Analysis between General Commercial Banks and Islamic

Course Title: Project Report

Course Code: BUS498
Prepared To
Leo Vashkor Dewri
Lecturer
Department of Business
Administration
East West University

Prepared By
Saiful Islam

ID: 2009-3-13-027
Major: Accounting
Spring14

15 April 2014
LeoVashkor Dewri
Lecturer,
Department of Business Administration
East West University
Dhaka.
Subject: Regarding Submission of BUS498 Project Report
Dear Sir:
With great pleasure I submit this project that I have been assigned as an important requirement of
BBA program at East West University. I found the study to be quite interesting, beneficial and
knowledge. I have tried my level best to prepare an effective & creditable report.
This project report is about A comparative financial analysis between general commercial bank
And Islamishariah bank.
I also want to thank you for your support and patience with me and I appreciate the opportunity
provided by East West University to work on this wonderful project report.
Sincerely Yours,
Saiful Islam
ID: 2009-3-13-027
Major: Accounting
Department of Business Administration
East West University

Acknowledgement
Assistance and cooperation of different people in different stages of my project paper preparation
helped me to add more beauties to the report. Preparing this project a have worked a lot and
went to different places to collect data. Without those people help it would not have been
possible for me to work on this project. I faced many problems when started the work on report
but I am greatly thankful to Allah for enabling me to get successfully through my
responsibilities.
I would like to thank Ms. Leo Vashkor Dewri who is my project advisor, helped me lot to prepare
this project, time to time she advised me how to work on it. Also my cousin Mr. Mohammad Asif
who worked in Dhaka Stock Exchange whose assistance priced me huge, thanks to that person
too. There are many people who helped me; it is not possible to mention all the names though I
remember your help.
I have prepared this report as an integral part of BBA program Under the Business
Administration department, East West University. I am highly indebted to a number of person for
their kind advice, suggestions, directions and cooperation that have enabled me to prepare this
report.
I am very grateful to my teacher for all his kind cooperation and guideline in preparing this
paper.
I also like to thank the entire departmental heads and stuff who helped me in various ways. The
members of the management of all the banks I worked with were very co-operative and helpful
to me from top to bottom level.
Finally this paper is subject to defects drawbacks that are inherent in very human endeavor. I
therefore request every reader of this paper to furnish me any mistake so that further action for
improvement can be taken.

Executive Summary
This project report is based on my analysis of financial statements of 2008, 2009, 2010, 2011
and 2012 of Prime Bank Limited, Brac bank Limited, Dutch-Bangla Bank Limited, Islamic
Bank, Shahjalal Bank, and Al-Arafah Islamic Bank Limited. I have done my analysis mainly
focusing on the comparative analysis between these six Banks. In this period, I have chosen three
Islamic and three General Commercial Banks to done this performance Comparison. It was a
great opportunity to know and gather knowledge different types of banking operations. My
faculty supervisor helped me to choose the topic- Comparative analysis between General
Commercial Banks and Islamic Shariah Banks. In the new competitive business era, general
banking sector is getting more competitive in Bangladesh. But it is also true that, Islamic
Banking sector has drawn the attention of many in this competitive Banking Industry.
This paper focuses on the comprehensive comparison about the performance of general and
Islamic banking system operation in Bangladesh. For this analysis I have used some most
commonly used measures such as general business measures, profitability ratios liquidity ratios.
Though, both general and Islamic banking have enormous contribution to the economy they have
two major functional differences. First one is that whereas the general banks follow borrowing
and lending mechanisms, the Islamic bank does trading and investment mechanisms and neither
accepts nor pays interest in any of its activities. And the other is that the conventional banks
provide and receive interest for deposit and advance but Islamic banks are concerned with profit
in case of both deposit and investment.
In this sector the most used financial statements are the balance sheet and profit and loss account
where the balance sheet shows the financial position and profit and loss account shows the net
profit or net loss of a bank. Ratio Analysis deals with these statements. Ratio analysis is the most
popular trend to evaluate a banks performance over years or with other companies in an
industry. In my report I had to study these banks financial statements for the last five years then

had to analyze and give significant comments regarding the changes in the financial position.
Analysis and interpretation of these financial statements through ratio analysis has now become
an important technique for performance appraisal because the investors, financial experts,
management executives and the bankers are always rely on these ratios to make important
decisions. The management team of any bank, investor and the government agencies always
concern about liquidity ratios and adequacy ratios of a bank which interprets the efficiency of a
bank.
As a part of my B.B.A program, I have spent three months by analyzing the activities of these
Islamic and Traditional Banks. I have analyzed the financial statements of these banks to find out
its ratios by using its past records. After preparing this report I came to know that analysis of
financial statements through ratios helps to overcome the past flaws and make the future
decisions and strategies. Therefore, it is very necessary for every organization whether the
companys size is to make financial statement and to analyze it by ratios.

Table of contents
Topic
Letter of Transmittal
Acknowledgement
Executive summary

Page no.
I
Ii
iii-iv

Chapter 01
1.1 Introduction
1.2
1.3
1.4
1.5
1.6

Background of the study

Objective of the report
Scope of the project
Limitation of the study
Methodology & data sources
1.6.1 Data analysis
1.6.2 Conceptual framework
1.6.3 Theoretical Framework
1.6.5 Population
1.6.6 Sample

10-11
11
11-12
12
12
13
14
15
16-18
18
18

Chapter 02
2.1 Literature Review

19-20

Chapter 03
3.1 Overview of banking system of Bangladesh
3.2 Impact of Banking Industry in the Bangladesh
economy
3.3 Current Structure of Bank
3.4 Islamic banking
3.5 Comparison between Islamic bank and general
bank

21
21-22
22-23
24
24

Chapter 04
4.1 Ratio analysis
4.2 Profitability ratio
4.2.1 Return on sales
4.2.2 Return on asset (ROA)
4.2.3 Net interest margin
4.2.4 Net operating margin
4.2.5 Earnings per share(EPS)
4.3 Liquidity ratios
4.3.1 Current ratio(CR)
4.3.2 Current asset ratio(CAR)
4.3.3 Loan ratio
4.4 Risk ratios
4.4.1 Credit risk
4.4.1.1Ttotal loans/ total deposits
4.4.2 Interest rate risk ratio
3.4.2.1 Interest sensitive asset/ interest
sensitive liabilities
4.4.3 Price risk
4.4.3.1 Price earnings ratio
4.5 Equity ratio
4.6 Other financial ratios
4.6.1 Rate of return on loans
4.6.2 Loan to asset ratio
4.6.3 total debt to equity ratio
4.6.4 Debt ratio

25
26
26-29
28-29
29-31
30-32
32-34
34
35-36
36-37
38-39
39
39
40-41
41
41-43
43
43-45
46-47
47
47-49
49-51
51-53
53-55

Chapter 05
451 findings of the project at a glance
5.2 Performance indicator
5.2.1 Profitability
5.2.2 Liquidity
5.2.3 Risk
5.2.4 Capital Adequacy
5.2.5 Others

56
57
57
58
58-59
59
59-60

Chapter 06
6.1 Conclusion
6.2 Recommendations
6.3 Bibliography

60
61
62-64

List of Charts
Chart
no.

Chart name

01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16

Return on equity
Return on asset
Net interest margin
Net operating margin
Earnings per share
Current ratio
Current asset ratio
loan ratio
Total loan to total deposit
Interest sensitive
price earnings ratio
Equity ratio
Rate of return on loans
loan to asset ratio
total debt to equity ratio
debt ratio

Page
no.
27
29
30
32
34
36
37
39
41
43
45
47
49
51
53
55

List of tables
Table
no.

Table name

Page no.

01
02

Steps of presenting ratio analysis

Current structure of banking system in
Bangladesh
Comparison of general banking and Islamic
banking
Return on equity
Return on assets
Net interest income
Net operating margin
Earnings per share
Current ratio
Current asset ratio
loan ratio
Total loan to total deposit
Interest sensitive
price earnings ratio
Equity ratio
Rate of return on loans
loan to asset ratio
total debt to equity ratio
debt ratio

14
22-23

03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19

24
26
28
29
31
33
35
36
38
40
42
44
46
48
50
52
54

10

20

findings of the project at a glance

56

Chapter: 01
1.1 Introduction
Bangladesh is the country where more than 90% people are Muslim (Pew Rsearch
Religion&Public Life Project, 2011). . Naturally, it remains a deep cry in their hearts to fashion
10

11

and design their economic lives in accordance with the precepts of Islam. Therefore, with a view
to provide Islamic banking services at first Islamic Bank Bangladesh ltd was established 1983.
(Assignmentpoint.com, 1995). Now we have several Islamic Banks those are providing different
banking services than that of general commercial bank. Islamic Banking has been growing
worldwide significantly in the past three decades and is developing remarkably in the Southeast
Asia, Middle East and even in Europe and in North America. Bangladesh also has this dual
banking system where Islamic shariah Bank and general Bank banks are operating side by side.
The number of general commercial banks are more than the Islamic Shariah banks, contributing
more in the economy. The banks play an important role in the economy of the country. Banking
sector in Bangladesh demonstrated a moderate level of resilience in FY11, attributable to
improvement in key financial indicators of the banking industry. With a view to maintaining
soundness, solvency, efficiency and stability in the financial system, Bangladesh Bank (BB)
initiated a number of policy measures including greater emphasis on risk managements in the
banks, periodic review of stability of the banks and the banking industry through stress testing,
strengthening financial inclusion of under-served/un-served productive economic sectors and
population segments, encouraging enhanced CSR activities and Green Banking initiatives.
Moreover, preparation of revised risk management guidelines is at final stage. The following
paragraphs highlight the recent regulatory and supervisory measures initiated by BB for banks,
industry statistics and performance trends of the banking sector. The contribution of banking
sector to the GDP of Bangladesh is very impressive. In the FY 2008-2009 contribution of
financial sectors to the GDP was 8.00%, while the contribution of banking sector was 7.22%.
However, this is not a good sign for the overall economy of Bangladesh but also compare to the
whole world this is very satisfactory outcomes for the Bangladesh economy as the banking sector
in rest of the world was collapsed in the meantime. Therefore, without any question we can say
that the banking sector of the Bangladesh is a progressive economic sector in our country.
The purpose of this paper is to compare the financial performance (profitability, liquidity and
structure etc.) of the two banking styles over the 2007-2011 time periods.
Among other findings the empirical results show no significant differences in terms of
profitability. However, Islamic banks are less exposed to liquidity risk. On the other hand,
general banks depend more on external liabilities than Islamic banks.

1.2 Background of the study

Under BBA program a student must have to do a project or internship by which students
experience practically. In a project students have to go for huge research and apply their

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theoretical knowledge into the project work. This project enables a student for developing their
analytical skills. At the end of the day it reflects what they learned throughout the program.

1.3 Objective of the project

The primary objective:
The primary objective of preparing this report is to compare financial performance analysis of
General Commercial Bank and Islamic Shariah Banks, and to have a clear conception about all
of the essential parts of this project.
Secondary objective:

To evaluate the Profitability of these banks in a view to compare performance.

Compare the performance of these banks through various financial ratios.

Overview of these Banks.

To identify the problem facing by them.

At least to relate theoretical knowledge with practical experience in several functions of

these banks.

To show the comparable areas of General Commercial Bank and Islamic Shariah Banks.

To know about the competiveness among the Islamicshariahbanks of Bangladesh in respect to

the services provided by the General Commercial Bank banks.

1.4 Scope of the project

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13

The project covers the topic A Comparative analysisbetween Islamic Shariah Banks and
General Commercial Banks. To conduct a study on this topic I have gathered valuable
information from EWU library, & Dhaka stock exchange library. I have also got some
information from web sites that are related to my topics. I have also collected much information
from Security Exchange Commission library.

1.5 Limitation of the study

Shortage of time period:
I had to complete this report writing within a shorter period of time. So the time constraint of the
study hindering the course of vast area and time for preparing a report within the mentioned
period is really difficult.
Lack of sufficient well informed officials:
Many officials of the branch are not well informed about some required information. I had to
face many difficulties to collect this information.

1.6 Methodology & data sources

Project design:
This project report typically focused on ratio analysis but there is some descriptive information
too. Two general commercial banks and two Islamic shariah banks are taken to evaluate the two
different banking style performances.
Data sources:
This report is prepared mainly on the extensive use of secondary data available in annual reports.
Based on the data from the annual reports the overall project report is prepared. The overall
conceptual and theoretical framework has been explained as well as the how the data are
analyzed is explained below:

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o The Primary sources are absent in this case.

o The secondary Sourcesof data and the information are used to prepare this
project work.
Data collection:
o Annual Report
o Website
o Journals
o Bangladesh bank bulletin

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1.6.1 Data analysis:

Financial Analysis based on the performance comparison has been done with ratio formulas,
and used to compare the performances of both types of banks. Ratio analysis is presented in a
standard manner so that the calculations and interpretations might clear to all. The decision
criterion is based on the comparison of each banks performance with the Industry Average. The
industry average is calculated on the basis of the average of average of the banks that are
collected as sample for the comparison of performance between traditional and Islamic banks.
The Ratio Presentation follows the following Steps:

Presentation of Ratio Analysis

Step #

Ratio Title and Formula

01
Step #

Calculation (with numerator and

02
Step #

denominator)
Interpretation

03
Step #

Graphical representation

04
Table # 01: Steps of presenting ratio analysis

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16

1.6.2 Conceptual framework

Financial performance

Profit ratio

ROE

ROA

Liquidity
Ratio

Solvency
Ratio

CREDIT

Capital
Ratio

EQUITY

Other
Financial
Ratio

RFL

CR
INTEREST

LAR

CAR
PRICE

NIM

TDE

LDR
NOM

DER

EPS

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17

1.6.3 Theoretical Framework

The ratio analysis involves method of calculating and interpreting financial ratios to asses banks
performance. In order to compare performance of Islamic banks and General commercial banks
for the period of 2008-2012 the study uses inter-bank analysis. The study evaluates inter-bank
financial performance of Islamic and General commercial banks in term of profitability, liquidity,
risk, capital adequacy, and others efficiency. Financial ratios are applied to measure these
performances. The study uses seventeen financial ratios to evaluate bank performances. These
ratios are grouped under five broad categories.
(Assignmentpoint.com, 1995)
Profitability Ratios

Profitability ratios measure the managerial efficiency (investopedia.com, 2002). These ratios use
margin analysis and show the return on assets, deposits, investments, and equity. The higher
profitability ratios are indicator of better performance. The ratios are-

o
o
o
o
o

Return on Equity Capital (ROE) = Net Income / Total Equity Capital

Return on Assets (ROA) = Net Income / Total Assets
Net Interest Margin (NIM) = [(Interest Income-Interest Expense) / Total Assets]
Net Operating Margin (NOM) = Net Operating Revenues / Total Assets
Earnings Per Share (EPS) = Net Income / Common Equity Shares Outstanding

Liquidity Ratios
Liquidity ratios measure the bank ability to meet its short-term obligations. Banks face liquidity
problem due to excess withdrawal from current and saving account (Readyratios.com, 2001).
There are several measures of liquidity. Liquidity position of banks is measured by using four
following ratios.

o Current Ratio (CR) = Cash and account with banks/Total deposits

o Current Asset Ratio (CAR) = Current asset /Total asset
o Loan Deposit Ratio (LDR) = Loans/ Deposits

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Risk Ratios
Risk to the manager of a financial institution or to a regulator supervising a financial institution
means the perceived uncertainty associated with a particular event (Investopedia.com, 2000).
Bankers always try to achieve the high stock value and high profitability. In this case, I have
chosen some vital risk that encountered daily by financial institutions. This area. Credit Risk:The Probability that Some of the Banks Assets Will Decline in Value and
Perhaps Become Worthless.
o Total Loans/Total Deposits
b. Interest Rate Risk Measures: The Danger that Shifting Interest Rates May Adversely
Affect a Banks Net Income, the Value of its Assets or Equity.
o Interest Sensitive Assets/Interest Sensitive Liabilities
C. Price Risk: Market value ratios relate the observable market values like the stock price with
the book values obtained from the firm's financial statements.
o Price Earnings Ratio

Capital Adequacy Ratios

Capital ratios indicate the healthiness of financial institution to shock withstanding losses
(Investopedia.com, 2002). These ratios identify the already existing banking problems. Adverse
trends in these ratios may increase risk exposure and capital adequacy problems. This study
focused on two following Capital ratios.

o Equity Ratio = Shareholders Equity / Total Assets

Other Financial Ratios

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There are some other financial ratios exist that are highly important to conduct in terms of
evaluating banks financial performances. This are-

o
o
o
o

Rate of Return on Loans = Net Interest Income / Total Loans

Loan to Asset Ratio = Total Loans/Total Asset
Total Debt to Equity Ratio = Total Liabilities / Total Equity
Debt Ratio = Total Debt / Total Assets.

1.6.4 Population
The population of this research is the overall banking Industry in particular the Islamic and General
commercial banks of Bangladesh.

1.6.5 Sample
ShahjalalIslamic Bank Limited, Al-Arafah Islamic Bank Limited, and ICB Islamic Bank Limited
are selected as Islamic banks and Bank Asia Limited, Dhaka Bank Limited, and Dutch-Bangla
Bank Limited are selected as General commercial banks. In our country we have only 10 Islamic
Based Banks, among them these three Islamic Banks can be clearly differentiated in respect of
their performance. These threeGeneral commercial banks recent performance forced to choose
these banks as a sample for the project. But in general these banks are selected randomly, though
the availability of information has played an important role to choose them. There are few other
reasons for choosing these four Banks. This are Availability of data as required when needed.
Reputation of these banks.
Growth of these Banks.

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Chapter 02
2.1 LITERATURE REVIEW
There are so many studies regarding performance analysis of the commercial banks and
Islamishariah bank. But a number of major studies have been conduct about performance
analysis of the commercial banks and islamishariah banks. Some of them are given below:
AnanyaRaihan& et al (Raihan, 2001) stated about the picture of modernization and automation
of commercial Banks and islamishariah banks in Bangladesh. This article emphasizes about the
IT development of commercial Banks in Bangladesh. This article also talked about the
information process and (ICT) based banking system.
Moniruzzaman and Rahman (Monirruzzaman, 1998) talked about the profitability
performance of denationalized banks. They have seen that 36.43 percent profit increase in 1984
in relation to 1983 profit which was 35.33 percent. UBL, PBL and RBL, The trend of
Profitability performance decrease of after cutting denationalization. On that time their profit
performance widely fluctuates after denationalized period compared the pre- denationalized
period.
N. Jahangir & M. Haq (Haq, 2005) stated about the internal problems about different banks.
They highlighted about the resources about bank, absence of infrastructure facilities, lack of
modern technologies, and lack of managerial support, unplanned employment which affect the
performance of a bank and banking industry. . As service organizations, banks should have
efficient complaint handling system. But neither private nor government banks have this system
which needs to be established on an urgent basis to uphold the service quality of banking sector.
After all if a bank should keep the performance then that bank should enhance these facilities.
Jahangir, Shill and Haque (Jahngir, 2007) stated about the profitabilitys traditional
measurement which is related to the stockholders equity. This stockholders equity is quite
different in banking industry from any other sector of business. Because so many factors are
included there are loan of deposit ratios, dividend payment ratios which indicate the good and
bad impression of banks profitability as it depicts the status of asset liability management of
banks.
Hossain and Bhuiyan (Hossain, 1990) talked about the operational definition of performance
measurement of universally. In a broad sense the level of performance of an industry can be

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measured by the extent of its organizational effectiveness. In the context of services rendered
towards public the performance of an organization can be viewed as the extent to which its work
is carried out within established specifications for goods and services produced to the general
satisfaction of the clientele served, within given cost and time constraints, and in such a manner
as to support or contribute to the achievement of the organization objectives.
Berger &Humphery (Humhery, 1997) opinion that the measurement of performance of banking
sector is that which represent the scenario of good and bad performance of banking sector all
over the world. By measuring the performance a bank can resolve the lacking and perform better
in future.
Bhattacharjee (Bhattacharjee, 1989) found that there are five different sets of productivity
represent the five different dimensions. Three sets of showing the productivity measurement and
the rest of the two showing the rising trend about the performance of a bank. Banking Sector in
Bangladesh to be associated with variations in policies pertaining to structure and processes as
well as variations in deposit mix, credit mix and service package offered by banks. Each of these
factors represented specific group of homogenous productivity measures. They are employee
productivity, labor productivity etc.
Chowdhury and Ahmed (Chowdhury, 2002) stated about the net income and the EPS of the
selected private commercial banks have increased from the previous year during 2003 to 2006 by
conducted the research of the performance of the banking sectors. Loans recovery rate indicated
that the banks are able to manage their credit efficiently.
According to Ncube (Ncube, 2009) noticed that there are two broad approaches to measure the
performance of the banking sector and accounting approaches. This makes use of economic
technique and financial ratios. Traditionally accounting methods primarily based upon the use of
financial ratios have been employed for assessing bank performance.

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Chapter 03
3.1 Overview of banking system of Bangladesh
The financial system of Bangladesh is comprised of three broad fragmented sectors:
1. Formal Sector,
2. Semi-Formal Sector,
3. Informal Sector.
The sectors have been categorized in accordance with their degree of regulation.
The formal sector includes all regulated institutions like Banks, Non-Bank Financial Institutions
(FIs), Insurance Companies, Capital Market Intermediaries like Brokerage Houses, Merchant
Banks etc.; Micro Finance Institutions (MFIs).
The semi-formal sector includes those institutions which are regulated otherwise but do not fall
under the jurisdiction of Central Bank, Insurance Authority, Securities and Exchange
Commission or any other enacted financial regulator. This sector is mainly represented by
Specialized Financial Institutions like House Building Finance Corporation (HBFC), Palli Karma
Sahayak Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non-Governmental
Organizations (NGOs and discrete government programs.

3.2 Impact of Banking Industry in the Bangladesh economy

In Bangladesh, following independence, the banking sector was nationalized. The dominance
of these nationalized banks continued well until the late 1990s, even though gradually
privatebanks were allowed entry into the banking business. One key indicator of this is the
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volume of non-performing loans (NPLs). For example, as of 2000, total NPL of the state-owned
commercialbanks (SCBs) stood at a whopping 39 per cent of total loans (Taka 110 billion or 10
per cent of GDP).While some of the NPL reflected bad lending decisions, especially those given
to weaklyperforming public enterprises, a large part reflected the non-servicing of loans by
politicallywell-connected private business. This NPL ratio has come down recently based on
reformefforts while at the same time the lending share of the SCBs has been sharply cut back
bygreater competition from private banks, yet the gross NPL of SCBs remains fairly large (24
percent or around taka billion 200 as of June 2009). In the private sector, NPLs for domestic
privatebanks fell from 22 per cent in 2000 to only 4.9 percent in June 2009 (International
Monetary Fund, 2010).

3.3 current Structure of Bank

Bangladesh Bank (BB) has been working as the central banksince the country's independence. Its
prime jobs include issuing of currency, maintaining foreign exchange reserve and providing
transaction facilities of all public monetary matters. BB is also responsible for planning the
government's monetary policy and implementing it thereby. The BB has a governing body
comprising of nine members with the Governor as its chief. Apart from the head office in Dhaka,
it has nine more branches, of which two in Dhaka and one each in Chittagong, Rajshahi, Khulna,
Bogra, Sylhet, Rangpur and Barisal. Following is the countrys banking system as on
30thNovember, 2012 (Bangladesh Bank, 1972). In the following table, there is the list of Banks
of Bangladesh under their category.
Nationalized Commercial Banks (NCBs)
1. Sonali Bank
2. Janata Bank
1.Pubali Bank
2.Uttara Bank

3. Agrani Bank
4. Rupali Bank
Private Commercial Banks (PCBs)
16.Al-Arafah Islami Bank Ltd.
17.Social Investment Bank Ltd.
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3.National Bank Ltd.

18.Dutch-Bangla Bank Ltd.
4.The City Bank Ltd.
19.Mercantile Bank Ltd.
5.United Commercial Bank Ltd.
20.Standard Bank Ltd.
6. Arab Bangladesh Bank Ltd.
21.One Bank Ltd.
7.IFIC Bank Ltd.
22.EXIM Bank
8.Islami bank Bangladesh Ltd.
23.Bangladesh Commerce Bank Ltd.
9.Al Baraka Bank Bangladesh Ltd. 24.Mutual Trust Bank Ltd.
10.Eastern Bank Ltd.
25.First Security Bank Ltd.
11.NCC Bank Ltd.
26.The Premier Bank Ltd.
12.Prime Bank Ltd.
27.Bank Asia Ltd.
13.South East Bank Ltd.
28.The Trust Bank Ltd.
14. Dhaka Bank Ltd.
29. Shah Jalal Bank Limited
15. ICB Islamic Bank
30. AB Bank
Foreign Bank
1. American Express Bank
7. Muslim Commercial Bank Ltd.
2. Standard Chartered Grindlays 8. City Bank NA
Bank
3. Habib Bank Ltd.
9. Hanvit Bank Ltd.
4. State Bank Of India
10. HSBC Ltd.
5. Credit Agricole Indosuez (The 11. ShamilIslami Bank Of Bahrain EC
Bank)
6. National Bank of Pakistan
1.Bangladesh Krishi Bank

12. Standard Chartered Bank

Development Banks
3.
Bangladesh
ShilpaRinSangstha

2.RajshahiKrishiUnnayan Bank

Bank
4. Bank
Commerce
Others

of

Small

Industries

&

Bangladesh Ltd.

1. Ansar VDP Unnayan Bank

3. Grameen Bank
2. Bangladesh Samabai Bank Ltd. 4. Karmasansthan Bank
(BSBL)
Table # 02: Current Structure of Banking System in Bangladesh.

3.4 Islamic bank

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Islamic banks in the banking sector demonstrated a remarkable growth in CY11. The expansion
of the Islamic Banking network was also impressive. As a proportion of the overall banking
industry, the combined share of Islamic banks, excluding Islamic Banking Branches/ windows of
conventional banks was found around 16 percent in assets, 18 percent in investments, 17percent
in deposits, 13 percent in equity and 16 percent in liabilities as of end-December 2011 (Khan,
2014).

3.5comparisons between Islamic bank and general bank

General commercial bank

Islamic Banking

ing
Money is a commodity besides

Money is not a commodity though it is

medium of exchange and store

used as a medium of exchange and store

of value. Therefore, it can be

of value. Therefore, it cannot be sold at

sold at a price higher than its

a price higher than its face value or

face value and it can also be

rented out.

rented out.
Time value is the basis for

Profit on trade of goods or charging on

charging interest on capital.

providing service is the basis for earning

Interest is charged even in case

profit.
Islamic bank operates on the basis of

the organization suffers losses

profit and loss sharing. In case, the

by using banks funds.

businessman has suffered losses, the

Therefore, it is not based on

bank will share these losses based on

profit and loss sharing.

the mode of finance used (Mudarabah,

While disbursing cash finance,

Musharakah).
The execution of agreements for the

running finance or working

exchange of goods & services is a must,

capital finance, no agreement

while disbursing funds under Murabaha,

for exchange of goods &

Salam &Istisna contracts.

services is made.

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General commercial banks use

Islamic banking tends to create link with

money as a commodity which

the real sectors of the economic system

leads to inflation.

by using trade related activities. Since,

the money is linked with the real assets
therefore it contributes directly in the
economic development.

Table # 03: Comparison of General banking& Islamic Banking.

Chapter: 04
4.1 Ratio analysis
Ratio analysis is a study of the relationships between financial variables. It is very important in
fundamental analysis which investigates the financial health of any financial institution. This
ratio analysis gives frank financial information in this current business world. By giving a glance
anyone will be able to know what the position that institution is in now. Therefore all
stakeholders take interest in ratio analysis. For example using liquidity ratios managers can use
the information if the institution's liquidity is struggling and they may have to take out short term
finance. For this reason to compare the performance of Traditional and Islamic Banks the ratio
analysis has been selected. Here in this report contains the most common ratios and analyze to
compare the performance of selected Traditional and Islamic Banksfor the period of 2007-2011.
Due to the replication of the bank names again and again, names of the banks have been shorten,
likeDutch Bangla Bank Limited (DBBL)
Prime Bank Limited (PBL)
Brac Bank Limited (BBL)
Islamic Bank Limited (IBL)
Shah Jalal Islamic Bank Limited (SHIBL)
AL-Arafah Islamic Bank Limited. (AIBL)

26

27

4.2 Profitability ratios

Profitability Ratios measure the overall earnings performance of an institution and its efficiency
in utilizing assets, liabilities and equity (investopedia.com, 2002). Profitability ratios show a
company's overall efficiency and performance. Ratios that show returns represent the firm's
ability to measure the overall efficiency of the firm in generating returns for its shareholders.

4.2.1 Return on Equity

Return on equity measures a banks profitability which calculates how much net profit that bank
may generates with the money that shareholders have invested as equity (Investinganswers.com,
2005). The Return on Equity of a company measures the ability of the management of the
company to generate adequate returns for the capital invested by the owners of a company. The
Formula isReturn on Equity (ROE) = Net Profit after Taxation / Equity

Name

2008

2009

2010

2011

2012

Avera

Indust

of the

(%)

(%)

(%)

(%)

(%)

ge

ry
Avg.

Bank
DBBL
PBL

29.9

30.3

35

27

23.4

(%)
29.18

20.58

30.19

21.06

20.32

12.2

20.87

27

28

BBL
IBL
SHIBL

16.87
22.88
19
25.58

19.19
16.93

18.95
19

25.1

30.71

17.9
17.42

5.47
13.9
17.01

24%

17.25
22.44

13.8
AIBL

20.13
24.7

24.1

20.01

18.34

13.51

Table # 04: Return on Equity.

Interpretations:
ROE is very popular ratio toward the shareholders of any bank. After doing the analysis on the
six selected banks the industry average comes at 24%. Financial statements of selected six banks
shows those in years 2008, 2009,2010, 2011, and 2012 the average return from 100 taka invested
by the shareholders is respectively 29.18%, 20.87%, 16.87%, 17.25%, 22.44% and 20.13%
respectively for the Banks- DBBL, PBL, BBL, IBL, SHIBL and AIBL; and there average is
24%. The higher the percentage is the better for the bank as well as for shareholders. So we can
say that DBBL without any doubt is in the best position compare to these other banks in respect
to return on equity. So in our performance comparison between Traditional and Islamic Banks
the general commercial bank DBBL is ahead from the Islamic Banks in terms of return on equity.
The positions return on equity is shown in a graph below:

28

29

40
35
30
25

Dutch bangla bank

20

prime bank

15

Brac bank

10

Islami bank

shahjlal bank

Al-ArafahIslami bank

Chart 01: Return on Equity

4.2.2 Return on Assets (ROA)

The Return on Assets of a company determines its ability to utilize the assets employed in that
company efficiently and effectively to earn a good return (Investopedia.com, 2004). Return on
assets measures the amount of profit that the company generates as a percentage of the value of
its total assets. A company's return on assets (ROA) is calculated as the ratio of its net income in
a given period to the total value of its assets this ratios formula is-

Return on Assets (ROA) = Net Profit after Taxation /

Name of
Bank

2008
(%)

2009
(%)

2010
(%)

2011
(%)

2012

Avera

Indust

(%)

ge

ry

(%)

Avera

29

30

ge

DBBL
PBL
BBL

1.50

1.60

2.20

1.90

1.70

1.78

1.30

2.37

2.16

2.07

2.01

1.98
1.29

1.64
IBL

1.27
2.26

1.56
1.34
2.07

1.55
1.47
3.01

1.36
1.35
1.26

0.35
1.27
1.44

SHIBL
AIBL

2.40
%

1.34
2
1.92

1.80

1.77

2.65

2.06

1.3

Table # 05: Return on Assets.

Interpretations:
Ratio Analysis for the Return on Assets of selected six banks shows those in years 2008,
2009,2010, 2011, and 2012 the average return from 100 taka invested is assets is respectively
1.78%, 1.98%, 1.29%, 1.34%, 2%, and 1.92% respectively for the Banks- DBBL, PBL, BBL,
IBL, SHIBL and AIBL; and there average is 2.40%. The higher the percentage is the better for
the banks asset growth. So we can say that ICBI (ICB Islamic Bank) an Islamic Bank without
any doubt is in the best position compare to these other banks in respect to return on assets. The
positions return on equity is shown in a graph below:

30

31

3.5
3
2.5
2

Dutch bangla bank

1.5

prime bank
Brac bank

Islami bank

0.5

shahjlal bank

Al-ArafahIslami bank

Chart 02: Return on Assets.

4.2.3 Net Interest Margin (NIM)

Net interest margin (NIM) is a measure of the difference between the interest income generated
by banks or other financial institutions and the amount of interest paid out to their lenders (for
example, deposits), relative to the amount of their (interest-earning) assets (Answers.com, 2007).
It is similar to the gross margin of non-financial companies.
Net Interest Margin (NIM) = [(Interest Income-Interest Expense) / Total
Assets]
Name of
Bank

2008
(%)

2009
(%)

2010
(%)

2011
(%)

2012
(%)

Avera

Industr

ge

(%)

Averag
e

DBBL

3.31

2.90

4.10

4.90

4.38

3.92

PBL
BBL

2.28

2.31

3.49

2.61
2.67

2.52
2.10

2.64
2.56

2.43

2.46
4.01

2.33
3.71

1.97
3.83

4.29

3.39

3.85

IBL

31

32

SHIBL
AIBL

3.91
0.79

2.86
0.81

2.92

3.42
0.29

3.33
1.03

3.29
1.14

2.51
Table # 06: Net Interest Income.

Interpretations:
As the net interest margin measures how large a spread between interest revenues and interest
expenses management has been able to achieve by close control over earning assets and pursuit
of the cheapest source of funding, thus from the above calculation we can definitely say that
Dutch-Bangla Bank limited is in the best position in terms of the net interest margin comparing
with other five banks. DBBLhas a net interest ratio of 3.92% whereas the industry average of
these banks is 2.43%. Two Islamic banks are having similar type of percentages i.e. 3.85 and
3.29 %, on the other hand Prime Bank Limited is having a percentage of 2.64%.

5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0

Dutch bangla bank

prime bank
Brac bank
Islami bank
shahjlal bank
Al-ArafahIslami bank

Chart 03: Net Interest Margin.

4.2.4 Net Operating Margin (NOM)

32

33

This ratio says how effectively management is running its operations by using assets to generate
income and expenses (Investopedia.com, 1999). A company's operating income after operating
expenses are deducted, but before income taxes and interest are deducted. The formula is-

Net Operating Margin (NOM) = Net Operating Revenues / Total

Assets
Name of
2008
Bank

(%)

2009

2010

2011

2012

Avera

Indust

(%)

(%)

(%)

(%)

ge

ry

(%)

Avera
ge

DBBL

3.19

3.31

4.15

3.88

3.34

3.57

PBL

2.91

3.82

3.05

3.68

2.78

3.25

BBL

5.52

3.50

4.02

3.61

3.45

4.02

IBL

3.5

3.20

3.25

2.10

2.30

2.87

SHIBL

4.10

3.46

4.50

2.78

2.65

3.50

AIBL

3.30
%

3.53
3.39

3.28

3.85

3.70

3.45

Table # 07: Net Operating Margin.

Interpretations:
Ratio Analysis for the Net Operating Margin shows that the industry average is 3.30%. Among
the six selected banks BBL and Shah Jalal Islamic Bank Limited (SHIBL) is in the best position
with having an above average operating margin of 4.02% and 3.57% whereas the two selected
bank DBBL and BBL also achieved above average margin. It means SHIBL, DBBL, BBL, AIBL
all four banks are having effective management for their operations. The positionof these banks
is shown in a graph below:

33

34

6
5
4
Dutch bangla bank

prime bank

Brac bank

Islami bank
shahjlal bank

Al-ArafahIslami bank

Chart 04: Net Operating Margin.

4.2.5 Earnings per Share (EPS)

The portion of a company's profit allocated to each outstanding share of common stock.
Companies usually report the weighted average of the number of shares outstanding over the
reporting period (Investopedia.com, 2000). Earnings per Share are a widely used measure of
profitability. Net income of a firm divided by the number of its outstanding shares the sharesheld
by the stockholders (shareholders). The formula is

34

35

Earnings Per Share (EPS) = Net Income / Common Equity

Name of

2008

2009

2010

2011

2012

Avera

Indust

Bank

(%)

(%)

(%)

(%)

(%)

ge

ry

(%)

Avera
ge

DBBL
PBL
BBL
IBL
SHIBL
AIBL

5.7
4.30

5.7
7.80

3.95
4.33
2.98

2.94
4.59
3.91
2

3.72

10
5.70

10.80
4.70

11.60
2.22

5.05
4.46
4.65

4.29
4.84
2.10

1.32
4.42
3.62

4.14

3.73

2.38

8.76
4.94
3.51
4.53
3.46
3.19

6.12
%

Table # 08: Earnings Per Share.

Interpretations:
Ratio Analysis for the Earnings per Share shows that the industry average is 6.12%. Among the
six selected banks a DBBL is in the best position with having a earnings per share is 8.76%
because of the number of outstanding shares increased tremendously in last two years. Whereas
all other three banks are having an EPS of below industry average that is 4.94 for PBL, 3.51for
BBL for IBL 4.53 for AIBL is 3.19,. The positionof these banks is shown in a graph below:

35

36

14
12
10
8

Dutch bangla bank

prime bank

Brac bank

Islami bank

shahjlal bank
Al-ArafahIslami bank

Chart 05: Earnings Per Share.

4.3Liquidity ratio
Liquidity ratios measure the bank ability to meet its short-term obligations. Banks face liquidity
problem due to excess withdrawal from current and saving account. There are several measures
of liquidity. Liquidity position of banks is measured by using four following ratios.

36

37

4.3.1 Current Ratio (CR)

The ratio is mainly used to give an idea of the bank's ability to pay back its short-term
liabilities with its short-term assets (investorwords, 1998). The higher the current ratio, the more
capable the bank is of paying its obligations.
Current Ratio (CR) = Cash and account with banks/Total
deposits
Name of

2008

2009

2010

2011

2012

Bank

Avera

Industr

ge

y
Average

DBBL

1.17

1.19

1.14

1.12

1.17

1.02

1.02

1.06

2.37
1.11
12.45
3.07

1.25
PBL

1.14

1.05

6.40

1.09
BBL
IBL
SHIBL
AIBL

1.03
1.09
11.49

2.50
1.12
13.09

2.32
1.09
13.37

3.60
1.08
13.28

2.40
1.16
11.01

3.05

3.19

3.30

2.97

2.84

Table # 09: Current Ratio.

Interpretations
According to result the current ratio the industry average is 6.40. Which mean the industry has
11.51 taka of currents assets against 1 taka of short term debt or liability? It means the industry
has the ability to pay off its current liabilities with its current assets. From our ratio analysis we
found that SHIBL is in the best position in accordance to pay off their own short term liabilities
with 12.45 times. For Prime Bank Limited, Dutch-Bangla Bank Limited, and Al-Arafah Islamic
Bank Limited the current ratio is respectively 1.06 times, 1.17 times, and 3.07 timeswhich means

37

38

they invested less in short term assets. On the other hand IBL and BBLis 1.11 and 2.37 times
respectively. In fact the higher the current ratio is better for the institution because this higher
ratio helps to prevent getting default. Thus SHIBL is in the better position to prevent getting
default.

14
12
10
8

Dutch bangla bank

prime bank

Brac bank

Islami bank
shahjlal bank

Al-ArafahIslami bank

Chart 06: Current Ratio.

4.3.2 Current Asset Ratio (CAR)

The current assets ratio measures a company's ability to pay the liabilities that it is most likely to
have to pay soon with that assets that should yield cash the quickest. The Formula isCurrent Asset Ratio (CAR) = Current asset /Total

Name of

2008

2009

2010

20111

2012

Avera

Industry

Bank

(%)

(%)

(%)

(%)

(%)

ge

Average

(%)

38

39

DBBL
PBL
BBL
IBL
SHIBL
AIBL

8.46
7.8

8.13
7.33

9.94
5.28

8.66
6.87

12.06
6.38

10.37
13.57
20.88

12.84
13.47
17.82

11.49
11.81
16.15

11.40
10.43
16.50

16.64
8.66
9.56

6.12

7.51

5.63

6.87

8.49

9.45
6.73
12.55
11.59
16.18
6.92

15.17
%

Table # 10:Current Asset Ratio.

Interpretations:
According to result the current asset ratio the industry average is 15.17%. Which mean the
industry has 15.17 taka of currents assets against 1 taka of short term debt or liability. It means
the industry has the ability to pay off its current liabilities with its current assets. From our ratio
analysis we found that SHIBL is in the best position in accordance to pay off their own liabilities
with 16.18%. For Prime Bank, Brac Bank Limited, and Al-Arafah Islamic Bank Limited the
current ratio is respectively 6.73%, 12.55%, and 6.92% which means they invested much in short
term assets. On the other hand IBL and DBBL are belowof industry average with 11.59 and 9.45
percent respectively. In fact the higher the current asset ratio is better for the institution because
this higher ratio helps to pay off liabilities.

39

40

25
20
15

Dutch bangla bank

prime bank

10

Brac bank
5

Islami bank
shahjlal bank

Al-ArafahIslami bank

Chart 07: Current Assets Ratio.

4.3.3 Loan Ratio

Loan Ratio is also known as the Net loans to asset ratio, which means the Loans and lease
financing receivables, net of unearned income, allowance and reserves, as a percent of total
assets on a consolidated basis. The formula is

Loan Ratio = Net Loans /Total asset

Name of

2008

2009

20010

2011

2012

Avera

Industry

Bank

(%)

(%)

(%)

(%)

(%)

ge

Average

(%)

40

41

DBBL
PBL
BBL
IBL
SHIBL
AIBL

68.79
72.89

59.41
74.08

66.74
74.67

64.62
73.98

58.77
72.08

72.89
79.61
74.63
74.62

79.23
78.45
74.61

78.03
80.30
78.19

76.07
76.41
76.63

75.90
75.42
74.65

74.48

72.40

72.79

71.42

66.67
73.58
76.42
78.10
75.74
73.14

74.53
%

Table # 11: Loan Ratio.

Interpretations:
According to result the Total Loans to total asset ratios industry average is 74.53%,which mean
that the industry has used their assets of 100 Taka to give 74.53 taka valued loans. From our ratio
analysis we found that IBLhas the highest average ratio as well as the SHIBL and BBL is also
above the industry average with average ratio of 75.74% and 76.42%. On the other hand the
others twogeneral commercial banks are having below industry average. Increase in loan ratio or
the net loans to total asset ratios indicates the insufficient fund for bank to carry on operations
thus General commercial banks like PBL and AIBL having below average indicates that they are
in a good position for foster their operations in daily life. The analysis result is shown in graphs
below:
90
80
70
60
50
40
30
20
10
0

Dutch bangla bank

prime bank
Brac bank
Islami bank
shahjlal bank
Al-ArafahIslami bank

Chart 08: Loan Ratio.

41

42

4.4 Risk ratios

Risk to the manager of a financial institution or to a regulator supervising a financial institution
means the perceived uncertainty associated with a particular event (Investopedia.com, 2000). It
is divided into three parts- I. Credit Risk II. Interest Rate Risk. III. Price Risk.

4.4.1 Credit Risk

The Credit ratio, expressed as a percentage, which results when a borrower's monthly payment
obligation on long-term debts is divided by his or her net income or gross monthly income
(investinganswers.com, 2002). A credit ratio basically is the percentage of your income that is
taken up by your debt obligations. Lenders look at this percentage to help them decide whether
or not you are a good credit risk.

4.4.1.1 Loan To Deposit Ratios

Total Loans to Total Deposit Ratio is a ratio between the banks total loans and total deposits. It
measures that if the ratio is lower than 1, the bank did not borrow the money first from another
bank in order to then loan it further to its customers, but did only use its own deposits
(investopedia, 2002). If, on the other hand, the ratio is greater than 1, the bank did not use only
its deposits, but it first borrowed additional money from another bank and loaned it to its
customers for a higher price.
Total Loans/Total Deposits

Name of

2008

2009

2010

2011

2012

Avera

Industr

42

43

Bank

(%)

(%)

(%)

(%)

(%)

ge

(%)

Averag
e

DBBL

80.
85

71.
41

81.
28

73.
06

73.
03

75.
93

PBL
94.57

90.06

84.84

82.01

77.78

IBL

85.28

89.
08

SHIBL

87.
85

96.
03

95.63
90.
17

92.
62

87.56

76.96

89.

28

19

87.

25

89.

45
25
98.
100. 97

91.67

85

BBL
90.81

85.

89.
16
96.
82

AIBL

94.
93.44

94.21

99.40

94.55

89.86

29

Table # 12: Total Loan to Total Deposit.

Interpretations:
According to result the Total Loans to Deposit Ratio the industry average is 91.67% or
0.91,which mean that the industry has used their deposits only for giving loans to customers and
not take any additional borrowings from others. From our ratio analysis we found that SHIBL is
in the most risky position in accordance to provide loans among these banks with a differentiable
average 96.82%. The selected threegeneral commercial banks are below industry average that
means they dont take any additional fund from other banks to support their lending. On the other
hand AIBL are close to the industry average that is 94.29% .

43

44

120
100
80
Dutch bangla bank

60

prime bank

40

Brac bank
Islami bank

20

shahjlal bank

Al-ArafahIslami bank

Chart 09: Total Loans To Deposits.

4.4.2 Interest Rate Risk Ratio

Interest Rate Risk in the danger that shifting interest rates may adversely affect a banks net
income, the value of its assets or equity.The risk that an investment's value will change due to a
change in the absolute level of interest rates, in the spread between two rates, in the shape of the
yield curve or in any other interest rate relationship.

4.4.2.1 Interest Sensitive Gap

Interest sensitive assets to interest sensitive liabilities or replicable assets to liability shows that
portion of Interest sensitive assets for interest sensitive liability.To achieve smooth running for
the organization banks must have higher per cent of retraceable asset to liability ratio.

44

45

Interest Sensitive Assets/Interest Sensitive Liabilities

Name of

2007

2009

2010

2011

2012

Avera

Industr

Bank

(%)

(%)

(%)

(%)

(%)

ge

(%)
88.06
85.02

Average

DBBL
PBL

88.86

86.88

85.42

89.25

89.90

BBL
IBL
SHIBL

91.06
90.45
87.53
102.8

88.16
87.08
88.12
103.6

83.78
91.56
86.45
101.7

81.89
85.09
88
102.5

80.25
81.67
88.90
103.1

AIBL

6
89

89.78

87.42

86.53

87.17
87.08
102.6

88.03
%

0
88.45

89.53

Table # 13: Interest Sensitive (Asset/Liabilities).

Interpretations:
According to result the Interest Sensitive Asset to Interest Sensitive Liabilities the industry
average is 88.03% or 0.88,which mean that the industry is liability sensitive that is they have less
interest sensitive asset then interest sensitive liability. From our ratio analysis we found that
SHIBL is in the good position in accordance to have interest sensitive instruments that is 1.02 or
102.60%. DBBL is also in the good position in accordance to have interest sensitive instruments
that is 88.06%. The selected two other general commercial banks are close to industry average.
On the other hand IBL is having really low interest sensitive instruments that are 0.87 or 87.06%.

45

46

120
100
80
Dutch bangla bank

60

prime bank

40

Brac bank

20

Islami bank
shahjlal bank

Al-ArafahIslami bank

Chart-10: Interest Sensitive Gap

4.4.3 Price risk

Especially to these market value movements are bond, portfolios and stockholders equity, which
can dive suddenly as market prices move against a financial firm (Investopedia.com, 2001).
Market value ratios relate the observable market values like the stock price with the book values
obtained from the firm's financial statements.

4.4.3.1 Price Earnings Ratio (P/E Ratio)

Price earnings ratio shows how much an investor is willing to pay per taka of reported profit. It is
calculated by dividing the stock price per share by the earnings per share (EPS) (Lexicon.ft.com,
2000). The formula is given below:

46

47

Price Earnings Ratio= Stock Price Per Share / Earnings Per Share
(EPS)
Name of

2008

2009

2010

2011

2012

Avera

Industry

Bank

Times

Times

Times

Times

Times

ge

Average

Times
32.18
11.95
13.45

DBBL
PBL
BBL
IBL
SHIBL
AIBL

78.70
12.88

34.40
9.47

22.90
16.60

15
8.34

9.90
12.46

19.57
10.78
8.55

11.04
12.87
12.24

16.95
13.29
13.11

8.87
11.27
15.48

10.80
9.68
9.17

9.53

11.23

13.24

10.13

10.21

11.58
11.71
10.89

13.11
Times

Table # 14: P/E Ratio.

Interpretations:
According to the analysis of Price Earnings Ratio the industry average is 13.11 times,which
mean that the industryinvestors are willing to pay 13.11times per taka of reported profit. From
our ratio analysis we found that DBBL is in the good position compare to the other three banks
with P/E ratio of 32.18 times. The selected two general commercial banks are close to industry
average. SHIBL and BBL are also close to industry average. On the other hand AIBL is having
really low P/E ratio and below industry average that is 10.89% times.

47

48

90
80
70
60
50
40
30
20
10
0

Dutch bangla bank

prime bank
Brac bank
Islami bank
shahjlal bank
Al-ArafahIslami bank

Chart 11: Price Earnings Ratio.

4.5Capital adequacy ratio

This ratio is a measure of a bank's capital. It is expressed as a percentage of a bank's risk
weighted credit exposures. This ratio is used to protect depositors and promote the stability and
efficiency of financial systems around the world. It is also known as "Capital to Risk Weighted
Assets Ratio (CRAR)."

4.5.1 Equity ratio

Equity Ratio indicating the relative proportion of equity used to finance a company's assets
(Readyratios.com, 2000). The Equity ratio measures the proportion of the total assets that are
financed by stockholders and not creditors. A low equity ratio will produce good results for

48

49

stockholders as long as the company earns a rate of return on assets that is greater than the
interest rate paid to creditors.
Equity Ratio= Shareholders Equity / Total Assets
Name of

2008

2009

2010

2011

2012

Avera

Industr

Bank

(%)

(%)

(%)

(%)

(%)

ge

(%)

Averag
e

DBBL
PBL
BBL
IBL
SHIBL
AIBL

5.22
8.05
7.51
6.09
8.17
7.28

5.32
13.78
9.14
7.22
8.36
7.35

6.92
13.53
7.90
7.11
8.59
13.13

7.25
13.41
7.21
7.09
7.35
11.23

6.96
8.74
5.85
8.22
7.21
8.34

6.33
11.50
7.50
7.15
7.94
9.49

10.02
%

Table # 15: Equity Ratio.

Interpretations:
According to the analysis of Equity Ratio the industry average is 10.02%,which mean that the
shareholders have invested 10.02% of total asset of the industry. From our ratio analysis we
found that PBL is in the good position compare to the other five banks with Equity ratio of 11.50
% on an average. Except this bank, all other banks like twogeneral commercial banks and three
Islamic banks are below industry equity ratio.

49

50

14
12
10
8

Dutch bangla bank

prime bank

Brac bank

Islami bank
shahjlal bank

Al-ArafahIslami bank

Chart 12: Equity Ratio.

4.6 Otherfinancialratios
4.6.1 Rate of Return on Loans
This ratio indicates the rate of return on loans means in which rate the borrowers of loan return
their loans. Higher rate of return for a company means better the position of liquid assets
(Investopedia, 2000). So that banks can further lend money and earn interest incomes.

50

51

Rate of Return on Loans = Net Interest Income / Total Loans

Name of

2008

2009

2010

2011

2012

Avera

Industry

Bank

(%)

(%)

(%)

(%)

(%)

ge

Average

(%)
2.50
3.17
1.83
0.89
3.36
1.46

DBBL
PBL
BBL
IBL
SHIBL
AIBL

1.97
2.99
1.08
0.86
3.87

2.35
2.77.
1.36
0.79
3.03

2.96
3.24
2.37
1
2.86

2.71
3.49
2.51
0.99
3.43

2.52
3.35
1.85
0.81
3.62

0.85

1.50

2.34

1.72

0.9

3.03%

Table # 16: Rate of Return on Loans.

Interpretations:
According to the analysis of rate of return on loans the industry average is 3.03%,which mean
that the Borrowers have returned 3.03% of their total loans. From our ratio analysis we found
that all banks except SHIBL and PBL are above industry average. So we can say that these banks
are not suffering from liquidity crisis due to the good rate of return on loans.

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52

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0

Dutch bangla bank

prime bank
Brac bank
Islami bank
shahjlal bank
Al-ArafahIslami bank

Chart 13: Rate of Return on Loans.

4.6.2 Loan to Assets Ratio

Loan to asset ratio is used to measure the relation of the banks loan portfolio to the total
assets.High loans to assets ratio might mean two things:
Bank is at higher risk because loans are less liquid assets than other financial assets.
Loans usually are the most profitable assets of the bank, and it is highly expected that
bank with high loans to assets ratio will have higher net interest income.

Loan to Asset Ratio = Total Loans/Total Asset

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53

Name of

2008

2009

2010

2011

2012

Avera

Industr

Bank

(%)

(%)

(%)

(%)

(%)

ge

(%)

Averag
e

DBBL
PBL
BBL
IBL
SHIBL
AIBL

68.79
78.30

59.19
78.96

66.87
68

64.62
66.41

58.78
63.82

72.72
77.99
74.63

67.44
77.11
74.61

70.75
79.12
78.19

68.18
78.53
76.63

59.67
77.27
73.43

74.62

74.48

72.40

72.79

71.42

63.65
71.10
67.75
78
75.50
73.14

72.12
%

Table # 17: Loan to Asset Ratio.

Interpretations:
According to the analysis of Loans to Asset Ratiothe industry average is 72.12%. From our ratio
analysis we found that all the Islamic Banks IBL, SHIBL, and AIBL are having above industry
average which is not a good sign for them, because it may leads them higher risky position due
to the liquidity crisis. On the otherhand general commercial banks are having a ratio below
industry average.

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54

90
80
70
60
50
40
30
20
10
0

Dutch bangla bank

prime bank
Brac bank
Islami bank
shahjlal bank
Al-ArafahIslami bank

Chart - 14: Loan To Asset Ratio

4.6.3 Total Debt to Equity Ratio

The debt-to-equity ratio is a financial ratio indicating the relative proportion of entity's equity
and debt used to finance an entity's assets (Financeformulas, 1999). This ratio is also known as
financial leverage. The formula for calculating this ratio is-

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55

Total Debt to Equity Ratio = Total Liabilities / Total Equity

Name of

2008

2009

2010

2011

2012

Avera

Industry

Bank

(%)

(%)

(%)

(%)

(%)

ge

Average

11
10.39
16.10
11.12
12.84

(%)
25.08
10.23
12.92
13.11
13.18
8.32

DBBL
PBL
BBL
IBL
SHIBL
AIBL

45
11.43
13.32
15.42
11.23
10.67

34.10
9.21
10.67
12.84
10.96
11.03

20.20
9.87
11.66
13.07
10.61
5.51

15.10
10.23
12.87
13.10
20.25
6.82

11.08(
%)

7.59

Table # 18: Total Debt to Equity Ratio.

Interpretations:
As we can see the industry average for total debt to equity ratio is 11.08%, so we can easily
compare the performance of these general commercial banks with Islamic Banks by looking at
their average outcomes. Among six selected banks except PBL bank (10.23%) and AIBL (8.32%)
all other banks have higher debt to equity ratio which means that they are not only increasing the
risk but also increasing the profit too.

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56

45
40
35
30
25
20
15
10
5
0

Dutch bangla bank

prime bank
Brac bank
Islami bank
shahjlal bank
Al-ArafahIslami bank

Chart 15: Debts to Equity Ratio.

4.6.4 Debt to assetRatio

Debt ratio is a ratio that indicates the proportion of a company's debt to its total assets. It shows
how much the company relies on debt to finance assets (Investorwords.com, 2000). The debt
ratio gives users a quick measure of the amount of debt that the company has on its balance
sheets compared to its assets. The higher the ratio, the greater the risk associated with the firm's
operation. A low debt ratio indicates conservative financing with an opportunity to borrow in the
future at no significant risk. The formula for calculating debt ratio is

56

57

Total Debt to Total Asset Ratio = Total Debt / Total Asset

Name of

2008

2009

2010

2011

2012

Avera

Industr

Bank

(%)

(%)

(%)

(%)

(%)

ge

(%)

Averag
e

DBBL
PBL
BBL
IBL
SHIBL
AIBL

94.79
91.98
92.49
93.91
91.83
82.86

93.08
90.20
91.43
92.76
91.64
85.66

93.08
90.80
92.10
92.89
91.63
73.25

92.75
91.10
92.79
92.91
92.43
80.82

93.04
91.26
94.15
91.18
91.18
79.48

93.35
91.07
92.14
91.74
91.74
80.41

92.1
3%

Table # 19: Debt Ratio.

Interpretations:
As we can see the industry average for total debt to asset ratio is 92.13%, so we can say that the
industry is highly aggressive and we can easily compare the performance of these general
commercial banks with Islamic Banks by looking at their average outcomes. Among six selected
banks except BBL (92.14%), and DBBL (93.35%) all other three banks are having lower debt to
asset ratio which means ICBI bank, BA, and DBBL have higher probability of default in deposits
if any investment defaults. On the other hand Islamicbanks are below industry average thus we
can say that they are having minimum probability of being default due to investment default. The
overall scenario is shown is the following diagram-

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58

100
90
80
70
60
50
40
30
20
10
0

Dutch bangla bank

prime bank
Brac bank
Islami bank
shahjlal bank
Al-ArafahIslami bank

Chart-16: Debts to Asset Ratio.

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59

Chapter: 5
5.1 Findings of theprojectataglance
After doing the ratio analysis on the selected traditional and Islamic Banks, I have found too
many things relating to my Project topic A comparative analysis between General Commercial
Banks and IslamicShariah Banks, but everything is not possible to show in this report. Thus I
have summarized the overall ratio analysis in a Single table it is given below:-

Banks Performance on an Average

from

Ratio Name

1. Return on Equity
2. Return on Asset
3. Net Interest Margin
4. Net Operating
Margin
5. Earnings Per Share
6. Current
Ratio(times)
7. Current Asset Ratio

2008-2012

Dutch

Prime

Brac

Islami

Shahjlal

AI-

Bangla

Bank

Bank

Bank

Bank

ArafahIslami

29.18%
1.78%
3.92%
3.57%
8.76%
1.17%

20.87%

16.8

17.25

22.44%

Bank
20.13%

1.98%

7%
1.29

%
1.34%

2%

1.92%

2.64%

%
2.56

3.85%

3.29%

3.25%

%
4.02

2.87%

3.5%

3.53%

4.94%

%
3.51

4.53%

3.46%

3.19%

1.06%

%
2.37

1.11%

12.45%

3.07%

%
12.5

11.59

16.18%

6.92%

5%
76.4

%
78.1%

75.74%

73.14%

9.45%
6.73%

8. Loan Ratio

66.67%

73.58%

4.4%

2%

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60

9. Loans to Deposit

85.85%

87.2

89.16

96.82%

94.29%

85.02%

5%
87.1

%
87.8%

102.6%

88.45%

11.95%

7%
13.4

11.58

11.71%

10.89%

6.33%

11.5%

5%
7.5%

%
7.15%

7.94%

9.49%

2.5%

3.17%

1.83

0.89%

3.36%

1.46%

Loans
14. Loan to Assets

63.65%

71.1%

%
67.7

78%

75.5%

73.14%

15. Debt to Equity

25.08%

10.23%

5%
12.9

13.11

13.18%

8.32%

16. Debt Ratio

93.35%

91.07%

2%
92.1

%
92.85

91.74%

80.41%

4%

Ratio
10. IS Asset to Liability
Ratio
11. P/E Ratio
(Times)
12. Equity Ratio
13. Rate of Return on

75.93%
88.06%
32.18%

Table # 20: Findings at a Glance.

5.2Performance indicator
Based on the ratio analysis the performance indicator is segmented into five categories. These are
summarized below:

5.2.1 Profitability
In terms of profitability, the performance between traditional and Islamic Banks is clearly
indicating that general commercial banks are doing tremendous work compare to the Islamic
banks. Like the return on equity and net interest margin shows the proof of my statement. During
the analysis I have found that ICB Islamic Bank in their financial statement is too much
fluctuating in figures. Thus the result varies too much.

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61

The reasons for high profitability prospect by ICB Islamic Bank indicate the various internal and
external factors that are directly or indirectly influencing their performance. These reasons are
summarized below:

By looking at the ROA of ICB Islamic bank we can say that their managerial efficiency is
up to the mark and exactly equal to the industry average.
The rate of return flowing to the shareholders is another factor that indicates higher
profitability.
Higher return on asset directly indicates the fact that they are doing well enough to run
their business with acceptable level of profit.
Another reason of having profit is higher interest revenue compare to the interest
expenditures.
Finally the intermediation function of the bank is another reason for higher profitability
compare to the general commercial banks.

5.2.2 Liquidity
In terms of Liquidity, the performances of Islamic Banks are comparably well enough than
general commercial banks. Islamic banks like ICBI have fair enough liquidity compare to the
general commercial banks in case of Loan ratio, current asset ratio as well as current ratio. In
every case the outcome of this bank which is representing Islamic banks is higher than the
industry average.
In terms of liquidity, the Islamic banks of Bangladesh are doing a tremendous job compare to the
general commercial banks. The reasons are summarized below:
Financial-Service managers of Islamic banks are highly concerned about the danger
of not having sufficient cash and borrowing capacity.

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62

By looking at the ratio analysis we can easily comments that in terms of the current
ratio, current asset ratio and loan ratio, Islamic banks are going faster than the general
commercial banks.
They are having enough cash on their hand compare to the deposits as well as they
are providing more loans to the borrowers compare to the deposits in a balanced way.
Finally we can say that, their supplementary capital is also influencing their liquidity
performance and clearly differentiated themselves from the General commercial
banks.

5.2.3 Risk
To compare the performance of traditional and Islamic banks I have conducted three risk
measures, which indicates that Islamic banks have sufficient profit with high risk in case of
credit, interest rate as well as market value of the companys shares.
As we know that high risk indicates possible loss, thus by lowering the risks of the organization
the Islamic banks are operating well enough compare to general commercial banks. The reasons
are

Low credit risks in terms of issuing loans and collecting deposits.

Low interest risks in terms of Interest sensitive assets and interest sensitive liabilities.
Finally, Low price risks in terms of shareholders equity and total assets.
5.2.4 Capital adequacy
Equity ratio helps to compare the performance of traditional and Islamic banks by showing the
proportion of the firms assets that are financed through shareholders money rather creditors. In
that case Islamic Banks are far ahead from the general commercial banks. By looking at the
equity ratio only of these four selected banks Islamic banks are fine enough to compete with
General commercial banks. Both the Islamic banks are having higher equity ratio that means the
shareholders proportion of equity is higher than the general commercial banks. Because of the

High paid-up capital and statutory reserves compare to the general commercial banks.
Their retained earnings are high as well as they are having some extra reserves that
influence to go higher their overall equity.

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5.2.5 Others
Through the loan and debt related ratios, the performance comparison is done smoothly, where
differences can be identified easily. Is case of return on loan and debt to equity, the general
commercial banks are far ahead of Islamic banks. On the other hand Islamic banks are far ahead
of general commercial banks in case of loan to asset and debt ratio. But in reality they are
tremendously behind from general commercial banks. As because they may be higher in numbers
in outcomes but that was negative measures that lagging them behind.
The proportions of net interest income to total loans are higher in terms of the general
commercial banks. Because General commercial banks able to collect their interest
incomes properly, this is obviously higher than the total interest expenditure.
The general commercial banks are having enough assets including tangible as well as
intangible to cover up the overall loans compare to the Islamic banks.
Finally we can say that the general commercial banks are doing well compare to
Islamic banks in some particular areas, but no doubt that Islamic banks are competing
with general commercial banks in all other areas strongly.
So far I have found is that, if I compare the outcomes of general commercial banks and Islamic
banks with the industry average the Islamic banks are doing well enough, but except some cases,
general commercial banks are also competing with Islamic banking in Bangladesh banking
sector.

Chapter 06
6.1 Conclusion
Bangladesh Bank (BB) as a central bank of Bangladesh monitors the banking activities of all
banks. The general commercial banking system in Bangladesh is led by the private commercial
banks. Private commercial banks are playing a vital role in the development of our economy.
Islamic Banking system is bringing a dramatic change in our countrys banking system as

63

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because in our country majority people are Muslim, Islamic banking has an opportunity to gear
up their quality of services and grab maximum amount of market shares. To compete in this
competitive market with general commercial banking system they must have adequate capital.
Furthermore, the composition of all commercial banks shows the concentration of loans and
advances in total assets, thus they must think alike the general commercial banks. As the industry
average is not the whole aggregated industry average of overall banking sector, thus my projects
calculations will not work wholly to compare the industry average. But if only with these four
banks are concerned the industry average is totally perfect and applicable to everywhere else. We
found that the Islamic banks are having comparatively poor management thus they must try to
improve their managements efficiency level. In our analysis, it has been that the performance
measurement of a bank under traditional or Islamic banking has various of outcomes depending
on the financial conditions and we found that general commercial banking is leading the
banking sector till now, but in near future Islamic banking has a vast opportunity to lead the
banking Industry of Bangladesh.

6.2 Recommendations
In our country we have already thirty commercial (traditional) and ten Islamic Banks, it directly
indicated without any doubt that we are having a competitive banking sector strives to achieve
maximum market share with numerous services. During the preparation of my project I have
found same lacks of these banks that can be easily solved. Furthermore, these leggings are the
demand for the general people, thus they should take a proper care for these following leggings As my project work is totally based on the secondary data that is Annual Report of
these six selected banks, I found it difficult to make choice while I was selecting banks
for my project report. The annual reports are not fully available so that students like
me will face difficulties, if someone try to collect some information about them.

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For ICB Islamic Bank, the financial condition is really volatile, they are having a high
percentage of return on asset but lowest percentage of net operating income. They
dont have any consistency in their yearly growth. Even if we look at their financial
statement we will found that the amounts are continuously fluctuating from year to
year.
As Banks provides services to the people in a competitive market, they must be
upgraded day by day.
Financial analysis shows the Banks profitability, liquidity, adequacy, risk factors. From
my project work I have found that general commercial banks are doing tremendously
whereas Islamic banks has liquidity crisis over the years.
Return on Equity ratio directly indicates that the return of shareholders by Islamic
banks is pretty low compare to the general commercial banks. This also indicated the
poor management capability for the firms.
General commercial banks in particular are suffering from the liquidity too which is
shown by the current ratio in my Project.
The general commercial banks largely depend on the equity capital whereas the
Islamic banks are largely dependent of debt capital. To compete in the banking sector
the general commercial banks must not depends only in the equity capital rather
depends on the debt capital too.

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6.3 Bibliography
Al Arafah Bank, 2008,2009,2010,2011,2012. Annual Report. Dhaka: Al Arafah Bank.
Answers.com, 2007. Definition of Net Interest Margin. [Online] Available at:
www.answers.com/topic/net-interest-margin-1 [Accessed 18 February 2014].
Assignmentpoint.com, 1995. History of Islami Bank Bangladesh ltd. [Online] Available at:
www.assignmentpoint.com [Accessed 14 February 2014].
Bangladesh Bank, 1972. Bangladesh-bank.org. [Online] Available at: www.bangladeshbank.org/aboutus/index.php [Accessed 12 February 2014].
Bhattacharjee, 1989. Performance Dynamic of Nationallized Commerciaal IN Bangladesh. Bank
Performance, 101(01).
Brac Bank , 2008,2009,2010,2011,2012. Annual Report. Dhaka: Brac Bank.
Chowdhury, A., 2002. Politics, Society and Financial Sector Reform in Bangladesh.
International Journals of Social Economics, 29(12), pp.963-88.
Dutch Bangla Bank, 2008,2009,2010,2011,2012. Annual Report. Dhaka: Dutch Bangla Bank.
Financeformulas, 1999. Underlying Concept of Debt to Equity Ratio. [Online] Available at:
www.financeformulas.net/Debt-to-Equity-Ratio.html [Accessed 28 February 2014].
Gapenski, E.F.&., 1995. Intermediate Financial Management. 5th ed. Brigham.
Haq, N.J.&.M., 2005. Effects of Managerial Leadership Power Bases on Employee. Commitment
in the Nationalized Commercial Banks of Bangladesh, 30(1), p.22.
Hossain, &., 1990. Performance Dynamic of Nationallized Commerciaal IN Bangladesh. Sonali
Bank, 111(01).
Humhery, B.&., 1997. Efficiency of Financial Institutions: International Survey and Directors for
Future Research. European Journal of Operation Research, 98(2), pp.175-212.
International Monetary Fund, 2010. Staff Country Report.
investinganswers.com, 2002. Definition of Credit Risk. [Online] Available at:
www.investinganswers.com/financial-dictionary/debt-bankruptcy/credit-risk-2933 [Accessed 22
February 2014].

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67

Investinganswers.com, 2005. Definition of Return of Equity. [Online] Available at:

www.investinganswers.com/financial-dictionary/financial-statement-analysis/return-equity-roe916 [Accessed 18 February 2014].
Investopedia.com, 1999. Definition of Net Operating Margin. [Online] Available at:
www.investopedia.com/terms/n/net_margin.asp [Accessed 18 February 2014].
Investopedia.com, 2000. Definition of Earnings Per Share. [Online] Available at:
www.investopedia.com/terms/e/eps.asp [Accessed 22 February 2014].
Investopedia.com, 2000. Definitions of Risk Ratio. [Online] Available at:
http://www.investopedia.com/terms/a/asset-liability-committee.asp [Accessed 15 February
2014].
Investopedia.com, 2001. Definition of Price Risk. [Online] Available at:
www.investopedia.com/terms/c/commodity-price-risk.asp [Accessed 24 February 2014].
investopedia.com, 2002. Definition of 'Profitability Ratios'. [Online] Available at:
http://www.investopedia.com/terms/p/profitabilityratios.asp [Accessed 13 February 2014].
Investopedia.com, 2002. Definitions of Capital Ratio. [Online] Available at:
http://www.investopedia.com/terms/w/workingcapital.asp [Accessed 15 February 2014].
Investopedia.com, 2004. Definition of Returns of Assets. [Online] Available at:
http://www.investopedia.com/articles/fundamental/04/012804.asp [Accessed 18 February 2014].
Investopedia, 2000. Definition of 'Rate Of Return. [Online] Available at:
www.investopedia.com/terms/r/rateofreturn.asp [Accessed 28 February 2014].
investopedia, 2002. Definition of Loan To Deposit Ratio. [Online] Available at:
www.investopedia.com/terms/l/loan-to-deposit-ratio.asp [Accessed 22 February 2014 ].
Investorwords.com, 2000. Definition of Debt Ratios. [Online] Available at:
www.investorwords.com/1326/debt_ratio.html [Accessed 28 February 2014].
investorwords, 1998. Definition of Current Ratios. [Online] Available at:
www.investorwords.com/1258/current_ratio.html [Accessed 22 February 2014].
Islami Bank, 2008,2009,2010,2011,2012. Annual Report. Dhaka: Islami Bank.
Jahngir, N.s.s.&.H., 2007. Examination of profitability in the Context of Bangladesh Banking
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Khan, M.T.A., 2014. Huge Demand forIslamic Banking In Bangladesh. Islamic Finance News.
Lexicon.ft.com, 2000. Definition of Pricr Earnings Ratio. [Online] Available at:
lexicon.ft.com/Term?term=price/earnings-ratio [Accessed 24 February 2014].
Monirruzzaman, M.&.R., 1998. Profitability Performance of Denationalized Banks. Dhaka:
BIBM.
Ncube, 2009. nnovation in Banking Products in Bangladesh. Bank performance in Bangladesh,
28(1), pp.170-207.
Pew Rsearch Religion&Public Life Project, 2011. Muslim Population by Country. pew research
religion&public life project.
Prime Bank , 2008,2009,2010,2011,2012. Annual Report. Dhaka: Prime Bank.
Raihan, A., 2001. Computerization and Information Technology in the Bank Sector. Hindrances
and Remedies, 26(1), p.95.
Readyratios.com, 2000. Meaning and Definition of Equity Ratio. [Online] Available at:
www.readyratios.com/reference/debt/equity_ratio.html [Accessed 28 February 2014].
Readyratios.com, 2001. Definitions of Liquidity Ratios. [Online] Available at:
www.readyratios.com/reference/liquidity/ [Accessed 15 February 2014].
Readyratios.com, 2003. Definition of Profitability Ratios. [Online] Available at:
www.readyratios.com/reference/profitability/ [Accessed 15 February 2014].
Rose, P.S., 2007-08. Bank Management and Financial Services. 6th ed. McGraw-hill.
Shahjala Bank , 2008,2009,2010,2011,2012. Annual Report. Dhaka: Shahjala Bank.

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# RATIOS WITH FORMULAS

Type

Ratio Name

Return on Equity

PROFITABILI
TY

Formula

Net Income / Total Equity Capital

Return on Assets
Net Income / Total Assets
Net
Interest [(Interest Income-Interest Expense) /
Margin
Net

Total Assets]
Operating Net Operating

Margin
Earnings

Revenues

Total

Assets
Per Net Income / Common Equity Shares

Share
Current Ratio

Outstanding
Cash and account with banks/Total
deposits

LIQUIDITY
Current

Asset Current asset /Total asset

Ratio
Loan Deposit Ratio Loans/ Total asset
Credit Ratio
Total Loans/Total Deposits
RISK
Interest Rate Risk Interest Sensitive Assets/Interest Sensitive
Ratio
P/E Ratio
CAPITAL

Equity Ratio

Liabilities

Stock Price Per Share / Earnings Per

Share
Shareholders Equity / Total Assets

Rate of Return on Net Interest Income / Total Loans

Loans

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70

OTHERS

Loan
Ratio
Total

to

Assets Total Loans/Total Asset

Debt

Equity Ratio
Debt Ratio

to Total Liabilities / Total Equity

Total Debt / Total Assets.

70