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1.1 Origin of Study:

The report of making ratio analysis of EXIM Banl Ltd. is a part of the course (Financial
Institutions and Markets) and it was assigned by our respective course instructor.

1.2 Methodology:
All the resources that were used to make this report was secondary data. That is the report
was made with the help of annual report book of 3 years of EXIM Banl Ltd. There was
also some assistance from the relevant text book.

1.4 Research Objectives:

The objective is to find out the performance level of consecutive three years of EXIM
Banl Ltd. After finding out the performance level there will be an evaluation and state the
position of the bank’s current position on the basis of standard average.

1.5 Expected Findings:

Finishing the report, I hope that following things about the bank will be found:
 The performance and operating level of the bank
 The profitability condition of the bank.

1.6 Scope:
The report will help me for further study and also broaden my knowledge and will
facilitate for doing this kind of analysis in future.

1.7 Limitations:
1. Lack of adequate information to study the analysis.
2. Due to lack of industry average the measurement of performance level is somewhat

Ratio Analysis

1. Net Interest margin:

Net interest margin ration measures total interest earning to total asset. It indicates the
interest generating capacity of the Bank with its total asset.

Interest income – Interest expense/ total asset: (In Taka)

Year Interest income – Total asset (B) A/B

interest expense( A)
2005 494859124 14441764062 3.42%
2004 420894991 11070968412 3.8%
2003 268199855 7173976074 3.73%

Here we can see that EXIM Banl Ltd. has fluctuating interest earning. It’s highest interest
earning was in 2004 which was 3.8% that is higher than in 2003 and 2005. From the
result we find that the bank has deteriorated its position regarding earning interest from
the previous years.

2. Net non interest margin:

Net non interest margin indicates the non interest earning compare to it total asset.

Non interest revenue – Non interest expense/ Total asset. (In Taka)

Year Non interest Total asset A/B

revenue- Non (B)
interest expense
( A)
2005 53377810 14441764062 .0036

2004 16595000 11070968412 .0014

2003 - 22238342 7173976074 .003

This ratio indicates the bank able to manage few non interests earning compare to its non
operating income. In 2005 its non interest expense was more than in 2004 but less than in
2003. But it is not adequate from the banking perspective. Therefore the bank should
increase more non interest revenue from additional sources

3. Earning Per Share

EPS indicates the average earnings that stockholders get per share. A bank’s goodwill
and its loyalty to its stockholder as well as overall performance is reflected by the EPS of
that bank.

Net income before tax/ Number of ordinary shares outstanding

. (In Taka)

Year Net income after Number of ordinary A/B

Tax( A) share outstanding
2005 312358166 9108000 34.29
2004 242960425 7590000 32.01
2003 151784859 7590000 20

From the above data we see that EXIM Banl Ltd. is gradually improve regarding earning
per share. In 2003 the bank’s EPS was lower than 2004 and 2005 because of their poor
after tax net income in 2003. But it gradually increase its EPS and has indication to earn
further EPS for the upcoming years.

4. Revenue to Income ratio:

It is the comparison between total operating incomes to net income after tax. It indicates
how much the bank spends on its operating expenses and it taxation provisions.

Total operating income/ net income after tax.

. (In Taka)

Year Total operating Net income after A/B

income(A) tax(B)
2005 849173398 312358166 2.72
2004 678585179 242960425 2.79
2003 428173344 151784859 2.82

This data shows in 2003 EXIM Banl Ltd. spent a slightly greater in operating or tax
purpose and the following next two years it was able to minimize its operating expense
which ensures greater EPS for its stockholders.

5. Efficiency Ratio
For calculating efficiency ratio I used Total asset to number of full time employee ratio.
This ratio indicates how much each employee contributes to total asset of the bank. This
also show how much assets each employee bear in this Bank.

Total Asset/ Number of full time . (In Taka)

Year Total asset (A) Number of A/B

2005 14441764062 449 321642852.21

2004 11070968412 405 27335724.47

2003 7173976074 324 22141901.46

This data shows number of employees fluctuates year to year. The above data reflects the
increase in total asset as well as the number of employees. Therefore the efficiency ratio
increases gradually in 2005 than in 2004 and 2003.

6. Operating efficiency Ratio:

Operating efficiency ratio gives idea about comparison between total operating revenue
and total operating expense. It also implicitly indicates about profitability of the bank.

Total operating revenue/ Total operating expense (In Taka)

Year Total operating Total operating A/B

revenue (A) expense(B)
2005 849173398 232828641 3.65

2004 678585179 186255894 3.64

2003 428173344 136691873 3.13

The above data shows that EXIM Banl Ltd. had greater total operating expense from the
previous year and the total operating revenue was also greater from the previous year and
that result in increase in profitability of the bank because operating efficiency ratio in
2005 was greater than 2004 and operating efficiency ration in 2004 was greater than in

7. Employee Productivity ratio

Employee Productivity measures the productivity capacity of the employees of the bank.
In another word how much each employee contributes to total operating income.

Net operating income/ Number of full time employee (In Taka)

Year Net operating Number of full A/B

income(A) time employee(B)
2005 273747591 449 609682.83

2004 218612860 405 539784.84

2003 124187612 324 383295.02

From the above data the number of employees and net operating income fluctuated from
year to year which results employee productivity ratio increase from the previous year
that means the productivity capacity of the employees of the bank is improving.

8. Cost of funding assets

Cost of funding means the amount banks need to incur for raise its fund. Banks have to
carefully monitor their expenses for collecting funds because it has direct impact on the
total income of the bank. If bank have to incur too much cost for its funding then its
income will be minimized.

Total interest expense/ Total asset (In Taka)

Year Total interest Total asset (B) A/B

2005 753166414 14441764062 5.22%

2004 468445677 11070968412 4.23%

2003 363362032 7173976074 5.02%

From the above data we see that the bank was able to reduce its costing of fund in 2004
from 2003 but in the year 2005 its costing of fund increased surpassing the costing of
fund in 2004. Therefore banks total income was reduced in 2005 because it bears greater
cost of raising funds than in 2004.

9. Average Interest expense on deposit

This ratio measures the cost of raising deposit comparing with total deposit and non
deposit borrowing. The lower part also indicates the part of total liability of the bank.

Total deposit interest expense/ total time and savings deposit +non deposit
(In Taka)

Year Total deposit Total time & saving A/B

interest expense(A) deposit +Non deposit
2005 753166414 12223387790 6.16%

2004 468445677 9441348144 4.96%

2003 363362032 6052418043 6%

The figure shows that Standard Bank Ltd was able to minimize its interest expense on
deposits in 2004 but in the next year its interest expense on deposits increased in a greater
amount in 2005 which is highest among three years. Therefore in 2005 the bank’s cost of
raising deposit was increased comparing with total deposit and non deposit borrowing.

10. Deposit of operating expense ratio

This ratio shows the relationship between the interest on deposit and total operating
expenses. Although interest on deposit is not included in total operating expenses but
both are expenses that bank must have to incur.

Interest on deposit/ Total operating expense

(In Taka)
Year Interest on Total operating A/B
deposits(A) expense(B)
2005 753166414 232828641 3.23

2004 468445677 186255894 2.52

2003 363362032 136691873 2.66

EXIM Banl Ltd. had fluctuated deposit of operating expense ratio. In 2005 the ratio was
highest that indicates the bank had greater interest on deposits than total operating
expense from both 2004 and 2003.

11. Pay roll total cost ratio

This ratio shows how much pay roll bears from total operating expenses. Here payrolls
include all the salaries and allowances that bank have to pay to employees. This pay roll
cost usually cut a significant portion total operating expenses.

Pay roll cost/ Total operating expense

(In Taka)
Year Pay roll cost (A) Total operating A/B
2005 106890794 232828641 45.91%

2004 84694544 186255894 45.47%

2003 58060506 136691873 42.48%

These figures indicate how much EXIM Banl Ltd. pays to its employees compare to its
total operating expenses. We see Bank spend more money as salaries and allowances in
2005 compare to in 2003 and 2004.

12. Capital Adequacy ratio

Capital adequacy ratio holds a major weight in terms of bank’s credibility and solvency.
Central bank frequently monitors this ratio in banking sector under BASEL agreement to
ensure that banks are keeping their capital adequate in comparison with their asset.

Total capital/ Total risk weighted asset

(In Taka)

Year Total capital(A) Total risk weighted A/B

2005 1515391254 10480227000 14.46%

2004 1179429998 7546997000 15.63%

2003 908084563 4318535000 21.02%

Here w e can see EXIM Banl Ltd. is able to maintain the necessary amount of capital to
its risk weighted asset according to central bank. Though capital adequacy ratio decrease
in 2005 from previous two years the bank is still able to hold more capital to make this
ratio healthy in order to gain public confidence.

13. Return on Equity;

Return on equity is single most important indicator of overall bank’s performance. It

indicates how much income the bank can generate for the betterment of stockholder.
Here common equity represents amount of money company raises by selling its share to

Net income available to shareholder/ Common equity

(In Taka)
Year Net income available to Common A/B
shareholder(A) equity(B)
2005 312358166 1412355756 22.17%

2004 242960425 1099997590 22.09%

2003 151784859 857037165 17.71%

From the above data we can find that EXIM Banl Ltd. holds significant amount in ROE
which indicates better performance. The ROE gradually increased year after year which
results in better position as well as the higher income generated which is beneficial for
the stockholders.

14. Return on Asset:

Return on asset is another important indicator of bank health. It measures the net income
to total asset of the bank.

Net income/ Total asset

(In Taka)

Year Net income(A) Total asset(B) A/B

2005 312358166 14441764062 2.16%

2004 242960425 11070968412 2.19%

2003 151784859 7173976074 2.12%

These ROA ratios also show the better performance of Standard Bank Ltd in all three
years (2003,2004 and2005). Though there was some fluctuation the results indicate that
the management was more careful and responsible.


From analyzing all the ratios of EXIM Banl Ltd. we find that the activities and its
associated requirements and results are significant comparing the certain standard level
that means the bank is able to maintain the requirements of a good bank. Its EPS is
increasing gradually year after year and the amount of EPS is significant with the
standard average. EXIM Banl Ltd. is adequately capitalized because it holds required
amount of capital against various risk weighted assets. The bank’s net income is also in
significant level because ROA and ROE of the bank which are the major indicators of
earning of a bank are up to the mark. The other ratios are also well associated with the
standard of industry average. In totally EXIM Banl Ltd. is performing its activities
maintaining all the standard average which will be able to retain all its clients,
shareholders, stockholders and will encourage them to invest in the bank.


1. Annual reports of 2003, 2004 and 2005.

2. Scott Besley, Eugene F. Brigham, Essentials of Managerial Finance, Twelfth
edition, Dryden, Orlando.