2011

Trend Analysis in Deposit, Loan & Marketing Expenses of Commercial Banks

Based On the Study of 2000-2009 Fiscal
Submitted to QUAZI SAGOTA SAMINA Senior Lecturer, Department of Business Administration EAST WEST UNIVERSITY

Submitted by Name DEWAN JOHEB ZAMAN GAZI MD.SALAUDDIN TANVIR AHMED SUKANTA SAHA

ID 2009-3-10-035 2007-1-10-018(3) 2007-2-10-025 2007-2-10-143

Submitted Date: 12 April, 2011

Trend Analysis in Deposit, Loan & Marketing Expenses of Commercial Banks

Name of the Sample Banks:

1. 2. 3. 4. 5. AGRANI BANKS LIMITED DUTCH-BANGLA BANK LIMITED STANDARD BANK LIMITED ONE BANK LIMITED EXIM BANK LIMITED

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LETTER OF TRANSMITTAL
April12, 2010 QUAZI SAGOTA SAMINA Senior Lecturer Department of Business Administration East West University Dhaka 1212

Subject: Submission of Term Paper

Dear Madam: We are very pleased to submit this assignment on Trend Analysis in Deposit, Loan & Marketing Expenses of Commercial Banks as you have authorized us to do in this semester. We are honored to prepare this term paper under your guidance since it gave us the opportunity to know the Commercial Banks Strategies and Analysisin Deposit, Loan & Marketing Expenses in Bangladesh. We tried our level best to accumulate the information for you as comprehensive as possible. We will be obliged to provide further clarification on this report whenever necessary.

Sincerely Yours, DEWAN JOHEB ZAMAN GAZI MD. SALAUDDIN TANVIR AHMED SUKANTA SAHA ID # 2009-1-10-295 ID#2007-1-10-018(3) ID#2007-2-10-025 ID#2007-2-10-143

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ACKNOWLEDGEMENT
We would like to express our gratitude and indebtedness to our honorable faculty,
QUAZI SAGOTA SAMINA, Senior Lecturer, Department of Business Administration, East West University. With her inexhaustible guidance, valuable advice, continuous inspiration and constructive criticism she helped us to carry out this report successfully.

We would also like to express our gratitude to the Commercial Banks for whom we were assigned and Dhaka Stock Exchange library that helped us to gather all the necessary information.

Finally, we would like to thank to all the group members that directly or indirectly helped us to provide and accumulate all the necessary information for the accomplishment of this assignment.

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TABLE OF CONTENT
TOPIC NAME 1.0 Abstract 2.0 Introduction 2.1 Origin of Bank 2.2 Definitions of bank 2.3 Banking Scenario in Bangladesh 2.4 Bangladesh Bank 2.5 Category of Banks in Bangladesh 2.6Commercial Banks of Bangladesh 3.0 Objective of the Study 4.0 Limitations of the Study 5.0 Significance of the Study 6.0 Benefits of the Study 7.0 Scope & Methodology of the Study 7.1 Research Design 7.2 Sources of Data 7.2.1 Primary Data Sources 7.2.2 Secondary Sources of Data 7.3 Data Processing Techniques 7.4 Classification and Tabulation of Data 7.5 Tools for Analysis of Data 7.6 Organization of Report 8.0 An Overview of the Selected Private Commercial Banks 8.1 Agrani Bank Ltd. 8.1.1 History 8.1.2 Mission, Goals and Objectives 8.2 Dutch Bangla Bank Ltd. 8.2.1 History 8.2.2 Mission Statement 8.2.3 Goals and Objectives Page 4

TABLE OF CONTENT
TOPIC NAME 8.3 Standard Bank Ltd. 8.3.1 History 8.3.2 Mission Statement 8.3.3 Goals and Objectives 8.4 One Bank Ltd. 8.4.1 History 8.4.2 Mission Statement 8.4.3 Goals and Objectives 8.5 EXIM Bank Ltd. 9.0 Data Presentation and Analysis 9.1 Agrani Bank Ltd. 9.1.1 Regression Analysis 9.1.1.1 Deposit & Loan 9.1.1.2 Deposit & Marketing Expenses 9.1.1.3 Loan & Marketing Expenses 9.2 Dutch Bangla Bank Ltd. 9.2.1 Regression Analysis 9.2.1.1 Deposit & Loan 9.2.1.2 Deposit & Marketing Expenses 9.2.1.3 Loan & Marketing Expenses 9.3 Standard Bank Ltd. 9.3.1 Regression Analysis 9.3.1.1 Deposit & Loan 9.3.1.2 Deposit & Marketing Expenses 9.3.1.3 Loan & Marketing Expenses 9.4 One Bank Ltd. 9.4.1 Regression Analysis 9.4.1.1 Deposit & Loan 9.4.1.2 Deposit & Marketing Expenses 9.4.1.3 Loan & Marketing Expenses 9.5 EXIM Bank Ltd. 9.5.1 Regression Analysis 9.5.1.1 Deposit & Loan 9.5.1.2 Deposit & Marketing Expenses 9.5.1.3 Loan & Marketing Expenses
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TABLE OF CONTENT
TOPIC NAME

9.6 Table 1: Deposits of Selected Private Commercial Banks 9.7 Table 2: Total Loans & Advances of Selected Private Commercial Banks 9.8 Table 3: Marketing Expenses of Selected Private Commercial Banks 9.9 Table 4: Trend equation and r2 of Deposits, Loan and Marketing Expenses 9.10 Table 5: Correlation Matrix 10.0 Performance Evaluation of Selected Private Commercial Banks of Bangladesh 10.1 Growth of Deposit of Selected Private Commercial Banks 10.2 Growth of Total Loans & Advances of Selected Private Commercial Banks 10.3 Correlation Matrix of Deposit, Loan & Marketing expenses of Selected Private Commercial Banks 11.0 Conclusion (Major Findings) &Recommendation 12.0 Bibliography &References

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1.0 Abstract
In a developing country like Bangladesh the banking system as a whole play a vital role in the progress of economic development.In this paper we have tried to analyze the development and growth of Selected Private Commercial Banks of Bangladesh. It is observed that all the selected private commercial banks are able to achieve a stable growth of deposits, loans and marketing expenses during the period of 2000-2009. Trend equations have been tested for deposits, loans and marketing expenses of the selected private commercial banks. Among them the trend value of deposits, loans and marketing expenses are positive in case of all the selected banks. Square of correlation coefficient (r2), standard deviation has also been tested for all trend equations. The r2 of deposits, loans and marketing expenses is more than 0.5. It indicates the prospect of private commercial banks in Bangladesh is very bright.

2.0 Introduction
2.1 Origin of bank
It is very hard to collect correct information of the origin of the bank. The word Bank has derived from the Italian word Banco which means accumulation of money of stock. It is believed that its origin is from the French word Banque which means beach for keeping, lending and exchanging of money or coin in the market place by money lenders or money changers. It is believed that the ancestors of modern banking system were merchants, goldsmith and money lenders. Modern banking sowed its seed in the mediaeval Italy despite strong Christian prohibitions against charging interest. The bank had started in Italy in 12th century as a public bank. The bank of Venice that was established in 1158 A.D. was the first bank in the history of banking. Following its establishment various banks such as Bank of Barcelona, which was established in 1401 A.D. was the second bank of the world. Similarly, Bank of

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Geneva (1407), Bank of Amsterdam (1609), Bank of Hindustan (1770), were established. The first central bank was the Bank of England which was established in 1844 A.D.

2.2 Definitionsof Bank

A financial institution, which deals with money and credit, It accepts Deposits from individuals, firms and companies at a lower rate of Interest and gives at higher rate of interest to those who need them. A financial establishment which uses money deposited by customers for investment, pays it out when required, makes loan at interest, exchanges currency, etc. J.W Gilbert in his principles and practice banking defines a banker in these words: A banker is dealer in capital or more properly, a dealer in money. He is intermediate party between the borrower and the lender. He borrows of one and lends to another. Sir John Paged defines banker in these terms: That no person or body, corporate or otherwise, can be a banker who does not 1) Take deposits accounts, 2) Take current accounts, 3) Issue and pay Cheques and Collect Cheques crossed and uncrossed for his customers The American defined the term banker in a very broad sense as under: By banking, we mean the business of dealing in credits and by a Bank we include every person, firm or company having a place of business where credits are opened by deposits of collection of money or currency. Subjects to be paid or remitted on Cheques or order, money is advanced or loaned on stocks, bonds, bullion, bill of exchange, promissory notes are received for discount or sale.

2.3 Banking Scenario in Bangladesh

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Banking system plays a very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. In a developing country like Bangladesh the banking system as a whole play a vital role in the progress of economic development. A bank as a matter of fact is just like a heart in the economic structure and the Capital provided by it is like blood in it. As long as blood is in circulation the organs will remain sound and healthy. If the blood is not supplied to any organ then that part would become useless. So if the finance is not provided to agriculture sector or industrial sector, it will be destroyed. Loan facility provided by banks works as an incentive to the producer to increase the production. Banking is now an essential part of our economic system. Modern trade and commerce would almost be impossible without the availability of suitable banking services. First of all, banking promotes savings. All manner of people, from the ordinary laborers and workers to the rich land owners and businessmen, can keep their money safely in banks and saving centers. Secondly, banking promotes investments. Banks easily invest the money they get in industry, agriculture and trade. They either invest it directly or advance loans to other investors. Thirdly, it is most through banks that foreign trade is carried on. Whether we export or import, it is through banks that money is transferred from one country to another. For example, bills of exchange and letters of credit are the regular ways banks use to transfer money. In Bangladesh SONALI Bank is the largest among the Nationalized Commercial Banks (NCBs) while PUBALI is leading in the private ones. Among the 12 foreign banks, Standard Chartered has become the largest in the country. Besides the scheduled banks, SAMABAI (Cooperative) Bank, ANSAR-VDP Bank, KARMASANSTHAN (Employment) Bank and GRAMEEN bank are functioning in the financial sector. In Bangladesh the number of total branches of all scheduled banks is 6,038 as of June 2000. Of the branches, 39.95 per cent (2,412) are located in the urban areas and 60.05 per cent (3,626) in the rural areas. Of the branches NCBs hold 3,616, private commercial banks 1,214, foreign banks 31 and specialized banks 1,177.

2.4 Bangladesh Bank

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Bangladesh Bank, the central bank as well as chief authority to regulate countrys monetary and financial system, was established in Dhaka as a body corporate vide the Bangladesh Bank Order, 1972 (P.O. No. 127 of 1972) with effect from 16th December, 1971. Bangladesh Bank started functioning with all capital and liabilities of the Dhaka branch of State Bank of Pakistan. At present it has got 9 branches and those are located at Motijheel, Khulna, Sadarghat, Bogra, Chittagong, Sylhet, Barisal, Rangpur and Rajshahi in Bangladesh and total number of staffs stood at 5071 (Officials 3914 and Staff 1157) as of end FY 2010. Bangladesh Bank (BB) has been working as the central bank since the country's independence. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. Bangladesh Bank (BB) regulates and supervises the activities of all banks. BB is also responsible for planning the government's monetary policy and implementing it thereby.The BB has a governing body comprising of nine members with the Governor as its chief.

2.5 Category of Banks in Bangladesh

Category NCBs Private Banks Foreign Banks Development Banks Other Number of Banks 4 28 12 5 4 Number of Branches 3616 1214 31 1177 1280

2.6 Commercial Banks of Bangladesh A commercial bank is a financial institution which collects savings from many persons and institutions and provides credit or loan facility to different industrial and commercial business. Commercial banking business consists of changing cash into bank deposit and bank deposit into cash, transferring bank deposit from one person or institution to other, giving bank deposit in exchange for cheques, bills of exchange, government securities etc.

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The commercial banking system dominates the financial sector with limited role of Non-Bank Financial Institutions and the capital market. The Banking sector alone accounts for a substantial share of assets of the financial system. The banking system is dominated by the 4 State Owned Commercial Banks, which together controlled more than 30% of deposits and operates 3383 branches (50% of the total) as of June 30, 2008.Out of 6562 commercial bank branches operating in the country, up to end December 2006 the NCBs operate 3384 branches, of which 2146 are in rural areas and 1238 are in urban areas; SBs have 1354 branches of which 1200 are in rural areas and 154 are in urban areas; PCBs have 1776 branches of which 488 are in rural areas and 1288 are in urban areas; and FCBs have 48 branches exclusively in urban areas. Out of 30 PCBs, six have been operating as Islamic banks. Besides these full-fledged Islamic banks, 10 conventional banks in the private sector have opened selected branches and Islamic banking counters respectively to deal with the Islamic banking business parallel to their conventional operations. NCBs owned 65.3 percent while PCBs, SBs and FCBs own 24.5, 6.6 and 3.6 percent respectively of total assets of the scheduled banks. Of the total deposits, NCBs' share stood at 38.8 percent while SBs, PCBs and FCBs shared 5.8, 48.7 and 6.8 percent respectively. Among PCBs, the Islamic Banks' share of deposits is 12.5 percent. On the other hand, NCBs disbursed 32.3 percent of total advances while SBs, PCBs and FCBs disbursed 9.3, 51.5 (of which 14.8 percent was disbursed by the Islamic Banks) and 6.9 percent respectively at the end of September 2006.

3.0 Objectives of the Study

The main reason of the study was to gather experience and practical information regarding trend analysis for deposits, loans and marketing expenses of the private commercial banks.The prime purposes of the report are to analysis trend and relationship among commercial banks for deposits, loans and marketing expenses of the selected private commercial banks and to identify the problems exists regarding trend of deposits, loans and marketing expenses of private commercial banks and suggest possible solution to eliminate these problems. Another purpose is to fulfill the course requirement as we learned how to prepare report and to imply the theoretical knowledge into practical. Also the purpose of the report is to
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observe, are the private commercial banks able to achieve a stable growth of deposits, loans and marketing expenses during the period of 2000-2009 by testing the trend equations for deposits, loans and marketing expenses of the private commercial banks to find out the trend value of deposits, loans and marketing expenses in case of all the selected banks. Mainly to test square of correlation coefficient (r2), standard deviation for all trend equations.

4.0 Limitation of the Study

Something is better than nothing. No matter how efficiently a study is conducted, it cannot be perfect in all respects. This study was conducted in accordance with the objectives of the study. The study may not include broad explanations of facts and figures due to the nature of the study. Secondly, the limitation, which affects the study, is the restriction on mentioning every fact of the bank due to the problem of secrecy of the bank. In addition, the availability of required data was a problem as all the documents and files are kept strictly under lock and key due to their strictly confidential nature. Thirdly, the problem of short time period also makes the analysis restricted as one cannot properly understand and thus analyze all the operations of a bank just a very short time of eight weeks.Executives are very busy. So sometimes, they answered very quickly without thinking deeply. They sometime also answered our questions using the term probably. Therefore, the chance of having wrong information is there. The officials were sometimes unable to answer our questions because of the strict confidentialities they have to maintain. Some of the executives were so busy that it was hard on our part to convince them to give us some time.

5.0 Significance of the Study

Deposit collection and loan givingare the major function of all the commercial banks, which help to carry out almost all transaction of the bank. Mostly among the various deposit and loan features provided by commercial banks, fixed and saving deposit, short term and long term loans as secured loan, unsecured loan and demandloan are considered to be more important. In the case of term deposit

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although the bankers pay interest the funds are committed for longer periods, which can safely be lent for long term project as secured loans or unsecured loans. But in the case of current deposits although no interest is payable, these deposits are repayable at demand and therefore banker must be cautious in lending such deposits. Fixed and saving deposits are considered to be more suitable because this deposit can be invested in short term loans with higher rate of return and hence it helps to earn high profit.The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants.Loans can also be subcategorized according to whether the debtor is an individual person (consumer) or a business. Common personal loans include mortgage loans, car loans, home equity lines of credit, credit cards, installment loans and payday loans. The credit score of the borrower is a major component in and underwriting and interest rates of these loans. The monthly payments of personal loans can be decreased by selecting longer payment terms, but overall interest paid increases as well. So the deposit and loan in the commercial banks has a good contribution to the country economy. If deposits are well collected and loans are provided in the necessary sectors as well as country can benefit from it. This study however intends to give general information regarding banking, deposits prospects, loans prospects, marketing expenses and itsmobilization in the country, which may give the general idea about banking and deposits.

6.0 Benefits of the Study

The study done will benefit the finance students in particular and banking students in general because the financial analysis section of this report comprehensively encompasses financial analysis and trend in deposit, loan and marketing expenses of selected commercial banks. Furthermore, selected commercial banks of this report may also be benefit from the recommendations made at the end of the report.

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7.0 Scope & Methodology of the study

The present study has been carried out to evaluate the performance of selected private commercial banks of Bangladesh. The selected banks are Dutch Bangla Bank (DBBL), Agrani Bank Ltd., Standard Bank Ltd., One Bank and Exim Bank Ltd. This study has been based mainly on data from secondary sources. The relevant data and information were collected from Stock Exchanges, Annual Reports of different commercial banks of Bangladesh, Bangladesh Bank, Securities and Exchange Commission and web sites of relevant commercial banks of Bangladesh etc. Relevant articles and literature in this context have also been consulted. In this article we analyzed last ten years data of selected private commercial banks of Bangladesh. For evaluating the performance of selected private commercial banks of Bangladesh data has been analyzed through the various statistical measures like growth percentage, trend equation, square of correlation coefficient etc. Among the various straight line Trend Methods of Time Series Analysis the method of Least Square is most popular and widely used in practice. The method of least square can be used either to fit a straight-line trend or a parabolic trend. The straight line trend is represented by the equation Yc = a + b. Where, Ycdenotes the trend values to distinguish them from the actual Y values. a is the Y intercept or the value of the Y variable when X = 0. b represents the slope of the line of the amount of change in Y variable that if associated with a change of one unit in X variable. X variable in time series analysis represents time. The square of correlation coefficient (r2) is called the multiple determinations or squared multiple correlation coefficients. The coefficient of correlation is denoted by r. The value of r lies between 0and 1. The higher the r2 the greater the percentage of the variation of Y explained by the regression model, that is, thebetter the goodnessof fit of the regression model to the sample observations. r2closer to zero, the worse the fit.

7.1 Research Design

The research methodology is the process of arriving to the solution of the problems through planned and systematic dealing with the collection, analysis and interpretation of facts and figures. As the research entirely considers about the deposit, loan and marketing expenses of the commercial banks, the main purpose of this study is to show deposits, loans and marketing expenses and its utilization in commercial banks with its financial positions, collection and uses of funds, its

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prospects and its position in context of Bangladesh as well as to recommend suggestions for its improvement. Those research methodologies have been used which proves helpful to deposit, loan and marketing expenses trend analysis. For the purpose of achieving the objective, the following methodology is used. The data has been collected by acquiring various kinds of annual reports, bulletins and journals from the commercial banks. The study report is based mostly on the secondary information of the commercial banks. In addition to this, reference has been made in library consult, class lectures, related books of banking, financial management and accounting during the preparation of this study.

7.2 Sources of Data

For the preparation of this report different kinds of books are followed. In this report, all the data collected is secondary in nature. Almost all the data has been collected from published annual reports, brochures etc. Mostly all the data are collected from the concerned commercial banks and Dhaka stock exchange (DSE). 7.2.1 Primary data sources Primary source of data is questionnaires, observations, interviewing personally in the management of the concerning commercial banks. The data regarding the organization, its features and structures were received primary through the management of commercial banks. 7.2.2 Secondary sources of data In this study, the main sources of data are secondary which are collected from pre published data sources. The secondary data sources used in this study are: Internal source 1. Annual reports of the commercial banks 2. Performance report of the commercial banks External source 1. Book publications 2. Journals 3. Articles from newspaper 4. Annual reports of commercial banks

7.3 Data Processing Techniques

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The data collected from the above stated sources has been classified tabulated and interpreted for easier study.

7.4 Classification and Tabulation of Data

The data collected are classified, tabulated and arranged in manner to make it easily understandable with the use of tables in chronological order. After classification the data is tabulated.

7.5 Tools for Analysis of Data

Various financial accounting and statistical tools have been used of analyses the collected data and interpret the result obtained. The various tools used are: deposit trend, loan trend, marketing expenses trend, correlation coefficient, trend analysis.

7.6 Organization of Report

The report consists of three chapters. The first chapter is the introduction chapter that contains theAbstract, Introduction, origin of bank, Definitions of Bank, Banking Scenario in Bangladesh, Bangladesh Bank, Category of Banks in Bangladesh, Commercial Banks of Bangladesh, Objectives of the Study, Limitation of the Study, Significance of the Study, Benefit of the Study, Scope & Methodology of the study, Research Design, Sources of Data , Data Processing Techniques, Classification and Tabulation of Data, Tools for Analysis of Data. The second chapter contains data presentation and analysis of the commercial banks and third chapter is regarding the findings &conclusion and recommendation regarding the study.

8.0 An overview of the Selected Private Commercial Banks of Bangladesh

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8.1 Agrani Bank Ltd.

Agrani Bank Limited, a leading commercial bank with 867 outlets strategically located in almost all the commercial areas throughout Bangladesh, overseas Exchange Houses and hundreds of overseas Correspondents, came into being as a Public Limited Company on May 17, 2007 with a view to take over the business, assets, liabilities, rights and obligations of theAgrani Bank which emerged as a nationalized commercial bank in 1972 immediately after the emergence of Bangladesh as an independent state. Agrani Bank Limited started functioning as a going concern basis through a Vendors Agreement signed between the ministry of finance, Government of the People's Republic of Bangladesh on behalf of the former Agrani Bank and the Board of Directors of Agrani Bank Limited on November 15, 2007 with retrospective effect from 01 July, 2007. 8.1.1 History Agrani Bank anationalized commercial bank (NCB) of Bangladesh established on 26 March 1972 under the Bangladesh Banks (Nationalization) Order 1972 by taking over two abandoned Pakistani banks - Habib Bank and Commerce Bank. With its head office in DHAKA, the bank started its operational activities with an authorized capital of Tk.0.30 million and paid up capital of Tk. 10 million. The paid up capital has increased to Tk. 30 million in December 1973. In 1999-2000, the banksauthorized and paid up capital were Tk. 8 billion and 2.5 billion respectively. 8.1.2 Mission, Goals and objective In addition to traditional deposit taking in various accounts and providing loans to almost all sectors of the economy, the bank offers many other services through its schemes of school banking, inland travelerscheques, pension funds, industrial development bond and inland remittance. The bank operates some income generating and economic development projects such as the Productive Employment Project, Netrokona Integrated Agriculture product and Water Management Project, IFAD Project for Poverty Alleviation through Employment Creation, Kurigram Poverty Alleviation Project, Crop Intensification Project,
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National Micro Irrigation Development Project, Micro Entrepreneurship Development Project, and Agricultural Diversification and Intensification Project. The bank participates actively in foreign exchange business including overseas remittance services. The total volume of foreign exchange business handled by the bank in servicing imports and exports and remittances during 1999-2000 amounted to Tk. 55.345 billion compared to only Tk. 310 million in 1972-73. At present, the bank has correspondent relationship with 903 foreign banks/bank offices throughout the world. The management of the bank is vested in a 7-member board of directors appointed by the government. The managing director is the chief executive and he is assisted by deputy managing director, six general managers and other senior executives. The general managers are in charge of the bank's branches in six administrative divisions of the country namely DHAKA, CHITTAGONG, Rajshahi, Khulna,Sylhet and Barisal. The bank has 22 departments at its head office, including a training institute at Dhaka. Total number of employees of the bank was 13269 on 30 June 2000. Up to 31 December 2000, the Bank had 903 branches, of which 586 were in rural areas and 38 were authorized to deal in foreign exchange transactions. At the start of its operation in 1972, Agrani Bank had 246 branches, of which 37 were temporarily closed. It had a total deposit of Tk. 581 million, advances of Tk.663.40 million and borrowing of Tk. 294.80 million. Initially, it did not have any liquid asset to run its operations smoothly and to undertake development activities. Investment amounting to Tk. 110 million was in unapproved securities. On 30 June 2000, the total deposit at the bank stood at Tk. 92.96 billion, total loans and advances at Tk. 74.92 billion, total investment at Tk.25.375 billion, total assets at Tk. 124.798 billion and reserve funds at Tk. 319 million. Of the total deposits, 8.03%, 35.41%, 19.21% and 37.35% were in current, savings, fixed and other deposits respectively. 4.24% of the total amount of loans and advances were classified. The credit-deposit ratio of the bank was 80.60%. The bank had borrowed Tk. 630 million from the inter-bank call market and the total value of its liquid assets was Tk. 36.160 billion. In September 1999, the interest rate offered by the bank on savings deposits in both rural and urban areas was 7.50%, while the average interest rate charged by it on lending in different sectors was 13.29%. Public sectors' borrowing from the bank was Tk. 12 billion (16% of the bank's total loans and advances); about 44% of these loans were classified. The bank also

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provided micro-credit. Up to June 2000, the disbursement of micro-credit amounted to Tk. 4.615 billion. Agrani Bank monitors its operations through a performance budget. It has a marketing intelligence unit. It conducts a program of human resources development through training and motivation and has adopted some important policy measures, including introduction of Lending Risk Analysis, suggested by the Financial Sector Reform Program. The business policies of the bank in 1990s included fulfilling capital adequacy requirements, mobilizing large amount of deposits, and making investment of assets in more profitable ways. The bank has diverted its activity toward off-balance sheet items during the last decade as a part of its strategy to increase its area of operation and non-interest based income.

8.2 Dutch Bangla Bank Ltd.

Dutch-Bangla Bank started operation is Bangladesh's first joint venture bank. The bank was an effort by local shareholders spearheaded by M Sahabuddin Ahmed (founder chairman) and the Dutch company FMO. From the onset, the focus of the bank has been financing high-growth manufacturing industries in Bangladesh. The rationale being that the manufacturing sector exports Bangladeshi products worldwide. Thereby financing and concentrating on this sector allows Bangladesh to achieve the desired growth. DBBL's other focus is Corporate Social Responsibility (CSR). Even though CSR is now a clich, DBBL is the pioneer in this sector and termed the contribution simply as 'social responsibility'. Due to its investment in this sector, DBBL has become one of the largest donors and the largest bank donor in Bangladesh. The bank has won numerous international awards because of its unique approach as a socially conscious bank. DBBL was the first bank in Bangladesh to be fully automated. The Electronic Banking Division was established in 2002 to undertake rapid automation and bring modern banking services into this field. Full automation was completed in 2003 and hereby introduced plastic money to the Bangladeshi masses. DBBL also operates the nation's largest ATM fleet and in the process drastically cut consumer costs and fees by 80%. Moreover, DBBL choosing the low profitability route for this sector has surprised many critics. DBBL had pursued the mass automation in Banking as a CSR activity and never intended profitability from this sector. As a result it now provides unrivaled banking technology offerings to all its customers. Because of this mindset, most local banks have joined DBBL's banking infrastructure instead of pursuing their own.
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8.2.1 History Dutch-Bangla Bank Limited (the Bank) is a scheduled commercial bank. The Bank was established under the Bank Companies Act 1991 and incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. DBBL- a Bangladesh European private joint venture scheduled commercial bank commenced formal operation from June 3, 1996. 8.2.2 Mission statement Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social responsibility. "Profits alone" do not hold a central focus in the Bank's operation; because "man does not live by bread and butter alone". Dutch-Bangla Bank dreams of better Bangladesh, where arts and letters, sports and athletics, music and entertainment, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality and ethics make all our lives worth living. DBBL's essence and ethos rest on a cosmos of creativity and the marvel-magic of a charmed life that abounds with spirit of life and adventures that contributes towards human development. 8.2.3 Goals and objective Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Taking cue from its pool esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and epitomizes its vaunted marques "Your Trusted Partner".

8.3 Standard Bank Ltd.

8.3.1 History Standard Bank Limited (SBL) was incorporated as a Public Limited Company on May 11, 1999 under the Companies Act, 1994 and the Bank achieved satisfactory progress from its commercial operations on June 03, 1999. SBL has introduced several new products on credit and deposit schemes. It also goes for Corporate and Retail Banking etc. The Bank also participated in fund Syndication with other

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Banks. Through all these myriad activities SBL has created a positive impact in the Market. 8.3.2 Mission statement To be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability. Vision of the bank is to be a modern Bank having the object of building a sound national economy and to contribute significantly to the Public Exchequer. 8.3.3 Goals and objective
y y y y

To be a dynamic leader in the financial market in innovating new products as to the needs of the society. To earn positive economic value addition (EVA) each year to come. To top the list in respect of cost efficiency of all the commercial Banks. To become one of the best financial institutions in Bangladesh economy participating in the most significant segments of business market that we serve.

8.4 One Bank Ltd.

8.4.1 History ONE Bank Limited was incorporated in May, 1999 With the Registrar of Joint Stock Companies under the Companies Act. 1994. as a commercial bank in the private sector. The Bank is pledge-bound to serve the customers and the community with utmost dedication. The prime focus is on efficiency, transparency, precision and motivation with the spirit and conviction to excel as ONE Bank in both value and image. The name 'ONE Bank' is derived from the insight and long nourished feelings of the promoters to reach out to the people of all walks of life and progress together towards prosperity in a spirit of oneness. OBL is a private sector commercial bank dedicated in the business line of taking deposits from public through its various saving schemes and lending the fund in various sectors at a higher margin. However, due attention is given in respect of risk undertaking, risk hedging and if not appropriately hedged, reflection of the same in pricing. In the financing side, the bank's major concentration is in trade finance covering about 20.88% of total financing as on YE2006 which is mainly a

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short-term investment. The banks financing concentrate in both, working capital finance and long-term finance. OBL has major concentration of financing in medium and large industries. Since the short-term finance carries low risk compared to long-term finance; the financing strategy of OBL will assist the bank to keep the risk at minimal. 8.4.2 Mission statement y To constantly seek to better serve our Customers. y Be pro-active in fulfilling our Social Responsibilities. y To review all business lines regularly and develop the Best Practices in the industry. y Working environment to be supportive of Teamwork, enabling the Employees to perform to the very best of their abilities. 8.4.3 Goals and objective y To establish ONE Bank limited as a Role Model in the Banking Sector of Bangladesh. y To meet the needs of our Customers, Provide fulfillment for our People and create Shareholder Value.

8.5 Exim Bank Ltd

EXIM Bank (Export Import Bank of Bangladesh Limited) incorporated on 2 June 1999 as a private sector banking company under the companiesact 1994. It started operations on 3 August 1999 with an authorized capital of Tk. 1 billion divided into 10 million ordinary shares of Tk. 100 each. The initial paid up capital of the bank was Tk. 225 million, fully subscribed by 28 sponsors. Total shareholders equity of the bank in 2000 was Tk. 265.25 million comprising paid up capital Tk. 225 million, statutory reserve Tk. 16.05 million, other reserves Tk. 23.61 million and profit for the year 2000 Tk. 0.59 million. Total liabilities and shareholders equity of the bank on 31 December 2000 stood at Tk. 4,301.23 million. Management of the bank is vested in a 22-member board of directors headed by the chairman. The managing director is the chief executive and the bank has a total of 130 employees including 19 executive officers. The bank finances export and import businesses and also conducts traditional commercial banking activities. All 3 urban branches of the bank established during the period from August 1999 to

Page 22

May 2001 are linked with the head office (RAJUK Avenue, Dhaka) through a computer network. The deposits accumulated by the bank in 2000 were Tk. 3,934.47 million in various accounts, VIZ, fixed deposits, savings deposits, current, contingency and others, bearer certificates of deposits, short-term deposits, call deposits, interest payable scheme, foreign currency deposits and other deposits. The interest rate offered by the bank on the deposits was 8.5% for savings deposits and 9% to 11.5% for fixed deposits of different maturities. Total loans and advances of the bank on 31 December 2000 stood at Tk. 2,170.53 million. The lending portfolio comprised general loans, loan against Alt cash assistance, LIM, LTR, packing credit, house building loan, lease finance, hire purchase, PAD, cash credit (export), cash credit (import), cash credit (hypothecation), overdrafts and staff loans. The bank's lending rates varied between 10% and 16%, depending upon the sectors and the duration of loans. It had no classified loan up to December 2000. The bank has correspondent relationships with 26 foreign banks. Investments of the bank other than loans and advances were limited to government TREASURYBILLs, PRIZEBONDs and shares and debentures, and total investment during 2000 amounted to Tk. 321.60 million. The bank has earned a net profit after tax and provisions of Tk. 48.14 million in 2000. Its total income was Tk. 187.3 8 million and the total expenditure Tk. 13.67 million.

Page 23

9.0 Data Presentation and Analysis

9.1 Agrani Bank Ltd.
Total deposit, loan and marketing expense (in million Tk.)position of Agrani Bank Ltd.:
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT 100528.5 106713.6 115471.3 117427.1 125389.3 130836.1 128920.7 135921.5 146814.6 166283.6 LOAN 77012.59 80015.54 88959.84 89312.47 95920.8 95404.25 105869.6 118493.5 113362.2 122236.2 MARKETNG EXPENSE 4.9 3.6 7.5 9.5 7.5 5.3 5.5 5.3 10.3 10.7

Total deposit, loan and marketing expense (in million Tk.) position of Agrani Bank Ltd.:
180000 160000 140000 120000 100000 80000 60000 40000 20000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Deposit Loan MKT. EXP

Page 24

9.1.1 Regression Analysis: 9.1.1.1 Deposit & Loan:

Model Summary
Adjusted R Square .849 Std. Error of the Estimate 7526.7467

Model 1

R .930 a

R Square .866

a. Predictors: (Constant), VAR00002

b ANOVA

Model 1

Regression Residual Total

Sum of Squares 2918172942 453215323.8 3371388266

df 1 8 9

Mean Square 2918172942 56651915.48

F 51.511

Sig. .000 a

a. Predictors: (Constant), VAR00002 b. Dependent Variable: VAR00001

a Coefficients

Unstandardized Coefficients Model 1 (Constant) VAR00002 B 14650.401 1.143 Std. Error 15893.167 .159

Standardi zed Coefficien ts Beta .930 t .922 7.177 Sig. .384 .000

a. Dependent Variable: VAR00001

9.1.1.2 Deposit & Marketing Expenses:

Model Summary
Adjusted R Square .348 Std. Error of the Estimate 15622.5565

Model 1

R .649 a

R Square .421

a. Predictors: (Constant), VAR00003

Page 25

b ANOVA

el Regressi Resi al al rs:

Sum Squares 1418874088 1952514178 3371388266

a. Predi

nstant),

R00003

ffici nts

Unstandardized Coeffi ients (Constant) VAR00003

5064.021

2100.273

a. Dependent Variable: VAR00001

9.1.1.3 Loan & Marketing Expenses:

M d l Summ ry Adjusted R Square .157 Std. rror of the stimate 14461.9850

Model 1

R .501 a

R Square .251

a. Predi tors: (Constant), VAR00003

Model 1

Regression Residual otal

Sum of Squares 559947184.8 1673192079 2233139264

a. Predi tors: (Constant), VAR00003 b. Dependent Variable: VAR00002

Model 1

B 91931.851

Std. rror 15529.667

Beta .649

b ANOVA

df 1 8 9

Mean Square 559947184.8 209149009.9

Page 26



 

b.

ependent ariable:

R00001

   

df 1 8 9

Mean Square 1418874088 244064272.3

F 5.814

Sig. .042 a

Standardi zed Coeffi ien ts t 5.920 2.411 Sig. .000 .042

F 2.677

Sig. .140 a

Coeffi ient

a. Dependent Variable: VAR00002

9.2 Dutch Bangla Bank LTD

Total deposit, loan and marketing expense (in million Tk.) positionof Dutch Bangla Bank Ltd.:
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT 11457.76 15975.45 17133.81 21067.56 27241.11 40111.54 42110.15 51575.67 46738.53 56748.43 LOAN 8044.43 9391.64 11431.32 14976.06 20349.42 28325.34 28369.58 41016.62 39425.14 46572.54 MARKETNG EXPENSE 22.71 31.79 27.95 28.19 29.59 38.06 31.23 36.89 34.29 38.24

Model 1

.501

Page 27

&

Unstandardi ed Coeffi ients B Std. rror (Constant) 76358.175 14375.996 VAR00003 3181.245 1944.247

#"
Standardi ed Coeffi ien ts Beta t 5.312 1.636 Sig. .001 .140

&

Total deposit, loan and marketing expense (in million Tk.) position of Dutch Bangla Bank Ltd.:
60000 50000 40000 30000 20000 10000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT LOAN MKT.EXP

9.2.1 Regression Analysis: 9.2.1.1 Deposit & Loan:

Model Summary

Model 1

R .989 a

R Square .978

a. Predi tors: (Constant), VAR00002

b ANOVA

Model 1

Regression Residual

Sum of Squares 2360291223.283 52253030.987 2412544254.271

df 1 8 9

otal

a. Predi tors: (Constant), VAR00002 b. Dependent Variable: VAR00001

Page 28

' '

Adjusted R Square .976

Std. rror of the stimate 2555.7052

Mean Square 2360291223 6531628.873

F 361.363

Sig. .000 a

ffici nts

U Model 1 a.

t dardized Coeffi ient

t)

00002

. 49 00001

.989

19. 10

.000

ependent ariable:

9.2.1.2 Deposit & Marketing Expenses:

Mod l Summ ry

a. Predi tor : (Constant), AR00003

Model 1

Regression Residual

Sum of Squares 1759457668.914 653086585.357 2412544254.271

otal

a. Predi tors: (Constant), AR00003

Coefficients

Unstandardized Coeffi ients (Constant)

AR00003

2775.666

597.886

a.

ependent ariable: AR00001

Model 1

B -55511.1

Std. rror 19281.832

Beta .854

Page 29

b.

ependent ariable: AR00001

Model 1

R .854 a

R Square . 29

b AN VA

df 1 8 9

Standardi zed Coeffi ien ts t -2.879 4.642 Sig. .021 .002

DP P

Adju ted R Square . 95

Std. rror of the timate 9035.2545

Mean Square 1759457669 81635823.17

F 21.553

@86

6 649 8

H GF 55 5 6 4

B 4543.

td. rror .

Beta

Si . .

D Q

3
Standardi zed Coeffi ien t Sig. .002 a

696 5 5 687 64 P I

21 D

C E DC

F H GF C E DC B A F D Q Q

9.2.1.3 Loan & Marketing Expenses:

Model Summary

Model 1

R .827 a

R Square .683

a. Predi tors: (Constant), VAR00003

b AN VA

Model 1

Regression Residual

Sum of Squares 1222819349.299 566472346.169 1789291695.468

df 1 8 9

otal

a. Predi tors: (Constant), VAR00003 b. Dependent Variable: VAR00002

a Coefficients

Unstandardized Coeffi ients (Constant) VAR00003

Standardi zed Coeffi ien ts Beta .827

2313.976

556.829

a. Dependent Variable: VAR00002

Model 1

B -49011.8

Std. rror 17957.765

Page 30

W W

Adjusted R Square .644

Std. rror of the stimate 8414.8109

Mean Square 1222819349 70809043.27

F 17.269

Sig. .003 a

t -2.729 4.156

Sig. .026 .003

9.3 Standard Bank LTD

Total deposit, loan and marketing expense (in million Tk.) positionof Standard Bank Ltd.:
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT 2749.07 4101.59 5612.42 8731 12043.39 14220.8 19213.75 29304.73 42548.11 48789.56 LOAN 2308.53 3495.71 4952.24 7801 10183.59 12634.12 16691.72 25970.08 36723.32 44736.54 MARKETNG EXPENSE 1.87 2.87 2.88 4.3 4.91 11.59 8.91 6.78 12.54 14.78

Total deposit, loan and marketing expense (in million Tk.) position of Standard Bank Ltd.:
60000 50000 40000 30000 20000 10000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT LOAN MKT.EXP

Page 31

9.3.1 Regression Analysis: 9.3.1.1 Deposit & Loan:

Model Summary Adjusted R Square .998 Std. Error of the Estimate 708.6103

Model 1

R .999 a

R Square .998

a. Predictors: (Constant), VAR00002

b ANOVA

Model 1

Regression Residual Total

Sum of Squares 2385396437.01 4017028.981 2389413465.99

df 1 8 9

Mean Square 2385396437 502128.623

F 4750.569

Sig. .000 a

a. Predictors: (Constant), VAR00002 b. Dependent Variable: VAR00001

Coefficients

Unstandardized Coefficients Model 1 (Constant) VAR00002 B 334.251 1.112 Std. Error 348.509 .016

a. Dependent Variable: VAR00001

9.3.1.2 Deposit & Marketing Expenses:

Model Summ ry Adjusted R Square .722 Std. Error of the Estimate 8595.3525

Model 1

R .868 a

R Square .753

a. Predictors: (Constant), VAR00003

c
Standardi zed Coefficien ts Beta .999 t .959 68.924 Sig. .366 .000

Page 32

b AN VA

Model 1

Regression Residual

Sum of Squares 1798372786.528 591040679.461 2389413465.989

otal

a. Predi tors: (Constant), VAR00003 b. Dependent Variable: VAR00001

Coefficients

Unstandardized Coeffi ients (Constant) VAR00003

3094.623

627.237

a. Dependent Variable: VAR00001

9.3.1.3 Loan & Marketing Expenses:

Model Summ ry Adjusted R Square .724 Std. rror of the stimate 7697.2388

Model 1

R .869 a

R Square .754

a. Predi tors: (Constant), VAR00003

b AN VA

Model 1

Regression Residual

Sum of Squares 1456374278.139 473979875.272 1930354153.412

df 1 8 9

otal

a. Predi tors: (Constant), VAR00003 b. Dependent Variable: VAR00002

Page 33

q q

Model 1

B -3373.452

Std. rror 5240.379

Beta .868

e h

df 1 8 9

Mean Square 1798372787 73880084.93

F 24.342

Sig. .001 a

g g

f f

Standardi zed Coeffi ien ts t -.644 4.934 Sig. .538 .001

Mean Square 1456374278 59247484.41

F 24.581

Sig. .001 a

Coefficients

Unstandardized Coeffi ients (Constant)

AR00003

2784.867

561.698

9.4 One Bank LTD

Total deposit, loan and marketing expense (in million Tk.) position of One Bank Ltd.:
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT 6399 7607 8847 10915 18030 20253 24057 27861.42 39364.89 50873.7 LOAN 4392 5126 6051 9613 13851 15681 19484 23287.4 32532.7 42190.39 MARKETNG EXPENSE 1.5 2.7 5.42 9.04 12.75 12.47 14.84 16.44 19.01 22.64

a.

ependent ariable: AR00002

Model 1

B -3342.618

Std. rror 4692.821

Beta .869

Page 34

t
Standardi zed Coeffi ien ts t -.712 4.958 Sig. .497 .001

Total deposit, loan and marketing expense (in million Tk.) position of One Bank Ltd.:
60000 50000 40000 30000 20000 10000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT LOAN MKT.EXP

9.4.1 Regression Analysis: 9.4.1.1 Deposit & Loan:

Model Summary

Model 1

R .999 a

R Square .998

a. Predi tors: (Constant), VAR00002

b ANOVA

Model 1

Regression Residual otal

Sum of Squares 1931577933 4125994.810 1935703928

df 1 8 9

a. Predi tors: (Constant), VAR00002 b. Dependent Variable: VAR00001

Page 35

y y

Adjusted R Square .998

Std. rror of the stimate 718.1569

Mean Square 1931577933 515749.351

F 3745.187

Sig. .000 a

Coefficients

Unstandardized Coeffi ients (Constant)

AR00002

1.172

9.4.1.2 Deposit & Marketing Expenses:

Model Summ ry Adjusted R Square .883 Std. rror of the stimate 5020.7142

Model 1

R .946 a

R Square .896

a. Predi tors: (Constant), AR00003

ANOVAb Sum of Squares 1734043359.9 201660568.10 1935703928.0

Model 1

df 1 8 9

Regression Residual Total

a. Predi tors: (Constant), AR00003

Coefficients

Unstandardized Coeffi ients (Constant)

AR00003

1988.153

239.710

a.

ependent ariable: AR00001

Model 1

B -1802.813

Std. rror 3218.854

Beta .946

Page 36

b.

ependent ariable: AR00001

Standardi zed Coeffi ien ts t -.560 8.294 Sig. .591 .000

a.

ependent ariable: AR00001

Model 1

B 1244.136

Std. rror 400.342 .019

Beta .999

Standardi zed Coeffi ien ts t 3.108 61.198 Sig. .014 .000

Mean Square 1734043360 25207571.01

F 68.791

Sig. .000 a

9.4.1.3 Loan & Marketing Expenses:

Model Summary

Model 1

R .950 a

R Square .902

a. Predi tors: (Constant), VAR00003

b ANOVA

Model 1

Regression Residual Total

Sum of Squares 1269685718 137406584 1407092302

df 1 8 9

a. Predi tors: (Constant), VAR00003 b. Dependent Variable: VAR00002

Coefficients

Unstandardized Coeffi ients (Constant) VAR00003

Standardi zed Coeffi ien ts Beta .950

1701.249

197.869

a. Dependent Variable: VAR00002

Model 1

B -2651.442

Std. rror 2657.018

Page 37

Adjusted R Square .890

Std. rror of the stimate 4144.3725

Mean Square 1269685718 17175823.01

F 73.923

Sig. .000 a

t -.998 8.598

Sig. .348 .000

9.5 EXIM Bank Ltd.

Total deposit, loan and marketing expense (in million Tk.) position of EXIM Bank Ltd.:
YEAR 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT 11895.47 14562.35 15242.96 19078.17 28319.21 35032.02 46932.5 58833.06 73835.46 80456.32 LOAN 8754.21 10432.21 11324.59 18005.71 24668.29 30567.13 40702.5 50838.7 66898.18 72654.35 MARKETNG EXPENSE 5.71 5.93 6.09 6.8 7.1 6.4 10.64 15.12 26.72 33.21

Total deposit, loan and marketing expense (in million Tk.) position of EXIM Bank Ltd.:
90000 80000 70000 60000 50000 40000 30000 20000 10000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 DEPOSIT LOAN MKT.EXP

Page 38

9.5.1 Regression Analysis: 9.5.1.1 Deposit & Loan:

Model Summary Adjusted R Square .998 Std. Error of the Estimate 1264.4564

Model 1

R .999 a

R Square .998

a. Predictors: (Constant), VAR00002

b ANOVA

Model 1

Regression Residual

Sum of Squares 5795195957.774 12790800.877 5807986758.651

df 1 8 9

Mean Square 5795195958 1598850.110

F 3624.602

Sig. .000 a

a. Predictors: (Constant), VAR00002 b. Dependent Variable: VAR00001

nstandardi ed Coefficients Std. Error 721.820 .018

(Constant) VAR00002

2238.860 1.080

a. Dependent Variable: VAR00001

9.5.1.2 Deposit & Marketing Expenses:

Model Summary Adjusted R Square .840 Std. Error of the Estimate 10155.1069

Model 1

R .926 a

R Square .858

a. Predictors: (Constant), VAR00003

Page 39

Model 1

otal

a Coefficients

Standardi ed Coefficien ts eta .999 t 3.102 60.205 Sig. .015 .000

b ANOVA

Model 1

Regression Residual otal

Sum of Squares 4982977193.0 825009565.666 5807986758.7

df 1 8 9

Mean Square 4982977193 103126195.7

F 48.319

Sig. .000 a

a. Predi tors: (Constant), VAR00003 b. Dependent Variable: VAR00001

Coefficients

Unstandardized Coeffi ients (Constant) VAR00003

2392.559

344.194

a. Dependent Variable: VAR00001

9.5.1.3 Loan & Marketing Expenses:

Model Summ ry

Model 1

R .930 a

R Square .865

a. Predi tors: (Constant), VAR00003

b ANOVA

Model 1

Regression Residual otal

Sum of Squares 4294364414.7 669541002.35 4963905417.0

df 1 8 9

a. Predi tors: (Constant), VAR00003 b. Dependent Variable: VAR00002

Page 40

k k

Adjusted R Square .848

Model 1

B 8818.015

Std. rror 5333.504

Beta .926

Std. rror of the stimate 9148.3674

f f f

e e

Standardi zed Coeffi ien ts t 1.653 6.951 Sig. .137 .000

Mean Square 4294364415 83692625.29

F 51.311

Sig. .000 a

Coefficients

Unstandardized Coeffi ients (Constant)

AR00003

2221.097

310.071

9.6 Table 1: Deposits of Selected Private Commercial Banks

SL Name of Banks 2000 1 Agrani Bank Ltd. Growth Dutchbangla Bank Ltd. Growth Standard Bank Ltd. Growth One bank Ltd. Growth Exim Bank ltd. Growth 100528.51 2001 106713.6 2002 115471.3 2003 117427.1 Total Deposits (in million Tk.) 2004 125389.3 2005 130836.1 2006 128920.7 2007 135921.5 2008 146814.6 2009 166283.6

11457.76

2749.07

6399

11895.47

a.

ependent ariable: AR00002

6.15% 15975.45

8.21% 17133.81

39.43% 4101.59

7.25% 5612.42

49.20% 7607

36.84% 8847

18.88% 14562.35

16.30% 15242.96

22.42%

4.67%

Model 1

B 6005.169

Std. rror 4804.760

Beta .930

1.69% 21067.56

6.78% 27241.11

22.96% 8731

29.30% 12043.39

55.56% 10915

37.94% 18030

23.37% 19078.17

65.19% 28319.21

25.16%

48.44%

Page 41

l
Standardi zed Coeffi ien ts t 1.250 7.163 Sig. .247 .000

4.34% 40111.54

-1.46% 42110.15

5.43% 51575.67

8.01% 46738.53

13.26% 56748.43

47.25% 14220.8

4.99% 19213.75

22.48% 29304.73

-9.38% 42548.11

21.42% 48789.56

18.08% 20253

35.11% 24057

52.47% 27861.42

45.19% 39364.89

14.67% 50873.7

12.33% 35032.02

18.78% 46932.5

15.81% 58833.06

41.29% 73835.46

29.24% 80456.32

23.70%

33.97%

25.36%

25.50%

8.97%

9.7 Table 2: Total Loans & Advances of Selected Private Commercial Banks

SL

Name of Banks 2000 2001 80016 2002 88959.8 2003 89312

Total Loans (in million Tk.) 2004 95920.8 2005 95404.3 2006 105870 2007 118494 2008 113362 2009 122236.2

Agrani Bank Ltd. Growth Dutchbangla Bank Ltd. Growth Standard Bank Ltd. Growth One bank Ltd. Growth Exim Bank ltd. Growth

77012.6

3.99% 8044.43 9391.6

11.18% 11431.3

0.40% 14976

7.40% 20349.4

-0.54% 28325.3

10.97% 28370

11.92% 41017

-4.33% 39425.1

7.83% 46572.54

16.75% 2308.53 3495.7

21.72% 4952.24

31% 7801

35.88% 10183.6

39.19% 12634.1

0.15% 16692

44.58% 25970

-3.88% 36723.3

18.13% 44736.54

41.66% 4392 5126

41.66% 6051

57.52% 9613

30.54% 13851

24.06% 15681

32.11% 19484

55.58% 23287

41.40% 32532.7

21.82% 42190.39

16.71% 8754.21 10432

18.04% 11324.6

58.86% 18006

44.08% 24668.3

13.21% 30567.1

24.25% 40703

19.52% 50839

39.70% 66898.2

29.68% 72654.35

19.16%

8.55%

58.99%

37.00%

23.91%

33.15%

24.90%

31.58%

8.60%

Page 42

9.8 Table 3: Marketing Expenses of Selected Private Commercial Banks

SL Name of Banks 2000 1 Agrani Bank Ltd. Growth Dutchbangla Bank Ltd. Growth Standard Bank Ltd. Growth One bank Ltd. Growth Exim Bank ltd. Growth 4.9 2001 3.6 2002 7.5 Total Marketing Expenses (in million Tk.) 2003 9.5 2004 7.5 2005 5.3 2006 5.5 2007 5.3 2008 10.3 2009 10.7

-26.53% 22.71 31.79

108.33% 27.95

26.66% 28.19

-21.05% 29.59

-29.33% 38.06

3.77% 31.23

-3.63% 36.89

94.33% 34.29

3.88% 38.24

39.98% 1.87 2.87

-12.07% 2.88

0.85% 4.3

4.96% 4.91

28.62% 11.59

-17.94% 8.91

18.12% 6.78

-7.04% 12.54

11.51% 14.78

53.47% 1.5 2.7

0.34% 5.42

49.30% 9.04

14.18% 12.75

136.04% 12.47

-23.12% 14.84

-23.90% 16.44

84.95% 19.01

17.86% 22.64

80% 5.71 5.93

100.74% 6.09

66.79% 6.8

41.03% 7.1

-2.19% 6.4

19.00% 10.64

10.78% 15.12

15.63% 26.72

19.09% 33.21

3.85%

2.69%

11.65%

4.41%

-9.85%

66.25%

42.10%

76.71%

24.28%

9.9 Table 4: Trend equation and r2 of Deposits, Loan and Marketing Expenses Trend equation, Yc= a+bx
DEPOSIT & MKT. EXP. r2 0.421 0.729 0.753 0.896 0.858 LOAN & MKT. EXP. r2 0.251 0.683 0.754 0.902 0.865

Name of Banks Agrani Bank Ltd. Dutch-bangla Bank Ltd. Standard Bank Ltd. One bank Ltd. Exim Bank ltd.

LOAN & DEPOSIT r 0.866 0.978 0.998 0.998 0.998

Page 43

9.10 Table 5: Correlation Matrix

CORRELATION AGRANI Bank Ltd. Standard Bank Ltd. EXIM Bank Ltd. ONE Bank Ltd. Dutch Bangla Bank Ltd. DEPOSIT & MKT. EXP. 0.926257294 0.867549388 0.926257294 0.946477972 0.853987998 LOAN & MKT. EXP. 0.93011725 0.868596356 0.93011725 0.949919545 0.826685991 LOAN & DEPOSIT 0.998898254 0.998898254 0.998898254 0.998933671 0.989111273

10.0 Performance Evaluation of Selected Private Commercial Banks of Bangladesh

10.1 Growth of Deposit of Selected Private Commercial Banks
Table 1 shows growth pattern of deposits of selected commercial banks. It is observed from the table that the deposit is highest in Agrani Bank Ltd. that is TK 166283.6 million in 2009. The growth percentage of One Bank Ltd.is highest that is 65.19% in 2004. In 2006 Growth percentage of Standard Bank Ltd. and EXIM Bank Ltd. is 37.94% and 48.44% in year 2004respectively. The lowest growth percentage of deposit is in Dutch Bangla Bank Ltd. that is-9.38% in 2008. During 2000 to 2009 every year deposit of Agrani Bank Ltd., Dutch Bangla Bank Ltd., Standard Bank Ltd., One Bank Ltd., and EXIM Bank Ltd. has increased from the previous yearexcept 2006 and 2008. So it is reflected from the table that the deposit of all the selected banks have showed an increasing trendduring the period of 2000-2009.

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10.2 Growth of Total Loans & Advances of Selected Private Commercial Banks
The growth pattern of total loan and advances of selected private commercial banks of Bangladesh are reflected from Table 2. It is reflected from the table that almost every years loan and advances of selected private commercial banks of Bangladesh has increased from the previous year. The growth of loan and advances is more than 10% in Agrani Bank Ltd., Dutch Bangla Bank Ltd., Standard Bank Ltd., One Bank Ltd. and EXIM Bank Ltd. The lowest growth observed in Dutch Bangla Bank Ltd. -3.88% in 2008.Trend Equations of Selected Private Commercial BanksTable 4show the summary of trend equation and r2 of LOAN & DEPOSITof selected private commercial banks. It is reflected from the table that trend equation of all the selected banks are positive and goodness of fit of all the equations are high i.e. more than 0.50. In case of Dutch Bangla Bank Ltd., Standard Bank Ltd., One Bank Ltd. and EXIM Bank Ltd. Its very high i.e. more than 0.90. Table 4 shows the summary of trend equation and r2 of DEPOSIT & MKT. EXP. of selected private commercial banks. It is reflected from thetable that the trend equation of all the selected banks are positive.Goodness of fit of all the selected banks ishigh i.e. more than 0.70 except Agrani Bank Ltd. Table 4show the summary trend equation and r2 of LOAN & MKT. EXP. of selected private commercial banks. It is reflected from the table that the trend equation of all the selected banks are positive and goodness of fit of all the selected private commercial banks are very high i.e. more than 0.60 except Agrani Bank Ltd.

10.3 Correlation Matrix of Deposit, Loan & Marketing expenses of Selected Private Commercial Banks
Table 5 show the correlation matrix for estimating interrelationships between chosen parameters ofDEPOSIT & MKT. EXP., LOAN & MKT. EXP.&LOAN & DEPOSITall the selectedprivate commercial banks. From the correlation matrix we have observed the followings; y Deposit has strong correlation with loans and marketing expenses. y Loans have strong correlation with deposit and marketing expenses. y Marketing expenses have strong correlation with deposit and loans.

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11.0 Conclusion (Major Findings) &Recommendation

The journey of Private commercial banks has started in Bangladesh in the year 1982-1983. After commencement the private commercial play a vital role in the economic development of the country. The selected private commercial banks create employment opportunities for more than thirty thousand people. It has been observed that the deposit amountof the selected private commercial banks have increased from the previous year during 2000 to 2009. It is alsoreflected from the analysis that the loans and advances given of all the selected commercial banks are very high during 2001 to 2007. It indicates the profitability of all the selected banks is quite satisfactory. Loans recovery rate indicated that the banks are able to manage their credit efficiently. Every year these banks open new branches. It seems that Agrani Bank Ltd., Dutch Bangla Bank Ltd., Standard Bank Ltd., One Bank Ltd. and EXIM Bank Ltd. are able to manage credit efficiently as a result recovery is quite good. Three trend equations have been tested for different activities of the private commercial banks. Among them the trend value of deposits, loans and marketing expenses are positive in case of all the selected banks. Square of correlation coefficient (r2) has also been tested for all trend equations. The r2of deposits, loans and marketing expenses is more than 0.5. It indicates the prospect of private commercial banks in Bangladesh is very bright. From the sequence of our analysis it is reflected that although the deposits, loans and marketing expenses of all the selected banks have showed an increasing trend during the period of 2000 to 2009, the total deposits of Dutch Bangla Bank Ltd., Standard Bank Ltd., One Bank Ltd. and EXIM Bank Ltd. are not satisfactory in comparison to Agrani Bank Ltd. So these banks need to increase their deposits. It has been identified that although almost every years loans and advances of selected private commercial banks have increased from the previous year, the growth rate of loans and advances is not satisfactory for Agrani Bank Ltd. So it should try to increase the growth rate. Agrani Bank Ltd.needs to increase its marketing expensesfor increasing deposits and loans. As the deposit, loans and marketing expenses of Agrani Bank Ltd. is fluctuating, the bank should try to keep it at a stable point. We are quite optimistic that if the given suggestions of this paper are implemented then the Banking sector may be able to overcome its present problems and may contribute in the rapid development of the economy of Bangladesh.

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12.0 Bibliography&References

1. Al Shammari, M., and Salimi, M. (1998). Modeling the operating efficiency of banks, A parametric methodology. Journal of Logistic Information Management, Vol. 11. 2. Avkiran, N. K. (1997). Models of retail performance for bank branches: predicting the level of key business drivers. International Journal of Bank Marketing, Vol. 15, No. 6. 3. Annual report (2000-2009) of Agrani Bank Ltd. 4. Annual report (2000-2009) of Dutch Bangla Bank Ltd. 5. Annual report (2000-2009) of Standard Bank Ltd. 6. Annual report (2000-2009) of One Bank Ltd. 7. Annual report (2000-2009) of EXIM Bank Ltd.

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