LankaBangla Finance Limited: A Study on Leasing Sector

LankaBangla Finance Limited: A Study on

Leasing Sector

Submitted To:
Md. Humayan Kabir FCA
Course Instructor
Insurance, Leasing and Risk Management (FNB 508)

Submitted By:

April 28, 2016

Name

Student Id

Bushra Binte Mizan

Rajesh Paul
Md. Rafiur Rahman

419
438
446

Department of Finance & Banking

Jahangirnagar University, Savar, Dhaka.

April 28, 2016

Md. Humayan Kabir FCA
Course Instructor
Insurance, Leasing and Risk Management (FNB 508)
Department of Finance & Banking
Jahangirnagar University
Savar, Dhaka-1342

Subject: Submission of Report.

Dear Sir:
Here is the report that you asked us to prepare on LankaBangla Finance Limited: A Study on
Leasing Sector.
Preparing some careful analysis and consideration, we mainly focus on the key aspects of the
company and financial statement analysis and some ratio analysis on those statements and
overall growth of leasing sector of Bangladesh.
We hope that this report will be up to your expectation and draw your appreciation. If you have
any question or inquiry regarding this report, please call us. We are looking forward to receiving
your comments and suggestions on this report.
Sincerely Yours,
Bushra Binte Mizan (ID: 419)
Rajesh Paul (ID: 438)
Md. Rafiur Rahman (ID: 446)
2nd

Batch, B.B.A. Program

Department of Finance & Banking

Jahangirnagar University
Savar, Dhaka-1342

Table of Contents
Serial No
1.0
1.1
1.2
1.3
1.4
1.5
2.0
2.1
2.2
2.3
2.4
2.5
3.0
3.1
3.2
3.3
3.4
4.0
4.1
4.2
4.3
4.4
4.5
5.0

Topic
Introduction to the Report
Objective of the Report
The scope of the Report
Significance of the Report
Methodology
Limitation of the Report
Company Overview
Product and Services of LankaBangla Finance
Corporate Financial Services
Personal Financial Services
SME Financial Services
Liability Management
Overall Financial Market Condition of Bangladesh
Market condition of NBFI
Market Situation
Stock Market of FIs
Relationship of LankaBangla with the overall market
Financial Performance and comparative analysis
Financial Position of LankaBangla
Financial Ratios
Equity Parameters
Overall performance measurement
Comparison with 4 other Financing Institutions
Conclusion

Page No
1
1
1
1
1
1
3
3
4
5
5
6
8
8
10
12
12
14
14
14
14
16
17
19

1.1 Introduction to the Report:

This report is prepared as an academic requirement for the course Insurance, Leasing and Risk
Management under the supervision of humayun kabir, course teacher, Department of Finance & Banking,
Jahangirnagar University.
1.2 Objective of the Report:
The basic objectives of this study are as follows:
To gain knowledge about different functions of a leasing company.
To have some practical experience on analyzing of a leasing company that will be helpful for my MBA
Program.
To get an overall idea about the financial performance of LankaBangla Finance Limited.
To relate the theoretical knowledge to the original financial data of LankaBangla Finance Limited.
To present my observation and suggestion about the company.
1.3 The scope of the Report:
This report covers the overall description of the company, its services and its financial performance analysis.
Since 1997 LankaBangla Finance Limited is still in its growth stage in Bangladesh; it has still to go a long way
to achieve its destination. To achieve the long-term goal it must take each step very carefully. The report will
mainly focus on how LankaBangla Finance Limited is performing according to different types financial ratios
used internationally to measure a companys performance and how the leasing sector of our country is
growing.
1.4 Significance of the Report:
The report shows the growth of the leasing sector and financial performance of LankaBangla Finance Limited
in different ratios so that customer may know how the company is going on in recent years and get an idea
about the leasing sector of Bangladesh. Furthermore, top management of LankaBangla Finance Limited can
also evaluate the suggestion about different sectors where it is lagging behind the required level.
1.5 Methodology:
The basic data both primary and secondary used in the preparation of this report are obtained from:
Primary Sources:
Primary data for this report had been collected through the interview, conversation, discussion and job
observation of different employees. The executives & officers of Prime Bank were quite friendly &
cooperative to provide lots of information to prepare this report.
Secondary Sources:
Secondary information was collected from:

Annual reports of LankaBangla Finance Limited.

Brochures of LankaBangla Finance Limited
Regulations published by Bangladesh Bank.
Newspapers, Websites

1.6 Limitation of the Report:

Time limitation: Time limitation is one of the most important constrain to make the report perfect and
up to date and for which many aspects of LankaBangla Finance Limited are dropped in this report.
1

 Experience: In some sectors collecting information and interpreting was needed more experienced
personnel to make an effective report.
Confidential: Many more information could not gather for the resources of maintaining confidentiality.
Again the company's policy is not to disclose some data & information for obvious reason, which could
be much more useful.
Unavailability of information: Sufficient records & publications as well as up to date information are not
readily available.

2.1 Company Overview:

LankaBangla Finance Limited started its journey long back in 1997 as a joint-venture financial institution with
multinational collaboration having license from Bangladesh Bank under Financial Institution Act-1993. Now
LankaBangla is the countrys leading provider of integrated financial services including corporate financial
services, personal financial services, SME financial services, stock broking, corporate advisory and wealth
management services. LankaBangla is a primary dealer of government securities since November 2009. The
company got listed in both of the bourses of country i.e. DSE & CSE in 2006.
LankaBangla recently have gone through a businesses process reengineering to build capacity to their
clients superior experience than any time ever. The company now operates in centralized administrative
framework through cutting edge technological environment. LankaBangla is serving a wide operational
periphery covering major businesses hubs of the country. Under the broadest umbrella of products and
service offerings, we are the lone financial institution to operate credit card (MasterCard and VISA) and also
provide third party card processing services to different banks in Bangladesh.
LankaBangla is the market leader in the capital market services and has been giving all out effort to develop
an efficient, vibrant and transparent capital market in Bangladesh. Through our subsidiary, LankaBangla
Securities Limited we are providing top notch broking services and leading the industry with cutting edge
trading, top rated research and customer service. Another subsidiary, LankaBangla Investments Limited is a
premier investment bank in the country providing corporate advisory, issue management and portfolio
management services. The other subsidiary, LankaBangla Asset Management Company Limited is providing
professional wealth management services. In quest of sustainable business, LankaBangla is positioning itself
to provide enduring value to the people, customers, shareholders and the communities. There are some
other key divisions are involved for setting up the strategic priorities by managing balance sheet prudently,
by helping to provide various decisions, by creating, operating and maintaining IT infrastructure, by
nurturing human resources to deliver the best and uphold the livelihood of the community.
2.2 PRODUCT AND SERVICES OF LANKABANGLA FINANCE
Products and Services are classified into following categories:
Personal Financial Services
Corporate Financial Services:
1. Loans:
1. Corporate and Institutes Units
Auto Loan
Lease Finance
Home and Mortgage Loan
Term Finance
Personal Loan (Unsecured)
Short Term Finance
Short Term Loan (Secured Loan)
2. Cards:
Revolving Finance
Credit Card
Loan Against TDR
Work order Finance
Club Finance
Bridge Finance
Project Finance
2. Emerging and commercial Business Unit
Factoring Finance
Distributor Finance
Reverse Factoring
3. Project and Structured Finance
Syndicate Finance
3

Liability Management:

Classic TDR
Shohoj Sanchoy
Periodic Return Term Deposit
Agroj (Senior Citizen
Quick Sonchoy
Earn First
Double Money
Triple Money
Money Builder

Project/ Infrastructured Finance

Private Placement of Equity
Preferred Stock
Fixed Income Securities (Bond)
Advisory Service
SME Financing:
Astha (Partial/
Fully Secured
Loan)
Ahona
(UnsecuredLoan)
Anonnya (Women Entrepreneur
Loan)
Swarnali (Agro Processing
Industry Finance)
Durbar (Commercial
Vehicle Finance)
Abash (Loan for Construction of
Mess Rent)

2.3 CORPORATE FINANCIAL SERVICES:

The Corporate Financial Services Division of LankaBangla takes ownership to focus exclusively on corporate
and institutional clients domiciled or conducting business in its footprint by offering clients access to its
extensive branch network.
The division delivers services through 3 (three) units, namely Corporate & Institutions Unit, Project &
Structured Finance Unit and Emerging & Commercial Business Unit.
Corporate & Institutions Unit : When opportunity knocks, you need a partner with a range of lending
solutions that can turn ambition into accomplishment. Our smart relationship managers, equipped with
efficient management skill and sound knowledge of the industry and market, are at your service to provide a
complete range of corporate financial solutions like Lease Finance, Term Finance, Short Term Finance,
Revolving Finance, Bridge Finance, Club Finance, Working Capital Finance etc. suited to respective clients.
From a straightforward Term Loan to complex club financing, we can help you with a range of options and
solutions. We are committed to partner in your journey of prosperity and share the joy of success while
Growing Together.
Project & Structured Finance Unit: LankaBanglas Project & Structured Finance Unit is a specialized unit
comprising of experienced professionals who are expert in conducting the technical, financial and economic
feasibility of all types of projects and product structuring. Financial solutions like syndicated loan, preference
share, bond etc. are some in its wide array of services. It determines the financial feasibility and viability of
the project during the pre-booking stage and also monitors the progress of the project implementation
during the post-booking stage. Always serving the client at its core, the highly skilled team, channeling its
vast network of professionals, provides a consolidated service encompassing all crucial aspects of the
project. In addition to performing agency functions, LankaBangla can also handle merger, acquisition etc.
Emerging & Commercial Business Unit: At LankaBangla, we understand that an adequate cash flow works as
blood circulation for live running of a business. We are constantly striving to provide innovative financial
4

solutions to meet working capital needs of businesses. With this motto, LankaBangla has designed the
products of Factoring, Reverse Factoring, Distributor Finance, etc. to meet dynamic corporate financial
needs. These are uniquely structured working capital solutions against receivables, lifting orders, confirmed
payables, credit advisory, collections, etc.
2.4 PERSONAL FINANCIAL SERVICES:
LankaBangla Finance Limited is one of the leading financial institutions in Bangladesh offering a wide variety
of personal financial services to cater to the full scope need of innovative, customized solutions and services.
The personal financial services division currently offers auto loan, home loan, personal loan, loan against
deposit, loan against purpose (LAP) and credit cards. The division delivers services through 4 (Four) units
namely Auto Loan Unit, Mortgage Loan Unit, Personal Loan Unit and Card Center.
Auto Loan Unit
The unit deals with all sales, marketing, business promotions, relationship management with customers and
auto dealers, customer service activities including planning, budgeting, target setting & allocation, and also
execution, monitoring & evaluation of sales deal, customer service quality, etc.
Home Loan Unit
The activities of Home Loan Unit includes sales, marketing, business promotions, relationship management
with customers & developers, customer service management, etc. including planning, budgeting, target
setting & allocation and also execution, monitoring and evaluation of sales deal, customer service quality,
etc. The products are mainly Home Loans for purchasing, constructing or renovation of homes or takeovers
of existing home loans with other financiers, home loan for comments and loan against purpose (LAP).
Personal Loan Unit
Any purpose loans for personal exigencies are offered under Personal Loan Unit which deals with all sales,
marketing, business promotions, relationship management, customer service activities including planning,
budgeting, target setting & allocation and also execution, monitoring & evaluation of sales deal, customer
service quality, etc. Loan against lien of deposits, shares of listed companies, savings instruments etc. are
also offered under the unit for any purpose.
Credit Card
Card Centre deals with issuing of MasterCard and VISA credit cards; There are mainly two categories of cards
Gold & Classic; individual and corporate. LankaBangla is the lone Financial Institute that offers cards and
provides third party card processing services through its state-of-the-art card software. The unit deals with
all sales, marketing, business promotions, relationship management, customer service activities including
planning, budgeting, target setting and allocation, execution, monitoring and evaluation of sales deal,
customer service quality, etc.
2.5 SME FINANCIAL SERVICES
SMEs, the heart of growth of economies worldwide, are emerging as the most powerful and sustainable
pillars of Bangladesh economy. SMEs in Bangladesh are no longer concentrated to low-tech, traditional and
agro-based economic activities only; these are spreading over non-traditional manufacturing and service
sector as well.

Our country is moving forward towards SME led industrial development. Bangladesh Bank is also relentlessly
working towards the development of the sector to achieve higher GDP growth, financial inclusion and overall
a resilient and dynamic financial system of the country. As the steward of the financial sector, Bangladesh
Bank has been motivating the banks and financial institutions to concentrate more on SME banking
operations. According to experts in financial sector, financial inclusion, a much talked topic now days, will be
achieved through SME. LankaBangla Finance Ltd., with the belief of growing together, has focused in SME
business and performed well so far. The division deals with all the activities- sales, marketing, business
promotions, relationship management, customer service activities, budgeting, target setting & allocation,
and also execution, monitoring & evaluation of sales deals in Small Medium Enterprise Segment. In 2014,
SME division enjoyed higher growth in every parameter than that of previous year and is expecting to excel
further.
The division is working on new product introduction, cluster analysis & finding out prospective sectors. Quick
Branch expansion of LBFL in district level proves that LBFL is going to develop SME sector in Bangladesh by
financing in different kinds of business in widespread urban & rural areas. We are now strongly focusing on
Agro processing Finance outside Dhaka & Chittagong metropolitan area & our team is dedicated for working
there. Beside this the Division has been arranging campaign, SME Fair, Branding, Mobile lending Officers
recruitment, Product diversification for the whole year; a dedicated team for each Branch is working to
develop woman entrepreneurship in Bangladesh. LBFL is providing SME finance facilities to different types of
sector with increased focus on women. By availing the refinancing facility through Bangladesh Bank, LBFL is
able to offer attractive rates for prospective women entrepreneurs of Bangladesh. Moreover the Division is
forming Women Entrepreneur Development Unit & Women Entrepreneur desk at Head Office & Branch
level as per Bangladesh Bank instruction.
Recognizing human resource as the most valuable soft factor of the organization, LBFL continued to invest
to enhance and upgrade skill sets of the people. A significant number of seminars, workshops and trainings,
both in-house and external, were arranged during the year.
Management has a plan to give a special priority on SME Business in the year 2015 & set a huge budget
accordingly to support this sector. However in the year 2014 Portfolio growth is beyond 100%, Disbursement
growth is 360% & NPL reduced by 67% approximately comparatively last year which suggests that the
Division is growing in terms of every parameter & a good net profit is going to attain in the year 2015 if the
budgeted target is achieved.
2.6 LIABILITY MANAGEMENT
Liability Management has adopted the strategy to reduce bank borrowing dependencies by increasing core
deposits and to balance the heat of extreme volatility of money market. In this regard two separate units
have been formed:

Retail Liability Department,

Corporate Liability Department.

Retail Liability
The core objective of Retail Liability Department is to focus on retail deposits. Different Liability products are
being offered to customers to cater their requirements. Considering the nature of retail clients and to
provide the best customer service through strengthening the relationships, a number of separate retail

deposit teams consisting of 300 product marketing officers have been deployed throughout the branches all
over Bangladesh. All members of the teams work under predefined monthly targets.
Corporate Liability
LankaBangla Finance welcomes the opportunity to establish relationships with corporate clients. Over the
years we have received large deposits from various corporate houses which benefited us to enrich our
portfolio. We understand that our corporate clients seek qualified and committed financial partners for
investment of their funds. Our endeavor to reduce bank borrowing dependencies has been facilitated by
collecting large corporate deposits. In this regard we have formed a separate corporate team with
professional Relationship Officers who are concentrating solely on providing RM based services to corporate
houses.

3.0 Overall Financial Market Condition of Bangladesh:

The monetary policy pursued during FY2014-15 aimed at providing adequate credit to productive sector in
order to promote investment and attaining inclusive growth as well as limiting average inflation at the level
6.5 percent at the end of the fiscal year. The Monetary Policy Statement (MPS) for the second half of FY
2014-15 set targets for broad money and reserve money growth at 16.5 percent and 15.9 percent
respectively at the end of the fiscal year. However, the end of June, 2015 broad money and reserve money
growth stood at 12.4 percent and 14.3 percent respectively. Growth in broad money declined due mainly to
slow growth in net foreign assets (NFA) and substantial decrease in public sector credit. Private sector credit
growth was 13.19 percent in FY 2014-15, slightly higher than year-on-year growth of 12.27 percent of
previous fiscal year, but below the target 15.5 percent set in MPS. On the other hand, the interest rate
spread decreased to 5.13 percent at the end of June, 2015 from 5.60 percent of June, 2014. Besides this,
importance is given to the financial inclusion process aimed to deliver financial products and services among
the disadvantaged sections of society through mainstream financial institutions in easy ways. The capital
market remained broadly stable during FY 2014-15.
The price indices of both Dhaka Stock Exchange and Chittagong Stock Exchange have maintained the
increasing trends.
3.1 Market condition of NBFI
Non-Bank Financial Institutions (NBFIs) are playing a significant role in providing finance in different sectors
like industrial, commercial, housing, transportation and information technology sectors of the country. Up to
30 June, 2015, there are 33 licensed non-bank financial institutions functioning in the country. These NBFIs
have a wide network of 202 branches operating in Dhaka city and other regions of the country. Total paid up
capital and reserve of these financial institutions stood at Tk.8,052.06 crore as on 30 June, 2015, of which
paid up capital is Tk.4,715.00 crore. Total assets and deposits of the NBFIs are Tk.55,594.05 crore and
Tk.26,900.27 crore respectively as on 30 June, 2015.
Besides, investing in industry, trade and housing sectors, NBFIs also invest in the stock market to develop a
vibrant capital market. The share of NBFIs in terms of investment in listed company was Tk.1,842.70 crore at
end June, 2015. As on 30 June 2015, the total outstanding loan/leases, total amount of classified loan/leases
and the rate of classified loan/leases of all the NBFIs stood at Tk.40,921.01 crore, Tk. 3,158.95 crore and 7.72
percent respectively.
3.2 Market Situation
Dhaka Stock Exchange (DSE) Ltd
The total number of listed securities has increased from 536 in June, 2014 to 555 in June, 2015. At the end of
June, 2015 total issued capital of all listed securities stands at Tk.1,09,195.35 crore, which was
Tk.1,03,207.64 crore in June, 2014, registering 5.80 percent growth. Total market capitalisation of all listed
securities was Tk.2,94,320.23 crore in June, 2014, which stands at Tk. 3,24,730.63 crore in June, 2015,
representing 10.33 percent increase.
Securities Trading Information of Dhaka Stock Exchange:

2005-06

303

18

Issue
Market
Securities
d
Capitalization
Traded
Capital
(Tk in crore)
in Value
(Tk in
(Tk in crore)
crore)
8572.26
21542.19
4600.82

2006-07

325

10

16427.93

47585.54

16467.16

2149.32 -

2007-08

378

13

28437.97

93102.52

54328.6

3000.5 -

2008-09

443

17

45794.4

124133.9

89378.92

3010.26 -

2009-10

450

23

60726.29

270074.46

256349.8

6153.68 -

2010-11

490

19

80683.91

285389.22

325915.2

6117.23 -

2011-12

511

15

93362.96

249161.29

117145.1

4572.88 -

2012-13

525

15

98358.97

253024.6

2013-14

536

13

103207.64

294320.23

112539.8

4480.52

2014-15

555

16

109195.35

324730.63

112351.9

4583.11

End of
Period

No. of Listed
Securities
(Including
Mutual

No. of
IPOs

DSE
General
index*

DSE
Board
Index
(DSEx)**

1339.53 -

85708.97 -

4104.65

Note: * Stop displaying DSE General Index (DGEN) in DSE website from August 01, 2013.
** DSE introduced new index benchmark DSE broad index (DSEx) on January 28, 2013 as per
DSE Bangladesh Index Methodology designed and developed by S&P Dow Jones Indices
DSE introduced its new index benchmark; DSE board Index (DSEx) on January 28, 2013 where the first day
closing was 4,090.47 points. DSEx has increased from 4,480.52 points in June, 2014 to 4,583.11 points
in June, 2015, showing 2.29 percent up. Figure 5.4 below shows the trend of DSE market capitalisation, DSE
general index and DSE broad index.

3.3 Stock Market of FIs:

Stock Market Statistics of Financial Institutions (From March 01, 2011 April 27, 2016)
Symbol
FAREASTFIN
LANKABAFIN
FIRSTFIN
IDLC
BAYLEASING
PRIMEFIN
MIDASFIN
ILFSL
NHFIL
PHOENIXFIN
BIFC
FASFIN
PLFSL
BDFINANCE
ISLAMICFIN
PREMIERLEA
UNIONCAP
IPDC
UTTARAFIN
DBH
GSPFINANCE
UNITEDFIN
ICB
FAREASTFIN`S
ISLAMICFIN`S
PHOENIXFIN`S
FASFIN`S
ILFSL`S
NHFIL`S
PREMIERLEA`S
BDFINANCE`S
PLFSL`S
MIDASFIN`S

Open Price
22.00
25.39
34.46
56.90
50.65
47.79
13.80
8.30
22.30
16.50
33.78
33.95
41.14
10.78
19.06
6.76
30.35
14.08
95.68
58.10
30.90
0.24
92.90
8.10
11.06
22.60
13.58
13.00
24.55
6.86
13.86
15.54
21.50

High
27.00
32.17
36.19
60.98
57.96
52.61
15.60
8.80
23.60
17.80
37.06
36.88
43.64
12.20
19.57
7.33
30.97
15.17
102.70
61.40
31.84
0.29
100.70
8.10
11.06
22.60
13.58
13.00
24.55
6.86
13.86
15.54
21.50

Low
14.10
25.30
32.64
56.90
50.65
47.79
13.60
8.30
21.80
16.50
33.78
33.39
41.14
10.28
18.05
6.29
28.96
13.92
95.35
56.60
29.51
0.19
92.00
8.10
11.06
22.60
13.58
13.00
24.55
6.86
13.86
15.54
21.50

Close Price
18.10
31.30
35.76
60.98
56.39
52.49
15.60
8.80
23.60
17.80
37.06
36.88
43.64
12.20
19.57
7.33
30.97
15.17
102.70
61.40
31.84
0.29
100.70
8.10
11.06
22.60
13.58
13.00
24.55
0.00
-0.50
0.00
0.00

Change %
91.00%
32.84%
14.09%
13.27%
12.24%
12.07%
10.64%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
9.99%
9.98%
9.97%
9.97%
9.92%
8.33%
2.07%
1.42%
1.34%
0.75%
0.00%
0.00%
0.00%
0.00%
0.00%

Volume
9,112,000
16,258,369
318,780
4,218,500
2,337,950
868,140
33,907
889,255
179,426
574,454
118,077
197,159
1,840,001
353,862
84,472
125,492
123,643
1,078,800
252,527
129,500
1,685,347
971,823
73,191
194,500
350,979
230,500
297,500
142,500
21,500
55,649
432,300
365,661
20,500

Value
173,386,500
469,940,000
10,905,500
268,295,100
143,950,000
47,030,000
490,000
7,780,000
4,380,000
11,170,000
4,240,000
7,410,000
79,460,000
4,067,200
1,840,000
870,000
3,850,000
16,560,000
27,820,000
8,820,000
55,636,400
2,350,000
7,410,000
1,710,000
4,780,000
6,580,000
4,460,000
1,910,000
610,000
380,000
6,200,000
5,680,000
430,000

10

3.4 Relationship of LankaBangla with the overall market

Stock Statistics
Market Capitalization (BDT)

8,578,938,419.00

Shareholders Equity (BDT)

6,261,793,994

Book Value Per Share (BDT)

26.02

Last Audited P/B Ratio (x)

1.37

Forward P/E

17.95

EPS (BDT)

1.75

Audited P/E (x)

17.95

Trading Currency

Bangladeshi Taka

Market Category

Market Lot

CFI Code

ESVUFR

Credit Rating

LT: A1, ST: ST-3

Last Dividend Declaration Date

Feb 23, 2016

AGM Date

Mar 30, 2016

Stock market Trading of LankaBangla:

11

3.5 Growth of the company

2011
(Year)

2012
(Year)

2013
(Year)

2014
(Year)

2015
(Year)

Total assets

22,379,997,44
9

25,338,682,76
2

32,064,892,09
2

39,128,786,50
4

50,447,884,897.0
0

Total liabilities

16,288,099,82
6

18,672,073,40
2

25,035,397,62
2

31,997,327,09
6

44,098,631,960.0
0

Shareholder's

5,720,165,436

6,473,960,231

6,839,911,824

6,946,730,196

6,261,793,994.00

823,515,000

1,894,084,500

2,083,492,950

2,187,667,590

2,406,434,340.00

22,379,997,44
9

25,338,682,76
2

32,064,892,09
2

39,128,786,50
5

50,447,884,897.0
0

69.46

34.18

32.83

31.75

26.02

962,018,216

529,976,451

785,109,671

932,598,726

1,072,362,560.00

2,013,762,679

1,389,911,494

2,217,912,829

2,067,127,533

2,521,675,118.00

626,840,582

793,651,503

892,079,847

1,284,844,620

1,611,968,975.00

1,386,922,097

596,259,991

1,325,832,982

782,282,913

909,706,143.00

82,877,901

85,950,216

328,697,034

348,673,535

376,862,732.00

1,304,044,196

510,309,775

997,135,948

433,609,378

532,843,411.00

Provision for tax

444,984,316

162,291,593

42,583,388

(20,377,493)

111,914,896.00

Net profit after

859,059,880

348,018,182

954,552,560

453,986,871

420,928,515.00

10.43

1.84

4.58

2.08

1.75

338,495,616

(672,505,294)

(1,654,805,94
8)

1,410,468,158

2,965,936,804.00

(1,308,808,04
2)

(306,222,327)

(236,730,655)

(1,525,881,35
5)

(366,635,634.00)

Balance Sheet

equity
Paid up capital
Total liabilities
and shareholders'
equity
Book Value Per
Share
Income statement
Net interest
income
Total operating
income
Total operating
expenses
Profit before
provision against
loans and
advances
Total provision
Profit for the year
before taxation

tax for the year

EPS
Cash Flow
Net cash from
operating
activities
Net cash used in
investing
activities

12

Net Cash used in

1,253,544,371

513,836,579

2,760,059,032

(188,405,822)

(2,897,067,328.0
0)

financing
activities
Net

283,231,945

(464,891,042)

868,522,429

(303,819,019)

(297,766,158.00)

1,858,384,440

2,141,616,385

1,676,725,342

2,545,247,770

2,241,428,751.00

2,141,616,385

1,676,725,343

2,545,247,771

2,241,428,751

1,943,662,593.00

increase/(decreas
e) in cash and
cash equivalents
Cash & Cash
Equivalents at
beginning of the
year
Cash and cash
equivalents at
end of the year

13

4.1 Financial Performance and comparative analysis

4.2 Financial Position of LankaBangla:

Financial Position
Total Assets
Total Liabilities
Business Disbursement
Property Plant and Equipment
Term Deposits
Total Investment Portfolio
Operational Performance
Operating Revenue
Operating Expenses
Financial Expenses
Net Profit Before Tax
Net Profit After Tax
EBITDA

2010

2011

2012

2013

2014

Growth 5 Year
of 2014 CAGR
over
(%)/
21.49
23.92
24.16
22.02
78.41
46.60
75.34
34.84
53.71
36.50
20.63
24.01

13,72
12,49
4,27
39
4,81
13,06

15,90
14,07
4,44
30
5,57
15,39

19,49
15,62
6,37
50
7,67
18,84

26,63
22,31
11,07
73
10,87
25,61

32,35
27,70
19,75
12
16,71
30,90

1,47
17
49
61
40
1,32

2,21
21
1,40
54
46
2,01

3,62
37
1,82
1,23
1,23
3,27

3,49
40
2,40
34
44
3,10

4,09
71
2,63
46
65
3,41

33.19
55.01
6.88
-

63.48
26.91
4.17
10.3

50.42
39.28
7.88
19.64

69.04
19.28
2.71
16.76

64.31
18.14
2.45
15.07

7.90

6.51

3.96

4.84

5.08

4.96

5.66

44.99
10.2
2.6
32.95
2.94

73.09
7.7
1.4
30.62
3.15

60.72
4.0
1.7
43.39
6.98

80.72
5.1
1.2
10.95
1.94

81.86
5.9
1.2
14.54
2.21

1.42
15.27
0.21
32.85
13.76

68.28
6.6
1.6
26.49
3.44

1,00
53
1,22
53.1
5.5
1.8
497.
270.2
55% B
17.19
5.8

3,00
82
1,82
82.3
8.3
2.1
170.
79.7
30% B
31.22
3.2

3,00
1,89
3,87
189.4
17.7
5.6
59.0
10.4
10% B
56.60
1.8

3,00
2,08
4,31
208.3
19.7
2.0
66.
32.4
5%
B
43.67
2.2

3,00
2,18
4,64
218.7
21.2
2.9
44.
14.7
10%
B
67.11
1.4

0.00
5.00
7.71
5.00
7.71
45.37
-

31.61
42.45
39.61
42.45
39.61
12.77
81.5
32
%
40.57
-

17.22
76.22
9.19
35.10
45.45
10.06

29.02
42.47
52.22
12.76
26.78

66.68
18.71
2.58
15.92

4.2 Financial Ratios

Gross Profit Ratio
Operating Profit Ratio
Return on Capital Employed
Capital Adequacy Ratio (2011: Test Run. Effct.
Gross Non performing assets to gross
advances/Non performing loans (assets)
Cost to Income Ratio
Debt Equity Ratio
Financial Expense Coverage Ratio
Return on Equity (%)
Return on Assets (%)

4.3 Equity Parameters

Authorized Capital
Paid-up Capital
Shareholders' Equity
No. of Share Outstanding
Net Asset Value (NAV) Per Share
Earnings Per Share (EPS)
Market Price Per Share (Closing)
Price Earnings Ratio (Times)
Dividend Payment (C-cash & B- bonus)
Dividend Payout Ratio (%)
Dividend Coverage (Times)

53.69
-

14

Dividend Yield (%)

Profit Per Employee (mn)
"Credit Ratings"
Long Term
Short Term

1.10
5.5

1.76
2.4

1.69
0.7

3.01
1.7

4.55
0.8

A2
ST-

A2
ST-

A2
ST-

A2
ST-

A2
ST-

51.14
-

2.42
2.2

Despite the challenges posed by economical and political environment, LankaBangla maintained a significant
progress in many lines of businesses during 2014. Total assets have grown by 20% from BDT 32 billion in
2013 to BDT 39 billion in 2014. Disbursement of record amount of corporate loan, significant growth in retail
and SME business, cautious investment in capital market and right decision on time accompanied by
lowering the cost of borrowing significantly by increasing deposit from public & paying off the high cost bank
borrowing and decreasing operating cost by increasing efficiency results such a significant performance for
the Company.
The company strengthened our loan proposal scrutiny framework, increased concentration through due
diligence in credit approval and disbursed BDT 19,750 million in 2014 compared to BDT 11,070 million in
2013. In line with our long term strategy, we penetrated in the liabilities market strongly with the focus of
increasing our retail customer base by offering attractive rates and ensuring quality customer services.
Deposit grew significantly during this period outperforming most of other players in the market. Total asset
of the company increased to BDT 39,129 million in 2014 from BDT 32,648 million in 2013.
Even in the backdrop of the economy in 2014, LankaBanglas investment portfolio reach BDT 36,576 million
in 2014 compared to BDT 29,812 million in 2013. Consolidated operating revenue stands at BDT 5,100
million while operating expenses were incurred BDT 1,285 million. Consolidated net profit after tax is
reported at BDT 454 million. Return on average equity remained 6.59% during 2014 and Consolidated
Earnings per Share (EPS) stood BDT 2.02.NPL ratio stood at 5.08% in 2014.

15

4.4 Overall performance measurement

LANKABANGLA FINANCE LIMITED

2014

2010

Total Assets
Total assets are growing at 24% (Avg.) due to Company's relentless
effort to disburse quality loans.

2012
2013
Net Profit After Tax

2014

Net Profit was increased in 2014 in comparison to 2013 as Company

was able to reduce its interest expenses significantly by capitalizing the
market imperfection.

2014

2010

Operating revenue is being continually growing due to Company's rapid

expansion in the money market by covering more geographical areas.

201

2.05

1.84
2012
2013
Operating Revenue

2012
2013
Earnings Per Share (EPS)

2.98

5.65

4,090

3,490

3,628
1,476

2,211
2011

2011

Earnings Per Share (EPS)

Operating Revenue

2010

448

2013

652

1,236
403

32,353

26,630

19,499
2012

467

2011

2.13

2010

Net Profit After Tax

15,904

13,721

Total Assets

2014

EPS increases in 2014 due to Company's relentless effort to maintain

quality loan growth, administrating expenses and strengthening
recovery and collections.

Return on Equity (%)

Operating Profit Ratio

43.4%
55%
33.0%

30.6%

39%

27%

14.5%
19%

18%
10.9%

2010

2011

2012

2013

2014

Operating margin was slightly reduced in 2014 in comparison to 2013 as

operating expenses were significantly increased in the year due to
Company's rapid expansion .

2010

2011

2012

2013

2014

Return on equity was increased in 2014 due to Company's relentless

effort on the efficient uses of Shareholders' fund by maintaing quality
loan growth, administrating expenses and strengthening recovery and
collections.

16

4.5 Comparison with 4 other Financing Institutions:

Investor
Last Audited P/ E Ratio
(x)
Last Audited P/B Ratio
(x)
Growth
Annual Operating
Profit Growth
Net Interest Income
Growth
Investment Income
Growth
Commission Income
Growth
Operating Income
Growth
Earnings Growth
Assets Growth
Equity Growth
Deposits Growth
Loans Growth
Liquidity & Leverage
Loans/Total Deposits
Liquid Assets to Total
Deposits
Profitability &
Investment Return
Operating Profit
Margin
Net Profit Margin
ROA
ROE
Expense Ratio
Asset Management &
Asset Quality
Non Performing Loan
(BDT)
NPL Ratio
Efficiency &
Productivity & Capital
Strength
Expense Ratio
Investment Income to
Investment Assets
Interest Yield
Net Spread

Lanka
BAYLEASING
IDLC
Bangla
17.95
14.43 9.81
1.37

0.72 2.23

MIDASFIN

PHOENIXFIN

42.68

9.63

2.41

0.77

16.29%

4.50% 44.53%

45.98%

14.99%

13.12% 39.00%

41.47%

119.51%

10.92% -9.56%

1258.89%

100.53%

-16.98%

76.24% 23.92%

0.00%

21.99%

24.20% 32.41%

342.06%

27.77%

-7.28%
28.93%
-9.86%
80.46%
37.58%

0.47%
14.68%
-1.91%
46.71%
16.36%

2.34%
265.04%
5.75%
4.38%

-36.65%
16.64%
-1.77%
26.05%
19.76%

1.58
0.12

1.57
0.47

36.80%

68.96%

15.71%
0.68%
7.53%
-75.84%

20.93%
1.21%
7.88%
-68.41%

1.39
0.06

36.08%
16.69%
0.94%
6.37%
-77.60%

86.05%
16.85%
21.73%
21.23%
14.97%

2.22 1.29
1.23 0.22

76.84% 59.98%
48.94%
1.54%
4.82%
-83.22%

34.05%
2.28%
20.95%
-61.13%

0 0

0 0

-0.76
0.1852

-0.68
0.0964

0.11
0.11

0.13
0.13

-0.78
0.0998
0.11
0.11

-0.83 -0.61
0.0745 0.0183
0.07 0.14
0.07 0.14

17

The comparison has been done with 4 other similar types of company. IDLC is one of them. In this
industry IDLC is being considered as the benchmark. Comparing it to the others it can be found that
lankabangla has a good command over the industry. All the financial information shows the direction
that lankabangla is growing a positive growth. The percentage might be negative. But the
percentage is declining and may be with in some days it will show the positive sign.

18

5.0 Conclusion
In Bangladesh commercial Banks have spread their command in financial system, but we have to
recognize the fact that non-Bank Financial Institutions are also significant for smooth economy.
Company like LBFL is providing some additional and dynamic financial services which helped them to
become well known. In one hand they are providing support for those financial sectors that was not
served by commercial bank. As an efficient company LBFL helps in minimizing risk which in turn
helps the economy as a whole. As LBFL becoming stronger and efficient day by day it can be hoped
that if they get necessary support from government it will be able to play a more historic role in the
economic development of Bangladesh.
LankaBangla specialize in providing with instant cash through the purchase of accounts receivable or
debts outstanding which is a financing technique known as Factoring. Factoring moves your cash
flow forward creating immediate cash to improve your financial position and increase your
purchasing power. As the Non-banking financial institution it is searching for new area of business
and collect information about the potential sector as well as to prepare strategy for getting
competitive advantage.
Comparing the other financial institutions LBFS has a good trend over time and the company has a
good command over the industry.
Lastly, It can be said that the Non-banking financial institution have huge opportunity to increase
business and profit in the Bangladeshi economic. Its plan should be innovative to do these jobs.

19