1.

1 Origin of the Report

The internship report is a basic requirement for the BBA program. The proposed topic is
Performance Appraisal of Bank Asia Limited. The topic is assigned by Mr. Tanbir Ahmed
Chowdhury, Chairperson& Dean of Department of Business Administration, East West
University and supervised by A.B.M Burhan Uddin, AVP & In-charge, Shantinagar Branch
Islamic Window, Bank Asia Limited.

1.2 Objective of the Study

To present the principal activities of Bank Asia Limited.

To evaluate the financial performance of Bank Asia Limited.
To identify the problems of Bank Asia Limited.
To suggest remedial measures for the development of Bank Asia Limited.

1.3 Scope of the Study

This report consists of job experiences during internship in Bank Asia Limited. The report
mainly emphasizes the sequential activities involved in customer service, cash, credit and
investment approval process used by Bank Asia. The report also focuses on 5year (2008-
2012) financial analysis, comparative growth rate and overall performance analysis of Bank
Asia Limited. Finally the report incorporates an evaluation of the different aspects of the
lending process and monitoring techniques and findings problems and makes some
recommendations. This study is mainly based on secondary data available from the various
divisions and departments of Bank Asia Limited, in addition to these other necessary
information have been collected from the daily news papers, relevant journals, annual reports
of Bank Asia Limited, Bangladesh bank, Ministry of Finance and Planning and publications
of other relevant institutions have also been taken into consideration. Collected data have
been analyzed using different financial and statistical tools. Tools for analysis used are
Growth Rate (percentage change over the years), Ratio analysis, Pie chart, and Line chart in
graphical presentation.

1.4 Methodology of the Study

1.4.1 Study Design

1
The report was fully investigative in nature. Data have been collected from two sources:
1. Primary sources.
2. Secondary sources.
1.4.2 Sources of Information

Primary sources of data

Face to face conversation with the bank officers & staffs.
Different manuals of Bank Asia Limited.
Different circulars of Bank Asia Limited.

Secondary sources of data

Annual report of Bank Asia Limited, 2007-2012.

Different papers of Bank Asia Limited.
Different text books.

1.5 Limitation of the Study

The following are the limitations faced by me during the course of the study.

Short of time

Time shortage is a big constrains. So the time constraint of the study hindering the course of
vast area and time for preparing a report within the mentioned period is really difficult.

Busy working environment

The officials had some times been unable to provide information because of their
huge routine work.
Lack of enough cooperation due to high workload.

1.6 Structural Design of the Report

2
Collected data and information and analytical part have been ascended in different chapter
based on the relation to the topic of the report.

The report covers the organizational structures, background, objectives, functions,

introduction and financial and comparative analysis of Bank Asia. Bank Asia may offer the
common & usual services like the other commercial banks, but this study will show how it
succeeds to perform these activities in complied methods

2.1 Background of the Study

It is very important to have a practical application of the knowledge acquired from any
academic course of the study. Only a lot of theoretical knowledge will become fruitless if it is
not applied in the practical life. So I need proper application of our knowledge to get some

3
benefit from our theoretical knowledge to make it more fruitful. Such an application can be
possible through internship.

The internship program exercise a significant importance as it enables a student to familiar

with the practical business activities. The student work closing with the people of an
organization and learn about the function of that organization. This program enables a student
to develop his analytical skill and scholastic aptitude.

2.2 Historical Background of Bank Asia Limited

Bank Asia has been launched by a group of successful entrepreneurs with recognized
standing in the society. The management of the Bank consists of a team led by senior bankers
with decades of experience in national and international markets. The senior management
4
team is ably supported by a group of professionals many of whom have exposure in the
international market.

It set milestone by acquiring the business operations of the Bank of Nova Scotia in Dhaka,
first in the banking history of Bangladesh. It again repeated the performance by acquiring the
Bangladesh operations of Muslim Commercial Bank Ltd. (MCB), a Pakistani bank.

In the year 2003 the Bank again came to the limelight with oversubscription of the Initial
Public Offering of the shares of the Bank, which was a record (55 times) in our capital
market's history and its shares commands respectable premium.

The asset and liability growth has been remarkable. Bank Asia has been actively participating
in the local money market as well as foreign currency market without exposing the Bank to
vulnerable positions. The Bank's investment in Treasury Bills and other securities went up
noticeably opening up opportunities for enhancing income in the context of a regime of
gradual interest rate decline.

Bank Asia Limited started its service with a vision to serve people with modern and
innovative banking products and services at affordable charge. Being parallel to the cutting
edge technology the Bank is offering online banking with added delivery channels like ATM,
Tele-banking, SMS and Net Banking. And as part of the bank's commitment to provide all
modern and value added banking service in keeping with the very best standard in a
globalized world.

2.3 Vision of Bank Asia Limited

Bank Asias vision is to have a poverty free Bangladesh in course of a generation in the new
millennium, reflecting the national dream. Their vision is to build a society where human
dignity and human rights receive the highest consideration along with reduction of poverty.

5
2.4 Mission of Bank Asia Limited

To assist in bringing high quality of service to customers and to participate in the

growth and expansion of our national economy.
To set high standards of integrity and bring total satisfaction to clients, shareholders
and employees.
To become the most sought after bank in the country, rendering technology driven.
Innovative services by dedicated team of professionals.

2.5 Core Objectives of Bank Asia Limited

Place customer interest and satisfaction as first priority and provide customized
banking products and services.
Value addition to the stakeholders thorough attaining excellence in banking
operation.

Maintain high ethical standard and transparency in dealings.

Be a compliant institution through adhering to all regulatory requirements.

Contribute significantly for the betterment of society.

Ensure higher degree of motivation and dignified working environment for our human
capital and respect optimal work-life balance.

Committed to protect the environment and go green.

2.6 Goal of Bank Asia Limited

Sustainable growth
Synergies between new knowledge and human capital for sustainable economic growth.

6
Capital stewardship
Preservation and enlargement of multiple forms of capital, like intellectual, natural, financial,
organizational, social; all of which contribute to long term value creation.

Accelerating financial inclusion

Accelerate progress towards financial inclusion with technology like ATM, mobile phone,
smart card based banking services and renewable energy generation projects especially in
rural areas.

Differentiating Value Added Services

Strong focus on extremely cost-efficient and green services through Internet Banking,
electronic fund transfer, automated cheques clearing, e-bank statement, SMS alert etc.

Going Green
Quantification of in-house facilities and energy consumption to promote paperless office and
enhance energy efficiency. Greater emphasis on green banking projects.

Leader in business
Create new dimension in the syndication and structured financing.
Grow with export.
Well diversified portfolio.

2.7 Features of Bank Asia Limited

Bank Asia is engaged in conventional commercial banking. It is also introducing

banking functions on Islamic Banking Principles.

7
 It is the pioneer in introducing and launching different customer friendly deposit
schemes to tap the savings of the people for channeling the same to the productive
sectors of the economy.
For uplifting the standard of living of the limited income group of the population, the
Bank has introduced Consumer Credit Schemes by providing financial assistance in
the form of loan to the consumers for procuring household durables, which have had
encouraging responses.
The Bank is committed to continuous research and development so as to keep pace
with modern banking.
The operations of the Bank are computer oriented to ensure prompt and efficient
services to the customer.
The Bank has introduced camera surveillance system (CCTV) to strengthen the
security services inside the Bank premises.
The Bank has introduced customer relations management system to assess the needs
of various customers and resolve any problem on the spot.

2.8 Principal Activities of Bank Asia Limited

The principle activity of the bank is banking. The banking business includes obtain deposits
through account opening, offer credit to corporate organizations, as well as retail and small &
medium enterprise, trade financing, project financing, lease and hire purchase financing. The
modes of banking include conventional banking and Islamic banking. It also performs
merchant banking function under the license by Securities and Exchange Commission,
Dhaka, Bangladesh.

2.9 Over all banking of Bank Asia limited

2.9.1 Retail Banking

Deposit Accounts
8
 Consumer finance
Agricultural/ Rural finance
E-banking

2.9.2 Corporate Banking

General corporate finance

Work order financing
Export finance
Project finance
Off-shore banking Unit
Cash Management
Syndication finance

2.9.3 Islamic Banking

Deposit product
Deposit scheme
Profit on deposit
Investments products
Corporate Banking
SME finance
Retail Finance

2.9.4 SME Banking

Secured product
Unsecured product
9
 Women entrepreneur special product

2.9.5 Other Services

Locker services
Centralized Trade services
Bank Asia securities limited
International Division
Foreign Remittance Department
Treasury Services

2.10 Product & Services of Bank Asia Limited

Bank Asia Limited offers a wide range of product and services to their customer. They offer
following products and Services:

Business Banking
10
 Overdraft
Secured Overdraft
Secured OD (Earnest Money)
Working capital finance
Loan against Trust Receipt
Loan against Cash Incentives
Bill discounting
Loan syndication and structured finance
Packing credit
Demand loan
Demand loan (Work order)
Time loan
Transport loan
House building loan
Term loan
Lease finance
Letter of Guarantee
Letter of Credit
Back to back Letter of Credit

Small and Medium Enterprise (SME)

Term Loan
Subidha - Unsecured Trading
Sondhi - Secured Trading
Sristi - Unsecured Manufacturing
Shombridhi - Secured Manufacturing
Shofol - Unsecured Service
Sheba - Secured Service

11
 Over Draft
Somadhan - Secured

Special Products
Utshob - Seasonal Business
Subarno - Women Entrepreneur

Consumer Finance

Auto Loan
Consumer Durable Loan
Unsecured Personal Loan
House Finance
Loan for Professionals
Senior Citizen Support

Credit Card

MasterCard Local Credit Card

VISA Dual Currency Credit Card
VISA Local Credit Card
VISA Butterfly Credit Card
VISA Mini Credit Card
VISA International Card Against RFCD, RQ A/C
Virtual Card
SME Credit Card
NBFI Card Cheque
International Prepaid Hajj Card
Treasury

Money Market
12
 Overnight Call
Repo and Reserves Repo
Swap
Sale and Purchase of Treasury Bill & Bond
Term Placement
Term Borrowing

Foreign Exchange Market

Spot
Forward
Interbank Buy/Sale

Deposit Accounts

Saving Account
Current Account
Short Notice Deposit
Fixed Term Deposit
Foreign Currency Account
Deposit Pension Scheme
Monthly Benefit Scheme
Double Benefit Scheme
Triple Benefit Scheme
Bank Asia Sanchoy Plus

Islamic Banking

Deposit Products
Al-Wadiah Current Account (AWCA)
Mudarba Savings Account (MSA)
Mudarba Special Notice Deposit Account (MSNDA)
13
 Mudarba Term Deposit Account (MTDA) of different Tenure
Mudarba hajj Savings Scheme (MHSS)
Mudarba Deposit Pension Scheme (MDPS)
Mudarba Monthly Profit Paying Deposit Scheme (MMPPDS)
Smart Junior Saver (SJS)

Investment Products
Bai Mudarba Muajjal
Hire Purchase Shirkatul Melk (HPSM)
Musharaka
Quard against Accepted Bills

Service Products

ATM Services
Remittance Service
Locker Service
Online Banking
Internet Banking
Phone Banking
Mobile Banking
Remote Banking (EBEK)
SWIFT
Centralized Trade Services
Student File
Travelers Cheque

Off-shore Banking Unit (OBU) Products

On-shore Bill Discounting through OBU

14
 Bill Discounting
Capital Finance
Working Capital Finance
Trade Finance
On-shore Export Bill Discounting

Capital Market Operation

Brokerage Operation
Margin Loan

15
2.11 Corporate Culture

Environment
While conducting due diligence on requests for credit facilities, Bank Asia will strive to
ensure that environmental impacts are appraised with the same care as any other business
factors. To the extent deemed practical, Bank Asia will raise and recommend compliance with
local environmental laws to all its borrowing relationships. They firmly believe in long-term
sustainable development, and investment decisions will only be supported when the bank is
convinced, taking into account all relevant feedback, that any adverse environmental impact
will be minimal or will be avoided altogether.

Teamwork
Teamwork and co-operation is an important aspect of the work ethics in Bank Asia. They
leverage on the dynamics of their collective skills, knowledge and experience to achieve the
best for their customers. Bank Asia views its employees as its greatest asset and recognizes
the pivotal role that meritocracy plays in setting rewards and penalties for safeguarding the
interests of its employees. It respects the incidence of conflicts arising in the workplace and
seeks amicable resolution of contentious issues in a manner that is constructive, open, honest
and ultimately beneficial to all parties involved.

Work Place Ethics

Fortified Service Rule
Fortified Code of Conduct
Fortified Policies

Diversity
BAL respects all employees as unique individuals with fundamental human rights and
supports the cultural and ethnic diversity of its workforce. It is their belief that creating a
work environment that enables them to attract, retain and fully engage diverse talents leads to
enhanced innovation and creativity in their services. BAL takes all allegations of harassment
seriously, including sexual, communal etc and prohibits all forms of discrimination.

16
2.12 Management Hierarchy

Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

First Vice President

Assistant Vice President

First Assistant Vice President

Senior Executive Officer

Executive Officer

Senior Officer

Officer

Junior Officer

Assistant Officer

Banking Officer

17
 Trainee Officer

2.13 Board of Directors

Chairman
Mr. A Rouf Chowdhury

Vice Chairman

18
 Mr. Mohd. Safwan Choudhury
Mr. Mohammed Lakiotullah

Directors
Ms. Hosneara Sinha
Mr. A M Nurul Islam

Mr. Rumee A Hossain

Mr. Nafees Khundker
Mr. M Irfan Syed

Ms. Farhana Haq Chowdhury

Ms. Naheed Akhter Sinha
Ms. Sohana Rouf Chowdhury

Mr. Faisal Samad

Mr. Shah Md. Nurul Alam

President & Managing Director

Mr. Md. Mehmood Husain

2.14 Strategic Plan of Bank Asia Limited

To manage and operate the bank in the most efficient manner to enhance financial
performance and to control cost of fund.

To strive for customer satisfaction through quality and control and delivery of timely
services.

19
 To identify customers credits and other banking needs and monitor their perceptions
towards our performance in meeting these requirements.

To review and update policies, procedure and practices to enhance the ability to
expand better services to customers.

To train and develop all employees and provide them adequate resources so that
customers needs can be responsibly addressed.

To promote organizational effectiveness by openly communicating company plans,

policies, practices and procedures to all employees in a timely fashion.

To cultivate a working environment that fosters motivation for improved

performance.

To increase direct contact with customers in order to cultivate a closure relation

between the bank and its customers.

3.1 Deposit Growth

Money placed into a banking institution for safekeeping. 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.

Table No. 1: Deposit of BAL

20
 Year Deposit (Tk in Growth in
Millions) %
2007 30,004,090,000 -
2008 42,435,238,986 41.4315%
2009 54,832,818,230 29.2152%
2010 83,601,263,368 52.4657%
2011 95,131,098,609 13.7914%
2012 110,061,775,383 15.6948%

Source: Annual Report of Bank Asia Limited

Figure No. 1: Percentage change in Deposit Growth

In the graph it shows that deposit growth of Bank Asia has fluctuated every year. The highest
growth is in 2010. 2011 & 2012 the growth rate is very small compare to last 3years.

3.2 Loan & Advance Growth

The amount of money lent under a loan agreement.

Table No. 2: Loan & Advance of BAL

Year Advance (Tk in Growth in

Millions) %
2007 28,456,944,137 -
2008 39,974,998,635 40.4753%
2009 50,267,917,439 25.7483%
2010 79,504,232,613 58.1609%
21
 2011 82,819,973,884 4.1705%
2012 92,328,818,525 11.4813%

Source: Annual Report of Bank Asia Limited

Figure No. 2: Percentage change in Loan & Advance Growth

Bank Asias loan & advance is also fluctuated every year. From 2008-2012 the growth rate is
40.47%, 25.74%, 58.16%, 4.17% & 11.38%. In the graph it shows in 2011 the growth rate is
very few compare to other years.

3.3 Investment Growth

An asset or item that is purchased with the hope that it will generate income or appreciate in
the future. In an economic sense, an investment is the purchase of goods that are not
consumed today but are used in the future to create wealth. In finance, an investment is a
monetary asset purchased with the idea that the asset will provide income in the future or
appreciate and be sold at a higher price.

Table No. 3: Investment of BAL

Year Investment (Tk Growth in

in Millions) %

22
 2007 4,203,135,875 -
2008 6,133,814,349 45.9342%
2009 9,663,097,538 57.5381%
2010 12,075,700,932 24.9671%
2011 15,950,511,189 32.0876%
2012 25,114,904,514 57.4551%

Source: Annual Report of Bank Asia Limited

Figure No. 3: Percentage change in Investment Growth

Above analysis shows that investment growth of Bank Asia Limited is fluctuated every year.
It increased from 45.93% to 57.53% in 2009. Again it falls down in 2010 to 24.96% & in
2011 and 2012 increase by 32.08% and 57.45%. That indicates that they cannot make their
investment efficient and also show less profitability and performance efficiency.

3.4 Import Growth

Import refers to the goods or services brought into one country from another. Exports, imports
form the backbone of international trade. The higher the value of imports entering a country,
compared to the value of exports, the more negative that country's balance of trade becomes.

Table No. 4: Import of BAL

Year Import (Tk in Growth in

Millions) %

23
 2007 39,218,700,000 -
2008 50,985,000,000 30.0017%
2009 67,378,300,000 32.1531%
2010 110,417,890,000 63.8775%
2011 99,414,200,000 -9.9654%
2012 106,746,150,000 7.3751%

Source: Annual Report of Bank Asia Limited

Figure No. 4: Percentage change in Import Growth

The graph shows that Import growth is very much fluctuating in Bank Asia. Even they have
negative growth in 2011 which is -9.96%. The highest growth rate is 63.87% in 2010.

3.5 Export Growth

A function of international trade whereby goods produced in one country is shipped to
another country. Exports are one of the oldest forms of economic transfer, and occur on a
large scale between nations that have fewer restrictions on trade, such as tariffs or subsidies.

Table No. 5: Export of BAL

Year Export (Tk in Growth in

Millions) %
2007 20,417,300,000
2008 25,155,300,000 23.2058%

24
 2009 30,953,400,000 23.0492%
2010 57,281,670,000 85.0577%
2011 74,794,500,000 30.5731%
2012 66,478,340,000 -11.1186%

Source: Annual Report of Bank Asia Limited

Figure No. 5: Percentage change in Export Growth

The graph shows that Bank Asia has very small export growth except in 2010. In 2010 it has
highest rate of growth which is 85.05%. In 2012 it has negative growth rate which is
-11.11%.

3.6 Assets Growth

A resource with economic value that an individual, corporation or country owns or controls with
the expectation that it will provide future benefit. It is also a balance sheet item representing
what a firm owns.

Table No. 6: Assets of BAL

Year Assets (Tk in Growth in

Millions) %
2007 38,427,853,094 -
2008 53,371,247,063 38.8868%
25
 2009 68,663,199,976 28.6520%
2010 105,198,050,148 53.2087%
2011 117,729,408,006 11.9121%
2012 140,361,374,568 19.2237%

Source: Annual Report of Bank Asia Limited

Figure No. 6: Percentage change in Assets Growth

Assets growth of Bank Asia has average rate from 2008-2010. But in 2011 and 2012 it falls
down which is 11.91% & 19.22%.

3.7 Operating Profit Growth

The profit earned from a firm's normal core business operations. This value does not include
any profit earned from the firm's investments (such as earnings from firms in which the
company has partial interest) and the effects of interest and taxes.

Table No. 7: Operating Profit of BAL

Year Operating Growth in

Profit (Tk in %
Millions)
2007 1,574,722,774
2008 1,904,878,573 20.9659%

26
 2009 2,617,037,702 37.3860%
2010 4,248,864,804 62.3539%
2011 4,041,969,139 -4.8694%
2012 5,051,805,176 24.9837%

Source: Annual Report of Bank Asia Limited

Figure No. 7: Percentage change in Operating Profit Growth

Above analysis shows that operating profit growth of Bank Asia has fluctuated every year. In
2008 it 20.96% & 2009-2010 it increases treamandously. Again it falls down in 2011 by
-4.86%. In 2012 it again increase 24.98%.

3.8 Return on Equity (ROE)

Return on equity or return on capital is the ratio of net income of a business during a year to
its stockholders' equity during that year. It is a measure of profitability of stockholders'
investments. It shows net income as percentage of shareholder equity.

Table No. 8: Return on Equity of BAL

Year ROE
2008 23.00%
2009 32.03%
2010 32.12%
27
 2011 19.61%
2012 7.11%

Figure No. 8: Return on Equity shown in the graph from the year 2008-2010

Return on equity is an important measure of the profitability. Generally higher values of ROE
indicate favorable meaning. Above analysis shows that the return on equity of Bank Asia
Limited has been increased from 2008-2010. The return on equity from 2008 to 2010 is
23.00%, 32.03% and 32.12% respectively. This indicates that bank is efficient in generating
income on new investment. In 2011 ROE is 19.61% and in 2012 it is 7.11%, which are more
less than previous years ROE. This result is due to the banks greater use of debt.

3.9 Return on Assets (ROA)

Return on assets is the ratio of annual net income to average total assets of a business during
a financial year. It measures efficiency of the business in using its assets to generate net
income. It is a profitability ratio.

Table No. 9: Return on Assets of BAL

Year ROA
2008 1.87%
2009 2.18%
2010 2.22%

28
 2011 1.72%
2012 0.70%

Figure No. 9: Return on Assets shown in the graph from the year 2008-2010

Bank Asias returns on total assets are 1.87%, 2.18%, 2.22%, 1.72% and 0.70% respectively
from 2008-2012. The percentage of return on asset is increased in an increasing manner from
2008-2010 but the value of ROA is very low. It shows that they earned a little from their
investment. In 2011 and 2012 the value of ROA falls to 1.72% and 0.70%. A decreasing trend
means that profitability is deteriorating. This low return may results from the banks above
average use of debt. Its very weak for the organization.

3.10 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.

Table No. 10: Return on Investment from the year 2008-2012

Year ROI
2008 13.88%
2009 18.61%
2010 15.79%

29
 2011 13.98%
2012 5.20%

Figure No. 10: Return on Investment shown in the graph from the year 2008-2010

Above analysis shows that return on investment of Bank Asia Limited is fluctuated every
year. It increased from 13.88% to 18.61% in 2009. But after that the value of ROI decreased
at a huge percentage in 2012. That indicates that they cannot make their investment efficient
and also show less profitability and performance efficiency.

3.11 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.

Table No. 11: Earning per Share from the year 2008-2012

Year EPS

2008 3.94
2009 6.19
2010 6.43
2011 3.65
2012 1.44

30
 Figure No. 11: EPS shown in the graph from the year 2008-2010

From the above analysis we can see that the Earning per Share of BAL from 2008 to 2012 are
3.94, 6.19, 6.43, 3.65, 1.44 respectively. EPS increased from 2008-2010 but it decreased in
2011 and 2012. There is no rule of thumb to interpret earnings per share. But there is a
common assumption that the higher the EPS figure, the better it is and a higher EPS is the
sign of higher earnings, strong financial position and, therefore, a reliable organization. So,
depend on that assumption it can be said that the condition of EPS of Bank Asia is not too
strong.

3.12 Debt Equity Ratio

Debt-to-Equity ratio is the ratio of total liabilities of a business to its shareholders' equity. It is
a leverage ratio and it measures the degree to which the assets of the business are financed by
the debts and the shareholders' equity of a business.

Table No. 12: Debt Equity Ratio from the year 2008-2012

Year Debt Equity

Ratio
2008 15.01
2009 12.86
2010 13.9
2011 8.43
2012 9.76

31
 Figure No. 12: Debt Equity Ratio shown in the graph from the year 2008-2010

Debt equity ratio of Bank Asia Limited from 2008-2012 is 15.01%, 12.86%, 13.9%, 8.43%
and 9.76% respectively. The value of debt equity ratio is fluctuated every year. Lower values
of debt equity ratio are favorable indicating less risk. Higher value is unfavorable because it
means that the business relies more on external lenders.

3.13 Loan Deposit Ratio

The amount of a bank's loans divided by the amount of its deposits at any given time. The
higher the ratio, the more the bank is relying on borrowed funds, which are generally more
costly than most types of deposits.

Table No. 13: Loan Deposit Ratio from the year 2008-2012

Year Loan Deposit

Ratio
2008 94.20%
2009 91.67%
2010 95.10%
2011 87.16%
2012 83.89%

Figure No. 13: Loan Deposit Ratio shown in the graph from the year 2008-2010

32
From the above analysis it can see that the loan deposit is very high that is 94.20%, 91.67%,
95.10%, 87.16% and 83.89% from 2008-2012.Higher ratio indicate that the bank is relying
more on borrowed fund which are generally more costly than most types of deposits.
3.14 Price Earnings Ratio
A valuation ratio of a company's current share price compared to its per-share earnings.

Table No. 14: Price Earnings Ratio from the year 2008-2012

Year Price Earnings

Ratio
2008 9.73
2009 6.9
2010 8.34
2011 10.48
2012 14.93

Figure No. 14: Price Earnings Ratio shown in the graph from the year 2008-2010

33
Here we can see that price earnings ratio is 9.73, 6.9, 8.34, 10.48 and 14.93 respectively from
2008-2012.P/E Ratio decrease in 2009 but after that it increased every year. It tells whether
the price of share is fairly valued, undervalued or overvalued.

3.15 Capital Adequacy Ratio

A measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit
exposures. Also known as Capital to Risk Weighted Assets Ratio.

Table No. 15: Capital Adequacy Ratio from the year 2008-2012

Year Capital Adequacy

Ratio

2008 11.25%
2009 12.27%
2010 8.11%
2011 14.88%
2012 13.05%

Figure No. 15: Capital Adequacy Ratio shown in the graph from the year 2008-2010
34
Above analysis shows that capital adequacy ratio is fluctuated every year. It is 11.25% in
2008, 12.27% in 2009, 8.11% in 2010, 14.88% in 2011 and 13.05% in 2012.Higher capital
adequacy ratio protect the depositors.

In 2011 & 2012, Bank Asias deposit and loan & advance growth is very less. If
deposit and loan & advance are less, the bank cannot perform well.

In 2012 Bank Asia has negative export growth which shows companys export
position is very weak.

Bank Asias operating profit growth is not in good condition. It has also negative
growth in 2011.

In 2011 & 2012, ROE of Bank Asia is less than previous year (2008-2010) which
shows that, it occurs because of banks greater use of debt.

In 2012, ROA of Bank Asia is very few which means they cant use their assets
efficiently. Its very weak for the organization.

35
 ROI is fluctuated every year but in 2012 it has tremendous fall. It indicates that they
cannot make their investment efficiently and shows less profitability and performance
efficiency.

The loan deposit ratio is very high of Bank Asia. It indicates that bank is relying more
on borrowed fund.

Bank Asia limited has huge amount of loan, for this reason they might face liquidity
crisis which will largely influence their business growth.

For financial security, every financial institution has to reserve some fund. But in
2012 Bank Asia Limited had very less reserve fund.

Political unrest has hampered the economic growth for last few years to a large extent.
There should be more number of risk taker and long term investor. So that company
can grow, can make profit, increase the value of the firm. It will generate confidence
among the investors as well as it will increase the EPS of the company.

Bank Asia Limited should reserve more fund for their future orientation.

In the face of competitive and borrower dominated credit scenario Bank Asia must
come up with innovative loan products to meet up the demand of time. In this
connection Bank Asia can focus on some more loan products like:

Leasing
Apartment loan
Marriage loan
Education loan

To combat the problem of mobilizing deposit in the form of credit, Bank Asia should
focus on intensive marketing effort.

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 Loan monitoring is a continuous task and requires expert manpower. Therefore it is
suggested that Bank Asia should set up a separate loan monitoring cell, which will be
responsible for monitoring its total loan portfolio with special care to the problem
loan.

To increase their performance, it should focus on efficient management.

Appraising method should be unbiased & the aims and objectives of performance
appraisal need to be well communicated from top level to bottom level management

Banking industry is inevitable for a country. Bank mobilizes savings helps the operation of
trade and business, participates in the economic development activities and so on. Banking
evolution happens to keep pace with the advanced stage in social development.
The bank should care again in manpower and its capital to use these in such a way that will
produce a maximum output in future and motivated the client and investor for deposit and
investment. The bank should take care to reduce unnecessary expenses. If the bank keeps its
expenses at satisfactory level it produces a maximum output in future.
There are many benefits to implementing a regular and systematic performance appraisal
system within an organization. In order to gain the most benefit from performance appraisals
it is recommended that a system is developed in consultation with workers and managers, and
clear links are established between appraisals and valued rewards and outcomes. If resources
permit, information on work performance should be obtained from multiple sources.
Performance appraisals can be a powerful tool for increasing motivation and improving work
practice if conducted in a constructive, open and supportive manner.
Finally if the Bank Asia Limited control their expense and take proper steps to overcome
their little limitations, they will become a first rows bank of Bangladesh.

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 Bibliography

Principles of Managerial Finance by Gitman- Twelfth Edition

Commercial Bank Management, Peter S. Rose, International
Edition, McGraw-Hill Irwin.
Commercial Banking, Benton E. Gup and James W. Kolari, 3 rd
Edition, John Wiley & Sons, Inc.
richard-wilson.blogspot.com
http://www.dsebd.org/
www.answers.com ... Business & Finance Business
Dictionary
Essentials of Managerial Finance by Scott Besley
Annual report of Bank Asia Limited From 2008-2012

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