Comparative Financial Statement of City Bank and Social Islami Bank Bangladesh Ltd - Assignment Point
Comparative Financial Statement of City Bank and Social Islami Bank Bangladesh Ltd
Subject: Finance | Topics:

Executive Summary:

Banking Business is appearing to be the dominant factor in recent years. Long before, since the emergence of Banks and similar activities was to attracting people to save valuable possessions and engaging more people in it. But with the change in time and technology the pattern of Bank business activities has also changed. It is now changing in every day with the changing world with competent man and cutting edge technology to fulfill its goal for the people.

In this project paper, I want to provide the comparative scenario between two prominent bank in Bangladesh those are The city bank ltd. and Social Islami bank ltd. The financial statements are the main factors to compare the position of those banks that lead the title name of this project paper which is “a comparative study of financial statement analysis between The City Bank Ltd. and Social Islami Bank Ltd.”

This project paper mainly divided into two parts those are organizational part and the analysis part. In organizational part consists of organizational overview, vision, mission, values, and organizational structure and so on. In analysis, this part was divided into two parts includes graphical analysis and ratio analysis between two banks. In graphical analysis part several financial items are showed to compare the position between two banks. In ratio analysis part I used several common ratios as a tool to effective comparison.

In this project paper showed my best effort with a limited knowledge. Above all, I just tried to show the real picture of financial position by analysis of several financial statements of The city bank ltd. and Social Islami bank ltd.

 Introduction:

Everywhere in this world, banking industry is playing a vital role in the economic development. We can observe that financial development in different countries of the world starts with Banking Financial Institutions. Bank as the principal source of credit to millions of individuals, families, businesses & many units of government, has attached its own pace of advancement in the development path of economy.

 The main function of a commercial bank is to mobilize deposits and to provide loans to people & organizations to finance their consumptions and business activities. Thus banks encourage the flow of money to productive use & investment which accelerates the flow of economic growth. In this project paper I want to show the comparison between two leading bank in Bangladesh those are the city bank ltd. and Social Islami bank ltd. under the supervision of Sr. Lecturer Nigar Sultana, Department of Business Administration, Stamford University Bangladesh.

Objectives

Without objectives, no study can be fruitful one. Before preparing the report, I setup some objectives. Those objectives are divided into two parts, these are given below:

Primary objectives

             To meet the requirements to achieve MBA degree.

               Highlighting and analyzing the comparative financial position of the city bank ltd. and social Islami bank ltd.

Secondary objectives

               To know the financial condition of the banks.

              To get the opportunity of financial statement analysis.

               To promote myself by using different financial tools.

 Methodology

For preparing the paper, both primary & secondary data have been utilized. Primary data have been collected from the selected banks having interview of bank officials. The secondary data have been collected by visiting the websites of the banks, searching the annual reports and visiting the several financial websites to make this paper fruitful.

Generally, it’s a analysis based project paper which for why I used several graphs and ratio analysis for that several computer software make it in a nice look.

Limitations of the study

It is obvious that every study has some limitations. The study I have made that was great importance and required me huge work .To do that I have faced some difficulties, which made my conduction of the study little hazardous. Some of these are given below:

 The organization maintains strict confidentiality about their financial and other information. They are afraid of any type of information leakage to their competitors. So there was always difficulty to have appropriate information from them.

    Scope of my study was so wide of this kind of analytical and comprehensive study.

    Lack of sufficient books, papers and journals etc.

    Web site of the banks isn’t up to date to gather valuable information.

   In case of secondary data collection, there was very few secondary information.

An Overview of Banking Sector in Bangladesh

Definition of Bank

A financial institution that is licensed to deal with money and its substitutes by accepting time and demand deposits, making loans, and investing in securities. The bank generates profits from the difference in the interest rates charged and paid. An organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor’s checks; and issues drafts and cashier’s checks.

 Objectives of Bank

 The main objective of a commercial bank is to provide high standard facilities for transfer of funds, financing the business operations and purchase of households, security and adequate return on savings and earns income from these activities to provide optimum return to its shareholders.

 The main objective of commercial banks is to maintain higher profitability by maintaining circular and efficient flow of amount of money deposited by the customers and the lenders. Commercial banks contribute to the economic cycle by keeping the money circulation among households, government and corporate businesses. The commercial banks lend money to the economic agents through their various products and services by earning interest income on the borrowed money. Commercial banks design their short term and long term loans and other products to cater to the need of customers while enhancing their own returns. Their objective is to attract more customers and build profitable relationships with the new and existing customers.

  Its principal objective is to maintain price stability. In seeking its principal objective, the Bank of Lithuania is independent from the Government of the Republic of Lithuania or other institutions of the state.

  Bangladesh Bank is the Central bank of Bangladesh. It is the monetary authority of the country. The broad objectives of the Bank are :

  To regulate currency issuance and to keep foreign exchange reserves.

  To manage the monetary and credit system of Bangladesh with a view to stabilizing domestic monetary value.

   To preserve the par value of the Bangladeshi Taka and reserve all the rights of the bank.

  To promote and maintain a high level of production, employment and real income in Bangladesh; and to foster growth and development of the country’s productive resources.

 Historical Background of the Banking Institution in Bangladesh Bank

There is no formal evidence of the existence of banks in Bengal during the period before 400 BC; traders of this period were known to have carried out activities to provide financial assistance among them. The wealthy people of that period used to put their surplus money and valuables under the soil in brass-made pitchers and maintained accounts for them by writing on the body of dishes made of gold or silver. Such activities, however, were centered in temples and other religious places. Borrowing and lending gave way to banking during the period, who believed that wise men should deposit money with a person bearing good moral character, having respectable and rich relatives, and well conversant with law. Probably it is the introduction of banking system in the world. During the Mughal period, there were different types of gold coins in circulation that encouraged people to engage in monetary transactions and profit-motivated financial activities. Many individuals and some families attained special reputation in trading and in finance. One such family, that of jagat sheth, had branches of its monetary business in dhaka, Hughli and murshidabad. Mughal rulers patronised the banking business of Jagat Sheth family and others, and also used to borrow money from them when needed. People could convert their valuables, mostly gold and silver, into currency with minimum cost at Mughal mints. Monetary transactions and transfer through hundi (bill of exchange), along with cash transaction, was in vogue during the Mughal period. The revenue received from zamindars and dues there from were sent to the government treasury through family-based financial or banking institutions. A major landmark was the establishment of the Hindustan Bank in 1700 AD at calcutta Established in 1784; the Bengal Bank was the first British-patronised modern bank in India. Dhaka Bank started to operate as a commercial bank in 1806. The Bengal Bank opened its first branch in Dhaka by purchasing Dhaka Bank in 1862. In 1873, it opened its two branches in sirajganj and chittagong. Another branch of Bengal Bank was opened in chandpur in 1900. Six branches of Bengal Bank were in operation in the Bangladesh region until the partition of bengal in 1947 and these branches were located at Dhaka, Chittagong, mymensingh, rangpur, Chandpur and narayanganj. The banking system in the territory of Bangladesh grew slowly during the British and Pakistan periods. There were only 25 bank branches in 1901 and the number grew to 668 in 1946. The banking system in Bangladesh started functioning with 1,130 branches of 12 banks inherited from Pakistan. These banks were nationalised and renamed after being merged. The the banks were the sonali bank (The National Bank of Pakistan, The Bank of Bawalpur, The Premier Bank), agrani bank (Habib Bank, Commerce Bank), janata bank (United Bank, Union Bank), rupali bank (Muslim Commercial Bank, Standard Bank), pubali bank (Australasia Bank, Eastern Mercantile Bank) and uttara bank (Eastern Banking). bangladesh bank, the central bank of the country, was set up on 16 December 1971 by the Bangladesh Bank Order 1972. The government accepted the assets and liabilities of the Deputy Governor’s office of the State Bank of Pakistan in Dhaka and declared the Bangladesh Bank as a fully effective and permanent central bank. Bangladesh Bank (BB) regulates and supervises the activities of all banks. The BB is now carrying out a reform programmed to ensure quality services

 BB

  NCBs

  PCBs

  Specialized bank

Banking Operation in Bangladesh Bank

Bangladesh Bank performs all the functions that a central bank of any country is expected to perform, and such functions include maintaining the price stability through economic and monetary policy measures, managing the country’s foreign exchange and the gold reserve and regulating the banking sector of the country. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. Except for the 1 and 2 taka notes, it issues all other denominations of Bangladeshi Taka. Bangladesh Bank is empowered to act as the watchdog of the country’s banking system, and all scheduled banks are accountable to Bangladesh Bank, which has extensive powers to ensure soundness of the banking system. No bank can commence banking business in Bangladesh and no existing bank can open a new branch in or outside the country or shift any branch from one place to another without obtaining a license/permission from the Bangladesh Bank.

Organizational Profile of The City Bank Ltd

An Overview of the Bank:

City Bank is one of the oldest private Commercial Banks operating in Bangladesh. It is a top bank among the oldest five Commercial Banks in the country which started their operations in 1983. The Bank started its journey on 27th March 1983 through opening its first branch at B. B. Avenue Branch in the capital, Dhaka city. It was the visionary entrepreneurship of around 13 local businessmen who braved the immense uncertainties and risks with courage and zeal that made the establishment & forward march of the bank possible. Those sponsor directors commenced the journey with only Taka 3.4 crore worth of Capital, which now is a respectable Taka 330.77 crore as capital & reserve. City Bank is among the very few local banks which do not follow the traditional, decentralized, geographically managed, branch based business or profit model. Instead the bank manages its business and operation vertically from the head office through 4 distinct business divisions namely

  1.                                                           I.            Corporate & Investment Banking;
  2.                                                        II.            Retail Banking (including Cards);
  3.                                                     III.            SME Banking; &
  4.                                                     IV.            Treasury & Market Risks.

 Under a real-time online banking platform, these 4 business divisions are supported at the back by a robust service delivery or operations setup and also a smart IT Backbone. Such centralized business segment based business & operating model ensure specialized treatment and services to the bank’s different customer segments.

The bank currently has 90 online branches and 1 SME service centers and 11 SME/Agri branch spread across the length & breadth of the country that include a full fledged Islami Banking branch. Besides these traditional delivery points, the bank is also very active in the alternative delivery area. It currently has 163 ATMs of its own; and ATM sharing arrangement with a partner bank that has more than 550 ATMs in place; SMS Banking; Interest Banking and so on. It already started its Customer Call Center operation. The bank has a plan to end the current year with 200 own ATMs.

City Bank is the first bank in Bangladesh to have issued Dual Currency Credit Card. The bank is a principal member of VISA international and it issues both Local Currency (Taka) & Foreign Currency (US Dollar) card limits in a single plastic. VISA Debit Card is another popular product which the bank is pushing hard in order to ease out the queues at the branch created by its astounding base of some 400,000 retail customers. The launch of VISA Prepaid Card for the travel sector is currently underway.

City Bank has launched American Express Credit Card and American Express Gold Credit card in November 2009. City Bank is the local caretaker of the brand and is responsible for all operations supporting the issuing of the new credit cards, including billing and accounting, customer service, credit management and charge authorizations, as well as marketing the cards in Bangladesh. Both cards are international cards and accepted by the millions of merchants operating on the American Express global merchant network in over 200 countries and territories including Bangladesh. City Bank also introduced exclusive privileges for the card members under the American Express Selects program in Bangladesh. This will entitled any American Express card members to enjoy fantastic savings on retail and dining at some of the finest establishment in Bangladesh. It also provides incredible privileges all over the globe with more than 13,000 offers at over 10,000 merchants in 75 countries. City Bank prides itself in offering a very personalized and friendly customer service. It has in place a customized service excellence model called CRP that focuses on ensuring happy customers through setting benchmarks for the bank’s employees’ attitude, behavior, readiness level, accuracy and timelines of service quality.

Table01: overall financial activities

Date of Incorporation

March 14, 1983

Formal Inauguration

March 27, 1983

Number of Branches

86

Paid up Capital

1,188,000,000

Total capital

3,156.25

Total asset

48,755.40

Total deposits

40,539.63

City Bank is one of the largest corporate banks in the country with a current business model that heavily encourages and supports the growth of the bank in Retail and SME Banking. The bank is very much on its way to opening many independent SME centers across the country within a short time. The bank is also very active in the workers’ foreign remittance business. It has strong tie-ups with major exchange companies in the Middle East, Europe, Far East & USA, from where thousands of individual remittances come to the country every month for disbursements through the bank’s large network of 99 online branches and SME service centers. The current senior management leaders of the bank consist of mostly people from the multinational banks with superior management skills and knowledge in their respective “specialized” areas. The newly launched logo and the pay-off line of the bank are just one initial step towards reaching that point.

Vision

The Financial Supermarket with a Winning Culture Offering Enjoyable Experiences

Mission

  • Offer wide array of products and services that differentiate and excite all customer segments
  • Be the “Employer of choice” by offering an environment where people excel and leaders are created
  • Continuously challenge processes and platforms to enhance effectiveness and efficiency
  • Promote innovation and automation with a view to guaranteeing and enhancing excellence in service
  • Ensure respect for community, good governance and compliance in everything they do

Values

  • Result Driven
  • Accountable & Transparent
  • Courageous & Respectful
  • Engaged & Inspired
  • Focused on Customer Delight

 Strategies of CBL

CBL believes in the practice of Market-Oriented Strategic Planning, developing and maintaining viable fit the organization’s objectives, skills and resources. The aim of such approach is to shape and reshape the bank’s businesses and services so that they yield target profits and growth.

The strategic planning of CBL consists of two organizational levels, which are:

  • Location Based Strategy
  • Business Level Strategy

 Location Based Strategy 

Since the growth and profits of banking business largely depend upon the locations of branches where large concentration of other businesses and industries are involved, CBL Main Strength is its location based strategy.

The 90 branches of CBL are divided into six different regions, which are:

1. Dhaka Division, comprising 40 branches.

      2. Chittagong Division, comprising 15 branches

 3. Comilla Division comprising 06 branches

4. Sylhet Division, comprising 10 branches

5. Bogra Division, comprising 10 branches

  6. Khulna Division, comprising 09 branches

The concentration of businesses and lifestyles of the people are not the same in these six areas. So, the strategies of the six areas differ from one another; but they are designed with distinctive local touch. Head office constantly monitors the progresses of all the six areas. The bank is not interested in launching more branches. Currently CBL is focusing in strengthening the existing branches.

Business Level Strategy   

The business strategy of the Bank is to strengthen its retail business, following a conservative lending approach. But the Bank’s major portion of the profit generates from its Retail banking and SME Banking.

Organizational Structure of City Bank Limited

City Bank ltd. Maintain organizational hierarchy to locate and differentiate employees that is varies upon employee’s designation and work. Junior officer is the entry level post for the entire officers.

Table-2: Organizational hierarchy of City Bank Limited:

Chairman

Vice-Chairman

Board of Directors

Managing Director & CEO

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

First Vice President

Senior Executive Officer

Vice President

Assistant Vice President

Senior Assistant Vice President

Executive Officer

Senior Officer

Officer

Junior Officer

 

Functions of the Bank

The bank performing following functions:

  Borrow money from different institutions and individual.

  Lending with or without security for local and international trade.

  Carrying out functions of foreign trade and foreign exchange business including opening L/C, issuance of T/C, credit card, promissory note, approved securities etc.

  Buying and selling foreign currencies.

  Participates in the capital market as stock-broker and as a portfolio investor.

  Reliable safe custody of valuables.

  Providing excellent remittance facilities.

  Provides withdrawal facilities of deposits.

Departments of CBL

  •  Human resources Department
  • Finance Department
  • Audit & Inspection Department
  • Marketing Department
  • Retail Banking & Consumer Banking Division
  • Corporate Banking Division
  • Treasury Division
  • Trade Service & Correspondents Banking Division
  • Loans and advance Division
  • SME Banking Division
  • Card Division
  • Information & Technology Division.

 Products Offered by CBL

City Bank Ltd. is a rapid growing commercial bank in the country. It’s competing in the market with wide range of product and services that plays a vital role in its attainment. The CBL concentrates the following categories of banking services-

Table-3: Products Offered by CBL

Corporate BankingRetail BankingSME BankingIslamic Banking    Treasury
Working Capital Finance

Trade Finance

Short/ midterm Finance

Project Finance

Islamic Finance

Structured Finance

Cash Management

Investment Banking

Deposit

Loan

Debit Card

Credit Card

The CityMaxx Card

NRB

NFB

City Global

Accelerated Banking

City Muldhon

City Sheba

City Shulov

City Munafa

City Nokshi

City Agro

SME Centre

Manarah Current A/C

Manarah Savings A/C

Manarah Term Deposit

Manarah Monthly Deposit

Manarah Personal Finance

Manarah Auto Finance

Manarah Hajj Deposit Scheme

Manarah Schedule of Charges

 

Overnight Deposit

Term Deposit

Foreign Exchange

Local Currency Spot & Forward

Derivatives

 Corporate Banking

City Bank is a major player in Bangladesh wholesale banking industry to offer the full scope of innovative, customized solutions and services. They offer service at the highest level. Our focus is not on short-term profit, but on building long-term relationships and standing by our clients whenever they need us.

They have a unique business focus on enabling project financing, trade, investment and supply chain financing for clients. They aim to be a one-stop gateway for corporate and financial institutions looking to extend their business. And they are committed to using our country wide network to facilitate our clients’ growing trade and investment flows and supply chain financing needs across our business footprint.

They focus exclusively on corporate and institutional clients domiciled or conducting business in our footprint, offering clients access to our extensive branch network and award-winning suite of state of the art services.

City Bank fully understands the importance of time, convenience and efficiency to the success of your business. They make easy the complex financial world for you and help you maximize every opportunity.

City Retail Banking

One of the most remarkable success stories of last 50 years’ banking industry globally has been the conceptualization and innovative execution of banking with individual customers, their friends & families. The industry has termed it as Retail Banking or Personal Banking or Consumer Banking; and it has now – at a very rapid pace – become the major revenue line for most of the top banks in the world. City Bank, too, recently has started its journey in Retail Banking .Their aim is clear. They want City Bank to become the most preferred bank to all individual clientele of the country, at least of the cities and towns where they operate. They want to provide their customers the best-in-class services, innovative products and financial solutions from smart outlets – all with a big smile that conveys and generates happiness all the way !

Table-4: Retail banking products

Deposit

Loan

NRB

NFB

Card

Current Account

Savings Account

City Onayash

City Shomridhdhi

City Projonmo

City Lchchapurun

City Youth School Plan

City Youth College Plan

FDR

City Drive

City Solution

City Express

City Double

City Scholar

 

NRB

Student File

Medical File

City Wallet

I-Banking

Locker Service

Debit Card

  • Visa Debit Card
  • MasterCard Debit Card

Credit Card

  • The American Express Card
  • VISA Classic Local
  • VISA Classic Dual
  • VISA Gold Local
  • VISA Gold Dual
  • The City Maxx Card

 SME Banking

SME Banking of City Bank is assuming a new and modern dimension. It is entering in to a wider horizon. The philosophy of extending banking services to SME’s of the country is to meaningfully push every one of them up to the next level of respective business operations. The upward push would be meaningful as they would be business wise competitive for a sustainable future. It is therefore would be turning in to an abode of SME’s to grow to the next level. Hence, the bank has named it City Business – for taking SME’s to the next level.

For the first time in the history of City Bank, SME Banking business processes are going to be driven thru a centralized platform model. This is a fundamental move away from a 25 years legacy system of decentralized geography based branch banking model.

Islamic Banking

City Bank introduces City Manarah – Islamic Banking. City Manarah is here to guide you and manage your finances in a fully Islamic Shariah Compliant way. It offers a wide variety of deposit and investment products such as Manarah Savings, Manarah Current, Manarah Term Deposit and Manarah Monthly Deposit Schemes. Each account is designed to meet your financial needs with best value for your money.

For your better understanding please take a closer look at all the Manarah deposit and investment products and also visit your nearest branch at Dhaka, Chittagong, Sylhet, Comilla, Rajshahi and Khulna for Islamic Banking services and products

 City Bank Treasury & Market Risk Division

City Bank has a dedicated Treasury team who is capable of providing all treasury Solutions. Through our foreign correspondent business partners CBL is providing a wide range of Treasury products. In CBL Treasury, there are four teams who are specialized in their own area to ensure the best possible solution to our customer requirement. CBL has following teams in the Treasury:

    1. Foreign Exchange
    2. Money Market
    3. Corporate Sales
    4. ATM & Market Research

Organizational Profile of Social Islami Bank Ltd

 An Overview of the Bank

The Social Islami Bank Ltd. (SIBL), a second-generation bank, operating from 22, November 1995 based on Shariah Principles. SIBL is a capitalized new generating Bank with an authorized capital of Taka 4000 Million in 2008 and paid up capital of Taka 585 million in 2008. SIBL has now 76 branches all over the country with two subsidiary companies – SIBL Securities Ltd. & SIBL Investment Ltd. Targeting poverty, Social Islami Bank Ltd. is indeed a concept of 21st century participatory three sector banking model in one. in the formal sector, it works as an Islami participatory Commercial Bank with human face approach to credit and banking on the profit and loss sharing: it is a Non-formal banking with informal finance and credit package that empowers and humanizes real poor family and create local income opportunities and discourages internal migration; it is a Development Bank intended to monetize the voluntary sector and management of Waqf, Mosque properties and introducing cash Waqf system for the first time in the history. In the formal corporate sector, this Bank would, among others, offer the most up to date banking services through opening of various types of deposit and investment accounts, financing trade, providing guarantee, opening letters of credit, collection of bills, leasing of equipment and consumers’ durable, hire purchase and installment sale for capital goods, investment in low-cost housing and management of real estates, participatory investment in various industrial, agricultural, transport, educational and health projects.

The bank has taken a renewed drive aiming at consolidating its business in more focused areas covering SME and Agro-finance with emphasis on searching for alternative delivery channel under which SMS banking and mobile based remittance payment systems that are gradually introduced to disseminate the SIBL services to the doorsteps of the customers. The bank has already introduced Internet banking and launched some new products to strengthen its business. The products are Sonali Din, Sommridhir Sopan, Sonchoy Protidin, Swopner Shiri, Shukher Thikana, Sabuj Shayanho, and Zamil, ATM, Debit, card.

SIBL is a pioneer in introducing on-line banking among all the Islami Banks of the country with state-of-the-art banking software, which will enable the bank to perform as any branch real time banking service to the clients. The state-of-the-art banking software of the bank will enable to perform as any branch real time banking service to the clients. SIBL is supported by core banking solutions and their products & services are strongly backed by IT infrastructure, which are upgraded & expanded on continuous basis. SIBL has set its strategy to convert all its banking activities from traditional branch-based banking system to an ideal blending of both centralized processing unit (CPU) and effective operation of branch that based on modern essence of banking.

 SIBL is quite conscious of its social business responsibilities and is always trying to participate in various social programs in the country under its CSR portfolio giving special emphasis on health, habitat & education. The bank ensures to provide better integrated idea of formal, informal & voluntary banking in the same platform. SIBL has its unique feature to mobilize capital through CASH WAQF program.

 SIBL lays emphasis on employment generated, environment friendly and green banking based investment keeping an eye on equitable distribution of resources over geographical territory for sustainable growth of macro economy of the country. The Bank’s continuous effort has been to increase the shareholders’ value, and be valued as a compliant organization. The Corporate Governance systems in SIBL ensure transparency and accountability at all levels in conducting business. SIBL in its journey towards continuous excellence has changed its brand logo recently. They take pride in their new logo.

 Vision

In its journey towards continuous excellence they are striving to become the country’s leading Islami Bank offering one-step service of an wide range of value added products and services meeting the needs of their customers; conducting their business ethically in accordance with the laws of Shariah while optimizing best utilization of the most modern state-of-the-art technological solutions through creation of

pro-active organizational culture based on sound team spirit, fairness, mutual understanding and pragmatic leadership always remaining open to new ideas and adaptable to the best practices in the market ensuring recognition and quality banking experience to their Customers and deliver best value to all their stakeholders as well.

 Mission

Following are the missions of the SIBL:

  Transformation into a service-oriented technology-driven profit earning Bank

  Ensure fast, accurate and best-in-class customer service

    Balanced & sustainable growth strategy

    Optimum return on shareholder’s equity

    Introducing innovative Islami Banking Products

    Attract and retain high quality human resources

    Empowering real poor families and create local income opportunities

   Providing support for social benefit organizations by way of mobilizing Funds and social services

 values

Following are the values of the SIBL:

Honesty: To be honest is ordained by the scripture they stick to this value in all their service provision.

 Transparency: Remaining transparent in all acts is a virtue that’s builds trust – they adhere to it.

Efficiency: Efficiency implies perfection in any job done – they strive to render full satisfaction with it.

 Accountability: To be accountable is to be responsible and above any suspicion – they are dutifully there.

 Reliability: They infuse reliability in customers’ mind through habitual acts of dedicated service.

 Innovation: Their minds and eyes are open to the evolution in quality of life to innovate further benefits for the service takers.

 Flexibility: Flexibility leads to better understanding and greater satisfaction – they pursue the quality.

 Security: Customers must feel secure with all their products and services – they keep on ensuring it.

 Technology: Modern life is technology dependent – they keep looking for the latest development to provide the best in ease to their clients.

Overseas Operations of SIBL

Social Islami Bank has set up joint venture Exchange Company named Gulf Overseas Exchange Co. Ltd, in Oman contributing 25% of its paid up capital. The present paid up capital of the company is Riyal Omani 1, 82,000.00. The Chairman of the company is the-x-minister of the government of Oman. The exchange company, established in 1985, now has three branches in Oman and is being managed fully by officials of SIBL. The company is running in profit. SIBL is also exploring possibilities of opening branches in the Middle East, Switzerland and USA. SIBL has entered into the Management contract with a Kuwait Exchange company to provide management and technical services. SIBL has acquired equity and management of Nepal Arab Bank Ltd. which is the largest and highly profitable Private Commercial Bank in Nepal.

Non-Formal and Voluntary Sector Banking Programs

Since the opening of the Bank on 22nd November 1995, Non-Formal sector has started implementing its programs in various areas. Those are as follows:

 A. Environment-friendly program: Tokai Project

 The project has a special strategic value. Till December 1995 only one group consisting of six members was formed at Hossain Marker, Utter Badda, Gulshan Thana. Group savings from the members is under process. Formation of more groups of ‘Tokai Pannaya Bavshee’ (Tokai goods Traders) is under process at different areas including Hossain Market

 B. Real Life Non-formal School of Management

 As a part of environmentally friendly program, the bank is committed to educate the Tokai and this has a worldwide strategic value. Till December 1995 one Tokai Non-formal School has been started at Hossain Market, Uttar Badda, Gulshan, and Dhaka with30 students with a view to giving them real-life education with Islami orientation. In the process of learning, the Tokai developed propensity for savings. As a result they are regularly depositing a small portion of their income as savings.

 C. Mosque Property Development Program

Construction of Mini Market at Kazi Bari Mosque, Uttar Khan, Uttara, Dhaka, consisting of 4 shops has been completed where Bank has invested Tk.1.28 laces. Recovery rate in this sector is 100 percent.

 D. Capital Market Instruments-Securitization of voluntary sector

In the voluntary sector, the bank is in the process of organizing Voluntary Capital Market operation for mobilization of necessary fund and in the process of developing the following financial instruments with different sets of rules in con formality with Shariah:

 Waqf Properties Development Bond (specific and general).

    Cash Waqf Deposit Certificate (specific and general).

   Family Waqf Certificate.

   Mosque Properties Development Bond (specific and general).

    Mosque Community Share.

   Quarn-e-Hasana Certificate (specific and general).

    Zakat/Ushar payment Certificate.

    Non-Muslim Trust Properties Development.

    Municipal Properties Development Bond (specific and general).The value of all the bonds and Qurd-e-Hasana Certificate are guaranteed by the Bank against surrender of the instruments on maturity.

 Corporate Social Responsibility (CSR)

As an Islami Bank, Social Islami Bank Limited is quite conscious of its social responsibility and always trying to participate in social cause program in the country. The bank is committed to serve the society at large through its family empowerment Micro Investment, Micro Enterprise and SME programs under non-formal sector, social capital mobilization through CASH WAQF and other programs under voluntary sector. The bank has already formed CSR Desk with the aim to serve humanity through different philanthropic activities giving emphasis on health and Education. The bank believes that any kinds of social & philanthropic activities would improve the quality of the lives of the poor masses of the country. The Board of Directors of the Bank consists of winning personalities in respective area of Trade, Commerce & Industry of the country. Under the proactive guidance, policy and direction of the Board, Management conducts its business operations. The Corporate Governance systems in SIBL ensure transparency and accountability at all levels in conducting business. The Shariah Supervisory Committee is consisting a group of prominent Islami Scholars, Economists and Lawyers to advise the Management

 on Shariah matters relating to the business operations. The Board of Directors provides leadership and direction to the Management to attain goals and objectives of the bank. The solid performance of the bank that achieved is due to the divine blessings of Allah Sobhanahui Tala and constant guidance, cooperation and support of the Board & Shariah Supervisory Committee as well as committed, dedicated and hard work of the Management Team.

 Products Offered by SIBL

Table-5: Products Offered by SIBL

Products & Services

Investment Products

Deposit Products

Cards

E-Banking

Bai-Muazzal

Mudaraba Scheme Deposits

SIBL Credit Card

Internet Banking

HPSM

Al Wahid Current Account

Visa Islami Credit Card (Dual)

Mobile Banking

HPSM-Ijara

Mudaraba Savings Deposit

Visa Islami Credit Card (Local)

SMS Banking

Murabaha

Mudaraba Term Deposit

SIBL Zameel Debit Card

Musharaka

Mudaraba Notice Deposit

Bill Purchase

Cash Waqf. Deposit

Bai-Salam (PC)

Quard

 Graphical Financial Analysis of The

City Bank Ltd.

The City Bank Ltd. five years financial summary at a glance

 Table-6: Five Years Financial Summary of City Bank Ltd. at a glance

 (Taka in million unless specified)

Income Statement

Years

2012

2011

2010

2009

2008

Interest Income

8810

9415

7090

5743

4669

Interest Expenses

5476

4997

3516

3672

3163

Non- Interest Income

5855

3338

3728

2297

1874

Non- Interest Expenses

3605

3560

3201

2112

1625

Profit Before Provision

2749

4196

4100

2256

1755

Profit Before Tax

3858

3468

2999

1388

1014

Profit After Tax

550

2018

1849

819

398

Balance Sheet

Authorized Capital

10000

10000

10000

1750

1750

Paid-up Capital

6318

5055

3889

1571

1366

Reserve Fund & Surplus

11356

12801

7630

4293

2851

Total Shareholders’ Equity

18269

17856

11519

5864

4217

Deposits

85858

83818

67420

62384

45034

Loans and Advances

87258

76807

60327

43486

34421

Investments

18204

16131

12474

10586

9074

Fixed Assets

5923

5950

3206

2788

2514

Total Assets

131276

115736

90898

76467

57115

Off-Balance Sheet Exposures

16898

15866

20387

10447

10921

Foreign Exchange Business

Export

23056

22033

18646

13815

14766

Import

45589

43474

38155

28718

30894

Remittance

46923

42189

24496

17933

9828

Foreign Exchange Business

115899

107696

81297

60466

55488

Risk weighted Assets

117575

111049

45715

35919

Core Capital (Tier-I)

11657

11322

9260

3535

2711

Supplementary Capital (Tier-II)

3851

3714

3120

1625

1243

Tier I Capital Ratio

8.4%

9.6%

8.3%

7.7%

7.5%

Tier II Capital Ratio

4.3%

3.2%

2.8%

3.6%

3.5%

Total Capital Adequacy Ratio

 

 

 

12.7%

12.8%

11.2%

11.3%

11.0%

Credit Quality

Provision for Unclassified Loans

1520

1400

1040

799

420

Provision for Classified Loans

1203

1101

970

708

780

Percentage of NPL over Total Loans & Advances

4.4%

3.4%

4.4%

4.9%

6.3%

Share Information

No. of Shares Outstanding (million)

456.05

505.51

38.9

15.7

13.7

EPS

.81

4

3.7

52.1

25.3

Diluted

Cash Dividend

Stock Dividend

22.0%

25.0%

30.0%

25.0%

15.0%

Market Value Per share (Tk.)

50

53

1000

730

452

Price Earning Ratio (Times)

12

13

17

14

18

Net Asset value Per Share

32

35

296

373

309

Operating Performance Ratio

Credit Deposit Ratio

84.5%

85.7%

89.5%

69.7%

76.4%

Cost to Income Ratio

47.8%

45.9%

43.8%

48.4%

48.1%

Total Operating Income per Employee

2.90

2.8

2.7

1.8

1.6

Total profit per Employee

1.5

1.5

1.5

0.9

0.8

Cost of fund

8.5%

6.4%

4.9%

6.1%

6.9%

Cost of Deposits

7.6%

6.4%

5.3%

6.6%

7.1%

Yield on Loans and Advances

14.2%

13.1%

12.7%

13.1%

13.5%

Return on Asset

1.80%

2.0%

2.2%

1.2%

0.8%

Return on Equity

12.50%

13.7%

21.3%

16.2%

11.2%

Distribution Network

Number of Branches

90

89

88

87

83

Number of ATM

163

122

85

50

23

Number of Employees

2890

2772

2685

2424

2134

Number of Foreign Correspondents

542

538

533

513

501

 Graphical Analysis

 Profit Before Tax   :

The table (Table-) shows Profit before Tax of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-7: Profit Before Tax (In million Taka)

Years

2012

2011

2010

2009

2008

Profit Before Tax

3858

3468

2999

1388

1014

Percentage Change on the basis of Base year 2007

3.804733

(%)

3.420118

(%)

2.957593

(%)

1.368836

(%)

1

 Source: Table-6 City Bank Ltd.’s five Years Financial Summary.

 Graph-1: Profit Before Tax (In million Taka)

 Source: Table-7

 Findings

The graph showed the profit before tax of city bank that was growing from the years 2008 to 2012. Here the table of profit before tax of city bank showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2012 the net profit before tax was more than 2008 profit before tax which for why the graph trend was upward .

 Deposits   :

The table (Table-) shows Deposits of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-8: Deposits of CBL (In million Taka)

Years

2012

2011

2010

2009

2008

Deposits

85858

83818

67420

62384

45034

Percentage Change on the basis of Base year 2007

1.906515

(%)

1.861215

(%)

1.497091 (%)

1.386063

(%)

1

 Source: Table- City Bank Ltd.’s five Years Financial Summary.

 Graph-2: Deposits (In million Taka)

Source: Table-8

Findings

The graph showed the deposits of city bank that was growing from the years 2008 to 2012. Here the table of deposits of city bank showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2010 the deposits was more than 2008 deposits which for why the graph trend was upward. In 2012 the percentage change was too high than the previous years on the basis of base year 2008.

 Total Assets   :

The table (Table-) shows Total Assets of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-9: Total Assets of CBL (In million Taka)

Years

2012

2011

2010

2009

2008

Total Assets

131276

115736

90898

76467

57115

Percentage Change on the basis of Base year 2007

2.298450

(%)

2.026367

(%)

1.591490

(%)

1.338825

(%)

1

 Source: Table-6 City Bank Ltd.’s five Years Financial Summary.

Source: Table-9

Findings

The graph showed the total assets of city bank that was growing from the years 2008 to 2012. Here the table of total assets of city bank showed the percentage change on the basis of base year 2008, in this the growing rate was positive that means from the year 2010 the total assets was more than 2008 total assets which for why the graph trend was upward. In 2012 the percentage change was too high than the previous years on the basis of base year 2008.

Shareholder Equity   :

 The table (Table-) shows Shareholders Equity of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-10: Shareholders Equity of CBL (In million Taka)

Years

2012

2011

2010

2009

2008

Shareholder Equity

18269

17856

11519

5864

4217

Percentage Change on the basis of Base year 2007

4.332226

(%)

4.234289

(%)

2.731562

(%)

1.390562

(%)

1

 Source: Table-6 City Bank Ltd’s five Years Financial Summary.

Source: Table-10

Findings

The graph showed the shareholders equity of city bank that was growing from the years 2008 to 2012. Here the table shareholder equity of city bank showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 shareholder equity was more than 2010 shareholders equity which for why the graph trend was upward. In 2012 the percentage change was too high than the previous years on the basis of base year 2008.

Earnings Per Share   :

The table (Table-) shows Earnings Per Share of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-11: Earning Per Share of CBL

Years

2012

2011

2010

2009

2008

Earnings Per Share

4.2

4

3.7

52.1

25.3

Percentage Change on the basis of Base year 2007

0.166007

(%)

0.158102

(%)

0.146245

(%)

2.059288

(%)

1

Source: Table-6 City Bank Ltd’s five Years Financial Summary.

Source: Table-11

Findings

The graph showed the earning per share of city bank that was growing from the years 2008 to 2009. Here the table earning per share of city bank showed the percentage change on the basis of base year 2008, The EPS 2009 EPS was booming more than 2008 after that EPS was extremely reduced than the previous years.

Import Business   :

The table (Table-) shows Import Business of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-12: Import Business of CBL (In million Taka)

Years

2012

2011

2010

2009

2008

Import

45589

43474

38155

28718

30894

Percentage Change on the basis of Base year 2007

1.47565

(%)

1.407198

(%)

1.235029

(%)

0.92956

(%)

1

 Source: Table-6 City Bank Ltd.’s five Years Financial Summary.

Source: Table-12

Findings

The graph showed the import business of city bank that was growing from the years 2008 to 2012. Here the table import  business of city bank showed the percentage change on the basis of base year 2008, Here from the year 2008 to 2009 import  business was fluctuated after that it was increased that leads to upward trend.

Export Business   :

The table (Table-) shows Export Business of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-13: Export Business CBL (In million Taka)

Years

2012

2011

2010

2009

2008

Export

23056

22033

18646

13815

14766

Percentage Change on the basis of Base year 2007

1.56142

(%)

1.49214

(%)

1.26276

(%)

0.93559

(%)

1

Source: Table-6 City Bank Ltd.’s five Years Financial Summary.

Source: Table-13

Findings

The graph showed the export business of city bank that was fluctuated from the years 2008 to 2012. Here the table export business of city bank showed the percentage change on the basis of base year 2008, Here from the year 2008 to 2009 export business was decreased and after that it was increasing.

 Remittance Business   :

 The table (Table-) shows Remittance Business of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-14: Remittance Business of CBL (In million Taka)

Years

2012

2011

2010

2009

2008

Remittance

46923

42189

24496

17933

9828

Percentage Change on the basis of Base year 2007

4.774420

(%)

4.292735

(%)

2.492470

(%)

1.824684

(%)

1

Source: Table-6 City Bank Ltd’s five Years Financial Summary.

 Source: Table-14

Findings

The graph showed the remittance business of city bank that was growing from the years 2008 to 2012. Here the table remittance business of city bank showed the percentage change on the basis of base year 2008, Here from the year 2008 the remittance business was growing in a high rate. In 2012 remittance business was reached in a peak point.

Foreign Exchange Business   :

The table (Table-) shows Foreign Exchange Business of City Bank Ltd. from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-15: Foreign Exchange Business of CBL (In million Taka)

Years

2012

2011

2010

2009

2008

Foreign Exchange Business

115899

107696

81297

60466

55488

Percentage Change on the basis of Base year 2007

2.09(%)

1.94(%)

1.46(%)

1.08(%)

1

 Source: Table-6 City Bank Ltd.’s five Years Financial Summary.

Source: Table-15

Findings

The graph showed the foreign exchange business of city bank , that was growing from the years 2008 to 2012. Here the table foreign exchange business of city bank showed the percentage change on the basis of base year 2008, we can say that their foreign exchange business was growing in a positive rate that’s lead to show upward trend.

Graphical Financial Analysis of

Social Islami Bank Ltd.

Social Islami Bank Ltd. five years financial summary at a glance

 Table-16: SIBL’s five Years Financial Summary.

(Taka in million)

Particulars

2012

2011

2010

2009

2008

Authorized Capital

10000

10000.00

10000

4000.00

4000.00

Paid up Capital

6393.92

6393.92

2987.81

2691.72

1309.88

Total Shareholder Equity

9509.88

9412.21

4198.77

3555.75

1867.36

Capital Base (Tire I & II)

9856.35

9534.52

4678.56

3914.62

2168.22

Total Deposits

75346.50

66852.55

44850.77

31588.16

24099.82

Client Deposits

85307.51

56661.16

39833.37

27663.62

22065.79

Investments (Loans & Advances)

71254.45

53908.58

36680.28

26580.58

19951.30

Investments (Shares & Securities)

4623.12

5241.36

3049.72

1310.66

853.46

Import

85464.51

68198.50

39459.50

22753.30

18343.80

Export

45667

34975

21372.20

14433.20

12674.30

Remittance

10556.56

5134.90

1099.40

1923.50

2341.10

Foreign Exchange Business

115899.35

108308.30

61931.00

39110.00

33363.20

Operating Profit

1980.02

2768.80

1638.63

1064.31

787.37

Profit before Tax

2768.56

1901.28

1136.69

726.88

354.81

Fixed Assets

2248.42

2134.87

914.74

649.61

443.28

Total Assets

89567.40

84406.18

55168.54

39980.82

29808.88

Stock Dividend

14%

11%

10%

Cash Dividend

10.50%

Investments as a % of total deposits

80%

80.63%

81.78%

84.15%

82.79%

Investments Deposits Ratio

94%

94.65%

92.08%

96.08%

90.42%

Risk Weighted Capital Adequacy Ratio

15.1%

13.17%

9.33%

14.97%

10.87%

Ratio of Classified Investments to total Investment

3.20%

3.93%

4.76%

3.19%

4.38%

No. of Foreign Correspondents

2270

2250

2250

2250

2200

Number of Employees

1864

1375

1252

950

750

Book Value Per Share (Tk.)

10

10

10

100

100

Earnings Per Share

1.50

1.81

2.15

18.39

17.20

Number of Branches

85

76

64

52

28

 Source: Annual Report 2012

Graphical Financial Analysis

Profit before Tax   :

The table (Table-) shows Profit before Tax of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-17: Profit Before Tax of SIBL (In million Taka)

Years

2012

2011

2010

2009

2008

Profit Before Tax

2768.56

1901.28

1136.69

726.88

354.81

Percentage Change on the basis of Base year 2007

7.802936

(%)

5.338586

(%)

3.203658

(%)

2.048645

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-17

Findings

The graph showed the profit before tax of SIBL that was growing from the years 2008 to 2012. Here the table of profit before tax of SIBL showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 the profit before tax was more than base year’s profit before tax which for why the graph trend was upward. In 2012, profit before tax was the highest growing year (7.80 times) from the base year.

Deposits   :

The table (Table-) shows Deposits of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-18: Deposits of SIBL (In million Taka)

Years

2012

2011

2010

2009

2008

Deposits

75346.50

66852.55

44850.77

31588.16

24099.82

Percentage Change on the basis of Base year 2007

3.126434

(%)

2.773985

(%)

1.8610417

(%)

1.3107218

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-18

Findings

The graph showed the deposits of SIBL that was growing from the years 2008 to 2012. Here the table of deposits of SIBL showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 the deposits was more than base year’s deposits which for why the graph trend was upward. In 2012, a deposit was the highest growing year (3.12 times) from the base year.

 Total Assets   :

The table (Table-) shows Total Assets of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

 Table-19: Total Assets of SIBL (In million Taka)

Years

2012

2011

2010

2009

2008

Total Assets

89567.40

84406.81

55168.54

39980.82

29808.88

Percentage Change on the basis of Base year 2007

3.0047220

(%)

2.8315995

(%)

1.8507417

(%)

1.3412385

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-19

Findings

The graph showed the total assets of SIBL that was growing from the years 2008 to 2012. Here the table of total assets of SIBL showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 the total assets was more than base year’s total assets which for why the graph trend was upward. In 2012, total assets were the highest growing year (3.004 times) from the base year.

 Shareholder Equity   :

The table (Table-) shows Shareholders Equity of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

 Table-20: Shareholders Equity of SIBL (In million Taka)

Years

2012

2011

2010

2009

2008

Shareholder Equity

9509.88

9412.21

4198.77

3555.75

1867.36

Percentage Change on the basis of Base year 2007

5.092687

(%)

5.040383

(%)

2.2485059

(%)

1.9041588

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-20

Findings

The graph showed the shareholders equity of SIBL that was growing from the years 2008 to 2012. Here the table of shareholders equity of SIBL showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 the shareholders equity was more than base year’s shareholders equity which for why the graph trend was upward. In 2012, shareholders equity was the highest growing year (5.09 times) from the base year.

Earnings Per Share   :

The table (Table-) shows Earnings per share of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-21: Earning Per Share of SIBL

Years

2012

2011

2010

2009

2008

Earnings Per Share

1.50

1.81

2.15

18.39

17.2

Percentage Change on the basis of Base year 2007

0.087209

(%)

0.1052325

(%)

0.1250

(%)

1.0691860

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-21

Findings

The graph showed the earning per share of SIBL that was fluctuating from the years 2008 to 2012. Here the table of earning per share of SIBL showed the percentage change on the basis of base year 2008, from the year 2008 to 2009 earnings per share was increased, from year 2010 to 2011 earnings per share was decreased and after that earning per share was decreased in a high rate. In 2009, earning per share was the highest growing year (1.06 times) from the base year.

Import Business   :

The table (Table-) shows Import Business of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

Table-22: Import Business (In million Taka)

Years

2012

2011

2010

2009

2008

Import

85464.51

68198.5

39459.5

22753.30

18343.80

Percentage Change on the basis of Base year 2007

4.659040

(%)

3.717795

(%)

2.151108

(%)

1.240380

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-22

Findings

The graph showed the import business of SIBL that was growing from the years 2008 to 2012. Here the table of import business of SIBL showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 the import business was more than base year’s import business which for why the graph trend was upward. In 2012, import business was the highest growing year (4.65 times) from the base year.

 Export Business   :

The table (Table-) shows Export Business of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

 Table-23: Export Business of SIBL (In million Taka)

Years

2012

2011

2010

2009

2008

Export

45667

34975

21372.2

14433.3

12674.3

Percentage Change on the basis of Base year 2007

3.603118

(%)

2.759521

(%)

1.686262

(%)

1.138784

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-23

Findings

The graph showed the export business of SIBL that was growing from the years 2008 to 2012. Here the table of export business of SIBL showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 the export business was more than base year’s export business which for why the graph trend was upward. In 2012, export business was the highest growing year (3.60 times) from the base year.

Remittance Business   :

The table (Table-) shows Remittance Business of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

 Table-24: Remittance Business of SIBL (In million taka)

Years

2012

2011

2010

2009

2008

Remittance

10556.56

5134.9

1099.4

1923.5

2341.1

Percentage Change on the basis of Base year 2007

4.509230

(%)

2.1933706

(%)

0.696083

(%)

0.821622

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

 Source: Table-24

Findings

 The graph showed the remittance business of SIBL that was growing from the years 2008 to 2012. Here the table of remittance business of SIBL showed the percentage change on the basis of base year 2008, From year 2009 to 2011 remittance business was declining after that in 2012, remittance business was the highest growing year (4.50 times) from the base year.

 Foreign Exchange Business   :

 The table (Table-) shows Foreign Exchange Business of SIBL from the year 2008 to 2012 and Percentage Change on the basis of Base year 2008.

 Table-25: Foreign Exchange Business of SIBL (In million Taka)

Years

2012

2011

2010

2009

2008

Foreign Exchange Business

115899.35

108308.3

61931

39110

33363.2

Percentage Change on the basis of Base year 2007

3.4738679

(%)

3.246340

(%)

1.856266

(%)

1.172249

(%)

1

 Source: Table-16 SIBL’s five Years Financial Summary.

Source: Table-25

 Findings

The graph showed the foreign exchange business of SIBL that was growing from the years 2008 to 2012. Here the table of foreign exchange business of SIBL showed the percentage change on the basis of base year 2008, In this the growing rate was positive that means from the year 2008 the foreign exchange business was more than base year’s foreign exchange business which for why the graph trend was upward. In 2012 foreign exchange business was the highest growing year (3.47 times) from the base year.

Graphical Comparative Analysis between The City Bank  

And Social Islami Bank Ltd.

Profit Before Tax   :

The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding profit before tax.

Source: Annual reports from 2008-2012.

The profit before tax measure that looks at a bank’s profits before the company has to pay corporate income tax. This measure deducts all expenses from revenue including interest expenses and operating expenses, but it leaves out the payment of tax.

The graph showed the profit before tax of city bank ltd. and social Islami bank ltd. that was growing from the years 2008 to 2012. Both banks trend was growing. Comparatively we can say that city bank’s performance was the better than social Islami bank ltd.

Deposits   :

The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding deposits.

Source: Annual reports from 2008-2012.

Bank deposits are made to deposit accounts at a banking institution, such as savings

accounts, checking accounts and money market accounts. The account holder has the right to withdraw any deposited funds, as set forth in the terms and conditions of the account. The “deposit” itself is a liability owed by the bank to the depositor (the person or entity that made the deposit), and refers to this liability rather than to the actual funds that are deposited.

 The graph showed the deposits of city bank ltd. and social Islami bank ltd. that was growing from the years 2008 to 2012. Both bank’s trend was upward. Generally, we can say that city bank’s deposits was more than social Islami bank ltd.Comparatively, city banks performance was better than SIBL regarding deposits.

Total Assets   :

 The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding total assets.

 Total assets of bank refers that the sum of all cash, investments, furniture, fixtures, equipment, receivables, intangibles, and any other items.

 The graph showed the total assets of city bank ltd. and social Islami bank ltd. that was growing from the years 2008 to 2012. Both bank’s trend was upward. Generally, we can say that city bank’s total assets was more than social Islami bank ltd. comparatively, city banks performance was better than SIBL regarding total assets.

 Shareholder Equity   :

 The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding shareholders equity.

 Shareholders’ equity represents the equity stake currently held on the books by a firm’s equity investors. Shareholders’ equity is often referred to as the book value of the company, and it comes from two main sources. The first and original source is the money that was originally invested in the company, along with any additional investments made thereafter. The second comes from retained earnings that the company is able to accumulate over time through its operations.

The graph showed the shareholders equity of city bank ltd. and social Islami bank ltd. that was growing from the years 2008 to 2012. Both bank’s trend was upward. Generally, we can say that city bank’s shareholders’ equity was more than social Islami bank ltd. comparatively, city banks performance was better than SIBL regarding shareholders equity.

Earnings Per Share   :

The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding earning per share.

 Earnings per share are generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio. It refers that, the portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company’s profitability.

 The graph showed the earning per share of city bank ltd. and social Islami bank ltd. that was declining from the years 2008 to 2012. Both bank’s trend was downward. Generally, we can say that city bank’s earnings per share was more than social Islami bank ltd. It’s difficult to say which one was on better position, but it’s true that city bank’s shareholder was more reluctant to hold that share because of the declining trend of EPS.

Import Business   :

The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding import business.

In Bangladesh most of the goods are imported from different countries all over the world. In this activities banks play a vital role to conduct that business. To conduct that operation bank gains different service charges and others. Here city bank ltd and social Islami bank ltd. both conduct the same operation.

The graph showed the import business of city bank ltd. and social Islami bank ltd. that was growing from the years 2008 to 2012. Both bank’s trend was upward. Generally, we can say that SIBL’s import business was more than city bank ltd. Comparatively, social Islami bank’s performance was better than city bank ltd. regarding import business.

Export Business   :

 The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding export business.

Bangladesh is going to be export oriented country, every year which export huge amount of agro-products, medicine and garments product in different countries all over the world. In this activities banks play a vital role to conduct that business. To conduct that operation bank gains different service charges and others. Here city bank ltd. and social Islami bank ltd. both conduct the same operation.

 This graph showed the export business of city bank ltd. and social Islami bank ltd. from the years 2008 to 2012. Social Islami bank’s trend was upward and city bank’s export business trend was downward from the year 2008 to 2009 after that it was growing. Generally, we can say that SIBL’s export business was more than city bank ltd. Comparatively, social Islami bank’s performance was better than city bank ltd. regarding export business.

Remittance Business   :

 The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding remittance business.

Bangladesh is considered as one of the major labor exporting country of the world. Since independence huge number of Bangladeshis went abroad and also in every year the numbers of expatriate are growing which lead to increase the foreign remittance of Bangladesh government.    To conduct that operation bank gains different service charges and others. Here city bank ltd. and social Islami bank ltd. both conduct the same operation.

 This graph showed the remittance business of city bank ltd. and social Islami bank ltd. from the years 2008 to 2012. City bank’s trend was upward and social Islami bank’s remittance business trend was downward from the year 2008 to 2010 after that it was growing. Generally, we can say that city bank’s remittance business was more than social Islami bank ltd. Comparatively, city bank’s performance was better than social Islami bank ltd. regarding remittance business.

Foreign Exchange Business   :

The graph- provides the comparative position between The City Bank Ltd. and Social Islami Bank Ltd. regarding foreign exchange business.

The graph showed the foreign exchange business of city bank ltd. and social Islami bank ltd. that was growing from the years 2008 to 2012. Both bank’s trend was upward. In 2011 both bank’s foreign exchange business stand in a same point. Generally, we can say that city bank’s foreign exchange business was more than the social Islami bank ltd from the year 2008 to 2011. Comparatively, city bank’s performance was better than the social Islami bank ltd. regarding foreign exchange business.

Comparative Ratio Analysis

 Return on Equity (ROE)

The formula of return on equity is:

Table-26: Return on Equity (ROE)

Return on Equity (ROE)

Years

City Bank

SIBL

2008

11.20%

10.82%

2009

16.20%

12.14%

2010

21.30%

15.31%

2011

13.70%

13.44%

2012

12.50%

12.20%

Source: Annual Reports 2008-2012.

The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. The ROE is useful for comparing the profitability of a company to that of other firms in the same industry. If the ratio is higher, it indicate that the firms effective utilization of equity. Here the city banks performance is better than SIBL. The ROE of city bank fluctuating over the years but SIBL’s ROE is growing. In 2012 both bank’s ROE is declining. Comparatively, city banks performance is better than SIBL

 Return on Assets (ROA)

An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company’s annual earnings by its total assets, ROA is displayed as a percentage. The formula for return on assets is:

Table-27: Return on Assets (ROA)

Return on Assets (ROA)

Years

City Bank

SIBL

2008

0.80%

0.68%

2009

1.20%

1.08%

2010

2.20%

1.17%

2011

2.00%

1.50%

2012

1.80%

1.60%

 Source: Annual Reports 2008-2012.

Source: Table-27

ROA tells you what earnings were generated from invested assets. ROA for public companies can vary substantially and will be highly dependent on the industry. This is why when using ROA as a comparative measure, it is best to compare it against the ROA of a similar company. Here both banks ROA was growing over the years. Comparatively city bank’s percentage of ROA was greater than the SIBL. In 2012 city bank’s ROA was declining and SIBL’s ROA is growing.

Return on Investment (ROI)

A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio. The formula of return on investment is:

Table-28: Return on Investment (ROI)

Return on Investment (ROI)

Years

City Bank

SIBL

2008

4.39%

23.68%

2009

7.74%

32.92%

2010

14.82%

21.08%

2011

12.51%

24.14%

2012

12.00%

26.15%

Source: Annual Reports 2008-2012.

Return on investment is a very popular metric because of its versatility and simplicity. That is, if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then the investment should be not be undertaken. Here SIBL’s ROI was greater than the city bank, so we can say that comparatively SIBL’s investment was effectively utilized than the city bank. It was true that SIBL’s ROI was fluctuated, but that was above the city bank’s graph.

Earnings per Share (EPS)

The portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company’s profitability. The formula of EPS is:

Table-29: Earnings per Share (EPS)

Earning Per Share

Years

City Bank

SIBL

2008

25.3

17.2

2009

52.1

18.39

2010

3.7

2.15

2011

4

1.81

2012

4.2

1.50

Source: Annual Reports 2008-2012.

Earnings per share are generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio. Here most of the times city banks EPS was grater than the SIBL’s EPS. In 2010 both condition was poor for declining the EPS but after that both EPS was growing. Comparatively, we can say that city banks performance was good.

Equity Multiplier

Like all debt management ratios, the equity multiplier is a way of examining how a company uses debt to finance its assets. Also known as the financial leverage ratio or leverage ratio.

The formula of equity multiplier is:

Table-30: Equity Multiplier

Equity Multiplier (Times)

Years

City Bank

SIBL

2008

13.54

15.96

2009

13.04

11.24

2010

7.89

13.14

2011

6.48

8.97

2012

6.00

7.15

Source: Annual Reports 2008-2012.

In other words, this ratio shows a company’s total assets per dollar of stockholders’ equity. A higher equity multiplier indicates higher financial leverage, which means the company is relying more on debt to finance its assets. Here both bank’s equity multiplier was declining over the years. Comparatively it’s too difficult to say which position was good.

 Total operating income per employee

Total operating income per employee measures management’s ability to use their employee resources effectively to create profits for the company. The formula of total operating income per employee is:

Table-31: Total operating income per employee

Total operating income per employee (million)

Years

City Bank

SIBL

2008

1.60

1.05

2009

1.80

1.12

2010

2.70

1.31

2011

2.80

2.01

2012

2.90

2.20

Source: Annual Reports 2008-2012.

When making a comparison between two banks, the business with the higher value for income per employee is the more efficient bank.  When drawing conclusions about the comparative performance analysis of a bank its one of the effective tools to judge the efficiency of management. Here both banks income per employee was growing. Comparatively we can say, city banks performance was better than SIBL.

Assets Utilization Ratio

The asset utilization ratio measures management’s ability to make the best use of its assets to generate revenue. Like all ratios, this is just an indicator. A high ratio may mean more efficient management. The formula of assets utilization ratio is:

Table-32: Assets Utilization Ratio

Assets Utilization Ratio(Times)

Years

City Bank

SIBL

2008

0.03

0.02

2009

0.03

0.03

2010

0.05

0.03

2011

0.04

0.03

2012

0.03

0.02

 Source: Annual Reports 2008-2012.

Here city bank’s asset utilization ratio was similar from the year 2008 to 2009, after that it was growing. In 2012 city bank’s asset utilization ratio was downward. From year 2008 to 2009 SIBL’s asset utilization ratio was growing after that it was constant. Comparatively, we can say that city bank’s performance was better than SIBL.

Tax Management Efficiency Ratio

The tax management efficiency ratio of a fund measures what percentage of a fund earnings are lost to taxation. Funds that lose a lot of money to taxes have low efficiency and are less desirable, while those that lose little to taxes have a high tax management efficiency ratio and greater desirability. The formula of tax management efficiency ratio is:

Table-33: Tax Management Efficiency Ratio

Tax Management Efficiency Ratio

Years

City Bank

SIBL

2008

23%

26%

2009

36%

41%

2010

45%

39%

2011

48%

46%

2012

50%

48%

 Source: Annual Reports 2008-2012.

Here, from 2008 to 2009 city bank’s tax management efficiency ratio was declined after that it was growing that lead to upward trend. SIBL’s tax management efficiency ratio was fluctuated from the year 2008 to 2012. Comparatively we can say that city bank’s performance was better than SIBL regarding tax management efficiency ratio.

Findings & Recommendations

 And Conclusion

 Findings of City Bank Ltd

During the period of project I have achieved vast experiences that enrich my knowledge of banking extensively. Here I have tried to present my experiences and knowledge in order to provide a better judgment. CBL is one of the fasts growing and committed private commercial bank in the country. It conducts business activities efficiently around the country to achieve its objectives, and goals and gradually forwarding towards its mission and vision. The bank have been achieving continuous growth rate in all spares of banking operation since its establishment.

 More findings about the Organization

    Understanding customers’ savings trend and market demand the bank focus on different financial innovation to promote their financial growth.

    Its profit is growing over the years.

    Total assets growth trend is positive and upward.

    Shareholder’s equity of city bank is growing over the years.

    Earnings per share condition are too poor that is declining.

    Revenue from import and export business are growing.

    City bank is more conscious about the liquidity of bank.

     Top management gives its highest attention in the operation of fund management.

 Recommendations of City Bank Ltd

After analysis of all gathered information and other relevant documents, CBL should carefully consider following matters:

    ROA and ROE should increase more.

    Assets utilization capacity should be improved.

   At present CBL perform business activities through 89 of its branches but they should open more branches in order to reach to more customers to accumulate more funds.

    The proper managerial observation and cooperation are required.

    All branches should proper maintain all documents in daily basis.

    They should launch mobile banking service.

  Top management must ensure the proper implication of IT in all branches.

    City Bank Ltd. need to increase own ATM booth all over the country.

    City Bank Ltd. should more concentrate on different kind of financial innovation.

    City Bank Ltd. should implement internet banking service.

    City Bank Ltd. should hire more efficient financial professional to develop their financial policies.

    Foreign Exchange expertise should be more recruited.

    Need to update their networking system as well as updated software.

Findings of Social Islami Bank Ltd

The Social Islami Bank Ltd. has been trying to operate its business successfully in Bangladesh since 1995. Social Islami Bank Ltd. has already developed an image and goodwill among its clients by offering its excellent service. This success has resulted from the dedication, commitment and dynamic leadership of its management over the periods. During the short span of time of its operation the bank has successfully grabbed a position itself as a progressive and dynamic financial in the country. If the bank goes this way, it is expected that near future Social Islami Bank Ltd. become one of the giant in this banking sector.

More findings about the Organization

   Social Islami Banks profit was growing over the years.

    Total assets growth trend was upward from the year 2008 to 2012.

    Shareholder’s equity was growing over the years.

    Earnings per share condition wasn’t good which is declining.

    Revenue from import and export business are growing which is more than city bank.

    Top management gives its highest attention in the operation of fund management.

    Foreign exchange business condition was good.

    ROA and ROE showed the sound position, but comparatively condition was poor than city bank ltd.

    ROI was fluctuating, but comparatively its better than city bank ltd.

 Recommendation of Social Islami Bank Ltd

The banks are actually service organizations. The main objectives of the world famous and successful banking organizations are to make profit through addressing the clients time to time with new pieces of financial instruments. Here Social Islami Bank try to operate their business with a different kind of financial innovation. After analysis of all gathered information and other relevant documents, SIBL should carefully consider following matters:

    As one of leading Banks in Bangladesh, SIBL should provide equal emphasis in each department of banking service.

    Social Islami Bank need to increase their ROA and ROE

    SIBL should more focus on their deposit collection.

    Assets utilization capacity should be improved.

    SIBL should promote debit card and credit card service.

    The proper managerial observation and cooperation are required in each department.

    SIBL should launch mobile banking service.

    SIBL need to ensure updated IT facilities in all branches.

    SIBL need to increase own ATM booth all over the country.

    SIBL should more concentrate on different kind of financial innovation.

    SIBL should implement internet banking service.

    Social Islami Bank need to enhance their financial innovation to grab the market more.

   SIBL can provide higher compensation to their employees. So it will motivate employees for better performance.

Conclusion:

Now a day banking organizations are one of most vital parts of an economy. Now banks provide various services for individual, different firms, companies even for cultivation and so on. As an organization, City Bank has earned the reputation of top banking operation in Bangladesh. The organization is much more structured compared to any other bank operating local or foreign in Bangladesh. With a bulk of qualified and experienced human resource, City Bank can exploit any opportunity in the banking sector. It is pioneer in introducing many new financial products like American Express Credit Card, Special bank Account and services in the banking sector of our country. On the other hand Social Islami Bank is running successfully and for its good deposit performance the bank occupies 2nd position in the Islamic Banking Sector. Above all, it can be safely said that SIBL action program is directed towards development of an authentic participatory Economy beyond Market Economy.

In this project paper, I want to show the comparative scenario between two prominent banks in Bangladesh those are the city bank ltd. and Social Islami bank ltd. The financial statements are the main factors to compare the position of those banks that lead the title name of this project paper which is “a comparative study of financial statement analysis between The City Bank Ltd. and Social Islami Bank Ltd.”

 After all analysis, we can say that comparatively City bank’s performance was better than Social islami bank from the year 2008 to 2012. In export and import business Social islami bank’s performance was better than city bank. Overall both banks return on assets and return on equity condition was sound but need to improve more.

Bibliography

  P.N. Varshney (2005), Banking Law and Practice. Sultan Chand & Sons Prokashni

  Islamabad: The Islamic Foundation, The International Association of Islamic Economics.

  Maududi, Syed Abul Ala (1979). Sud and Adhunic Banking. Adhunik Prokashani,

  Annual Report 2008-2012 – Financial Statement Department, Bangladesh Bank.

  Annual Report 2008-2012 of the City Bank Ltd.

  Annual Reprt 2008-2012 of the Social Islami Bank Ltd.

Manual:

  Bai-Murabaha

  Hire Purchase under Shirkatui Melk

  Bai-Salam

  Musharaka

  Bai-Muajjal

Web Site:

www.thecitybank.com

www.siblbd.com

www.dseorg.bd

Social Islami Bank Bangladesh Ltd

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