I hereby declare that this report titled "Financial Performance Analysis of Exim Bank Limited submitted by me to Sonargaon University. This report is primarily prepared to fulfill the partial requirement of obtaining BBA degree under Sonargaon University and to analyze Exim Financial Performance of Bank Limited To find out the reasons behind the performance improvements or pitfalls of Exim Bank Ltd. over the years.
Finally, to suggest the necessary recommendations to overcome the shortcomings of Exim Bank to improve their financial performance. The information was collected within the organization of the Financial Administration Department of Exim Bank Limited.
Data Analysis Method
Scope of the Report
Limitations of the study
ORGANIZATIONAL OVERVIEW
History of Exim Bank Limited
Export Import Bank of Bangladesh Limited was established in the year 1999 under the leadership of the late Mr. Nazrul Islam Mazumder who is an enlightened business tycoon in the Garments business in Bangladesh became the honorable chairman after the demise of the honorable founder chairman. The Bank started functioning from 3rd August 1999 with its name as Bengal Export Import Bank Limited.
On November 16, 1999, it was renamed as Export Import Bank of Bangladesh Limited with Mr. With its pragmatic decision and managerial orientations in operational activities, this bank has earned a secure and recognizable position in the banking industry in terms of performance, growth, and excellent management.
Vision
Mission
The bank has chalked out the following corporate objectives in order to ensuresmooth achievement of its goals
Eventually the bank also emphasizes on
- Corporate Culture
- Achievements
- Corporate Social Responsibilities
- Objectives
- Values
- Awards of Exim Bank Limited
- Corporate Philosophy
EXIM Bank has also been successful in improving the performance of the organization by improving the performance of individual employees and also recognizes existing talents to fill the senior vacancies within the organization or place them in the right position, making best use their capabilities can be assured. The objectives of Exim Bank Limited are specific and focused on its vision and to position itself as a bank with a difference in the mindset of the people. From the very beginning of its journey, Exim Bank set a standard of service that made the bank outstanding.
International Diamond Award for Excellence in Quality-2012 of the European Association for Quality Research, Switzerland. Central Shariah Board Islamic Banking Award-2009 by Central Shariah Board for Islamic Banks of Bangladesh.
For Customers
For Employees
For Shareholders
For the Community
Strategic Priority
Ethics, Integrity and Trust
Prime Operational Area of the Bank
Investment
Core Banking Solution
Core banking solutions are banking applications on a platform that enables a step-by-step, strategic approach designed to enable banks to improve operations, reduce costs and be prepared for growth. Advances in technology, especially the Internet and information technology, have led to new ways of doing business in the banking sector. The platform where communication technology and information technology are merged to suit the core needs of banks is known as core banking solutions.
Here, computer software has been developed to carry out core banking operations such as recording transactions, profit calculations on loans and deposits, customer registers, balance of payments and withdrawals. It allows the user (customers) to operate accounts from any branch if it has installed core banking solutions. EXIM Bank uses the T24 Islamic Banking Solution of Temenos, which is already a recognized world leader in banking software technology with over 700 installations in over 125 countries and more than 40 installations for Islamic Banking.
T24 for Islamic Banking enables offering the right range of the latest competitive Islamic financial products based on the award-winning success of the T24 banking software platform and is a single core banking software system that handles Islamic financial services in tandem with non-Islamic. This helps us maintain tight control over operating costs while remaining focused on serving our valued customers in the most convenient and efficient manner. Temenos T24 is built on an open software architecture that uses established technology standards to support all major types of banking.
As a result of T24's leading technology credentials, T24 has the flexibility to support the needs of any bank – from the smallest green operation to the largest multinational. T24 provides a high-performance foundation to manage users, customers, processes, risks, delivery channels and applications - as well as to deploy a full range of banking services across specialized lines of business. T24 is the most widely used banking software globally and this experience continues to be built back into T24, giving T24 the most comprehensive coverage across: retail, corporate, wholesale, universal, Islamic, private wealth management and microfinance banking.
Board of Directors
Functional Department of Exim Bank Ltd
Human resource Department (HRD)
Financial and Administration Department (FAD)
Inspection and Audit Division
Marketing Division
Public Relation Department
Information Technology Department
Investment Division
International Division
General Services Division (GSD)
Card Division
Challenges of Future operation of Exim Bank Ltd
Exim Bank Limited is well positioned to meet the challenges of 2021 and will continue to strive to innovate and seize opportunity for growth and value creation. The Bank will focus on its large customer base to generate more business from existing customers. This strategy is supported by continuous improvement in the existing broad spectrum of products and services and level of customer service delivery.
The Bank will continue to tap the potential of retail, credit card, SME and remittance market. However, continued pressure on interest margins, fees, exchange rate earnings and increased supply requirements for Retail, Credit Card and SME will also pose a challenge for the financial institutions during 2021. In its pursuit of growth, the Bank will always follow good corporate governance and practices and sound risk management policies and strict credit evaluation procedure.
We see ourselves as a strong and effective player in the financial system and will remain ready for its implementation.
Exim Bank Ltd. at a glance
Theoretical Background
- Financial Ratio Analysis
- Financial Ratios A. Current Ratio
- D ebt Ratio
- Cost Income Ratio
- Total Asset Turnover Ratio
- Operating Profit Margin
- Net Profit Margin
- Return on Asset
- Return on Equity
- Earnings per Share
- Price Earnings Ratio
- Cash Ratio
- Cash to Asset Ratio
- Investment to Total Asset Ratio
- Investment to Total Deposit Ratio
- Common Size Analysis
- Trend Analysis
Since a ratio is simply a mathematical equation based on ratios, large and small companies can use ratios to compare their financial information. The debt ratio is calculated to measure the extent of financial leverage which is defined as total assets provided by the firm's creditors. The firm's earnings per share are usually presented in the interest of the potential shareholders and management.
The price-to-earnings (P/E) ratio is commonly used to assess an investor's valuation of a stock. It shows how much investors are willing to pay for each of the company's earnings. The cash ratio is a measure of liquidity that shows a company's ability to cover its short-term obligations with only cash and cash equivalents.
The cash ratio is calculated by adding the company's total reserves of cash and near-cash securities and dividing that total by its total current liabilities. The cash ratio is the current value of marketable securities and cash divided by the company's current liabilities. The investment-to-assets ratio is a financial ratio commonly used for banks (or credit unions) to measure the ratio of the bank's loan portfolio to total assets.
Investment-to-deposit ratio (IDR) is used to assess a bank's liquidity by comparing a bank's total lending to its total deposits during the same period. If the ratio is too high, it means that the bank may not have enough liquidity to cover any unforeseen fund needs. Conversely, if the ratio is too low, the bank may not be earning as much as it could be.
Financial Performance Analysis of Exim Bank
Ratios: Current Ratio
In 2018, the current ratio was 1.07, and with the increasing trend, the value in 2019 was 1.08, indicating that the capacity has been reached.
Debt Ratio
Cost Income Ratio
Total Asset Turnover Ratio
Operating Profit Margin
Net Profit Margin
Return on Asset
Return on Equity
Earnings per Share
Price Earnings Ratio
Cash Ratio
Cash to Asset Ratio
Investment to Total Asset Ratio
Investment to Total Deposit Ratio
Findings and Analysis
In 2018, the current ratio was 1.07 and with its rising trend, the value in 2019 was 1.02, which indicates that it is growing into its capacity. The 2020 ratio is 1.19, which may also indicate increased operational growth and likely pull up the company's value. In general, a current ratio greater than 1 or 2:1 suggests that the company has sufficient financial resources to remain confident in paying off current liabilities.
As we can see that the current ratio of Exim Bank Limited has an increasing trend, it may soon have a current ratio of 2, which means that the company may not have enough current assets available to meet its obligations. its short term. The cost-to-income ratio has a downward trend, which means that income is growing at a higher rate than cost, which may suggest that the company is focusing on cost minimization. So we can say that the operating efficiency of Exim Bank Limited is good.
This shows that Exim Bank Limited is using its assets more efficiently to generate operating income. The lowest value was 5.28 in 2018 and the highest value was 6.36 in 2020, which means that the company is more efficient in generating sales to actual profit. The lowest value was 0.46 in 2018 but it changes upwards to 0.66 in 2019 which indicates that its earning power has increased from 2018 but in 2020 again it has become lower than 2019. Therefore it can be said that The proportion of their earnings does not increase year by year regularly.
As all the values of Exim Bank Limited have risen and fallen over the years, it shows that the company is not using the investments of equity investors productively to make additional profits and to return the profits to investors at an attractive level. But Exim Bank Limited managed to increase their EPS as we can see in the bar chart. The Price Earnings ratio calculates the level of price for which the investors pay per taka of earnings offered by the bank.
Interpretation
Chapter Five
Recommendations & Conclusion
Recommendations
As we have already seen that a large percentage of the company's financing assets is from debt. Exim Bank Limited's total asset turnover had an increasing trend, which means they were efficiently using their assets to generate income. Exim Bank Limited's operating profit margin trend is already increasing to continue this process, they need to increase sales to achieve cost-effectiveness through economies of scale and reduction of production costs, while bringing in revenue extra.
The return on asset has a random trend which is not good for increasing revenue, reducing cost and reducing asset cost. Return on equity is following a downward trend, which is not good, management should work hard to increase return on equity by increasing profit margin, using more financial leverage, improving asset turnover, and distributing free cash, etc.
Conclusion
