Bank Asia
Bank Asia
Bank Asia
“Credit Risk Management of Bank Asia Limited: A Study on Ring Road Branch”
A Dissertation Report on
“Credit Risk Management of Bank Asia Limited: A Study on Ring Road Branch”
Submitted by
Ms. Rafiunnahar Rahana
MPHRM Program
Roll-24-05-19-035
Batch 5, Session-2018-2019
Supervisor
Professor Dr. S.S. Karmaker
Faculty of Business Administration
University of Dhaka
Date of Submission
March 13, 2020
March 13, 2020
Dear Sir:
I solicit your attention that I have completed my dissertation report on the topic of “Credit
Risk Management of Bank Asia Limited” I have intended to share the experience,
observation and learning during the dissertation to prepare the report on the credit risk
management of the whole bank. Here I have shown the activities under the credit department
of the Ring Road Branch of Bank Asia Limited. I would be grateful, if you accept this report
being kind enough to pardon the errors and mistakes of the report.
Sincerely yours,
------------------------------
Ms. Rafiunnahar Rahana
Masters of Professional Human Resource Management (MPHRM)
Faculty of Business Administration
University of Dhaka
Roll-24-05-19-035
Batch 5, Session-2018-2019
Acknowledgement
First of all, I would like to express my gratefulness to Allah for giving me strength to survive.
At the very beginning, I would like to thank Professor Dr. Ataur Rahman, University of Dhaka,
for giving me her precious time and sincere guidance by pointing out the flows of my
Dissertation Report and by providing me the right direction.
I am also thankful to the branch for helping me in various ways by giving their valuable
information and thoughts. Also I would like to express my deepest thanks and appreciation to
Mohammad Munzur Rashid (FVP & Head of Branch), Bank Asia Limited, Ring Road Branch
for giving me his valuable time and thus enabling me to prepare the Dissertation report. In
addition I remain grateful to Mr. A.F.M. Tanvir Ahsan (FAVP and Manager Operations), Mr.
Mizanur Rahaman (SEO and Credit-In-Charge), Mrs Rubaida Iftakher (SEO & GB In-Charge),
Md. Rashel (SEO) & all other employees.
Table of Contents
Executive Summary
Chapter 1: Introduction
Primary data
Secondary data
4.3 Products and Services Offered by Ring Road Branch, Bank Asia Limited
9.1 Findings:
9.2 Recommendations:
9.3 Conclusion:
References
Appendix
Chapter: Introduction
Significantly banks need to pay enough attention to manage credit risk and implement
strategies policies and set standards. Sources of credit risk are credit concentration,
inappropriate credit management and credit need assessment of the borrower. As it cannot be
avoided completely banks intention for all these efforts to keep in a tolerating level.
Banks implement their top most spirit in resolving credit risk related issues. As credit risk is so
vital for commercial banks that it can cause major financial disaster for the bank and people
related with bank as an internal personnel such as employees and external entities such as the
customers who deposited money and other stakeholders.
Primary data
The interpretation of the analysis was performed with best efforts and presented in a
distinguishable manner. As a normal process to make a report more accurate few corrections
were made according to my honorable supervisor’s advice while preparing the final report.
I. Lack of Sufficient Relevant Information: Certainly the task of data collection is not
a simple task .I tried to collect data for my study that are relevant with the report. I had
to separate data from accurate and inaccurate data .performing the data collection task
is not always accurate and sometimes I could not get the data that was required .Another
thing is that due to maintaining business secrecy all information were not disclosed to
an intern.
II. New in this Field: Certainly there is difference in reports prepared by an experienced
and without experience people. As I did the research report for the first time, there is a
probability that there are some mistakes whether in the organization of the report or
presentation of the report. I tried my best to avoid any mistake. As I am new in this filed
there is a hope that my shortcomings will be considered.
Chapter: Work Experience
I have started my career as a Junior Officer of Bank Asia Limited at 04-09-2011. During the
career of my job, I had great experience of working in a very friendly environment and with
some brilliant professionals of one of the country’s leading private commercial banks.
Everyday office starts at a specific time. Bank Asia Ring Road Branch opens at 10 a.m. in the
morning and shuts at 6 p.m. According to the prescribed rules and regulations we have to
maintain office time like a regular employee. We had to attend there by 9.45 a.m. After entering
into the office, I signed the attendance sheet and scanning the biometric attendance.
It took me about a week to get adapted with the working environment of Bank Asia Limited.
However, it is hard to become familiar with all the sectors and operations of the bank
completely within such a short period of three months. But I tried to gain knowledge about
almost all of them.
Within my career I gave an insight into almost all the operations of the bank, especially in the
areas of customer service, general banking, relation building with customers, iSteler software
works like customer's ID or account opening, credit and foreign trade such as remittance giving
etc. There is every week like Sunday, I attended all weekly meetings, knowledge sharing
sessions and events.
Chapter: Credit Overview of Ring Road Branch, Bank Asia Limited
Manager
Sub-Manager
Teller Monitoring
Accounts Clearing & Export
Operation
Compliance
Receptions Remittance
3 Products and Services Offered by Ring Road Branch, Bank Asia Limited
Business Banking:
VISA Platinum Card (with Priority Pass) VISA Gold Dual Card
VISA Classic Local Card Hajj Card Travel Card (prepaid card)
VISA Classic Dual Card Virtual Card Master Silver Card
VISA Butterfly Card Master Gold Card
VISA Gold Local Card SME Credit Card
Loan Portfolio
Corporate Sector SME Retail Sector
1400
1208
1200
1000
Interpretation: After analyzing 2015-2018 bar chart of loan portfolio of the branch, it is seen
that the corporate sector's rate has surprisingly increased and holds the largest position, SME
holds less than that and retail sector holds the lowest rate throughout those years.
Chapter : Financial Performance: Loans and Advances of Bank Asia
Limited
Interpretation: Through analysis of 2014-2017 bar chart of loan and advance of the bank, the
result comes that the performance of loan and advance has positively increased.
2 Classified Loan
Figure in Million Taka
Classified Loan
10000 8847 8642
8000
6201 5809
6000
4000
2000
0
2014 2015 2016 2017
Interpretation: The analysis result of 2014-2017 shows that the classified loans is being
increased more since 2016.
3 Non-Performing Loan
Figure in Million Taka
NPL
6.00% 5.31% 5.41%
5.00% 4.26% 4.38%
4.00%
3.00%
2.00%
1.00%
0.00%
2015 2016 2017 2018
Interpretation: The bar chart analysis result of 2015-2018 shows that the NPL is being
diversified every year.
4 Loan Mix-2017:
Figure in Million Taka
2018
General Coverage SME
9% 2%
89%
Interpretation: The chart shows that in 2018, most of the loan amounts is covered by general-
SOD and term loans holding 89℅ rate of total loan amount of the year.
5 Credit Risk Indicators Measurement of Bank Asia Limited:
As we know, if the credit risk percentage of a bank is low, that is safer for the bank. Because
in that case risk of defaulting is less and the bank is safe. On the other hand, if the credit risk
percentage of a bank is high, that is risky for the bank. Because in that case risk of defaulting
is much and the bank is at stake. Here I describe some credit risk indicator by annual report
data.
Calculation:
2018 3.78%
2017 4.86%
2016 3.88%
2015 5.13%
Calculation:
2018 1.09%
2017 1.36%
2016 1.10%
2015 1.31%
Interpretation: Through analysis of 2015-2018 bar chart of Loan Loss Provision to Total
Loans Ratio of the bank, the result comes that the performance of indicator has positively
decreased and bank overcome the risk year by year.
3. Nonperforming Assets to Equity Capital:
𝑁𝑜𝑛𝑝𝑒𝑟𝑓𝑜𝑟𝑚𝑖𝑛𝑔 𝑎𝑠𝑠𝑒𝑡𝑠
𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦
× 100
Calculation:
2018 41.28%
2017 46.90%
2016 31.97%
2015 37.35%
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%
𝑇𝑜𝑡𝑎𝑙 𝐿𝑜𝑎𝑛𝑠
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑝𝑜𝑠𝑖𝑡𝑠
× 100
Calculation:
2018 91.93%
2017 95.51%
2016 87.94%
2015 85.91%
80.00% 82.00% 84.00% 86.00% 88.00% 90.00% 92.00% 94.00% 96.00% 98.00%