I am happy that I have successfully completed the internship at NCC Bank Limited and for my internship report on Credit Risk Management. This is to confirm that Elma Akter, ID is a student of the Department of Business Administration of Daffodil International University. Under my supervision, she prepared her internship report on “Credit Risk Management of NCC Bank Limited”.
National Credit & Commerce Bank Limited has its own unique history and adheres to all rules, policies and regulations. The main source of records was changed to NCC Bank Limited Annual Financial Document from 2016 to 2020. In the third chapter of this report, I discussed the financial activities of NCC Bank Limited.
At the end of the report, I discussed the findings and made a recommendation to address these issues. And would also like to thank the authorities and employees of NCC Bank for their cooperation.
Introduction
Origin of the Study
The objective of the study
Methodology of the study
Primary sources
Secondary sources
Scope of the study
Limitations of the study
About NCC Bank Limited
NCC Bank Limited or National Credit and Commerce Bank Limited is a Bangladesh personal commercial financial institution Mohammad Mahmudur Rashid is the existing managing director and CEO of the bank. It became a scheduled commercial financial institution after receiving permission from a significant financial institution in 1993 and started with the pay-as-you-go capital of Tk. The factor of the enterprise becomes some to collect assets from within and put them in the kind of path to build up the country's industrial and trade sector and also expect a thrust component within the association of the capital market.
The purpose of the company changed to mobilizing assets from within and investing them in this way so that one can expand the country's industrial and trade sector and also play a catalytic position within the formation of the capital market. The club with the browse has helped the organization achieve a first-class performance in this regard. The organization operated with 16 branches until 1992 and then, with the approval of the Central Bank, it was converted into a full-fledged non-public merchant bank in 1993 with a paid-up capital of Tk.
The bank established a new extended financing within the industrial, commercial and external substitute commercial enterprise. Its diverse range of deposits and credit scores has also attracted customers – every business and people who experience the convenience of doing business with a bank.
The vision of NCC bank ltd
NCC Bank established in 1985 as a funding company in the call of NCL (National Credit Limited).
The mission of NCC Bank
Products and services of NCC Bank…………………………………………… …...6,7
Management Hierarchy of NCC Bank ltd
Credit
Credit Management
So from 2016 to 2017 total asset turnover ratio was not good for NCC Bank Limited. The figure above, we can see that the debt ratio is lower than 1, which is good for NCC Bank Limited. The chart shows that NCC Bank Limited's return on equity has fluctuated over the years.
NCC Bank Limited's net profit margin has seen ups and downs over the years. But in this graph we can see that the NPM of NCC Bank Limited is higher than the default value. So we can see that NCC Bank Limited's deposit growth is decreasing year on year.
From the graph, one can fully see the entire loan score and advances of NCC Bank Limited. This is a good sign for NCC Bank Limited and proves that they are utilizing their assets. The total assets of NCC Bank Limited was decreasing day by day which is not a good sign for the bank.
NCC Bank Limited must ensure that the bank is able to manage its liabilities effectively.
Overdrafts
- Cash credit (Hypothecation)
- Cash Credit (Pledge)
Loans
- Personal loans
- Housing Loan
- Small Business Loan Scheme
- Project Loan
- Demand Loan………………………………...…………………………….. 12,13
- Consumer Scheme
- Lease Financing
Credit Risk Grading
The function of Credit Risk Grading
Credit rating of the bank
Credit Risk Grading (CRD) procedures
- Analysis of Financial Risk……………………………….……………………14,15
- Analysis of Management risk
- Analysis of Security Risk
- Analysis of Relationship Risk………………………………………………15,16
Within the above dialogue, the burden of financial chance is 50%, but there are some components that divide the calculation into four parts. The assessment of this elegance of chance appears at parameters alongside corporate outlook, length of the organization, enterprise growth, market opposition and barriers to entry. But in the system of lending, it must protect the depositor's cash as well as the commercial enterprise of the bank.
Therefore, proper supervision and follow-up of the control is very vital in the lending and healing technique. NCC Bank Limited strictly follows a 3-step technique to supervise and follow the lending and restoration system. To select the borrower, NCC Bank Ltd employees first interview the man or woman to establish their functionality to manipulate finances or perform the task effectively.
The following steps are taken to ensure that the loans are legitimate for the right people. Account performance, integrity, history, ability to repay through internal resources of NCC Bank Ltd. Adequate documentation and securitization are very essential at this stage to extend the security of the credit rating and enable NCC Bank Ltd to liquidate the mortgage liability in the event of borrower default.
In NCC Bank Ltd, interest on various loans depends on the level of coincidence and type of security offered. It should be borne in mind that interest price is the reflected.. image of threat within the deal. It is the variant within the COF that can cause the alternatives within the mortgage to price. e) Effective yield can be greater to the extent that the debtors are required to keep the deposit to help the loan sport. f) Yield is increased by the commitment charge and bearer charge that is feasible. g).
The capacity way that the customer will pay his loan in time or not, usually this side of the bank at this factor. I have to keep something as collateral with the bank as opposed to that hundred thousand TK. Conditions: Under situations, a Buyer has obeyed those conditions during the borrower takes loan financial institutions regularly offer certain conditions to the customer for the protection of their property.
Liquidity Ratio
As we know, the standard cash ratio of the banking industry is at least 0.5 to 1. That means that NCC Bank Limited has a good cash ratio and if creditors decided on a high cash ratio, they could easily pay off its debts. A quick ratio measures a company's ability to pay its current obligations without having to promote its inventories or raise additional financing.
Efficiency Ratio
Solvency Ratio
A higher debt-to-equity ratio means that with a higher debt-to-equity ratio, a company's additional financing comes from debt versus issuing equity.
Profitability Ratios
This shows that the bank's return has reduced the fairness of NCCBL's managerial negligence.
P/E Ratio
Financial Growth Rate
Loan and Advances
Deposits and Loans
Amount of Non-Performing Loans and Advances
Amount of Doubtful Loan
Amount of sub-standard loans with a ratio
Common-size Analysis of National Commerce and Credit Bank Limited
- Balance sheet common size…………………………………………….…………. 37,38
- Balance sheet Trend Analysis……………………………………..………….. 41,42,43
From the above hint, we can see that NCC Bank Limited has invested more in stocks and securities from 2016 to 2020. The cash holding is decreasing from 2016 to 2020, which may be a signal that they might be investing more money instead of keeping it in the hand . From the above information, we can see that NCC Bank Limited's net interest income is decreasing year-on-year.
Total liabilities and equity also increased from the previous year and amounted to 148.82% in 2020. From this analysis, we can see that NCC Bank Limited's net interest income has not been so good in recent years that it has been declining year on year.
Findings
Recommendation
NCC Bank Limited has faced demanding situations abroad but in the current years its operations have grown. The revenue-destroying industry competition within the banking industry makes it difficult for a financial institution's operations to squeeze out any extraneous income. In such a scenario, with good economic strengths and logo images, NCC Bank Limited serves the local community of Bangladesh by offering different banking offerings.
To perform extremely well overall and to be dominant in a number of industries in this harsh state of opposition now relies not only on internal forces but also on eternal opportunities. NCC is this type of financial institution that was able to develop its length within the banking industry of Bangladesh through constant overall performance. Although NCC Bank Limited has established its image as one of the carriers of pleasant services to its customers with capacity and NCC Bank Limited is not always the market leader.
The steady overall performance of the bank over the last few years is a testament to the strengths of the financial institution, the effectiveness of the management team and the uphill battle of employees. Despite the lifestyle of deficiencies in a few areas, the overall performance of NCC Bank Limited has been excellent in the various banking businesses in Bangladesh.
