

2000000000.00

4000000000.00

6000000000.00

8000000000.00

10000000000.00

12000000000.00

2007 2008 2009 2010 2011

Interest Margin

Shonali Ba

Janata Ban

Agrani Ba

Rupali Ban

0.00

20000000.00

40000000.00

60000000.00

80000000.00

100000000.00

120000000.00

2007 2008 2009 2010 2011

Intrest Margin

Andhra Bank

Bank Of India




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5. Loan to Deposit Ratio: it is a commonly used statistic for assessing a bank's liquidity

by dividing the banks total loans by its total deposits. This number, also known as

the LTD ratio, is expressed as a percentage. If the ratio is too high, it means that

banks might not have enough liquidity to cover any unforeseen fund requirements;

if the ratio is too low, banks may not be earning as much as they could be.This ratio is often used by policy makers to determine the lending practices of

financial institutions.

Formula:


0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

2007 2008 2009 2010 2011

Loan To Deposit Ratio

Shonali Bank Janata Bank Agrani Bank Rupali Bank


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Situation In India-

Interpretation:

In this case our banks are more efficient with consistency in making lending

operations.

6. Return On Credit: It is another ratio measuring the proportion of interest generated

by specific credit operations or loans provided by the bank.

Formula:

Return on Credit= Interest Income / Loans and Advances


62.00%

64.00%

66.00%

68.00%

70.00%

72.00%

74.00%

76.00%

78.00%

2007 2008 2009 2010 2011

Loan To Deposit Ratio

Andhra Bank

Bank Of India

Indian Overseas Ba

Punjab National Ba


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Situation in India-

Interpretation-

Again the graphs are showing that the Indian banks are consistent in their

performances. On the other hand our banks are not consistent with their

performance.

7. ROA (return on assets) Ratio: An indicator of how profitable a company is relative to

its total assets. ROA gives an idea as to how efficient management is at using its

assets to generate earnings. Calculated by dividing a company's annual earnings by

its total assets, ROA is displayed as a percentage. Sometimes this is referred to as

"return on investment".

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2007 2008 2009 2010 2011

Return On Credit

Shonali Bank

Janata Bank

Agrani Bank

Rupali Bank

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2007 2008 2009 2010 2011

AxisTitle

Return On Credit

Andhra Bank

Bank Of India




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The formula for return on assets is:

ROA tells what earnings were generated from invested capital (assets). ROA for

public companies can vary substantially and will be highly dependent on the

industry. This is why when using ROA as a comparative measure, it is best to

compare it against a company's previous ROA numbers or the ROA of a similar

company.

The assets of the company are comprised of both debt and equity. Both of these

types of financing are used to fund the operations of the company. The ROA figure

gives investors an idea of how effectively the company is converting the money it

has to invest into net income. The higher the ROA number, the better, because the

company is earning more money on less investment.

The ROA is often referred to as ROI(return on investment).


-1.00%

-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

2007 2008 2009 2010 2011

ROA

Shonali Bank

Janata Bank

Agrani Bank

Rupali Bank


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Situation in India-

Interpretation:

This one of the critical and vital statistic shows that if we ignore the past

performance of one of our banks (Rupali Bank), our banks are doing really good.

Our banks has performance has a tendency of being around 2.00% or more in recent

times. On the other hand the Indian banks are consistent in their performance but

they are below 1.60%.

8. Return on Equity: The amount of net income returned as a percentage ofshareholders equity. Return on equity measures a corporation's profitability by

revealing how much profit a company generates with the money shareholders have

invested.

ROE is expressed as a percentage and calculated as:

Return on Equity = Net Income/Shareholder's Equity

Net income is for the full fiscal year (before dividends paid to common stock holders

but after dividends to preferred stock.) Shareholder's equity does not include

preferred shares.

It is also known as "return on net worth" (RONW).

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

1.40%

1.60%

2007 2008 2009 2010 2011

ROA

Andhra Bank

Bank Of India




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The ROE is useful for comparing the profitability of a company to that of other firms

in the same industry.

There are several variations on the formula that investors may use to find out

different measures, but this paper will focus on only the general Formula.

Two important notes:

Forhigh growth companies one should expect a higher ROE.

AveragingROE over the past 5 to 10 years can give a better idea of the

historical growth.


Situation in India-

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

2007 2008 2009 2010 2011

ROE

Shonali Bank

Janata Bank

Agrani Bank

Rupali Bank

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2007 2008 2009 2010 2011

ROE

Andhra Bank

Bank Of India




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Interpretation:

This important measurement indicates, those Indian banks are consistently keeping

their returns, but our banks are not efficiently managing their funding thus return isfluctuating. But both sides returns are on the base of equity are decreasing. These

signs will discourage investors to invest in these banks in our country.

9. Net Profit Margin: it is a ratio of profitability calculated as net income divided by

revenues, or net profits divided by sales. It measures how much out of every dollar

of sales a company actually keeps in earnings.

Profit margin is very useful when comparing companies in similar industries. A

higher profit margin indicates a more profitable company that has better control

over its costs compared to its competitors. Profit margin is displayed as a

percentage.

Looking at the earnings of a company often doesn't tell the entire story. Increased

earnings are good, but an increase does not mean that the profit margin of a

company is improving. For instance, if a company has costs that have increased at a

greater rate than sales, it leads to a lower profit margin. This is an indication that

costs need to be under better control.

It is also known as Net Profit Margin.

Formula:

Here for banking institution Sales has been recognized as Investments + Loans and

Advances.


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Situation in India-

Interpretation:

This analysis again indicates the consistent profit making of Indian banks. Though

some of Bangladeshi banks are able to make some huge profits in specific years, butthey lost consistency. That indicates control is very weak in our state owned banks.

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00%

2007

2008

2009

2010

2011

Net Profit Margin

Rupali Bank

Agrani Bank

Janata Bank

Shonali Bank

0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60%

2007

2008

2009

2010

2011

Net Profit Margin

Punjab National Bank Indian Overseas Bank Bank Of India Andhra Bank


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Result of the Analysis:

From the analysis we see,

Current Ratio and Quick Ratios are indicating how vulnerable our banks are to claims;

Loans to Deposit Ratios are indicating how efficiently liabilities are being converted to

assets. Return on credit indicating how much the given loans are earning.

ROE indicates that a bank convert its equity into net earnings. The higher ratio indicates

higher ability and indicates that the ROE of all the SCB are fluctuating from year to year.

It is also indicates that all the banks fail to maintain a satisfactory ROE. ROA indicates

that a bank convert its assets into net earnings. The higher ratio indicates higher ability

and indicates that the ROA of all the state banks are fluctuating from year to year. It is

also indicates that all the banks fail to maintain a satisfactory ROA.


As the analysis shows the Indian banks are improving their performances constantly.

Consistent improving and successfully managing downward slopes in economy was the

key success factor of the Indian state owned banks. How our banks can achieve such

level of perfection will be suggested in the next chapter of this paper.

Limitations of This Study:

1) India has almost 30 state owned banks on the other hand Bangladesh has only 4

state owned banks (excluding some special purpose banks)2. Comparing them will

only provide an idea about the scenario not the whole picture.2) The idea is to get a benchmark for the Bangladeshi bank, for the sake of simple

comparative analysis four Bangladeshi and four Indian banks has been taken.

3) As time was short only five year data has been analyzed, analyzing more data could

give a more accurate picture.


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Chapter 5: Suggestion and Conclusion

5.1 Suggestion:

The following suggestions will be helpful if our banks follow those3:

a) Fair dealings with the customers. More contribution from the employee

of the bank. The staff should be cooperative, friendly and must be

capable of understanding the problems of customers.

b) Internet banking facility must be made available in all the banks.

c) Prompt dealing with permanent customers and speedy transaction

without harassing the customers

d) Each section of every bank should be computerized even in rural areas

also.

e) More ATM coverage should be provided for the convenience of the

customers.

f) No limit on cash withdrawals on ATM cards.

g) The bank should bring out new schemes at time-to time so that more

people can be attracted. Even some gifts and prizes may be offered to

the customers for their retention.

h) 24 hours banking should be induced so as to facilitate the customers who

may not have a free time in the daytime. It will help in facing the

competition more effectively.

i) Bank should properly disclose the features of the product and services to

the customers. Moreover door to door services can also be introduced bybank.

j) Branch should promote cooperation and coordination among employees

which help them in efficient working.

k) Combining traditional wisdom with modern statistical tools like Value-at-

risk analysis and Markov Chain Analysis should be employed to assess the

borrowers. This is to be supplemented by information sharing among the

bankers about the credit history of the borrower. In case of new

borrowers, especially corporate borrowers, proper analysis of the cash

flow statement of last five years is to be done carefully.

l)

Assisting the borrowers in developing his entrepreneurial skills will notonly establish a good relation between the borrowers but also help the

bankers to keep a track of their funds.

m)Some tax incentives like capital gain tax exemption, carry forward the

losses to set off the same with other income of the Qualified Institutional

Borrowers (QIBs) should be granted so as to ensure their active

participation by way of investing sizeable amount in distressed assets of

banks and financial institutions.


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5.2 Conclusion:

Evaluation of banks financial performance is important for all parties like

depositors, bank manager, stockholders, creditors, regulators and educationalist.

In a competitive market financial bank performance provides signals to depositor

investors whether to invest or withdraw fund from the bank. Similarly, it flashes

direction to bank manager whether to improve its deposit service or loan service

or both to improve its finance. Stockholders and creditors use the performance

to evaluate the attractiveness of the bank as an investment by examining its

ability to meets its current and expected future financial obligation. Regulator is

also interested to know its regulation purpose. Educationalist can use this article

for further research.

Current Ratio and Quick Ratios are indicating how vulnerable our banks are to

claims; Loans to Deposit Ratios are indicating how efficiently liabilities are being

converted to assets. Return on credit indicating how much the given loans are

earning.

ROE indicates that a bank convert its equity into net earnings. The higher ratio

indicates higher ability and indicates that the ROE of all the SCB are fluctuating

from year to year. It is also indicates that all the banks fail to maintain a

satisfactory ROE. ROA indicates that a bank convert its assets into net earnings.

The higher ratio indicates higher ability and indicates that the ROA of all the

state banks are fluctuating from year to year. It is also indicates that all the banks

fail to maintain a satisfactory ROA.


This study really helped out to find the weak links in our state owned banking

sector. If the authority takes necessary steps to improve these links, our state

owned banks will be able to perform at its best.


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References:

1. CIA Factbook

http://www.indexmundi.com/factbook/compare/india.bangladesh/economy

2. Wikipedia.

3. International Journal of Innovation, Management and Technology, Vol. 2, No. 3, June

2011

By: Kajal Chaudhary and Monika Sharma

&

Performance Evaluation and Competitive Analysis of State Owned Commercial Banks

in Bangladesh

Research Journal of Finance and Accounting

ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online)

Vol 2, No 3, 2011By: Shah Johir Rayhan (Corresponding author)

Department of Management & Finance

Sher-e-Bangla Agricultural University

S.M. Sohel Ahmed

Department of Marketing

Northern College Bangladesh

Ripon Kumar Mondal

Department of Agricultural Economics

Sher-e-Bangla Agricultural University

Bibliography:Fundamentals of Financial Management. 12thEdition.

By: James C Van Horne and John M Wacowics JR.
http://www.indexmundi.com/factbook/compare/india.bangladesh/economyhttp://www.indexmundi.com/factbook/compare/india.bangladesh/economyhttp://www.indexmundi.com/factbook/compare/india.bangladesh/economy


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Appendix:

1)The 8 Balance Sheetssonali bank

2007 2008 2009 2010 2011

Property & Assets

Cash 23407815028 20641592198 28415953542 33230634571 65634773139

Balance B&F 7316574707 9979717359 10614726092 40099345277 13077936686

Money @call 1517463000 250857360 3079323200 5547312900 11742379680

Investments 88890899351 95093241199 113479966309 111745095461 132089167727

Loans and

Advance

206347592413 231166579465 254022504699 286098070161 348091755805

Fixed Asset 9839341127 9920927663 10047274621 10594092052 23060119998

other 125893233074 124644547313 131197680686 133200410488 101908464655

Total 461964232939 492946148318 550857429148 620514960910 695604597690

Liability and

Capital

Borrowings 6990041413 545955691 60124599 26385637 20926263206

Deposits 328997209441 364385970931 406151569403 478134084948 533123037103

other 104235253186 103596507559 107383753943 125333593203 104262013373

Equity 21741728899 24417714137 37261981202 45773859298 56123284007


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janata bank

2007 2008 2009 2010 2

Property & Assets

Cash 15579764948 16527172701 16531848663 17597592643 24115279

Balance B&F 7328402871 5979793315 4123427486 6167291516 8888361

Money @call 8567349333 7088744458 5533529807 3607144341 18475731

Investments 55862930391 57823525987 72533203682 57514002747 90905865

Loans andAdvance 121204454973 144678183388 166359485619 225732208529 257801035

Fixed Asset 2424177100 2446425915 2685195290 6299906482 9634633

other 32121123227 32613451158 25896092822 28315781897 30568462

Total 243088202843 267157296922 293662783369 345233928155 440389369

Liability and

Capital

Borrowings 2531387633 587633 31565952 50488931 63498

Deposits 198635892054 221335750734 246175046479 286566890434 361676694

other 36241755883 36758590982 33595800525 38226221808 48496261

Equity 5679167273 9062367573 13860370413 20390326982 30152914

Total 243088202843 267157296922 293662783369 345233928155 440389369


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Page 43of 72

Agrani bank

2007 2008 2009 2010 20

Property & Assets

Cash 1728000000 2079000000 9536303168 13016651219 189194798

Balance B&F 7966000000 7616000000 2985379481 3004978834 36129140

Money @call 1110000000 820000000 1700000000 10000000

Investments 21900000000 29330000000 40897186296 43916295003 853312528

Loans and

Advance

95090000000 95110000000 122236085269 163256184445 1940856561

Fixed Asset 2480000000 2530000000 2878697343 5435899358 112266497

other 56006000000 49835000000 33829220120 36222018059 346447560

Total 186280000000 187320000000 214062871677 264852026918 3488207088

Liability and

Capital

Borrowings 9427000000 2105000000 1192703306 6216816056 257581539

Deposits 135920000000 146810000000 166283624192 206326011342 2522083600

other 37593000000 31985000000 35145617167 36591914752 449115707

Equity 3340000000 6420000000 11440927012 15717284768 259426240

Total 186280000000 187320000000 214062871677 264852026918 3488207088


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Page 44of 72

Rupali bank

2007 2008 2009 2010 2011

Property & Assets

Cash 6779310465 6608196961 5286406832 7542640873 7400358179

Balance B&F 308043540 2069676457 2688523347 6579820158

Money @call 4350000000 4474700000 3700000000 3200000000

Investments 14090649118 12545717273 14303004404 15717194721 23611153759

Loans and

Advance

47080319537 49030036101 52344171190 66048966139 76524922447

Fixed Asset 529763264 2323315942 2332537980 9520746146 9674607803

other 8681968105 7021822063 7755650032 19716430319 19242261581

Total 81512010489 82311831880 87791446895 124434501545 143033123927

Liability and

Capital

Borrowings 30137644 23303233 337206339 269497245 1604970053

Deposits 73302306480 71207978507 73803437188 91123755017 107233954572

other 19107442082 19249699782 19232576344 18889771623 20757222606

Equity -10927875717 -8169149642 -5581772976 14151477661 13436976685

Total 81512010489 82311831880 87791446895 124434501546 143033123916


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Page 45of 72

Andhra

Bank

2007 2008 2009 2010 2011Assets

Cash 29490561 49016678 48533389 66986980 71844052

Balance B&F 8989747 4123330 4341626 4713723 9,768,927

+

Money @call 1761437 3803149 39975864 22,976,528

Investments 143007185 148982376 169111120 208809986 242039993

Loans and

Advance

278890663 342383852 441392597 561135072 714353582

Fixed Asset 1923459 2194634 3352951 3556567 3175002

other 11346925 15419877 17960393 18245831 24849111

Total 475,409,97

7

565,923,89

6

684,692,07

6

903,424,02

3

1,089,007,1

95

Liability and

Capital

Borrowings 7335347 5905095 33512347 58524426 76,397,408

Deposits 414540209 494365476 593900196 776882076 921,562,816

other 21971621 33160436 20809599 23917086 26,122,809

Equity 31562800 32492889 36469934 44100435 64924162

Total 475409977 565923896 684692076 903424023 1089007195


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Page 46of 72

bank of India

2007 2008 2009 2010 2011

Property & Assets

Cash 71968894 117418505 89152845 156026240 217824332

Balance B&F 87022782 50657890 87410212 111209850 106066262

Money @call 15063674 9097499 41049499 45065248 49209296

Investments 354927618 418028767 526071791 670801795 858724176

Loans and

Advance

851158944 1134763264 1429093738 1684907098 2130961817

Fixed Asset 7892954 24260671 25319347 23518088 24807363

other 30135047 34073181 56920239 58136266 124132245

Total 1418169913 1788299777 2255017671 2749664585 3511725491

Liability and

Capital

Borrowings 66208269 71724490 94869763 223998955 220213756

Deposits 1198817362 1500119812 1897084797 2297619439 2988858063

other 94190529 110561565 128113898 85746253 129746875

Equity 58953753 105893910 134949213 142299938 172906797

Total 1418169913 1788299777 2255017671 2749664585 3511725491


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Indian overseas bank

2007 2008 2009 2010 2011

Property & Assets

Cash 46861079 91242328 59404442 76664472 100108943

Balance B&F 31910810 9680915 36313189 14454255 18605114

Money @call 11021137 2489969 13501386 7127680 1472500

Investments 239744736 284747084 312154387 376505627 486104540

Loans and

Advance

470602860 604238440 748852726 789991593 1118329775

Fixed Asset 5106572 5585775 17098596 16995655 16811068

other 17321090 20612881 23409261 29177012 46410845

Total 822568284 1018597392 1210733987 1310916294 1787842785

Liability and

Capital

Borrowings 28962275 63536463 104945824 89822019 193564046

Deposits 687404149 843255829 1001158896 1107947110 1452287511

other 66298209 63238398 33119634 37901334 48751928

Equity 39903651 48566702 71509633 75245831 93249300

Total 822568284 1018597392 1210733987 1310916294 1787852785


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Page 48of 72

Punjab bank

2007 2008 2009 2010 2011

Property & Assets

Cash 123720292 152581517 170582536 183275755 237768960

Balance B&F 13042619 31505971 41452838 41094724 50386381

Money @call 19692277 4219750 2096070 10365164 8756775

Investments 451898360 539917050 633851803 777244678 951623475

Loans and

Advance

965965186 1195015662 1547029887 1866012080 2421066661

Fixed Asset 10098255 23155219 23971073 25134690 31055961

other 39807976 43808437 50201966 63200681 82594189

Total 1624224965 1990203606 2469186173 2966327772 3783252402

Liability and

Capital

Borrowings 19488566 54465596 43743633 192623660 315896905

Deposits 1398596711 1664572260 2097604967 2493298030 3128987266

other 101785089 147982286 181301277 103176897 123282659

Equity 104354599 123183464 146536296 177229185 215085572

Total 1624224965 1990203606 2469186173 2966327772 3783252402


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2) Ratio Calculations:

Sonali Bank

Current Ratio

current assets / current liabilities

Year Current Assets Current Liabilities Current Ratio

2007 32241852735.00 335987250854.00 0.095961536

2008 30872166917.00 364931926622.00 0.084597057

2009 42110002834.00 406211694002.00 0.103665166

2010 78877292748.00 478160470585.00 0.164959878

2011 90455089505.00 554049300309.00 0.163261806

Quick Ratio

(cash+ short notice money)/current liabilities

Year Quick Assets Current Liabilities Quick Ratio

2007 24925278028.00 335987250854.00 0.07418519

2008 20892449558.00 364931926622.00 0.057250265

2009 31495276742.00 406211694002.00 0.077534146

2010 38777947471.00 478160470585.00 0.081098187

2011 77377152819.00 554049300309.00 0.139657523

Net Working Capital Current Assets - Current Liabilities

Year Current Assets Current Liabilities Net Working Capital

2007 32241852735.00 335987250854.00 -303745398119.00

2008 30872166917.00 364931926622.00 -334059759705.00

2009 42110002834.00 406211694002.00 -364101691168.00

2010 78877292748.00 478160470585.00 -399283177837.00

2011 90455089505.00 554049300309.00 -463594210804.00


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Page 50of 72

Interst Margin

Interest Income - interest paid

Year Interest Income interest paid Interst Margin

2007 8962089341.00 6625390799.00 2336698542.00

2008 13101861774.00 13965929070.00 -864067296.00

2009 17683108223.00 15800026939.00 1883081284.00

2010 22841408729.00 19131795895.00 3709612834.00

2011 28092050860.00 22415764284.00 5676286576.00

Loan To Deposits

Ratio

Loans / Deposits

Year Loans Deposits

Loan To Deposits

Ratio

2007 206347592413.00 328997209441.00 62.72%

2008 231166579465.00 364385970931.00 63.44%

2009 254022504699.00 406151569403.00 62.54%

2010 286098070161.00 478134084948.00 59.84%

2011 348091755805.00 533123037103.00 65.29%

Return On Credit Interest Income/Loans And Advances

Year Interest Income Loans And Advances Return On Credit

2007 8962089341.00 206347592413.00 4.34%

2008 13101861774.00 231166579465.00 5.67%

2009 17683108223.00 254022504699.00 6.96%

2010 22841408729.00 286098070161.00 7.98%

2011 28092050860.00 348091755805.00 8.07%

ROA

(Net Profit Before Tax/ Total Assets)*100

Year Net Profit Before Total Assets ROA


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Tax

2007 -1834170743.00 461946232939.00 -0.40%

2008 1336400387.00 492949148318.00 0.27%

2009 2244267215.00 543969267865.00 0.41%

2010 1620358504.00 620514960910.00 0.26%

2011 9899181075.00 695604597690.00 1.42%

ROE

(Net Profit After Tax/Total Equity)*100

Year Net Profit After Tax Total Equity ROE

2007 2311114502.00 21741728899.00 10.63%

2008 973580120.00 24417714137.00 3.99%

2009 1536766608.00 37261981202.00 4.12%

2010 2737610402.00 45773859298.00 5.98%

2011 9981947683.00 56123284007.00 17.79%

Net Profit Margin

Net Profit after Tax/(Invesrment + Loans & Advances)

Year Net Profit After Tax (Invesrment + Loans & Advances) Net Profit Margin

2007 2311114502.00 295238491764.00 0.78%

2008 973580120.00 326259820664.00 0.30%

2009 1536766608.00 367502471008.00 0.42%

2010 2737610402.00 397843165622.00 0.69%

2011 9981947683.00 480180923532.00 2.08%


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Page 52of 72

Janata Bank

Current Ratio



2007 31475517152.00 201167279687.00 0.156464397

2008 29595710474.00 221336338367.00 0.133713744

2009 26188805956.00 246206612431.00 0.106369223

2010 27372028500.00 286617379365.00 0.09550024

2011 51479372034.00 361740192752.00 0.142310346

Quick Ratio



2007 24147114281.00 201167279687.00 0.120034999

2008 25495723837.00 221336338367.00 0.115189959

2009 22065378470.00 246206612431.00 0.089621389

2010 21204736984.00 286617379365.00 0.073982733

2011 42591010701.00 361740192752.00 0.117739227



2007 31475517152.00 201167279687.00 -169691762535.00

2008 29595710474.00 221336338367.00 -191740627893.00

2009 26188805956.00 246206612431.00 -220017806475.00

2010 27372028500.00 286617379365.00 -259245350865.00

2011 51479372034.00 361740192752.00 -310260820718.00


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Page 53of 72

Interst Margin


Year Interest Income interest paid Interest Margin

2007 6017323687.00 4617377131.00 1399946556.00

2008 12953199215.00 9306491598.00 3646707617.00

2009 14869282150.00 10380072954.00 4489209196.00

2010 19058219576.00 11961473276.00 7096746300.00

2011 26266118212.00 17785817554.00 8480300658.00

Loan To Deposits

Ratio

Loans / Deposits

Year Loans Deposits

Loan To Deposits

Ratio

2007 121204454973.00 198635892054.00 61.02%

2008 144678183388.00 221335750734.00 65.37%

2009 166359485619.00 246175046479.00 67.58%

2010 225732208529.00 286566890434.00 78.77%

2011 257801035388.00 361676694608.00 71.28%



2007 6017323687.00 121204454973.00 4.96%

2008 12953199215.00 144678183388.00 8.95%

2009 14869282150.00 166359485619.00 8.94%

2010 19058219576.00 225732208529.00 8.44%

2011 26266118212.00 257801035388.00 10.19%

ROA


Year

Net Profit Before

Tax Total Assets ROA


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Page 54of 72

2007 1681033179.00 243088202843.00 0.69%

2008 4749323769.00 267157296922.00 1.78%

2009 5636819382.00 293662783369.00 1.92%

2010 7820431873.00 345233928155.00 2.27%

2011 8875669617.00 440389369132.00 2.02%

ROE



2007 15476452.00 5679167273.00 0.27%

2008 3145382406.00 9062367573.00 34.71%

2009 2784781440.00 13860370413.00 20.09%

2010 4907974833.00 20390326982.00 24.07%

2011 4444908801.00 30152914820.00 14.74%

Net Profit Margin

Net Profit after Tax/(Investment + Loans & Advances)

Year Net Profit After Tax (Investment + Loans & Advances) Net Profit Margin

2007 15476452.00 177067385364.00 0.01%

2008 3145382406.00 202501709375.00 1.55%

2009 2784781440.00 238892689301.00 1.17%

2010 4907974833.00 283246211276.00 1.73%

2011 4444908801.00 348706900987.00 1.27%


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Page 55of 72

Agrani bank

Current Ratio



2007 10804000000.00 145347000000.00 0.07433246

2008 10515000000.00 148915000000.00 0.070610751

2009 14221682649.00 167476327498.00 0.084917569

2010 16021630053.00 212542827398.00 0.075380714

2011 23532393988.00 277966514077.00 0.084659097

Quick Ratio



2007 2838000000.00 145347000000.00 0.019525687

2008 2899000000.00 148915000000.00 0.019467481

2009 11236303168.00 167476327498.00 0.067091889

2010 13016651219.00 212542827398.00 0.061242486

2011 19919479891.00 277966514077.00 0.071661437



2007 10804000000.00 145347000000.00 -134543000000.00

2008 10515000000.00 148915000000.00 -138400000000.00

2009 14221682649.00 167476327498.00 -153254644849.00

2010 16021630053.00 212542827398.00 -196521197345.00

2011 23532393988.00 277966514077.00 -254434120089.00


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Page 56of 72

Interst Margin



2007 4380000000.00 2619000000.00 1761000000.00

2008 9547000000.00 5241000000.00 4306000000.00

2009 10122406610.00 6083558757.00 4038847853.00

2010 13997620160.00 7086680562.00 6910939598.00

2011 22434672794.00 11965996593.00 10468676201.00

Loan To Deposits

Ratio

Loans / Deposits

Year Loans Deposits

Loan To Deposits

Ratio

2007 95090000000.00 135920000000.00 69.96%

2008 95110000000.00 146810000000.00 64.78%

2009 122236085269.00 166283624192.00 73.51%

2010 163256184445.00 206326011342.00 79.13%

2011 194085656173.00 252208360096.00 76.95%



2007 4380000000.00 95090000000.00 4.61%

2008 9547000000.00 95110000000.00 10.04%

2009 10122406610.00 122236085269.00 8.28%

2010 13997620160.00 163256184445.00 8.57%

2011 22434672794.00 194085656173.00 11.56%

ROA


Year

Net Profit Before



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Page 57of 72

2007 1713176000.00 186280000000.00 0.92%

2008 2641212000.00 187320000000.00 1.41%

2009 3257680246.00 214062871677.00 1.52%

2010 6407246802.00 264852026918.00 2.42%

2011 7344983190.00 348820708845.00 2.11%

ROE



2007 986970000.00 3340000000.00 29.55%

2008 2650176000.00 6420000000.00 41.28%

2009 1355516965.00 11440927012.00 11.85%

2010 3516772268.00 15717284768.00 22.38%

2011 2499897603.00 25942624046.00 9.64%

Net Profit Margin



2007 986970000.00 116990000000.00 0.84%

2008 2650176000.00 124440000000.00 2.13%

2009 1355516965.00 163133271565.00 0.83%

2010 3516772268.00 207172479448.00 1.70%

2011 2499897603.00 279416909049.00 0.89%


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Page 58of 72

Rupali Bank

Current Ratio



2007 11129310465.00 73332444124.00 0.151765165

2008 11390940501.00 71231281740.00 0.159914861

2009 11056083289.00 74140643527.00 0.149123109

2010 13431164220.00 91393252262.00 0.14696013

2011 13980178337.00 108838924625.00 0.128448332

Quick Ratio



2007 11129310465.00 73332444124.00 0.151765165

2008 11082896961.00 71231281740.00 0.155590307

2009 8986406832.00 74140643527.00 0.121207564

2010 10742640873.00 91393252262.00 0.117543042

2011 7400358179.00 108838924625.00 0.067993672



2007 11129310465.00 73332444124.00 -62203133659.00

2008 11390940501.00 71231281740.00 -59840341239.00

2009 11056083289.00 74140643527.00 -63084560238.00

2010 13431164220.00 91393252262.00 -77962088042.00

2011 13980178337.00 108838924625.00 -94858746288.00


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Page 59of 72

Interest Margin



2007 3422541804.00 3022968993.00 399572811.00

2008 4090581930.00 3080511189.00 1010070741.00

2009 4978543342.00 3238758184.00 1739785158.00

2010 5552622912.00 3463821453.00 2088801459.00

2011 9382331618.00 5163924073.00 4218407545.00

Loan To Deposits

Ratio

Loans / Deposits

Year Loans Deposits

Loan To Deposits

Ratio

2007 47080319537.00 73302306480.00 64.23%

2008 49030036101.00 71207978507.00 68.85%

2009 52344171190.00 73803437188.00 70.92%

2010 66048966139.00 91123755017.00 72.48%

2011 76524922447.00 107233954572.00 71.36%



2007 3422541804.00 47080319537.00 7.27%

2008 4090581930.00 49030036101.00 8.34%

2009 4978543342.00 52344171190.00 9.51%

2010 5552622912.00 66048966139.00 8.41%

2011 9382331618.00 76524922447.00 12.26%

ROA


Year

Net Profit Before



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Page 60of 72

2007 -11017471483.00 81512010489.00

2008 874097696.00 82311831880.00 1.06%

2009 1668489322.00 87791446895.00 1.90%

2010 1425728455.00 124434501545.00 1.15%

2011 2498577157.00 143033123927.00 1.75%

ROE



2007 -11017471483.00 -10927875717.00

2008 874097696.00 -8169149642.00 10.70%

2009 1668489322.00 -5581772976.00 29.89%

2010 600292013.00 14151477661.00 4.24%

2011 1091310752.00 13436976685.00 8.12%

Net Profit Margin



2007 -11017471483.00 61170968655.00

2008 874097696.00 61575753374.00 1.42%

2009 1668489322.00 66647175594.00 2.50%

2010 600292013.00 81766160860.00 0.73%

2011 1091310752.00 100136076206.00 1.09%


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Page 61of 72

Andhra Bank

Current Ratio



2007 40241745.00 421875556.00 0.095387714

2008 56943157.00 500270571.00 0.113824719

2009 52875015.00 627412543.00 0.084274718

2010 111676567.00 835406502.00 0.133679313

2011 104589507.00 997960224.00 0.104803282

Quick Ratio



2007 31251998.00 421875556.00 0.074078712

2008 52819827.00 500270571.00 0.105582519

2009 48533389.00 627412543.00 0.077354827

2010 106962844.00 835406502.00 0.128036882

2011 94820580.00 997960224.00 0.095014388



2007 40241745.00 421875556.00 -381633811.00

2008 56943157.00 500270571.00 -443327414.00

2009 52875015.00 627412543.00 -574537528.00

2010 111676567.00 835406502.00 -723729935.00

2011 104589507.00 997960224.00 -893370717.00


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Page 62of 72

Interst Margin



2007 33153253.00 18977861.00 14175392.00

2008 42898681.00 28699959.00 14198722.00

2009 53746168.00 37477120.00 16269048.00

2010 63728657.00 41781287.00 21947370.00

2011 82912769.00 50703074.00 32209695.00

Loan To Deposits

Ratio

Loans / Deposits

Year Loans Deposits

Loan To Deposits

Ratio

2007 278890663.00 414540209.00 67.28%

2008 342383852.00 494365476.00 69.26%

2009 441392597.00 593900196.00 74.32%

2010 561135072.00 776882076.00 72.23%

2011 714353582.00 921562816.00 77.52%



2007 33153253.00 278890663.00 11.89%

2008 42898681.00 342383852.00 12.53%

2009 53746168.00 441392597.00 12.18%

2010 63728657.00 561135072.00 11.36%

2011 82912769.00 714353582.00 11.61%

ROA


Year

Net Profit Before



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Page 63of 72

2007 5663434.00 475409977.00 1.19%

2008 6085417.00 565923896.00 1.08%

2009 6901428.00 684692076.00 1.01%

2010 10861244.00 903424023.00 1.20%

2011 13170003.00 1089007195.00 1.21%

ROE



2007 5379025.00 31562800.00 17.04%

2008 5755714.00 32492889.00 17.71%

2009 6530512.00 36469934.00 17.91%

2010 10458482.00 44100435.00 23.72%

2011 12670725.00 64924162.00 19.52%

Net Profit Margin



2007 5379025.00 421897848.00 1.27%

2008 5755714.00 491366228.00 1.17%

2009 6530512.00 610503717.00 1.07%

2010 10458482.00 769945058.00 1.36%

2011 12670725.00 956393575.00 1.32%


64/72

Page 64of 72

Bank Of India

Current Ratio



2007 174055350.00 1265025631.00 0.137590374

2008 177173894.00 1571844302.00 0.112717203

2009 217612556.00 1991954560.00 0.109245743

2010 312301338.00 2521618394.00 0.123849564

2011 373

Theisis on comparative bank performence

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