internship report

Internship Report

On

A Comparative Financial Performance Analysis

of Three Branches of National Bank Limited

Tapash Chandra Paul

BBA Program 2014 (17th Batch)

Roll: 35

Internship Report

On

A Comparative Financial Performance Analysis


Tapash Chandra Paul

BBA Program 2014 (17th Batch)

Roll: 35

Supervisor

Dr. Syed Golam Maola

Professor

Department of Management

Faculty of Business Studies

University of Dhaka

28th February, 201

iii

Executive Summary

This study aims at measuring and comparing the financial performance of three branches of

National Bank Limited in Bangladesh. In a competitive financial market bank performance is

very important because it provides signal to depositors and investors whether to invest or

withdraw funds from the bank. Similarly, it flashes direction to bank managers whether to

improve its deposit service or loan service or both to improve its finance. Regulator is also

interested to know for its regulation purposes. Specifically two objectives were pointed out in

these study as to analyze comparative branch financial performance among three branches in

the light of growth and profitability performance and evaluate comparative branch financial

performance among three branches in the light of employee performance.

For comparative branch performance analysis three branches are being selected. For the

organization part, much information has been collected both from the primary sources and as

well as from the secondary sources. The bank personnel usually don’t want to disclose all the

statistical information about their organization due to obvious reasons of scrutiny and

confidentiality. Time is another major limitations the duration of the program was 45 days only

and being a temporary member of the organization.

The emergence of National Bank Limited in the private sector was an important event in the

Banking arena of Bangladesh. When the nation was in the grip of severe recession, the

government took the farsighted decision to allow the private sector to revive the economy of

the country. Several dynamic entrepreneurs came forward for establishing a bank with a motto

to revitalize the economy of the country.

Among three branches Kaliakoir branch performed very well in term of collecting deposits. By

providing large amount of advances to import business, Bogra branch sanctioned excess loans

and advances from its budgeted ones. Kaliakoir branch achieved high growth rate profit among

three branches due to increase in interest received from loans and advances, increase in interest

received from IBTA and there was no interest paid on IBTA. Growth rate of per employee

deposit in Kaliakoir branch was high which was being meant high employee performance

comparison among three branches. Bogra branch was high employee performance in terms of

per employee advances. In terms of per employee profit-loss Kaliakoir branch was high

employee performance among three branches. Overall performance of Kaliakoir branch of

National Bank Limited was high among three branches in terms of growth and profitability

performance and employee performance of a branch. Bogra branch of NBL should give equal

focus on all schemes of deposit. On the other hand Pabna branch of NBL should give a good

attention regarding loan and advances sanction. Bogra branch should decrease its interest

payment on IBTA and operating expense in order to turn back increasing profit trends.

Employees of Bogra branch should more concentrate on their customer segments, markets,

product-use profiles and financial position of loan seeker in order to reduce loan loss.

However, National Bank Limited is a new generation Bank. It is committed to provide high

quality financial services or products to contribute to the growth of GDP of the country through

stimulating trade and commerce, accelerating the pace of industrialization, boosting up export,

creating employment opportunity for the educated youth, poverty alleviation, raising standard

of living of limited income group and overall sustainable socio-economic development of the

country.

iv

Letter of Transmittal

28th February, 2015


Professor

Department Of Management

University Of Dhaka

Sub: Submission of Internship Report.

Dear Sir,

I am glad to submit my internship report covering the topic “A Comparative Financial

Performance Analysis of Three Branches of National Bank Limited” after the completion

45 days internship program in National Bank Limited (Kaliakoir Branch, Gazipur).

This report is an integral part of the completion of the BBA program. For preparing this report

I tried my level best to accumulate relevant and up-to-date information from all available

sources. It is prepared on the primary and secondary data from different sources.

Recommendations are only subjective judgment of mine.

It is my sincere hope that you would find the report useful.

Sincerely Yours,

……………………..

Tapash Chandra Paul

BBA Program 2014

Roll No: 35

Section: A

Batch: 17th


University Of Dhaka

v

Declaration

I Tapash Chandra Paul, hereby declare that the presented report of internship named “A

Comparative Financial Performance Analysis of Three Branches of National Bank

Limited” is being prepared by me under the supervisor Dr. Syed Golam Maola, Professor,

Department Of Management, University Of Dhaka. No part of this report has been previously

submitted to any other University/ College/ Institution/ Organization for any academic

certificate/ degree/ diploma/ qualification.

I also conform that the report is only being prepared to meet my academic requirement not for

any other purpose. It will not act anything that will hamper Bank’s confidentiality and interests.

It might not be used with the interest of opposite bodies of National Bank Limited.

………………………..

(Tapash Chandra Paul)

vi

Supervisor’s Certificate

This is to certify that the internship report entitled “A Comparative Financial Performance

Analysis of Three Branches of National Bank Limited” has been prepared by Tapash

Chandra Paul as a partial fulfillment of the requirement of Bachelor of Business Administration

(BBA) degree from the Department of Management, University of Dhaka under my guidance

and supervision.

I wish him every success in life.

……………………………..


Professor


University Of Dhaka

vii

Acknowledgement

Giving all praise and honor to God for enabling me to complete my Internship report with good

and sound health within scheduled time. The successful accomplishment of this Internship

report is the outcome of the contribution and involvement of a number of people, especially

those who took the time to share their thoughtful guidance and suggestions to improve the

report. It’s difficult for me to thank all of those people who have contributed something to this

report. There are some special people who cannot go without mention.

First of all, I would like to thank our honorable academic supervisor Dr. Syed Golam Maola,

Professor, Department Of Management, University Of Dhaka. I am thankful to him for his

continuous support and supervision, suggestions and providing me with valuable information

that was very much needed for the completion of this presentation.

Then, I express my sincere gratitude Md Mahbub Anan Siddique, Senior Asst. Vice President,

National Bank Limited for giving me the opportunity, appointment for the Internship Program

that I have completed. Finally, I take this opportunity to show my profound gratitude to

Mohammad Ferdous Alam, Senior Executive Officer, Md. Liton Khan, Executive Officer, all

the Officers and staff members in National Bank Limited, Kaliakoir Branch, Gazipur for their

all-out co-operation by providing required information and enabling me to prepare my report

so informative. Without their help this report might not have been a comprehensive one.

(Tapash Chandra Paul)

viii

A Comparative Financial Performances Analysis


Table of Contents

Contents Page No.

Executive Summary iii

Letter of Transmittal iv

Declaration v

Supervisor’s Certificate vi

Acknowledgement vii

Chapter I

Introduction 1-3

1.1 Background of the Study

2

1.2 Objectives

2

1.3 Scope

3

1.4 Limitations

3

Chapter II

Methodology

4-6

2.1 Sources of Data 5

5

5

2.1.1 Primary Sources

2.1.2 Secondary Sources

2.2 Methods of Data Collection

6

2.3 Tools of Analysis

6

Chapter III

Organization Profile of NBL

7-12

3.1 A Brief History

8-9

3.2 Vision and Mission

9

3.3 Organogram

10-11

3.4 Products & Services

11

3.5 Conclusion

12

ix

Chapter IV

Corporate Financial Performance

13-19

4.1 Introduction 14

4.2 Highlights of corporate financial performance 15-19

4.2.1 Loans to Deposit Ratio (LDR) 16

4.2.2 Return on Assets (ROA) 17

4.2.3 Return on Equity (ROE) 18

4.2.4 Earnings Per Share (EPS)

19

4.3 Conclusion 19

Chapter V

Profile of Three Branches

20-24

5.1 Basic facts of three branches

21-23

5.2 Branch management organogram

24

5.3 Conclusion 24

Chapter VI

Analysis and Findings

25-35

6.1 Growth and profitability performance analysis of three

branches

6.1.1 Deposits

6.1.2 Advances

6.1.3 Profit / Loss

26-30

26-27

27-28

29-30

6.2 Employee efficiency performance analysis of three

branches

6.2.1 Per Employee Deposits

6.2.2 Per Employee Advances

6.2.3 Per Employee Profit / Loss

30-33

31

32

33

6.3 Manpower assessment of three branches

34

6.4 Conclusion 35

Chapter VII

Conclusion and Recommendations

36-38

7.1 Conclusion

37

7.2 Recommendations 38

Appendix

39-40

Appendix – I

39-40

References 41

2

Chapter I: Introduction

This study aims at measuring and comparing the financial performance of three branches along

with my internship placement Kaliakoir branch of National Bank Limited in Bangladesh

through extensive use of financial ratios that mainly indicate the growth and profitability

performance analysis and employee performance analysis.

The concept of financial performance and its measurement is well advanced within finance and

management fields. Generally, the financial performance of banks and other financial

institutions has been measured using a combination of financial ratios analysis, benchmarking,

measuring performance against budget or a mix of these methodologies (Avkiran, 1995).

Financial ratio analysis involves methods of calculating and interpreting financial ratios to

analyze and monitor firm’s performance. The basic inputs to ratio analysis are the firm’s

income statement and balance sheet. The study findings can be helpful for management of NBL

also for three branches of NBL to improve their financial performance and formulate policies

that will improve their performance in future.

1.1 Background of the Study

There is a far gap between theoretical knowledge and practical field. Internship program has

been launched mainly to bridge this gap. The internship is a part of the Bachelor Business

Administration (BBA) degree that provides the job experience to students. I was placed at

National Bank Limited, Kaliakoir Branch, Gazipur as an internee for 45 days duration.

The presented report of internship named “A Comparative Financial Performances Analysis of

Three Branches of National Bank Limited” is originated from the partial fulfillment of the

Bachelor Business Administration (BBA) degree conducted by the Department Of

Management, University Of Dhaka. During the internship program, I was under the faculty

supervisor Dr. Syed Golam Maola, Professor, Department Of Management, University Of

Dhaka and organizational supervisor Md. Liton Khan, Executive Officer, National Bank

Limited, Kaliakoir Branch, Gazipur.

1.2 Objectives

1.2.1 Broad Objective

The main objective of the report is to compare and analyze financial performance of three

branches of National Bank Limited.

1.2.2. Specific Objectives

The following specific objectives have been covered by this study:

to analyze comparative branch financial performance among three branches in the light

of growth and profitability performance.

to evaluate comparative branch financial performance among three branches in the light

of employee performance.

3

1.3 Scope

This particular subject is extremely extensive in nature. To evaluate comparative the financial

performance among three branches of National Bank Limited it is being required to three

branches as a whole. This report tried to concentrate only on the financial performance issues

while evaluation of the performance measures also requires some other considerations. The

study findings can be helpful for management of National bank ltd. always for branch manager

to improve their financial performance and formulate policies that will improve overall their

performance. The study also identified specific areas for bank to work on which can ensure

sustainable growth for these banks.

1.4 Limitations

Comparing and analyzing the broad performance of three branches of a bank are not that easy.

Moreover due to obvious reasons of scrutiny and confidentiality, the bank personnel usually

don’t want to disclose all the statistical information about their organization. Time is another

major limitation s the duration of the program was 45 days only and being a temporary member

of the organization, it was not possible on my part to notice or express some of the sensitive

issues and other aspects. However the some of the limitations I have face while preparing this

report are listed as follows:

Time Limitation: To complete the study, time was limited by 45 days. It was really

very short time to know details about an organization like National Bank Ltd.

Inadequate Data: Lack of available information about export & import business

operations of National Bank Ltd. Because of the unwillingness of the busy key persons,

necessary data collection became hard. The employees are extremely busy to perform

their duty.

Lack of Record: Large-scale study was not possible due to constrains and restrictions

posed by the organization. Unavailability of sufficient written documents as required

making a comprehensive study. In many cases up-to-date information was not

available.

5

Chapter II: Methodology

While conducting the study, sources were explored for primary information and data. But

hardly any updated data could be found. In the absence of updated information or data

dependence on secondary data has been inevitable. However, whenever possible primary data

has been used. Data were also collected by interviewing the responsible officers and from some

documents & statements printed by the National Bank Limited. Personnel of Kaliakoir Branch,

National Bank Limited also helped me in collecting data providing books and Bank’s annual

report.

2.1 Sources of Data

The following sources have been used for the purpose of gathering and collecting data as

required.

2.1.1 Primary sources of data

Collecting data directly from the practical field is called primary source of data. Sources of

Primary data are follows:

a) Face to face conversation with respective officers of the NBL.

b) Personal interview with respective officers of the NBL.

c) Practical experience gained during internship period

2.1.2 Secondary sources of data

Collecting data indirectly from the practical field is called Secondary data. Sources of

Secondary data are follows:

a) Annual reports (2009-13) of NBL

b) Brochures, manuals and publication of the NBL

c) Branch highlights report (2013 and 2014) of Kaliakoir branch, Pabna branch and Bogra

branch of NBL

d) Website of NBL

e) Selected books.

6

2.2 Methods of Data Collection

The following methods have been used for the purpose of gathering and collecting data as

required.

2.2.1 Interview method:

The face-to-face informal interview was taken for collecting primary data. Manger and officers

of Kaliakoir branch were mainly interviewed by me.

2.2.2 Record review:

As part of the requirement analysis, some current and previous documents and brochures

related to branch financial information had been reviewed.

2.2.3 Discussion:

Formal and informal discussion with the manger and officers of Kaliakoir branch, NBL were

held to gather information of the current work procedures.

2.3 Tools of Analysis

This is a descriptive report mainly aiming to evaluate financial performance three selected

branches of NBL in the term of growth and profitability performance and employee

performance. The data gathered from both primary and secondary sources were arranged

orderly to get a clear picture of three branches financial performance of NBL. To evaluate and

analyze the financial performance mainly trend analysis and ratio analysis technique are being

used.

a) Trend analysis: It is really important to analysis trends in ratios as well as their absolute

levels. This analysis informs us whether a company’s financial condition improving or

deteriorating.

b) Ratio analysis: Ratio analysis tools are used to analyze the gathered data with the help

of computer software Microsoft Excel.

c) Tables/boxes: Several tables/boxes had been used to display and analyze multiple set

of variation in data over years.

d) Charts: Several charts had been used to display and analyze the trends and ratio

analysis of data. Several charts had been used such as Clustered column, 3D- Clustered

column, Stacked Line, Line with Markers, Stacked Line with Markers.

8

Chapter III: Organization Profile of National Bank Limited

3.1 A Brief History

National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the

private sector. From the very inception, it was the firm determination of National Bank Limited

to play a vital role in the national economy. We are determined to bring back the long forgotten

taste of banking services and flavors. We want to serve each one promptly and with a sense of

dedication and dignity. The then President of the People's Republic of Bangladesh Justice

Ahsanuddin Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch

at 48, Dilkusha Commercial Area, Dhaka started commercial operation on March 23, 1983.

The 2nd Branch was opened on 11th May 1983 at Khatungonj, Chittagong.

At present, NBL has been carrying on business through its 179 branches & Agri Branches

spread all over the country. Since the very beginning, the bank has exerted much emphasis on

overseas operations and handled a sizable quantum of home bound foreign remittance. It has

drawing arrangements with 415 correspondents in 75 countries of the world, as well as with 37

overseas Exchange Companies located in 13 countries. NBL was the first domestic bank to

establish agency arrangements with the world famous Western Union in order to facilitate

quick and safe remittance of the valuable foreign exchanges earned by the expatriate

Bangladeshi nationals.

NBL was also the first among domestic banks to introduce international Master Card in

Bangladesh. In the meantime, NBL has also introduced the Visa Card and Power Card. The

Bank has in its use the latest information technology services of SWIFT and REUTERS. NBL

has been continuing its small credit program for disbursement of collateral free agricultural

loans among the poor farmers of Barindra area in Rajshahi district for improving their

livelihood. National Bank, has now acquired strength and expertise to support the banking

needs of the foreign investors. NBL stepped into a new arena of business and opened its Off

Shore Banking Unit at Mohakhali to serve the wage earners and the foreign investors better

than before.

Since its inception, the bank was aware of complying with Corporate Social Responsibility. In

this direction, we have remained associated with the development of education, healthcare and

have sponsored sporting and cultural activities. During times of natural disasters like floods,

cyclones, landslides, we have extended our hand to mitigate the sufferings of victims. It

established the National Bank Foundation in 1989 to remain involved with social welfare

activities. The foundation runs the NBL Public School & College at Moghbazar where present

enrolment is 1140. Besides awarding scholarship to the meritorious children of the employees,

the bank has also extended financial support for their education. It also provided financial

9

assistance to the Asiatic Society of Bangladesh at the time of their publication of Banglapedia

and observance of 400 years of Dhaka City.

3.2 Vision and Mission

3.2.1 Vision

Ensuring highest standard of clientele services through best application of latest information

technology, making due contribution to the national economy and establishing ourselves firmly

at home and abroad as a front ranking bank of the country are our cherished vision.

3.2.2 Mission

Efforts for expansion of our activities at home and abroad by adding new dimensions to our

banking services are being continued unabated. Alongside, we are also putting highest priority

in ensuring transparency, account ability, improved clientele service as well as to our

commitment to serve the society through which we want to get closer and closer to the people

of all strata. Winning an everlasting seat in the hearts of the people as a caring companion in

uplifting the national economic standard through continuous up gradation and diversification

of our clientele services in line with national and international requirements is the desired goal

we want to reach.

10

3.3 Organogram

Source: NBL Booklets

Sponsor Directors

Managing

Director

Committees

Executive Committee

Audit Committee

Management Committee

Risk Management

Committee

Asset Liability Management

Committee

EVP

VP VP

Public relation

AVP, NBL Train. Ins

AVP, admin

EVP EVP EVP

SVP SVP

Loan &

Recovery

DMD Admin

Establishment

EVP

DMD

Operator

SVP

AVP

AVP AVP

AVP

AVP

AVP

AVP

AVP

AVP

SVP

AVP

AVP

VP

Computer

VP

EVP

AVP Establish

AVP

AVP Develop

Board of Directors

11

Sponsor Directors of NBL consists of 18 members. Board of Directors of NBL consists of 15

members where 1 Chairman, 10 Directors, 3 Independent Directors, and 1 Managing

Director. There are five committees who conduct whole operations of NBL. These

committees are 8 members of Executive Committee, 3 members of Audit Committee, 27

members of Management Committee, 3 members of Risk Management Committee and 7

members of Asset Liability Management Committee.

3.4 Products & Services

National Bank Limited offers different types of Corporate and Personal Banking Services

involving all segments of the society within the purview of the rules and regulations as laid

down by the Central Bank and other Regulatory Authorities. Following products and services

are offered by NBL:

Table 3.4: Products and Services offered by NBL

Deposit Products

Savings deposit

Current deposit

Term deposit

Foreign currency deposit

Monthly saving scheme

Monthly income scheme

Double benefit scheme

Millionaire income scheme

Credit products

Overdraft

Lease financing

House building

Small medium enterprise

Consumer credit scheme

Trade finance

Credit & Debit cards

Gold International

Gold Local

Silver International

Silver Local

Power Card

12

3.5 Conclusion:

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. The members of the board of directors

are creative businessmen and leading industrialists of the country. To keep pace with time and

in harmony with national and international economic activities and for rendering all modern

services, NBL, as a financial institution, automated all its branches with computer networks in

accordance with the competitive commercial demand of time. Moreover, considering its fourth-

coming future, the infrastructure of the Bank has been rearranging. The expectation of all class

businessmen, entrepreneurs and general public is much more to NBL. At present we have 179

branches under our branch network. In addition, our 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.

14

Chapter IV: Corporate Financial Performance

4.1 Introduction

A corporation's operating performance is frequently measured using accounting ratios such as

return on sales and return on investment. These ratios provide a great deal of information about

a firm's financial performance of by means of comparisons with prior years' performance and

with other companies in the same industry. Nevertheless, there are limitations to the use of

these measures. One is that financial ratios may fail to consider the value of management's

actions and investment decisions taken with the intent of affecting future as opposed to current

performance. For example, a business that defers such things as maintenance and research and

development can appear to be performing well based on accounting ratios even though these

actions may impair the future performance of the business. Another limitation is that

accounting ratios aggregate many aspects of performance such as financing, marketing, and

production.

A firm may appear to be performing well even if it is poorly managed on certain of these

dimensions as long as it compensates by performing particularly well on other dimensions.

Financial performance analysis of a company is very important to get an overall view about an

organization. It generally consists of interpretation of balance sheet and interpretation of

income statement. By using these two sources one can perform the ratio analysis and trend

analysis which are the major tools for analyzing the financial performance of a bank. National

Bank Limited (NBL) setting new standards in the banking arena in the time of turbulent

economic conditions. As part of the long term financial reform and modernization plan of the

government, the bank had been converted into a public limited company.

15

4.2 Highlights of corporate financial performance

(Tk. in million)

Particulars 2009 2010 2011 2012 2013

Income statement

Interest income 7006.63 9616.14 14434.75 19103.18 18934.86

Interest expenses 4490.34 5577.09 9188.82 13679.66 16166.14

Profit before taxes and

provision

3397.69 8940.60 9591.94 3725.20 3539.91

Net Profit after taxation 2070.47 6860.34 6085.70 1487.91 2116.59

Balance Sheet

Authorized capital 7450.00 17500.00 17500.00 17500.00 17500.00

Paid-up Capital 2846.54 4412.13 8603.65 14196.03 14196.03

Reserve Funds & surplus 6070.22 14693.47 12918.92 8178.24 9733.61

Total Shareholders’ equity 8916.76 19105.60 21522.57 22374.27 23929.64

Total Deposits 76834.13 102471.83 128215.97 157331.73 193642.97

Total Loans and Advances 65129.29 92003.56 115388.89 126169.79 151098.98

Investment 12315.20 24993.32 30334.63 54326.46 56827.52

Total Assets 91931.63 134732.31 169037.38 205207.33 235173.80

Foreign exchange Business

Import 77539.77 96442.57 104570.90 94137.40 113492.00

Export 38398.85 47812.47 60893.90 69062.90 75912.41

Remittance 44381.50 49145.30 54469.40 66513.90 58224.10

Regulatory and Capital

Measures

Total Capital (Tier-I+II) 9124.62 19190.79 24905.13 26460.36 27705.46

Total Risk Weighted

Assets

105986.20 156148.60 196812.10 206732.40 236911.20

Total Capital adequacy

ratio

8.61% 12.29% 12.65% 12.80% 11.69%

Credit Quality

Percentage of Classified

Loans against total Loans

and Advances

5.96% 3.96% 2.83% 4.32% 3.24%

Operating Performance

Advance Deposit ratio 84.77% 89.78% 90.00% 80.19% 78.03%

Cost of Funds 6.45% 6.52% 7.29% 8.75% 8.81%

ROA 2.52% 6.05% 4.01% 0.80% 0.96%

ROE 27.53 48.96% 29.96 6.78 9.14

No of shares

outstanding(million)

284.65 441.21 860.37 1419.60 1419.60

EPS 4.69 7.97 4.29 1.05 1.49

Market Price per Share 64.63 191.60 66.80 22.10 11.80

Price Earnings Ratio

(Times)

13.78 24.04 15.88 21.05 7.92

Rating

Long term A1 AA3 AA2 AA- AA-

Short term ST-2 ST-1 ST-1 ST-1 ST-2

16

Financial performance analysis of NBL consists of interpretation of balance sheet and

interpretation of income statement. Only four indicators loans to deposits ratio, returns on

assets, returns on equity and earning per share are mainly interpreted in this study. These are

interpreted in below:

4.2.1 Loans to deposits Ratio (LDR)1

Loan to deposit is the most important ratio to measure the liquidity condition of the bank. Here,

loan means the advances for the conventional banks. Bank with Low LDR is considered to

have excessive liquidity, potentially lower profits, and hence less risk as compared to the bank

with high LDR. However, high LDR indicates that a bank has taken more financial stress by

making excessive loans and also shows risk that to meet depositors’ claims bank may have to

sell some loans at loss. A high figure denotes lower liquidity.

Figure 4.2.1 Loans to Deposit Ratio (LDR) trends

In perspective of bank total deposits percentage of total loans calculate. Higher the ratio means

less liquid and taking more risk. So bank has to maintain certain ratio for following the central

bank policy and keep sustainable position in the competitive market. Bank total loan against

deposit was 90% in 2011 which reached highest point around this period and minimum 78.03%

in year 2013. Lower rate of ratio means more liquidity of bank. According to above graph

indicate that is NBL current LDR well consistent compare previous years. Liquidity position

of this bank improved the ratio that refers bank has more liquidity than other time compare to

present.

1 Loans to deposit Ratio (LDR) = Total Loans

Total deposits

84.77%

89.78% 90.00%

80.19%

78.03%

72.00%

74.00%

76.00%

78.00%

80.00%

82.00%

84.00%

86.00%

88.00%

90.00%

92.00%

2009 2010 2011 2012 2013

Loans To Deposit Ratio (LDR)

17

4.2.2 Return on Assets (ROA)2

The return on assets ratio, often called the return on total assets, is a profitability ratio that

measures the net income produced by total assets during a period by comparing net income to

the average total assets. Return on Assets (ROA) shows the ability of management to acquire

deposits at a reasonable cost and invest them in profitable investments (Ahmed, 1995).

Generally, a higher ratio means better managerial performance and efficient utilization of the

assets of the firm and lower ratio is the indicator of inefficient use of assets. ROA can be

increased by Banks either by increasing profit margins or asset turnover but they can’t do it

simultaneously because of competition and trade-off between turnover and margin. So bank

maintain higher ROA will make more the profit.

1.

Figure 4.2.2: Return on Assets (ROA) trends

Last year was another challenging year for the banking sector if we are compare to 2009-2011.

During the year average interest margin has decreased due to bank investment of fund to the

low yield and government securities. With expansion of business, asset profile of the bank also

increased gradually. Total asset of bank grew up 14.60% at December 2013 against last year.

The significant increase in asset was mainly achieved due to rise in loan and advance,

investment, cash and balance with other bank and institutions. This factor is effecting the

calculation of ROA. NBL performs most effectively in 2010. But in last year there some hope

that it will try to reach previous position. It indicates that total asset of the bank increased but

net profit did not increase with the assets. This shows the management inefficiency in using

the bank asset to generate profit.

2 ROA = Net Income after Provision & Tax

Total assets

2.52%

5.09%

3.60%

0.73% 0.90%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2009 2010 2011 2012 2013

Return on Assets (ROA)

18

4.2.3 Return on Equity (ROE)3

The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to

generate profits from its shareholders investments in the company. In other words, the return

on equity ratio shows how much profit each dollar of common stockholders' equity generates.

So a return on 1 means that every dollar of common stockholders' equity generates 1 dollar of

net income. This is an important measurement for potential investors because they want to see

how efficiently a company will use their money to generate net income. ROE is also an

indicator of how effective management is at using equity financing to fund operations and grow

the company.

Figure 4.2.3: Return on equity (ROE) trends

Lower ROE in 2012 was 6.65%., if we compare to last 5 year ROE. The earnings per share

was Tk. 1.49 in 2013 increasing 41.90% over Tk. 1.05 previous year. In graph ROE reached

highest point 35.91% at 2010 than its getting lower towards. NBL earn maximum ROE 35.91%

in 2010 and minimum 6.65% in 2012. In accordance with prudent capital structure plan, the

bank has a consistent dividend policy. In addition NBL declared high stock dividend as and

when possible to strengthen the capital base. Bank current ROE position need to change if we

compare to last 5 years except of 2012. So the management should work hard to increase the

return associated with equity.

3ROE= Net Income after Provision & Tax

Total Shareholders’ equity

23.22%

35.91%

28.28%

6.65%8.85%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

2009 2010 2011 2012 2013

Return on Equity (ROE)

19

4.2.4 Earnings Per share4

Earnings per share (EPS) measures the profit available to equity shareholders on a per share

basis, that is, the amount that they can get on every share held (Khan & Jain, 2007). This ratio

is usually used to find out the operating efficiency of the firm against its‟ total number of share

outstanding. The EPS of the banks in the last 5 years are as follows:

Figure 4.2.4: Earnings per Share (Tk.) trends

Higher EPS in 2010 was 15.55 (Tk.), if we compare to last 5 year EPS of National Bank

Limited because of achieving high profit after tax 6860.34 (Tk. in million) though opening 14

new branches and appointing 482 new employees in 2010 according to plan for bank

expansions. The numbers of shares outstanding share was gradually increased over last 5 year.

But net profit after tax was gradually decreased and increased by one year after. Operating

efficiency of National Bank Limited in the formed of the earnings of the firm against its each

share or stock was continuously poor. Earnings per share of NBL should be increase to attract

investors.

4.3 Conclusion

NBL helps to mobilize the resources to stay strong in the key areas of operation. In the areas

of treasury operation, NBL remains the key player in the country’s foreign exchange and

money market enhancing profitability through careful pricing and assessment of risk and return

on investment, the treasury dealing is being strengthened to facilitate transactions requiring

more sophisticated products and services for larger institutional and corporate clients. Though

it has a wide range of network and confidence from the customers but it has some problems

those problems reduce it income.

4 EPS = Net Profit after tax

No of shares outstanding

7.17

15.55

7.07

1.05 1.49

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

2009 2010 2011 2012 2013

Earnings Per Share (Tk. )

21

Chapter V: Profile of Three Branches

5.1 Basic facts of three branches

For comparative branch performance analysis three branches are being selected along with my

internship placement. Basic facts of these three branches are given in the below:

5.1.1 Kaliakoir Branch

Opening of Kaliakoir Branch was 2007. At present a senior executive officer is in-charge.

Total number of employees are 20.

Financial Information

(Tk. in million)

Sl Particulars 31.12.2013 31.12.2014

1 Interest Received from loans and advances 40.48 64.45

2 Interest Received from IBTA 145.88 146.23

3 Total Interest Received (1+2) 186.36 210.69

4 Interest Paid on deposit 121.70 138.34

5 Interest Paid on IBTA - -

6 Total Interest Paid (4+5) 121.70 138.34

7 Net Interest Income (3-6) 64.66 72.35

8 Non-Interest Income 6.38 5.43

9 Operating Income (7+8) 71.04 77.78

10 Operating Expense 13.52 14.98

11 Profit/(Loss) (9-10) 57.53 62.799

12 Total Income (3+8) 192.74 216.12

13 Total Expenditure (6+10) 135.22 153.32

14 Employee Expenditure 7.97 8.40

15 Average Advance 235.90 389.46

16 Average Deposit 1379.71 1674.02

17 Average High Cost Deposit 1025.87 1277.02

18 Average Bills Payable 10.34 23.86

19 Number of Average Voucher 1376 2580

20 Number of Employee 20 20

22

5.1.2 Bogra Branch

Opening of Bogra Branch was 1984. At present a senior vice president is in-charge. Total

number of employees are 34.


(Tk. in million)

Sl. Particulars 31.12.2013 31.12.2014

1. Interest Received from loans and advances 185.82 312.38

2. Interest Received from IBTA -

3. Total Interest Received (1+2) 192.12 312.38

4. Interest Paid on deposit 95.95 90.04

5. Interest Paid on IBTA 21.40 114.27

6. Total Interest Paid (4+5) 117.35 204.31

7. Net Interest Income (3-6) 74.77 108.07

8. Non-Interest Income 15.49 14.61

9. Operating Income (7+8) 90.26 122.67


11 Profit/(Loss) (9-10) 63.41 8.74

12 Total Income (3+8) 207.61 326.98






18. Average Bills Payable 14.22 27.30

19. Number of Average Voucher 1450 1550

20. Number of Employee 33 34

23

5.1.3 Pabna Branch

Opening of Pabna Branch was 1988. At present a vice president is in-charge. Total number of

employees are 24.


(Tk. in million)

Sl Particulars 31.12.2013 31.12.2014

1 Interest Received from loans and advances 44.82 39.29

2 Interest Received from IBTA 101.70 105.69

3 Total Interest Received (1+2) 146.53 144.99

4 Interest Paid on deposit 95.66 103.47

5 Interest Paid on IBTA - -

6 Total Interest Paid (4+5) 95.66 103.47

7 Net Interest Income (3-6) 50.87 41.52

8 Non-Interest Income 6.91 4.25

9 Operating Income (7+8) 57.78 45.77


11 Profit/(Loss) (9-10) 40.80 27.30

12 Total Income (3+8) 153.44 149.24






18 Average Bills Payable 16.23 22.98

19 Number of Average Voucher 1468 1572

20 Number of Employee 24 23

24

5.2 Branch management organogram

All the branches are followed almost same branch management organogram. The main

functions of NBL branches are divided into five parts. These are (a)cash division, ( b)clearing,

bills and remittance division, (c)deposit division, (d)accounts division and (e) advance division.

Some branch has a separate remittance division.

Figure 5.2: Branch management organogram

5.3 Conclusion:

At present, NBL has been carrying on business through its 179 branches & Agri Branches

spread all over the country. Since the very beginning, the bank has exerted much emphasis on

overseas operations and handled a sizable quantum of home bound foreign remittance. It has

drawing arrangements with 415 correspondents in 75 countries of the world, as well as with 37

overseas Exchange Companies located in 13 countries.

2nd Man Branch In-Charge

General Banking

Deposit

Advance

Cash Accounts

Branch In-Charge

Accounts

Clearing, Bills

& Remittance:

26

Chapter VI: Analysis and Findings

6.1 Growth and profitability performance analysis of three branches

Three financial indicators are being used to compare and analyze growth performance among

three branches. These are growth rate of deposit collection, growth rate of sanctioning loans

and advances and growth rate of profit-loss.

6.1.1 Deposits

A strong deposit base is necessary for the success of a bank. Bank deposit account is an

arrangement with a bank that allows the customer to pay take out money. The bank keeps a

record of all the payment and deposits (transaction) in the customer’s name. It binds the banker

and the customer into a contractual relationship. Using an account, a customer may deposits

and withdrawals of money from his/her account. It is also called the primary and fiduciary

relationship between bank and customer. Opening deposit account with a bank is the way of

creating banker relationship.

Table 6.1.1: Deposit collection (Tk. in million)

Particulars

2013

2014

Average

Budget

Actual

(31.12.13)

Budget

Actual

(31.12.14)

Budget

Achievement

Pabna Branch

1200.00

1187.09

1450.00

1344.03

95.81%

Bogra Branch

1300.00

1159.71

1430.00

1199.88

86.56%

Kaliakoir Branch

1600.00

1600.28

2000.00

1861.71

96.56%

Source: Branches inspection report of NBL

During the year 2013-2014 National Bank Limited mobilized a substantial amount of deposits

from mid-level income group people under Deposits Savings Scheme. In 2013 Pabna branch

achieved 98.93% of its budgeted deposit collection, Bogra branch achieved 89.21% of its

budgeted deposit collection and Kaliakoir branch achieved 100.02% of its budgeted deposit

collection. In 2014 Pabna branch achieved 92.69% of its budgeted deposit collection, Bogra

branch achieved 83.91% of its budgeted deposit collection and Kaliakoir branch achieved

93.09% of its budgeted deposit collection.

27

Budgeted deposit collection is high for the newly opening branch than the old branch of NBL.

Budgeted deposit collection was high for Kaliakoir branch than other two branches. And it

performed very well in close to achieve it budgeted deposit.

Figure 6.1.1 Branches deposit collection

All deposits aren’t the same. Banks can tailor product and sales strategies when they know their

customers’ rate sensitivity and deposit stickiness. Three branches of national banks that use

advanced elasticity-based pricing models discover differences in rate sensitivity and

competitive conditions. Those differences reveal themselves across customer segments,

markets, product-use profiles and balance levels. Kaliakoir branch can be treated as benchmark

for Pabna and Bogra branch in terms of deposit collection growth.

6.1.2 Advances

In evaluating the performance of a banking institution, it is important to assess the extent to

which clients have availed of institutional credit. The Bank’s Loans and Advances portfolio

also indicates an impressive growth. A major source of bank failures has been irrecoverable

loans that were made to related companies or individuals. Loans to affiliated companies,

shareholders or directors are not always made on a strictly commercial basis and represent a

potential source of impairment of the bank's capital.

0

500

1000

1500

2000

2013 2014

Tk. i

n m

illio

n

Deposits

Pabna Branch Bogra Branch Kaliakoir Branch

28

Table 6.1.2: Advances (Tk. in million)

Particulars

2013

2014

Average

Budget

Actual

(31.12.13)

Budget

Actual

(31.12.14)

Budget

achievement

Pabna Branch 450.00 262.38 400.00 326.28 69.94%

Bogra Branch 1500.00 1489.60 1900.00 2832.73 124.2%

Kaliakoir Branch 260.00 339.23 450.00 480.90 118.67%


In 2013 Pabna branch achieved 58.31% of its budgeted loan and advance, Bogra branch

achieved 99.31% of its budgeted loan and advance and Kaliakoir branch achieved 130.47% of

its budgeted loan and advance. In 2014 Pabna branch achieved 81.57% of its budgeted loan

and advance, Bogra branch achieved 149.09% of its budgeted loan and advance and Kaliakoir

branch achieved 106.87% of its budgeted loan and advance. In 2014 Pabna branch achieved

81.57% of its budgeted loan and advance but its budgeted loans was reduced due to growth of

import loan decreased.

Figure 6.1.2: Branches advance

Bogra branch was closed to achieve its budgeted loan and advance target in the year 2013. But

in the year 2014 Bogra branch sanctioned excess from its budgeted loan and advance because

of providing a large amount of loan to import business. On the other hand growth rate of loan

and advance increased in Kaliakoir branch due to providing loan to the industrial sectors

especially Ready-made-garment’s (RMG). Bogra branch can be treated as benchmark for

Pabna and Kaliakoir branch in terms of sanctioning loans and advances growth.

0.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

2013 2014

Tk. In

mil

lio

n

Advances


29

6.1.3 Profit / Loss

The most common measure of bank branch performance is profitability performance.

Generally, accounting profits are the difference between revenues and costs. Profitability is

considered to be the most difficult attributes of a firm to conceptualize and to measure. These

ratios are used to assess the ability of the business to generate earnings in comparison with its

all expenses and other relevant costs during a specific time period.

More specifically, these ratios indicate firm’s profitability after taking account of all expenses

and income taxes, the efficiency of operations, firm pricing policies, profitability on assets and

to shareholders of the firm Profitability ratios are generally considered to be the basic bank

financial ratio in order to evaluate how well bank is performing in terms of profit. For the most

part, if a profitability ratio is relatively higher as compared to the competitor(s), industry

averages, guidelines, or previous years’ same ratios, then it is taken as indicator of better

performance of the bank. Study applies these criteria to judge the profitability of the National

banks Limited.

Table 6.1.3: Profit-Loss (Tk. in million)

Particulars

2013

2014

Average

Budget

Actual

(31.12.13)

Budget

Actual

(31.12.14)

Budget

achievement

Pabna Branch 59.00 40.80 50.00 27.30 61.88%

Bogra Branch 60.00 63.41 80.00 8.74 58.32%

Kaliakoir Branch 57.50 57.52 75.00 62.80 91.88%


In 2013 Pabna branch achieved 69.15% of its budgeted profits, Bogra branch achieved

105.68% of its budgeted profits and Kaliakoir branch achieved 100.03% of its budgeted profits.

In 2014 Pabna branch achieved 54.60% of its budgeted profits, Bogra branch achieved 10.96%

of its budgeted profits and Kaliakoir branch achieved 83.73% of its budgeted profits.

Growth rate of profit decreased in Pabna branch due to increase in interest paid on deposit from

95.66(tk. in million) to 103.47 (tk. in million), increase in operating expense from 16.98 (tk.

in million) to 18.46 (tk. in million), increase in employee expenditure from 11.81 (tk. in

million) to 12.97 (tk. in million), and decrease in interest received from loans and advances

from 44.82 (tk. in million) to 39.29 (tk. in million), decrease in non-interest income from 6.91

(tk. in million) to 4.25 (tk. in million).

30

Figure 6.1.3: Profit-Loss

Profit Growth rate decreased in Bogra branch because of increasing interest paid on IBTA from

21.40 (tk. in million) to 114.27 (tk. in million) and increasing of operating expense from

26.85 (tk. in million) to 113.93 (tk. in million). Growth rate of profit increased in Kaliakoir

branch due to increase in interest received from loans and advances from 40.48 (tk. in million)

to 64.45(tk. in million), increase in interest received from IBTA from 145.88 (tk. in million) to

146.23 (tk. in million) and there was no interest paid on IBTA. In term of high growth rate of

profit Kaliakoir branch can be treated as benchmark for Pabna and Bogra branch.

6.2 Employee Performance Analysis of the Selected Branches

Ratio analysis is a method of interpreting the financial statements of a branch. A single ratio

by itself is not of much use (Kevin, 2009). Three financial ratio are being used to compare and

analyze employee performance among three branches. These are per employee deposit

collection, per employee sanctioning loans and advances and per employee profit-loss.

0

10

20

30

40

50

60

70

2013 2014

Tk. in

mil

lio

nProfit / Loss


31

6.2.1 Per Employee Deposit 5

It is the main component of the liability side of the balance sheet of a bank. Interest is to be

paid on the deposits received from the public and the other parties. Interest paid constitutes the

major part of the total expenditure of a commercial bank. This ratio has been computed by

dividing the amount of total deposits by the number of employees in the bank.

Figure 6.2.1: Per Employee Deposit

In Pabna branch the trend wise growth rate has shown an increasing trend 18.16 % per

employee deposit in general as shown in the above graph and in absolute terms from 49.46 (tk.

in million) per employee deposit to 58.44 (tk. in million) per employee deposit. In Bogra

branch the trend wise growth rate has shown an increasing trend 0.40 % per employee deposit

in general as shown in the above graph and in absolute terms from 35.15 (tk. in million) per

employee deposit to 35.29 (tk. in million) per employee deposit.

And in Kaliakoir Branch the trend wise growth rate has shown an increasing trend 16.35 % per

employee deposit in general as shown in the above graph and in absolute terms from 80.01 (tk.

in million) per employee deposit to 93.09 (tk. in million) per employee deposit. Comparing

among three branches growth rate of per employee deposit in Pabna Branch was high means

as high employee performance.

5 Per Employee Deposit=

𝐓𝐨𝐭𝐚𝐥 𝐃𝐞𝐩𝐨𝐬𝐢𝐭

𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐄𝐦𝐩𝐥𝐨𝐲𝐞𝐞

49.4658.44

35.15 35.29

80.0193.09

0.00

50.00

100.00

2013 2014

Tk. i

n m

illio

n

Per Employee Deposit

Pabna Bogra Kaliakoir

32

6.2.2 Per Employee Advance 6

The main earning of a commercial bank is from the advances provided to the private and the

industry. Ultimately, the interest is to be earned from this major factor only. Interest constitutes

the main part of the total income of the commercial bank. This ratio has been computed by

dividing the amount of total advances by the number of employees in the bank.

Figure 6.2.2 Per Employee Advance

In Pabna Branch the ratio has shown an upward trend (in absolute terms) 10.93 (Tk. in million)

per employee to 14.19 (Tk. in million) per employee in general as shown in graph and banks

has 29.83 % the trend wise growth rate for the period 2013-2014. In Bogra Branch the ratio

has shown an upward trend (in absolute terms) 45.14 (Tk. in million) per employee to 83.03

(Tk. in million) per employee in general as shown in graph and banks has 83.94% the trend

wise growth rate for the period 2013-2014.

In Kaliakoir Branch the ratio has shown an upward trend (in absolute terms) 16.96 (Tk. in

million) per employee to 24.05 (Tk. in million) per employee in general as shown in graph

and banks has 41.80% the trend wise growth rate for the period 2013-2014. Comparing among

three branches trend wise growth rate of per employee advance in Bogra Branch was high

means as high employee efficiency performance.

6 Per Employee Advance =

Total Advance

Number of Employee

10.9314.19

45.14

83.03

16.96

24.05

2013 2014

Tk. I

n m

illio

n

Per Employee Advance


33

6.2.3 Per Employee Profit/ Loss7

Below graph deals with profit per employee which is calculated by profit divided by no. of

employees. Every business exists in order to earn profit. Without profit no commercial activity

can sustain for a long period. Similarly, profit earning has become the main motive of

commercial banks operating in India. Profit earning and timely growth in the profit earning is

an essential feature for the continued success of a bank.

Figure 6.2.3 Per Employee Profit/ Loss

An analysis of data on the basis of percentage growth rate per employee profit-loss over the

base year shows that the maximum-minimum percentage growth rate was recorded in 2013 to

2014 respectively Pabna branch (-30 %) in 2014, Bogra branch (-86.46%) in 2014 and

Kaliakoir branch (9.03%) in 2014. In terms of per employee profit-loss Kaliakoir branch was

high employee efficiency performance among three branches.

7 Per Employee Profit/ Loss =

Net Profit/ Loss

Number of Employee

1.70

1.19

1.92

0.26

2.883.14

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2013 2014

Tk. I

n m

illio

n

Per Employee Profit/ Loss


34

6.3 Manpower assessment

The grade wise position of manpower of the branch in the period 2014 is appended below

Table 6.3: Manpower assessment among branches

Branch Pabna Branch Bogra Branch Kaliakoir Branch

Branch In-Charge (Grade) Vice President Sr. Vice President Senior Executive

Officer

Number of Employee 23 34 20

Excess (short) of Employee (2) 7 (5)

The grade wise position of branch in-charge in Pabna branch is vice president whereas in Bogra

branch is senior vice president and in Kaliakoir branch is senior executive officer. In terms of

the grade wise position of Branch Pabna branch is high branch weight than other two branches.

Figure 6.3: Manpower Assessment

In the manpower assessment among three branches it is found that Pabna branch requires 2

more employees and Kaliakoir branch requires 5 more employees to maintain banking

activities. On the other hand Bogra branches has a number of 7 excess employees.

-10

0

10

20

30

40

Number of Employee Excess (Short) of Employee

Manpower Assessment


35

6.4 Conclusion

The performance evaluation of bank branches is a difficult task. One of the main reasons for

this difficulty is the complexity inherent in the variety of aspects to be considered in the

evaluation, and the multiple and conflicting interests of the different stakeholders involved.

Three branches of National Banks that use advanced elasticity-based pricing models discover

differences in rate sensitivity and competitive conditions. Those differences reveal themselves

across customer segments, markets, product-use profiles and balance levels.

Comparing three branches Kaliakoir branch performed very well in term of collecting deposits.

Bogra branch over exceeded from its budgeted loan and advance because of providing a large

amount of loan to import business in the year 2013. Growth rate of profit increased high in

Kaliakoir branch comparing three branches due to increase in interest received from loans and

advances, increase in interest received from IBTA and there was no interest paid on IBTA.

Comparing among three branches year wise growth rate of per employee deposit in Pabna

branch was high means as high employee efficiency performance. Comparing among three

branches year wise growth rate of per employee advance in Bogra branch was high means as

high employee efficiency performance. In terms of per employee profit-loss Kaliakoir branch

was high employee efficiency performance among three branches. Overall performance of

Kaliakoir branch of National Bank Limited is high among three branches in terms of growth

and profitability performance and employee efficiency performance of a branch.

37

Chapter VII: Conclusion and Recommendations

7.1 Conclusion

The concept of financial performance and its measurement is well advanced within finance and

management fields. Generally, the financial performance of banks and other financial

institutions has been measured using a combination of financial ratios analysis, benchmarking,

measuring performance against budget or a mix of these methodologies.

In this study bank branches performance compared through the growth of deposit collection,

sanctioning loan and advance and profit-loss against budget. Employee performance among

three branches is being measure and analyze with the help of per employee deposit, per

employee advance and per employee profit-loss. It has been prepared on the primary and

secondary data from different sources.

Despite of severe unfavorable economic conditions of last few years, NBL achieved a worthy

performance in all core areas of banking operation. This paper highlighted the performance of

NBL over the Financial 2009-2013. The results indicate that the overall bank performance in

terms of profitability performance (ROA, ROE and EPS) has been declining if we took 2010

figure as benchmark year. Banks increased the size of their portfolios during the period but net

profit did not increase with the assets as well as with equity and share. This shows the

management inefficiency in using the bank asset to generate profit. On the other hand loans to

deposit ratios (LDR) were satisfactory range in comparing to last 5 years and also it was

decreasing trend. NBL is also contributing to the advancement of the socioeconomic condition

of the country.

Pabna branch achieved average 95.81% from its budgeted deposit collection in the period 2013

and 2014. But in terms of sanctioning loans and advances Pabna branch achieved average

69.94% only from its budgeted ones. In terms of achieving profit budget is not satisfactory at

all. It achieved average 61.88% from its budgeted ones.

Bogra branch achieved average 86.56% from its budgeted deposit collection in the period 2013

and 2014. Bogra branch achieved average 124.20% from its budgeted ones in terms of

sanctioning loans and advances. It achieved average 58.32% profit from its budgeted ones

which is not satisfactory at all. Comparing among three branches growth rate of per employee

advance in Bogra Branch was high.

Kaliakoir branch achieved average 96.56% from its budgeted deposit collection in the period

2013 and 2014. In terms of sanctioning loans and advances Kaliakoir branch achieved average

118.67% from its budgeted ones. It achieved average 91.88% profit from its budgeted ones

which is satisfactory. Comparing among three branches growth rate of per employee deposit

and per employee profit in Kaliakoir Branch was high.

To keep pace with the current market and demand, NBL is following several strategies and

taking new initiatives, offering new products and services to the customers. NBL have a strong

position in the competitive market. It is among one of the fastest growing Bank. Income, total

assets, investment activity, export, import and remittance are all showing positive trends even

after the global challenges that we are facing today. But the little concerned on financial

stability of the bank decreased in recent year, this may be because of opening of new branches

in different business centers and the instability in the economy of the world.

38

7.2 Recommendations

A bank's primary business is to generate funds from customers and lend or invest these funds

at a yield that exceeds the cost of these funds. If a bank is unable to do this, the efficiency with

which they process account transactions will be a moot issue. Management of NBL should be

focused more on consolidation of its core business so that major business parameters deposits,

advances, import and export show moderate to satisfactory growth. The following aspects are

recommended in order to improve the financial performance of three branches:

o Bogra branch of NBL should give equal focus on all schemes of deposit. Management

of NBL should try to update all types of deposit schemes and it is necessary to increase

the rate of interest of deposit.

o Pabna branch of NBL should give a good attention regarding loan and advances

sanction. Management of NBL should increase their loan facility on deposit schemes

and the credit proposal evaluation process and time should be shortened.

o Bogra branch should decrease its interest payment on IBTA and operating expense in

order to turn back increasing profit trends. NBL should increase its finance on

diversified projects to achieve more clients.

o Employees of Bogra branch should study more on their customer segments, markets,

and product-use profiles to increase it’s per employee deposit.

o Employees of Kaliakoir branch should focus on sanctioning more loan by reducing

credit proposal evaluation process which would help increasing it’s per employee

advance.

o Employees of Bogra branch should more concentrate on their customer segments,

markets, product-use profiles and financial position of loan seeker in order to reduce

loan loss.

o Management of NBL should appoint one asst. vice president and one principal officer

in Kaliakoir branch. Because growth rate of deposit collection, earning profit, per

employee deposit, per employee profit in this branch is high among three branches and

at present it is being charged only by one senior executive officer.

o Motivated and talented manpower is giving good results in the banking sector. So, all

three branches should focus on motivated and talented manpower who can motivate

customer. For survival and growth management in banks is adopting different strategies

to improve employee productivity.

39

Appendix- I

Statement of affairs of Bogra Branch, Bogra as on 01.01.2015

Liabilities Taka Assets Taka

Current Deposit 11,03,68,954.60 Cash in Local Currency 1,34,47,613.56

Savings Bank Deposits 11,16,76,880.97 Cash in FC (Gen.) 2,92,477.50

Special Notice Deposit 5,11,64,421.94 Bangladesh Bank 1,04,16,082.56

Monthly Saving Scheme - Balance with Local Bank 10,916.25

NBL Monthly Scheme 10,24,44,251.00 Investments 31,09,500.00

New NBL Monthly Savings 3,09,29,592.60

Special Deposits Scheme 99,880.00 Loan (General) 27,19,33,083.00

Monthly Benefit Scheme 4,98,600.0 HBL (Staff) (EHBL) 1,57,19,025.00

Double Benefit Scheme 12,78,79,571.00 HB Loan (General) 35,34,222.00

Fixed Deposit 50,89,20,151.00 SOD (General) 9,28,81,353.82

Sundry Deposit 5,61,36,055.03 Cash Credit 2,35,68,25,424.51

Foreign Currency Deposits 2,728.22 LTR 8,50,20,808.00

RFCD 7,49,541.06 PAD (Cash) -

Monthly Income Scheme 1,32,77,010.00 Car Loan (Staff) 3,49,983.00

School Banking Deposit 69,046.00 Rural Credit for Agri. 2,11,974.00

NBL Millionaire Dep.

Scheme

2,04,49,776.00 Women’s Refinancing

Scheme

1,75,392.00

NBL Super Saver’s Term 1,07,31,666.00

PO Issued 2,62,71,241.50 Furniture & Fixture 1,18,883.41

PS Issued 13,346.00 Office Equipment 7,68,532.40

Demand Draft Issued

(Local)

60,861.25 Suspense A/c 1,26,800.00

Demand Draft Payable A/c 9,49,851.00 Sundry Assets 51,20,440.22

Stationery in Hand 1,10,873.02

Bangladesh Bank ACSP

Loan

45,50,000.00 Stamp in Hand 950.00

Advance Deposits 54,050.00

Interest Suspense A/c 3,05,61,708.00

Bills of Collection (Local) 2,80,446.00 Local Bill Lodged 2,80,446.00

Banker’s Liability LG

(Local)

7,41,15,320.83 Cust. Liability LG

(Local)

7,41,15,320.83

Banker’s Liability LG

(Foreign)

14,86,67,000.00 Cust. Liability LG

(Foreign)

14,86,67,0

00.00

CIBTA 163,59,41,012.54

Income 47948.00 Expenditure 4,657.00

Total Liabilities Taka 308,32,93,908.08 Total Assets Taka 308,32,93,908.08

Total Deposit Tk.114,53,98,125.42

Total Bills Payable Tk. 2,72,95,299.75

Total Advances Tk.282,66,51,265.33

40

Statement of affairs of Pabna Branch, Pabna as on 15.01.2015

Liabilities Taka Assets Taka

Current Deposits 58134523.49 Cash in Hand 4359928.00

Savings Bank Deposits 146454778.37 Cash in Foreign Currency 63157.50

Special Notice Deposits 48085035.56 Sonali Bank 10720090.24

Monthly Savings Scheme 863600.00 Investment 500.00

NBL Monthly Scheme 153952262.10

New NBL Monthly Savings 48303063.00

Monthly Benefit Scheme Loan (General) 52258596.81

Double Benefit Scheme 176105630.00 House Building Loan staff 1696559.00

Fixed Deposits 540974146.00

Sundry Deposits 5227117.85 S.O.D Draft 124297339.79

FC Accounts (WES) 389.74 Cash Credit 116988591.75

Resident for Curn. Dep.

(RFCD)

18855.94

Monthly Income Scheme 19700000.00

School Banking Deposit 440891.00 Car Loan 1083331.00

NBL Millionaire Dep. Sche. 32436364.00 Consumer Credit Scheme

NBL Serious Saving A/c 153.00 Retail Banking(RTL) 804112.00

Double Benefit Account 2248538.00 Small Enterprise

Finance(SEF)

167606.00

Monthly Earning Scheme 8100000.00 Lease Rental Receivables

NBL Micro Loan (MCL) 3389333.00

PO Issued 43547566.84 Furniture, Fix. & Fitt. 1976211.01

PS Issued 4240.00 Office Equipment 964866.67

DD Payable Account 1705529.00

Suspense A/c

Interest Payable on Deposit 15562563.00 Sundry Assets

Acc. Exp. Payable FR Supplies 111418.00 Stationery in hand 42335.13

Leave Fare Assistance Stamp in Hand 11050.00

Advance Deposits 29900.00

Local Bills for Collection 531000.00 Local Bills lodged 531000.00

Banker’s Liab. L/G(L) 24225200.00 LDB lodged

Banker’s Liab. L/G(Forn) 771000.00 Cust. Liab. L/G (Local) 24225200.00

Cust. Liab. L/G (Foreign) 771000.00

CIBTA CIBTA A/c 983137699.12

Income 101229.20 Expenditures 86687.07

Total Liabilities Taka 1327605094.09 Total Assets Taka 1327605094.09

(Fig. in Taka)

Total Deposit 124,10,45,348.05

Total Bills Payable 4,52,57,335.84

Total Advances 30,06,85,469.35

41

References

Ahmed, F. (1995), Performance of Commercial Banks in Bangladesh-A Note on Current

Trends. Journal of the Institute of Bankers, Bangladesh. Vol. 36-41, June.

Avkiran, N. K (1995): “Developing an Instrument to Measure Customer Service Quality in

Branch Banking”; International Journal of Bank Marketing, Vol. 12(6), pp. 10 – 18.

Kevin, S. (2009), Security Analysis and Portfolio Management, PHI Learning Private Limited,

New Delhi.

Khan, M.Y. & Jain, P.K. (2007), Financial Management, McGraw-Hill, New York.

NBL (2010), Annual report

…… (2011), Annual report

….... (2013), Annual report

…… (2015), Inspection Report, Bogra Branch

…… (2015), Inspection Report, Kaliakoir Branch

…… (2015), Inspection Report, Pabna Branch

internship report

Documents

branches kaliakoir branch

profitability performance

light of employee performance

employee advances

bank personnel

bogra branch of nbl

employee deposit

high growth rate profit