Financial Management

of
Dutch Bangla Bank Limited

Name

Student ID

Md. Rafiur Rahman

600

Mohsi Nihad Mosabbir Ornab

613

Rajesh Paul

617

Md. Shuaib Shahriar Rusho

620

Lamia Nuzhat Shashi

1923

Here We Are..

 Dutch-Bangla

Bank Limited (DBBL) is the most innovative and

technologically advanced bank of Bangladesh.

The

bank was an effort by local shareholders spearheaded by M

Sahabuddin Ahmed (founder chairman) and the Dutch company FMO.

DBBL

commenced formal operation from June 3, 1996.

DBBL

is most widely recognized for its donations to social causes and

its IT investment (largest ATM network).

Dutch Bangla Bank Limited (DBBL)

 Vision

DBBL dreams of better Bangladesh, where arts and letters, sports and
athletics, music and entertainment, science and education, health and
hygiene, clean and pollution free environment and above all a society
based on morality and ethics make all our lives worth living.
Mission

DBBL engineers enterprise and creativity in business and industry with

a commitment to social cause. Profits alone do not hold a central
focus in the Banks operation.

Vision & Mission of DBBL

Name

Dutch Bangla Bank Limited

Total Assets
Total Deposits
Total Loans and Advances
Total Clients*
Total Branches *
Total Fast tracks*
Total ATMs*
EPS
Regulatory Capital
Capital Adequacy Ratio
Total Revenue
No of Share Outstanding
No of Employees*
Number of deposit account holder
Number of loan account holder

2,15,993 million taka

1,66,762 million taka
1,24,422 million taka
40,00,000+
146
365
2700+
11 taka
18,077 million taka
13.83%
20,742 million taka
200,000,000
5556
3,795,255
26,268

DBBL at a Glance..

Particulars (in million)

2010

2011

2012

Cash
Balance with other banks & financial
institutions
Money at call and short notice

10019.74 10635.26 18798.38

Investments

11001.61 10897.67 13428.58

Loans and advances

Fixed assets including land, building,
furniture & fixtures

67657.67 79660.70 91648.95

Other assets
Total Assets
Borrowings from other banks, financial
institutions
Deposits and other accounts

2695.77
1400.00

2934.36

4866.58
5700.00

12554.69
4470.00

2014
23539.4
1
27190.9
9
3550.00
19261.1
8
124422.
99

4676.72 4382.59 4141.72

13187.9 13887.2
5472.50 7524.91 10341.25
2
6
101181. 123267.0 155918. 185537. 215993.
64
4
56
39
55

1864.88

3981.91

1829.99

4839.53 7472.24
125433.1 145230.
83244.77 100711.01
3
10
17215.5
7654.73 10433.41 13593.21
6
1416.26 1352.99 1198.19 2977.77

BalanceOther
Sheet
(Abridged) of DBBL
liabilities
Subordinated debt

2013
21621.2
3
18260.9
6
4220.00
17441.9
1
106422.
78

12054.7
0
166762.
33
18001.4
7
4657.61

Particulars (in million)

2010

2011

2012

Cash
Balance with other banks & financial
institutions
Money at call and short notice

10019.74 10635.26 18798.38

Investments

11001.61 10897.67 13428.58

Loans and advances

Fixed assets including land, building,
furniture & fixtures

67657.67 79660.70 91648.95

Other assets
Total Assets

2695.77
1400.00

2934.36

4866.58 12554.69
5700.00 4470.00

2013
21621.2
3
18260.9
6
4220.00
17441.9
1
106422.
78

2014
23539.4
1
27190.9
9
3550.00
19261.1
8
124422.
99

3981.91

4676.72 4382.59 4141.72

13187.9 13887.2
5472.50 7524.91 10341.25
2
6
101181.6
155918.5 185537. 215993.
4
123267.04
6
39
55

where the bank has focused for asset growth

in recent years?

While answering this question we have gone through

Asset utilization and funding (Credit/Deposit,
Investment /Credit mix, G. securities/ Investment,
Deposit/Equity position)

How funds mostly were managed?

Particulars (in million)

2010

2011

2012

Loans & Advances

Loans, Cash Credits &
Overdrafts
Bills purchased and
discounted

59144.39

69564.63

82639.29

8512.67

10096.06

9009.66

Lease receivables
Total Loans & Advances

.60
67657.67

.01
79660.70

Deposits
Current Deposits
Bills payable
Savings and Bank deppsits
Term deposits
Total Deposits
Credit Deposit Ratio

14854.17
1260.98
31030.02
36099.60
83244.77
81.28%

18915.38
1109.71
37503.60
43182.32
100711.01
79.10%

Credit Deposit Ratio

2013

2014

99365.87 119217.55
7056.91

5205.44

91648.95 106422.78 124422.99

25245.42
1540.12
42877.18
55770.42
125433.13
73.07%

31692.30
1903.96
49930.95
61702.88
145230.10
73.28%

40475.14
3256.60
60757.73
62272.87
166762.33
74.61%

Credit Deposit Ratio

81.28%
82.00%
80.00%

79.10%

78.00%
76.00%

74.61%

74.00%

73.07%

73.28%

2012

2013

72.00%
70.00%
68.00%

2010

2011

Credit Deposit Ratio (contd)

2014

Investments (in million)

Treasury bills
Treasury bonds
Prize bonds
Total in Government
securities
ICBs fifteen years debenture
( interest rate @ 5% p.a.)
Subordinated bonds
Shares
Total other investments
Total

2010

2011

2012

.00

.00

961.19

2013

2014

3414.05 1314.39
12878.9 17013.
9735.01 9727.03 11198.18
9
95
3.60
3.36
4.93
7.58
7.55
16300.6 18335.
9738.60 9730.39 12164.30
2
89
9.00
6.00
3.00
.00
.00
1250.00 1150.00 1250.00 1130.00 914.00
4.01
11.28
11.28
11.28
11.28
1263.01 1167.28 1264.28 1141.28 925.28
11001.6 10897.6
17441.9 19261.
1
7
13428.58
1
18

Investments of DBBL

Investments/ Loans and advances

0.17
0.16

0.16
0.17

0.16

0.15

0.16
0.15

0.15

0.15
0.14

0.14

0.14
0.13
0.13
0.12

2010

2011

2012

2013

Investments/ Loans and advances

2014

Govt. securities/Investments
96.00%

95.20%
93.46%

94.00%
92.00%
90.00%
88.52%
88.00%

90.59%
89.29%

86.00%
84.00%
2010

2011

2012

2013

Government Securities / Investments

2014

The

percentage change of year 2014 in terms of 2013

in investment are Investments
Treasury bills
Treasury bonds
Prize bonds
Total in Government securities
ICBs fifteen years debenture ( interest rate @ 5% p.a.)
Subordinated bonds
Shares
Total other investments

Percentage
-61.50%
32.11%
-0.40%
12.49%

Total

10.43%

-19.12%
-18.93%

Any change on Bank's investment & loan assets

portfolio?

The

percentage change of year 2014 in terms of 2013

in loan asset are
Particulars
Cash
Balance with other banks & financial institutions
Money at call and short notice
Investments

Percentage

Loans and advances

16.91%

Fixed assets including land, building, furniture & fixtures

Other assets
Total Assets

5.50%
5.30%
16.42%

8.87%
48.90%
15.88%
10.43%

Any change on Bank's investment & loan

assets portfolio?

To do this activity we have constructed graph based on

following slides.

Show link between funded & non funded income sources with
Balance sheet items (i.e., inv. income as a % of investment items in
Balance sheet and how it has changed)

Funded Income (in million)

Interest on loans and
advances

2010

2011

2012

2013

2014

6672.4

9223.5

12162.7

13371.3

13072.1

976.2
.2
1.1
309.8
1287.3
31.5
14690.1

1601.0
.6
.5
479.5
2081.6
53.3
15206.9

7352.7
7337.4
6.9

6873.0
8333.9
11.4

1661.9

1978.1
1989.6

Interest on balance with other banks and financial institutions

Fixed deposits
413.5
431.4
689.2
Special notice deposits
9.0
4.1
6.2
Nostro accounts
.3
.3
.2
Money at call and short notice
77.3
320.9
1057.5
Total Interest Income (Main)
500.1
756.8
1753.1
Interest income - Off-Shore
2.7
3.9
8.8
Total Interest Income
7175.2
9984.2
13924.6
Interest paid on deposits and
borrowings etc.
3448.4
5024.2
6919.5
Net Interest Income
3726.9
4960.0
7005.1
Dividend on shares
8.3
.8
1.8
Interest on treasury bills,
bonds and debentures
1071.4
1168.5
1379.3
Gain on sale of shares
Total Investment income

199.1
1278.8

1169.3

1381.2

1668.7

Total Funded Income

5005.6

6129.3

8386.3

9006.1 510323.

Funded Income

Non Funded Income (in

million)

2010

2011

2012

2013

2014

Commission, exchange and

brokerage
Commission
Exchange earnings

484.79
657.75

498.57
1184.00

527.75
672.21

593.18
1007.99

640.99
707.90

1142.55

1682.57

1199.96

1601.17

1348.89

Other operating income

Charges for service

21.95

26.36

30.93

29.28

24.52

Income from IT service

426.98

712.19

1033.47

1236.68

1345.61

Recoveries from client

Service charges on deposit accounts
Income from Export-Import
Examination and appraisal fees
Document handling charges-Export
Locker Rent
Gain on sale of fixed assets
Other earnings

62.27
295.81
69.62
1.61
9.85
2.66
2.87
117.27

74.93
245.47
104.63
.86
6.07
2.88
4.37
100.83

108.85
286.29
129.83
.55
8.45
3.12
.22
105.51

100.22
329.49
215.42
.09
2.91
3.03
3.46
167.82

101.83
353.55
159.63
.01
.56
3.87
.03
197.97

Off-shore Banking Unit

.10

2.20

8.78

Total

1010.89 1278.59 1707.33 2090.59 2196.36

Non Funded Income

Interest Income earned form loans & advances

13.27%

14.00%
12.00%

11.58%

12.56%
10.51%

9.86%

10.00%
8.00%
6.00%
4.00%
2.00%

0.00%
2010

2011

2012

2013

2014

Linkage of Income Statement with Balance Sheet

Investment Income from Total Investment

14.00%

11.62%

12.00%

10.73%

10.29%

10.00%

9.57%

10.33%

8.00%
6.00%
4.00%
2.00%
0.00%
2010

2011

2012

2013

2014

Linkage of Income Statement with Balance

Sheet (contd).

Interest paid for deposits

6.00%
5.00%

5.52%
5.06%

4.99%

4.14%

4.12%

4.00%
3.00%
2.00%
1.00%
0.00%
2010

2011

2012

2013

Linkage of Income Statement with Balance

Sheet (contd).

2014

Service charges on deposit accounts; 5%

Net Interest Income; 24%
Income from IT service; 15%
Dividend on shares; 3%

Exchange earnings; 14%

Interest on treasury bills, bonds and debentures; 24%
Commission; 9%

What is the core profitability area of your

bank?

NIM and spread can be calculated to view the interest

rate exposure.!!!

Show how the bank has managed its interest rate

exposure for deposit and credit over the years

NIM Calculation Formula

Net Interest Margin (NIM) and Spread (2nd

method)

Interest Earning Assets (in

million)
2010
Balance with other banks &
financial institutions
2695.77
Loans, Cash Credits &
Overdrafts
59144.39
Money at call and short notice 1400.00

2011
4866.58

2013

20132

12554.69 18222.88

69564.63 82639.29 99365.87

5700.00
4470.00 4220.00
99663.9 121808.7
63240.16 80131.21
8
5

Total
Interest Bearing Liabilities
(in million)
Borrowings from other banks,
financial institutions & agents 1864.88
Savings and Bank Deposits

31030.02

Term deposits

36099.60

1829.99

4839.53

6996.96

37503.60 42877.18 49930.95

43182.32 55770.42 61702.88

103487. 118630.8
68994.50 82515.91
12
0

Net Interest
Margin
(NIM)
Contd.
Total

2014
26502.2
6
119217.
55
3550.00
149269.
81
10624.1
1
60757.7
3
62272.8
7
133654.
71

Year
Interest Income
Interest Expense
Net Interest Income

2010

2011

2012

2013

2014

7175.23
3448.38
3726.85

9984.16
5024.15
4960.00

13924.62
6919.48
7005.14

14690.08
7352.70
7337.38

15206.95
6873.02
8333.93

16000.00

13924.62

14000.00
12000.00
7175.23

6000.00
4000.00

15206.95

9984.16

10000.00
8000.00

14690.08

6919.48

7352.70

6873.02

5024.15
3448.38

2000.00
.00

2010

2011
Interest Income

2012

2013

Interest Expense

Net Interest Margin (NIM) Contd.

2014

8.00%
7.03%

7.00%
6.00%

5.89%

6.35%

NIM

7.29%

6.19% 6.37%

6.02% 5.86%

5.00%

5.58%

5.05%

4.00%
3.00%
2.00%
1.00%
0.00%

2010

2011
NIM (1st Method)

2012

2013

NIM (2nd Method)

Net Interest Margin (NIM) Contd.

2014

To measure profitability we have gone through Operating Income, Expense and Efficiency
ROE
ROA
ROI
EPS

Discuss how the bank has improved/managed

its profitability over the years.

Total Operating Income

9000.00
8000.00
7000.00
6000.00
5000.00
4000.00
3000.00
2000.00
1000.00
.00

2010

2011

2012

Net Interest Income

Commission, exchange and brokerage

Operating Income

2013

2014

Investment Income
Other operating income

4000.00

Main Operating Expense Items

3500.00

Salary and
allowances
Rent, taxes,
insurance, electricity,
etc.

3000.00
2500.00

1500.00

Postage, stamp,
telecommunications,
etc.

1000.00

Stationery, printings,
advertisements, etc.

2000.00

Depreciation and
repair of banks
assets

500.00
.00

2010

2011

2012

Operating Expense

2013

2014

Operating Effeciency
70.00%

63.90%

60.00%
50.00%

61.61%

53.91%
47.42%

41.35%

40.00%
30.00%
20.00%
10.00%
0.00%

2010

2011

2012

Operating Effeciency

Operating Efficiency

2013

2014

Return

on Assets (ROA)
Return on Assets

2.5%

2.2%

2.0%

1.9%

1.7%

1.5%

1.2%

1.1%

2013

2014

1.0%
0.5%
0.0%
2010

2011

2012

Return on Assets

Profitability Ratio

Return

on Equity (ROE)
Return on Equity

40.0%

35.3%

35.0%
30.0%

27.0%

25.0%

23.4%

20.0%

17.0%

16.2%

2013

2014

15.0%
10.0%
5.0%
0.0%

2010

2011

2012

Return on Equity

Profitability Ratio (c0ntd).

Return

on Investment (ROI)
Return on Invesment

14.0%

11.6%
12.0%

10.7%

10.3%

2011

2012

10.0%

9.6%

10.3%

8.0%
6.0%
4.0%
2.0%
0.0%
2010

Return on Invesment

Profitability Ratio (c0ntd).

2013

2014

Earnings

Per Share (EPS)

Earnings Per Share

12.00
11.50

11.57
11.03

11.00
10.77
10.50

10.00

10.00
9.50
9.00
2011

2012

2013

Earnings Per Share

Profitability Ratio (c0ntd).

2014

Operating Profit
Total provision maintained

2010
2011
4198.65 4779.98
1661.97 2001.76

2012
5205.78
2334.46

2013
2014
4583.84 5324.57
3356.55 4201.66

Total provision/ Operating Profit

0.73

0.40

0.42

0.45

2010

2011

2012

2013

Provision to operating profit ratio

0.79

2014

Items
Unclassified loans and advances
All unclassified loans
1.00%
Small and medium enterprise financing
0.25%
Consumer financing (other than housing
finance)
5.00%
Consumer financing (for housing finance)
2.00%

2010

2011

2012

2013

2014

43667.62
436.68
18370.18
183.70

53341.18
533.41
18967.30
189.67

61013.18
610.13
21409.34
53.52

70278.02
702.78
22392.77
55.98

91285.14
912.85
20863.45
52.16

1763.18
88.16
332.35
6.65

2976.88
148.84
411.64
8.23

2891.48
144.57
404.73
8.09

3051.79
152.59
397.86
7.96

2757.71
137.89
534.55
10.69

Loans to BHs/MBs/SDs

3.47

95.57

2.00%
Short term agricultural credit
5.00%
Special mention account (2%)
Total for Unclassified Loans

730.17
36.51
26.19
777.88

.07
701.76
35.09
20.33
935.65

1111.71
55.59
85.47
957.38

2180.18
109.01
30.85
1059.17

1.91
1837.68
45.94
4.05
1165.49

Classified loans and advances

Substandard
20%
Doubtful
50%
Bad /loss
100%
Total for Classified Loans

5.23
1.05
485.35
242.67
640.37
640.37
884.09

320.78
64.16
419.43
209.71
787.24
787.24
1061.11

308.48
61.70
215.31
107.65
1202.73
1202.73
1372.07

55.48
11.10
442.09
221.05
2065.24
2065.24
2297.38

383.38
76.68
290.54
145.27
2814.14
2814.14
3036.09

Provision Required
1661.97
1996.76 (Classified
2329.46
3356.55
Provision
Maintained
in DBBL
loan4201.57
Total Provision Maintained
1661.97 2001.76
2334.46
3356.55
4201.66
Detailed)
Total provision surplus
.0000
5.0000
5.0000
.0004
.0836

2014

2013

2012

2011

2010

4201.57
4201.66
3356.55
3356.55
2329.46
2334.46

Total provision
maintained

1996.76
2001.76
1661.97

.00

1661.97

500.00 1000.001500.002000.002500.003000.003500.004000.004500.00

Provision Maintained in DBBL (Anticipation!)

Off Balance sheet

Items
Contingent liabilities
Acceptances and
endorsements
Letters of guarantee
Irrevocable letters of
credit
Bills for collection
Other contingent
liabilities
Total contingent liabilities

2010

2011

2012

2013

2014

0
4045.31

0
2411.35

0
2992.56

791.32
3543.48

40.53
3674.16

20251.70
21669.87

10707.93
24829.53

11247.02
29111.95

13842.77
25787.81

15880.51
23957.65

530.89
46497.76

608.66
38557.47

171.31
43522.84

2596.47
46561.85

3727.09
47279.93

Other commitments
Documentary credits and short term trade-related
transactions
Forward assets purchased and forward
deposits placed
Undrawn note issuance and revolving underwriting
facilities
Undrawn formal standby facilities, credit lines and
other commitments
Total other commitments
.00
.00

Off Balance Sheet exposure of

.00 DBBL
.00

.00

2014
2013
2012
Cash Reserve Requirement (CRR): 6.5% of average demand and time liabilities
Required reserve
10349.51
8354.03
7391.66

6028.75

Actual reserve maintained

Balance with Bangladesh Bank-Local
currency
Surplus
Cash Reserve Maintained (%)

6330.06
301.31
6.82%

11540.97
1191.46
7.25%

9289.51
935.48
6.67%

7827.94
436.29
6.88%

Statutory Liquidity Ratio (SLR): 13% of average demand and time liabilities
Required Reserve
20699.02
18100.40
16015.25
Available for maintenance
Cash in hand (including foreign currencies)
Balance with Bangladesh Bank - Foreign
currencies
Balance with Sonali Bank Limited
Unencumbered approved securities
Reserve Maintained
Surplus
Total surplus
Statutory Liquidity Ratio (SLR) Maintained
(%)

2011

13062.30

6332.08

7489.01

5644.38

3535.95

4771.87
894.49
18328.34
30326.78
9627.75
10819.21

4298.84
543.87
16293.04
28624.76
10524.36
11459.84

4858.52
467.54
12162.36
23132.80
7117.55
7553.84

250.72
518.53
9733.03
14038.23
975.93
1277.24

Liquidity Requirement &19.05%

Maintenance
in DBBL
20.56%
18.78%
13.97%

 Investment

of DBBL has been raised from 2012 to 2014 because of

some reasons (E.g.: Political turmoil, Economic Breakdown etc.) people
were interested to deposit in to banks rather than to investing in to
some risky projects. So overall loans and advances of DBBL has been
declined comparatively at that time.

In

order to make the best use of deposited funds DBBL has started to
invest in Govt. Securities. Thats why investment in govt securities has
increased significantly in recent years.

As

Govt. securities has less Investment income so overall investment

income of DBBL has been declined.

Finally. From the analyzed data we have

concluded to some points to be noted

 From

the relationship between Interest Income and Loans and advances

It has been found that Loans and advances has increased gradually from
2010-2014. But % of interest income from loans was at a greater rate in
2012. It was because Interest Rate was at the Peak Level at that time.

Central

Bank had advised to decrease the rate but Banks were not
willing to decrease the rate. And the rate of DBBL was also high at that
time.

(Source: July 22, 2012, Dhaka tribune)

Finally. From the analyzed data we have

concluded to some points to be noted

 As

the BAD debt and Substandard Loan of DBBL has been

increased significantly so provisions against loan has also been
increased.

As

the provision has been increased so we have already seen

that ROE, ROA, ROI of DBBL has been decreased.

Finally. From the analyzed data we have

concluded to some points to be noted

Thank You