An Analysis of Financial Performance of BRAC Bank LTD - Al Sukran

Internship Report
on
An Analysis of Financial Performance of BRAC Bank Ltd
Supervised By:
Sk. Habibur Rahaman
Senior Lecturer
Manarat International University
Prepared by:
Al Sukran
ID-1413MBA50346
Department of Business Administration
MANARAT INTERNATIONAL UNIVERSITY

Date of Submission: January 30, 2015
Internship Report
on
Supervised By:
Sk. Habibur Rahaman
Senior Lecturer
Signature of Supervisor
Prepared by:
Al Sukran
ID-1413MBA50346
MANARAT INTERNATIONAL UNIVERSITY

Date of Submission: January 30, 2015
LETTER OF TRANSMITTAL
January 30, 2015

To
Sk. Habibur Rahaman
Senior Lecturer
Subject: Submission of Internship Report on
Dear Sir,
With due respect to state that I am AL SUKRAN, ID-1413MBA50346 is a student of Masters
of Business Administration of Manarat International University. I am delighting to submit
here with a copy of internship report for your kind evaluation and appreciation.
I have given my best effort to prepare the report with relevant information that I have
collected from BRAC BANK LTD and from other sources during my internship program. I
have the immense pleasure to have the opportunity to study on An Analysis of Financial
Performance of BRAC Bank Ltd. There is no doubt that the knowledge I have gathered
during the study will help me in real life.
For your kind consideration I would like to mention that there might be some errors and
mistakes due to limitations of my knowledge. I hope that you will forgive me considering
that I am still learner and in the process of leaning.
Thanking for your cooperation.
Sincerely
.
Al Sukran
ID-1413MBA50346
Major in Accounting
DECLARATION
I do hereby solemnly declare that the work presented in this Internship Report has been
carried out by me and has not been previously submitted to any other University College /
Organization for an academic qualification / certificate / diploma or degree.
The work I have presented does not breach any existing copyright and no portion of this
report is copied from any work done earlier for a degree or otherwise.
I further undertake to indemnify the Department against any loss damage arising from breach
of the foregoing obligations.
. .
Al Sukran
ID-1413MBA50346
SUPERVISORS CERTIFICATE
This is to certify that the Internship Report on An Analysis of Financial Performance of
BRAC Bank Ltd in the bona-fide record at the report is done by AL SUKRAN
bearing
ID-1413MBA50346 as a partial fulfillment of the requirement of Master of Business

Administration (MBA) from the Business Administration Department of Manarat
International University.
The report has been prepared under my guidance and is a record of bona fide work carried
out successfully.
Signature of the Supervisor

..
Date
ACKNOWLEDGEMENT
First of all, I would like to express my deep gratitude to the Almighty Allah for fruitfully
preparing this Internship report.
I uttered a wholehearted thankfulness to my supervisor Sk. Habibur Rahaman, Senior
Lecturer, Department of Business Administration, Manarat International University (MIU)
who has given me the opportunity and directions to prepare such a meaningful thesis paper. I
am so satisfied to work under her supervision and care. Also it would be rather incomplete
without express thanks my Internal and External Supervisions again & again.
It is my pleasure to them and my grateful appreciation goes to BRAC BANK LTDs authority
for rendering me their expertise, knowledge and giving me the opportunity of having a
practical experience through this internship program.
I would like to show my gratitude towards MD. Enamul Haque, Manager of Pallabi SME
Branch, Md. Murad Hossain, Unit office of Pallabi SME Branch & all the staff of Brac Bank
Ltd, Pallabi SME Branch who co-operate with me friendly. They have explained everything I
asked for in details. Throughout time they were never impatience. They did not allow me to
feel uncomfortable for even a single moment. I am really grateful to all for their supportive
and friendly behavior.
EXECUTIVE SUMMARY
This internship report is prepared as a partial fulfillment for the MBA

program of the department of Business Administration under Manarat
International University. This report focuses working experiences in BRAC
BANK LTD. This report will give a clear idea about BRAC BANK LTD & its
Customer Services. The report contains two main parts.
In my first chapter I have explained about my given topic. Here, I have
discussed about Background of the Report, Object of the Report,
Methodology of the Report, Justification of the Report, Scope of the
Report, Structure of the Report & Limitations of the Report
In my second chapter I have tried to describe Literature Review of Brac
Bank Ltd.
In chapter three I have projected a short profile of Overview of the
Organization Background of BRAC Bank Ltd Capital Structure of BRAC
Bank Ltd Corporate Vision, Corporate Mission, Core Values, Management
of Organizational & Function of Organization, organizational structure.
In chapter four I have discussed Financial Performance of Brac Bank which
is including Different Types of Ratio Analysis, Ratio Analysis of BRAC BANK
LTD & Findings of Report.
In chapter five includes Recommendations, Conclusions.
TABLE OF CONTENTS
Contents
Cover Page
Title page
Letter of Transmittal
Declaration
Supervisors Certificate
Acknowledgement
Executive Summary
Table of Contents
Page
i
ii
iii
iv
v
vi
Chapter 1
Introduction
1.1 Background of the Study
1.2 Scope of the Study
1.3 Objectives of the Study
1.4 Methodology of the Study
1.5 Instruments used for analysis
1.6 Limitations of the Study
1
1
2
2
3
4
Chapter 2
Overview of the Organization

2.01 Background of BRAC Bank Ltd
2.02 Capital Structure of Brac Bank Ltd
2.03 Board of Directors
2.04 Our Subsidiaries
2.05 Corporate Vision
2.06 Corporate Mission
2.07 Core Values
2.08 Management of Organizational
2.09 Function of Organization
5
6
7
8
9
9
10
11
12
Chapter 3
Analysis and Findings
3.1 Definition of Financial Ratio Analysis
3.2 Different Types of Ratio Analysis
3.3 Ratio Analysis of BRAC BANK LTD.
3.3.01 Current ratio
3.3.02 Operating Cash Flow Ratio
3.3.03 Cost Income Ratio
15
15
17
17
18
19
3.3.04 Total Asset Turnover Ratio

3.3.05 Investment to Deposit ratio
3.3.06 Debt Ratio
3.3.07 Time Interest Earned Ratio
3.3.08 Net Profit Margin
3.3.09 Return on Asset (ROA)
3.3.10 Return on Equity (ROE)
3.3.11 Earnings per Share
3.3.12 Cost of Fund
3.3.13 Credit Deposit Ratio
3.3.14 Return on Investment
3.3.15 Net Asset Value Per Share
3.4 Findings
Chapter 4
Recommendations & Conclusions
4.1 Recommendations
4.2 Conclusions
Reference
Appendix
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36-40
CHAPTER 1
Introduction
1.1 Background of the Study
This is a report on my internship at BRAC BANK LTD this report details my experiences at
the company.
The internship and this report are part of my MBA requirements for the ACCOUNTING at
major at Manarat International University. As an accounting student I have to work with
accounting related topic. I discuss about An Analysis of Financial Performance of BRAC
Bank Ltd. So I analysis some data base on different ratio analysis.
1.2 Scope of the Study:

In spite of limitation I also got some facility to complete my internship report. The
employees whose held a responsible post in the entire department helped me lot. They gave
me all essential data and conversation with me. My university internship supervisor also
helped me a lot. He gave me a guidelines how to prepare my report more attractive and
perfect. This bank has given me the opportunity to observe the banking environment for the
first time indeed. I got an opportunity to gather experience by working in the different
departments of the branch under the supervision of different departmental heads.
1.3 Objective of the Study:

The objective of this study is to have a clear concept and some practical experience about
Financial Ratio Analysis Systems of an organization. However, we had some textbook
knowledge but had little in real life, practice so ever.
This report is designed to know more about the Financial Ratio Ananlysis of BRAC
BANK LTD. and analyze the ratio of this organization and identify the financial condition
of this organization. In addition, the study seeks to achieve the following objectives:
To analysis the Financial Statement of Brac Bank Ltd.
To calculate the financial ratios and identify the areas of concern.

To identify and assess the present Financial Ratio Analysis of Brac Bank Limited.
1.4 Methodology of the Study:

This report is prepared by two sources
Primary Sources.
Secondary Sources.
Primary Sources: Basically this type of Sources included working at bank and interviews
with others the bankers of BRAC BANK LTD.
Secondary Sources: Secondary data were collected in the following ways:
Data gathered within the organization itself.
Data gathered from Texts
Internet sources.
General reports
Annual reports
Official documents
Credit manual and foreign exchange manual of the bank.
1.5 Instruments Used For Analysis:

A. Ratio Analysis
B. Trend Analysis
A. Ratio Analysis: The quantitative (such as ratio analysis) tools are used to analyze the
gathered data & different types of computer software are used for reporting the gathered
information from the analysis such as- Microsoft Word, Microsoft Excel etc. Ratio can be
classified into four broad groups
Liquidity Ratio.
Activity Ratio.
Debt Ratio.
Profitability Ratio.
B. Trend analysis: It is really important to analysis trends in ratios as well as their

absolute levels. This analysis informs us whether a companys financial condition
improving or deteriorating.
1.6 Limitations of the Study:

In this report I have tried to use, as much as information possible but in some cases the
information were not enough. Lacking of some essential footnotes hampered our work in
some steps. The area of banking operating is very large. I had been working in this bank
about three months. This time is not enough to understand all the banking functions of
foreign exchange. Beside this, the employees were always busy under tremendous
workload. So, they could not able to extend their cooperation properly. I faced some
problems when I collect information about the organization because the information was
strictly private and confidential.
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. It was really very short
time to know details about an organization like BRAC 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 research 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.
Lack of experiences: Lack of experiences has acted as constraints in the way of

meticulous exploration on the topic. Being a member of the organization; it was not
possible on my part to express some of the sensitive issues. Lack of adequate
knowledge about export & import business of any organization.
CHAPTER 2
Overview of the Organization

2.01 Background of BRAC Bank Ltd
BRAC Bank Ltd is a scheduled commercial bank in Bangladesh. It established in Bangladesh
under the Banking Companies Act, 1991 and incorporated as private limited company on 20
May 1999 under the Companies Act, 1994. The primary objective of the Bank is to provide
all kinds of banking business. At the very beginning the Bank faced some legal obligation
because the High Court of Bangladesh suspended activity of the Bank and it could fail to
start its operations till 03 June 2001. Eventually, the judgment of the High Court was set
aside and dismissed by the Appellate Division of the Supreme Court on 04 June 2001 and the
Bank has started its operations from July 04, 2001.
Now, BRAC Bank Limited is one of the leading private banks in Bangladesh. BRAC
Bank has received the commercial banking license from Bangladesh Bank in 2001. Since
then it has established its name and branding with its quality of service and products. In a
very short time BRAC Bank became one of the successful and fastest growing private
banks in Bangladesh.
BRAC Bank is owned partially by BRAC, the largest non-government organization in the
world, International Finance Corporation (IFC), the private sector arm of The World Bank
Group, and Shore Cap International. The head office of the bank is situated at Gulshan,
Dhaka. BRAC Bank Ltd is operating its business in whole Bangladesh. BRAC Bank is
expanding its branch network rapidly throughout the country.
Currently, BRAC Bank Ltd has 157 Branches, more than 300 ATMs and 458 SME Unit
offices across the country. It has disbursed over BDT 10,000 crores of SME loan and has
over 500,000 individual customers who access online banking facilities. Its services cuts
across all strata of clientele are it corporate, retail or SME.
BRAC Bank LTD provides all sort of banking service to the mass people of Bangladesh.
Among them, BRAC Bank is well known for its SME Banking in Bangladesh.
2.02 Capital Structure of BRAC Bank Ltd

BRAC Bank has started with an initial capital of amount BDT 250 million, while the
authorized capital is BDT 1,000 million. Over time the bank has increased its capital base
because of its steady growth and within three years of operations, it has doubled its capital
base to BDT 500 million. BRAC Bank originated with Local and International Institutional
shareholding including BRAC as promoter with International Finance Corporation. Details
Capital Structure of recent Banking information is give below:
Name of Shareholder
BRAC
International Finance Corp
Sir Fazle Hasan Abed
Mr. Syed Humayun kabir
Mr. A.S Mahmud
Mr. Faruq A. Chowdhury
Dr. Saleh Uddin Ahmed
Ms. Tamara Hasan Abed
Mr. Shib Narayan Kairy
Ms. Nihad Kabir
General Public
Total Paid-up Share
Total Shares
316,598,451
38,002,483
7,020
7,020
5,872
5,872
4,825
5,872
5,341
5,872
354,638,693
709,287,321
% of Total Share
44.64
5.36
0.001
0.001
0.001
0.001
0.001
0.001
0.001
0.001
50.00
100.00
As on 04.06.2013
2.03 Board of Directors
Sir Fazle Hasan Abed, KCMG

Chairman
Muhammad A. (Rumee) Ali

Director
Shib Narayan Kairy

Director
Tamara Hasan Abed

Director
Nihad Kabir
Director (Independent)
Dr. Hafiz G.A. Siddiqi

Director
Zahida Ispahani
Director
Syed Mahbubur Rahman

Managing Director and CEO
2.04 Our Subsidiaries

BRAC EPL Stock Brokerage Limited
BRAC EPL Stock Brokerage Limited is one of the leading stock brokers in
the country. BRAC EPL Stock Brokerage Limited has membership at both of
the country's stock exchanges; the Dhaka Stock Exchange (DSE) and the
Chittagong Stock Exchange (CSE).
BRAC EPL Investment Limited

BRAC EPL Investment Limited delivers a whole range of Investment
Banking services including traditional merchant banking activities such as
Issue Management, Corporate Advisory, Corporate Finance, Underwriting
and Portfolio Management.
BRAC SAAJAN Exchange Limited

BRAC Saajan Exchange Limited mainly provides remittance services to the
large Bangladeshi Communities living in UK. Apart from its remittance
services the Company also caters to the investment needs of the NRBs
through its parent organization BRAC Bank.
bKash
bKash Limited (a subsidiary of BRAC Bank) operates with an objective to
ensure access to a broader range of financial services (mobile fund transfer
facility) for the people of Bangladesh. It has a special focus to serve the low
income masses of the country to achieve broader financial inclusion by
providing services that are convenient, affordable and reliable.
BRAC IT Services Ltd. (biTS)

BRAC IT Services Ltd. (biTS) is an IT Solution and Services company and
is a subsidiary jointly owned by BRAC Bank and BRAC. biTS has been
formed in 2013 through the merger of a subsidiary IT company. It strives to
become the most trustworthy company in Bangladesh providing technology
solutions and managed IT Services.
biTS provides end-to-end solutions for industries like Banks, Non-Banking
Financial Institutes, Educational Institutes, Micro-Finance, NGOs, FMCG

etc. It has a team of highly capable and professional individuals committed to
deliver high productivity, efficiency as well as creativity. We are committed
to help our customers to achieve operational efficiency through transforming
their existing operations using our best value solutions and services.
2.05 Corporate Vision

Building profitable and socially responsible financial institution focused on Market and
Business with Growth potential, thereby assisting BRAC and stakeholders to build a just,
enlightened, healthy democratic and poverty free Bangladesh.
2.06 Corporate Mission
Sustained growth in Small & Medium Enterprise sector

Continuous low-cost deposit Growth with controlled growth in retail assets.
Corporate Assets to be funded through self-liability mobilization. Growth in
Assets through syndications and investment in faster growing sectors.

Continuous endeavor to increase non-funded income
Keep our debt charges at 2% to maintain a steady profitable growth
Achieve efficient synergies between the banks branches, SME unit offices
and BRAC field offices for delivery of remittance and Banks other products
and services
Manage various lines of business in a full controlled environment with no
compromise on service quality

Keep a divers, far flung team fully controlled environment with no
compromise on service quality

Keep a diverse, far flung team fully motivated and driven towards
materializing the banks vision into reality
2.07 Core Values

Our Strength emanates from our owner - BRAC. This means, we will hold the following
values and will be guided by BRAC as we do our work.
Value the fact that one is a member of the BRAC family

Creating an honest, open and enabling environment
Have a strong customer focus and build relationships based on integrity,
superior service and mutual benefit

Strive for profit & sound growth
Work as team to serve the best interest of our owners
Relentless in pursuit of business innovation and improvement
Value and respect people and make decisions based on merit
Base recognition and reward on performance
Responsible, trustworthy and law-abiding in all that we do.
2.08 Management of Organizational

BRAC Bank Limited has two sets of reporting lines, one that reports directly to the MD and
another that reports to the DMD. MD is the representative of the Board of Directors as well
as responsible for all the business decisions taken by the bank. The Support Manager assists
him. Under him work the Heads of the Business and some of the Support Units. They are:
Head of SME Banking, Head of Retail Banking, Head of Corporate Banking, Head of
Probashi Banking, Head of Treasury & Financial Institutions, Head of Marketing &
Corporate Affairs, Head of Enterprise Risk Management, Head of Human Resources, Head
of Financial Administration,
Company Secretary & Head of Regulatory & Internal Control, Head of Impaired Assets
Management, Manager-Complaint Handling Cell & Credit Inspector. There is another part of
the Organ gram, which deals with the reporting line of Deputy Managing Director & COO.
This line constitutes of the Heads of the Support Units.
The Units are: Head of Retail Banking Operation, Head of Corporate Banking Operations,
Head of SME Banking Operations, Head of Probashi Banking Operations, Senior ManagerCard Operations, Head of Business Solutions, Head of Technology, Head of General
Infrastructure Services, Head of Central Operations, Senior Manager-Call Centre, Senior
Manager, Project Admin, Service Quality, and Operations Risk Mgt. & Operations MIS.
2.09 Function of Organization

BRAC Bank has a centralized banking structure through online banking system that
resembles the ABN.AMRO Model. Overall, BRAC Bank is divided into three major units
business unit, operations unit and support unit. All the functional divisions are discussed
below. Besides these divisions, there is another support division for infrastructural support of
BBL Channel Infrastructure Development and one more operations divisions General
Infrastructure Services. Among the functional units only five are business units and the rest
work as support units. They are:
Small and Medium Enterprise

Retail Banking
Corporate Banking
Probashi Banking
Other Functions
Small and Medium Enterprise:

The biggest operational division of BRAC bank is the SME (Small & Medium Enterprise)
Division. SME is directly related to business of the bank. BRAC Bank extends loans to
potential small and medium trading, manufacturing and service enterprises. This loan is able
to provide quick and quality banking services to targeted business at any places of the
country. Potential women entrepreneurs will also get the facilities of SME loan; this initiation
is to play a role in the socioeconomic development of the country by expansion of business
as well as creation of employment. BRAC Bank was titled to be the fastest growing bank in
2004 & 2005, and it had a profit of 14 crore taka. The profitability of the bank came mostly
from the SME sector. SME division is enriched with more than 700 staffs and it has 367 unit
offices all over the country.
Retail Banking:
Retail Banking is known as general banking where the individual customers get services time
to time from the local branches of the larger commercial banks. In BRAC Bank Retail
section has been divided into four parts
Distribution Serve the acquired customers

Sales Business acquisition.
Non Funded Business, Alternate Delivery Channels, Priority Banking
Phone Banking
They are interdependent and work closely with each other. Retail offers different types of
competitive banking products to the customers. The retail division of the BRAC Bank also
offers some special types of deposits and loan scheme for the customer attention.
Corporate Banking:
Corporate department has also two different wings Corporate Banking division & Cash
Management. Corporate Banking is a specialized area of BRAC Bank, which addresses the
diverse financial needs of Corporate Clients. This division exists to provide banking services
and financial partnership with local and foreign business houses (Public and Private Limited
Companies),
NGOs,
trading
houses,
joint
ventures
and
various
government
bodies/corporations etc. As the financial partner of choice for the corporate sector, BRAC
Bank wants to be distinguished by its:
Quality of service
Value of innovative solutions
Level of trust with clients
Customer knowledge
Probashi Banking:
This offers an array of products and services that are targeted towards the nonresident
Bangladeshis living in different parts of the world, a milestone for BRAC bank as to
becoming the pioneer in such operation. The official launching of Probashi Subidha Account
took place on 16 January 2007 with a prospective to catering the beneficiaries of NRB
customers with their different banking needs.
With a goal to provide fast and expeditious services to deliver remittances even in the most
remote corner of Bangladesh, the network of electronically connected field offices have been
expanded more than 1200 BDP outlets across the country for remittance payment. In 2007
the remittance services has turned out to be one of the core business areas of the Bank. The
year remained as a rewarding and successful one in terms of new tie-ups and partnerships
with a focus on pursuing unexplored and niche markets around the world.
Other Function
Apart from these five business units, BBL has other support units, which provide the
functional assistance to smoothly run the business. These are:
Card
Treasury & Financial Institutions
Central Operations
Enterprise Risk Management
Financial Administration
General Infrastructure Services
Credit
Consumer Service Delivery (CSD)
Impaired Assets Management
Information Technology
Human Resources
Marketing & Corporate Affairs
Company Secretariat
Chapter 3
Analysis and Findings
3.1 Definition of Financial Ratio Analysis
Financial ratios are mathematical comparisons of financial statement accounts or categories.

These relationships between the financial statement accounts help investors, creditors, and
internal company management understand how well a business is performing and areas of
needing improvement.
Financial ratios are the most common and widespread tools used to analyze a business'
financial standing. Ratios are easy to understand and simple to compute. They can also be
used to compare different companies in different industries. Since a ratio is simply a
mathematically comparison based on proportions, big and small companies can be use ratios
to compare their financial information. In a sense, financial ratios don't take into
consideration the size of a company or the industry. Ratios are just a raw computation of
financial position and performance.
3.2 Different Types of Ratio Analysis

Ratios allow us to compare companies across industries, big and small, to identify their
strengths and weaknesses. Financial ratios are often divided into four main categories:
Analyzing Liquidity Ratio

Analyzing Activity Ratio
Analyzing Debt Ratio
Analyzing Profitability
Analyzing Liquidity Ratio:

The liquidity of a business firm is measured by its ability to satisfy its short term obligations
as they come due. Liquidity refers to the solvency of the firms overall financial position.
Analyzing Activity Ratio:

Activity ratios measure the speed with which accounts are converted into sale or cash. With
regard to current accounts measures of liquidity are generally inadequate because differences
in the composition of a firms current accounts can significantly affects its true liquidity.
A number of ratios are available for measuring the activity of the important current accounts
which includes inventory, accounts receivable, and account payable. The activity (efficiency
of utilization) of total assets can also be assessed.
Analyzing Debt Ratio:

The debt position of that indicates the amount of other peoples money being used in
attempting to generate profits. In general, the more debt a firm uses in relation to its total
assets, the greater its financial leverage, a term use to describe the magnification of risk and
return introduced through the use of fixed-cost financing such as debt and preferred stock.
Analyzing Profitability:
These measures evaluate the banks earnings with respect to a given level of sales, a certain
level of assets, the owners investment, or share value. Without profits, a firm could not
attract outside capital. Moreover, present owners and creditors would become concerned
about the companys future and attempt to recover their funds. Owners, creditors, and
management pay close attention to boosting profits due to the great importance placed on
earnings in the marketplace.
3.3 Ratio Analysis of BRAC BANK LTD.

There is some most important ratio analyses of Brac Bank Ltd are showing below:
3.3.01 Current ratio:
The current ratio, one of the most commonly cited financial ratios, measures the firms ability
to meet its short term obligations. It is expressed as
Current Ratio=Current Asset/Current Liabilities
Current Ratio
Year
2010
Current Asset
Current Liability
Current Ratio
2011
2012
108,791,3
42,196
120,691,016
,472
95,407,908,332
107,837,411,843
1.
12
1.14
2013
157,898
,600,871
144,202,510,13
6
1.09
157,010,788
,637
139,510,917
,707
1.
13
Source: Annual report of Brac Bank Ltd 2010-11

Annual report of Brac Bank Ltd 2012-13
Current Ratio
1.16
1.14
1.14
1.13
1.12
1.12
1.09
1.1
1.08
1.06
2010
2011
2012
2013
Figure: Current Ratio

Interpretation
In this analysis it has seen that in 2008 BBLs current ratio was highest and 2012 it was
lowest among all the year. And company increased their current ratio in 2013. Normally
banks maintain current ratio 1:1 and we have seen that BBL maintains current ratio more
than 1:1 ratios. It indicates that BBLs liquidity position is not bad.
3.3.02 Operating Cash Flow Ratio

A measure of how well current liabilities are covered by the cash flow generated from a
company's operations. It is expressed as
Operating Cash Flow Ratio=Operating Cash Flow/Total Debt
Operating Cash Flow Ratio
Year
2010
Operating Cash Flow

Current Liability
2011
2012
(1,439,2
05,626)
933,830,374
95,407,908,332
-0.02
2013
107,837,411,843
19,855
,243,700
144,202,510,13
6
(5,679,858,
459)
139,510,917
,707
0.01
0.14
-0.04


0.14
0.15
0.1
0.05
-0.02
0
2010
0.01
2011
-0.04
2012
2013
-0.05
Figure: Operating Cash Flow Ratio

Interpretation
In this analysis it has seen that in 2012 BBLs operating cash flow was highest and 2013 it
was lowest among all the year. Less operating cash flow means more profit. So BBL enables
to reduce operating cash flow after 2012.
3.3.03 Cost Income Ratio:

It measures a particular Banks operating efficiency by measuring the percent of the total
operating income that the Bank spends to operate its daily activities. It is calculated as
follows:
Cost Income Ratio = Total operating Expenses/Total Operating Income
Cost Income ratio
Year
2010
Total Operating Income

Total Operating Expenses
Cost Income Ratio
2011
9,527,52
7,784
4,751,30
9,242
0.50
2012
10,134,733,
422
5,164,822,
269
0
.51
2013
10,894,8
01,767
5,749,6
05,759
12,460,835,
400
6,535,958,
634
0
.52
0.53

Cost Income Ratio

0.53
0.54
0.52
0.53
0.52
0.51
0.51
0.50
0.50
0.49
0.48
2010
2011
2012
2013
Figure: Cost Income Ratio

Interpretation
We know that this ratio measures the operating efficiency of the bank by measuring the
portion if the total operating costs relative to the total operating income of that bank and the
higher the ratio, the lower the operating efficiency. In 2018 the operating cost of BBL is low
but in 2012 it is high. So it can be said that the efficiency of the BBL has been unable to
minimize its operating cost during the time period. But in year 2013 Cost Income Ratios of
BBL lower than previous few years. But BBL maintains an average around .50 cost income
ratio which is really good for a bank industry.
3.3.04 Total Asset Turnover Ratio:

The total asset turnover indicates the efficiency with which the firm is able to use all its
assets to generate sales.
Total Asset Turnover= Operating Income/Total Asset
Total Asset Turnover
Year
2010
Total Operating Income

Total Asset
Total Asset Turnover Ratio
2011
9,527,527,78
4
117,297,555,74
8
0.0
8
2012
10,134,733,422
133,201,048,438
0.08
2013
10,894,801,76
7
173,676,792,02
9
0.0
6
12,460,835,400
171,901,669,638

Total Asset Turnover Ratio

0.1
0.08
0.08
0.08
0.06
0.07
0.06
0.04
0.02
0
2010
2011
2012
2013
Figure: Total Asset Turnovers
Interpretation
The banks total asset turnover ratio fluctuates from .06 to .08. We know the greater the total
asset turnover; it is more efficient. In year 2010 & 2011 Total asset turnover was 0.08 but in
2012 it became 0.06 but in 2013 BBL able to increase their Total asset turnover ratio at 0.07.
We can tell that total asset turnover is very good and the percentage of it does not movie so
much.
0.07
3.3.05 Investment to Deposit ratio:

Investment to Deposit Ratio shows the operating efficiency of a particular Bank in promoting
its investment product by measuring the percentage of the total deposit disbursed by the Bank
as long & advance or as investment. The ratio is calculated as follows:
Investment to Deposit Ratio = Total investment/Total Deposit
Investment To Deposit Ratio
Year
2010
2011
12,855,98
5,261
88,157,90
8,331
Total Investment
Total Deposit
Investment to Deposit Ratio
0.15
2012
14,198,827,5
11
103,725,529,2
25
0.
14
2013
25,372,525,2
82
134,646,448,482.0
00
0.
19
21,298,625,6
61
124,746,344,0
37
0.
17

Investment To Deposit Ratio

0.2
0.19
0.08
0.14
2010
2011
0.17
0.15
0.1
0.05
0
2012
2013
Figure: Investment to Deposit ratio

Interpretation
Investment to deposit ratio is showing that which amount of deposit is used to as investment.
BBLs investment to deposit ratio is decreasing in years 2010 to 2011 which conveys
negative signal for the bank. But in 2012 its again increasing and in 2013 it decrease at 0.17.
But overall investment to deposit ratio is around 0.16.
3.3.06 Debt Ratio:

The debt ratio measures the preparation of total assets provided by the firms creditors.
Debt ratio= Total Liabilities/Total Assets
Debt Ratio
Year
2010
2011
2012
2013
Total Asset
107,879,663
,647
117,297,555,
748
123,598,443,6
00
133,201,048,4
38
163,522,243,4
77
173,676,792,0
29
160,314,216,1
68
171,901,669,6
38
Debt ratio
0.92
0.93
0.94
0.93
Total Liabilities

Debt Ratio
0.95
0.94
0.94
0.93
0.93
0.92
0.92
0.91
0.94
0.93
0.93
0.92
2010
2011
2012
2013
Figure: Debt Ratio

Interpretation
Debt ratio indicates how much portion of total assets is financed by the debt. When debt
capital increases the cost of capital also increase and which decrease the firms value. In case
of decreasing debt capital the situation is vice versa. So every organization should give more
emphasize on equity capital than debt capital. So lower the ratio, it is less risky. So the bank
works hard to decrease this ratio. Average Debt ratio of BBL is around 1.00 which is very
good for a banking industry.
3.3.07 Time Interest Earned Ratio:

The times interest earned ratio, sometimes called the interest coverage ratio, measures the
firms ability to make contractual interest payments.
Time Interest Earned Ratio =Earnings before interest & Taxes/Interest
Time Interest Earned Ratio Interest Earned Time Ratio
Year
2010
Earning Before Interest & Tax

Interest
Time Interest Earned Ratio
2011
4,956,21
8,541
1,984,71
1,371
2.50
2012
5,164,822,2
69
2,053,030,0
38
2.
52
2013
5,145,196,0
08
1,987,929,1
20
2.
59
5,924,876,7
66
2,900,072,5
24
2.
04

Time Interest Earned Ratio

2.50
2.52
2.59
2011
2012
2.04
2.5
2
1.5
1
0.5
0
2010
2013
Figure: Time Interest Earned Ratio

Interpretation
From the analysis it has seen that BBLs TIE ratios were not fluctuating in 2010, 2011 and
2012. It was highest which indicates positive sign that mean BBLs interest payment capacity
were increasing trend. But in 2013 the TIE ratio decrease so much which not good for a
company.
3.3.08 Net Profit Margin

The net profit margin measures the percentage of each sales dollar remaining after all
expenses, including taxes, have deducted. The higher the firms net profit margin is better.
The net profit margin is a commonly cited measure of the companys success with respect to
earnings on sales.
Net Profit Margin=Net profit after tax/operating income
Net Profit Margin
Year
2010
2011
Net Profit after Tax

Total Operating
Income
1,670,36
1,526
9,527,52
7,784
Net Profit Margin
0.18
2012
1,702,381,8
69
10,134,733,4
22
0.
17
2013
540,381,0
91
10,894,801,7
67
0.
05
1,246,324,1
01
12,460,835,4
00
0.
10

Net Profit Margin

0.2
0.18
0.17
0.10
0.15
0.1
0.18
0.05
0.17
0.05
0
0.05
2010
2011
2012
0.1
2013
Figure: Net Profit Margin
Interpretation
In the year 2010 & 2011 BBLs net profit margin is good. But in 2012 BBLs net profit
margin decrease too much because of but situation of recession period of time. But in 2013
BBLs increase their net profit margin at 0.10. This is very good operating result of the bank.
3.3.09 Return on Asset (ROA):

The return on asset (ROA), which is often called the firms return on total assets, measures
the overall effectiveness of management in generating profits with its available assets. The
higher the ratio is better.
Return on Asset (ROA) =Net Profit after tax/Total Asset
Year
2010
2011
Return on Asset
(ROA)
1.55%
1.36%
2012
2013
0.35%
0.72%

Return on Asset
2.00%
1.55%
1.36%
1.50%
0.72%
1.00%
0.35%
0.50%
0.00%
2010
2011
2012
2013
Figure: Returns on Asset

Interpretation
From the analysis it has seen that BBLs Returns on Asset were good in 2010 & 2011. But it
was lowest at 0.35%. And in 2013 BBLs able to improve their ROA.
3.3.10 Return on Equity (ROE):

The return on equity measures the return earned on the owners (both preferred and common
stockholders) investment. Generally the higher the return is the better of the owners.
Return on Equity=Net Profit after Tax/ Shareholders equity
Return on Equity
Year
2010
2011
Return on Equity
18.95%
17.90%
2012
2013
5.47%
11.46%

18.95%
20.00%
Return on Equity
17.90%
11.46%
15.00%
5.47%
10.00%
5.00%
0.00%
2010
2011
2012
2013
Figure: Returns on Equity

Interpretation
The banks return on equity of BBLs was around 18% in 2010 and 2011. In 2012 because of
recession and bad market position Return on Equity reduced unbelievably at 5.47%. But in
2013 BBLs able to increase their ROE at 11.46%.
3.3.11 Earnings per Share

The firms Earning per share (EPS) are generally of interest to present or prospective
stockholders and management. The Earning per share represent the number of dollars earned
on behalf of each outstanding share of common stock. The earnings per share is calculated as
follows
Earnings per Share =Earnings available for common stock holder/No of shares of common
stock
Year
2010
2011
Earnings per Share
5.68
5.54
2012
2013
1.52
3.20

5.68
Earnings Per Share

5.54
3.20
4
3
1.52
2
1
0
2010
2011
2012
2013
Figure: Earnings per Share

Interpretation
The banks average earnings per share is 5.50 in 2010 & 2011 But in 2012 EPS was decrease
at 1.52 and in 2013 again BBLs EPS remain increase. Therefore, earning per share of BBL
should be increase to attract investors.
3.3.12 Cost of Fund:

The interest rate paid by financial institutions for the funds that they deploy in their business.
The cost of funds is one of the most important input costs for a financial institution, since a
lower cost will generate better returns when the funds are deployed in the form of short-term
and long-term loans to borrowers. The spread between the cost of funds and the interest rate
charged to borrowers represents one of the main sources of profit for most financial
institutions.
Cost of Fund
Year
2010
Cost of Fund
2011
8.54%
2012
8.66%
2013
8.43%
8.13%

Cost of Fund
8.80%
8.54%
8.66%
8.43%
8.60%
8.40%
8.13%
8.20%
8.00%
7.80%
2010
2011
2012
2013
Figure: Cost of Fund
Interpretation
The BBLs Average Cost of Fund is around 8.00% which is really good for a bank industry
maintain their cost of fund.
3.3.13 Credit Deposit Ratio:

It is the ratio of how much a bank lends out of the deposits it has mobilized. It indicates how
much of a bank's core funds are being used for lending, the main banking activity. A higher
ratio indicates more reliance on deposits for lending.
Credit Deposit Ratio
Year
2010
2011
95.63%
2012
84.82%
2013
76.96%
82.30%


120.00%
95.63%
100.00%
84.82%
76.96%
82.30%
2011
2012
2013
80.00%
60.00%
40.00%
20.00%
0.00%
2010
Figure: Credit Deposit Ratio

Interpretation
The BBLs credit deposit ratio was reducing from 2010 to 2012. But in 2013 BBLs able to
increase their Credit Deposit at 82.30%. Overall average credit ratio of BBLs 80% last four
year which is really good.
3.3.14 Return on Investment:

Return on investment (ROI) is the benefit to the investor resulting from an investment of
some resource. A high ROI means the investment gains compare favorably to investment
cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to
compare the efficiency of a number of different investments. In purely economic terms, it is
one way of considering profits in relation to capital invested.
Return on Investment
Year
2010
2011
9.00%
2012
12.41%
2013
3.44%
6.05%

14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
12.41%
9.00%
3.44%
2010
2011
2012
6.05%
2013
Figure: Return on Investment

Interpretation
The firms ROI fluctuates from 12.41% to 3.44% in 2011 to 2012. It was bad market
situation. It indicates banks ROI was not good in 2012; But in 2013 BBLs able to increase
their ROI.
3.3.15 Net Asset Value Per Share

The net asset value per share can be defined as an expression for net asset value that indicates
the value per share for a fund (exchange-traded, mutual, and closed-end) or a company.
Net Asset Value per Share (NAVPS) refers to the value of a single unit, or share, or a fund.
This number for a mutual fund indicates the price at which shares are bought and sold. Since
closed-end and exchange traded funds are listed and traded like stocks, which are influenced
by market forces, their NAVPS and selling/buying prices per share can be different.
Net Asset Value Per Share

Year
2010
2011
33.29
2012
28.80
2013
26.34
26.14


35
30
25
20
15
10
5
0
33.29
2010
28.80
26.34
2011
2012
26.14
2013
Fig
ure: Net Asset Value Per Share

Interpretation:
Net Asset Value Per Share of BBLs was 33.29 in 2010. But it is decreasing year by year. But
it maintains an average 26.00 last two years; this is very good for company.
3.4 Findings:
In the analysis it has seen that in 2010 BBLs current ratio was highest and 2012 it
was lowest among the years. It has seen that BBL maintains current ratio more than
1:1 ratios. It indicates that BBLs liquidity position is not bad.
In 2010 BBLs Cost Income Ratio was lowest it indicates positive sign. We know that
the lowest the ratio, the higher the operating efficiency. But company maintains an
average around .50 per year.
The greater the total asset turnover; it considered more efficiency. From the analysis it
has seen that in year 2010 to 2012 total asset turnover ratio of BBL decreasing but at
2013 its higher than previous which indicate better efficiency of BBL.
BBLs investment to deposit ratio is decreasing in years 2010 to 2011 which conveys
negative signal for the bank. But in 2012 its again increasing. Company maintains an
average Investment to deposit ratio around 0.16.
From the analysis it has seen that BBLs debt ratios were satisfactory range in
compare to other banks and also it was decreasing trend.

In the year 2010 to 2012 BBLs net profit margin decreasing year by year which
indicate that the banks operating result were not improving. But in 2013 it improved
better than previous year.
From the analysis it has seen that BBLs Returns on Asset were gradually decreasing
and in 2010 to 2012. But its improved from 2012 to 2013.
From the analysis return on equity of BBLs was around 18% in 2010 and 2011. In
2012 because of recession and bad market position Return on Equity reduced
unbelievably at 5.47%. But in 2013 BBLs able to increase their ROE at 11.46%.
From the analysis we found that earnings per share is 5.50 in 2010 & 2011 But in
2012 EPS was decrease at 1.52 and in 2013 again BBLs EPS remain increase.
From analysis Net Asset Value Per Share of BBLs was 33.29 in 2010. But it is
decreasing year by year. But it maintains an average 26.00 last two years
Chapter 4
Recommendations & Conclusion
4.1 Recommendations:
It is seen in the study that the liquidity ratio of B.B.L during 2012 & 2013. The
liquidity of the bank should be reds by improving current & quick ratio. But company
should maintain this properly and has to improve.
It is further seen that the loan to deposit ratio of the bank was lower during 2012 &
2013. Therefore the loan to deposit ratio must be improve by increasing need loan.
Assets utilization ratio was also lower in 2011 & 2012. In case B.B.L. This ratio
should also be increased by increasing operating income.
Finally, at the end of the year we can see that although there have some difficulties
but we can overcome those difficulties by removing all the weaknesses to develop the
product effectively and grab more opportunity hidden in the banking industry and the
bank should also increase the strength with their solid brand image, experience and
skills of the employees. With their strengths BRAC BANK LTD. can also reduce the
threats existing in the market.
4.2 Conclusion
Banking sector is the chief financial intermediaries in a country. Its also true for Bangladesh.
BRAC BANK LTD is a very challenging institution. In the age of globalization and free
trade, the process and the system of running a bank is changing. BBL is continuously
managing itself with this changing environment. The days are gone for banks to keep their
functions confined within the periphery of accepting deposit and lending money as well as
making a profit. The company strategies are clear and concise. The return is pretty good. If
the company performs this way, we can expect that in near future BBL may become one of
the top performer in banking sector of our country. They are also able to contribute to our
economy in better way. The working environment of the bank is impressive. It was also
found that the bank is doing better in most of the sectors and their performance is better than
average.
Finally it can be said that the bank is doing very good in the competitive market and if it can
continue to perform this way it can become a leading banking institution which can play a
pivotal role in the development of the country.
To cope up with the new millenniums electronic banking, bank should reinvent and redesign
itself for customer satisfaction. Some recommendations may be put forward in this regard.
The bank should launch some new products as automatic teller machine, money link, Tele
bank for better customer service.
References
Books:
Weygandt, Kieso, & Kimmel; Managerial Accounting; 11th Edition; Wiley Global
Education, 2011
Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel; Principle Accounting; 7th
Edition; Wiley, 2005
Annual Report
Annual Report of BRAC BANK LTD 2010

Report on Financial Ratio Analysis of Other Banks
Different Internship report of Manarat International University
Websites:
http://www.bracbank.com
http://www.wikipedia.org
www.investopedia.com
www.google.com
www.accountingcoach.com
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Internship Report

Department of Business Administration

MANARAT INTERNATIONAL UNIVERSITY

Department of Business Administration

MANARAT INTERNATIONAL UNIVERSITY

January 30, 2015

ID-1413MBA50346 as a partial fulfillment of the requirement of Master of Business

Signature of the Supervisor

This internship report is prepared as a partial fulfillment for the MBA

Overview of the Organization

3.3.04 Total Asset Turnover Ratio

1.2 Scope of the Study:

1.3 Objective of the Study:

To analysis the Financial Statement of Brac Bank Ltd.

To calculate the financial ratios and identify the areas of concern.

1.4 Methodology of the Study:

Data gathered within the organization itself.

Data gathered from Texts

Credit manual and foreign exchange manual of the bank.

1.5 Instruments Used For Analysis:

B. Trend analysis: It is really important to analysis trends in ratios as well as their

1.6 Limitations of the Study:

Lack of experiences: Lack of experiences has acted as constraints in the way of

Overview of the Organization

2.02 Capital Structure of BRAC Bank Ltd

2.03 Board of Directors

Sir Fazle Hasan Abed, KCMG

Muhammad A. (Rumee) Ali

Shib Narayan Kairy

Tamara Hasan Abed

Dr. Hafiz G.A. Siddiqi

Syed Mahbubur Rahman

2.04 Our Subsidiaries

BRAC EPL Investment Limited

BRAC SAAJAN Exchange Limited

BRAC IT Services Ltd. (biTS)

Financial Institutes, Educational Institutes, Micro-Finance, NGOs, FMCG

2.05 Corporate Vision

2.06 Corporate Mission

Sustained growth in Small & Medium Enterprise sector

Assets through syndications and investment in faster growing sectors.

compromise on service quality

compromise on service quality

2.07 Core Values

Value the fact that one is a member of the BRAC family

superior service and mutual benefit

2.08 Management of Organizational

2.09 Function of Organization

Small and Medium Enterprise

Small and Medium Enterprise:

Distribution Serve the acquired customers

Financial ratios are mathematical comparisons of financial statement accounts or categories.

3.2 Different Types of Ratio Analysis

Analyzing Liquidity Ratio

Analyzing Liquidity Ratio:

Analyzing Activity Ratio:

Analyzing Debt Ratio:

3.3 Ratio Analysis of BRAC BANK LTD.

Source: Annual report of Brac Bank Ltd 2010-11

Figure: Current Ratio

3.3.02 Operating Cash Flow Ratio

Operating Cash Flow

Source: Annual report of Brac Bank Ltd 2010-11