RATIO ANLYSIS OF

Dhaka Bank Limited

NATIONAL BANK LTD.

1
 Term Paper on:
Financial Ratio Analysis of NATIONAL CREDIT AND
COMMERCE BANK Limited & National Bank Limited

Bank Management
Course Code: FIN380, Sec: 01

SUBMITTED BY:
Sk. Nazmus Sadab
2014-2-10-253

SUBMITTED TO:
Leo Vashkor Dewri
Senior Lecturer
Department of Business Administration
East West University

DATE: 17/12/2018

2
 Letter of Transmittal
th
17 December, 2018
Leo Vashkor Dewri
Senior Lecturer
Department of Business Administration
East West University

Subject: Submission of the Term Paper on “Financial ratio analysis of “Dhaka Bank
Limited” and National Bank”.

Dear Sir,

We are submitting the term paper on “Financial ratio analysis of “Dhaka Bank Limited” and
“National Bank.” which was assigned as a group report and a mandatory requirement of the
course “Commercial bank management”

We have given our best effort to look for relevant findings related to company’s ratio analysis by
analyzing the annual report of the Dhaka Bank Limited and National Bank.

We hope your kind consideration if any mistakes are there and let us know for our learning
purpose.

Sincerely,

Sk. Nazmus Sadab

2014-2-10-253

3
 Executive Summary

Banking system of Bangladesh is not similar to other countries. There are more than 50 banks in
Bangladesh which is more than enough. We have chosen two banks, Dhaka Bank Ltd. &
National Bank Ltd. For our final analysis.
NCC Bank was established in 1985 with the Authorized Paid-up Capital of Tk. 390 million. It
has 115 branches all over Bangladesh. It offers variety of products and services to its customers
National Bank Limited is one of the pioneers of first generation private commercial bank
incorporated in 1983. It has the largest capital in Bangladesh. Presently, the bank created a strong
market base through 200 branches. This bank also offers different types of services, loans and
products.
In this paper we have tried to compare both banks performance with each other through ratio
analysis. We have used in total 28 ratios to analyze those banks performance. We have explained
those ratios and tried to find out the lacking and improvements.
Though there some major drawback in some sectors of the bank, they need to make sure they
improve. Current situation of these banks is not up to the mark. They have to improve their asset,
liability, credit and fund management to survive in this competitive market.

In this paper we have explained my best in respect of my real life experience gathered from
different departments. Also describe different aspects of both two banks and then compared
between these two banks and provided some information of their present situation. And last but
not the least it also cover up the learning of ours.

4
Contents

Executive Summary.....................................................................................................................................4
CHAPTER 1: INTRODUCTION........................................................................................................................6
Origin of the report..................................................................................................................................6
Background of the study..........................................................................................................................7
Scope of the study...................................................................................................................................7
Objective of the report.............................................................................................................................7
Methodology...........................................................................................................................................7
Limitations..............................................................................................................................................7
CHAPTER 2: BANK HISTORY.........................................................................................................................7
Dhaka Bank Limited.................................................................................................................................7
National Bank Limited............................................................................................................................9
Product and Service:................................................................................................................................9
Deposits and advances...........................................................................................................................10
CHAPTER 3: RATIO ANALYSIS.....................................................................................................................11
1.EFFICENCY REATIO:...............................................................................................................11
2.Return on Equity..........................................................................................................................12
3.Return on Asset.............................................................................................................................13
4.Net Interest Margin......................................................................................................................14
5.Net Non Interest Margin..............................................................................................................15
6.Net Bank Operating margin........................................................................................................16
7.Earnings Per Share (EPS)............................................................................................................17
8.Net Profit Margin.........................................................................................................................18
9.Asset Utilization............................................................................................................................19
10.Equity Multiplier........................................................................................................................19
11.Operating Efficiency Ratio.........................................................................................................20
12.Employee Productivity Ratio.....................................................................................................21
13.Cash Reserve Ratio.....................................................................................................................21
14.Price Earning Ratio....................................................................................................................22
15.Liquid assets to deposit-borrowing ratio(LADST)...................................................................23
16.Net Loans to deposit and borrowing (Net LD&B)....................................................................24
17. Total Equity to Net Loans(EQL)..............................................................................................25

5
 18.Total equity Capital to Total Balance Sheet Asset Ratio........................................................25
19. Rate of Return on Loans...........................................................................................................26
20.Cost to Income Ratio (C/I).........................................................................................................27
21.Dividend Coverage Ratio (DCR)...............................................................................................27
22.Investment to Total Deposit Ratio.............................................................................................28
23.Provision for Loan and losses to total loan...............................................................................29
24.Liquid Securities Indicator........................................................................................................29
25.Liquidity Ratio............................................................................................................................30
26.CapitalAdequacyRatio...............................................................................................................31
27.Nonperforming loan to Equity Capital.....................................................................................31
28.Non performing loans & advances as % of total loans & advances........................................32
Product of the Dhaka Bank Limited...........................................................................................................33
Chapter 4: LEARNING and CONCLUSION...................................................................................................34
Conclusion............................................................................................................................................36

6
 CHAPTER 1: INTRODUCTION

Origin of the report

The objective of this paper is to analyze the ratio of Dhaka Bank Limited in comparison with
National Bank Limited. The collected data is from 2013-2017. By analyzing the ratios of Dhaka
Bank Limited and National Bank Limited, we expect to get an understanding of the financial
condition of this bank.

Background of the study

By analyzing the ratio of the both bank it is easy to evaluate the both bank’s financial
performance.

Scope of the study

The study would focus on the following areas of Dhaka Bank Limited and National Bank limited
 Credit appraisal system of National credit and commerce Bank Limited.
 Procedure for different credit facilities.
 Organization structures and responsibilities of management.

Each of the above areas would be critically analyzed in order to determine the efficiency of
Dhaka Bank Limited & National Bank’s Credit appraisal and Management system.

Objective of the report

 To fulfill the requirement of Commercial Bank Management course

 Analyzing the performance of National Bank Limited
 Analyzing the performance of Dhaka Bank Limited

Methodology
We have used secondary sources of information.
 Website of LankaBangla Ltd.
 Annual report 2013 to 2017.
 Materials provided in class

Limitations

 Interest expense was not broken down in the financial statements.

 We didn’t have enough primary resources.
 For resource constraints we mostly depended on secondary data

7
 CHAPTER 2: BANK HISTORY
Dhaka Bank Limited
Bangladesh economy is rapidly growing since the 90’s. Urbanization with concurrent lifestyle
changes with the economic development created a demand for banking services to support the
new initiatives as well as to channelize consumer investments in a profitable manner. A group of
highly acclaimed businessmen of the country grouped together to respond to this need and
established Dhaka Bank Limited in the year 1995.
The bank was incorporated as a PUBLIC LIMITED COMPANY under the Companies Act,
1994. The Bank started its commercial operation on July 05, 1995 with the Authorized Capital of
Tk. 1,000 million and Paid-up Capital of Tk. 100 million. The present Authorized Capital of the
Bank is Tk. 10,000 million. The Paid-up Capital of the Bank stood at Tk. 6,879 million as on
September 30, 2016. The total equity (capital and reserves) of the Bank as on September 30,
2016 stood at Tk. 14,437 million (un-audited). As on December 2016, the Bank has 96 Branches
including 2 Islamic Banking Branches, 3 SME Service Centers, 56 ATMs, 20 ADMs, 2 Offshore
Banking Units, 1 Kiosk and 6 Branches under Dhaka Bank Securities Limited across the country
and a wide network of correspondents all over the world. The Bank has plans to open more
Branches in the days ahead to expand the service delivery network.

Product and services offered by Dhaka Bank:

PROJECT FINANCE (LONG, MID & SHORT TERM): Project financing is an innovative and
timely financing technique that has been used to fund large-scale corporate projects. It includes
understanding the rationale for project financing, preparing the financial plan, assessing the risks,
designing the financing mix, and raising the funds. Dhaka Bank offers a full range of products &
services to the entrepreneurs implementing a project including structuring mode of financing,
mitigation of different risks and providing advisory service for successful implementation of the
project. Products offered under Project Finance are Term Loan, Machineries Term Loan,
Construction Lease Finance (Machineries), Foreign Currency Loans. Our experience in Project
Financing covers a wide span of businesses and industries. One can leverage on our expertise in
the following sectors particularly:

WORKING CAPITAL FINANCE: Working Capital is the life blood for any newly established
projects. Dhaka Bank’s working capital financing includes all sorts of facilities for every sector
of businesses and industries with respect to their nature of operation. Our products and services
for financing working capital depending on the nature of facilities can be segmented as Non-
Funded Facilities, Letter of Credit (Cash LC, BTB LC, UPAS, EDF etc.), Bank Guarantee (BB,
PG, APG, Payment Guarantee, FC), Funded Facilities, Short Term Loan (3, 6, 9 months),
Overdraft Others, Overdraft Work Order, Cash Credit (Hypothecation, Pledge), Loan against
Trust Receipt (LTR), Time Loan

8
TRADE FINANCE: Ever since “Business” has become a matter of beyond the geographical
boundaries, Foreign Trade has been introduced as a major wing of modern banking. For
supporting the businesses of our customers, we have made a strong base for offering wide range
of products and services related to Trade Finance. Export LC (Advising & Transfer), Export Bill
Negotiation/Collection, Import Finance, Import Bill Handling, Shipping guarantee, EDF Loan,
OBU Financing

CASH MANAGEMENT SOLUTIONS: Payment & collection solution, Bulk cheque processing,
Utility Bill collection, Vendor/Salary Payment, Cash pickup & Delivery, Hajj Remittance
Processing, Managing IPOs as Lead Bank, Act as Banker to the issue of IPOs

National Bank Limited

National Bank Limited is one of the pioneers of first generation private commercial bank
incorporated in 1983. Since inception, NBL to provide modern banking facilities to the mass
people is opening branches in rural areas alongside urban areas giving due importance. Presently,
the bank created a strong market base through 200 branches and 10 SME centers throughout the
country. Customer’s satisfaction and involvements gets priority in our daily activities.

National Bank Limited has its prosperous past, glorious present, prospective future and under
processing projects and activities. Established as the first private sector bank fully owned by
Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the
passage of time after facing many stress and strain.

At present it has 200 branches under itsbranch network. In addition, its effective and diversified
approach to seize the market opportunities is going on as continuous process to accommodate
new customers by developing and expanding rural, SME financing and offshore banking
facilities. We have opened 10 branches and 8 SME/Agri branches during 2017.

Product and Service:

Retail Banking: Bank offers individuals the best services, including providing complete customer
satisfaction:

 Deposit services.
 Current Account in both Taka and major foreign currencies.
 Convertible Taka Accounts.
 Local and foreign currency remittances.
 SME Banking.
 Any Purpose loan

Corporate Banking: National Bank Limited caters to the needs of the corporate clients and
provides a comprehensive range of financial services, which include:

9
  Corporate Deposit Accounts.
 Project & Infrastructure Development Finance, Syndicated Finance, Linkage Finance,
Investment Business Counseling, Working Capital and other finances.
 Bonds and Guarantees.

Commercial Banking: Being a commercial bank, National Bank Limited provides

comprehensive banking services to all types of commercial concerns. Some of the services are:

 Trade Finance.
 Commodity Finance.
 Issuance of Import L/Cs.
 Advising and confirming Export L/Cs. – Bonds and Guarantees.
 Investment advice.

Online Banking: National Bank limited offers ‘Any branch’ banking service (to limited scale)
that facilitates its customers to deposit, withdraw and transfer funds through the counters of any
of its branches within the country.

Capital Market Operation: The Bank will also introduce capital market operation which will
include Portfolio Management, Investors Account, Underwriting, Mutual Fund Management,
and Trust Fund Management etc.

Farm and Off-Farm Credits (Rural): Out of Bank’s social commitment towards the population at
the grass-root level, it will participate in farm and off-farm credit programmers in rural
Bangladesh to bring in economic buoyancy in the periphery.

Credit to Women Entrepreneurs: The Bank believes in ‘Equal Opportunity Policy’ and as such
has been contemplating to introduce credit programmers for willing and talented women
entrepreneurs.

Counter for Payment of Bills: Dedicated counters are available at National Bank Limited’s
branches to receive the payment of various utility bills.

Deposits and advances

Deposits Schemes: Deposit of the Bank showed a continuous increase during the year and in
2010 stood at TK.102471.8 million. The growth over previous year was 33.37 percent. The
growing customers’ confidence in National Bank helped the necessary broadening of customer
range that spanned private individuals, corporate bodies, multinational concerns and financial
institutions. The Bank introduced various products/ schemes to attract the depositors.

Cash and Balances with Banks and Financial Institutions: Cash and Balances with Bangladesh
Bank was TK. 8695.31 million as against Tk. 6843.69 million in 2010. The funds are maintained
to meet Cash Reserve Requirement (CRR) and Statutory Liquidity Requirement (SLR) of the

10
bank is TK. 1101.57 million as at 31 December 2010. The Bank maintained sufficient balances
with correspondents outside Bangladesh to facilitate prompt settlement of payments under Letter
of Credits commitments.

Investments: Investments of the Bank were TK. 24993.33 million showing an increase of 11.53
percent during the year under review. Investment activities centered on meeting the Bank’s SLR
and was mostly in the form of Government Treasury Bills having varying dates of maturity. The
average yield on the bills was 7.00% per annum.

Loans and Advances: The Bank’s total Loans and Advances stood at TK. 92003.56 million in
2010 showing a growth of 28.55 percent compared to Tk. 65129.29 million of 2009. Bank’s
clientele comprised of corporate bodies engaged in such vital economic sectors as Trade Finance,
Steel-Re-Rolling, Ready Made Garments, Textiles, Ship Scrapping, Edible Oil, Cement,
Transport, Construction etc.

Foreign Exchange and Foreign Trade: The bank opened a total number of 24,385 LCs amounting
USD 1,117.61 million in import trade in 2010. The main commodities were scrap vessels, rice,
wheat, edible oil, capital machinery, petroleum products, fabrics & accessories and other
consumer items.The bank has been nursing the export finance with special emphasis since its
inception. In 2010 it handled 18,761 export documents valuing USD 559.78 million with a
growth of 5.41 percent over the last year

Merchant Banking: Merchant Banking activity has lately gained popularity in our country. At the
initial stage the activities would center on issue Management, Portfolio Management, pre-
placement and underwriting.

11
 CHAPTER 3: RATIO ANALYSIS
1.EFFICENCY REATIO:

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 33.69 24.87 44.53 44.09 33.09

Limited

NATIONAL 36.69
BANK

From the below graph we can see Dhaka Bank Limited Efficiency ratio is not stable there 2015
and 2016 is gradually good and the National bank Efficiency ratio is 36.69. NCC bank fall down
there ratio in last year and the 2014.

Efficiency ratio
50

45 44.53 44.09
40
36.69
35
33.69 33.09
30

25 24.87

20

15

10

0
2013 2014 2015 2016 2017

12
2.Return on Equity

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 1.98 2.03 1.65 1.82 2.06
Limited
NATIONAL 1.36
BANK

From the graph we can see that Dhaka Bank Limited had higher ROE than National bank but it’s
gradually gone up and now it is falling down. On the other hand National bank’s ROE is down.

Return on Equity

2.5

2 2.03 2.06
1.98
1.82
1.65
1.5
1.36

0.5

0
2013 2014 2015 2016 2017

13
3.Return on Asset

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 2.99 2.33 1.98 2.90 2.33
Limited
NATIONAL 1.36
BANK

From the below graph we can see that Dhaka Bank Limited’s ROA is far better than National
bank’s ROA. Though it dropped in between but still it was able to catch up National bank’s
ROA. National bank needs to manage and invest their assets more carefully as it is decreasing
day by day.

Return on Asset
3.5

3
2.99
2.9

2.5
2.33 2.33
2 1.98

1.36
1.5

0.5

0
2013 2014 2015 2016 2017

14
4.Net Interest Margin

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 1.54 1.88 1.90 2.87 1.78
Limited
NATIONAL 1.82
BANK

From the below graph we see that the Dhaka Bank Limited has higher Net Interest Margin but it
is declining. The Net Interest Margin of National bank is below NCC Bank.

Net Interest Margin

3.5

3
2.87

2.5

2
1.82 1.88 1.9
1.78
1.54
1.5

0.5

0
2013 2014 2015 2016 2017

15
5.Net Non Interest Margin

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 18.98 17.54 22.87 15.99 21.66
Limited
NATIONAL 16.3
BANK

From the graph we can clearly see that Dhaka Bank Limited’s net non-interest margin is very
rich. Sometimes it has been negative. On the other hand National Bank’s non-interest margin is
also not so good it is bad compare to Dhaka Bank Limited.

Net Non Interest Margin

25
22.87
21.66
20
18.98
16.3 17.54
15.99
15

10

0
2013 2014 2015 2016 2017

16
6.Net Bank Operating margin

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 4.98 5.54 4.30 4.91 5.71
Limited
NATIONAL 4.66
BANK

From the graph we can assume that Dhaka Bank Limited has an overall good net bank operating
margin than National Bank. National bank’s net bank operating margin is not good. Dhaka Bank
Limited must stay aware that is should not fall again like 2015.

Net Bank Operating margin

6
5.71
5.54
5
4.98
4.66 4.91

4.3
4

0
2013 2014 2015 2016 2017

7.Earnings Per Share (EPS)

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 9.43 10.51 9.83 8.39 10.53
Limited
NATIONAL 8.35
BANK

From the below graph Dhaka Bank Limited EPS is fall down but they are trying to increase
there EPS. On the other hand National bank EPS is 8.35 which is bad then the Dhaka Bank
Limited.

17
 Earnings Per Share (EPS)
12

10.51 10.53
10 9.83
9.43
8.35
8.39
8

0
2013 2014 2015 2016 2017

8.Net Profit Margin

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 30.43 34.62 29.76 26.52 32.61
Limited
NATIONAL 29.21
BANK

From the graph given below we can see that Dhaka Bank Limited’s net profit margin is
inconsistent which can be a bad thing for a financial institution. We can also see after the
downfall in 2015 and 2016, National bank 2017 is 29.21.

Net Profit Margin

40

35 34.62
32.61
29.21
30.43
30 29.76
26.52
25

20

15

10

0
2013 2014 2015 2016 2017

18
9.Asset Utilization

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 23.71 22.81 22.89 23.09 21.39
Limited
NATIONAL 21.43
BANK

From the below graph we can see that both bank has a declining asset utilization ratio. This
means they are not using their inventories and assets properly. But we can also say that National
bank has a good asset utilization ratio than Dhaka Bank Limited.

Asset Utilization
24
23.71
23.5

23 23.09
22.81 22.89

22.5

22

21.43
21.5
21.39

21

20.5

20
2013 2014 2015 2016 2017

10.Equity Multiplier

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 8.90 8.32 9.19 9.83 10.28
Limited
NATIONAL 8.72
BANK

From the graph we can identify that both bank has an almost constant equity multiplier which
moving between 8-10. But National Bank has an lower equity multiplier than Dhaka Bank
Limited.

19
 Equity Multiplier
12.00

10.00 10.28
9.83
8.72
8.9
9.19
8.32
8.00

6.00

4.00

2.00

0.00
2013 2014 2015 2016 2017

11.Operating Efficiency Ratio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 36.91 36.21 32.84 34.66 32.49
Limited
NATIONAL 32.89
BANK

We can see that Dhaka Bank Limited has a constant falling operating efficiency. Dhaka Bank
Limited had a peak of efficiency but then it is gradually falling. It is not good for the bank. Right
now it is upper Dhaka Bank Limited.

Operating Efficiency Ratio

38

37
36.91
36.21
36

35
34.66
34

32.89
33 32.84
32.49
32

31

30
2013 2014 2015 2016 2017

20
12.Employee Productivity Ratio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 6.99 7.87 7.81 8.22 9.24
Limited
NATIONAL 6.22
BANK

From the below graph we can see the Dhaka Bank Limited they are gradually increasing their
employee productivity ratio which is good for the Dhaka Bank Limited. On the other hand National
bank 2017 is 6.22 which is not too good the compare the Dhaka Bank Limited.

Employee Productivity Ratio

10
9.24
9

8 8.22
7.87 7.81
7
6.99
6.22
6

0
2013 2014 2015 2016 2017

13.Cash Reserve Ratio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 8.32 9.30 9.88 8.10 10.26
Limited
NATIONAL 7.99
BANK

From the below graph we can see the Dhaka Bank Limited try to increasing their cash reserve
ratio which is upward slopping. Which is good for the any bank but the other bank National
bank their cash reserve ratio 2017 is 7.99 which is not good as par as comparison with the
Dhaka Bank Limited.

21
 Cash Reserve Ratio
12

10 10.26
9.88
9.30
7.99
8.32
8 8.10

0
2013 2014 2015 2016 2017

14.Price Earning Ratio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 11.43 11.97 10.67 10.64 9.43
Limited
NATIONAL 8.42
BANK

From the below graph we can see the price earning ratio decreasing of the Dhaka Bank Limited
which is not good. And the National bank ratio 2017 is 8.42 compare with the Dhaka Bank
Limited which is too poor then the Dhaka Bank Limited.

Price Earning Ratio

14

12 11.97
11.43
10.67 10.64
10
9.43
8.42
8

0
2013 2014 2015 2016 2017

22
15.Liquid assets to deposit-borrowing ratio(LADST)

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 12.09 11.78 10.87 12.84 12.33
Limited
NATIONAL 10.90
BANK

From the below graph we can see the Dhaka Bank Limited LADST ratio is more or less constant
but National bank ratio is 2017 is lower than the Dhaka Bank Limited.

Liquid assets to deposit-borrowing ratio(LADST)

13.5

13
12.84
12.5
12.33
12.09
12
11.78
11.5

10.90
11
10.87
10.5

10

9.5
2013 2014 2015 2016 2017

16.Net Loans to deposit and borrowing (Net LD&B)

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 68.43 64.33 66.87 67.38 65.87
Limited
NATIONAL 68.74
BANK

From the below graph we can see the Dhaka Bank Limited net LD&B ratio is fall down. National bank
ratio is good then the Dhaka Bank Limited. NCC bank 2016 they raise their ratio but following two
year they constantly fall down their Net LD&B ratio.

23
 Net Loans to deposit and borrowing (Net LD&B)
70

68.74
69
68.43
68
67.38
67 66.87

66 65.87

65
64.33
64

63

62
2013 2014 2015 2016 2017

17. Total Equity to Net Loans(EQL)

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 22.54 19.43 19.62 18.73 19.53
Limited
NATIONAL 18.55
BANK

From the below graph we can see the EQL is decreasing of Dhaka Bank Limited. National bank
EQL ratio is poor then the Dhaka Bank Limited.

Total Equity to Net Loans(EQL)

25

22.54

20
18.55 19.43 19.62 19.53
18.73

15

10

0
2013 2014 2015 2016 2017

24
18.Total equity Capital to Total Balance Sheet Asset Ratio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 7.42 7.82 8.43 8.92 8.66
Limited
NATIONAL 6.73
BANK

From the below graph we can see the Dhaka Bank Limited increasing their ratio but the other
bank National bank ratio is very poor compare with the Dhaka Bank Limited. Dhaka Bank
Limited gradually upstairs’ of their ratio.

Total equity Capital to Total Balance Sheet Asset Ratio

10

9 8.92
8.43 8.66
8 7.82
7.42
6.73
7

0
2013 2014 2015 2016 2017

19. Rate of Return on Loans

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 5.62 4.77 5.92 4.99 5.08
Limited
NATIONAL 4.82
BANK

We can see the below graph Dhaka Bank Limited they are suffer of their rate of return on loans
ratio some years they are high and some years they are low. Dhaka Bank Limited must follow
this ratio if it will be the higher rate. National bank condition is bad then the Dhaka Bank
Limited their ratio is 4.82.

25
 Rate of Return on Loans
7

6 5.92
5.62
4.82
5 4.99 5.08
4.77

0
2013 2014 2015 2016 2017

20.Cost to Income Ratio (C/I)

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 56.82 64.51 64.74 58.92 65.92
Limited
NATIONAL 52.73
BANK

From the below graph we can see the Dhaka Bank Limited C/I ratio is increasing. National bank
they are on the bad condition then the Dhaka Bank Limited their ratio is 52.73.

Cost to Income Ratio (C/I)

70
64.51 64.74 65.92
60 58.92
56.82
52.73
50

40

30

20

10

0
2013 2014 2015 2016 2017

26
21.Dividend Coverage Ratio (DCR)

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 13.43 13.85 12.64 11.83 12.42
Limited
NATIONAL 11.32
BANK

From the below graph we can see the DCR is decreasing of Dhaka Bank Limited they are not
stable of their DCR. DCR of National is 11.32 which is below then the Dhaka Bank Limited.

Dividend Coverage Ratio (DCR)

16

14 13.85
13.43
12.64 12.42
12
11.32 11.83

10

0
2013 2014 2015 2016 2017

22.Investment to Total Deposit Ratio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 1.73 1.83 1.63 1.92 2.03
Limited
NATIONAL 1.73
BANK

From the below graph we can see the ratio is increasing year by year. National bank ratio is 1.73
which is bad then the Dhaka Bank Limited.

27
 Investment to Total Deposit Ratio
2.5

2 2.03
1.92
1.73 1.83
1.73
1.63
1.5

0.5

0
2013 2014 2015 2016 2017

23.Provision for Loan and losses to total loan

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 2.72 2.71 2.83 1.53 1.78
Limited

NATIONAL 2.55
BANK

From the below graph we can see the Dhaka Bank Limited is decreasing of their ratio. National
bank is good then the Dhaka Bank Limited.

28
 Provision for Loan and losses to total loan
3
2.83
2.72
2.55 2.71
2.5

2
1.78
1.5 1.53

0.5

0
2013 2014 2015 2016 2017

24.Liquid Securities Indicator

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 16.53 15.84 15.94 16.94 17.42
Limited
NATIONAL 15.74
BANK

From the below graph we can see they are increasing of their ratio gradually National bank ratio
is not bad as the compare with the Dhaka Bank Limited but they are normally lower than the
Dhaka Bank Limited.

Liquid Securities Indicator

18

17.5 17.42

17 16.94

16.53
16.5

16 15.94
15.74 15.84

15.5

15

14.5
2013 2014 2015 2016 2017

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25.Liquidity Ratio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 1.64 1.43 1.74 1.53 1.74
Limited
NATIONAL 1.12
BANK

From the below graph we can see the liquidity ratio is increasing of Dhaka Bank Limited which
is good as a bank. National bank their ratio is very poor then the Dhaka Bank Limited. National
bank need to improve their liquidity ratio if they want to survive in the market Dhaka Bank
Limited need to hold it or increasing this ratio day by day.

Liquidity Ratio
2

1.8
1.74 1.74
1.64
1.6
1.53
1.4 1.43

1.12
1.2

0.8

0.6

0.4

0.2

0
2013 2014 2015 2016 2017

26.CapitalAdequacyRatio

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 64.42 62.51 58.81 55.21 62.31
Limited
NATIONAL 58.32
BANK

From the below graph we can see the ratio of capital adequacy is decreasing but the very last
year their ratio is increase of Dhaka Bank Limited and the National bank ratio is 58.32 compare
with the Dhaka Bank Limited is very bad.

30
 66
Capital AdequacyRatio
64.42
64

62.51 62.31
62

60
58.32 58.81
58

56
55.21
54

52

50
2013 2014 2015 2016 2017

27.Nonperforming loan to Equity Capital

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 58.31 55.82 57.31 56.12 57.82
Limited

NATIONAL 55.09
BANK

From the below graph we can see the Dhaka Bank Limited is fluctuate of their nonperforming
loan to equity capital. National bank is bad condition then Dhaka Bank Limited

Nonperforming loan to Equity Capitalt Title

59

58.31
58
57.82
57.31
57

56 56.12
55.82
55.09
55

54

53
2013 2014 2015 2016 2017

31
28.Non performing loans & advances as % of total loans & advances

YEAR 2013 2014 2015 2016 2017

Dhaka Bank 44.92 43.82 64.92 45.52 48.32
Limited
NATIONAL 43.77
BANK

Dhaka Bank Limited are not stable of this ratio we can see the below graph. They are raising
their ratio is 2015 and then they are decreasing this. National bank are poor then the Dhaka
Bank Limited.

Non
70 performing loans & advances as % of total loans & advances
64.92
60

50
48.32
43.77
44.92 45.52
43.82
40

30

20

10

0
2013 2014 2015 2016 2017

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 Product of the Dhaka Bank Limited
 Loan Products
  Personal Loan
  Education Loan
  Car Loan Scheme
  House Building Financing
  House Repairing& Renovation Loan
  Home Improvement Loan
  Consumer Finance Scheme

 Deposit Products
  Current A/C
  Savings Bank Deposit A/C
  Special Notice deposit A/C
  Special Savings Scheme
  Special Deposit Scheme
  Instant Earnings Term Deposit
  Money Double Program
  Youngster Account
  Youngster Maximus Account
  Youngster Moneyplant Scheme

 SME Banking
  Small Business Loan
  Lease Finance
  Working Capital Loan
  Festival Business Loan
  Festival Personal Loan

 Cards
  Credit Cards
  Debit cards

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 Chapter 4: LEARNING and CONCLUSION

Learning outcome of this course:

After completing the course, Management of Commercial Bank, instructed by our honorable faculty Leo
Vashkor Dewri, we have broader knowledge about the managing system of commercial banks. We
believe that, through this course we have learned that- how a bank forms, plans, operates, calculates,
evaluate and control themselves. Some of the important issues, we have learned from this course are
written bellow:

 This course provides us an introduction about the financial management of the commercial
banking enterprise.
 We also realized the importance of the banking and financial institution in an economy.
 We are also introduced with some important laws and regulation which is important to manage a
financial institutions.
 We also got an overview on Balance sheet, income statement and other financial statements.
 After doing the course we also got some ideas about the capital management, risk measurement,
source of capital, capital allocation etc.
 We have introduced different types of bank with their features along with some other non bank
financial institution.
 We also learned the activities, regulation, polices and importance of the commercial banks.
 We are also introduced their financial statements such as: Income Statement, Balance Sheet and
Cash Flow Statement and also find out the difference with other financial institutions.
 We are also understood the source of risk bank face in today’s economy and how they detect
those risk and finally how they overcome those risk when they are lending and borrowing the
funds.
 To understand bank’s performance, we also learned some ratios, we also learned how to measure
the efficiency of a bank through these ratios.
 We also learned that- how the economic, financial and regulatory environment impact the
decision making of the commercial banks.
 Through this course, we also got some ideas about the strategy of asset, liability and fund
management. Not only that we are also introduced about the some interest sensitive assets and
liabilities of the commercial banks.
 We also learned some lending policies of the commercial bank and the factors which determine
the growth and mix of loans, steps in lending process, some potential problem of providing loan
and the process of maintaining provision.
 This course also introduced us with some important issues such as value creation and risk
management for banking firms.
 Through this course we also learned some analytical and technical tools (ratios) which help us to
understand the performance of the commercial banks.

34
After completing the course, we believe that, our technical, analytical and decision making skills are
developed for the managerial responsibilities of the financial management of the commercial banking
firms. We also proudly believe that this course made our foundation for more advance academic and
professional training and development in bank management.

35
 Conclusion

Since the banking service especially the private Banks are doing an outstanding business, so it is
clear that the modern people are more concerned about securing their valuable assets and get
high-quality and timely services. For this reason lot of new commercial bank has been
established in last few years and these banks have made this banking sector very competitive. So,
now banks have to organize their operation and do their operations according to the need of the
market. Banking sectors no more depends on a traditional method of banking. In this competitive
world this sector has trenched its wings wide enough to cover any kind of financial services
anywhere in this world. The major task for banks, to survive in this competitive environment is
by managing its assets and liabilities in an efficient way. National credit and commerce Bank and
National Bank are two of the most promising bank in Bangladesh. Both the Banks are helping
the economy of Bangladesh by remitting of funds both local and foreign. For helping the people
the bank provides bridge financing loan, working capital loan to its corporate clients. As modern
function National credit and commerce bank and National Bank provides credit card facility,
ATM card facility and any branch banking facility to its customers.

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37